As filed with the Securities and Exchange Commission on September 30, 2020
Registration No. 333-
811-4420
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-6
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No.
and
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 184 (X)
WRL SERIES LIFE ACCOUNT
(Exact Name of Registrant)
TRANSAMERICA LIFE INSURANCE COMPANY
(Name of Depositor)
(Former Depositor, Transamerica Premier Life Insurance Company)
4333 Edgewood Road, NE
Cedar Rapids, IA 52499
(Address of Depositors Principal Executive Offices)
Depositors Telephone Number: (319) 355-8511
Brian Stallworth, Esq.
Transamerica Life Insurance Company
c/o Office of the General Counsel
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499-4240
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of the Registration statement.
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Explanatory Note
Registrant is filing this Registration Statement for the purpose of registering interests under the Transamerica® Associate Freedom Elite Builder flexible premium variable life insurance policy (Policy) on a new Form N-6 in compliance with the pre-July 2020 version of Form N-6 (OMB number 3235-0503). Interests under the Policy were previously registered on Form N-6 (File No. 333-199059) and funded by WRL Series Life Account (File No. 811-4420). Upon effectiveness of the merger between Transamerica Premier Life Insurance Company with and into Transamerica Life Insurance Company (TLIC), TLIC became the obligor of the Policies and Depositor of WRL Series Life Account which was transferred intact to TLIC.
TRANSAMERICA® ASSOCIATE FREEDOM ELITE BUILDER
Issued by
TRANSAMERICA LIFE INSURANCE COMPANY
(Former Depositor, Transamerica Premier Life Insurance Company)
WRL Series Life Account
Supplement dated October 1, 2020
to the
Prospectus dated May 1, 2017
as Supplemented
Home Office: 4333 Edgewood Road NE
Cedar Rapids, Iowa 52249
Service Center: 4333 Edgewood Road NE
Cedar Rapids, Iowa 52499-0001
Phone: (800) 333-6524
Transamerica Life Insurance Company (TLIC or the Company) is amending the prospectus dated May 1, 2017 as supplemented for Transamerica® Associate Freedom Elite Builder policy (the Policy) to provide information regarding the merger (the Merger) of the issuer of your Policy, Transamerica Premier Life Insurance Company (TPLIC), formerly known as Western Reserve Life Assurance Co. of Ohio, with and into TLIC. Please read this supplement carefully and retain it for future reference. Capitalized terms not otherwise defined in this supplement have the meanings given to them in the prospectus. Except as modified in this supplement, all other terms and information in the prospectus remain unchanged.
TPLIC no longer sells the Policy. Following the Merger, TLIC will not issue new Policies. Although Policies will no longer be sold, additional purchase payments will continue to be permitted.
Effective on October 1, 2020, TPLIC merged with and into its affiliate TLIC. Before the Merger, TPLIC was the issuer of the Policy. Upon consummation of the Merger, TPLICs corporate existence ceased by operation of law, and TLIC assumed legal ownership of all of the assets of TPLIC, including WRL Series Life Account (the Separate Account) that funds the Policy, and the assets of the Separate Account. As a result of the merger, TLIC became responsible for all liabilities and obligations of TPLIC, including those created under the policy. The Contract has thereby become an individual flexible premium variable life insurance policy funded by a separate account of TLIC.
The Merger did not affect the terms of, or the rights and obligations under your Policy, other than to change the insurance company that provides your Policy benefits from TPLIC to TLIC. The Merger also did not result in any adverse tax consequences for any Policy owners, and Policy owners will not be charged additional fees or expenses as a result of the Merger. Policy values will not change as a result of the Merger. You will receive a Policy endorsement from TLIC that reflects the change from TPLIC to TLIC. Until we amend all forms we use that are related to the Policy, we may still reflect TPLIC in correspondence and disclosure to you. The information below describes changes to the prospectus as a result of the Merger and otherwise updates information in the prospectus. As a result all references in the prospectus to Transamerica Premier Life Insurance Company (formerly, Western Reserve Life Assurance Co. of Ohio) are amended to refer to Transamerica Life Insurance Company.
More detailed information, including an explanation of the underlying portfolios fees and investment objectives, may be found in the current prospectuses for the underlying fund portfolios, which you can receive by contacting our Service Center at the phone number above.
Please note the change regarding your fund reports:
We want to let you know that beginning January 1, 2021, we will no longer mail copies of shareholder reports for funds in your portfolio. This change is permitted by regulations adopted by the Securities and Exchange Commission. Instead, the reports will be made available on our website. Well let you know by mail each time a report is posted. The notification will have a URL for accessing the report.
If youve already elected to receive documents from us electronically, youre not affected by this change. Youre already receiving an email with a link to the reports so theres nothing you need to do.
You do have the option of continuing to receive paper copies of all future shareholder reports free of charge. If youd like this option, give us a call at the number on your account statement.
I. | The following replaces the table Please direct transactions, claim forms, payments and other correspondence and notices as follows: |
Transaction | Direct or Send to | |
Telephonic Transaction |
1-727- 299-1800 or 1-800-851-9777 (toll free) | |
Facsimile Transaction |
1-727-299-1648 (subaccount transfers only) 1-727-299-1620 (all other facsimile transactions) | |
Electronic Transaction |
www.tlic.transamerica.com | |
Payments made by check |
PO Box 653011, Dallas, TX 75265-3011 or 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-0001 | |
Claims, general correspondence, and notices |
Mailing Address: 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-0001 |
II. | The following hereby replaces the list of portfolios available to you on the cover of the prospectus and the table in the The Portfolios subsection (p. 22) of the Transamerica Premier, the Separate Account, the Fixed Account, and the Portfolios section (p. 20) of the prospectus: |
PORTFOLIO |
INVESTMENT OBJECTIVE |
ADVISOR/ SUBADVISOR | ||
Access One Trust | ||||
Access VP High Yield FundSM |
The Fund seeks to provide investment results that correspond generally to the total return of the high yield market, consistent with maintaining reasonable liquidity. | ProFund Advisors LLC | ||
AB Variable Products Series Fund, Inc. Class B | ||||
AB Balanced Wealth Strategy Portfolio |
The Portfolios investment objective is to maximize total return consistent with the Advisers determination of reasonable risk. | AllianceBernstein L.P. | ||
Fidelity® Variable Insurance Products Service Class 2 | ||||
Fidelity VIP Index 500 Portfolio |
The fund seeks investment results that correspond to the total return of common stocks publicly traded in the United States, as represented by the &P 500® Index. | Fidelity Management & Research Company LLC | ||
Franklin Templeton Variable Insurance Products Trust Class 4 | ||||
Franklin Allocation VIP Fund |
Capital appreciation. Its secondary goal is income. | Franklin Advisers, Inc. |
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Transamerica Series Trust Initial Class | ||||
Transamerica Aegon High Yield Bond VP | Seeks a high level of current income by investing in high-yield debt securities. | Transamerica Asset Management, Inc./ Aegon USA Investment Management, LLC | ||
Transamerica Aegon U.S. Government Securities VP | Seeks to provide as high a level of total return as is consistent with prudent investment strategies. | Transamerica Asset Management, Inc./Aegon USA Investment Management, LLC | ||
Transamerica Barrow Hanley Dividend Focused VP | Seeks total return gained from the combination of dividend yield, growth of dividends and capital appreciation. | Transamerica Asset Management, Inc./Barrow, Hanley, Mewhinney & Strauss, LLC | ||
Transamerica BlackRock Global Real Estate Securities VP | Seeks to maximize total return. | Transamerica Asset Management Inc./BlackRock Investment Management, LLC | ||
Transamerica BlackRock Government Money Market VP | Seeks as high a level of current income as is consistent with preservation of capital and liquidity. | Transamerica Asset Management, Inc./BlackRock Investment Management, LLC | ||
Transamerica BlackRock iShares Edge 40 VP | Seeks long-term capital appreciation and capital preservation. | Transamerica Asset Management, Inc./BlackRock Investment Management, LLC | ||
Transamerica BlackRock Tactical Allocation VP | Seeks capital appreciation with current income as a secondary objective. | Transamerica Asset Management, Inc./BlackRock Investment Management, LLC | ||
Transamerica International Growth VP | Seeks long-term capital appreciation. | Transamerica Asset Management, Inc./TDAM USA Inc. | ||
Transamerica Janus Balanced VP | Seeks long-term capital appreciation. | Transamerica Asset Management, Inc./Janus Capital Management LLC | ||
Transamerica Janus Mid-Cap Growth VP | Seeks long-term capital appreciation | Transamerica Asset Management, Inc./Janus Capital Management LLC | ||
Transamerica JPMorgan Asset Allocation Conservative VP | Seeks current income and preservation of capital. | Transamerica Asset Management, Inc./JPMorgan Investment Management Inc. | ||
Transamerica JPMorgan Asset Allocation Growth VP | Seeks long-term capital appreciation. | Transamerica Asset Management, Inc./JPMorgan Investment Management Inc. | ||
Transamerica JPMorgan Asset Allocation Moderate VP | Seeks capital appreciation and current income. | Transamerica Asset Management, Inc./JPMorgan Investment Management Inc. | ||
Transamerica JPMorgan Asset Allocation Moderate Growth VP | Seeks capital appreciation with current income as a secondary objective. | Transamerica Asset Management, Inc./JPMorgan Investment Management Inc. | ||
Transamerica JPMorgan Core Bond VP | Seeks total return, consisting of current income and capital appreciation. | Transamerica Asset Management, Inc./JPMorgan Investment Management Inc. | ||
Transamerica JPMorgan Enhanced Index VP | Seeks to earn a total return modestly in excess of the total return performance of the S&P 500® (including the reinvestment of dividends) while maintaining a volatility of return similar to the S&P 500® | Transamerica Asset Management, Inc./J.P. Morgan Investment Management Inc. | ||
Transamerica JPMorgan International Moderate Growth VP | Seeks capital appreciation with current income as a secondary objective. | Transamerica Asset Management, Inc./JPMorgan Investment Management Inc. | ||
Transamerica JPMorgan Tactical Allocation | Seeks current income and preservation of capital. | Transamerica Asset Management, Inc./JPMorgan Investment Management Inc. | ||
Transamerica Managed Risk-Balanced ETF VP | Seeks to balance capital appreciation and income. | Transamerica Asset Management, Inc./Milliman Financial Risk Management LLC | ||
Transamerica Managed Risk Growth ETF VP | Seeks capital appreciation as a primary objective and income as a secondary objective. | Transamerica Asset Management, Inc./Milliman Financial Risk Management LLC | ||
Transamerica Morgan Stanley Capital Growth VP | Seeks to maximize long-term growth. | Transamerica Asset Management, Inc./Morgan Stanley Investment Management Inc. | ||
Transamerica Morgan Stanley Global Allocation VP | Seeks high total return. | Transamerica Asset Management, Inc./Morgan Stanley Investment Management Inc. | ||
Transamerica Multi-Managed Balanced VP | Seeks to provide a high total investment return through investments in a broadly diversified portfolio of stocks, bonds and money market instruments. | Transamerica Asset Management, Inc./Aegon USA Investment Management, LLC | ||
Transamerica PIMCO Tactical Balanced VP | Seeks a combination of capital appreciation and income. | Transamerica Asset Management, Inc./Pacific Investment Management Company LLC |
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Transamerica PIMCO Tactical Conservative VP | Seeks a combination of capital appreciation and income. | Transamerica Asset Management, Inc./Pacific Investment Management Company LLC | ||
Transamerica PIMCO Tactical Growth VP | Seeks a combination of capital appreciation and income. | Transamerica Asset Management, Inc./Pacific Investment Management Company LLC | ||
Transamerica PIMCO Total Return VP | Seeks maximum total return consistent with preservation of capital and prudent investment management. | Transamerica Asset Management, Inc./Pacific Investment Management Company LLC | ||
Transamerica QS Investors Active Asset Allocation Conservative VP | Seeks current income and preservation of capital. | Transamerica Asset Management, Inc./QS Investors, LLC | ||
Transamerica QS Investors Active Asset Allocation Moderate Growth VP | Seeks capital appreciation with current income as a secondary objective. | Transamerica Asset Management, Inc./QS Investors, LLC | ||
Transamerica QS Investors Active Asset Allocation Moderate VP | Seeks capital appreciation and current income. | Transamerica Asset Management, Inc./QS Investors, LLC | ||
Transamerica Small/Mid Cap Value VP | Seeks to maximize total return. | Transamerica Asset Management, Inc./Systematic Financial Management, L.P. | ||
Transamerica T. Rowe Price Small Cap VP | Seeks long-term growth of capital by investing primarily in common stocks of small growth companies. | Transamerica Asset Management, Inc./T. Rowe Price Associates, Inc. | ||
Transamerica WMC US Growth VP | Seeks to maximize long-term growth. | Transamerica Asset Management, Inc./Wellington Management Company LLP | ||
ProFunds Trust
| ||||
ProFund VP Asia 30 | Seeks investment results, before fees and expenses, that correspond to the performance of the ProFunds Asia 30 Index. | ProFund Advisors LLC | ||
ProFund VP Basic Materials | Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. Basic MaterialsSM Index. | ProFund Advisors LLC | ||
ProFund VP Bull | Seeks investment results, before fees and expenses, that correspond to the performance of the S&P 500® Index. | ProFund Advisors LLC | ||
ProFund VP Consumer Services | Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. Consumer ServicesSM Index. | ProFund Advisors LLC | ||
ProFund VP Emerging Markets | Seeks investment results, before fees and expenses, that correspond to the performance of the S&P/BNY Mellon Emerging 50 ADR Index (USD). | ProFund Advisors LLC | ||
ProFund VP Europe 30 | Seeks investment results, before fees and expenses, that correspond to the performance of the ProFunds Europe 30 Index. | ProFund Advisors LLC | ||
ProFund VP Falling U.S. Dollar | Seeks daily investment results, before fees and expenses, that correspond to the daily performance of the basket of non-U.S. currencies included in the ICE® U.S. Dollar Index®. | ProFund Advisors LLC | ||
ProFund VP Financials | Seeks investments results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. FinancialsSM Index. | ProFund Advisors LLC | ||
ProFund VP Government Money Market | The Fund seeks a high level of current income consistent with liquidity and preservation of capital. | ProFund Advisors LLC | ||
ProFund VP International | Seeks investment results, before fees and expenses, that correspond to the performance of the MSCI EAFE Index. | ProFund Advisors LLC |
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ProFund VP Japan | Seeks investment results, before fees and expenses, that correspond to the performance of the Nikkei 225 Stock Average. | ProFund Advisors LLC | ||
ProFund VP Mid-Cap | Seeks investment results, before fees and expenses, that correspond to the performance of the S&P MidCap 400® Index. | ProFund Advisors LLC | ||
ProFund VP NASDAQ 100 | Seeks investment results, before fees and expenses, that correspond to the performance of the Nasdaq - 100® Index. | ProFund Advisors LLC | ||
ProFund VP Oil & Gas | Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. Oil & GasSM Index. | ProFund Advisors LLC | ||
ProFund VP Pharmaceuticals | Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. Select PharmaceuticalsSM Index. | ProFund Advisors LLC | ||
ProFund VP Precious Metals | Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones Precious MetalsSM Index. | ProFund Advisors LLC | ||
ProFund VP Short Emerging Markets | Seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the return of the S&P/BNY Mellon Emerging 50 ADR Index (USD) for a single day, not for any other period. | ProFund Advisors LLC | ||
ProFund VP Short International | Seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the return of the MSCI EAFE Index for a single day, not for any other period. | ProFund Advisors LLC | ||
ProFund VP Short NASDAQ 100 | Seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the return of the Nasdaq-100® Index for a single day, not for any other period. | ProFund Advisors LLC | ||
ProFund VP Short Small-Cap | Seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the return of the Russell 2000® Index for a single day, not for any other period. | ProFund Advisors LLC | ||
ProFund VP Small-Cap | Seeks investment results, before fees and expenses, that correspond to the performance of the Russell 2000® Index. | ProFund Advisors LLC | ||
ProFund VP Small-Cap Value | Seeks investment results, before fees and expenses, that correspond to the performance of the S&P SmallCap 600® Value Index. | ProFund Advisors LLC | ||
ProFund VP Telecommunications | Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. Select TelecommunicationsSM Index. | ProFund Advisors LLC | ||
ProFund VP U.S. Government Plus | Seeks daily investment results, before fees and expenses, that correspond to one and one-quarter times (1.25x) the daily price movement of the most recently issued Long Bond. | ProFund Advisors LLC | ||
ProFund VP UltraNASDAQ 100 | Seeks daily investment results, before fees and expenses, that correspond to two times (2x) the return of the Nasdaq-100® Index for a single day, not for any other period. | ProFund Advisors LLC | ||
ProFund VP UltraSmall-Cap | Seeks daily investment results, before fees and expenses, that correspond to two times (2x) the return of the Russell 2000® Index for a single day, not for any other period. | ProFund Advisors LLC | ||
ProFund VP Utilities | Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. UtilitiesSM Index. | ProFund Advisors LLC |
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III. | The following hereby replaces the footnote 2 for the Cash Withdrawal Charge table (p. 7) in the Fee Tables section (p. 5) of the prospectus: |
We currently charge $20 for an overnight delivery ($30 for Saturday delivery) and $50 for wire service. You can obtain further information about these charges by contacting us at our mailing address or our Service Center.
IV. | The following hereby replaces the Range of Expenses for the Portolios1,2 (p. 20) Fee Tables section (p. 5) of the prospectus: |
The table below shows the lowest and highest total operating expenses charged by the portfolios during the fiscal year ended December 31, 2019. Expenses of the portfolios may be higher or lower in the future. More detail concerning each portfolios fees and expenses is contained in the prospectus for each portfolio.
Lowest | Highest | |||
Total Annual Portfolio Operating Expenses (total of all expenses that are deducted from portfolio assets, including management fees, 12b-1 fees, and other expenses) | 0.29% | 5.49% | ||
Net Annual Portfolio Operating Expenses (total of all expenses that are deducted from portfolio assets, including management fees, 12b-1 fees, and other expenses, after contractual waiver of fees and expenses)3 | 0.29% | 1.68% |
1 The portfolio expenses used to prepare this table were provided to Transamerica by the funds. The expenses shown are those incurred for the year ended December 31, 2019. Current or future expenses may be greater or less than those shown.
2 The table showing the range of expenses for the portfolios takes into account the expenses of several Transamerica Series Trust asset allocation portfolios that are each a fund of funds. A fund of funds portfolio typically allocates its assets, within predetermined percentage ranges, among certain other Fund portfolios and affiliated Fund portfolios (each such portfolio an Acquired Fund). Each fund of funds has its own set of operating expenses, as does each of the portfolios in which it invests. In determining the range of portfolio expenses, Transamerica took into account the information received from those funds on the combined actual expenses for each fund of funds and for the portfolios in which it invests. See the prospectuses for the Transamerica Series Trust for a presentation of all applicable Acquired Fund fees and expenses.
3 The range of Net Annual Portfolio Operating Expenses takes into account contractual arrangements for 28 portfolios that require a portfolios investment adviser to reimburse or waive portfolio expenses until April 30, 2021.
V. | The following hereby replaces the Transamerica Premier subsection (p. 20) of the Transamerica Premier, The Separate Account, The Fixed Account and the Portfolios section (p. 20) of the prospectus: |
Transamerica Life Insurance Company
Transamerica Life Insurance Company, located at 4333 Edgewood Road NE, Cedar Rapids, Iowa 52499, is the insurance company issuing the Policy.
Transamerica Life Insurance Company was incorporated under the laws of the State of Iowa on April 19, 1961 as NN Investors Life Insurance Company, Inc. It is engaged in the sale of life and health insurance policies and annuity contracts. The Company is licensed in the District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands, and all states except New York.
The Company is a wholly-owned indirect subsidiary of Transamerica Corporation which conducts most of its operations through subsidiary companies engaged in the insurance business or in providing non-insurance financial services. All of the stock of Transamerica Corporation is indirectly owned by Aegon N.V. of The Netherlands, the securities of which are publicly traded. Aegon N.V., a holding company, conducts its business through subsidiary companies engaged primarily in the insurance business.
Financial Condition of the Company
The benefits under the Policy are paid by TLIC from its general account assets and/or your cash value held in the Separate Account. It is important that you understand that payment of the benefits is not assured and depends upon certain factors discussed below.
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Assets in the Separate Account. You assume all of the investment risk for your investment base that is allocated to the investment divisions of the Separate Account. Your investment base in those investment divisions constitutes a portion of the assets of the Separate Account. These assets are segregated and insulated from our general account, and may not be charged with liabilities arising from any other business that we may conduct.
Assets in the General Account. Any guarantees under the Policy that exceed your investment base are paid from our general account (and not the Separate Account). Therefore, any amounts that we may be obligated to pay under the Policy in excess of investment base are subject to our financial strength and claims-paying ability and our long-term ability to make such payments. The assets of the Separate Account, however, are also available to cover the liabilities of our general account, but only to the extent that the Separate Account assets exceed the Separate Account liabilities arising under the Policies supported by it. We issue other types of insurance policies and financial products as well, and we also pay our obligations under these products from our assets in the general account.
Our Financial Condition. As an insurance company, we are required by state insurance regulation to hold a specified amount of reserves in order to meet all the contractual obligations of our general account. We monitor our reserves so that we hold sufficient amounts to cover actual or expected contract and claims payments. However, it is important to note that there is no guarantee that we will always be able to meet our claims-paying obligations, and that there are risks to purchasing any insurance product.
State insurance regulators also require insurance companies to maintain a minimum amount of capital, which acts as a cushion in the event that the insurer suffers a financial impairment, based on the inherent risks in the insurers operations. These risks include those associated with losses that we may incur as the result of defaults on the payment of interest or principal on our general account assets, which include bonds, mortgages, general real estate investments, and stocks, as well as the loss in market value of these investments. We also experience liquidity risk if our general account assets cannot be readily converted into cash to meet obligations to our contract owners, or to provide the collateral necessary to finance our business operations.
We are continuing to evaluate our investment portfolio to mitigate market risk and actively manage the investments in the portfolio.
How to Obtain More Information. We encourage contract owners to read and understand our financial statements. We prepare our financial statements on a statutory basis. Our financial statements, which are presented in conformity with accounting practices prescribed or permitted by the Iowa Department of Insurance as well as the audited financial statements of the Separate Account are located in the Statement of Additional Information (SAI). For a free copy of the SAI, simply call or write us at the phone number or address of our Administrative Office referenced in this prospectus. In addition, the SAI is available on the SECs website at www.sec.gov. Our financial strength ratings which reflect the opinions of leading independent rating agencies of our ability to meet our obligations to our policy Owners, are available on our website (www.transamerica.com/individual/what-we-do/about-us/financial-strength/), and the websites of these nationally recognized statistical ratings organizations A.M. Best Company (www.ambest.com), Moodys Investors Service (www.moodys.com), Standard & Poors Rating Services (www.standardandpoors.com) and Fitch, Inc. (www.fitchratings.com).
VI. | The following hereby replaces The Separate Account subsection (p. 21) of the Transamerica Premier, the Separate Account, the Fixed Account, and the Portfolios section (p. 20) of the prospectus. |
The separate account invests in shares of the portfolios of a fund. Each portfolio is an investment division of a fund, which is an open-end investment management company registered with the SEC. Such registration does not involve supervision of the management or investment practices or policies of the portfolios by the SEC.
Each portfolios assets are held separate from the assets of the other portfolios, and each portfolio has investment objectives and policies that are different from those of the other portfolios. Thus, each portfolio operates as a separate investment fund, and the income or loss of one portfolio has no effect on the investment performance of any other portfolio. Pending any required approval by a state insurance regulatory authority, certain subaccounts and corresponding portfolios may not be available to residents of some states.
Each portfolios investment objective(s) and policies are summarized below. There is no assurance that a portfolio will achieve its stated objective(s). Certain portfolios may have investment objectives and policies similar to other portfolios that are managed by the same investment adviser or sub-adviser. The investment results of the portfolios, however, may be higher or lower than those of such other portfolios. We do not guarantee or make any representation that the investment results of the portfolios will be comparable to any other portfolio, even those with the same investment adviser or manager.
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Certain portfolios invest substantially all of their assets in portfolios of other funds. (See the chart above listing portfolios available under the Policy.) As a result, you will pay fees and expenses at both portfolio levels. This will reduce your investment return. These arrangements are referred to as fund of funds or master-feeder funds. Funds of funds or master-feeder structures may have higher expenses than portfolios that invest directly in debt or equity securities.
As described in more detail in the underlying portfolio prospectuses, certain underlying portfolios employ a managed volatility strategy that is intended to reduce the underlying portfolios overall volatility and downside risk, and to help us manage the risks associated with providing certain guarantees under the Policies. During rising markets, the hedging strategies employed to manage volatility could result in your Policy value rising less than would have been the case if you had been invested in an underlying portfolio with substantially similar investment objectives, securities, policies and strategies that does not utilize a volatility management strategy. In addition, the cost of these hedging strategies may have a negative impact on performance. On the other hand, investing in underlying portfolios with a managed volatility strategy may be helpful in a declining market with higher market volatility because the hedging strategy will reduce your equity exposure in such circumstances. In such cases, your Policy value may decline less than would have been the case if you had not invested in underlying portfolios with a managed volatility strategy. There is no guarantee that a managed volatility strategy can achieve or maintain the underlying portfolios optimal risk targets, and the underlying portfolio may not perform as expected. Portfolios that employ a managed volatility strategy are identified by an * preceding the name of the portfolio in the first column of the chart above.
Certain portfolios may employ hedging strategies to provide for downside protection during sharp downward movements in equity markets. (See chart above listing portfolios available under the Policy.) The cost of these hedging strategies could limit the upside participation of the portfolio in rising equity markets relative to other portfolios. You should consult with your registered representative to determine which combination of investment choices is appropriate for you.
You can find more detailed information about the portfolios, including a description of risks, in the fund prospectuses. You may obtain a free copy of the fund prospectuses by contacting us at our administrative office at 1-800-851-9777 or visiting our website at www.tlic.transamerica.com. You should read the fund prospectuses carefully.
Note: If you received a summary prospectus for a portfolio listed above, please follow the directions on the first page of the summary prospectus to obtain a copy of the full fund prospectus.
SELECTION OF UNDERLYING PORTFOLIOS
The underlying portfolios offered through this product are selected by TLIC. TLIC may consider various factors, including, but not limited to, asset class coverage, the alignment of the investment objectives of an underlying portfolio with our hedging strategy, the strength of the advisers or sub-advisers reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor that we may consider is whether the underlying portfolio or its service providers (e.g., the investment adviser or sub-advisers) or its affiliates will make payments to us or our affiliates in connection with certain administrative, marketing, and support services, or whether affiliates of the portfolio can provide marketing and distribution support for sales of the Policies. (For additional information on these arrangements, please refer to the section of this prospectus entitled Revenues We Receive.) We review the portfolios periodically and may remove a portfolio or limit its availability to new premiums and/or transfers of cash value if we determine that a portfolio no longer satisfies one or more of the selection criteria, and/or if the portfolio has not attracted significant allocations from policyowners. We have included the Transamerica Series Trust portfolios at least in part because they are managed by TAM, our directly owned subsidiary.
You are responsible for choosing the portfolios, and the amounts allocated to each, that are appropriate for your own individual circumstances and your investment goals, financial situation, and risk tolerance. Because investment risk is borne by you, decisions regarding investment allocations should be carefully considered. We do not recommend or endorse any particular underlying fund portfolio and we do not provide investment advice.
In making your investment selections, we encourage you to thoroughly investigate all of the information that is available to you regarding the portfolios including each funds prospectus, statement of additional information and annual and semi-annual reports. Other sources, such as the underlying funds website, provide more current information including information about any regulatory actions or investigations relating to a fund or underlying fund portfolio. After you select portfolios for your initial premium, you should monitor and periodically re-evaluate your allocations to determine if they are still appropriate.
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You bear the risk of any decline in your cash value resulting from the performance of the portfolios you have chosen.
ADDITION, DELETION, OR SUBSTITUTION OF PORTFOLIOS
We do not guarantee that each portfolio will always be available for investment through the Policy. We reserve the right, subject to compliance with applicable law, to add new portfolios or portfolio classes, close existing portfolios or portfolio classes, or substitute portfolio shares that are held by any subaccount for shares of a different portfolio. New or substitute portfolios may have different fees and expenses and their availability may be limited to certain classes of purchasers. We will not add, delete or substitute any shares attributable to your interest in a subaccount without notice to you and prior approval of the SEC, to the extent required by the 1940 Act or other applicable law. We may also decide to purchase securities from other portfolios for the separate account. We reserve the right to transfer separate account assets to another separate account that we determine to be associated with the class of contracts to which the Policy belongs.
YOUR RIGHT TO VOTE PORTFOLIO SHARES
Even though we are the legal owner of the portfolio shares held in the subaccounts, and have the right to vote on all matters submitted to shareholders of the portfolios, we will vote our shares only as policyowners instruct, as long as such action is required by law.
Before a vote of a portfolios shareholders occurs, you will receive voting materials from us. We will ask you to instruct us on how to vote and to return your voting instructions to us in a timely manner. You will have the right to instruct us on the number of portfolio shares that corresponds to the amount of cash value you have in that portfolio (as of a date set by the portfolio).
If we do not receive voting instructions on time from some policyowners, we will vote those shares as well as shares of the fund that the Insurer itself owns in the same proportion as the timely voting instructions we receive. Therefore, because of proportional voting, a small number of policyowners may control the outcome of a vote. Should federal securities laws, regulations and interpretations change, we may elect to vote portfolio shares in our own right. If required by state insurance officials, or if permitted under federal regulation, we may disregard certain owner voting instructions. If we ever disregard voting instructions, we will send you a summary in the next annual report to policyowners advising you of the action and the reasons we took such action.
VII. | The following hereby amends the Premium Limitations & Payments section (p. 44) of the prospectus: |
We will not allow the premiums you pay to exceed the current maximum premium limitations, if applicable, by which the Policy qualifies as life insurance under federal tax laws. (For more information regarding the Guideline Premium Test, please refer to the section entitled Death Benefit in this prospectus.)
This maximum is set forth in your Policy. If you make a payment that would cause your total premiums to be greater than the maximum premium limitations, we generally will return the excess portion of the premium payment, with interest, within 60 days after the end of the Policy year. In addition, we reserve the right to refund a premium or require evidence of insurability if the premium would increase the death benefit by more than the amount of the premium. We will not accept a payment that will cause the Policy to become a modified endowment contract without your consent. Please refer to the section of this prospectus entitled Federal Income Tax Considerations for more information regarding tax considerations regarding your Policy or consult a qualified tax advisor.
Note: We reserve the right to reject any form of payment. Any unacceptable forms of payment will be returned.
VIII. | The following replaces the Disruptive Trading and Marketing Timing subsection (p. 45) of the Transfers section (p. 44) of the prospectus: |
Disruptive Trading and Market Timing
Statement of Policy. This variable insurance contract was not designed to accommodate market timing or facilitate frequent or large trading through transfers among the investment divisions of the Separate Account (Subaccounts) by market timers or frequent or disruptive traders. (Both frequent and large transfers may be considered disruptive.)
Market timing and disruptive trading can adversely affect you, other contract owners, beneficiaries and underlying Funds.
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These adverse effects may include:
1. | Dilution of the interests of long-term investors in a Subaccount if purchases or transfers into or out of an underlying Fund are made at prices that do not reflect an accurate value for the underlying Funds investments (some market timers attempt to do this through methods known as time-zone arbitrage and liquidity arbitrage); |
2. | An adverse effect on Fund management, such as: |
a. | Impeding a Fund managers ability to sustain an investment objective. |
b. | Causing the underlying Fund to maintain a higher level of cash than would otherwise be the case. |
c. | Causing an underlying Fund to liquidate investments prematurely (or otherwise at an inopportune time) in order to pay withdrawals or Transfers out of the underlying Fund. |
3. | Increased brokerage and administrative expenses. |
These risks and costs are borne by all contract owners invested in those Subaccounts, not just those making the Transfers.
We have developed policies and procedures with respect to market timing and disruptive trading (which vary for certain Subaccounts at the request of the corresponding underlying Funds) and we do not make special arrangements or grant exceptions to accommodate market timing or other potentially disruptive or harmful trading. As discussed herein, we cannot detect or deter all market timing or potentially disruptive trading. Do not invest with us if you intend to conduct market timing or potentially disruptive trading.
Detection. We employ various means in an attempt to detect and deter market timing and disruptive trading. However, despite our monitoring we may not be able to detect nor halt all harmful trading. In addition, because other insurance companies (and retirement plans) with different policies and procedures may invest in the underlying Funds, we cannot guarantee that all harmful trading will be detected or that an underlying Fund will not suffer from market timing and disruptive trading among Subaccounts of variable products issued by these other insurance companies or retirement plans.
Deterrence. If we determine that you are engaged in market timing or disruptive trading, we may take one or more actions in an attempt to halt such trading. Your ability to make Transfers is subject to modification or restriction if we determine, in our sole opinion, that your exercise of the Transfer privilege may disadvantage or potentially harm the rights or interests of other contract owners (or others having an interest in the variable insurance products). As described below, restrictions may take various forms but, under our current policies and procedures, will include loss of expedited Transfer privileges. We consider Transfers by telephone, fax, or overnight mail to be expedited Transfers. This means that we would accept only written Transfer requests with an original signature sent to us only by U.S. mail. We may also restrict the Transfer privileges of others acting on your behalf, including your registered representative or an asset allocation or investment advisory service.
We reserve the right to reject any premiums or Transfer request from any person without prior notice, if, in our judgment, (1) the payment or Transfer, or series of Transfers, would have a negative impact on an underlying Funds operations; or (2) if an underlying Fund would reject or has rejected our purchase order or has instructed us not to allow that purchase or Transfer; or (3) because of a history of market timing or disruptive trading.
We may impose other restrictions on Transfers, or even prohibit Transfers for any owner who, in our view, has abused, or appears likely to abuse, the Transfer privilege on a case-by-case basis. We may, at any time and without prior notice, discontinue Transfer privileges, modify our procedures, impose holding period requirements, or limit the number, size, frequency, manner, or timing of Transfers we permit. We also reserve the right to reverse a potentially harmful Transfer if an underlying Fund refuses or reverses our order; in such instances some contract owners may be treated differently than others in that some Transfers may be reversed and others allowed. For all of these purposes, we may aggregate two or more variable insurance products that we believe are connected by contract owners or persons engaged in trading on behalf of contract owners.
In addition to our internal policies and procedures, we will administer your variable insurance product to comply with any applicable state, federal, and other regulatory requirements concerning Transfers. We reserve the right to implement, administer, and charge you for any fee or restriction, including redemption fees, imposed by any underlying Fund. To the extent permitted by law, we also reserve the right to defer the Transfer privilege at any time that we are unable to purchase or redeem shares of any of the underlying Funds.
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Under our current policies and procedures, we do not:
● | Impose redemption fees on Transfers. |
● | Expressly limit the number or size of Transfers in a given period except for certain Subaccounts where an underlying Fund has advised us to prohibit certain Transfers that exceed a certain size. |
● | Provide a certain number of allowable Transfers in a given period. |
Redemption fees, Transfer limits, and other procedures or restrictions may be more or less successful than ours in deterring market timing or other disruptive trading, and in preventing or limiting harm from such trading.
We do not impose any prophylactic transfer restrictions. In the absence of any such restrictions (e.g., expressly limiting the number of trades within a given period or limiting trades by their size), it is possible that some level of market timing and disruptive trading will occur before it is detected and we take steps to deter it.
Please Note: The limits and restrictions described herein are subject to our ability to monitor Transfer activity. Our ability to detect market timing or other disruptive trading may be limited by operational and technological systems, as well as by our ability to predict strategies employed by contract owners (or those acting on their behalf) to avoid detection. As a result, despite our efforts to prevent harmful trading activity among the Subaccounts available under this variable insurance product, there is no assurance that we will be able to detect or deter market timing or disruptive trading by such contract owners or intermediaries acting on their behalf. Moreover, our ability to discourage and restrict market timing or disruptive trading may be limited by decisions of state regulatory bodies and court orders which we cannot predict.
Furthermore, we may revise our policies and procedures in our sole discretion at any time and without prior notice as we deem necessary or appropriate: (1) to better detect and deter market timing or other harmful trading that may adversely affect other contract owners, other persons with material rights under the variable insurance products, or underlying Fund shareholders generally; (2) to comply with state or federal regulatory requirements; or (3) to impose additional or alternative restrictions on owners engaging in market timing or disruptive trading among the Subaccounts under the variable insurance product. In addition, we may not honor Transfer requests if any Subaccount that would be affected by the Transfer is unable to purchase or redeem shares of its corresponding underlying Fund.
Underlying Fund Frequent Trading Policies. The underlying Funds may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares. Underlying Funds may, for example, assess a redemption fee (which we reserve the right to collect) on shares held for a relatively short period of time. The prospectuses for the underlying Funds describe any such policies and procedures. The frequent trading policies and procedures of an underlying Fund may be different, and more or less restrictive, than the frequent trading policies and procedures of other underlying Fund and the policies and procedures we have adopted for our variable insurance policies to discourage market timing and disruptive trading. Contract owners should be aware that we do not monitor Transfer requests from contract owners or persons acting on behalf of contract owners for compliance with, nor do we apply, the frequent trading policies and procedures of the respective underlying Funds that would be affected by the Transfers.
Contract owners should be aware that we are required to provide to an underlying Fund portfolio or its payee, promptly upon request, certain information about the trading activity of individual contract owners, and to restrict or prohibit further purchases or transfers by specific contract owners or persons acting on their behalf, if identified by an underlying Fund portfolio as violating the frequent trading policies established for the underlying Fund portfolio. Please read the Funds prospectus for information about restrictions on transfers.
Omnibus Order. Contract owners and other persons with material rights under the variable insurance products also should be aware that the purchase and redemption orders received by the underlying Funds generally are omnibus orders from intermediaries such as retirement plans and Separate Accounts funding variable insurance products. The omnibus orders reflect the aggregation and netting of multiple orders from individual retirement plan participants and individual owners of variable insurance products. The omnibus nature of these orders may limit the underlying Funds ability to apply their respective frequent trading policies and procedures.
We cannot guarantee that the underlying Funds will not be harmed by Transfer activity relating to the retirement plans or other insurance companies that may invest in the underlying Funds. These other insurance companies are responsible for their own policies and procedures regarding frequent Transfer activity. If their policies and procedures fail to successfully discourage harmful Transfer activity, it will affect other owners of underlying Fund shares, as well as the owners of all of the variable annuity contracts or life insurance policies, including ours, whose variable Account Options correspond to the
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affected underlying Funds. In addition, if an underlying Fund believes that an omnibus order we submit may reflect one or more Transfer requests from owners engaged in market timing and disruptive trading, the underlying Fund may reject the entire omnibus order and thereby delay or prevent us from implementing your request.
IX. | The following hereby replaces the Federal Income Tax Considerations section (p. 63) of the prospectus: |
The following summarizes some of the basic federal income tax considerations associated with a Policy and does not purport to be complete or to cover all situations. This discussion is not intended as tax advice. Please consult counsel or other qualified tax professionals for more complete information. We base this discussion on our understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service (the IRS). Federal income tax laws and the current interpretations by the IRS may change.
Tax Status of the Policy
A Policy must satisfy certain requirements set forth in the Internal Revenue Code (the Code) in order to qualify as a life insurance policy for federal income tax purposes and to receive the tax treatment normally accorded life insurance policies under federal tax law. Guidance as to how these requirements are to be applied is limited. Nevertheless, we believe that the Policy should generally satisfy the applicable Code requirements.
In certain circumstances, owners of variable life insurance policies have been considered for federal income tax purposes to be the owners of the assets of the separate account supporting their policies due to their ability to exercise investment control over those assets. Where this is the case, the policy owners have been currently taxed on income and gains attributable to the separate account assets. There is little guidance in this area. We believe that the Policy does not give you investment control over separate account assets.
In addition, the Code requires that the investments of the separate account be adequately diversified in order to treat the Policy as a life insurance policy for federal income tax purposes. We intend that the separate account, through the portfolios, will satisfy these diversification requirements.
The following discussion assumes that the Policy will qualify as a life insurance policy for federal income tax purposes.
Tax Treatment of Policy Benefits
In General. We believe that the Policy described in this prospectus is a life insurance policy under Code Section 7702. Section 7702 defines a life insurance policy for federal income tax purposes and places limits on the relationship of the cash value to the death benefit. As life insurance policies, the death benefits of the policies are generally excludable from the gross income of the beneficiaries. In the absence of any guidance from the IRS on the issue, we believe that providing an amount at risk after attained age 99 in the manner provided should be sufficient to maintain the excludability of the death benefit after attained age 99. Lack of specific IRS guidance, however, makes the tax treatment of the death benefit after attained age 99 uncertain. Also, any increase in cash value should generally not be taxable until received by you or your designee. However, if your Policy is a modified endowment contract as defined in Code Section 7702A you may be taxed to the extent of gain in the Policy when you take a Policy loan, pledge or assign the Policy. Federal, state and local transfer, estate and other tax consequences of ownership or receipt of Policy proceeds depend on your circumstances and the beneficiarys circumstances. A tax professional should be consulted on these consequences.
Generally, you will not be deemed to be in constructive receipt of the cash value until there is a distribution. When distributions from a Policy occur, or when loans are taken out from or secured by a Policy (e.g., by assignment), the tax consequences depend on whether the Policy is classified as a MEC. Moreover, if a loan from a Policy that is not a MEC is outstanding when the Policy is surrendered or lapses, the amount of outstanding indebtedness will be considered an amount distributed and will be taxed accordingly.
Modified Endowment Contracts. Under the Code, certain life insurance policies are classified as MECs and receive less favorable tax treatment than other life insurance policies. The rules are too complex to summarize here, but generally depend on the amount of premiums paid during the first seven Policy years or in the seven Policy years following certain changes in the Policy. Changes that would cause a contract to enter a new seven-year test period include, for example, an increase in the death benefit that is not the result of a premium necessary to keep the Policy in-force. Additionally, a reduction in benefits during a seven-year test period could cause a Policy to become a MEC. Due to the Policys flexibility, each Policys
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circumstances will determine whether the Policy is classified as a MEC. If you do not want your Policy to be classified as a MEC, you should consult a tax professional to determine the circumstances, if any, under which your Policy would or would not be classified as a MEC.
Upon issue of your Policy, we will notify you as to whether or not your Policy is classified as a MEC based on the initial premium we receive. If a payment would cause your Policy to become a MEC, you and your registered representative will be notified and we will not apply the premium. At that time, you will need to notify us if you want to continue your Policy as a MEC. Unless you notify us that you do want to continue your Policy as a MEC, we will refund the dollar amount of the excess premium that would cause the Policy to become a MEC.
Distributions (other than Death Benefits) from MECs. Policies classified as MECs are subject to the following tax rules:
● | All distributions other than death benefits from a MEC, including distributions upon surrender and cash withdrawals, will be treated first as distributions of gain taxable as ordinary income. They will be treated as tax-free recovery of the owners investment in the Policy only after all gain has been distributed. Your investment in the Policy is generally your total premium payments. When a distribution is taken from the Policy, your investment in the Policy is reduced by the amount of the distribution that is tax-free. |
● | Loans taken from or secured by (e.g., by assignment) or pledges of such a Policy and increases in cash value secured by such loan or pledge are treated as distributions and taxed accordingly. If the Policy is part of a collateral assignment split dollar arrangement, the initial assignment as well as increases in cash value during the assignment may be treated as distributions and considered taxable. |
● | A 10% additional federal income tax is imposed on the amount included in income except where the distribution or loan is made when you have reached age 591⁄2 or are disabled, or where the distribution is part of a series of substantially equal periodic payments for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and the beneficiary. |
● | If a Policy becomes a MEC, distributions that occur during the Policy year will be taxed as distributions from a MEC. In addition, the IRS has the authority, but has not yet done so, to issue regulations providing that distributions from a Policy that are made within two years before the Policy becomes a MEC will also be taxed in this manner. |
Distributions (other than Death Benefits) from Policies that are not MECs. Distributions from a Policy that is not a MEC are generally treated first as a recovery of your investment in the Policy, and as taxable income after the recovery of all investment in the Policy. However, certain distributions which must be made in order to enable the Policy to continue to qualify as a life insurance policy for federal income tax purposes if Policy benefits are reduced during the first 15 Policy years may be treated in whole or in part as ordinary income subject to tax. Distributions from or loans from or secured by a Policy that is not a MEC are not subject to the 10% additional tax applicable to MECs.
Policy Loans. Loans from or secured by a Policy that is not a MEC are generally not treated as distributions. Instead, such loans are treated as indebtedness. If a loan from a Policy that is not a MEC is outstanding when the Policy is surrendered or lapses, the amount of the outstanding indebtedness will be taxed as if it were a distribution at that time. The tax consequences associated with Policy loans outstanding after the first 10 Policy years with preferred loan rates are less clear and a tax professional should be consulted about such loans.
Deductibility of Policy Loan Interest. In general, interest you pay on a loan from a Policy will not be deductible. Before taking out a Policy loan, you should consult a tax professional as to the tax consequences.
Investment in the Policy. Your investment in the Policy is generally the sum of the premium payments you made reduced by a withdrawal or distributions from the Policy that are tax-free.
Withholding. To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipients federal income tax liability. The federal income tax withholding rate is generally 10% of the taxable amount of the distribution. Withholding applies only if the taxable amount of all distributions is at least $200 during a taxable year. Some states also require withholding for state income taxes. With the exception of amounts that represent eligible rollover distributions from Pension Plans and 403(b) arrangements, which are subject to mandatory withholding of 20% for federal tax, recipients can generally elect, however, not to have tax withheld from distributions. If the taxable distributions are delivered to foreign countries, U.S. persons may not elect out of withholding. Taxable distributions to non-resident aliens are generally subject to withholding at a 30% rate unless withholding is eliminated under an international treaty with the United States. The payment of death benefits is generally not subject to withholding.
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Business Uses of the Policy. The Policy may be used in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others. The tax consequences of such plans and business uses of the Policy may vary depending on the particular facts and circumstances of each individual arrangement and business use of the Policy. Therefore, if you are contemplating using the Policy in any such arrangement, you should be sure to consult a tax professional as to tax attributes of the arrangement and in its use of life insurance. In recent years, moreover, Congress and the IRS have adopted new rules relating to nonqualified deferred compensation and to life insurance owned by businesses and life insurance used in split-dollar arrangements. The IRS has recently issued new guidance regarding concerns in the use of life insurance in employee welfare benefit plans, including, but not limited to, the deduction of employer contributions and the status of such plans as listed transactions. Any business contemplating the purchase of a new Policy or a change in an existing Policy should consult a tax professional. In addition, Section 101(j) of the Internal Revenue Code imposes notice, consent and other provisions on policies owned by employers and certain of their affiliates, owners and employees in order to receive death benefits tax-free and it requires additional tax reporting requirements.
Alternative Minimum Tax. There also may be an indirect tax upon the income in the Policy or the proceeds of a Policy under the federal corporate alternative minimum tax, if the policyowner is subject to that tax.
Living Benefit Rider (an Accelerated Death Benefit). We believe that the single-sum payment we make under this rider should be fully excludible from the gross income of the beneficiary, except in certain business contexts. You should consult a tax professional about the consequences of adding this rider to your Policy, or requesting a single-sum payment.
Continuation of Policy Beyond Attained Age 99. The tax consequences of continuing the Policy beyond the insureds attained age 99 are unclear and may include taxation of the gain in the Policy or the taxation of the death benefit in whole or in part. You should consult a tax professional if you intend to keep the Policy in force beyond the insureds attained age 99.
Other Tax Considerations. The transfer of the Policy or designation of a beneficiary may have federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate, and generation-skipping transfer taxes. The individual situation of each owner or beneficiary will determine the extent, if any, to which federal, state, and local transfer and inheritance taxes may be imposed and how ownership or receipt of Policy proceeds will be treated for purposes of federal, state and local estate, inheritance, generation-skipping and other taxes. Special Rules for Pension Plans and Section 403(b) Arrangements. If the Policy is purchased in connection with a section 401(a) qualified pension or profit sharing plan, including a section 401(k) plan, or in connection with a section 403(b) plan or program, federal and state income and estate tax consequences could differ from those stated in this prospectus. The purchase may also affect the qualified status of the plan. You should consult a qualified tax professional in connection with such purchase. Policies owned under these types of plans may be subject to the Employee Retirement Income Security Act of 1974, or ERISA, which may impose additional requirements on the purchase of policies by such plans. You should consult a qualified tax professional regarding ERISA.
Please Note:
● | Foreign Account Tax Compliance Act (FATCA). The discussion above provides general information regarding U.S. federal income tax consequences to life and annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from life policies and annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, such purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchasers country of citizenship or residence. FATCA imposed additional reporting and documentation requirements where non-U.S. entities (including foreign corporations, partnerships, and trusts) purchase policies to identify U.S. persons who are beneficial owners of the policies. Additional withholding of U.S. tax may be imposed if such documentation is not provided. In furtherance of FATCA implementation, the U.S. has entered into Inter-Government Agreements (IGAs) with various foreign governments that require an exchange of information between U.S. financial institutions, including TLIC and the foreign governments regarding purchases of life insurance and annuities by their respective citizens. Prospective purchasers are advised to consult with a qualified tax professional regarding U.S., state, and foreign taxation with respect to a life insurance policy or an annuity contract purchase. |
● | In 2001, Congress enacted the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which modified the estate, gift and generation-skipping transfer taxes through 2009 and eliminated the estate tax (but not |
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the gift tax) and replaced it with a carryover basis income tax regime for estates of decedents dying in 2010, and also eliminated the generation-skipping transfer tax for transfers made in 2010. The 2010 Taxpayer Relief Act generally extended the EGTRRA provisions existing in 2009 and reunified the estate and gift transfer taxes for 2011 and 2012. The American Taxpayer Relief Act of 2012 made permanent certain of the changes to the estate, gift and generation-skipping transfer taxes. These provisions were modified again in December, 2017 by H.R. 1 (formerly known as the Tax Cuts and Jobs Act). The estate and gift tax unified credit basic exclusion amount increases to $10,000,000, subject to inflation adjustments (using the C-CPI-U), for taxable years beginning after December 31, 2017, and before January 1, 2026. This recent history of changes in these important tax provisions underscores the importance of seeking guidance from a qualified tax professional to help ensure that your estate plan adequately addresses possible transfer taxation of the Policy and its benefits in light of your needs and that of your beneficiaries under all possible scenarios. |
X. | The following is added to the Additional Information section (p. 71) of the prospectus: |
Payments to Contract Owners
We usually pay the amounts of any surrender, cash withdrawal, or death benefit within seven calendar days after we receive all applicable written notices and/or due proofs of death (in good order) at our Service Center. However, we can postpone such payments if any of the following occurs:
● | The New York Stock Exchange (NYSE) is closed, other than customary weekend and holiday closings, or trading on the NYSE is restricted. |
● | The SEC permits, by an order, the postponement for the protection of contract owners. |
● | An emergency exists that would make the disposal of securities held in the Separate Account or the determination of their value not reasonably practicable. |
In addition, if, pursuant to SEC rules, the Money Market Portfolio available in your policy suspends payment of redemption proceeds in connection with a liquidation of such Portfolio or as a result of Portfolio liquidity levels, then we will delay payment of any transfer, cash withdrawal, surrender, loan, or death benefit from the Money Market Portfolio Subaccount until the Portfolio pays redemption proceeds.
If you have submitted a recent check or draft, we have the right to defer payment of surrenders, cash withdrawals, or death benefit until such check or draft has been honored.
If mandated under applicable law, we may be required to reject a premium payment and/or block a contract owners account and thereby refuse to pay any request for transfers, withdrawals, surrenders, loans, or death benefits until instructions are received from the appropriate regulators. We may also be required to provide additional information about you or your account to governmental regulators.
Collateral Assignment
You may assign your Policy by filing a written request with us. We will not be bound by any assignment until we receive it in our records. Unless otherwise specified by you, the assignment will then take effect on the date the assignment is signed by you, subject to any payments made or actions taken by us prior to our recording of the assignment. We assume no responsibility for the validity or effect of any assignment of the Policy or any interest in it. Any death benefit which becomes payable to an assignee will be payable in a single sum and will be subject to proof of the assignees interest and the extent of the assignment.
Tax-Free Section 1035 Exchanges
You can generally exchange one life insurance policy for another policy covering the same insured in a tax-free exchange under Section 1035 of the Internal Revenue Code. Before making an exchange, you should compare both life insurance policies carefully. Remember that if you exchange another life insurance policy for the one described in this prospectus, you might have to pay a surrender charge on your old policy, other charges may be higher (or lower), and the benefits may be different. If the exchange does not qualify for Section 1035 treatment, or if your current policy is subject to a policy loan,
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you may also have to pay federal income tax on the exchange. Additionally, if you are under age 591⁄2 then you also may be subject to a federal tax penalty equal to 10% of the taxable amount. You should not exchange another life insurance policy for this one unless you determine, after knowing all the facts, that the exchange is in your best interest and not just better for the person selling you the Policy. (That person will generally earn a commission if you buy the Policy through an exchange or otherwise.)
Selection of Underlying Fund Portfolio
You are responsible for choosing the portfolios, and the amounts allocated to each, that are appropriate for your own individual circumstances and your investment goals, financial situation, and risk tolerance. Because investment risk is borne by you, decisions regarding investment allocations should be carefully considered. We do not recommend or endorse any particular underlying fund portfolio and we do not provide investment advice.
In making your investment selections, we encourage you to thoroughly investigate all of the information that is available to you regarding the portfolios including each funds prospectus, statement of additional information and annual and semi-annual reports. Other sources, such as the underlying funds website, provide more current information including information about any regulatory actions or investigations relating to a fund or underlying fund portfolio. After you select portfolios for your initial premium, you should monitor and periodically re-evaluate your allocations to determine if they are still appropriate. You bear the risk of any decline in your cash value resulting from the performance of the portfolios you have chosen.
Please note the following information regarding Government Money Market funds
There can be no assurance that a government money market fund will be able to maintain a stable net asset value per share. During extended periods of low interest rates, and partly as a result of insurance charges, the yield on a government money market fund may become extremely low and possibly negative. You could lose money by investing in a government money market fund.
Business Continuity
Our business operations may be adversely affected by volatile natural and man-made disasters, including (but not limited to) hurricanes, earthquakes, terrorism, civil unrest, military action, fires and explosions, pandemic diseases, and other catastrophes (Catastrophic Events). Over the past several years, changing weather patterns and climatic conditions have added to the unpredictability and frequency of natural disasters in certain parts of the world. Such uncertainty as to future trends and exposure may lead to financial losses to our businesses. Furthermore, Catastrophic Events may disrupt our operations and result in the loss of, or restricted access to, property and information about Transamerica and its clients. Such events may also impact the availability and capacity of our key personnel. If our business continuity plans have not included effective contingencies for Catastrophic Events, we may experience business disruption, damage to corporate reputation, and damage to financial condition for a prolonged period of time.
XI. | The following hereby replaces the Sending Forms and Transaction Requests in Good Order subsection (p. 71) of the Additional Information section (p. 71) of the prospectus: |
We cannot carry out your instructions to process a transaction relating to the Policy until we have received your instructions in good order at our mailing address (or our administrative office or website as appropriate). Good order means the actual receipt by us of the instructions relating to a transaction in writing or, when appropriate, by telephone or facsimile, or electronically along with all forms, information and supporting legal documentation (including any required spousal or joint owners consents) we require in order to effect the transaction. This information and documentation generally includes, to the extent applicable to the transaction: your completed application; the policy number; the transaction amount (in dollars or percentage terms); the names and allocations to and/or from the subaccounts affected by the requested transaction; the dated signatures of all owners (exactly as registered on the Policy) if necessary; Social Security Number or Taxpayer I.D.; and any other information or supporting documentation that we may require. To be in good order, instructions must be sufficiently clear so that we do not need to exercise any discretion to follow such instructions.
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XII. | The following hereby replaces the Cyber Security Risks subsection (p. 72) of Additional Information section (p. 71) the prospectus: |
Our operations support complex transactions and are highly dependent on the proper functioning of information technology and communication systems. Any failure of our information technology or communications systems may result in a material adverse effect on our results of operations and corporate reputation.
Any failure of or gap in the systems and processes necessary to support complex transactions and avoid systems failure, fraud, information security failures, processing errors, cyber intrusion, loss of data and breaches of regulation may lead to a materially adverse effect on our results of operations and corporate reputation. In addition, we must commit significant resources to maintain and enhance its existing systems in order to keep pace with applicable regulatory requirements, industry standards and customer preferences. If we fail to maintain secure and well-functioning information systems, we may not be able to rely on information for product pricing, compliance obligations, risk management and underwriting decisions. In addition, we cannot assure investors or consumers that interruptions, failures or breaches in security of these processes and systems will not occur, or if they do occur, that they can be timely detected and remediated. The occurrence of any of these events may have a materially adverse effect on our businesses, results of operations and financial condition.
A computer system failure or security breach may disrupt our business, damage our reputation and adversely affect our results of operations, financial condition and cash flows.
We rely heavily on computer and information systems and internet and network connectivity to conduct a large portion of our business operations. This includes the need to securely store, process, transmit and dispose of confidential information, including personal information, through a number of complex systems. In many cases this also includes transmission and processing to or through commercial customers, business partners and third-party service providers. The introduction of new technologies, computer system failures, cyber-crime attacks or security or data privacy breaches may materially disrupt our business operations, damage our reputation, result in regulatory and litigation exposure, investigation and remediation costs, and materially and adversely affect our results of operations, financial condition and cash flows.
The information security risk that we face includes the risk of malicious outside forces using public networks and other methods, including social engineering and the exploitation of targeted offline processes, to attack our systems and information. It also includes inside threats, both malicious and accidental. For example, human error, unauthorized user activity and lack of sufficiently automated processing can result in improper information exposure or use. We also face risk in this area due to its reliance in many cases on third-party systems, all of which may face cyber and information security risks of their own. Third-party administrators or distribution partners used by us or our affiliates may not adequately secure their own information systems and networks, or may not adequately keep pace with the dynamic changes in this area. Potential bad actors that target us and our applicable third parties may include, but are not limited to, criminal organizations, foreign government bodies, political factions, and others.
In recent years information security risk has increased sharply due to a number of developments in how information systems are used by companies such as us, but also by society in general. Threats have increased as criminals and other bad actors become more organized and employ more sophisticated techniques. At the same time companies increasingly make information systems and data available through the internet, mobile devices or other network connections to customers, employees and business partners, thereby expanding the attack surface that bad actors can exploit.
Large, global financial institutions such as us have been, and will continue to be subject to information security attacks for the foreseeable future. The nature of these attacks will also continue to be unpredictable, and in many cases may arise from circumstances that are beyond our control. If we fail to adequately invest in defensive infrastructure, timely response capabilities, technology and processes or to effectively execute against its information security strategy, it may suffer material adverse consequences.
To date the highest impact information security incidents that we have experienced are believed to have been the result of e-mail phishing attacks targeted at our business partners and commercial customers. This in turn led to unauthorized use of valid our website credentials to engage in fraudulent transactions and improper data exfiltration. Additionally, we have also faced other types of attacks, including but not limited to other types of phishing attacks and distributed denial of service (DDoS) attacks, as well as certain limited cases of unauthorized internal user activity, including activity between other units
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of Aegon. Although to our knowledge these events have thus far not been material in nature, our management recognizes the need to establish and maintain adequate information security systems that are capable of addressing the possibility of these types of attacks, as well as for the possibility of more significant and sophisticated information security attacks, in the future. There is no guarantee that the measures that we take will be sufficient to stop all types of attacks or mitigate all types of information security or data privacy risks.
We maintain cyber liability insurance to help decrease the impact of cyber-attacks and information security events, subject to the terms and conditions of the policy, however such insurance may not be sufficient to cover all applicable losses that we may suffer.
A breach of data privacy or security obligations may disrupt our business, damage our reputation and adversely affect financial conditions and results of operations.
Pursuant to applicable laws, various government agencies and independent administrative bodies have established numerous rules protecting the privacy and security of personal information and other confidential information held by us. For example, our businesses are subject to laws and regulations enacted by U.S. federal and state governments, including various regulatory organizations relating to the privacy and/or security of the information of customers, employees or others. These laws, among other things, increased compliance obligations, impacted our businesses collection, processing and retention of personal data, reporting of data breaches, and provide for penalties for non-compliance. As an example, the New York Department of Finance Services (NYDFS), pursuant to its cybersecurity regulation, requires financial institutions regulated by the NYDFS, including certain of our entities, to, among other things, satisfy an extensive set of minimum cyber security requirements, including but not limited to governance, management, reporting, policy, technology and control requirements. Numerous other U.S. laws also impose various information security and privacy related obligations with respect to various Company affiliates operating in the U.S., including but not limited to the Gramm-Leach-Bliley Act and related state laws (GLBA), the California Consumer Privacy Act (CCPA) and the Health Insurance Portability and Accountability Act (HIPAA), among many others. Other legislators and regulators with jurisdiction over our businesses are considering, or have already enacted, enhanced information security risk management and privacy rules and regulations. A number of our entities and affiliates are also subject to contractual restrictions with respect to the information of our clients and business partners. The Company, and numerous of its employees and business partners have access to, and routinely process, the personal information of consumers and employees. We rely on various processes and controls to protect the confidentiality, integrity and availability of personal information and other confidential information that is accessible to, or in the possession of, us, our systems, employees and business partners. It is possible that an employee, business partner or system could, intentionally or unintentionally, inappropriately disclose or misuse personal or confidential information. Our data or data in our possession could also be the subject of an unauthorized information security attack. If we fail to maintain adequate processes and controls or if we or our business partners fail to comply with relevant laws and regulations, policies and procedures, misappropriation or intentional or unintentional inappropriate disclosure or misuse of personal information or other confidential information could occur. Such control inadequacies or non-compliance could cause disrupted operations and misstated or unreliable financial data, materially damage our reputation or lead to increased regulatory scrutiny or civil or criminal penalties or litigation, which, in turn, could have a material adverse effect on our business, financial condition and results of operations. In addition, we analyze personal information and customer data to better manage our business, subject to applicable laws and regulations and other restrictions. It is possible that additional regulatory or other restrictions regarding the use of such techniques may be imposed. Additional privacy and information security obligations have been imposed by various governments with jurisdiction over the Company or its affiliates in recent years, and more such obligations are likely to be imposed in the near future across our operations. Such restrictions and obligations could have material impacts on our business, financial conditions and/or results of operations.
For a complete description regarding Transamericas policies for its websites, including the Privacy Policy and Terms of Use for such websites, please visit: www.transamerica.com/individual/privacy-policy and www.transamerica.com/individual/terms-of-use.
XIII. | The following hereby replaces the Legal Proceedings subsection (p. 72) of the Additional Information section (p. 71) of the prospectus: |
We, like other life insurance companies, are subject to regulatory and legal proceedings in the ordinary course of our business. Such legal and regulatory matters include proceedings specific to us and other proceedings generally applicable to
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business practices in the industry in which we operate. In some lawsuits and regulatory proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any litigation or regulatory proceeding cannot be predicted with certainty, at the present time, we believe that there are no pending or threatened proceedings or lawsuits that are likely to have a material adverse impact on the separate account, on TCIs ability to perform under its principal underwriting agreement, or on our ability to meet our obligations under the Policy.
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P R O S P E C T U S
May 1, 2017
TRANSAMERICA® ASSOCIATE FREEDOM ELITE BUILDER
issued through
WRL Series Life Account
By
Transamerica Premier Life Insurance Company
Administrative Office
570 Carillon Parkway
St. Petersburg, Florida 33716-1294
Please direct transactions, claim forms, payments and other correspondence and notices as follows:
Transaction Type | Direct or Send to | |
Telephonic Transaction | 1-727- 299-1800 or 1-800-851-9777 (toll free) | |
Facsimile Transaction | 1-727-299-1648 (subaccount transfers only) 1-727-299-1620 (all other facsimile transactions) | |
Electronic Transaction | www.premier.transamerica.com | |
All payments made by check, and all claims, correspondence and notices |
Mailing Address: 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-0001 |
An Individual Flexible Premium Variable Life Insurance Policy
This prospectus describes the Transamerica® Associate Freedom Elite Builder® (Policy), a flexible premium variable life insurance policy (the Policy). You can allocate your Policys cash value to the fixed account (which credits a specified guaranteed interest rate) and/or to the WRL Series Life Account, which invests through its subaccounts in portfolios of the Transamerica Series Trust Initial Class (the Series Trust), the Fidelity Variable Insurance Products Funds Service Class 2 (the Fidelity VIP Fund), the ProFunds, the Access One Trust (Access Trust), the AllianceBernstein Variable Products Series Fund, Inc. (AllianceBernstein), and the Franklin Templeton Variable Insurance Products Trust (Franklin Templeton) (collectively, the funds). Please refer to the next page of this prospectus for the list of portfolios available to you under the Policy. Note: If your Policy was issued in the State of New Jersey before January 1, 2009, then you may not allocate your Policys cash value to the fixed account.
The value of your Policy that is allocated to the subaccounts may fluctuate. You bear the risk that your Policy value may decrease.
If you already own a life insurance policy, it may not be to your advantage to buy additional insurance or to replace your policy with the Policy described in this prospectus. Additionally, it may not be to your advantage to borrow money to purchase the Policy or to take withdrawals from another policy you own to make premium payments under the Policy.
Prospectuses for the underlying portfolios must accompany this prospectus. Certain portfolios may not be available in all states. Please read these documents before investing and save them for future reference.
The Policy is not a bank deposit. The Policy is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
PORTFOLIOS AVAILABLE UNDER YOUR POLICY |
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TRANSAMERICA SERIES TRUST* | TRANSAMERICA SERIES TRUST* (CONT.) | PROFUNDS (CONT.) | ||
➣ TRANSAMERICA AB DYNAMIC ALLOCATION VP |
➣ TRANSAMERICA PIMCO TACTICAL BALANCED VP |
➣ PROFUND VP FALLING U.S. DOLLAR | ||
➣ TRANSAMERICA AEGON GOVERNMENT MONEY MARKET VP |
➣ TRANSAMERICA PIMCO TACTICAL CONSERVATIVE VP |
➣ PROFUND VP FINANCIALS | ||
➣ TRANSAMERICA AEGON HIGH YIELD BOND |
➣ TRANSAMERICA PIMCO TACTICAL GROWTH VP |
➣ PROFUND VP GOVERNMENT MONEY MARKET | ||
➣ TRANSAMERICA AEGON U.S. GOVERNMENT SECURITIES VP |
➣ TRANSAMERICA PIMCO TOTAL RETURN VP |
➣ PROFUND VP INTERNATIONAL | ||
➣ TRANSAMERICA ASSET ALLOCATION CONSERVATIVE VP |
➣ TRANSAMERICA QS INVESTORS ACTIVE ASSET ALLOCATION CONSERVATIVE VP |
➣ PROFUND VP JAPAN | ||
➣ TRANSAMERICA ASSET ALLOCATION GROWTH VP |
➣ TRANSAMERICA QS INVESTORS ACTIVE ASSET ALLOCATION MODERATE GROWTH VP |
➣ PROFUND VP MID-CAP | ||
➣ TRANSAMERICA ASSET ALLOCATION MODERATE GROWTH VP |
➣ TRANSAMERICA QS INVESTORS ACTIVE ASSET ALLOCATION MODERATE VP |
➣ PROFUND VP NASDAQ-100 | ||
➣ TRANSAMERICA ASSET ALLOCATION MODERATE VP |
➣ TRANSAMERICA SMALL/MID CAP VALUE VP |
➣ PROFUND VP OIL & GAS | ||
➣ TRANSAMERICA BARROW HANLEY DIVIDEND FOCUSED VP |
➣ TRANSAMERICA T. ROWE PRICE SMALL CAP VP |
➣ PROFUND VP PHARMACEUTICALS | ||
➣ TRANSAMERICA BLACKROCK GLOBAL ALLOCATION VP |
➣ TRANSAMERICA TORRAY CONCENTRATED GROWTH VP |
➣ PROFUND VP PRECIOUS METALS | ||
➣ TRANSAMERICA BLACKROCK TACTICAL ALLOCATION VP |
➣ TRANSAMERICA WMC US GROWTH VP |
➣ PROFUND VP SHORT EMERGING MARKETS | ||
➣ TRANSAMERICA CLARION GLOBAL REAL ESTATE SECURITIES VP |
FIDELITYFUNDS
➣ FIDELITY INDEX 500 PORTFOLIO |
➣ PROFUND VP SHORT INTERNATIONAL | ||
➣ TRANSAMERICA INTERNATIONAL MODERATE GROWTH VP |
➣ PROFUND VP SHORT NASDAQ-100 | |||
➣ TRANSAMERICA JANUS BALANCED VP |
ALLIANCEBERNSTEINVARIABLE PRODUCTSSERIES FUND
➣ AB BALANCED WEALTH STRATEGY PORTFOLIO |
➣ PROFUND VP SHORT SMALL-CAP | ||
➣ TRANSAMERICA JANUS MID-CAP GROWTH VP |
➣ PROFUND VP SMALL-CAP | |||
➣ TRANSAMERICA JENNISON GROWTH VP |
FRANKLINTEMPLETON VARIABLE PRODUCTSTRUST
➣ FRANKLIN FOUNDING FUNDS ALLOCATION VIP FUND |
➣ PROFUND VP SMALL-CAP VALUE | ||
➣ TRANSAMERICA JPMORGAN CORE BOND VP |
➣ PROFUND VP TELECOMMUNICATIONS | |||
➣ TRANSAMERICA JPMORGAN ENHANCED INDEX VP |
PROFUNDS
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➣ PROFUND VP ULTRANASDAQ100 | ||
➣ TRANSAMERICA JPMORGAN TACTICAL ALLOCATION VP |
➣ PROFUND VP ASIA 30 |
➣ PROFUND VP ULTRASMALL-CAP | ||
➣ TRANSAMERICA MANAGED RISK BALANCED ETF VP |
➣ PROFUND VP BASIC MATERIALS |
➣ PROFUND VP U.S. GOVERNMENT PLUS | ||
➣ TRANSAMERICA MANAGED RISK GROWTH ETF VP |
➣ PROFUND VP BULL |
➣ PROFUND VP UTILITIES | ||
➣ TRANSAMERICA MFS INTERNATIONAL EQUITY VP |
➣ PROFUND VP CONSUMER SERVICES |
ACCESSTRUST | ||
➣ TRANSAMERICA MORGAN STANLEY CAPITAL GROWTH VP |
➣ PROFUND VP EMERGING MARKETS |
➣ ACCESS VP HIGH YIELD FUND | ||
➣ TRANSAMERICA MULTI-MANAGED BALANCED VP |
➣ PROFUND VP EUROPE 30 |
*Transamerica JP Morgan Mid Cap Value VP, previously offered as an investment option under the Policy, does not accept new investments from current or prospective investors; the prospectus for this portfolio was mailed to policyowners invested in the portfolio under separate cover.
**Effective May 1, 2003, the Fidelity VIP Contrafund® Portfolio, Fidelity VIP Equity-Income Portfolio and the Fidelity VIP Growth Opportunities Portfolio were no longer available for sale to new investors. Prospectuses for those portfolios were mailed under separate cover to policyowners currently invested in the portfolios.
Policy Benefits/Risk Summary Transamerica® Associate Freedom Elite Builder |
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POLICY BENEFITS/RISK SUMMARY | TRANSAMERICA® ASSOCIATE FREEDOM ELITE BUILDER | |
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This summary describes the Policys important benefits and risks. The sections in this prospectus following this summary discuss the Policy in more detail. Additional discussion is also included in the Statement of Additional Information (SAI). For your convenience, we have provided a Glossary at the end of this prospectus that defines certain words and phrases used in this prospectus.
The Policy in General
| The Transamerica® Associate Freedom Elite Builder is an individual flexible premium variable life insurance policy. The Policy is priced like a group sponsored product. It has reduced charges including, surrender charges, cost of insurance rates, the monthly Policy charge, and premium expense charges. |
| The Policy gives you the potential for long-term life insurance coverage with the opportunity for tax-deferred cash value accumulation. |
| The Policy is designed to be long-term in nature in order to provide significant life insurance benefits for you. You should only purchase the Policy if you have the financial ability to keep it in force for a substantial period of time. You should consider the Policy in conjunction with other insurance that you own. |
| For Policies applied for on or after May 1, 2009, we offer four (4) bands of coverage under the Policy depending on the initial specified amount of insurance you have selected and any adjustments to the specified amount after issue: |
| Band 1: $50,000 - $249,999 |
| Band 2: $250,000 - $499,999 |
| Band 3: $500,000 - $999,999 |
| Band 4: $1,000,000 or more |
| Certain Policy charges are based on the band of coverage. Generally, the higher the band the lower the charges. |
| Your Policy offers supplemental riders, and depending on which riders are selected, certain charges may be deducted from the Policys cash value as part of the monthly deductions. |
| You will have a free look period once we deliver your Policy. You may return the Policy with the owners original signature and a written request during this period and receive a refund. We will place your net premium in the reallocation account until the reallocation date as shown on your Policy schedule page. Please see Canceling a Policy for a description of the free look period. |
| You may apply for an increase in the specified amount at any time before the insureds 86th birthday, and you may decrease the specified amount after your Policy has been in force for three years, but you may not increase and decrease the specified amount in the same Policy year. If approved, the change will take effect on the next Policy Monthiversary. Changes are not allowed after the insured reaches age 95. The amount of your decrease may be limited. For further details, please see Death Benefits Increasing/Decreasing the Specified Amount. |
| You can invest your premium in, and transfer your cash value to, subaccounts. Your cash value will fluctuate with the daily performance of the portfolios in which the subaccount invest. |
| You may place your money in the fixed account where it earns an interest rate declared in advance for a specified period (at least 3% annual interest) or in any of the subaccounts of the WRL Series Life Account (the Separate Account) which are described in this prospectus. The fixed account is not available to you if your Policy was issued before January 1, 2009 in the State of New Jersey. |
| The Policys cash value will increase or decrease depending on the investment performance of the subaccounts, the premiums you pay, the fees and charges that we deduct, the interest we credit to the fixed account, and the effects of any Policy transactions (such as transfers, loans and cash withdrawals). Investment returns are not guaranteed. The Policy is not suitable as a short-term investment or savings vehicle. |
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| Your Policy has a no lapse guarantee which means that as long as certain requirements are met, your Policy will remain in force and no grace period will begin until the no lapse date shown on your Policy schedule page. This is true even if your net surrender value is too low to pay the monthly deductions as long as, on any Monthiversary, you have paid premiums (minus any cash withdrawals, minus any outstanding loan amount, including any accrued loan interest, that equal or exceed the sum of the minimum monthly guarantee premiums in effect for each month from the Policy date up to and including the current month. The no lapse guarantee is discussed in more detail in the section of this prospectus entitled Policy Lapse and Reinstatement. |
Flexibility
The Policy is designed to be flexible to meet your specific circumstances and life insurance needs. Within certain limits, you can:
| Choose the timing, amount and frequency of premium payments. |
| Change the Death Benefit Option. |
| Increase or decrease the amount of life insurance coverage. |
| Change the beneficiary. |
| Transfer cash value among investment options available under the Policy. |
| Take a loan against the Policy. |
| Take cash withdrawals or surrender the Policy. |
Death Benefit
If the insured dies while the Policy is in force, we will pay a death benefit to the named beneficiary(ies) in accordance with the terms of the Policy. The amount of the death benefit generally depends on the specified amount of insurance that you select, the death benefit option that you choose, your Policys cash value, and any additional life insurance provided by riders that you purchase. The death benefit proceeds are reduced by any outstanding loan amount, including accrued loan interest, and any due and unpaid charges if the insured dies during the grace period.
You may choose one of three Death Benefit Options:
| Under Option A, the death benefit is the greatest of: |
> | The specified amount; or |
> | The minimum death benefit under the Guideline Premium Test; or |
> | The amount required for the Policy to qualify as a life insurance policy under Section 7702 of the Internal Revenue Code. |
| Under Option B, the death benefit is the greatest of: |
> | The specified amount plus the Policys cash value on the date of the insureds death; or |
> | The minimum death benefit under the Guideline Premium Test; or |
> | The amount required for the Policy to qualify as a life insurance policy under Section 7702 of the Internal Revenue Code. |
| Under Option C, the death benefit is the greatest of: |
> | The amount payable under Option A; or |
> | The specified amount, multiplied by an age-based factor, plus the Policys cash value on the date of the insureds death; or |
> | The amount required for the Policy to qualify as a life insurance policy under Section 7702 of the Internal Revenue Code. |
Cash Value
Your cash value is the sum of the value of your investment in the subaccounts plus the value of the fixed account, (including the loan reserve account) on any business day. It is not guaranteed - it depends on the performance of the investment options that you have chosen, the timing and the amount of premium payments you have made, Policy charges, and how much you have withdrawn from the Policy.
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You can access your cash value in several ways:
| Withdrawals You can withdraw part of your Policys net surrender value once each year after the first Policy year. Withdrawals are described in more detail in the section of this prospectus entitled Surrenders and Cash Withdrawals Cash Withdrawals. |
| Loans After the first Policy year, you can take a loan from the Policy using your Policys net surrender value as security as long as you qualify. Loans and loan interest rates are described in the section of this prospectus entitled Loans. |
| Surrender You can surrender or cash in your Policy for its net surrender value while the insured is alive. Surrenders are described in more detail in the section of this prospectus entitled Surrenders and Cash Withdrawals Surrenders. |
Investment Options
You can choose to allocate your net premiums and cash value among the subaccounts, each of which invests in a corresponding portfolio of the various underlying funds. Your Policy also offers a fixed account option, which provides a guaranteed minimum rate of interest.
You can transfer your cash value among the fixed account and the subaccounts during the life of your Policy. You can accumulate cash value among the fixed account and the subaccounts without paying any current income tax. We may limit the number of transfers out of the fixed account and, in some cases, may limit your transfer activity to deter disruptive trading and market timing. For more details, please refer to the section entitled Transfers in this prospectus.
Tax Information
We intend the Policy to qualify as a life insurance contract under the Internal Revenue Code so that the death benefit generally should not be taxable income to the beneficiary. If your Policy is not a Modified Endowment Contract (MEC) you will generally not be taxed on the gain in the Policy unless you take a cash withdrawal in excess of your basis in the Policy. As well, if your Policy is not a MEC, upon full surrender, any amount by which the proceeds we pay (including amounts we use to discharge any policy loan and unpaid loan interest) exceed your basis in the Policy will be treated as a distribution and subject to federal income tax. If your Policy is a MEC, cash withdrawals, loans, assignments, and pledges are treated when made first as taxable income to you to the extent of gain then in the policy and then as non-taxable recovery of basis. In addition, such gains may be subject to a 10% penalty tax if received before age 591⁄2. Please refer to the section of this prospectus entitled Federal Income Tax Considerations for more details.
Long-Term Financial Planning
The Policy is designed to help meet long-term financial objectives by paying a death benefit to family members and/or other named beneficiaries. The Policy is not suitable as a short-term savings vehicle. The Policy may not be the right kind of policy if you plan to withdraw money or surrender the Policy for short-term needs.
Please discuss your insurance needs and financial objectives with your registered representative.
Risk of an Increase in Current Fees and Expenses
Certain fees and expenses are currently assessed at less than their guaranteed maximum levels. In the future, these charges may be increased up to the guaranteed (maximum) levels. If fees and expenses are increased, you may need to increase the amount and/or frequency of premiums to keep the Policy in force.
Investment Risks
If you invest your Policys cash value in one or more subaccounts, then you will be subject to the risk that the investment performance of the subaccounts will be unfavorable and that your cash value will decrease. Also, we deduct Policy fees and charges from your cash value, which can significantly reduce your cash value. During times of poor investment performance, this deduction will have an even greater impact on your cash value. You could lose everything you invest and your Policy could lapse without value, unless you pay additional premiums. If you allocate premiums to the fixed account, we credit your fixed account value with interest at a rate declared by us. You assume the risk that the interest rate on the fixed account may decrease, although it will never be lower than the guaranteed minimum annual effective rate of 3%.
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Risks of Managing General Account Assets
The general account assets of Transamerica Premier Life Insurance Company (TPLIC; Transamerica Premier; or the Company) are used to support the payment of the death benefit under the Policies. To the extent that Transamerica Premier is required to pay amounts in addition to the Policys cash value under the death benefit, such amounts will come from general account assets. You should be aware that the general account assets are exposed to the risks normally associated with a portfolio of fixed-income securities, including interest rate, option, liquidity and credit risk, and are also subject to the claims of Transamerica Premiers general creditors. Transamerica Premiers financial statements contained in the Statement of Additional Information include a further discussion of risks inherent in the general account investments.
Premium Payments
Federal tax laws put limits on the premium payments you can make in relation to your Policys Death Benefit. We may refuse all or part of a premium payment that you make, or remove all or part of a premium from your Policy and return it to you with earnings under certain circumstances to maintain qualification of the Policy as a life insurance contract for federal income tax purposes. Please refer to the section entitled Premiums for more details.
Lapse
Your Policy will stay in force as long as the net surrender value is sufficient to cover your monthly deductions and Policy charges, or as long as the No Lapse Guarantee is in effect. Insufficient premium payments, poor investment performance, withdrawals, and unpaid loans or loan interest may cause your Policy to lapse which means you will no longer have insurance coverage. A Policy lapse may have adverse tax consequences. There are costs associated with reinstating a lapsed Policy. For a detailed discussion of your Policys Lapse and Reinstatement provisions, please refer to the section of this prospectus entitled Policy Lapse and Reinstatement.
Withdrawals and Loans
Making a withdrawal or taking a loan may:
| Reduce your Policys specified amount. |
| Reduce the death benefit proceeds paid to your beneficiary. |
| Make your Policy more susceptible to lapsing. |
| Trigger federal income taxes and, possibly a penalty tax. |
Cash withdrawals will reduce your cash value. Withdrawals, especially those taken during periods of poor investment performance by the subaccounts could considerably reduce or eliminate some benefits or guarantees under the Policy. Federal income taxes and a penalty tax may apply to loans and cash withdrawals. Please see the section of this prospectus entitled Federal Income Tax Considerations.
Be sure to plan carefully before using these Policy benefits. For a detailed description of withdrawals and loans, and any associated risks, please see the sections of this prospectus entitled Surrenders and Cash Withdrawals Cash Withdrawals and/or Loans.
Tax Consequences of Withdrawals, Surrenders and Loans
You may be subject to income tax if you take any withdrawals or surrender the Policy, or if your Policy lapses and you have not paid any outstanding policy indebtedness. If your Policy is a MEC, cash withdrawals, surrenders, assignments, pledges, and loans that you receive or make during the life of the Policy may be taxable and subject to a federal tax penalty equal to 10% of the taxable amount if taken prior to reaching age 591⁄2. Note: If you have not repaid a loan prior to surrender, the loan will be treated as a distribution upon surrender and taxed accordingly. Other tax issues to consider when you own a life insurance policy are described in more detail in the section of this prospectus entitled Federal Income Tax Considerations.
Note: You should consult with your own qualified tax advisor to apply the law to your particular circumstances.
Portfolio Risks
A comprehensive discussion of the risks of each portfolio may be found in each portfolios prospectus
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within the corresponding funds prospectus. Please refer to these fund prospectuses for more information.
There is no assurance that any portfolio will meet its investment objective.
FEE TABLES |
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The following tables describe the types of fees and expenses that you will pay when buying and owning your Policy. Please Note: We have presented two versions of each table. Section A includes the fee tables for Policies that were applied for on or after May 1, 2009, and are based on the Commissioners 2001 Standard Ordinary Tobacco and Non-Tobacco Mortality Tables (2001 C.S.O. Tables). Section B includes the fee tables for Policies that were issued before January 1, 2009 , and are based on the Commissioners 1980 Standard Ordinary Tobacco and Non-Tobacco Mortality Tables (1980 C.S.O. Tables). If the amount of a charge depends on the personal characteristics of the insured or the owner, then the fee table lists the minimum and maximum charges we assess under the Policy, and the fees and charges of a representative insured with the characteristics set forth below. These charges may not be representative of the charges you will pay.
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FOR ASSOCIATE POLICIES APPLIED FOR ON OR AFTER MAY 1, 2009
The first table describes the types of fees and expenses that you will pay when buying and owning the Policy; because you are eligible to buy a Policy, certain fees and expenses that are included in the public Freedom Elite Builder are waived or reduced.
Transaction Fees
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When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Expedited Delivery1 (cash withdrawals & surrenders)
|
When service is provided |
Will vary based on the vendor rates at the time of service |
$30 for overnight ($35 for Saturday delivery); $50 for wire service | |||
Living Benefit Rider3 (an Accelerated Death Benefit)
|
When rider is exercised |
Discount Factor |
Discount Factor |
1The charges are assessed when we incur the expense of expedited delivery of your partial withdrawal or complete surrender payment and are subject to change if the delivery service provider increases rates for such services. You can obtain further information about these administrative charges by contacting our administrative office.
2 The Company reserves the right at any time to change the current charges, but never to a level that exceeds the guaranteed charge.
3 We do not assess an administrative charge for this rider, however, if the rider is exercised, we reduce the single sum benefit by a discount factor to compensate us for lost income due to early payment of the death benefit. The discount factor is equal to the current yield on 90 day U.S. Treasury bills or the Policy loan rate (currently, an effective annual rate of 3.75%, not to exceed 4.0%), whichever is greater. For a complete description of the Living Benefit Rider, please refer to the section entitled Living Benefit Rider (an Accelerated Death Benefit) in this prospectus.
7
FOR ASSOCIATE POLICIES APPLIED FOR ON OR AFTER MAY 1, 2009
The table below describes the types of fees and expenses that you will pay periodically during the time that you own the Policy, not including portfolio fees and expenses.
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Monthly Policy Charge |
Monthly, on the Policy date and on each Monthiversary |
$7.00 per month during the first Policy year; $12.00 per month thereafter, issue ages 0-17
$0 per month for issue ages 18 and higher
|
$7.00 per month for juveniles, issue ages 0-17 $0 per month for issue ages 18 and higher | |||
Cost of Insurance4 (without Extra Ratings)5 |
Monthly, on the Policy date and on each Monthiversary |
|||||
Maximum Charge6 |
$29.79 per $1,000 of net amount at risk per month7 |
$29.19 per $1,000 of net amount at risk per month7 | ||||
Minimum Charge8 |
$0.02 per $1,000 of net amount at risk per month7
|
$0.01 per $1,000 of net amount at risk per month7 |
4 Cost of insurance charges are based on a number of factors including, but not limited to: the insureds issue age, sex and underwriting class, specified amount, and the net amount at risk. Cost of insurance rates generally will increase each year with the age of the insured. Cost of insurance rates are generally lower for each band of specified amount. For example, Band 2 (specified amounts $250,000 $499,999) generally has lower cost of insurance rates than those of Band 1 (specified amounts less than $250,000). The cost of insurance rates shown in the table may not be representative of the charges you will pay. Your Policys schedule page will indicate the guaranteed cost of insurance applicable to your Policy. You can obtain more detailed information concerning your cost of insurance charges by contacting your registered representative.
5 We may place an insured in a substandard underwriting class with extra ratings that reflect higher mortality risks and that result in higher cost of insurance rates. If the insured possesses additional mortality risks, then we may add a surcharge to the cost of insurance rates of up to a total charge of $83.33 monthly per $1,000 of net amount at risk.
6 This maximum charge is based on an insured with the following characteristics: Male, issue age 65, standard tobacco class, with an initial specified amount of less than $250,000 (Band 1) and in the 35th Policy year. This maximum charge may also apply to insureds with other characteristics.
7 The net amount at risk equals the death benefit on a Monthiversary, divided by 1.0024663, minus the cash value on such Monthiversary. Please refer to the section entitled Charges and Deductions Monthly Deductions for a description of the factor.
8 This minimum charge is based on an insured with the following characteristics: Female issue age 5, juvenile class, with an initial specified amount of $1,000,000 or higher (Band 4) and in the first Policy year. This minimum charge may also apply to insureds with other characteristics.
8
FOR ASSOCIATE POLICIES APPLIED FOR ON OR AFTER MAY 1, 2009
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Cost of Insurance (continued) |
||||||
Initial Charge for a male insured, issue age 35, in the ultimate select non-tobacco use class, Band 2
|
$0.09 per $1,000 of net amount at risk per month7 |
$0.04 per $1,000 of net amount at risk per month7 | ||||
Mortality and Expense Risk Charge |
Daily |
Annual rate of 1.50% of average daily net assets of each subaccount in which you are invested (for all Policy years) |
Annual rate of 1.50% for Policy years 1 15, and 0.30% for Policy years 16+, of average daily net assets of each subaccount in which you are invested
| |||
Loan Interest Spread9 |
On Policy anniversary or earlier, as applicable10
|
1.0% (effective annual rate) |
0.75% (effective annual rate) | |||
Optional Rider Charges:11
| ||||||
Accidental Death Benefit Rider |
Monthly, on the Policy date and on each Monthiversary until the insured reaches attained age 70 |
|||||
Maximum Charge12 |
$0.18 per $1,000 of rider face amount per month |
$0.18 per $1,000 of rider face amount per month | ||||
Minimum Charge13 |
$0.10 per $1,000 of rider face amount per month |
$0.10 per $1,000 of rider face amount per month
|
9The loan Interest Spread is the difference between the amount of interest we charge you for a loan (currently, an effective annual rate of 3.75%, guaranteed not to exceed 4.0%) and the amount of interest we credit to your loan reserve account (an effective annual rate of 3.0% guaranteed). After the 10th Policy year, we apply preferred loan rates on an amount equal to the cash value minus total premiums paid (less any cash withdrawals) and minus any outstanding loan amount. The maximum loan interest spread on preferred loans is 1.00%, and the current spread is 0.0%.
10 While a Policy loan is outstanding, loan interest is payable in arrears on each Policy anniversary, or, if earlier, on the date of loan repayment, Policy lapse, surrender, Policy termination, or the insureds death.
11 Optional Rider Charges are based on a number of factors including, but not limited to: some combination of each insureds issue age or attained age, sex, underwriting class, Policy year, and rider face amount. The cost of insurance rates shown in the table may not be representative of the charges you will pay. Your Policys schedule page will indicate the guaranteed cost of insurance charges applicable to your Policy and will not exceed the guaranteed charges included in this prospectus. The rider will indicate the maximum guaranteed rider charges applicable to your Policy. You can obtain more detailed information concerning your cost of insurance charges by contacting your registered representative.
12 This maximum charge is based on an insured with the following characteristics: Attained age 66. This maximum charge may also apply to insureds with other attained ages.
13 This minimum charge is based on an insured with the following characteristics: Attained age 40. This minimum charge may also apply to insureds with other attained ages.
9
FOR ASSOCIATE POLICIES APPLIED FOR ON OR AFTER MAY 1, 2009
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Optional Rider Charges (continued)
| ||||||
Charge |
When Charge is Deducted |
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Accidental Death Benefit Rider (continued) |
||||||
Initial Charge for a male insured, issue age 35
|
$0.10 per $1,000 of rider face amount per month |
$0.10 per $1,000 of rider face amount per month | ||||
Disability Waiver Rider14 |
Monthly, on the Policy date and on each Monthiversary until the insured reaches attained age 60 |
|||||
Maximum Charge15 |
$0.39 per $1,000 of net amount at risk per month7 |
$0.39 per $1,000 of net amount at risk per month7 | ||||
Minimum Charge16 |
$0.03 per $1,000 of net amount at risk per month7 |
$0.03 per $1,000 of net amount at risk per month7 | ||||
Initial charge for a male insured, issue age 35
|
$0.06 per $1,000 of net amount at risk per month7 |
$0.06 per $1,000 of net amount at risk per month7 |
14 Disability Waiver charges are based on the base insureds issue age and sex, and the net amount at risk. The charges shown are for Base Policy only (without riders). The addition of riders would increase these charges. The cost of insurance rates shown in the table may not be representative of the charges you will pay. Your Policys schedule page will indicate the guaranteed cost of insurance charges applicable to your Policy. You can obtain more detailed information concerning your cost of insurance charges by contacting your registered representative.
15 This maximum charge is based on an insured with the following characteristics: Female, issue age 55. This maximum charge may also apply to insureds with other characteristics.
16This minimum charge is based on an insured with the following characteristics: Male, issue age 18. This minimum charge may also apply to insureds with other characteristics.
10
FOR ASSOCIATE POLICIES APPLIED FOR ON OR AFTER MAY 1, 2009
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Optional Rider Charges (continued)
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Disability Waiver and Income Rider17 (Income charges plus Waiver of Monthly Deductions charges)
Income portion: |
Monthly, on the Policy date and on each Monthiversary until the insured reaches attained age 60 |
|||||
Maximum Charge18 |
$0.86 per $10 monthly rider benefit |
$0.86 per $10 monthly rider benefit | ||||
Minimum Charge19 |
$0.20 per $10 monthly rider benefit |
$0.20 per $10 monthly rider benefit | ||||
Initial charge for a male insured, issue age 35
Monthly deductions waiver portion: |
$0.28 per $10 monthly rider benefit |
$0.28 per $10 monthly rider benefit | ||||
Maximum Charge15 |
$0.39 per $1,000 of net amount at risk per month7 |
$0.39 per $1,000 of net amount at risk per month7 | ||||
Minimum Charge16 |
$0.03 per $1,000 of net amount at risk per month7 |
$0.03 per $1,000 of net amount at risk per month7 | ||||
Initial charge for a male insured, issue age 35 |
$0.05 per $1,000 of net amount at risk per month7 |
$0.05 per $1,000 of net amount at risk per month7
| ||||
Childrens Insurance Rider20 |
Monthly, on the Policy date and on each Monthiversary until the Monthiversary after the last insured child reaches his/her 25th birthday (or until the death of the last child)
|
$0.60 per $1,000 of rider face amount per month |
$0.60 per $1,000 of rider face amount per month | |||
Other Insured Rider21
(without Extra Ratings)4 |
Monthly, on the Policy date and on each Monthiversary until the insured reaches attained age 100 |
|||||
Maximum Charge22 |
$29.79 per $1,000 of rider face amount per month |
$29.19 per $1,000 of rider face amount per month
|
17The charge for this rider is based on the primary insureds issue age and sex, net amount at risk, and the amount of monthly income that would be paid in the event of total disability, as defined in the rider.
18 This maximum charge is based on an insured with the following characteristics: Female, issue age 55. This maximum charge may also apply to insureds with other characteristics.
19 This minimum charge is based on an insured with the following characteristics: Male, issue age 18. This minimum charge may also apply to insureds with other characteristics.
20 The charge for this rider is based on the rider face amount and the cost per $1,000 does not vary.
21 Rider charges are cost of insurance charges that are based on each other insureds issue age, sex, underwriting class, Policy year, and the rider face amount. Cost of insurance rates for this rider generally will increase each year with the age of the other insured. The cost of insurance rates shown in the table may not be representative of the charges you will pay. The rider will indicate the maximum guaranteed rider charges applicable to your Policy and will not exceed the guaranteed charges included in this prospectus. You can obtain more information about these riders by contacting your registered representative.
22 This maximum charge is based on an insured with the following characteristics: Male, issue age 85, standard tobacco underwriting class and in the 15th Policy year. This maximum charge may also apply to insureds with other characteristics.
11
FOR ASSOCIATE POLICIES APPLIED FOR ON OR AFTER MAY 1, 2009
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Optional Rider Charges (continued)
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Other Insured Rider21 (continued) (without Extra Ratings)4 |
Monthly, on the Policy date and on each Monthiversary until the insured reaches attained age 100 |
|||||
Minimum Charge23 |
$0.02 per $1,000 of rider face amount per month |
$0.01 per $1,000 of rider face amount per month | ||||
Initial charge for a female insured, issue age 30, in the ultimate select non-tobacco use class
|
$0.05 per $1,000 of rider face amount per month |
$0.04 per $1,000 of rider face amount per month |
23This minimum charge is based on an insured with the following characteristics: Female, issue age 5, juvenile class and in the first Policy year. This minimum charge may also apply to insureds with other characteristics.
12
FOR ASSOCIATE POLICIES ISSUED BEFORE JANUARY 1, 2009
The first table describes the types of fees and expenses that you will pay when buying and owning the Policy; because you are eligible to buy a Policy, certain fees and expenses that are included in the public Freedom Elite Builder are waived or reduced.
Transaction Fees
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Expedited Delivery1 (cash withdrawals & surrenders) |
When service is provided |
Will vary based on the vendor rates at the time of service |
$30 for overnight ($35 for Saturday delivery); $50 for wire service
| |||
Living Benefit Rider3 (an Accelerated Death Benefit)
|
When rider is exercised |
Discount Factor |
Discount Factor |
1The charges are assessed when we incur the expense of expedited delivery of your partial withdrawal or complete surrender payment and are subject to change if the delivery service provider increases rates for such services. You can obtain further information about these administrative charges by contacting our administrative office.
2The Company reserves the right at any time to change the current charge, but never to a level that exceeds the guaranteed charge.
3We do not assess an administrative charge for this rider, however, if the rider is exercised, we reduce the single sum benefit by a discount factor to compensate us for income lost due to early payment of the death benefit. The discount factor is equal to the current yield on 90 day U.S. Treasury bills or the Policy loan interest rate(currently, an effective annual rate of 3.75%, guaranteed not to exceed 4.0%), whichever is greater. For a complete description of the Living Benefit Rider, please refer to the section entitled Living Benefit Rider (an Accelerated Death Benefit) in this prospectus.
14
FOR ASSOCIATE POLICIES ISSUED BEFORE JANUARY 1, 2009
The table below describes the types of fees and expenses that you will pay periodically during the time that you own an Associate Policy, not including portfolio fees and expenses.
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Cost of Insurance4 (without Extra Ratings)5 |
Monthly, on the Policy date and on each Monthiversary |
|||||
Maximum Charge6 |
$83.33 per $1,000 of net amount at risk per month7 |
$19.35 per $1,000 of net amount at risk per month7,8 | ||||
Minimum Charge |
$0.06 per $1,000 of net amount at risk per month7,8
|
$0.02 per $1,000 of net amount at risk per month7,9 |
4 Cost of insurance charges are based on a number of factors including, but not limited to: the insureds issue age and sex, underwriting class, the specified amount, and the net amount at risk. Cost of insurance rates generally will increase each year with the age of the insured. The cost of insurance rates shown in the table may not be representative of the charges you will pay. Your policys schedule page will indicate the guaranteed cost of insurance charges applicable to your Policy. You can obtain more detailed information concerning your cost of insurance charges by contacting your registered representative.
5 We may place an insured in a substandard underwriting class with extra ratings that reflect higher mortality risks and that result in higher cost of insurance rates. If the insured possesses additional mortality risks, then we may add a surcharge to the cost of insurance rates up to a total charge of $83.33 monthly per $1,000 of net amount at risk.
6 This maximum charge is based on an insured with the following characteristics: Male, issue age 85, standard tobacco class, and in the 15th Policy year. This maximum charge may also apply to insureds with other characteristics.
7 The net amount at risk equals the death benefit on a Monthiversary, divided by 1.0024663, minus the cash value on such Monthiversary. Please refer to the section entitled Charges and Deductions Monthly Deductions for a description of the factor.
8This minimum charge is based on an insured with the following characteristics: Female, issue age 10, juvenile class, and in the first Policy year. This minimum charge may also apply to insureds with other characteristics.
9 This minimum charge is based on an insured with the following characteristics: female, issue age 30, ultimate select non-tobacco class in the first Policy year. This minimum charge may also apply to insureds with other characteristics.
15
FOR ASSOCIATE POLICIES ISSUED BEFORE JANUARY 1, 2009
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Cost of Insurance (continued) |
||||||
Initial Charge for a male insured, issue age 35, in the ultimate select non-tobacco use class10
|
$0.14 per $1,000 of net amount at risk per month7 |
$0.03 per $1,000 of net amount at risk per month7 | ||||
Mortality and Expense Risk Charge |
Daily |
Annual rate of 0.90% for Policy years 1 15, and 0.60% for Policy years 16+, of average daily net assets of each subaccount in which you are invested
|
Annual rate of 0.90% for Policy years 1 15, and 0.30% for Policy years 16+, of average daily net assets of each subaccount in which you are invested | |||
Loan Interest Spread11 |
On Policy anniversary or earlier, as applicable12
|
1.0% (effective annual rate) |
0.75% (effective annual rate) | |||
Optional Rider Charges:13
| ||||||
Accidental Death Benefit Rider13 |
Monthly, on the Policy date and on each Monthiversary until the insured reaches attained age 70 |
|||||
Maximum Charge14 |
$0.18 per $1,000 of rider face amount per month |
$0.18 per $1,000 of rider face amount per month | ||||
Minimum Charge15 |
$0.10 per $1,000 of rider face amount per month
|
$0.10 per $1,000 of rider face amount per month |
10 Because we no longer offer the 1980 C.S.O. version of this Policy, the information regarding the representative insured has not been updated since sales terminated in 2008.
11The Loan Interest Spread is the difference between the amount of interest we charge you for a loan (currently, an effective annual rate of 3.75%, guaranteed not to exceed 4.0%) and the amount of interest we credit to your loan reserve account (an effective annual rate of 3.0% guaranteed). After the 10th Policy year, we apply preferred loan rates on an amount equal to the cash value minus total premiums paid (less any cash withdrawals) and minus any outstanding loan amount. The maximum loan interest spread on preferred loans is 1.00%, and the current spread is 0.0%.
12While a Policy loan is outstanding, loan interest is payable in arrears on each Policy anniversary, or, if earlier, on the date of loan repayment, Policy lapse, surrender, Policy termination, or the insureds death.
13 Optional Rider Cost of insurance charges are based on some combination of each insureds issue age or attained age, sex and underwriting class, and the Policy year, and rider face amount. The cost of insurance rates shown in the table may not be representative of the charges you will pay. Your Policys schedule page will indicate the guaranteed cost of insurance charges applicable to your Policy. The rider will indicate the maximum guaranteed rider charges applicable to your Policy and will not exceed the guaranteed charges included in this prospectus. You can obtain more detailed information concerning your cost of insurance charges by contacting your registered representative.
14 This maximum charge is based on an insured with the following characteristics: Attained age 66. This maximum charge may also apply to insureds with other attained ages.
15This minimum charge is based on an insured with the following characteristics: Attained age 40. This minimum charge may also apply to insureds with other attained ages.
16
FOR ASSOCIATE POLICIES ISSUED BEFORE JANUARY 1, 2009
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Optional Rider Charges (continued)
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Accidental Death Benefit Rider (continued) |
||||||
Initial Charge for a male insured, issue age 3510
|
$0.10 per $1,000 of rider face amount per month |
$0.10 per $1,000 of rider face amount per month | ||||
Disability Waiver Rider16 |
Monthly, on the Policy date and on each Monthiversary until the insured reaches attained age 60 |
|||||
Maximum Charge17 |
$0.39 per $1,000 of net amount at risk per month7 |
$0.39 per $1,000 of net amount at risk per month7 | ||||
Minimum Charge18 |
$0.03 per $1,000 of net amount at risk per month7 |
$0.03 per $1,000 of net amount at risk per month7 | ||||
Initial charge for a male insured, issue age 3510 |
$0.05 per $1,000 of net amount at risk per month7
|
$0.05 per $1,000 of net amount at risk per month7 |
16 Disability Waiver charges are based on the base insureds issue age, sex and net amount at risk. The charges shown are for Base Policy only (without riders). The addition of riders would increase these charges. The cost of insurance rates shown in the table may not be representative of the charges you will pay. Your Policys schedule page will indicate the guaranteed cost of insurance charges applicable to your Policy. You can obtain more detailed information concerning your cost of insurance charges by contacting your registered representative.
17This maximum charge is based on an insured with the following characteristics: Female, issue age 55. This maximum charge may also apply to insureds with other characteristics.
18 This minimum charge is based on an insured with the following characteristics: Male, issue age 25. This minimum charge may also apply to insureds with other characteristics.
17
FOR ASSOCIATE POLICIES ISSUED BEFORE JANUARY 1, 2009
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Optional Rider Charges (continued)
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Disability Waiver and Income Rider19 (Income charges plus Waiver of Monthly Deductions charges)
Income portion: |
Monthly, on the Policy date and on each Monthiversary until the insured reaches attained age 60 |
|||||
Maximum Charge20 |
$0.86 per $10 monthly rider benefit |
$0.86 per $10 monthly rider benefit | ||||
Minimum Charge21 |
$0.20 per $10 monthly rider benefit |
$0.20 per $10 monthly rider benefit | ||||
Initial charge for a male insured, issue age 35 |
$0.28 per $10 monthly rider benefit |
$0.28 per $10 monthly rider benefit | ||||
Waiver of Monthly Deductions portion: |
||||||
Maximum Charge17 |
$0.39 per $1,000 of net amount at risk per month7 |
$0.39 per $1,000 of net amount at risk per month7 | ||||
Minimum Charge18 |
$0.03 per $1,000 of net amount at risk per month7 |
$0.03 per $1,000 of net amount at risk per month7 | ||||
Initial charge for a male insured, issue age 3510 |
$0.05 per $1,000 of net amount at risk per month7
|
$0.05 per $1,000 of net amount at risk per month7 | ||||
Childrens Insurance Rider22 |
Monthly, on the Policy date and on each Monthiversary until the Monthiversary after the last insured child reaches his/her 25th birthday (or until the death of the last child)
|
$0.60 per $1,000 of rider face amount per month |
$0.60 per $1,000 of rider face amount per month |
19 The charge for this rider is based on the primary insureds issue age and sex, net amount at risk and the amount of monthly waiver of premium benefit that would be paid in the event of total disability, as defined in this rider.
20This maximum charge is based on an insured with the following characteristics: Female, issue age 55. This maximum charge may also apply to insureds with other characteristics.
21 This minimum charge is based on an insured with the following characteristics: Male, issue age 27. This minimum charge may also apply to insureds with other characteristics.
22 The charge for this rider is based on the rider face amount and the cost per $1,000 does not vary.
18
FOR ASSOCIATE POLICIES ISSUED BEFORE JANUARY 1, 2009
Periodic Charges Other Than Portfolio Operating Expenses
| ||||||
Optional Rider Charges (continued)
| ||||||
Charge |
When Charge is Deducted
|
Amount Deducted | ||||
Guaranteed Charge | Current Charge2 | |||||
Other Insured Rider23 (without Extra Ratings)5 |
Monthly, on the Policy date and on each Monthiversary until the insured reaches attained age 100 |
|||||
Maximum Charge24 |
$83.33 per $1,000 of rider face amount per month |
$19.35 per $1,000 of rider face amount per month | ||||
Minimum Charge25 |
$0.06 per $1,000 of rider face amount per month25 |
$0.02 per $1,000 of rider face amount per month9 | ||||
Initial charge for a female insured, issue age 30, in the ultimate select non-tobacco use class10
|
$0.10 per $1,000 of rider face amount per month |
$0.02 per $1,000 of rider face amount per month |
23 Rider charges are cost of insurance charges that are based on each other insureds issue age, sex and underwriting class, the Policy year, and the rider face amount. Cost of insurance rates for this rider generally will increase each year with the age of the other insured. The cost of insurance rates shown in the table may not be representative of the charges you will pay. The rider will indicate the maximum guaranteed rider charges applicable to your Policy. You can obtain more information about these riders by contacting your registered representative.
24 This maximum charge is based on an insured with the following characteristics: Male, issue age 85, standard tobacco underwriting class and in the 15th Policy year. This maximum charge may also apply to insureds with other characteristics.
25This minimum charge is based on an insured with the following characteristics: Female, issue age 10, juvenile class and in the first Policy year. This minimum charge may also apply to insureds with other characteristics.
19
For information concerning compensation paid for the sale of the Policy, please see Sale of the Policies.
Range of Expenses for the Portfolios1, 2
The next table shows the lowest and highest total operating expenses charged by the portfolios during the fiscal year ended December 31, 2016. Expenses of the portfolios may be higher or lower in the future. More detail concerning each portfolios fees and expenses is contained in the prospectus for each portfolio.
Lowest | Highest | |||
Total Annual Portfolio Operating Expenses (total of all expenses that are deducted from portfolio assets, including management fees, 12b-1 fees, and other expenses) |
0.33% | 4.39% | ||
Net Annual Portfolio Operating Expenses (total of all expenses that are deducted from portfolio assets, including management fees, 12b-1 fees, and other expenses, after contractual waiver of fees and expenses)3 |
0.33% | 1.68% |
1 The portfolio expenses used to prepare this table were provided to Transamerica Premier by the funds. The expenses shown are those incurred for the year ended December 31, 2016. Current or future expenses may be greater or less than those shown.
2 The table showing the range of expenses for the portfolios takes into account the expenses of several Transamerica Series Trust asset allocation portfolios and the Franklin Founding Funds Allocation VIP Fund that are each a fund of funds. A fund of funds portfolio typically allocates its assets, within predetermined percentage ranges, among certain other Fund portfolios and affiliated Fund portfolios (each such portfolio an Acquired Fund). Each fund of funds has its own set of operating expenses, as does each of the portfolios in which it invests. In determining the range of portfolio expenses, Transamerica Premier took into account the information received from the Fund groups on the combined actual expenses for each of the fund of funds and for the portfolios in which it invests. The combined expense information includes the Acquired Fund (i.e., the underlying funds) fees and expenses for the Transamerica Series Trust asset allocation portfolios and the Franklin Founding Funds Allocation VIP Fund. See the prospectuses for the Transamerica Series Trust and the Franklin Founding Funds Allocation VIP Fund for a presentation of the applicable Acquired Fund fees and expenses.
3 The range of Net Annual Portfolio Operating Expenses takes into account contractual arrangements for 24 portfolios that require a portfolios investment adviser to reimburse or waive portfolio expenses until April 30, 2018.
TRANSAMERICA PREMIER, THE SEPARATE ACCOUNT, THE FIXED ACCOUNT AND THE PORTFOLIOS
Transamerica Premier
Transamerica Premier Life Insurance Company, located at 570 Carillon Parkway, St. Petersburg, Florida 33716-1294, is the insurance company issuing the Policy. We are obligated to pay all benefits under the Policy. Note: On October 1, 2014, Western Reserve Life Assurance Co. of Ohio (WRL) merged with Transamerica Premier Life Insurance Company. (Note: Effective July 31, 2014, Monumental Life Insurance Company changed its name to Transamerica Premier Life Insurance Company).
Financial Condition of the Company
The benefits under the Policy are paid by Transamerica Premier from its General Account assets and/or your cash value held in the Companys separate account. It is important that you understand that payment of the benefits is not guaranteed and depends upon certain factors discussed below.
Assets in the Separate Account. You assume all of the investment risk for your cash value that is allocated to the subaccounts of the separate account. Your cash value in those subaccounts constitutes a portion of the assets of the separate account. These assets are segregated and insulated from our general account, and may not be charged with liabilities arising from any other business that we may conduct. See The Separate Account.
Assets in the General Account. You also may be permitted to make allocations to the fixed account, which is supported by the assets in our general account. See The Fixed Account. Any guarantees under the Policy that exceed your cash value, such as those associated with the Policys death benefit, are paid from our general account (and not the separate account). Therefore, any amounts that we may be obligated to pay under the Policy in excess of the subaccount value are subject to our financial strength and claims-paying ability and our long-term ability to make such payments. The assets of the separate account, however, are also available to cover the liabilities of our general account, but only to the extent that the separate account assets exceed the separate account liabilities arising under the Policies supported by it.
We issue other types of insurance policies and financial products as well, and we also pay our obligations under these products from our assets in the general account.
Our Financial Condition. As an insurance company, we are required by state insurance regulation to hold a specified amount of reserves in order to meet all the contractual obligations of our general account to our
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policyowners. We monitor our reserves so that we hold sufficient amounts to cover actual or expected policy and claims payments. In addition, we hedge our investments in our general account, and may require purchasers of certain of the variable insurance products that we offer to allocate premium payments and cash value in accordance with specified investment requirements. However, it is important to note that there is no guarantee that we will always be able to meet our claims-paying obligations, and that there are risks to purchasing any insurance product.
State insurance regulators also require insurance companies to maintain a minimum amount of capital, which acts as a cushion in the event that the insurer suffers a financial impairment, based on the inherent risks in the insurers operations. These risks include those associated with losses that we may incur as the result of defaults on the payment of interest or principal on our general account assets, which include bonds, mortgages, general real estate investments, and stocks, as well as the loss in market value of these investments. We may also experience liquidity risk if our general account assets cannot be readily converted into cash to meet obligations to our policyowners or to provide the collateral necessary to finance our business operations.
How to Obtain More Information. We encourage both existing and prospective policyowners to read and understand our financial statements. We prepare our financial statements on a statutory basis. Our financial statements, which are presented in conformity with accounting practices prescribed or permitted by the Iowa Department of Insurance as well as the financial statements of the separate accountare located in the Statement of Additional Information (SAI). The SAI is available at no charge by writing to our mailing address Transamerica Premier Life Insurance Company, 4333 Edgewood Rd. NE, Cedar Rapids, Iowa 52499-0001 or by calling us at (800) 851-9777, or by visiting our website www.premier.transamerica.com. In addition, the SAI is available on the SECs website at http://www.sec.gov. Our financial strength ratings, which reflect the opinions of leading independent rating agencies of TPLICs ability to meet its obligations to its policy owners, are available on our website and the websites of these nationally recognized statistical ratings organizations--A.M. Best Company (www.ambest.com), Moodys Investors Service (www.moodys.com), S&P Global(www.standardandpoors.com), and Fitch Ratings (www.fitchratings.com).
WRL Series Life Account was a separate account of WRL, established under Ohio law. Effective on October 1, 2014, WRL Series Life Account was re-domesticated under the laws of the State of Iowa and reestablished under TPLIC. We own the assets in the separate account, and we may use assets in the separate account to support other variable life insurance policies we issue. The separate account is registered with the Securities and Exchange Commission (SEC) as a unit investment trust under the Investment Company Act of 1940, as amended (the 1940 Act).
The separate account is divided into subaccounts, each of which invests in shares of a specific portfolio of a fund. These subaccounts buy and sell portfolio shares at net asset value without any sales charge. Any dividends and distributions from a portfolio are reinvested at net asset value in shares of that portfolio.
Income, gains, and losses credited to, or charged against, a subaccount of the separate account reflect the subaccounts own investment experience and not the investment experience of our other assets. The separate accounts assets may not be used to pay any of our liabilities other than those arising from the Policies and other variable life insurance policies we issue. If the separate accounts assets exceed the required reserves and other liabilities, we may transfer the excess to our general account.
Changes to the Separate Account. As permitted by applicable law, we reserve the right to make certain changes to the structure and operation of the separate account, which may include:
| Remove, combine, or add subaccounts and make the combined or new subaccounts available for allocation of net premiums. |
| Combine the separate account or any subaccounts with one or more different separate accounts or subaccounts and/or create new separate accounts. |
| Close certain subaccounts to allocations of new net premiums by current or new policyowners at any time in our discretion. |
| Transfer assets of the separate account or any subaccount which we determine to be associated with the class of policies to which the Policy belongs, to another separate account or subaccount. |
| Operate the separate account as a management company under the 1940 Act, or as any other form of investment company permitted by law. |
| Establish additional separate accounts or subaccounts to invest in new portfolios. |
| Manage the separate account at the direction of a committee. |
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| Endorse the Policy, as permitted by law, to reflect changes to the separate account and subaccounts as may be required by applicable law. |
| Change the investment objective of a subaccount. |
| Substitute, add, or delete fund portfolios in which subaccounts currently invest net premiums, to include portfolios of newly designated funds. (Fund portfolios will not be added, deleted or substituted without prior approval of the SEC to the extent required by the 1940 Act or other applicable laws.) |
| Fund additional classes of variable life insurance policies through the separate account. |
| Restrict or eliminate any voting privileges of owners or other persons who have voting privileges in connection with the operation of the separate account. |
Some, but not all, of these future changes may be the result of changes in applicable laws or interpretation of the laws. We will not make any such changes without receiving any necessary approval of the SEC and applicable state insurance departments. We will notify you of any changes. We reserve the right to make other structural and operational changes affecting the separate account.
In addition, the portfolios that sell their shares to the subaccounts may discontinue offering their shares to the subaccounts.
The fixed account is part of Transamerica Premiers general account. We use general account assets to support our insurance and annuity obligations other than those funded by the separate accounts. Subject to applicable law, Transamerica Premier has sole discretion over the investment of the fixed accounts assets. Transamerica Premier bears the full investment risk for all amounts contributed to the fixed account. Please see the section above entitled Risks of Managing General Account Assets. Transamerica Premier guarantees that the amounts allocated to the fixed account will be credited interest daily at an annual net effective interest rate of at least 3.0%. We will determine any interest rate credited in excess of the guaranteed rate at our sole discretion. We have no formula for determining fixed account interest rates in excess of the guaranteed rate or any duration for such rates.
Money you place in the fixed account will begin earning interest credited daily and compounded annually at the current interest rate in effect at the time it is allocated. For Policies applied for on or after May 1, 2009, unless otherwise required by state law, we may restrict your allocations and transfers to the fixed account if the fixed account value, excluding the loan reserve, following the allocation or transfer would exceed $250,000. (This restriction does not apply to any transfer to the fixed account necessary in the exercise of conversion rights.) We may declare current interest rates from time to time. We may declare more than one interest rate for different money based upon the date of allocation or transfer to the fixed account. When we declare a current interest rate higher than the guaranteed rate on amounts allocated to the fixed account, we guarantee the higher rate on those amounts for at least one year (the guarantee period) unless those amounts are transferred to the loan reserve. At the end of the guarantee period we may declare a new current interest rate on those amounts and any accrued interest thereon. We will guarantee this new current interest rate for another guarantee period. We credit interest greater than 3.0% during any guarantee period at our sole discretion. You assume the risk that the interest rate on the fixed account may decrease, although it will never be lower than a guaranteed minimum annual effective rate of 3%.
We allocate amounts from the fixed account for cash withdrawals, transfers to the subaccounts, or the monthly deductions charges on a first in, first out basis (FIFO) for the purpose of crediting interest.
New Jersey: The fixed account is not available to you if your Policy was issued before January 1, 2009 in the State of New Jersey. You may not direct or transfer premium payments or cash value to the fixed account. The fixed account is available to you only in connection with Policy loans.
The fixed account has not been registered with the Securities and Exchange Commission and the staff of the Securities and Exchange Commission has not reviewed the disclosure in this prospectus relating to the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in this prospectus.
The separate account invests in shares of the portfolios of a fund. Each portfolio is an investment division of a fund, which is an open-end investment management company registered with the SEC. Such registration does not involve supervision of the management or investment practices or policies of the portfolios by the SEC.
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Each portfolios assets are held separate from the assets of the other portfolios, and each portfolio has investment objectives and policies that are different from those of the other portfolios. Thus, each portfolio operates as a separate investment fund, and the income or loss of one portfolio has no effect on the investment performance of any other portfolio. Pending any required approval by a state insurance regulatory authority, certain subaccounts and corresponding portfolios may not be available to residents of some states.
Each portfolios investment objective(s) and policies are summarized below. There is no assurance that a portfolio will achieve its stated objective(s). Certain portfolios may have investment objectives and policies similar to other portfolios that are managed by the same investment adviser or sub-adviser. The investment results of the portfolios, however, may be higher or lower than those of such other portfolios. We do not guarantee or make any representation that the investment results of the portfolios will be comparable to any other portfolio, even those with the same investment adviser or manager.
Certain portfolios invest substantially all of their assets in portfolios of other funds. (See the chart below listing portfolios available under the Policy.) As a result, you will pay fees and expenses at both portfolio levels. This will reduce your investment return. These arrangements are referred to as fund of funds or master-feeder funds. Funds of funds or master-feeder structures may have higher expenses than portfolios that invest directly in debt or equity securities.
As described in more detail in the underlying portfolio prospectuses, certain underlying portfolios employ a managed volatility strategy that is intended to reduce the underlying portfolios overall volatility and downside risk, and to help us manage the risks associated with providing certain guarantees under the Policies. During rising markets, the hedging strategies employed to manage volatility could result in your Policy value rising less than would have been the case if you had been invested in an underlying portfolio with substantially similar investment objectives, securities, policies and strategies that does not utilize a volatility management strategy. In addition, the cost of these hedging strategies may have a negative impact on performance. On the other hand, investing in underlying portfolios with a managed volatility strategy may be helpful in a declining market with higher market volatility because the hedging strategy will reduce your equity exposure in such circumstances. In such cases, your Policy value may decline less than would have been the case if you had not invested in underlying portfolios with a managed volatility strategy. There is no guarantee that a managed volatility strategy can achieve or maintain the underlying portfolios optimal risk targets, and the underlying portfolio may not perform as expected. Portfolios that employ a managed volatility strategy are identified by an * preceding the name of the portfolio in the first column of the chart below.
Certain portfolios may employ hedging strategies to provide for downside protection during sharp downward movements in equity markets. (See chart below listing portfolios available under the Policy.) The cost of these hedging strategies could limit the upside participation of the portfolio in rising equity markets relative to other portfolios. You should consult with your registered representative to determine which combination of investment choices is appropriate for you.
The ProFunds and Access Trust portfolios permit frequent transfers. Frequent transfers may increase portfolio turnover. A high level of portfolio turnover may negatively impact performance by increasing transaction costs. In addition, large movements of assets into and out of a ProFunds or Access Trust portfolio may negatively affect a portfolios ability to achieve its investment objective or maintain a consistent level of operating expenses. See Disruptive Trading and Market Timing. Some ProFunds or Access Trust portfolios may use investment techniques not associated with most mutual fund portfolios. Investors in the ProFunds or Access Trust portfolios will bear additional investment risks. See the ProFunds or Access Trust prospectus for a description of the investment risks associated with investing in the ProFunds or Access Trust portfolios.
You can find more detailed information about the portfolios, including a description of risks, in the fund prospectuses. You may obtain a free copy of the fund prospectuses, by contacting us at our administrative office at 1-800-851-9777 or visiting our website at www.premier.transamerica.com. You should read the fund prospectuses carefully. Note: If you received a summary prospectus for any of the portfolios listed below, please follow the instructions on the first page of the summary prospectus to obtain a copy of the full fund prospectus.
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Portfolio | Investment Adviser/Sub-Adviser | Investment Objective | ||
TRANSAMERICA SERIES TRUST: | ||||
Transamerica AB Dynamic Allocation VP |
Transamerica Asset Management, Inc.
AllianceBernstein, L.P.
|
Seeks capital appreciation and current income. | ||
Transamerica Aegon Government Money Market VP1 |
Transamerica Asset Management, Inc.
Aegon USA Investment Management, LLC
|
Seeks as high a level of current income as is consistent with preservation of capital and liquidity. | ||
Transamerica Aegon High Yield Bond VP2 |
Transamerica Asset Management, Inc.
Aegon USA Investment Management, LLC
|
Seeks a high level of current income by investing in high-yield debt securities. | ||
Transamerica Aegon U.S. Government Securities VP |
Transamerica Asset Management, Inc.
Aegon USA Investment Management, LLC
|
Seeks to provide as high a level of total return as is consistent with prudent investment strategies. | ||
*Transamerica Asset Allocation Conservative VP3 |
Transamerica Asset Management, Inc.
J.P. Morgan Investment Management Inc.
|
Seeks current income and preservation of capital. | ||
*Transamerica Asset Allocation Growth VP3 |
Transamerica Asset Management, Inc.
J.P. Morgan Investment Management Inc. |
Seeks long-term capital appreciation. | ||
*Transamerica Asset Allocation Moderate Growth VP3 |
Transamerica Asset Management, Inc.
J.P. Morgan Investment Management Inc. |
Seeks capital appreciation with current income as a secondary objective. | ||
*Transamerica Asset Allocation Moderate VP3 |
Transamerica Asset Management, Inc.
J.P. Morgan Investment Management Inc.
|
Seeks capital appreciation and current income. | ||
Transamerica Barrow Hanley Dividend Focused VP |
Transamerica Asset Management, Inc.
Barrow, Hanley, Mewhinney & Strauss, LLC
|
Seeks total return gained from the combination of dividend yield, growth of dividends and capital appreciation.
| ||
Transamerica BlackRock Global Allocation VP |
Transamerica Asset Management, Inc.
BlackRock Investment Management, LLC |
Seeks high total investment return. Total investment return is the combination of capital appreciation and investment income.
| ||
*Transamerica BlackRock Tactical Allocation VP4 |
Transamerica Asset Management, Inc.
BlackRock Financial Management, Inc.
|
Seeks capital appreciation with current income as a secondary objective.
|
1During extended periods of low interest rates, and partly as a result of insurance charges, the yield on the government money market portfolios subaccounts may become extremely low and possibly negative.
2Under normal market conditions, this portfolio invests at least 80% of its net assets in credit default swaps and other financial instruments that in combination have economic characteristics similar to the high yield debt (junk bonds) market and/or in high yield debt securities.
3Each of these asset allocation portfolios is a fund of funds and invests in a combination of underlying portfolios of Transamerica Series Trust and Transamerica Funds. Please see each portfolios prospectus for a description of the investment strategy and the risks associated with investing in the portfolio.
4This portfolio utilizes both a tactical asset allocation strategy and a strategic asset allocation strategy to seek to achieve its objective by investing in underlying funds that consist of ETFs and money market mutual funds. Please see the portfolios prospectus for a complete description of the portfolios investment strategies and the risks of investing in the portfolio.
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Portfolio |
Investment Adviser/Sub-Adviser | Investment Objective | ||
Transamerica Clarion Global Real Estate Securities VP |
Transamerica Asset Management, Inc.
CBRE Clarion Securities LLC |
Seeks long-term total return from investments primarily in equity securities of real estate companies. Total return consists of realized and unrealized capital gains and losses plus income.
| ||
*Transamerica International Moderate Growth VP3 |
Transamerica Asset Management, Inc.
J.P. Morgan Investment Management Inc.
|
Seeks capital appreciation with current income as a secondary objective.
| ||
Transamerica Janus Balanced VP |
Transamerica Asset Management, Inc.
Janus Capital Management LLC |
Seeks long-term capital growth, consistent with preservation of capital and balanced by current income.
| ||
Transamerica Janus Mid-Cap Growth VP |
Transamerica Asset Management, Inc.
Janus Capital Management LLC
|
Seeks long-term capital appreciation. | ||
Transamerica Jennison Growth VP |
Transamerica Asset Management, Inc.
Jennison Associates, LLC.
|
Seeks long-term growth of capital. | ||
Transamerica JPMorgan Core Bond VP |
Transamerica Asset Management, Inc.
JPMorgan Investment Management, Inc.
|
Seeks total return, consisting of current income and capital appreciation.
| ||
Transamerica JPMorgan Enhanced Index VP |
Transamerica Asset Management, Inc.
J. P. Morgan Investment Management Inc. |
Seeks to earn a total return modestly in excess of the total return performance of the S&P 500® (including the reinvestment of dividends) while maintaining a volatility of return similar to the S&P 500®.
| ||
Transamerica JPMorgan Tactical Allocation VP |
Transamerica Asset Management, Inc.
J. P. Morgan Investment Management Inc.
|
Seeks current income and preservation of capital. | ||
Transamerica Managed Risk Balanced ETF VP |
Transamerica Asset Management, Inc.
Milliman Financial Risk Management LLC
|
Seeks to balance capital appreciation and income. | ||
Transamerica Managed Risk Growth ETF VP |
Transamerica Asset Management, Inc.
Milliman Financial Risk Management LLC |
Seeks capital appreciation as a primary objective and income as a secondary objective.
| ||
Transamerica MFS International Equity VP |
Transamerica Asset Management, Inc.
MFS® Investment Management
|
Seeks capital growth. |
3Each of these asset allocation portfolios is a fund of funds and invests in a combination of underlying portfolios of Transamerica Series Trust and Transamerica Funds. Please see each portfolios prospectus for a description of the investment strategy and the risks associated with investing in the portfolio.
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Portfolio |
Investment Adviser/Sub-Adviser | Investment Objective | ||
Transamerica Morgan Stanley Capital Growth VP |
Transamerica Asset Management, Inc.
Morgan Stanley Investment Management Inc.
|
Seeks to maximize long-term growth. | ||
Transamerica Multi-Managed Balanced VP |
Transamerica Asset Management, Inc.
Aegon USA Investment Management, LLC
J. P. Morgan Investment Management Inc. |
Seeks to provide a high total investment return through investments in a broadly diversified portfolio of stocks, bonds and money market instruments.
| ||
*Transamerica PIMCO Tactical-Balanced VP |
Transamerica Asset Management, Inc.
Pacific Investment Management Company LLC
|
Seeks a combination of capital appreciation and income. | ||
*Transamerica PIMCO Tactical-Conservative VP |
Transamerica Asset Management, Inc.
Pacific Investment Management Company LLC
|
Seeks a combination of capital appreciation and income. | ||
*Transamerica PIMCO Tactical-Growth VP |
Transamerica Asset Management, Inc.
Pacific Investment Management Company LLC
|
Seeks a combination of capital appreciation and income. | ||
Transamerica PIMCO Total Return VP |
Transamerica Asset Management, Inc.
Pacific Investment Management Company LLC |
Seeks maximum total return consistent with preservation of capital and prudent investment management.
| ||
*Transamerica QS Investors Active Asset Allocation Conservative VP++ |
Transamerica Asset Management, Inc.
QS Investors, LLC |
Seeks current income and preservation of capital. | ||
*Transamerica QS Investors Active Asset Allocation Moderate Growth VP++ |
Transamerica Asset Management, Inc.
QS Investors, LLC |
Seeks capital appreciation with current income as a secondary objective. | ||
*Transamerica QS Investors Active Asset Allocation Moderate VP++ |
Transamerica Asset Management, Inc.
QS Investors, LLC
|
Seeks capital appreciation and current income. | ||
Transamerica Small/Mid Cap Value VP |
Transamerica Asset Management, Inc.
Systematic Financial Management L.P.; Thompson, Siegel & Walmsley, LLC
|
Seeks to maximize total return. | ||
Transamerica T. Rowe Price Small Cap VP |
Transamerica Asset Management, Inc.
T. Rowe Price Associates, Inc. |
Seeks long-term growth of capital by investing primarily in common stocks of small growth companies.
| ||
Transamerica Torray Concentrated Growth VP |
Transamerica Asset Management, Inc.
Torray LLC
|
Seeks to achieve long-term growth of capital. |
++This portfolio invests in a combination of underlying Exchange Traded Funds (ETFs). Please see the portfolios prospectus for a description of the investment strategy and the risks associated with investing in the portfolio.
5Formerly, Transamerica Systematic Small/Mid Cap Value VP.
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Portfolio |
Investment Adviser/Sub-Adviser | Investment Objective | ||
Transamerica WMC US Growth VP |
Transamerica Asset Management, Inc.
Wellington Management Company, LLP
|
Seeks to maximize long-term growth. | ||
FIDELITY FUNDS | ||||
Fidelity VIP Index 500 Portfolio |
Fidelity Management & Research Company
FMR Co., Inc.; Geode Capital Management, LLC
|
Seeks investment results that correspond to the total return of common stocks publicly traded in the United States, as represented by the S&P 500® Index.
| ||
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.: | ||||
AB Balanced Wealth Strategy Portfolio |
AllianceBernstein L.P. |
Seeks to maximize total return consistent with the Advisers determination of reasonable risk. | ||
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST: | ||||
Franklin Founding Funds Allocation VIP Fund6 |
See Footnote 7 |
Seeks capital appreciation with income as a secondary goal. | ||
PROFUNDS: | ||||
ProFund VP Asia 308 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the ProFunds Asia 30 Index. | ||
ProFund VP Basic Materials8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. Basic MaterialsSM Index. | ||
ProFund VP Bull8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the S&P 500® Index.. | ||
ProFund VP Consumer Services8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. Consumer ServicesSM Index. | ||
ProFund VP Emerging Markets8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the BNY Mellon Emerging Markets 50 ADR® Index. | ||
ProFund VP Europe 308 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the ProFunds Europe 30 Index. | ||
ProFund VP Falling U.S. Dollar8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the basket of currencies included in the U.S. Dollar Index®. |
6This portfolio is a fund of funds and invests in equal portions in Class 1 shares of the Franklin Income VIP Fund, Mutual Shares VIP Fund and Templeton Growth VIP Fund. Please see the portfolios prospectus for a description of the investment strategy and the risks associated with investing in the portfolio.
7Franklin Templeton Services, LLC is the portfolios administrator; the portfolio does not have an investment manager nor does it pay any investment management fees.
8The ProFunds VP and Access Trust portfolios permit frequent transfers, which in turn may increase portfolio turnover. A high level of portfolio turnover may negatively impact performance by increasing transaction costs. In addition, large movements of assets into and out of a ProFunds or Access Trust VP portfolio may negatively impact a funds ability to achieve its investment objective or maintain a consistent level of operating expenses. Please see the ProFunds VP or Access Trust prospectus for a description of the investment objectives and risks associated with investing in the ProFunds or Access Trust VP portfolios.
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Portfolio | Investment Adviser/Sub-Adviser | Investment Objective | ||
ProFund VP Financials8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. FinancialsSM Index.
| ||
ProFund VP Government Money Market8,9 |
ProFund Advisors LLC |
Seeks a high level of current income consistent with liquidity and preservation of capital.
| ||
ProFund VP International8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the MSCI EAFE Index. The fund determines its success in meeting this investment objective by comparing its daily return on a given day with the daily performance of MCSI EAFE futures contracts traded in the United States.
| ||
ProFund VP Japan8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Nikkei 225 Stock Average. The Fund seeks to provide a return consistent with an investment in the component equities in the Index hedged to U.S. dollars. The Fund seeks to provide a return based solely on the local price return of the equity securities in the Index, without any effect from currency movements in the yen versus the U.S. dollar. The Fund determines its success in meeting this investment objective by comparing its daily return on a given day with the daily performance of the dollar-denominated Nikkei 225 futures contracts traded in the United States.
| ||
ProFund VP Mid-Cap8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the S&P MidCap 400® Index.
| ||
ProFund VP NASDAQ-1008 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the NASDAQ-100® Index.
|
8The ProFunds VP and Access Trust portfolios permit frequent transfers, which in turn may increase portfolio turnover. A high level of portfolio turnover may negatively impact performance by increasing transaction costs. In addition, large movements of assets into and out of a ProFunds or Access Trust VP portfolio may negatively impact a funds ability to achieve its investment objective or maintain a consistent level of operating expenses. Please see the ProFunds VP or Access Trust prospectus for a description of the investment objectives and risks associated with investing in the ProFunds or Access Trust VP portfolios.
9During extended periods of low interest rates, and partly as a result of insurance charges, the yield on the government money market portfolios subaccounts may become extremely low and possibly negative.
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Portfolio
|
Investment Adviser/Sub-Adviser |
Investment Objective | ||
ProFund VP Oil & Gas8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. Oil & GasSM Index.
| ||
ProFund VP Pharmaceuticals8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. Pharmaceuticals SM Index.
| ||
ProFund VP Precious Metals8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones Precious Metals SM Index.
| ||
|
ProFund Advisors LLC |
Seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the BNY Mellon Emerging Markets 50 ADR Index. The fund does not seek to achieve its stated investment objective over a period of time greater than a single day.
| ||
ProFund VP Short International8 |
ProFund Advisors LLC |
Seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the MSCI EAFE Index (the Index). The fund does not seek to achieve its stated investment objective over a period of time greater than a single day. The fund determines its success in meeting this investment objective by comparing its daily return on a given day with the inverse (-1x) of the daily performance of MSCI EAFE futures contracts traded in the United States.
| ||
ProFund VP Short NASDAQ-1008 |
ProFund Advisors LLC |
Seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the NASDAQ-100® Index. The fund does not seek to achieve its stated investment objective over a period of time greater than a single day.
|
8The ProFunds VP and Access Trust portfolios permit frequent transfers, which in turn may increase portfolio turnover. A high level of portfolio turnover may negatively impact performance by increasing transaction costs. In addition, large movements of assets into and out of a ProFunds or Access Trust VP portfolio may negatively impact a funds ability to achieve its investment objective or maintain a consistent level of operating expenses. Please see the ProFunds VP or Access Trust prospectus for a description of the investment objectives and risks associated with investing in the ProFunds or Access Trust VP portfolios.
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Portfolio |
Investment Adviser/Sub-Adviser |
Investment Objective | ||
ProFund VP Short Small-Cap8 |
ProFund Advisors LLC |
Seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the Russell 2000® Index. The fund does not seek to achieve its stated investment objective over a period of time greater than a single day.
| ||
ProFund VP Small-Cap8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Russell 2000® Index.
| ||
ProFund VP Small-Cap Value8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the S&P SmallCap 600® Value Index.
| ||
ProFund VP Telecommunications8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. TelecommunicationsSM Index.
| ||
ProFund VP UltraNASDAQ-1008 |
ProFund Advisors LLC |
Seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the NASDAQ-100® Index. The fund does not seek to achieve its stated investment objective over a period of time greater than a single day.
| ||
ProFund VP UltraSmall-Cap8 |
ProFund Advisors LLC |
Seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the Russell 2000® Index. The fund does not seek to achieve its stated investment objective over a period of time greater than a single day.
| ||
ProFund VP U.S. Government Plus8 |
ProFund Advisors LLC |
Seeks daily investment results, before fees and expenses, that correspond to one and one-quarter times (1.25x) the daily price movement of the most recently issued 30-year U.S. Treasury Bond. The fund does not seek to achieve its stated investment objective over a period of time greater than a single day.
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8The ProFunds VP and Access Trust portfolios permit frequent transfers, which in turn may increase portfolio turnover. A high level of portfolio turnover may negatively impact performance by increasing transaction costs. In addition, large movements of assets into and out of a ProFunds or Access Trust VP portfolio may negatively impact a funds ability to achieve its investment objective or maintain a consistent level of operating expenses. Please see the ProFunds VP or Access Trust prospectus for a description of the investment objectives and risks associated with investing in the ProFunds or Access Trust VP portfolios.
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Portfolio |
Investment Adviser/Sub-Adviser |
Investment Objective | ||
ProFund VP Utilities8 |
ProFund Advisors LLC |
Seeks investment results, before fees and expenses, that correspond to the performance of the Dow Jones U.S. UtilitiesSM Index.
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ACCESS TRUST:
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Access VP High Yield Fund8,10 |
ProFund Advisors LLC |
Seeks to provide investment results that generally correspond to the total return of the high yield market consistent with maintaining reasonable liquidity.
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8The ProFunds VP and Access Trust portfolios permit frequent transfers, which in turn may increase portfolio turnover. A high level of portfolio turnover may negatively impact performance by increasing transaction costs. In addition, large movements of assets into and out of a ProFunds or Access Trust VP portfolio may negatively impact a funds ability to achieve its investment objective or maintain a consistent level of operating expenses. Please see the ProFunds VP or Access Trust prospectus for a description of the investment objectives and risks associated with investing in the ProFunds or Access Trust VP portfolios.
10Under normal market conditions, this portfolio invests at least 80% of its net assets in credit default swaps and other financial instruments that in combination have economic characteristics similar to the high yield debt (junk bonds) market and/or in high yield debt securities.
Transamerica Asset Management, Inc. (TAM), located at 1801 California Street, Suite 5200, Denver, Colorado 80202-2642, serves as investment adviser to the Transamerica Series Trust (Series Trust) and manages the Series Trust in accordance with policies and guidelines established by the Series Trusts Board of Trustees. TAM is directly owned by Transamerica Premier (77%) and AUSA Holding Company (23%). For certain portfolios, TAM has engaged investment sub-advisers to provide portfolio management services. TAM and each investment sub-adviser are registered investment advisers under the Investment Advisers Act of 1940, as amended. See the Series Trust prospectuses for more information regarding TAM and the investment sub-advisers.
Fidelity Management & Research Company (FMR) located at 82 Devonshire Street, Boston, Massachusetts 02109-3605 serves as investment adviser to the Fidelity VIP Fund and manages the Fidelity VIP Fund in accordance with policies and guidelines established by the Fidelity VIP Funds Board of Trustees. For certain portfolios, FMR has engaged investment sub-advisers to provide portfolio management services with regard to foreign investments. FMR and each sub-adviser are registered investment advisers under the Investment Advisers Act of 1940, as amended. See the Fidelity VIP Fund prospectuses for more information regarding FMR and the investment sub-advisers.
ProFund Advisors LLC (ProFund Advisors) located at 7501 Wisconsin Avenue, Suite 1000, Bethesda, Maryland 20814-6527 serves as the investment adviser and provides management services to all of the ProFunds and Access Trust portfolios. ProFund Advisors oversees the investment and reinvestment of the assets in each ProFunds and Access Trust portfolio in accordance with policies and guidelines established by the ProFunds or Access Trusts Board of Trustees. ProFund Advisors is a registered investment adviser under the Investment Advisers Act of 1940, as amended. See the ProFunds and Access Trust prospectuses for more information regarding ProFund Advisors.
AllianceBernstein L.P., (AllianceBernstein), located at 1345 Avenue of the Americas, New York, New York 10105-0302 serves as investment adviser to the Alliance Bernstein Variable Products Series Fund, Inc. and manages the AB Balanced Wealth Strategy Portfolio in accordance with the policies and guidelines established by the AllianceBernstein Board of Directors. Please see the prospectus for the portfolio for more information regarding AllianceBernstein L.P.
Franklin Advisers, L.P. (Franklin), located at One Franklin Parkway, San Mateo, California 94403-1906 serves as investment adviser to the Franklin Templeton Variable Insurance Products Trust and manages the Franklin Founding Funds Allocation VIP Fund. Franklin Templeton Services, LLC (FT Services) serves as administrator for the Franklin Founding Funds Allocation VIP Fund and provides certain administrative services and facilities for the advisor, and oversees rebalancing of the portfolios assets. FT Services is paid a fee for its services from the portfolio. Franklin oversees the investment and reinvestment of the portfolios assets in accordance with policies and guidelines established by the Trusts Board of Trustees. Please see the portfolios prospectus for more information regarding Franklin and FT Services.
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Selection of Underlying Portfolios
The underlying portfolios offered through this product are selected by Transamerica Premier. Transamerica Premier may consider various factors, including, but not limited to, asset class coverage, the alignment of the investment objectives of an underlying portfolio with our hedging strategy, the strength of the advisers or sub-advisers reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor that we may consider is whether the underlying portfolio or its service providers (e.g., the investment adviser or sub-advisers) or its affiliates will make payments to us or our affiliates in connection with certain administrative, marketing, and support services, or whether affiliates of the portfolio can provide marketing and distribution support for sales of the Policies. (For additional information on these arrangements, see the section of this prospectus entitled Revenue We Receive.) We review the portfolios periodically and may remove a portfolio, or limit its availability to new premiums and/or transfers of cash value if we determine that a portfolio no longer satisfies one or more of the selection criteria, and/or if the portfolio has not attracted significant allocations from policyowners. We have included the Series Trust portfolios at least in part because they are managed by TAM, our directly owned subsidiary.
You are responsible for choosing the portfolios, and the amounts allocated to each, that are appropriate for your own individual circumstances and your investment goals, financial situation, and risk tolerance. Because investment risk is borne by you, you should carefully consider any decisions that you make regarding investment allocations.
In making your investment selections, we encourage you to thoroughly investigate all of the information that is available to you regarding the portfolios including each funds prospectus, statement of additional information and annual and semi-annual reports. After you select portfolios for your initial premium, you should monitor and periodically re-evaluate your allocations to determine if they are still appropriate.
You bear the risk of any decline in your cash value resulting from the performance of the portfolios you have chosen.
We do not recommend or endorse any particular portfolio and we do not provide investment advice.
Addition, Deletion, or Substitution of Portfolios
We do not guarantee that each portfolio will always be available for investment through the Policy. We reserve the right, subject to compliance with applicable law, to add new portfolios or portfolio classes, close existing portfolios or portfolio classes, or substitute portfolio shares that are held by any subaccount for shares of a different portfolio. New or substitute portfolios may have different fees and expenses and their availability may be limited to certain classes of purchasers. We will not add, delete or substitute any shares attributable to your interest in a subaccount without notice to you and prior approval of the SEC, to the extent required by the 1940 Act or other applicable law. We may also decide to purchase for the separate account securities from other portfolios. We reserve the right to transfer separate account assets to another separate account that we determine to be associated with the class of contracts to which the Policy belongs.
Your Right to Vote Portfolio Shares
Even though we are the legal owner of the portfolio shares held in the subaccounts, and have the right to vote on all matters submitted to shareholders of the portfolios, we will vote our shares only as policyowners instruct, as long as such action is required by law.
Before a vote of a portfolios shareholders occurs, you will receive voting materials from us. We will ask you to instruct us on how to vote and to return your voting instructions to us in a timely manner. You will have the right to instruct us on the number of portfolio shares that corresponds to the amount of cash value you have in that portfolio (as of a date set by the portfolio).
If we do not receive voting instructions on time from some policyowners, we will vote those shares in the same proportion as the timely voting instructions we receive. Therefore, because of proportional voting, a small number of policyowners may control the outcome of a vote. Should federal securities laws, regulations and interpretations change, we may elect to vote portfolio shares in our own right. If required by state insurance officials, or if permitted under federal regulation, we may disregard certain owner voting instructions. If we ever disregard voting instructions, we will send you a summary in the next annual report to policyowners advising you of the action and the reasons we took such action.
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CHARGES AND DEDUCTIONS |
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This section describes the charges and deductions that we make under the Policy in consideration for: (1) the services and benefits we provide; (2) the costs and expenses we incur; and (3) the risks we assume. The fees and charges deducted under the Policy may result in a profit to us.
Services and benefits we provide under the | |
The death benefit, cash and loan benefits. | ||
Policy: | |
Investment options, including premium allocations. | ||
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Administration of elective options. | |||
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The distribution of reports to owners. | |||
Costs and expenses we incur: | |
Costs associated with processing and underwriting applications. | ||
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Expenses of issuing and administering the Policy (including any Policy riders). | |||
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Overhead and other expenses for providing services and benefits and sales and marketing expenses, including compensation paid in connection with the sale of the Policies. | |||
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Other costs of doing business, such as collecting premiums, maintaining records, processing claims, effecting transactions, and paying federal, state and local premium and other taxes and fees. | |||
Risks we assume: | |
That the charges we may deduct may be insufficient to meet our actual claims because insureds die sooner than we estimate. | ||
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That the costs of providing the services and benefits under the Policies may exceed the charges we are allowed to deduct. |
Some or all of the charges we deduct are used to pay aggregate Policy costs and expenses we incur in providing the services and benefits under the Policy and assuming the risks associated with the Policy.
We take the monthly deductions from the cash value on the Policy date and on each Monthiversary. We deduct this charge on a pro rata basis from all accounts (i.e., in the same proportion that the value in each subaccount and the fixed account bears to the total cash value on the Monthiversary).
Because portions of the monthly deductions (such as cost of insurance) can vary monthly, the monthly deductions will also vary.
Each monthly deduction consists of: | |
The monthly Policy charge (for Policies applied for on or after May 1, 2009); plus | ||
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The monthly cost of insurance charge for the Policy (including any surcharge associated with flat or table substandard ratings); plus | |||
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The monthly charge for any benefits provided by riders attached to the Policy. | |||
Monthly Policy Charge (for Policies Applied for On or After May 1, 2009): | ||||
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This charge currently equals $7.00 each Policy month for Juveniles at issue ages 0-17 and $0 for issue ages 18 and over. After the first Policy year, we may increase this charge. | |||
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We guarantee this charge will never be more than $12 per month for juveniles at issue ages 0-17 and $0 for issue ages 18 and over. | |||
Cost of Insurance Charge: | ||||
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We deduct this charge each month. It varies each month and is determined as follows: |
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1. Divide the death benefit on the Monthiversary by 1.0024663 (this factor reduces the net amount at risk, for purposes of computing the cost of insurance, by taking into account assumed monthly earnings at an annual rate of 3.0%); | ||||
2. Subtract the cash value on the Monthiversary after it has been allocated among the segments of specified amount in force in the following order: first, initial specified amount; then, each increase in specified amount starting with the oldest increase; then the next oldest, successively, until all cash value has been allocated (the resulting amounts are the net amount at risk for each segment of specified amount); | ||||
3. Multiply each segment of net amount at risk provided under 2. (above) by the appropriate monthly cost of insurance rate for that segment; and add the results together. | ||||
For Policies applied for on or after May 1, 2009: | ||||
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Your monthly current cost of insurance rate depends, in part, on your specified amount band. The specified amount bands available are: | |||
> Band 1: $50,000 - $249,999 | ||||
> Band 2: $250,000 - $499,999 | ||||
> Band 3: $500,000 - $999,999 | ||||
> Band 4: $1,000,000 and over | ||||
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Generally, the higher the specified amount band you choose, the lower the current cost of insurance rates. | |||
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We determine your specified amount band each Monthiversary by referring to the specified amount in force for the Base Policy (that is, the initial specified amount on the Policy date, plus any increases, and minus any decreases). Riders are not included in determining the Policys specified amount band. | |||
Optional Insurance Riders: | ||||
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The monthly deductions will include charges for any optional insurance benefits you add to your Policy by rider. |
To determine the appropriate monthly cost of insurance rates, we refer to a schedule of current cost of insurance rates and consider a number of factors including, but not limited to: the insureds issue age on the Policy date; issue age at the time of any increase in specified amount; specified amount band; sex; underwriting class; and the length of time from the Policy date or from the date of any increase in specified amount. Cost of insurance rates generally will increase each year with the age of the insured. Cost of insurance rates are generally lower for each higher band of specified amount. The factors that affect the net amount at risk for each segment of specified amount include: the investment performance of the portfolios in which you invest; payment of premiums; the fees and charges deducted under the Policy; the death benefit option you chose; as well as any Policy transactions (such as loans, cash withdrawals, transfers, and changes in specified amount). Monthly cost of insurance rates may change from time to time and different monthly cost of insurance rates may apply to increases in the specified amount following the Policy date and any additional death benefit. The actual monthly cost of insurance rates are primarily based on our expectations as to future mortality experience and expenses. The actual rates we charge will never be greater than the Table of Guaranteed Maximum Life Insurance Rates stated in your Policy. For Policies applied for on or after May 1, 2009, these guaranteed rates are based on the 2001 C.S.O. Mortality Tables and the insureds attained age, sex, and underwriting class. For Policies issued before January 1, 2009, these guaranteed rates are based on the Commissioners 1980 Standard Ordinary Tobacco and Non-Tobacco Mortality Tables (1980 C.S.O. Tables) and the insureds attained age, sex, and underwriting class.
If you increase the specified amount, different monthly cost of insurance rates may apply to that segment of specified amount, based on factors such as the insureds age and underwriting class at the time of the increase, sex, and the length of time since the increase. For Policies applied for on or after May 1, 2009: Increases in specified amount may move the Policy into a higher specified amount band, which may result in a decrease in the rates for the cost of insurance charge for as long as the Policy remains in the higher specified band and possibly a decrease in the
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premium expense charges because premium expense charges are based on the specified amount in force on the Base policy at the time the premium is received.
For Policies applied for on or after May 1, 2009: Decreases in specified amount may cause the Policy to drop into a lower band of specified amount, and may result in an increase in cost of insurance and premium expense charges. Decreases in specified amount will be applied on a last-in, first-out basis to the specified amount in force, and will first reduce the specified amount provided by the most recent increase in specified amount in force, then reduce the next most recent increases, successively, and thereafter reduce the initial specified amount.
The underwriting class of the insured will affect the cost of insurance rates. In determining underwriting classifications, we apply certain criteria that are based on an assessment of the insureds life expectancy. We currently place insureds into preferred and standard classes. We also place insureds into substandard classes with extra ratings, which reflect higher mortality risks, and will result in higher cost of insurance rates. Examples of reasons an insured may be placed into an extra risk factor underwriting class include, but are not limited to, medical history, avocation, occupation, driving record, or planned future travel (where permitted by state law).
We may issue certain policies on a simplified, guaranteed issue or expedited basis. Cost of insurance rates charged for any policies issued on a simplified guaranteed or expedited basis may cause healthy individuals to pay higher cost of insurance rates than they would pay under a substantially similar policy that we offer using different underwriting criteria.
The cost of insurance charge for any optional insurance rider, and for any increase in rider specified amount, is calculated in the same manner used to determine the Base Policys cost of insurance charges. Generally, the current cost of insurance rates for the optional riders are lower than the current cost of insurance rates on the Policy without riders, except that the current rates are not guaranteed for any amount of time under the riders.
Mortality and Expense Risk Charge
We deduct a daily charge from each subaccount that, together with other fees and charges, compensates us for services rendered, the expenses expected to be incurred, and the risks assumed. This charge is a maximum of:
For Policies Applied for On or After May 1, 2009 this charge is a maximum of:
| Your Policys cash value in each subaccount; multiplied by |
| The daily pro rata portion of the annual mortality and expense risk charge rate of 1.50%. |
The annual rate for the mortality and expense risk charge is equal to 1.50% of the average daily net assets of each subaccount. We may reduce this charge to 0.30% after the first 15 Policy years, but we do not guarantee that we will do so, and we reserve the right to maintain this charge at the 1.50% level after the 15th Policy year.
For Policies Applied for and Issued Before January 1, 2009 this charge is a maximum of:
| Your Policys cash value in each subaccount; multiplied by |
| The daily pro rata portion of the annual mortality and expense risk charge rate of: 0.90% for Policy years 1-15; and 0.60% after the first 15 Policy years. |
The annual rate for the mortality and expense risk charge is equal to 0.90% of the average daily net assets of each subaccount. We guarantee to reduce this charge to 0.60% after the first 15 Policy years. We may reduce this charge to 0.30% in the 16th Policy year, but we do not guarantee that we will do so, and we reserve the right to maintain this charge at the 0.60% level after the 15th Policy year.
If this charge, combined with other Policy fees and charges, does not cover our total actual costs for services rendered and expenses incurred, we absorb the loss. Conversely, if these fees and charges more than cover actual costs, the excess is added to our surplus. We expect to profit from these charges.
We currently charge you an effective annual interest rate on a Policy loan of 3.75% (4.0% maximum guaranteed) on each Policy anniversary. We will also credit the amount in the loan reserve account with an effective annual interest rate of 3.0%. After offsetting the 3.0% interest we credit, the net cost of loans currently is 0.75% annually (1.0% maximum guaranteed). After the 10th Policy year, we will apply preferred loan charged rates on an amount equal to the cash value minus total premiums paid (less any cash withdrawals) and minus any outstanding loan amount including accrued loan interest. The current preferred loan effective annual interest rate charged is 3.00% and is not guaranteed.
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We currently do not make any deductions for taxes from the separate account. We may do so in the future to the extent that such taxes are imposed by federal or state agencies.
The following charges apply if you elect any of the riders available under your Policy as noted below (see Supplemental Benefits (Riders)):
| Living Benefit Rider. We do not assess an administrative charge for this rider, however, if the rider is exercised, we reduce the single sum benefit by a discount factor to compensate us for income lost due to the early payment of the death benefit. For a complete description of the Living Benefit Rider, please refer to the section entitled Living Benefit Rider (an Accelerated Death Benefit) in this prospectus. |
| Other Insured Rider. We assess a cost of insurance charge based on each other insureds issue age, sex and underwriting class, and Policy year, and the rider specified amount. Cost of insurance charges generally will increase each year with the age of the insured. These charges will vary depending on whether the 1980 C.S.O. Mortality Tables or the 2001 C.S.O. Mortality Tables are applicable to your Policy, which depends upon the application and/or issue date of your Policy. |
| Childrens Insurance Rider. We assess a cost of insurance charge based on the rider face amount, regardless of the number of children insured. |
| Accidental Death Benefit Rider. We assess a cost of insurance charge based on the primary insureds attained age and rider specified amount. Cost of insurance charges generally will increase each year with the age of the insured. |
| Disability Waiver Rider. We assess a rider charge based on the primary insureds issue age, sex and net amount at risk for the Policy, as well as a charge based on those riders that would be eligible to have monthly deductions waived. |
| Disability Waiver and Income Rider. The charge for this rider is based on the primary insureds issue age, sex and the amount of monthly waiver of premium benefit that would be paid in the event of total disability, as defined in the rider. |
The value of each subaccount will reflect the fees and expenses paid and received by the corresponding portfolio - including, but not limited to - management fees and expenses, operating expenses and any 12b-1 fees. Under certain circumstances, the board of directors of a government money market portfolio would have the discretion to impose a liquidity fee on redemptions from the money market portfolio and to implement a redemption gate that would temporarily suspend redemptions from the fund. Accordingly, we reserve the right to implement, administer and charge you for any such fee or restriction that may be imposed by the government money market portfolios.
Please see the fund prospectuses for more detailed information about the portfolios.
We (and our affiliates) may directly or indirectly receive payments from the portfolios, their advisers, sub-advisers, distributors or affiliates thereof in connection with certain administrative, marketing and other support services we (and our affiliates) provide and expenses we incur in selling our variable insurance products.
These arrangements are sometimes referred to as revenue sharing arrangements and are described further below. While only certain of the types of payments described below may be made in connection with your particular Policy, all such payments may nonetheless influence or impact actions we (and/or our affiliates) take, and recommendations we (and our affiliates) make, regarding each of the variable insurance products that we (and our affiliates) offer, including your Policy.
We (and/or our affiliates) may receive some or all of the following:
Rule 12b-1 Fees. We and/or our affiliate, Transamerica Capital, Inc. (TCI), which is the principal underwriter for the Policies, indirectly receive 12b-1 fees from certain funds available as investment choices under our variable insurance products. Any 12b-1 fees received by TCI that are attributable to our variable
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insurance products are then credited to us. These fees range from 0.00% to 0.35% of the average daily assets of the certain underlying fund portfolios attributable to the Policies and to certain other variable insurance products that we and our affiliates issue.
Administrative, Marketing and Support Service Fees (Support Fees). The investment adviser, sub-adviser, administrators, and/or distributors (or affiliates thereof) of the portfolios may make payments to us and/or our affiliates, including TCI. These payments may be derived, in whole or in part, from the profits the investment adviser or sub-adviser realizes on the advisory fee deducted from portfolio assets. Policyowners, through their indirect investment in the portfolios, bear the costs of these advisory fees. (See the prospectuses for the funds for more information.) The amount of the payments we (or our affiliates) receive is generally based on a percentage of the assets of the particular portfolios attributable to the Policy and to certain other variable insurance products that our affiliates and we issue. These percentages differ and the amounts of payments may be significant. Advisers or sub-advisers (or other affiliates) payments to us vary.
The chart below provides the maximum combined percentages of 12b-1 fees and Support Fees that we anticipate will be paid to us on an annual basis:
Incoming Payments to Transamerica Premier and TCI | ||||||
Fund |
Maximum Fee % of assets* |
Fund |
Maximum Fee % of assets* | |||
Transamerica Series Trust** | | Fidelity Variable Insurance Products Funds | 0.39%*** | |||
ProFunds | 0.50% | Access One Trust | 0.50% | |||
Alliance Bernstein | 0.25% | Franklin Templeton | 0.35% |
*Payments are based on a percentage of the average assets of each fund portfolio owned by the subaccounts that are available under the Policy and under certain other variable insurance products offered by our affiliates and us. We and/or TCI may continue to receive 12b-1 fees and administrative fees on subaccounts that are closed to new investments, depending on the terms of the agreements supporting those payments and on the services provided.
**Because the Transamerica Series Trust is managed by an affiliate, there are additional benefits to us and our affiliates for amounts you allocate to the Transamerica Series Trust portfolios, in terms of our and our affiliates overall profitability. During 2016 we received $11,065,966.82 in benefits from TAM.
***We receive this percentage once $100 million in fund shares are held by the subaccounts of Transamerica Premier and its affiliates.
Other payments. We and our affiliates, including TCI and Transamerica Financial Advisors, Inc. (TFA), also directly or indirectly receive additional amounts or different percentages of assets under management from certain advisers and sub-advisers to the portfolios (or their affiliates) with regard to variable insurance products or mutual funds that are issued or managed by us and our affiliates. These payments may be derived in whole or in part, from the profits the investment adviser or sub-adviser receives from the advisory fee deducted from portfolio assets. Policyowners, through their indirect investment in the portfolios, bear the costs of those advisory fees (see the prospectuses for the funds for more information).
Certain advisers and sub-advisers of the underlying Funds (or their affiliates) (1) may directly or indirectly pay TCI conference sponsorship(s) or marketing allowance payments that provides such advisers and sub-advisers with access to TCIs wholesalers at TCIs national and regional sales conferences as well as internal and external meetings and events that are attended by TCIs wholesalers and/or other TCI employees; (2) may pay to TFA, directly or indirectly, varying amounts to obtain access to TFAs wholesaling and selling representatives; (3) may provide us and/or certain affiliates and/or selling firms with occasional gifts, meals, tickets or other compensation as an incentive to market the Funds and to assist with their promotional efforts; and (4) may reimburse our affiliated selling firms for exhibit booths and other items at national conferences of selling representatives. The amounts may be significant and these arrangements provide the adviser or sub-adviser (or other affiliates) with increased access to us and to our affiliates involved in the distribution of the Policy.
For the calendar year ended December 31, 2016, TCI and its affiliates received revenue sharing payments that totaled approximately $2,700,000.00. The firms that paid revenue to participate in TCI sponsored events included but were not limited to the following: Aegon USA Investment Management; Allianzgi Distributors; American Century Investment Management, Inc.; American Funds; Barrow, Hanley, Mewhinney & Strauss; Belle Haven Investments; BlackRock Investment Management, LLC; Columbia Threadneedle Investments; Fidelity Management & Research Company; Franklin Templeton Services, LLC; Goldman Sachs; Hartford; Invesco; Janus Capital Management LLC; Jennison Associates LLC; John Hancock; JP Morgan Investment Management Inc.; Kayne Anderson Capital Advisors, LP; Lord Abbett & Co.; Manning & Napier Advisors; MFS Investment Management; Milliman Financial Risk Management LLC; Morgan Stanley Investment Management Inc.; Morningstar Advisers; Natixis Global Asset Management; Neuberger Berman; New York Life/Mainstay
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Investments; Oppenheimer Funds, Inc.; Pacific Investment Management Company; PineBridge Investments LLC; Pioneer Investment Management, Inc.; Prudential Investments; QS Legg Mason Global Asset Allocation, LLC; Ridgeworth Investments; Rockefeller & Co.; Schroder Investment Management; Systematic Financial Management; TIAA; Thompson, Siegel & Walmsley; The Vanguard Group, Inc.; and Wellington Management Company.
Please Note: Some of the aforementioned advisers and/or sub-advisers may not be associated with underlying fund portfolios currently available in this product.
Proceeds from certain of these payments by the Funds, the advisers, the sub-advisers and/or their affiliates may be profit to us, and may be used for any corporate purpose, including payment of expenses (i) that we and our affiliates incur in promoting, issuing, marketing and administering the Policies; and (ii) that we incur, in our role as intermediary, in promoting and marketing the fund portfolios.
For further details about the compensation payments we make in connection with the sale of the Policies, see Sale of the Policies in this prospectus.
THE POLICY |
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Depending on the state of issue, your Policy may be an individual Policy or a certificate issued under a group policy. The Policy is subject to the insurance laws and regulations of each state or jurisdiction in which it is available for distribution. There may be differences between the Policy issued and the general Policy description contained in this prospectus because of requirements of the state where your Policy is issued. Some of the state specific differences are included in the prospectus, but this prospectus does not include references to all state specific differences. All state specific Policy features will be described in your Policy.
The Policy belongs to the owner named in the application. The owner may exercise all of the rights and options described in the Policy. If the owner dies before the insured and no contingent owner is named, then ownership of the Policy will pass to the owners estate. The principal rights an owner may exercise are:
| To designate or change beneficiaries before the death of the insured. |
| To receive amounts payable before the death of the insured. |
| To assign the Policy (if you assign the Policy, your rights and the rights of anyone who is to receive payment under the Policy are subject to the terms of that assignment). |
| To change the owner of the Policy. |
| To change the specified amount of the Policy. |
No designation or change in designation of an owner will take effect unless we receive a transfer of ownership form. The request will take effect the date we receive it, in good order, at our mailing address or by fax at our administrative office (1-727-299-1620), subject to payment or other actions taken by us before it was received.
Any modifications or waiver of any rights or requirements under the Policy must be in writing, in good order, and signed by our president or secretary. Note: No registered representative may bind us by making any promise not contained in the Policy.
Upon notice to you, we may modify the Policy:
| To make the Policy or the separate account comply with any law or regulation issued by a governmental agency to which we are subject; or |
| To assure continued qualification of the Policy as a life insurance contract under the Internal Revenue Code or to meet applicable requirements of other federal or state laws relating to variable life policies; or |
| To reflect a change in the operation of the separate account; or |
| To provide additional subaccounts and/or general account options. |
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To purchase a Policy, you must submit a completed application, in good order, and an initial premium to us through any licensed life insurance agent who is also a registered representative of a broker-dealer having a selling agreement with TCI (the principal underwriter for the Policy) and us. We may reject the application at any time before issuing a Policy.
Initial Premium. Before we issue the Policy to you, we may require you to pay a premium amount that is at least equal to a minimum monthly guarantee premium set forth in your Policy. Thereafter (subject to the limitations described below), you may make premium payments at any time and in an amount of at least $50 and subject to the need to pay enough premium to keep the Policy in force, and to the limitations on the maximum premium amount described below.
Possible Delays. There may be delays in our receipt and processing of applications and premium payments that are outside of our control for example, because of the failure of a selling broker-dealer or registered representative to promptly forward the application to us at our mailing address, or because of delays in determining whether the Policy is suitable for you. Any such delays will affect when your Policy can be issued.
Specified Amount. You select the specified amount of insurance coverage for your Policy within the following limits. For Policies applied for on or after May 1, 2009: Our current minimum specified amount for a Policy is generally $50,000. We currently charge lower cost of insurance rates for Policies with specified amounts in higher bands of coverage. We offer the following specified amount bands of coverage:
➣ Band 1: $50,000 - $249,999 |
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➣ Band 2: $250,000 - $499,999 |
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➣ Band 3: $500,000 - $999,999 |
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➣ Band 4: $1,000,000 and over |
Issue. We will generally only issue a Policy to you if you provide sufficient evidence that the insured meets our insurability standards. Your application is subject to our underwriting rules, and we may reject any application for any reason permitted by law. We will not issue a Policy to you if the insured is over age 85. The insured must be insurable and acceptable to us under our underwriting rules on the later of:
| The date of your application; or |
| The date the insured completes all of the medical tests and examinations that we require. |
Tax-Free Section 1035 Exchanges
You can generally exchange one life insurance policy for another policy covering the same insured in a tax-free exchange under Section 1035 of the Internal Revenue Code. Before making an exchange, you should compare both life insurance policies carefully. Remember that if you exchange another life insurance policy for the one described in this prospectus, you might have to pay a surrender charge on your old policy, other charges may be higher (or lower), and the benefits may be different. If the exchange does not qualify for Section 1035 treatment, or if your current policy is subject to a policy loan, you may also have to pay federal income tax on the exchange. You should not exchange another life insurance policy for this one unless you determine, after knowing all the facts, that the exchange is in your best interest and not just better for the person selling you the Policy.
When Insurance Coverage Takes Effect
Except as provided in the conditional receipt (Conditional Receipt), if issued, or in connection with certain Section 1035 Exchanges, insurance coverage will not take effect until after all of the following conditions have been met: (1) the first full premium must be received by the Company at our mailing address; (2) during the lifetime of every proposed insured, the proposed owner must have personally received and accepted the Policy which was applied for and all answers on the application must be true and correct on the date such Policy is received and accepted; and (3) on the date of the later of either (1) or (2) above, all of the statements and answers given in the application must be true and complete, and there must have been no change in the insurability of any proposed insured.
Conditional Insurance Coverage. If you pay the full initial premium and have met all of the requirements listed in the conditional receipt attached to the application, and we deliver the Conditional Receipt to you, the insured may have conditional insurance coverage under the terms of the Conditional Receipt. The conditional insurance coverage may vary by state and/or underwriting standards. Because we do not accept initial premiums in advance for Policies with a specified amount in excess of $1,000,000, we do not offer conditional insurance coverage for those Policies. Conditional insurance coverage is void if the check or draft you gave us to pay the
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initial premium is not honored when we first present it for payment.
The aggregate amount of conditional insurance coverage, if any, is the lesser of: |
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The amounts applied for under all Conditional Receipts issued by us; or | ||
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$500,000 of life insurance. | |||
Subject to the conditions and limitations of the Conditional Receipt, conditional insurance under the terms of the Policy applied for may become effective as of the later of: | |
The date of application; or | ||
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The date of the last medical examination, test, and other screenings required by us, if any (the Effective Date). Such conditional insurance will take effect as of the Effective Date, as long as all of the following Requirements are met: | |||
1. The person proposed to be insured is found to have been insurable as of the Effective Date, exactly as applied for in accordance with our underwriting rules and standards, without any modifications as to plan, amount, or premium rate. | ||||
2. As of the Effective Date, all statements and answers given in the application must be true. | ||||
3. The payment made with the application must not be less than the full initial premium for the mode of payment chosen in the application and must be received at our mailing address within the lifetime of the proposed insured. | ||||
4. All medical examinations, tests, and other screenings required of the proposed insured by us are completed and the results received at our mailing address within 60 days of the date the application was signed. | ||||
5. All parts of the application, any supplemental application, questionnaires, addendum and/or amendment to the application are signed and received, in good order, at our mailing address. | ||||
Any conditional life insurance coverage terminates on the earliest of: |
a. | 60 days from the date the application was signed; or | ||
b. | The date we either mail notice to the applicant of the rejection of the application and/or mail a refund of any amounts paid with the application; | |||
c. | When the insurance applied for goes into effect under the terms of the Policy that you applied for; or | |||
d. | The date we offer to provide insurance on terms that differ from the insurance for which you have applied. | |||
Special limitations of the Conditional Receipt: | |
The Conditional Receipt is not valid unless: | ||
1. All blanks in the conditional receipt are completed. | ||||
2. The receipt is signed by an authorized Company representative. | ||||
Other limitations: | |
There is no Conditional Receipt coverage for riders or any additional benefits, if any, for which you may have applied. | ||
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If one or more of the receipts conditions have not been met exactly, or if a proposed insured dies by suicide, we will not be liable except to return any payment made with the application. |
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If we do not approve and accept the application within 60 days of the date you signed the application, the application will be deemed to be rejected by us and there will be no conditional insurance coverage. In that case, Transamerica Premiers liability will be limited to returning any payment(s) you have made upon return of this receipt to us. |
For 1035 Exchanges. Coverage may begin earlier in Section 1035 exchange situations as provided in the Absolute Assignment to Effect Internal Revenue Code Section 1035 Exchange and Rollover form. As provided in that form, the insurance coverage shall take effect as of the date the replaced policy is surrendered, and before delivery of the Policy, if the following conditions have been met:
The Policy has been approved for issue - even if approved other than as applied for - and accepted in writing by the proposed owner and either:
1. | The replaced policy has been surrendered and the surrender proceeds thereafter received by the Company are themselves sufficient to place the Policy in force; or |
2. | If, in addition to the surrender of the replaced policy from the existing issuer, premium is paid during the proposed insureds lifetime (either with the application for the Policy or thereafter if permitted by the Company in writing) and if such premium together with any surrender proceeds thereafter received, are sufficient to place the Policy in force. |
Charges may be applied beginning on the date that the coverage takes effect.
Full Insurance Coverage and Allocation of Initial Premium. Once we determine that the insured meets our underwriting requirements and you have paid the initial premium, the Policy will be issued and full insurance coverage will commence and we will begin to take the monthly deductions from your net premium. This date is the Policy date (or the record date, if Policy is backdated). Any premium payments we receive before the Policy date (record date, if applicable) will be held in a non-interest bearing suspense account. On the Policy date (or on the record date if your Policy is backdated), the entire amount in the non-interest bearing suspense account will be allocated as follows: (i) to the subaccounts and/or the fixed account as you specified in your application, if your state does not require a full refund of initial premium; or (ii) to the reallocation account, if your state requires us to return your initial premium in the event you exercise your free look right. (While held in the reallocation account, premium(s) will be credited with interest at the current fixed rate until the reallocation date when they will be allocated to the subaccounts and/or the fixed account as you specified in your application.) Please Note: If your Policy is backdated, your premiums are credited on the record date and not the backdated Policy date.
On any day we credit net premiums or transfer cash value to a subaccount, we will convert the dollar amount of the net premium (or transfer) into subaccount units at the unit value for that subaccount, determined at the end of the day on which we receive the premium or transaction request. We will credit amounts to the subaccounts only on a valuation date, that is, on a date the New York Stock Exchange (NYSE) is open for trading. but no later than 4:00 p.m. Eastern Time. If premium or a transaction request is received after 4 p.m. Eastern Time, we will process the requested transaction the next available day that the NYSE is open. This is true whether the requested transaction comes in via fax, wire or other electronic means, or by telephone.
Transaction Type: | Priced when received at our: | |
Payment by Check | Mailing Address, unless a different address appears on your billing coupon | |
Transfer Request | Administrative Office | |
Payment by WireTtransfer | Administrative Office | |
Electronic Credit and Debit Transactions (e.g., payments through direct deposit, debit transfers, and forms of e-commerce payments | Administrative Office |
If you request, we may backdate a Policy by assigning a Policy date earlier than the date the Policy full insurance coverage begins. However, in no event will we backdate a Policy earlier than the earliest date allowed by state law or by our underwriting rules. Your request must be in writing and, if we approve the request, we will amend your application. Your premiums, however, will be credited on the date the Policy is issued, not the backdated Policy date. Please Note: State specific rules may apply to a request to backdate a policy. Please contact your registered representative for further information.
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Cost of insurance charges are based in part on the age of the insured on the Policy date or on the date of any increase in specified amount. Generally, cost of insurance charges are lower at a younger age. We will deduct the monthly deductions, including cost of insurance charges, for the period that the Policy is backdated. This means that while the monthly deductions may be lower than what would have been charged had we not backdated the Policy, you will be paying for insurance during a period when the Policy was not in force.
PREMIUMS |
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You must instruct us on how to allocate your net premium among the subaccounts and the fixed account according to these guidelines:
| Allocation percentages must be in whole numbers. |
| If you select dollar cost averaging, we may require you to have a minimum of $5,000 in each subaccount from which we will make transfers, and you may be required to transfer at least a total of $100 monthly. |
| If you select asset rebalancing, the cash value of your Policy (if an existing Policy) or your minimum initial premium (if a new Policy) must be at least $5,000. |
| Unless otherwise required by state law, we may restrict allocations and transfers to the fixed account under Policies applied for on or after May 1, 2009 if the fixed account value (excluding amounts in the loan reserve account) following the allocation or transfer would exceed $250,000. (This restriction does not apply to any transfer to the fixed account necessary in the exercise of conversion rights.) |
Currently, you may change the allocation instructions for additional premium payments without charge at any time by writing us at our mailing address or calling us at our administrative office at 1-800-851-9777, Monday - Friday, between the hours of 8:30 a.m. - 7:00 p.m. Eastern Time. You may also change allocation instructions through our website at www.premier.transamerica.com.
Please Note: Certain subaccounts have similar names. When providing your allocation instructions, please state or write the full name of the subaccount that you select for your allocation to ensure that those allocation instructions are in good order. The change will be effective as of the valuation date on which we receive instructions from you or your authorized representative, in good order, at our mailing address or administrative office. The minimum amount you can allocate to a particular subaccount is 1.0% of a net premium payment.
Whenever you direct money into a subaccount, we will credit your Policy with the number of units for that subaccount that can be bought for the dollar payment. Premium payments received at our mailing address, or at the address on your billing coupon (for payments made by check), or at our administrative office (for payments made by wire transfer and through electronic credit and debit transactions) before the NYSE closes, are priced using the unit value determined at the closing of that regular business session of the NYSE (usually at 4:00 p.m. Eastern Time). If we receive a premium payment after the NYSE closes or on a day that the NYSE is closed for trading, we will process the order using the subaccount unit value determined at the close of the next regular session of the NYSE. We will credit amounts to the subaccounts only on a valuation date, that is, on a date the NYSE is open for trading. Your cash value will vary with the investment experience of the subaccounts you have chosen. You bear the investment risk for amounts you allocate to the subaccounts.
You should periodically review how your cash value is allocated among the subaccounts and the fixed account because market conditions and your overall financial objectives may change.
Reallocation Account. If your state requires us to return your initial premium in the event you exercise your free look right, we will allocate the initial net premium on the Policy date (or the record date if your Policy is backdated) to the reallocation account as shown on your Policy schedule page. While held in the reallocation account, net premium(s) will be credited with interest at the current fixed account rate and reduced by any monthly deductions due. The net premiums will remain in the reallocation account until the reallocation date. The reallocation date is the date we reallocate all cash value held in the reallocation account to the fixed account and/or subaccounts you selected in your application. In those states that require us to return all premiums paid for the Policy in the event you exercise your free look right, we set the reallocation date to coincide with the free look period applicable to your Policy plus a margin of five days for Policy delivery. Please contact your registered representative/agent for details concerning the free look period for your state.
On the first valuation date on or after the reallocation date, we will reallocate all cash value from the reallocation account to the fixed account and the subaccounts you selected on the application. If however you requested dollar cost averaging, we will reallocate the cash balance on the reallocation date to the fixed account, the
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Transamerica Aegon Government Money Market VP subaccount, or the Transamerica JPMorgan Core Bond VP subaccount (depending on which subaccounts you selected on your application).
Please Note: For states that do not require a full refund of the initial premium, the reallocation date is the same as the Policy date. On the Policy date, we will allocate your initial net premium, minus monthly deductions, to the fixed account and the subaccounts in accordance with the instructions you gave us on your application.
You generally have flexibility to determine the frequency and the amount of the premiums you pay. Before we issue the Policy to you, we may require you to pay a premium amount that is at least equal to a minimum monthly guarantee premium set forth in your Policy. Thereafter (subject to the limitations described below), you may make premium payments at any time and in an amount of at least $50. Under some circumstances, you may be required to pay extra premiums to prevent a lapse. Your minimum monthly guarantee premium may change if you request a change in your Policy. If this happens, we will notify you of the new minimum monthly guarantee premium. See Minimum Monthly Guarantee Premium below.
You will determine a planned periodic payment schedule, which allows you to pay level premiums at fixed intervals over a specified period of time. The amount and frequency chosen by you will be shown in your Policy. You are not required to pay premiums according to this schedule. You may change the amount, frequency, and the time period over which you make your planned periodic payments. Please be sure to notify us or your selling firm of any address changes so that we may be able to keep your current address on record.
Even if you make your planned periodic payments on schedule, your Policy still may lapse. How long your Policy remains in force depends on the Policys net surrender value. If the net surrender value is not high enough to pay the monthly deductions when due (and your no lapse period has expired) then your Policy will lapse (unless you make the payment we specify during the 61-day grace period).
Minimum Monthly Guarantee Premium
The full initial premium is the only premium you are required to pay under the Policy. However, you greatly increase your risk of lapse if you fail to regularly pay premiums at least as large as the current minimum monthly guarantee premium.
The initial minimum monthly guarantee premium is shown on your Policys schedule page, and depends on a number of factors, including the issue age, sex, rate class of the insured, the specified amount requested, and your Policys applicable C.S.O. table. We will adjust the minimum monthly guarantee premium if you change death benefit options, increase or decrease the specified amount, or if any of the riders are added or terminated, or in force riders are increased or decreased. We will notify you of the new minimum monthly guarantee premium.
Until the no lapse date shown on your Policy schedule page, your Policy will remain in force and no grace period will begin, even if your net surrender value is too low to pay the monthly deductions as long as, on any Monthiversary, the total amount of the premiums you have paid (minus any cash withdrawals, minus any outstanding loan amount, including any accrued loan interest) equals or exceeds the sum of the minimum monthly guarantee premiums in effect for each month from the Policy date up to, and including, the current month. (Your initial minimum monthly guarantee premium is shown on your Policy schedule page. You may obtain information about your minimum monthly guarantee premium and assistance to determine the amount of premiums you must pay to keep your Policy in force by contacting our administrative office.) If you take a cash withdrawal or a loan, or if you increase or decrease your specified amount or if you add, increase or decrease a rider, you may need to pay additional premiums in order to keep the no lapse guarantee in effect. Please see the section of this prospectus entitled Policy Lapse and Reinstatement.
After the no lapse period ends, paying the current minimum monthly guarantee premium each month will not necessarily keep your Policy in force. You may need to pay additional premiums to keep the Policy in force.
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Premium Limitations & Payments
We will not allow you to make any premium payments that would cause the total amount of the premiums you pay to exceed the current maximum premium limitations by which the Policy qualifies as life insurance under federal tax laws.
This maximum is set forth in your Policy. If you make a payment that would cause your total premiums to be greater than the maximum premium limitations, we generally will return the excess portion of the premium payment within 60 days after the end of the Policy year. In addition, we reserve the right to refund a premium if the premium would increase the death benefit by more than the amount of the premium. We will not accept a payment that will cause the Policy to become a modified endowment contract without your consent. (Please see the section of this prospectus entitled Federal Income Tax Considerations for more information concerning your Policy or consult a qualified tax advisor.)
We may require premium payments to be at least $50 ($1,000 if by wire). If the billing mode is monthly direct, the minimum payment could be increased to $100. We may return premiums less than the minimum.
Note: We reserve the right to reject any form of payment. Any unacceptable forms of payment will be returned.
Wire Transfers. We will accept premium payments by wire transfer. If you wish to make payments by wire transfer, you should contact our administrative office at 1-800-851-9777 for instructions on wiring funds to us.
Tax-Free Exchanges (1035 Exchanges). We accept a part of or all of your initial premiums from one or more contracts insuring the same insured that qualify for tax-free exchanges under Section 1035 of the Internal Revenue Code. If you contemplate such an exchange, you should consult a competent tax advisor to learn the potential tax effects of such a transaction.
TRANSFERS |
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You or your authorized representative may make transfers among the subaccounts, or between the subaccounts and the fixed account. You will be bound by any transfers made by your authorized representative. We determine the amount you have available for transfers at the end of the valuation period when we receive your transfer request.
We may, at any time, discontinue transfer privileges, modify our procedures, or limit the number of transfers we permit. The following features apply to transfers under the Policy:
| Your Policy may be limited to a cumulative transfer out of the fixed account each Policy year of the greatest of 25% of the amount in the fixed account, or the amount transferred out of the fixed account the previous Policy year. However, the transfer may not be greater than the unloaned portion of the fixed account on that date. See Fixed Account Transfers. |
| Currently we do not, but reserve the right to, limit the amount of and the number of transfers out of the fixed account to one per Policy year. If we modify or stop our current practices, we will notify you at the time of your transfer. |
| For Policies applied for on or after May 1, 2009: Unless otherwise required by state law, we may restrict transfers to the fixed account, if the fixed account value, excluding amounts in the loan reserve, following the transfer would exceed $250,000. This restriction will not apply to any transfer to the fixed account necessary in the exercise of conversion rights. |
| You may request transfers in writing (in a form we accept), to our mailing address, by fax or by telephone to our administrative office, or electronically through our website (www.premier.transamerica.com). Please Note: Certain subaccounts have similar names. It is important that you state or write the full name of the subaccount when making a transfer request to ensure that any transfer request that you submit is in good order. |
| There is no minimum amount that must be transferred. |
| There is no minimum amount that must remain in a subaccount after a transfer. |
We will process any transfer order that is received in writing, in good order, at our mailing address, or by fax or by telephone at our administrative office, before the NYSE closes (usually 4:00 p.m. Eastern Time) using the subaccount unit value determined at the end of that session of the NYSE. If we receive the transfer order after the NYSE closes, or on a day the NYSE is closed for trading, we will process the order using the subaccount unit value determined at the close of the next regular business session of the NYSE. (If you send your request by fax, be sure to use the correct fax number. Please see Telephone, Fax and Online Privileges.)
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Disruptive Trading and Market Timing
The market timing policy and the related procedures (discussed below) do not apply to the ProFunds or Access Trust subaccounts because the corresponding portfolios are specifically designed to accommodate frequent transfer activity. If you invest in the ProFunds or Access Trust subaccounts, you should be aware that you may bear the costs and increased risks of frequent transfers discussed below and they may have a greater risk than other portfolios of suffering the harmful effects of market timing and disruptive trading.
Statement of Policy. This variable insurance Policy was not designed to accommodate market timing or facilitate frequent or large trading through transfers among the subaccounts or between the subaccounts and the fixed account by market timers or frequent or disruptive traders. (Both frequent and large transfers may be considered disruptive.)
Market timing and disruptive trading can adversely affect you, other policyowners, beneficiaries and underlying fund portfolios. The adverse effects include:
1. | Dilution of the interests of long-term investors in a subaccount if purchases or transfers into or out of an underlying fund portfolio are made at prices that do not reflect an accurate value for the underlying fund portfolios investments (some market timers attempt to do this through methods known as time-zone arbitrage and liquidity arbitrage); |
2. | An adverse effect on portfolio management, such as (a) impeding a portfolio managers ability to sustain an investment objective; (b) causing the underlying fund portfolio to maintain a higher level of cash than would otherwise be the case; or (c) causing an underlying fund portfolio to liquidate investments prematurely (or otherwise at an inopportune time) in order to pay withdrawals or transfers out of the underlying fund portfolio; and |
3. | Increased brokerage and administrative expenses. |
These risks and costs are borne by all policyowners invested in those subaccounts, not just those making the transfers.
We have developed policies and procedures with respect to market timing and disruptive trading (which vary for certain subaccounts at the request of the corresponding underlying fund portfolios) and we do not make special arrangements or grant exceptions to accommodate market timing or potentially disruptive trading. As discussed herein, we cannot detect or deter all market timing or potentially disruptive trading. Do not invest with us if you intend to conduct market timing or potentially disruptive trading or have concerns about our inability to detect or prevent any such trading.
Detection. We employ various means in an attempt to detect and deter market timing and disruptive trading. However, despite our monitoring we may not be able to detect nor halt all harmful trading. In addition, because other insurance companies (and retirement plans) with different policies and procedures may invest in the underlying fund portfolios, we cannot guarantee that all harmful trading will be detected or that an underlying fund portfolio will not suffer harm from market timing and disruptive trading among subaccounts of variable products issued by these other insurance companies or retirement plans.
Deterrence. If we determine that you or anyone acting on your behalf is engaged in market timing or disruptive trading, we may take one or more actions in an attempt to halt such trading. Your ability to make transfers is subject to modification or restriction if we determine, in our sole opinion, that your exercise of the transfer privilege may disadvantage or potentially harm the rights or interests of other policyowners (or others having an interest in the variable insurance products). As described below, restrictions may take various forms, but under our current policies and procedures will include loss of expedited transfer privileges. We consider transfers by telephone, fax, overnight mail, or the Internet to be expedited transfers. This means that we would accept only written transfer requests with an original signature sent to us only by U.S. mail. We may also restrict the transfer privileges of others acting on your behalf, including your registered representative or an asset allocation or investment advisory service.
We reserve the right to reject any premium payment or transfer request from any person without prior notice, if, in our judgment, (1) the premium payment or transfer, or series of premium payments or transfers, would have a negative impact on an underlying fund portfolios operations, or (2) if an underlying fund portfolio would reject or has rejected our purchase order or has instructed us not to allow that purchase or transfer, or (3) because of a history of market timing or disruptive trading.
We may impose other restrictions on transfers, or even prohibit transfers for any policyowner who, in our
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view, has abused, or appears likely to abuse, the transfer privilege on a case-by-case basis. We may, at any time and without prior notice, discontinue transfer privileges, modify our procedures, impose holding period requirements or limit the number, size, frequency, manner, or timing of transfers we permit. We also reserve the right to reverse a potentially harmful transfer if an underlying fund portfolio refuses or reverses our order; in such instances some policyowners may be treated differently than others in that some transfers may be reversed and others allowed. For all of these purposes, we may aggregate two or more trades or variable insurance products that we believe are connected by policyowners or persons engaged in trading on behalf of policyowners.
In addition, transfers for multiple policies invested in the Transamerica Series Trust underlying fund portfolios which are submitted together may be disruptive at certain levels. At the present time, such aggregated transactions likely will not cause disruption if less than one million dollars total is being transferred with respect to any one underlying fund portfolio (a smaller amount may apply to smaller portfolios). Please note that transfers of less than one million dollars may be disruptive in some circumstances; we may change the maximum dollar amount of permitted transfers quickly and without notice.
Please Note: If you engage a third party investment adviser for asset allocation services, then you may be subject to these transfer restrictions because of the actions of your investment adviser in providing these services.
In addition to our internal policies and procedures, we will administer your variable life policy to comply with any applicable state, federal, and other regulatory requirements concerning transfers. We reserve the right to implement, administer, and charge you for any fee or restriction, including redemption fees, imposed by any underlying fund portfolio. To the extent permitted by law, we also reserve the right to defer the transfer privilege at any time we are unable to purchase or redeem shares of any of the underlying fund portfolios.
Under our current policies and procedures, we do not:
| impose redemption fees on transfers; or |
| expressly limit the number or size of transfers in a given period except for certain subaccounts where an underlying fund portfolio has advised us to prohibit certain transfers that exceed a certain size; or |
| provide a certain number of allowable transfers in a given period. |
Redemption fees, transfer limits, and other procedures or restrictions imposed by the underlying funds or our competitors may be more or less successful than ours in deterring market timing or other disruptive trading and in preventing or limiting harm from such trading.
We do not impose any prophylactic transfer restrictions. In the absence of any such restrictions (e.g., expressly limiting the number of trades within a given period or limiting trades by their size), it is possible that some level of market timing and disruptive trading will occur before it is detected and we take steps to deter it.
Please note that the limits and restrictions described herein are subject to our ability to monitor transfer activity. Our ability to detect market timing or disruptive trading may be limited by operational and technological systems, as well as by our ability to predict strategies employed by policyowners (or those acting on their behalf ) to avoid detection. As a result, despite our efforts to prevent harmful trading activity among the variable investment options available under this variable insurance product, there is no assurance that we will be able to detect or deter market timing or disruptive trading by such policyowners or intermediaries acting on their behalf. Moreover, our ability to discourage and restrict market timing or disruptive trading may be limited by decisions of state regulatory bodies and court orders that we cannot predict.
Furthermore, we may revise our policies and procedures in our sole discretion at any time and without prior notice, as we deem necessary or appropriate (1) to better detect and deter harmful trading that may adversely affect other policyowners, other persons with material rights under the variable insurance products, or underlying fund shareholders generally, (2) to comply with state or federal regulatory requirements, or (3) to impose additional or alternative restrictions on policyowners engaging in market timing or disruptive trading among the investment options under the variable insurance product. In addition, we may not honor transfer requests if any variable investment option that would be affected by the transfer is unable to purchase or redeem shares of its corresponding underlying fund portfolio.
Underlying Fund Portfolio Frequent Trading Policies. The underlying fund portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares. Underlying fund portfolios may, for example, assess a redemption fee (which we reserve the right to collect) on shares held for less than a certain period of time. The prospectuses for the underlying fund portfolios describe any such policies and procedures. The frequent trading policies and procedures of an underlying fund portfolio may be
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different, and more or less restrictive, than the frequent trading policies and procedures of other underlying fund portfolios and the policies and procedures we have adopted for our variable insurance products to discourage market timing and disruptive trading. Policyowners should be aware that we do not monitor transfer requests from policyowners or persons acting on behalf of policyowners for compliance with, nor do we apply, the frequent trading policies and procedures of the respective underlying fund portfolios that would be affected by the transfers.
Policyowners should be aware that we are required to provide to an underlying fund portfolio or its payee, promptly upon request, certain information about the trading activity of individual policyowners, and to restrict or prohibit further purchases or transfers by specific policyowners or persons acting on their behalf, if identified by an underlying fund portfolio as violating the frequent trading policies established for the underlying fund portfolio. Please read the funds prospectus for information about restrictions on transfers.
Omnibus Orders. Policyowners and other persons with material rights under the variable insurance products also should be aware that the purchase and redemption orders received by the underlying fund portfolios generally are omnibus orders from intermediaries such as retirement plans and separate accounts funding variable insurance products. The omnibus orders reflect the aggregation and netting of multiple orders from individual retirement plan participants and individual policyowners of variable insurance products. The omnibus nature of these orders may limit the underlying fund portfolios ability to apply their respective frequent trading policies and procedures.
We cannot guarantee that the underlying fund portfolios will not be harmed by transfer activity relating to the retirement plans or other insurance companies that may invest in the underlying fund portfolios. These other insurance companies are responsible for their own policies and procedures regarding frequent transfer activity. If their policies and procedures fail to successfully discourage harmful transfer activity, it may affect other policyowners of underlying fund portfolio shares, as well as the policyowners of all of the variable annuity contracts or life insurance policies, including ours, whose variable investment options correspond to the affected underlying fund portfolios. In addition, if an underlying fund portfolio believes that an omnibus order we submit may reflect one or more transfer requests from policyowners engaged in market timing or disruptive trading, the underlying fund portfolio may reject the entire omnibus order and thereby delay or prevent us from implementing your request.
Telephone, Fax and Online Privileges
Telephone transfer privileges will automatically apply to your Policy unless you provide other instructions. The telephone transfer privileges allow you to give authority to the registered representative or agent of record for your Policy to make telephone transfers and to change the allocation of future payments among the subaccounts and the fixed account on your behalf according to your instructions. To make a telephone transfer, you may call us at our administrative office at 1-800-851-9777, Monday - Friday, between the hours of 8:30 a.m. - 7:00 p.m. Eastern Time, or fax your instructions to our subaccount transfer fax number 1-727-299-1648 (for all other fax requests, please use 1-727-299-1620). You also may request transfers electronically through our website, www.premier.transamerica,com. Please Note: Certain subaccounts have similar names. When providing your allocation instructions, please state or write the full name of the subaccount that you select for your allocation to ensure that those allocation instructions are in good order.
Additionally, please note the following regarding telephone, Internet or fax transfers:
| We will employ reasonable procedures to confirm that telephone instructions are genuine. |
| If we follow these procedures, we are not liable for any loss, damage, cost or expense from complying with telephone instructions we reasonably believe to be authentic. You bear the risk of any such loss. |
| If we do not employ reasonable confirmation procedures, we may be liable for losses due to unauthorized or fraudulent instructions. |
| Such procedures may include requiring forms of personal identification prior to acting upon telephone instructions, providing written confirmation of transactions to owners, and/or tape recording telephone instructions received from owners. |
| We may also require that you send us the telephone, Internet or fax order in writing. |
If you do not want the ability to make telephone transfers, you should notify us in writing at our mailing address, or through our fax number (1-727-299-1620).
| We will not be responsible for same day processing of transfers if the transfer order is faxed to a number other than 1-727-299-1648 or 1-727-299-1620. |
| We will not be responsible for any transmittal problems when you fax us your order unless you report it to us within five business days and send us proof of your fax transmittal. We may discontinue this option at any time. |
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We cannot guarantee that telephone and electronic transactions will always be available. For example, our offices may be closed during severe weather emergencies or there may be interruptions in telephone or fax service beyond our control. If the volume of calls is unusually high, we might not have someone immediately available to receive your order at our administrative office. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances.
Similarly, online transactions processed via the Internet may not always be possible. Telephone and computer systems, whether yours, your Internet service providers, your registered representatives or Transamerica Premiers, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may prevent or delay our receipt of your request. If you are experiencing problems, you should make your request or inquiry in writing.
You should protect your personal identification number (PIN) and your user ID and password because self-service options will be available to your authorized representative and to anyone who provides your identifying information. We will not be able to verify that the person using your PIN on the automated phone line or providing instructions online is you or one authorized by you.
Note: Your requests that are received before the NYSE closes are priced using the subaccount unit value determined at the close of that regular business session of the NYSE (usually 4:00 p.m. Eastern Time). If we receive a request after the NYSE closes, or on a day the NYSE is closed for trading, we will process the withdrawal request using the subaccount unit value determined at the close of the next regular business session of the NYSE. Please Note: All requests must be submitted in good order to avoid a delay in processing your request.
Currently, we do not, but reserve the right to, limit the number of transfers out of the fixed account to one per Policy year. If we change this, we will notify you at the time of your transfer.
We reserve the right to limit the maximum amount you may transfer from the fixed account to the greater of 25% of the amount in the fixed account or the amount you transferred from the fixed account in the immediately preceding Policy year.
These restrictions do not apply to dollar cost averaging transactions. However, the transfer may not be greater than the unloaned portion of the fixed account on the valuation date on which we receive the transfer request.
We will make the transfer at the end of the valuation date on which we receive the request, in good order, at our administrative office (for telephonic and facsimile transactions), at our mailing address (for written correspondence), or electronically through our website. We reserve the right to require that you make the transfer request in writing and that we receive the written transfer request no later than 30 days after a Policy anniversary.
For Policies Applied for On or After May 1, 2009, unless otherwise required by state law, we may restrict transfers to the fixed account if the fixed account value, excluding amounts in the loan reserve following the transfer would exceed $250,000. Note: These restrictions may prolong the period of time it takes to transfer your total cash value in the fixed account to the subaccounts and, therefore, you should carefully consider whether investment in the fixed account meets your needs and investment criteria. This restriction does not apply to any transfer to the fixed account necessary in the exercise of conversion rights.
Except when used to pay premiums, we also may defer payment of any amounts from the fixed account for no longer than six months after we receive such written notice.
New Jersey: If your Policy was issued before January 1, 2009 in the State of New Jersey, the fixed account is not available to you. You may not direct or transfer any money to the fixed account.
Conversion Rights
If, within 24 months of your Policy date, you transfer all of your subaccount values to the fixed account, then we will not charge you a transfer fee, even if applicable. You must make your request, in good order, in writing to our mailing address.
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In the event of a material change in the investment policy of any portfolio, you may transfer all subaccount value in that portfolio the fixed account without a transfer charge. We must receive your request to transfer the subaccount value to the fixed account in good order within 60 days after the effective date of the change of investment policy or the date you receive notification of such change, whichever is later.
Dollar cost averaging is a strategy designed to reduce the average purchase price per unit. The strategy spreads the allocation of your premium into the subaccounts over a period of time. This potentially allows you to reduce the risk of allocating most of your premium to the subaccounts at a time when prices are high. The success of this strategy is not assured and depends on market trends. You should consider carefully your financial ability to continue the program over a long enough period of time to purchase units when their value is low as well as when it is high. We make no guarantee that dollar cost averaging will result in a profit or protect you against loss.
Under dollar cost averaging, we automatically transfer a set dollar amount from the Transamerica Aegon Government Money Market VP subaccount, the Transamerica JPMorgan Core Bond VP subaccount, or the fixed account to a subaccount that you choose. We will make the transfers monthly as of the end of the valuation date after the first Monthiversary after the reallocation date. We will make the first transfer in the month after we receive your request at our mailing address or by facsimile at our administrative office, in good order, provided that we receive the form by the 25th day of the month. (Note: As stated on the dollar cost averaging form, the date that you select cannot be the 29th, 30th or 31st of any month.)
To start dollar cost averaging: | You must submit to us, in good order, in writing to our mailing address (or by facsimile to our administrative office), a completed form signed by the owner, requesting dollar cost averaging. | |
You may be required to have at least $5,000 in each subaccount or the fixed account from which we will make transfers. | ||
Your total transfers each month under dollar cost averaging may be limited to a minimum of $100. | ||
Each month, you may not transfer more than one-tenth of the amount that was in your fixed account at the beginning of dollar cost averaging. |
You may request dollar cost averaging at any time. There is no charge for dollar cost averaging.
Dollar cost averaging will terminate if any of the following occur: | We receive, in good order, at our mailing address (or by facsimile or telephone at our administrative office) a request to discontinue participation from you or your authorized representative. | |
The value in the accounts from which we make the transfers is depleted. | ||
You elect to participate in the asset rebalancing program. | ||
You elect to participate in any asset allocation services provided by a third party. |
If you terminate your participation in the dollar cost averaging program but later decide that you would like to participate again, you must sign and submit a new dollar cost averaging form, in good order. We may modify, suspend, or discontinue dollar cost averaging at any time.
We also offer an asset rebalancing program under which you may transfer amounts periodically to maintain a particular allocation percentage among the subaccounts you have selected. Cash value allocated to each subaccount will grow or decline in value at different rates. The asset rebalancing program automatically reallocates the cash value in the subaccounts at the end of each period to match your Policys currently effective premium allocation schedule. Cash value in the fixed account is not available for this program and this program is not available in conjunctions with the dollar cost averaging program. We make no guarantee that participating in the program will result in a profit or protect you against loss.
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You may elect asset rebalancing to occur on a monthly, quarterly, semi-annual or annual basis. Once we receive the asset rebalancing request form, in good order, at our mailing address (or by facsimile at our administrative office), we will change your premium allocations to match your asset rebalancing request instructions, and we will implement the asset rebalancing program on the date you indicated. If you do not indicate a specific date, we will use the date that we receive the form. We will credit the amounts transferred at the unit value next determined on the dates the transfers are made. If a day on which rebalancing would ordinarily occur falls on a day on which the NYSE is closed, rebalancing will occur on the next day that the NYSE is open.
To start asset rebalancing: | You must submit to us at our mailing address, (or by facsimile to our administrative office) a completed asset rebalancing request form, in good order, signed by the owner. | |
You may be required to have a minimum cash value of $5,000 or make a $5,000 initial premium payment. |
There is no charge for the asset rebalancing program. (We reserve the right to count such allocations as part of your free transfers in the future.)
Asset rebalancing will cease if: | You elect to participate in the dollar cost averaging program. | |
We receive, in good order, at our mailing address (or by facsimile or telephone to our administrative office) a request to discontinue participation from you, or your authorized representative. | ||
You make any transfer to or from any subaccount other than under a scheduled rebalancing. | ||
You elect to participate in any asset allocation services provided by a third party. |
You may start and stop participation in the asset rebalancing program at any time, but we may restrict your right to re-enter the program to once each Policy year. If you wish to resume the asset rebalancing program, you must complete a new request form. We may modify, suspend, or discontinue the asset rebalancing program at any time.
Third Party Asset Allocation Services
We do not offer any asset allocation programs or any allocation models for use with your life insurance policy. You may authorize and engage your own investment advisor to manage your account. These investment advisors may be firms or persons who also are appointed by us, or whose affiliated broker-dealers are appointed by us, as authorized sellers of the Policies. Even if this is the case, however, please note that the investment advisor you engage to provide advice and/or make transfers for you is not acting on our behalf, but rather is acting on your behalf. We do not offer advice about how to allocate your cash value under any circumstance. We are not responsible for any recommendations such investment advisors make, any investment models or asset allocation programs they choose to follow, or any specific transfers they make on your behalf.
Any fee that is charged by your investment advisor is in addition to the fees and expenses that apply under your Policy. We are not a party to the agreement you have with your investment advisor. You will, however, receive confirmations of transactions that affect your Policy. Note: If you make withdrawals of cash value to pay advisory fees, then taxes may apply to any such withdrawals and tax penalties may be assessed on withdrawals.
If your investment advisor has also acted as your insurance agent with respect to the sale of your Policy, he or she may be receiving compensation for services provided both as an insurance agent and investment advisor. Alternatively, the investment advisor may compensate the registered representative from whom you purchased your Policy for the referral that led you to enter into your investment advisory relationship with the investment advisor. If you are interested in the details about the compensation that your investment advisor and/or your registered representative receive in connection with your Policy, you should ask them for more details.
We, or an affiliate of ours, will process the financial transactions placed by your authorized representative or investment advisor. We reserve the right to discontinue doing so at any time and for any reason. We may require insurance agents or investment advisors, who are authorized by multiple policyowners to make financial transactions, to enter into an administrative agreement with Transamerica Premier as a condition of our accepting transactions on your behalf. The administrative agreement may impose limitations on the registered representative or investment advisors ability to request financial transactions on your behalf. These limitations, which are discussed in the section
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above entitled Transfers Disruptive Trading and Market Timing, are intended to (i) minimize the detrimental impact of an investment professional who is in a position to transfer large amounts of money for multiple clients in a particular portfolio or type of portfolio, or (ii) intended to comply with specific restrictions or limitations imposed by a portfolio(s) of Transamerica Premier.
Note:
| Limitations that we may impose on your authorized representative or investment advisor under the terms of the administrative agreement do not apply to financial transactions requested by owners on their own behalf, except as otherwise described in this prospectus. Any third party asset allocation service may be terminated at any time by the owner or by the third party service by sending written instruction to our mailing address. |
| The practices and procedures described above do not apply to any asset allocation portfolios that are available as investment options under the Policy. |
POLICY VALUES |
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Your cash value:
| Is determined on the Policy date and on each valuation date. |
| Equals the sum of all amounts invested in each subaccount and the fixed account, including any amounts held in the loan reserve account (part of the fixed account) to secure any outstanding Policy loan. |
| Serves as the starting point for calculating values under a Policy. |
| Varies from day to day, depending on the investment experience of the subaccounts you choose, the interest credited to the fixed account, the charges deducted and any other Policy transactions (such as additional premium payments, transfers, withdrawals and Policy loans). |
| Has no guaranteed minimum amount and may be more or less than premiums paid. |
The net surrender value is the amount we pay when you surrender your Policy while it is in force. We determine the net surrender value at the end of the valuation period when we receive your written surrender request, in good order, at our mailing address. You may also fax your requests to 1-727-299-1620.
Net surrender value on any valuation date equals: | The cash value as of such date; minus | |
Any outstanding loan amount including any accrued Policy loan interest. |
The cash value in a subaccount is referred to as subaccount value. At the end of any valuation period, the subaccount value is equal to the number of units that the Policy has in the subaccount, multiplied by the unit value of that subaccount. (Note: Subaccount transactions are converted to units for accounting purposes.)
The number of units in any subaccount on any valuation date equals: | The initial units purchased at unit value on the Policy date, or reallocation date, if different; plus | |
Units purchased with additional net premium(s); plus | ||
Units purchased due to a loan repayment; plus | ||
Units purchased via transfers from another subaccount or the fixed account; minus | ||
Units redeemed to pay for monthly deductions; minus | ||
Units redeemed to pay for cash withdrawals; minus | ||
Units redeemed.as part of a transfer to another subaccount or the fixed account (including the loan reserve account) minus | ||
Units redeemed due to any refund of premiums allocated to the subaccount. |
Every time you allocate, transfer or withdraw money to or from a subaccount, we convert that dollar amount into units. We determine the number of units we credit to, or subtract from, your Policy by dividing the dollar amount of the allocation, transfer or cash withdrawal by the unit value for that subaccount next determined at
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the end of the valuation period on which the premium allocation, transfer request or cash withdrawal request is received: (i) at our mailing address (for written requests or payments by check); (ii) at our administrative office (for requests by fax or telephone, or for payments made through electronic credit and debit transactions); or (iii) electronically through our website.
The value (or price) of each subaccount unit will reflect the investment performance of the portfolio in which the subaccount invests. Unit values will vary among subaccounts. The unit value of each subaccount was originally established at $10 per unit. The unit value may increase or decrease from one valuation period to the next.
The unit value of any subaccount at the end of a valuation period is calculated as: | The total value of the portfolio shares held in the subaccount, including the value of any dividends or capital gains distribution declared and reinvested by the portfolio during the valuation period. This value is determined by multiplying the number of portfolio shares owned by the subaccount by the portfolios net asset value per share determined at the end of the valuation period; minus | |
A charge equal to the daily net assets of the subaccount multiplied by the daily equivalent of the daily mortality and expense risk charge; minus | ||
The accrued amount of reserve for any taxes or other economic burden resulting from applying tax laws that we determine to be properly attributable to the subaccount; and the result divided by | ||
The number of outstanding units in the subaccount before the purchase or redemption of any units on that date. |
The portfolio in which any subaccount invests will determine its net asset value per share once daily, as of the close of the regular business session of the NYSE (usually 4:00 p.m. Eastern Time) except on customary national holidays on which the NYSE is closed, which coincides with the end of each valuation period.
On the Policy date, or the reallocation date if different, the fixed account value is equal to the cash value allocated to the fixed account, less the portion of the first monthly deduction that is subtracted from the fixed account.
The fixed account value at the end of any | The sum of net premiums allocated to the fixed account; plus | |
valuation period is equal to: | Any amounts transferred from a subaccount to the fixed account (including amounts transferred to the loan reserve account); plus | |
Total interest credited to the fixed account; minus | ||
Amounts charged to pay for monthly deductions; minus | ||
Amounts withdrawn or surrendered from the fixed account to pay for cash withdrawals or other fees and charges; minus | ||
Amounts transferred from the fixed account (including any amounts transferred from the loan reserve account) to a subaccount; minus | ||
Any refund of premiums allocated to the fixed account. |
DEATH BENEFIT |
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We will determine the amount of and pay the death benefit proceeds on any in force Policy, upon receipt, in good order, at our administrative office of satisfactory proof of the insureds death, plus written direction (from each eligible recipient of death benefit proceeds) regarding distribution of the death benefit payment, and any other documents, forms and information we need. We may require that the Policy be returned. We may pay the death
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benefit proceeds to the primary beneficiary(ies), if living, or to a contingent beneficiary. If each beneficiary dies before the insured and there is no contingent beneficiary, we will pay the death benefit proceeds to the owner or the owners estate. We will pay the death benefit proceeds in a lump sum or under a payment option.
The death benefit is equal to: | The amount determined based on the death benefit option that you select (described below); minus | |
Any monthly deductions due during the grace period (if applicable); minus | ||
Any outstanding loan amount including accrued loan interest; plus | ||
Any additional insurance in force provided by rider. |
We may further adjust the amount of the death benefit proceeds if we contest the Policy, or if you misstate the insureds age or sex.
The Policy offers three death benefit options Option A, Option B and Option C. The death benefit is determined at the end of the valuation period in which the insured dies. You must select one of the three death benefit options we offer. This is an important decision. If you do not choose a death benefit option in the application, the Option A death benefit option will automatically be in effect. No matter which death benefit option you choose, we guarantee that, as long as the Policy does not lapse, the death benefit will never be less than the specified amount on the date of the insureds death adjusted as shown above.
Your Policy is intended to qualify under Internal Revenue Code Section 7702 as a life insurance policy for federal tax purposes. The death benefit is intended to qualify for the federal income tax exclusion. The provisions of your Policy and any attached endorsement or rider will be interpreted to ensure such qualification, regardless of any language to the contrary.
To the extent the death benefit is increased to maintain qualification as a life insurance policy, we will make appropriate adjustments to any monthly deductions or supplemental benefits that are consistent with such an increase. Adjustments will be reflected in the monthly deductions.
Under Section 7702 of the Internal Revenue Code, a Policy will generally be treated as life insurance for federal tax purposes if at all times it meets the Guideline Premium Test (GPT). The GPT has two components, a premium limit component and a corridor component. The premium limit restricts the amount of premium that can be paid into the Policy. The corridor requires that the death benefit be at least a certain percentage (varying each year by age of the insured) of the cash value.
Option A
The death benefit equals the greatest of: | The specified amount; or | |
A specified percentage called the limitation percentage, multiplied by > The cash value on the insureds date of death; or | ||
The amount required for the Policy to qualify as a life insurance contract under Section 7702 of the Internal Revenue Code. |
Under Option A, your death benefit remains level unless the limitation percentage multiplied by the cash value is greater than the specified amount; then the death benefit will vary as the cash value varies.
The limitation percentage is the minimum percentage of cash value we must pay as the death benefit under federal tax requirements. It is based on the attained age of the insured at the beginning of each Policy year. The following table indicates the limitation percentages for different ages:
Attained Age | Limitation Percentage | |
40 and under | 250% | |
41 to 45 | 250% minus 7% for each age over age 40 | |
46 to 50 | 215% minus 6% for each age over age 45 | |
51 to 55 | 185% minus 7% for each age over age 50 | |
56 to 60 | 150% minus 4% for each age over age 55 |
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61 to 65 | 130% minus 2% for each age over age 60 | |
66 to 70 | 120% minus 1% for each age over age 65 | |
71 to 75 | 115% minus 2% for each age over age 70 | |
76 to 90 | 105% | |
91 to 95 | 105% minus 1% for each age over age 90 | |
96 and older | 100% |
If the federal tax code requires us to determine the death benefit by reference to these limitation percentages, the Policy is described as in the corridor. An increase in the cash value will increase our risk, and we will increase the cost of insurance we deduct from the cash value.
Option A Example. Assume that the insureds attained age is under 40 and that there are no outstanding loans. Under Option A, a Policy with a $100,000 specified amount will generally pay $100,000 in death benefits. However, because the death benefit must be equal to or be greater than 2.5 times cash value, any time the cash value of the Policy exceeds $40,000, the death benefit will exceed the $100,000 specified amount. (The figure $40,000 is derived by solving for cash value in the following calculation: $100,000 = 2.5 times cash value.) Each additional dollar added to the cash value above $40,000 will increase the death benefit by $2.50.
Similarly, as long as the cash value exceeds $40,000, each dollar taken out of the cash value will reduce the death benefit by $2.50. If at any time the cash value multiplied by the limitation percentage is less than the specified amount, then the death benefit will equal the specified amount of the Policy reduced by the dollar value of any cash withdrawals.
Option B
The death benefit equals the greatest of: | The specified amount plus the cash value on the insureds date of death; or | |
The limitation percentage, multiplied by the cash value on the insureds date of death; or | ||
The amount required for the Policy to qualify as a life insurance contract under Section 7702 of the Internal Revenue Code. |
Under Option B, the death benefit always varies as the cash value varies.
Option B Example. Assume that the insureds attained age is under 40 and that there are no outstanding loans. Under Option B, a Policy with a specified amount of $100,000 will generally pay a death benefit of $100,000 plus cash value. Thus, a Policy with a cash value of $10,000 will have a death benefit of $110,000 ($100,000 + $10,000). The death benefit, however, must be at least 2.5 times cash value. As a result, if the cash value of the Policy exceeds $66,667, the death benefit will be greater than the specified amount plus cash value. (The figure of $66,667 is derived by solving for cash value in the following calculation: $100,000 plus cash value = 2.5 times cash value.) Each additional dollar of cash value above $66,667 will increase the death benefit by $2.50.
Similarly, any time the cash value exceeds $66,667, each dollar taken out of the cash value will reduce the death benefit by $2.50. If at any time, cash value multiplied by the limitation percentage is less than the specified amount plus the cash value, then the death benefit will be the specified amount plus the cash value of the Policy.
Option C
The death benefit equals the greatest of: | 1. The death benefit under Option A; or | |
2. The specified amount, multiplied by > an age-based factor equal to the lesser of > 1.0 or > 0.04 times (95 minus insureds attained age at death) (the factor will never be less than zero); plus the cash value on the insureds date of death; or | ||
3. The amount required for the Policy to qualify as a life insurance contract under Section 7702 of the Internal Revenue Code. |
Under Option C, the death benefit varies with the cash value and the insureds attained age. Because the death benefit under Option C is at least as large as that under Option A, the Code Section 7702 life insurance
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qualification compliance test used in calculating the Option A benefit will be taken into account in the Option C death benefit.
Option C--Three Examples.
1. Assume that the insured is attained age 75 and that there are no outstanding loans. Under Option C, a Policy with a specified amount of $100,000 and with a cash value of $22,000 will have a death benefit of $102,000 {$100,000 x the minimum of (1.0 and (0.04 x (95-75))} plus $22,000.
2. Assume that the insured is attained age 75 and that there are no outstanding loans. Under Option C, a Policy with a specified amount of $100,000 and with a cash value of $9,000 will have a death benefit equal to the specified amount of $100,000, since the calculation of $100,000 times the minimum of {1.0 and (0.04 x (95-75))} plus $9,000 is less than the specified amount.
3. Assume that the insured is under attained age 71 and that there are no outstanding loans. Under Option C, a Policy with a specified amount of $100,000 and with a cash value of $10,000 will have a death benefit of $110,000, because through attained age 70 the minimum of {1.0 and (0.04 x (95-age))} is always 1.0. Until the insured attains age 71, the Option C death benefit is the same as the Option B death benefit.
Effect of Cash Withdrawals on the Death Benefit
For Policies Applied for On or After May 1, 2009: When death benefit Option A is in effect or when death benefit Option C is in effect and the insureds attained age is 71 or greater, a cash withdrawal will reduce the specified amount of the Policy by an amount equal to the amount of the cash withdrawal. For Policies Issued Before January 1, 2009: If you choose Option A, a cash withdrawal will reduce the specified amount by an amount equal to the amount of the cash withdrawal. Regardless of the death benefit option in effect, a cash withdrawal will reduce the death benefit by at least the amount of the withdrawal. This decrease in specified amount may cause your Policy to be in a lower specified amount band, so your cost of insurance rates would be higher. For a description of the effect of cash withdrawals on the death benefit option that you select, please refer to the section entitled Surrenders and Cash Withdrawals Cash Withdrawal Conditions in this prospectus.
Choosing Death Benefit Options
You must choose one death benefit option on your application. This is an important decision. The death benefit option you choose will have an impact on the dollar value of the death benefit, on your cash value, and on the amount of cost of insurance charges you pay. If you do not select a death benefit option on your application, we will assume you selected death benefit Option A and will ask you to confirm the selection of Option A in writing or choose one of the other death benefit options.
You may find Option A more suitable for you if your goal is to increase your cash value through positive investment experience. You may find Option B more suitable if your goal is to increase your total death benefit. You may find Option C more suitable if your goal is to increase your total death benefit before you reach attained age 70, and to increase your cash value through positive investment experience thereafter.
Changing the Death Benefit Option
After the third Policy year, you may change your death benefit option once each Policy year. Changing the death benefit option may affect the specified amount. We will notify you of the new specified amount.
Changes to the Death Benefit Option are subject to the following conditions:
| You must send your written request, in good order, to our mailing address or fax it to us at 1-727-299-1620. (If you send your request by fax, be sure to use the correct fax number. Please see Telephone, Fax, and Online Privileges.) |
| The effective date of the change will be the Monthiversary on or following the date when we receive your request for a change. |
| You may not make a change that would decrease the specified amount below the minimum specified amount shown on your Policy schedule page. |
| There may be adverse federal tax consequences. You should consult a tax advisor before changing your Policys death benefit option. |
Increasing/Decreasing the Specified Amount
You can increase the specified amount at any time or decrease at any time after the third Policy year. No more than one change in the specified amount can occur each Policy year. An increase or decrease in the specified amount will affect your cost of insurance charge, your minimum monthly guarantee premium, and may affect your
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ability to maintain the no lapse period guarantee. A change in specified amount may affect the Policys qualification tests as life insurance under IRC 7702 and could cause the Policy to become a Modified Endowment Contract under IRC 7702A and may have adverse federal tax consequences.
In addition (for Policies Applied for On or After May 1, 2009), an increase or decrease in specified amount may move the Policy into a different specified amount band so that your overall cost of insurance rate and premium expense charge rate will change. An increase in specified amount will be treated as an additional layer of coverage with its own cost of insurance rates. If you increase your specified amount we will notify you of your new minimum monthly guarantee premium.
Any decrease will reduce your specified amount in the additional layer of coverage created:
(a) | first, by the most recent increase; |
(b) | followed by, the next most recent increases successively; and |
(c) | followed by, the amount specified in the original application. |
You should consult a tax advisor before increasing or decreasing your Policys specified amount.
Conditions for and impact of decreasing the specified amount: | You must send your written request, in good order, to our mailing address or fax it to us at 1-727-299-1620. | |
Decreases are only allowed after the third Policy year. | ||
You may not increase and decrease your specified amount in the same Policy year. | ||
You may not decrease your specified amount lower than the minimum specified amount under Band 1 shown on your Policy schedule page. | ||
You may not decrease your specified amount if it would disqualify your Policy as life insurance under the Internal Revenue Code. | ||
Until the Policy anniversary on or following the insureds 65th birthday, we may limit the amount of decrease to no more than 20% of the then specified amount. | ||
A decrease in specified amount will take effect on the first Monthiversary on or next following the day we receive your written request, in good order, at our mailing address. | ||
Conditions for and impact of increasing the specified amount: | Your request, in good order, must be applied for through a supplemental application and must include evidence of insurability satisfactory to us. | |
Increases are allowed at any time. | ||
A requested increase in specified amount requires our approval and will take effect on the Monthiversary on or after the day we approve your request. | ||
We may require your increase in specified amount to be at least $50,000. | ||
You may not decrease and increase your specified amount in the same Policy year. |
For Policies applied for on or after May 1, 2009: If an increase or decrease to your Policys specified amount causes your specified amount band to change, then we will apply the new premium expense charge and cost of insurance rates to the amounts in the new band as of the effective date of the increase or decrease in specified amount. The new minimum monthly guarantee premium is effective on the date of increase or decrease.
There are several ways of receiving proceeds under the death benefit and surrender provisions of the Policy, other than in a lump sum. These are described in the section entitled Settlement Options in your Policy and in this prospectus.
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SURRENDERS AND CASH WITHDRAWALS |
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You must make a written request to surrender your Policy for its net surrender value as calculated at the end of the valuation date on which we receive your request, in good order, at our mailing address. You may also fax your request to our administrative office at1- 727-299-1620. We may require an original signature with your request. Written requests to surrender a Policy that are received at our mailing address (or faxed to our administrative office) before the NYSE closes are priced using the subaccount unit value determined at the close of that regular business session of the NYSE (usually 4:00 p.m. Eastern Time). If we receive a written request at our mailing address (or a fax request at our administrative office) after the NYSE closes, or on a day the NYSE is closed for trading, we will process the surrender request using the subaccount unit value determined at the close of the next regular business session of the NYSE. Please Note: All surrender requests must be submitted in good order to avoid a delay in processing your request.
The insured must be alive, the Policy must be in force, and it must be before the maturity date when you make your written request. A surrender is effective as of the date when we receive your written request, in good order, at our mailing address.
Once you surrender your Policy, all coverage and other benefits under it cease and cannot be reinstated. We will normally pay you the net surrender value in a lump sum (by check) within seven days or under a settlement option. A surrender may have tax consequences. For more information regarding tax consequences, please see the section entitled Federal Income Tax Considerations.
After the first Policy year, you may request a cash withdrawal of a portion of your surrender value subject to certain conditions. (Note: All requests for a withdrawal must be submitted in good order to avoid a delay in processing your request.)
Cash withdrawal conditions: | You must send your written cash withdrawal request with an original signature, in good order, to our mailing address (4333 Edgewood Road, N.E., Cedar Rapids, IA 52499). If your withdrawal request is less than $500,000, then you may fax it to us at 1-727-299-1620. | |
We may limit the number of withdrawals to one cash withdrawal per Policy year. | ||
We may limit the amount you can withdraw to a minimum of $500 and the remaining net surrender value following a withdrawal may not be less than $500. During the first 10 Policy years, the amount of the withdrawal may be limited to no less than $500 and to no more than 10% of the net surrender value. After the 10th Policy year, the amount of a withdrawal may be limited to no less than $500 and to no more than the net surrender value, less $500. | ||
You may not take a cash withdrawal if it will reduce the specified amount below the minimum specified amount set forth in the Policy. | ||
You may specify the subaccount(s) and the fixed account from which to make the withdrawal. If you do not specify an account, we will take the withdrawal from each account in accordance with your current premium allocation instructions. If this is not possible, the withdrawal amount will be withdrawn pro-rata from all accounts. | ||
We generally will pay a cash withdrawal request within seven days following the valuation date we receive the request, in good order, at our mailing address. | ||
We will deduct a processing fee equal to $25 or 2% of the amount you withdraw, whichever is less. We deduct this amount from the withdrawal, and we pay you the balance. |
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A withdrawal from the Transamerica Government Money Market VP portfolio or the ProFund VP Government Money Market fund may be subject to a redemption fee. | ||
You may not take a cash withdrawal that would disqualify your Policy as life insurance under the Internal Revenue Code. | ||
A cash withdrawal may have tax consequences. | ||
Your requests for a cash withdrawal that are received at our mailing address (or faxed to our administrative office per the above instructions) before the NYSE closes are priced using the subaccount unit value determined at the close of that regular business session of the NYSE (usually 4:00 p.m. Eastern Time). If we receive a written request at our mailing address (or a fax request at our administrative office) after the NYSE closes, or on a day the NYSE is closed for trading, we will process the withdrawal request using the subaccount unit value determined at the close of the next regular business session of the NYSE. Please Note: All cash withdrawal requests must be submitted in good order to avoid a delay in processing your request. |
A cash withdrawal will reduce the cash value by the amount of the cash withdrawal, and, in most cases, will reduce the death benefit by at least the amount of the cash withdrawal. For Policies Applied for On or After May 1, 2009. When death benefit Option A is in effect or when Death benefit Option C is in effect and the insureds attained age is 71 or greater, a cash withdrawal will reduce the specified amount of the Policy by an amount equal to the amount of the cash withdrawal. For Policies issued before May 1, 2009: When death benefit Option A is in effect, a cash withdrawal will reduce the specified amount by an amount equal to the amount of the cash withdrawal.
A decrease in specified amount may cause your Policy to be in a lower specified amount band, so that your cost of insurance rates would be higher. You also may have to pay higher minimum monthly guarantee premiums and premium expense charges. We will not impose a decrease charge when the specified amount is decreased as a result of taking a cash withdrawal.
When we incur extraordinary expenses, such as overnight mail expenses or wire service fees, for expediting delivery of your cash withdrawal or complete surrender payment, we will deduct that charge from the payment. We currently charge $30 for an overnight delivery ($35 for Saturday delivery) and $50 for wire service. You can obtain further information about these charges by contacting us at our mailing address or our administrative office.
You may cancel the Policy for a refund during the free look period by returning it, with a written request to cancel the Policy, to our mailing address. You may also fax your request to our administrative office at 1-727-299-1620 along with page 3 of the Policy. (If you send your request by fax, be sure to use the correct fax number.) The free look period generally expires 10 days after you receive the Policy, but in some states you may have more than 10 days. If you decide to cancel the Policy during the free look period, we will treat the Policy as if it had never been issued. We will pay the refund within seven days after we receive, in good order, the written request (with the owners signature) and returned Policy at our mailing address (or a fax request and page 3 of the Policy are received in good order at our administrative office). Note: Canceling a Policy after a 1035 Exchange could have tax consequences as any gain from the old policy will generally be recognized.
If your state requires us to allocate premiums according to a policyowners instructions during the free look period, then the amount of the refund will be the sum of:
| The difference between the premiums paid and the amounts allocated to any accounts under the Policy on the date the written request and Policy are received, in good order, at our mailing address (or a fax request and page 3 of the Policy are received at our administrative Office); plus |
| The total amounts of monthly deductions made and any other charges imposed on amounts allocated to the accounts; plus |
| The value of the amounts allocated to the accounts on the date we or our agent received the returned Policy. |
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If state law prohibits the calculation above, or requires us to refund all of the initial premiums, the refund will be the total of all premiums paid for this Policy. (See Policy Features Premiums Allocating Premiums Reallocation Account.) Please note: If you have submitted a recent check or draft, we have the right to defer payment of the refund until such check or draft has been honored.
California Policyowners Age 60 and Over
For policies issued in the state of California, if the policyowner is issue age 60 or older as of the Policy effective date, the Policys free look period is 30 days from the date of delivery. During the 30-day free look period, we will hold the net premiums in the fixed account, unless you direct us to allocate the net premiums as per your most recent allocation instructions. On the day following the end of the 30-day free look period, we will automatically transfer the accumulated value to subaccounts that you selected. This automatic transfer is excluded from the transfer limitations described later in this prospectus.
You can direct the allocation of your net premiums to the subaccounts during the 30-day free look period:
| On your application. |
| In writing any time before the end of the 30-day free look period. |
Signature guarantees are relied upon as a means of preventing the perpetration of fraud in financial transactions, including the disbursement of funds or assets from a victims account with a financial institution or a provider of financial services. They provide protection to investors by, for example, making it more difficult for a person to take another persons money by forging a signature on a written request for the disbursement of funds.
As a protection against fraud, we may require that the following transaction requests include a Medallion signature guarantee:
| All requests for disbursements (i.e., cash withdrawals and surrenders) of $500,000 or more. |
| Any disbursement request made on or within 10 days of our receipt of a request to change the address of record for an owners Policy. |
| Any disbursement request when Transamerica Premier has been directed to send proceeds to a different address from the address of record for that owners account. Please Note: This requirement will not apply to disbursement requests made in connection with exchanges of one annuity policy for another with the same owner in a tax-free exchange under Section 1035 of the Internal Revenue Code. |
| Any financial transaction where the owners signature on a request submitted does not match the signature in our files. |
An investor can obtain a signature guarantee from financial institutions across the United States and Canada that participate in a Medallion signature guarantee program. This includes many:
| National and state banks. |
| Savings banks and savings and loan associations. |
| Securities brokers and dealers. |
| Credit unions. |
The best source of a signature guarantee is a bank, savings and loan association, brokerage firm, or credit union with which you do business. Guarantor firms may, but frequently do not, charge a fee for their services.
A notary public cannot provide a signature guarantee. Notarization will not substitute for a signature guarantee.
LOANS |
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After the first Policy year (as long as the Policy is in force) you may borrow money from the Policy using the Policys net surrender value as the only security for the loan. We may permit a loan prior to the first Policy anniversary for Policies issued pursuant to 1035 Exchanges. A loan that is taken from and secured by a Policy may have tax consequences. See Federal Income Tax Considerations.
Policy loans are subject to certain conditions: | We may require you to borrow at least $500. |
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The maximum amount you may borrow is 90% of the cash value less any outstanding Policy loan, including accrued interest. |
When you take a loan, we will withdraw an amount equal to the requested loan from each of the subaccounts and the fixed account based on your current premium allocation instructions (unless you specify otherwise). If this is not possible, the withdrawal amount will be withdrawn from all accounts. We will transfer that amount to the loan reserve account as collateral for the loan. The loan reserve account is part of our fixed account.
We normally pay the amount of the loan within seven days after we receive a loan request, in good order, at our mailing address or, in the limited circumstances described below, by fax at our administrative office. We may postpone payment of loans under certain conditions.
You may request a loan of up to $50,000 by telephone by calling us at our administrative office at 1-800-851-9777, Monday - Friday, between the hours of 8:30 a.m. - 7:00 p.m. Eastern Time. If you do not want the ability to request a loan by telephone, you should notify us in writing at our mailing address. You will be required to provide certain information for identification purposes when you request a loan by telephone. We may ask you to provide us with written confirmation of your request. We will not be liable for processing a loan request if we believe the request is genuine. (Note: All loan requests must be submitted in good order to avoid a delay in processing your request.)
If your loan request is less than $500,000, you may fax it to us at 1-727-299-1620. If the loan request exceeds $500,000 or if the address of record has been changed within the past 10 days, we may reject your request or require a signature guarantee. We will not be responsible for any transmittal problems when you fax your request unless you report it to us within five business days and send us proof of your fax transmittal.
Your requests for a loan that are received at our mailing address (or faxed to our administrative office per the above instructions) before the NYSE closes are priced using the subaccount unit value determined at the close of that regular business session of the NYSE (usually 4:00 p.m. Eastern Time). If we receive a written request at our mailing address (or a fax request at our administrative office) after the NYSE closes, or on a day the NYSE is closed for trading, we will process the withdrawal request using the subaccount unit value determined at the close of the next regular business session of the NYSE. Please Note: All loan requests must be submitted in good order to avoid a delay in processing your request.
You can repay a loan at any time while the Policy is in force. Loan repayments must be sent to our mailing address - 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499 - and will be credited as of the date received.
At each Policy anniversary, we will compare the outstanding loan amount, including accrued loan interest, to the amount in the loan reserve account. At each such time, if the outstanding loan amount, including accrued loan interest, exceeds the amount in the loan reserve account, we will withdraw the difference from the subaccounts and the fixed account and transfer it to the loan reserve account, in the same manner as when a loan is made. If the amount in the loan reserve account exceeds the amount of the outstanding loan, including accrued loan interest, we will withdraw the difference from the loan reserve account and transfer it to the subaccounts and the fixed account in the same manner as current premiums are allocated. No charge will be imposed for these transfers, and these transfers are not treated as transfers in calculating the transfer charge. We reserve the right to require a transfer to the fixed account if the loans were originally transferred from the fixed account.
The Loan Interest Spread is the difference between the amount of interest we charge you for a loan and the amount of interest we credit to your loan reserve account. We currently charge you an effective annual interest rate on a Policy loan of 3.75% (4.0% maximum guaranteed) on each Policy anniversary. We may apply different loan interest rates to different parts of the loan. After the 10th Policy year, we may apply preferred loan charged rates on an amount equal to the cash value minus premiums paid (less any cash withdrawals) and minus any outstanding loan amount, including accrued loan interest. The maximum loan interest spread on preferred loans is 1.00% and the current spread is 0.0%.
Loan Reserve Interest Rate Credited
We will credit the amount in the loan reserve account with interest at an effective annual rate of 3.0%. After offsetting the 3.0% interest we credit, the net cost of loans currently is 0.75% annually (1.0% maximum guaranteed).
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A Policy loan reduces the death benefit proceeds and net surrender value by the amount of any outstanding loan amount, including accrued loan interest. Repaying the loan causes the death benefit proceeds and net surrender value to increase by the amount of the repayment. As long as a loan is outstanding, we hold an amount in the loan reserve equal to the amount of the outstanding loan as of the last Policy anniversary plus any accrued interest. This amount is not affected by the separate accounts investment performance and may not be credited with the interest rates accruing on the unloaned portion of cash value in the fixed account. Amounts transferred from the separate account to the loan reserve account will reduce the value in the separate account and we will credit such amounts with an interest rate declared by us rather than a rate of return reflecting the investment results of the separate account.
We also currently charge interest on Policy loans at an effective new annual rate of up to 3.75%. Because interest is added to the amount of the Policy loan to be repaid, the size of the loan will constantly increase unless the interest and/or Policy loan is repaid.
There are risks involved in taking a Policy loan, including the potential for a Policy to lapse if projected earnings, taking into account outstanding loans, are not achieved. A Policy loan may also have possible adverse tax consequences. You should consult a tax advisor before taking out a Policy loan.
We will notify you (and any assignee of record) if a loan causes your net surrender value to reach zero. If you do not submit a sufficient payment within 61 days from the date of the notice, your Policy may lapse.
POLICY LAPSE AND REINSTATEMENT |
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Your Policy may not necessarily lapse (terminate without value) if you fail to make a planned periodic payment. However, even if you make all your planned periodic payments, there is a possibility that your Policy will lose value and lapse. This Policy provides a no lapse guarantee as described below. Once the no lapse period ends, or if the no lapse guarantee is not in effect, your Policy may lapse if the net surrender value on any Monthiversary is less than the monthly deductions due on that day. Lapse might occur if unfavorable investment experience, loans and cash withdrawals cause a decrease in the net surrender value, or if you have not paid sufficient premiums as discussed below to offset the monthly deductions.
If the net surrender value is not enough to pay the monthly deductions, then we will mail a notice to your last known address according to our records, and any assignee of record. The notice will specify the minimum payment you must pay and the final date by which we must receive the payment to prevent a lapse. We generally require that you make the payment within 61 days after the date of the notice. This 61-day period is called the grace period. We pay the death benefit proceeds if an insured dies during the grace period. If we do not receive the specified minimum payment by the end of the grace period, then all coverage under the Policy will terminate without value.
Your Policy is a flexible premium policy that is subject to certain monthly deductions that are dependent upon among other factors the characteristics of the insureds, riders associated with your Policy, and your Policys specified amount. If your Policy does lapse and you choose to reinstate it, you will be required to make additional payments. The payments needed to reinstate the Policy will depend on whether the no lapse date has passed. Please refer to the section below entitled Reinstatement for a description of the payments that may be required to reinstate your Policy.
The Policy provides a no lapse guarantee (premium protection period in Illinois). As long as you keep the no lapse guarantee in effect, your Policy will not lapse and no grace period will begin, even if your net surrender value is not enough to pay your monthly deductions. The no lapse guarantee will not extend beyond the no lapse date stated in your Policy. Each month we determine whether the no lapse guarantee is still in effect. If the Policy is still in force, but the no lapse guarantee is not in effect, it can be restored by paying at any time before the no lapse date minimum monthly guarantee premiums sufficient to cover the period from the Policy date up to and including the current month.
No lapse date: | For issue ages 0-60, the no lapse date is the lesser of the number of years to attained age 65 or the 20th Policy anniversary. For issue ages 61-85, the no lapse date is the fifth Policy anniversary. The no lapse date is specified in your Policy. |
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Keeping the no lapse guarantee in effect: | The no lapse guarantee will not remain in effect if you do not pay sufficient minimum monthly guarantee premiums. You must pay total premiums (minus cash withdrawals, any outstanding loan amount, including accrued loan interest) that equal at least: > the sum of the minimum monthly guarantee premiums in effect for each month from the Policy date up to and including the current month. | |
Effect of Policy changes on minimum monthly guarantee premium: | We will recalculate the amount of the minimum monthly guarantee premium if, while the no lapse guarantee is in effect, you change death benefit options, increase or decrease the specified amount, or add, terminate, increase or decrease a rider. Depending upon the change made to the Policy or rider and the resulting impact on the level of the minimum monthly guaranteed premium, you may need to pay additional premiums to keep the Policy in force and/or to keep the no lapse guarantee in effect. We normally will not extend the length of the no lapse period. |
You will lessen the risk of Policy lapse if you keep the no lapse guarantee in effect by submitting total premiums (minus cash withdrawals and any loan balance) that equal at least the sum of the minimum monthly guarantee premiums in effect that are received and allocated to the Policy prior to the monthly anniversary and/or monthly policy date. Before you take a cash withdrawal or a loan or decrease the specified amount or add, increase or decrease a rider, you should consider carefully the effect it will have on the no lapse guarantee.
See Minimum Monthly Guarantee Premium for a discussion of how the minimum monthly guarantee premium is calculated and can change.
We may reinstate a lapsed Policy within five years after the lapse (and prior to the maturity date). You may not reinstate the Policy if it has been surrendered for cash surrender value. Any reinstatement must be made during the lifetime of the insured. Before we reinstate the Policy we will require all of the following:
| Submit a written application for reinstatement to our mailing address or you may fax your request to our administrative office at 1-727-299-1620. (If you send your request by fax, be sure to use the correct fax number.) |
| Submit the insureds written consent to reinstate. |
| Provide evidence of insurability satisfactory to us that the insured continues to qualify for the same underwriting class and any substandard rating upon which we based issuance of the Policy. |
Ø | If the no lapse guarantee has expired, pay an amount sufficient to provide a net premium equal to any uncollected monthly deductions due up to the time of termination, plus two monthly deductions due in advance at the time of reinstatement, plus an amount sufficient to increase the cash value to a positive amount at the time of reinstatement. |
Ø | If the no lapse guarantee has not expired, pay the lesser of the premium described directly above, or the total minimum monthly guarantee premium from the Policy date through the month of lapse, plus two months of minimum monthly guarantee premiums, minus premiums previously paid net of any withdrawals, outstanding loans and accrued loan interest that has been deducted from the cash value. |
The cash value of the loan reserve on the reinstatement date will be zero. Your net surrender value on the reinstatement date will equal the cash value at the time your Policy lapsed, plus any net premiums you pay at reinstatement, minus one monthly deduction. The reinstatement date for your Policy will be the Monthiversary on or following the day we approve your application for reinstatement. We may decline a request for reinstatement. We will not reinstate indebtedness (i.e., outstanding loan plus any accrued loan interest at the time your Policy lapsed).
FEDERAL INCOME TAX CONSIDERATIONS |
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The following summarizes some of the basic federal income tax considerations associated with a Policy and does not purport to be complete or to cover all situations. This discussion is not intended as tax advice. Please consult counsel or other qualified tax advisors for more complete information. We base this discussion on our understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service (the IRS). Federal income tax laws and the current interpretations by the IRS may change.
A Policy must satisfy certain requirements set forth in the Internal Revenue Code (the Code) in order to qualify as a life insurance policy for federal income tax purposes and to receive the tax treatment normally accorded life insurance policies under federal tax law. Guidance as to how these requirements are to be applied is limited. Nevertheless, we believe that the Policy should generally satisfy the applicable Code requirements.
In certain circumstances, owners of variable life insurance policies have been considered for federal income tax purposes to be the owners of the assets of the separate account supporting their policies due to their ability to exercise investment control over those assets. Where this is the case, the policyowners have been currently taxed on income and gains attributable to the separate account assets. There is little guidance in this area. We believe that the Policy does not give you investment control over separate account assets.
In addition, the Code requires that the investments of the separate account be adequately diversified in order to treat the Policy as a life insurance policy for federal income tax purposes. We intend that the separate account, through the portfolios, will satisfy these diversification requirements.
The following discussion assumes that the Policy will qualify as a life insurance policy for federal income tax purposes.
Tax Treatment of Policy Benefits
In General. We believe that the Policy described in this prospectus is a life insurance policy under Code Section 7702. Section 7702 defines a life insurance policy for federal income tax purposes and places limits on the relationship of the cash value to the death benefit. As life insurance policies, the death benefits of the policies are generally excludable from the gross income of the beneficiaries. In the absence of any guidance from the IRS on the issue, we believe that providing an amount at risk after attained age 99 in the manner provided should be sufficient to maintain the excludability of the death benefit after attained age 99. Lack of specific IRS guidance, however, makes the tax treatment of the death benefit after attained age 99 uncertain. Also, any increase in cash value should generally not be taxable until received by you or your designee. However, if your Policy is a modified endowment contract as defined in Code Section 7702A you may be taxed to the extent of gain in the Policy when you take a Policy loan, pledge or assign the Policy. Federal, state and local transfer, estate and other tax consequences of ownership or receipt of Policy proceeds depend on your circumstances and the beneficiarys circumstances. A tax advisor should be consulted on these consequences.
Generally, you will not be deemed to be in constructive receipt of the cash value until there is a distribution. When distributions from a Policy occur, or when loans are taken out from or secured by a Policy (e.g., by assignment), the tax consequences depend on whether the Policy is classified as a MEC. Moreover, if a loan from a Policy that is not a MEC is outstanding when the Policy is surrendered or lapses, the amount of outstanding indebtedness will be considered an amount distributed and will be taxed accordingly.
Modified Endowment Contracts. Under the Code, certain life insurance policies are classified as MECs and receive less favorable tax treatment than other life insurance policies. The rules are too complex to summarize here, but generally depend on the amount of premiums paid during the first seven Policy years or in the seven Policy years following certain changes in the Policy. Changes that would cause a contract to enter a new seven-year test period include, for example, an increase in the death benefit that is not the result of a premium necessary to keep the Policy in-force. Additionally, a reduction in benefits during a seven-year test period could cause a Policy to become a MEC. Due to the Policys flexibility, each Policys circumstances will determine whether the Policy is classified as a MEC. If you do not want your Policy to be classified as a MEC, you should consult a tax advisor to determine the circumstances, if any, under which your Policy would or would not be classified as a MEC.
Upon issue of your Policy, we will notify you as to whether or not your Policy is classified as a MEC based on the initial premium we receive. If a payment would cause your Policy to become a MEC, you and your registered representative/ agent will be notified and we will not apply the premium. At that time, you will need to notify us if you want to continue your Policy as a MEC. Unless you notify us that you do want to continue your Policy as a MEC, we will refund the dollar amount of the excess premium if we have not yet credit the premium, or, if the premium has been credited, we will return the excess premium within sixty (60) days of year end.
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Distributions (other than Death Benefits) from MECs. Policies classified as MECs are subject to the following tax rules:
| All distributions other than death benefits from a MEC, including distributions upon surrender and cash withdrawals, will be treated first as distributions of gain taxable as ordinary income. They will be treated as tax-free recovery of the owners investment in the Policy only after all gain has been distributed. Your investment in the Policy is generally your total premium payments. When a distribution is taken from the Policy, your investment in the Policy is reduced by the amount of the distribution that is tax-free. |
| Loans taken from or secured by assignment or pledges of such a Policy and increases in cash value secured by such loan or pledge are treated as distributions and taxed accordingly. If the Policy is part of a collateral assignment split dollar arrangement, the initial assignment as well as increases in cash value during the assignment may be treated as distributions and considered taxable. |
| A 10% additional federal income tax is imposed on the amount included in income except where the distribution or loan is made when you have reached age 591⁄2 or are disabled, or where the distribution is part of a series of substantially equal periodic payments for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and the beneficiary. |
| If a Policy becomes a MEC, distributions that occur during the Policy year will be taxed as distributions from a MEC. In addition, the IRS has the authority, but has not yet done so, to issue regulations providing that distributions from a Policy that are made within two years before the Policy becomes a MEC will also be taxed in this manner. |
Distributions (other than Death Benefits) from Policies that are not MECs. Distributions from a Policy that is not a MEC are generally treated first as a recovery of your investment in the Policy, and as taxable income after the recovery of all investment in the Policy. However, certain distributions which must be made in order to enable the Policy to continue to qualify as a life insurance policy for federal income tax purposes if Policy benefits are reduced during the first 15 Policy years may be treated in whole or in part as ordinary income subject to tax. Distributions from or loans from or secured by a Policy that is not a MEC are not subject to the 10% additional tax applicable to MECs.
Policy Loans. Loans from or secured by a Policy that is not a MEC are generally not treated as distributions. Instead, such loans are treated as indebtedness. If a loan from a Policy that is not a MEC is outstanding when the Policy is surrendered or lapses, the amount of the outstanding indebtedness will be taxed as if it were a distribution at that time. The tax consequences associated with Policy loans outstanding after the first 10 Policy years with preferred loan rates are less clear and a tax advisor should be consulted about such loans.
Deductibility of Policy Loan Interest. In general, interest you pay on a loan from a Policy will not be deductible. Before taking out a Policy loan, you should consult a tax advisor as to the tax consequences.
Investment in the Policy. Your investment in the Policy is generally the sum of the premium payments you made reduced by a withdrawal or distributions from the Policy that are tax-free.
Withholding. To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipients federal income tax liability. The federal income tax withholding rate is generally 10% of the taxable amount of the distribution. Withholding applies only if the taxable amount of all distributions is at least $200 during a taxable year. Some states also require withholding for state income taxes. With the exception of amounts that represent eligible rollover distributions from Pension Plans and 403(b) arrangements, which are subject to mandatory withholding of 20% for federal tax, recipients can generally elect, however, not to have tax withheld from distributions. If the taxable distributions are delivered to foreign countries, U.S. persons may not elect out of withholding. Taxable distributions to non-resident aliens are generally subject to withholding at a 30% rate unless withholding is eliminated under an international treaty with the United States. The payment of death benefits is generally not subject to withholding.
Business Uses of the Policy. The Policy may be used in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others. The tax consequences of such plans and business uses of the Policy may vary depending on the particular facts and circumstances of each individual arrangement and business use of the Policy. Therefore, if you are contemplating using the Policy in any such arrangement, you should be sure to consult a tax advisor as to tax attributes of the arrangement and in its use of life insurance. In recent years, moreover, Congress
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and the IRS have adopted new rules relating to nonqualified deferred compensation and to life insurance owned by businesses and life insurance used in split dollar arrangements. The IRS has recently issued new guidance regarding concerns in the use of life insurance in employee welfare benefit plans, including, but not limited to, the deduction of employer contributions and the status of such plans as listed transactions. Any business contemplating the purchase of a new Policy or a change in an existing Policy should consult a tax advisor. In addition, Section 101(j) of the Internal Revenue Code imposes notice, consent and other provisions on policies owned by employers and certain of their affiliates, owners and employees in order to receive death benefits tax-free and requires additional tax reporting requirements.
Alternative Minimum Tax. There also may be an indirect tax upon the income in the Policy or the proceeds of a Policy under the federal corporate alternative minimum tax, if the policyowner is subject to that tax.
Living Benefit Rider (an Accelerated Death Benefit). We believe that the single-sum payment we make under this rider should be fully excludible from the gross income of the beneficiary, except in certain business contexts. You should consult a tax advisor about the consequences of adding this rider to your Policy, or requesting a single-sum payment.
Same Sex Relationships. Same sex couples have the right to marry in all states. The parties to each marriage that is valid under the law of any state will each be treated as a spouse as defined in this Policy or any Rider. Individuals in other arrangements, such as, civil unions, registered domestic partnerships, or other similar arrangements, that are not recognized under the relevant state law will not be treated as married or as spouses as defined in the Policy. Therefore, tax treatment of individuals who do not meet the definition of spouse have adverse tax consequences and/or may not be permissible. Please consult a tax advisor for more information on this subject.
Continuation of Policy Beyond Attained Age 99. The tax consequences of continuing the Policy beyond the insureds attained age 99 are unclear and may include taxation of the gain in the Policy at the original maturity date or the taxation of the death benefit in whole or in part. You should consult a tax advisor if you intend to keep the Policy in force beyond the insureds attained age 99.
Other Tax Considerations. The transfer of the Policy or designation of a beneficiary may have federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate, and generation-skipping transfer taxes. The individual situation of each owner or beneficiary will determine the extent, if any, to which federal, state, and local transfer and inheritance taxes may be imposed and how ownership or receipt of Policy proceeds will be treated for purposes of federal, state and local estate, inheritance, generation-skipping and other taxes. Special Rules for Pension Plans and Section 403(b) Arrangements. If the Policy is purchased in connection with a section 401(a) qualified pension or profit sharing plan, including a section 401(k) plan, or in connection with a section 403(b) plan or program, federal and state income and estate tax consequences could differ from those stated in this prospectus. The purchase may also affect the qualified status of the plan. You should consult a qualified tax advisor in connection with such purchase. Policies owned under these types of plans may be subject to the Employee Retirement Income Security Act of 1974, or ERISA, which may impose additional requirements on the purchase of policies by such plans. You should consult a qualified advisor regarding ERISA.
Please Note:
| Foreign Account Tax Compliance Act (FATCA). The discussion above provides general information regarding U.S. federal income tax consequences to life and annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from life policies and annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, such purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchasers country of citizenship or residence. FATCA imposed additional reporting and documentation requirements where non-U.S. entities (including foreign corporations, partnerships, and trusts) purchase policies to identify U.S. persons who are beneficial owners of the policies. Additional withholding of U.S. tax may be imposed if such documentation is not provided. In furtherance of FATCA implementation, the U.S. has entered into Inter-Government Agreements (IGAs) with various foreign governments that require an exchange of information between U.S. financial institutions, including Transamerica Premier and the foreign governments regarding purchases of life insurance and annuities by their respective citizens. Prospective purchasers are advised to consult with a qualified tax adviser regarding U.S., state, and foreign taxation with respect to a life insurance policy or an annuity contract purchase. |
| In 2001, Congress enacted the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which modified the estate, gift and generation-skipping transfer taxes through 2009 |
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and eliminated the estate tax (but not the gift tax) and replaced it with a carryover basis income tax regime for estates of decedents dying in 2010, and also eliminated the generation-skipping transfer tax for transfers made in 2010. The 2010 Taxpayer Relief Act generally extended the EGTRRA provisions existing in 2009 and reunified the estate and gift transfer taxes for 2011 and 2012. The American Taxpayer Relief Act of 2012 made permanent certain of the changes to the estate, gift and generation-skipping transfer taxes. This recent history of changes in these important tax provisions underscores the importance of seeking guidance from a qualified advisor to help ensure that your estate plan adequately addresses possible transfer taxation of the Policy and its benefits in light of your needs and those of your beneficiaries under all possible scenarios. |
OTHER POLICY INFORMATION |
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If you surrender the Policy, you may elect to receive the net surrender value in either a lump sum by check or as a series of regular income payments under one of the three settlement options described below. In either event, life insurance coverage ends. Also, when the insured dies, the beneficiary may apply the lump sum death benefit proceeds to one of the same settlement options. If the regular payment under a settlement option would be less than $100, we will instead pay the proceeds in one lump sum. We may make other settlement options available in the future.
Once we begin making payments under a settlement option, you or the beneficiary will no longer have any value in the subaccounts or the fixed account. Instead, the only entitlement will be the amount of the payment specified under the terms of the settlement option chosen. Depending upon the circumstances, the effective date of a settlement option is the surrender date or the insureds date of death.
Under any settlement option, the dollar amount of each payment will depend on:
| The amount of the surrender on the surrender date or death benefit proceeds on the insureds date of death. |
| The interest rate we credit on those amounts (we guarantee a minimum annual interest rate of 3.0%). |
| The mortality tables we use. |
| The specific payment option(s) you choose. |
Option 1--Equal Monthly Installments for a Fixed Period |
We will pay the proceeds, plus interest, in equal monthly installments for a fixed period of your choice, but not longer than 240 months. We will stop making payments once we have made all the payments for the period selected. | |
Option 2--Equal Monthly Installments for Life (Life Income) |
At your or the beneficiarys direction, we will make equal monthly installments: Only for the life of the payee, at the end of which payments will end; or For the longer of the payees life, or for 10 years if the payee dies before the end of the first 10 years of payments; or For the longer of the payees life, or until the total amount of all payments we have made equals the proceeds that were applied to the settlement option. | |
Option 3--Equal Monthly Installments for the Life of the Payee and then to a Designated Survivor (Joint and Survivor) |
We will make equal monthly payments during the joint lifetime of two persons, first to a chosen payee, and then to a co-payee, if living, upon the death of the payee.
Payments to the co-payee, if living, upon the payees death will equal either: > The full amount paid to the payee before the payees death; or > Two-thirds of the amount paid to the payee before the payees death. All payments will cease upon the death of the co-payee. |
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If the insured is living and the Policy is in force, the Policy will mature on the Policy anniversary nearest the insureds 100th birthday. This is the maturity date. On the maturity date we will pay you the net surrender value of your Policy.
If you send a written request to our mailing address, we will extend the maturity date if your Policy is still in force on the maturity date. Any riders in force on the scheduled maturity date will terminate on that date and will not be extended.
Policy loans, partial withdrawals, and subaccount transfers may continue during the extension. Interest on any outstanding Policy loans will continue to accrue during the period for which the maturity date is extended. You must submit a written request to our mailing address for the extension between 90 and 180 days prior to the maturity date and elect one of the following:
1. | If you had previously selected death benefit Option B or C, we will change the death benefit to Option A. On each valuation date, we will adjust the specified amount to equal the cash value, and the limitation percentage will be 100%. We will not permit you to make additional premium payments unless it is required to prevent the Policy from lapsing. We will waive all future monthly deductions; or |
2. | We will automatically extend the maturity date until the next Policy anniversary. You must submit a written request to our mailing address, between 90 and 180 days before each subsequent Policy anniversary, stating that you wish to extend the maturity date for another Policy year. All benefits and charges will continue as set forth in your Policy. We will charge the then current cost of insurance rates. |
If you choose 2 above, you may change your election to 1 above at any time. However, if you choose 1 above, then you may not change your election to 2 above. Please Note: Item 2 above may not be available in all states, or its terms may vary depending on a states insurance law requirements.
The tax consequences of extending the maturity date beyond the 100th birthday of the insured are uncertain, and may include taxation of the gain in the Policy at the original maturity date or taxation of the death benefit in whole or in part. You should consult a tax advisor as to those consequences.
We usually pay the amounts of any surrender, cash withdrawal, death benefit proceeds, or settlement options within seven calendar days after we receive all applicable written notices and/or due proofs of death, in good order, at our administrative office. However, we can postpone such payments if any of the following occurs:
| The NYSE is closed, other than customary weekend and holiday closings, or trading on the NYSE is restricted. |
| The SEC permits, by an order, the postponement for the protection of policyowners. |
| An emergency exists that would make the disposal of securities held in the separate account or the determination of their value not reasonably practicable. |
In addition, pursuant to SEC rules, if either the Transamerica Aegon Government Money Market VP portfolio or the ProFund VP Government Money Market portfolio suspends payment of redemption proceeds in connection with a liquidation of such portfolio as a result of portfolio liquidity levels, we will delay payment of any transfer, partial withdrawal, surrender, loan, or death benefit from the Transamerica Aegon Government Money Market subaccount or the ProFund VP Government Money Market subaccount until the portfolio pays redemption proceeds.
If you have submitted a recent check or draft, we have the right to defer payment of surrenders, cash withdrawals, death benefit proceeds, or payments under a settlement option until such check or draft has been honored. We also reserve the right to defer payment of transfers, cash withdrawals, death benefit proceeds, or surrenders from the fixed account for up to six months.
If mandated under applicable law, we may be required to reject a premium payment and/or block a policyowners account and thereby refuse to pay any request for transfers, withdrawals, surrenders, loans or death benefits until instructions are received from the appropriate regulators. We may also be required to provide additional information about you or your account to governmental regulators.
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You may enter into a split dollar arrangement with another owner or another person(s) whereby the payment of premiums and the right to receive the benefits under the Policy (i.e., net surrender value of insurance proceeds) are split between the parties. There are different ways of allocating these rights.
For example, an employer and employee might agree that under a Policy on the life of the employee, the employer will pay the premiums and will have the right to receive the net surrender value. The employee may designate the beneficiary to receive any insurance proceeds in excess of the net surrender value. If the employee dies while such an arrangement is in effect, the employer would receive from the insurance proceeds the amount that he would have been entitled to receive upon surrender of the Policy and the employees beneficiary would receive the balance of the proceeds.
No transfer of Policy rights pursuant to a split dollar arrangement will be binding on us unless in writing and received by us at our mailing address, in good order. Split dollar arrangements may have tax consequences. You should consult a tax advisor before entering into a split dollar arrangement.
The Sarbanes-Oxley Act (the Act) was enacted in 2002. The Act prohibits, with limited exceptions, publicly-traded companies, including non-U.S. companies that have securities listed on exchanges in the United States, from extending, directly or through a subsidiary, many types of personal loans to their directors or executive officers. It is possible that this prohibition may be interpreted as applying to split-dollar life insurance policies for directors and executive officers of such companies, since such insurance arguably can be viewed as involving a loan from the employer for at least some purposes.
Although the prohibition on loans of publicly-traded companies was generally effective as of July 30, 2002, there is an exception for loans outstanding as of the date of enactment, as long as there is no material modification to the loan terms and the loan is not renewed after July 30, 2002. Any affected business contemplating the payment of a premium on an existing Policy, or the purchase of a new Policy, in connection with a split-dollar life insurance arrangement should consult legal counsel.
In addition, the IRS issued guidance that affects the tax treatment of split-dollar arrangements and the Treasury Department issued final regulations that would significantly affect the tax treatment of such arrangements. The IRS guidance and the final regulations affect all split dollar arrangements, not just those involving publicly-traded companies. Consult your qualified tax advisor with respect to the effect of this guidance on your split dollar policy.
Your Policy will terminate and all benefits under it will cease on the earliest of the following:
| The d3ate the Policy matures; |
| The date the Policy lapses; |
| The date we receive, in good orsder, your written request to surrender or terminate; or |
| The date of the insureds death. |
You may assign your Policy by filing a written request with us. We will not be bound by any assignment until we record it in our records. Unless otherwise specified by you, the assignment will then take effect on the date the assignment form is received in good order by the Company and accepted at our administrative office. We assume no responsibility for the validity or effect of any assignment of the Policy or of any interest in it. Any death benefit which becomes payable to an assignee will be payable in a single sum and will be subject to proof of the assignees interest and the extent of the assignment. To terminate the assignment, we will need a release of assignment form dated and completed by the assignee. If a corporation, we require a corporate resolution noting the authorized person(s).
SUPPLEMENTAL BENEFITS (RIDERS) |
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The following supplemental benefits (riders) are available and may be added to your Policy. Monthly charges for these riders are deducted from the cash value as part of the monthly deductions. The riders available with the Policies do not build cash value and provide benefits that do not vary with the investment experience of the separate account. These riders may not be available in all states; certain benefits and features may vary by state and they may be available under a different name in some states. Adding these supplemental benefits to an existing Policy, or canceling them, may have tax consequences; you should consult a tax advisor before doing so.
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We may discontinue offering riders at any time without notice, unless the rider specifically states otherwise. Some riders may only be elected at the time of application. Once a rider is elected it cannot be terminated without your consent (or by operation of law) if all terms and conditions are fully satisfied.
This rider may insure the spouse and/or dependent children of the primary insured. Subject to the terms of the rider, we will pay the specified amount of the rider to the primary insured for policies purchased prior to May 1, 2009, or to the selected beneficiary for 2001 C.S.O. policies. Available for issue ages 0-85, our minimum face amount for this rider is $10,000. The maximum face amount is the lesser of $500,000 or the total amount of coverage on the primary insured. The maximum number of Other Insured Riders that is allowed on any one Policy is five (5). We will pay the riders face amount when we receive proof (in good order at our mailing address) of the Other Insureds death. Please refer to the applicable fee tables for your Policy to determine the respective charges for this rider. Subject to the following conditions, on any Monthiversary while the rider is in force, you may convert it to a new policy on the Other Insureds life (without evidence of insurability).
Conditions to convert the rider: | Your request, in good order, must be in writing and sent to our mailing address. The Other Insured has not reached his/her 70th birthday (for Policies applied for on or after May 1, 2009), or 86th birthday (for Policies issued before January 1, 2009); The new policy is any permanent insurance policy that we currently offer for conversion. Subject to the minimum specified amount required for the new policy, the amount of the insurance under the new policy will equal the face amount in force under the rider as long as it meets the minimum specified amount requirements of the original Policy. We will base your premium on the Other Insureds rate class under the rider. | |
Termination of the rider: | The rider will terminate on the earliest of: The maturity date of the Policy; or The Policy anniversary nearest to the Other Insured s 100th birthday; or The date the Policy terminates for any reason except for death of the primary insured; or 31 days after the death of the primary insured; the date of conversion of this rider; or The Monthiversary when the rider terminates upon the owners written request. |
This rider provides insurance on the primary insureds children who are between the ages of 15 days and 18 years old on the effective date of the rider or when later added to the rider due to birth or legal adoption. The coverage for any insured child will terminate on the Monthiversary following that childs 25th birthday (or that childs death, if sooner).
Our minimum face amount for this rider is $2,000 and the maximum face amount is $10,000. We will pay a death benefit once we receive proof in good order at our mailing address that the insured child died while the rider was in force for that child. At each insured childs age 25 this rider may be converted to a new policy for five times the face amount of the rider. If the primary insured dies while the rider is in force, we will terminate the rider 31 days after the death, and we will offer a separate life insurance policy to each insured child for an amount equal to the face amount of the rider.
Accidental Death Benefit Rider
Available to primary insured issue ages 15-59, the minimum specified amount for this rider is $10,000. The maximum specified amount available for this rider is the lesser of (i) $150,000 or (ii) 150% of the Policys specified amount.
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Subject to certain limitations, we will pay the specified amount if the primary insureds death results solely from accidental bodily injury where:
| The death is caused by external, violent, and accidental means. |
| The death occurs within 90 days of the accident. |
| The death occurs while the rider is in force. |
The rider will terminate on the earliest of:
| The Policy anniversary nearest the primary insureds 70th birthday; or |
| The date the Policy terminates; or |
| The Monthiversary when this rider is terminated upon the owners written request. |
Subject to certain conditions, we will waive the Policys monthly deductions while the primary insured is disabled. This rider may be purchased if the primary insureds issue age is 15-55. We must receive proof, in good order, at our mailing address that:
| The primary insured is totally disabled. |
| The rider was in force when the primary insured became disabled. |
| The primary insured became disabled before the Policy anniversary nearest the insureds 60th birthday. |
| The primary insured is continuously disabled for at least six months. |
We will not waive any deduction that becomes due more than one year before we receive written notice of your claim at our mailing address.
Disability Waiver and Income Rider
This rider has the same benefits as the Disability Waiver Rider, but adds a monthly income benefit for up to 120 months. This rider may be purchased if the primary insureds issue age is 15-55. The minimum income amount for this rider is $10/month. The maximum income amount is the lesser of 0.2% of your specified amount or $300 per month.
Living Benefit Rider (an Accelerated Death Benefit)
This rider allows us to pay all or a portion of the death benefit once we receive proof, in good order, at our mailing address that the primary insured is ill and has a life expectancy of one year or less. A doctor must certify the insureds life expectancy.
We will pay a single-sum benefit equal to:
| The death benefit on the date we pay the single-sum benefit; multiplied by |
| The election percentage of the death benefit you elect to receive (election percentage); divided by |
| 1 + i (i equals the current yield on 90-day Treasury bills or the Policy loan interest rate (currently, 3.75%), whichever is greater) (discount factor); minus |
| Any indebtedness at the time we pay the single-sum benefit, multiplied by the election percentage. |
The maximum terminal illness death benefit used to determine the single-sum benefit as defined above is equal to:
| The death benefit available under the Policy once we receive satisfactory proof that the insured is ill; plus |
| The benefit available under any PIR or PIR Plus in force. |
The election percentage is a percentage that you select. It may not be greater than 100%.
The rider terminates at the earliest of:
| The date the Policy terminates. |
| The date a settlement option takes effect. |
| The date we pay a single-sum benefit. |
| The date you terminate the rider. |
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We will not pay a benefit under the rider if the primary insureds terminal condition results from self-inflicted injuries that occur during the period specified in your Policys suicide provision.
We do not assess an administrative charge for this rider; however, if the rider is exercised, we do reduce the single sum benefit by a discount factor to compensate us for expected lost income due to the early payment of the death benefit. The terms of this rider may vary depending on a states insurance law requirements.
For example, suppose before the owner elects the single sum benefit, a Policy has a $400,000 death benefit and a $10,000 loan balance. Suppose that the current yield on 90-day Treasury bills is 6.00% and the Policy loan interest rate is 3.75%. Because the greater of these is 6%, that is the interest rate that will be used to discount the single sum benefit. The owner elects to accelerate 50% of the death benefit, so the single sum benefit equals $183,679.25, which is ($400,000 x 0.50 / 1.06) - ($10,000 x 0.50). After the acceleration, the remaining death benefit is $200,000, which is 50% of $400,000, and all Policy values, including the loan balance, will be reduced by 50%.
Note: Before adding this rider to an existing Policy or requesting payment under the rider, you should consult a tax advisor to discuss the tax consequences of doing so.
ADDITIONAL INFORMATION |
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Unclaimed and Abandoned Property
Every state has unclaimed property laws that generally provide for escheatment to the state of unclaimed property (including proceeds of annuity, life and other insurance policies) under various circumstances. In addition to the state unclaimed property laws, we may be required to escheat property pursuant to regulatory demand, finding, agreement or settlement. To help prevent such escheatment, it is important that you keep your contact and other information on file with us up to date, including the names, contact information and identifying information for owners, insureds, annuitants, beneficiaries and other payees. Such updates should be communicated in a form and manner satisfactory to us.
Sending Forms and Transaction Requests in Good Order
We cannot carry out your instructions to process a transaction relating to your Policy until we have received your instructions in good order at our mailing address (or our administrative office or website, as appropriate). Good order means the actual receipt by us of the instructions relating to a transaction in writing or, when appropriate, by telephone or facsimile, or electronically, along with all forms, information and supporting legal documentation (including any required spousal or joint owners consents) we require in order to effect the transaction. To be in good order, instructions must be sufficiently clear so that we do not need to exercise any discretion to follow such instructions.
Distribution of the Policies
Distribution and Principal Underwriting Agreement. We have entered into a principal underwriting agreement with our affiliate, TCI, for the distribution and sale of the Policies. We pay commissions to TCI, which are passed on to selling firms (see below) and reimburse TCI for certain expenses it incurs in order to pay for the distribution of the Policies (e.g., commissions paid to firms selling the Policies, as described below).
Special Compensation for Affiliated Wholesaling and Selling Firms. Our parent company provides paid-in capital to TCI and pays the cost of TCIs operating and other expenses, including costs for facilities, legal and accounting services, and other internal administrative functions.
Transamerica Premiers main distribution channel is TFA, an affiliate, which sells Transamerica Premier products.
There are no commissions paid on this Policy.
Cyber Security Risks
We rely heavily on interconnected computer systems and digital data to conduct our variable product business activities. Because our variable product business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is potentially vulnerable to disruptions from utility outages and
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other problems, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions) and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third party administrator, the underlying portfolios, intermediaries and other affiliated or third-party service providers may adversely affect us and your cash value. For instance, cyber-attacks may: interfere with our processing of Policy transactions, including the processing of orders from our website or transactions with the underlying portfolios; cause the release and possible destruction of confidential customer or business information; impede order processing; subject us and/or our service providers and intermediaries to regulatory fines and financial losses; and/or cause reputational damage. Cyber security risks may also affect the issuers of securities in which the underlying portfolios invest, which may cause the underlying portfolios available under the Policy to lose value. There can be no assurance that we, the underlying portfolios or our service providers will avoid losses affecting your Policy that result from cyber-attacks or information security breaches in the future.
We, like other life insurance companies, are subject to regulatory and legal proceedings, including class action lawsuits, in the ordinary course of our business. Such legal and regulatory matters include proceedings specific to us and other proceedings generally applicable to business practices in the industry in which we operate. In some lawsuits and regulatory proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any litigation or regulatory proceeding cannot be predicted with certainty, at the present time, we believe that there are no pending or threatened proceedings or lawsuits that are likely to have a material adverse impact on the separate account, on TCIs ability to perform under its principal underwriting agreement, or on our ability to meet our obligations under the Policy.
The Company was the subject of inquiries and remains under audits and market conduct examinations with a focus on the handling of unreported claims and abandoned property. The audits and related examination activity may result in additional payments to beneficiaries, escheatment of funds deemed abandoned, and administrative penalties. The Company previously implemented changes in the procedures for the identification of unreported claims and handling of escheatable property to comply with the terms of regulatory agreements and newly adopted laws and regulations. The Company does not believe that any regulatory actions or agreements that result from these audits and examinations will have a material adverse impact on our ability to meet our obligations.
The financial statements of Transamerica Premier, and the separate account are included in the SAI.
Additional information regarding the investment performance of the portfolios appears in the fund prospectuses, which accompany this prospectus.
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GLOSSARY |
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accounts | The options to which you can allocate your money. The accounts include the fixed account and the subaccounts in the separate account. | |
administrative office | Our administrative office address is 570 Carillon Parkway, St. Petersburg, Florida, 33716-1294. Our phone number is 1-800-851-9777; our facsimile numbers are 1-727-299-1648 (for subaccount transfers only); and 1-727-299-1620 (for all other requests). Our administrative office serves as the recipient of all website (www.premier.transamerica.com), telephonic and facsimile transactions, including, but not limited to transfer requests and premium payments made by wire transfer and through electronic credit and debit transactions (e.g., payments through direct deposit, debit transfers, and forms of e-commerce payments). Our hours are Monday Friday from 8:30 a.m. 7:00 p.m. Eastern Time. Please do not send any checks, claims, correspondence or notices to this office; send them to the mailing address. | |
attained age | The issue age of the person insured, plus the number of completed years since the Policy date (for the initial specified amount) or the date of each increase in specified amount. | |
Base Policy | The Transamerica® Associate Freedom Elite Builder variable life insurance policy without any supplemental riders. | |
beneficiary(ies) | The person or persons you select to receive the death benefit from the Policy. You name the primary beneficiary and contingent beneficiaries. | |
cash value | The sum of your Policys value in the subaccounts and the fixed account. If there is a Policy loan outstanding, then the cash value includes any amounts held in our fixed account to secure the Policy loan. | |
death benefit proceeds | The amount we will pay to the beneficiary(ies) on the insureds death. The death benefit proceeds are reduced by any outstanding loan amount, including accrued interest, and, if the insured dies during the grace period, any charges that are due and unpaid. | |
face amount | The dollar amount of coverage as stated in any rider that you may add to your Policy. | |
fixed account | An option to which you may allocate net premiums and cash value. We guarantee that any amounts you allocate to the fixed account will earn interest at a declared rate. The fixed account is part of our general account. The fixed account is not available to you if your Policy was issued in the State of New Jersey before May 1, 2009. | |
free look period | The period during which you may return the Policy and receive a refund as described in this prospectus. The length of the free look period varies by state. The free look period is listed in the Policy. | |
funds | Investment companies which are registered with the U.S. Securities and Exchange Commission. The Policy allows you to invest in the portfolios of the funds through our subaccounts. We reserve the right to add other registered investment companies to the Policy in the future. | |
good order | An instruction that is received by the Company that is sufficiently complete and clear, along with all forms, information and supporting legal documentation (including any required spousal or joint owners consents) so that the Company does not need to exercise any discretion to follow such instruction. All orders to process a withdrawal request, a loan request, a request to surrender your Policy, a fund transfer request, or a death benefit claim must be in good order. | |
indebtedness | Outstanding loan payments plus accrued interest at the time your Policy lapsed. | |
in force | While coverage under the Policy is active and the insureds life remains insured. |
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initial premium | The amount you must pay before insurance coverage begins under the Policy. The initial premium is shown on the schedule page of your Policy. | |
insured | The person whose life is insured by the Policy. | |
issue age | The insureds age on his or her birthday nearest to the Policy date. When you increase the Policys specified amount of insurance coverage, the issue age for the new segment of specified amount coverage is the insureds age on his or her birthday nearest the date that the increase in specified amount takes effect. This age may be different from the attained age on other segments of specified amount coverage. | |
lapse | When life insurance coverage ends because you do not have enough cash value in the Policy to pay the monthly deductions and any outstanding loan amount, including accrued loan interest, and you have not made a sufficient payment by the end of a grace period. | |
loan reserve account | A part of the fixed account to which amounts are transferred as collateral for Policy loans. | |
mailing address | Our mailing address is 4333 Edgewood Road, N.E., Cedar Rapids, Iowa, 52499-0001. All premium payments and loan repayments made by check, and all claims, correspondence and notices must be sent to this address. | |
maturity date | The Policy anniversary nearest the insureds 100th birthday if the insured is living and the Policy is still in force. It is the date when life insurance coverage under this Policy ends. You may continue coverage, at your option, under the Policys extended maturity date benefit provision. | |
maximum fixed account value | For Policies applied for on or After May 1, 2009 : The maximum amount that may be allocated to the fixed account at any time without prior approval is the amount that would cause the fixed account to be $250,000, exclusive of loan reserve requirements. (This restriction does not apply to transfers to the fixed account necessary in the exercise of conversion rights). | |
minimum monthly guarantee premium | The amount shown on the Policy schedule page that we use during the no lapse period to determine whether a grace period will begin. We will adjust the minimum monthly guarantee premium if you change death benefit options, increase or decrease the specified amount, or add, terminate, increase or decrease a rider, and you may need to pay additional premiums in order to keep the no lapse guarantee in place. A grace period will begin whenever your net surrender value is not enough to meet monthly deductions and the no lapse period guarantee is no longer in effect. | |
Monthiversary | This is the day of each month when we determine Policy charges and deduct them from cash value. It is the same date each month as the Policy date. If there is no valuation date in the calendar month that coincides with the Policy date, the Monthiversary is the next valuation date. | |
monthly deductions | The monthly Policy charge, plus the monthly cost of insurance, plus the monthly charge for any riders added to the Policy. | |
mortality and expense risk charge | This charge is a daily deduction from each subaccount that is taken before determining the unit value of that subaccount. | |
net premium | The part of your premium that we allocate to the fixed account or the subaccounts. The net premium is equal to the premium you paid minus the premium expense charge and the premium collection charge. | |
net surrender value | The amount we will pay you if you surrender the Policy while it is in force. The net surrender value on the date you surrender is equal to: the cash value, minus any outstanding loan amount and accrued loan interest. |
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no lapse date | The no lapse date is defined as follows: For issue ages 0-60, the no lapse date is the anniversary on which the insureds attained age is 65 or the 20th Policy anniversary, whichever is earlier. For issue ages 61-85, the no lapse date is the fifth Policy anniversary. The no lapse date is specified in your Policy. | |
no lapse period | The period of time between the Policy date and the no lapse date during which the Policy will not lapse as long as certain conditions are met. | |
NYSE | The New York Stock Exchange. | |
planned periodic premium | A premium payment you make in a level amount at a fixed interval over a specified period of time. | |
Policy date | The date, generally, when our underwriting process is complete and full life insurance coverage goes into effect, the initial premium payment has been received, and we begin to make the monthly deductions. The Policy date is shown on the schedule page of your Policy. If you request, we may backdate a Policy by assigning a Policy date earlier than the date coverage goes into effect. We measure Policy months, years, and anniversaries from the Policy date. | |
portfolio | One of the separate investment portfolios of a fund. | |
premium expense charge | The charge that is deducted from each premium payment before determining the net premium that will be credited to the cash value. | |
premiums | All payments you make under the Policy other than loan repayments. | |
reallocation account | That portion of the fixed account where we hold the net premium(s) from the record date until the reallocation date. | |
reallocation date | The date we reallocate all cash value held in the reallocation account to the fixed account and/or subaccounts you selected on your application. We place your net premium in the reallocation account (or as mandated by state law) only if your state requires us to return the full premium in the event you exercise your free look right. In those states, we set the reallocation date to coincide with the free look period that is applicable to your Policy plus a margin of five days for Policy delivery. In all other states, the reallocation date is the later of the Policy date or the record date. | |
record date | The date we record your Policy on our books and your Policy is issued. The record date is generally the Policy date, unless the Policy is backdated. | |
separate account | The WRL Series Life Account. It is a separate investment account that is divided into subaccounts. We established the separate account to receive and invest net premiums under the Policy and other variable life insurance policies we issue. | |
specified amount (may be referred to as face amount in riders) |
The minimum death benefit we will pay under the Policy provided the Policy is in force. The initial specified amount of life insurance that you have selected is shown on the Policys schedule page that you receive when the Policy is issued. The specified amount in force is the initial specified amount, adjusted for any increases or decreases in the Policys specified amount. Other events such as a request to increase or decrease the specified amount, change in death benefit option or a cash withdrawal (if you choose Option A death benefit) may also affect the specified amount in force. | |
subaccount | A subdivision of the separate account that invests exclusively in shares of one investment portfolio of a fund. | |
termination | When the insureds life is no longer insured under the Policy or any rider, and neither the Policy (nor any rider) is in force. | |
valuation date | Each day the New York Stock Exchange is open for normal trading. Transamerica Premier is open for business whenever the New York Stock Exchange is open. Please |
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Note: Any day that Transamerica Premier is open for business, but the New York Stock Exchange is not open for normal trading, is not considered a valuation date. | ||
valuation period | The period of time over which we determine the change in the value of the subaccounts. Each valuation period begins at the close of normal trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time on each valuation date) and ends at the close of normal trading of the New York Stock Exchange on the next valuation date. | |
we, us, our, the Company (Transamerica Premier; TPLIC) | Transamerica Premier Life Insurance Company. | |
written notice | The written notice you must sign and send us to request or exercise your rights as owner under the Policy. To be complete and in good order, it must: (1) be in a form we accept, (2) contain the information and documentation that we determine we need to take the action you request, and (3) be received at our mailing address. | |
you, your (owner or policyowner) | The person entitled to exercise all rights as owner under the Policy. |
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APPENDIX A - ILLUSTRATIONS
FOR POLICIES APPLIED FOR ON OR
AFTER MAY 1, 2009
(BASED ON THE 2001 C.S.O. TABLES)
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FOR POLICIES APPLIED FOR ON OR AFTER MAY 1, 2009
The following illustrations show how certain values under a sample Policy would change with different rates of fictional investment performance over an extended period of time. In particular, the illustrations show how the death benefit, cash value, and net surrender value under a Policy issued to an insured of a given age, would change over time if the premiums indicated were paid and the return on the assets in the subaccounts were a uniform gross annual rate (before any expenses) of 0%, 6% or 10%. The tables illustrate Policy value that would result based on assumptions that you pay the premiums indicated, you do not change your specified amount, and you do not take any cash withdrawals or Policy loans. The values under the Policy will be different from those shown even if the returns averaged 0%, 6% or 10%, but fluctuated over and under those averages throughout the years shown.
The first of the illustrations that follows is based on a Policy for an insured who is a 35 year old male in the Ultimate Select rate class (the representative insured), annual premium paid on the first day of each Policy year of $3,104, a $400,000 initial specified amount and death benefit Option A and using the Guideline Premium Life Insurance Compliance Test. That illustration also assumes cost of insurance charges based on our current cost of insurance rates.
The second illustration that follows is based on the same factors as those reflected in the first illustration except the cost of insurance charges are based on the guaranteed cost of insurance rates and expenses (based on the 2001 Commissioners Standard Ordinary Mortality Table).
The amounts shown in the illustrations for the death benefits, cash values and net surrender values take into account the amount and timing of all Policy, subaccount and portfolio fees assessed under the Policy. The current illustration reflects the current charges for the Policy and the guaranteed illustration reflects the guaranteed charges for a Policy. These fees are:
(1) The daily charge for assuming mortality and expense risks assessed against each subaccount. This charge is equivalent to an annual charge of 1.50% of the average net assets of the subaccounts during the first 15 Policy years; we may reduce this charge to 0.30% in the 16th Policy year, but we do not guarantee that we will do so, and we reserve the right to maintain this charge at the 1.50% level after the 15th Policy year;
(2) The estimated daily expenses equivalent to an effective arithmetic average annual expense level of 1.19% of the portfolios gross average daily net assets. The 1.19% gross average portfolio expense level assumes an equal allocation of amounts among the 66 subaccounts available to new investors. We used annualized actual audited expenses incurred during 2016 for the portfolios to calculate the gross average annual expense level; and
(3) The cost of insurance charges and the current monthly Policy charge.
The hypothetical returns shown in the tables are provided only to illustrate the mechanics of a hypothetical policy and do not represent past or future investment rates of return. Tax charges that may be attributable to the separate account are not reflected because we are not currently assessing such charges. If tax charges are deducted in the future, the separate account would have to earn a sufficient amount in excess of 0%, 6% or 10% or cover any tax charges to produce after tax returns of 0%, 6% or 10%. Your actual rates of return for a particular Policy likely will be more or less than the hypothetical investment rates of return. The actual return on your cash value will depend on factors such as the amounts you allocate to particular portfolios, the amounts deducted for the Policys monthly deductions, the portfolios expense ratios, and your loan and withdrawal history, in addition to the actual investment experience of the portfolios.
We will furnish the owner, upon request, a personalized illustration reflecting the proposed insureds age, sex, risk classification and desired Policy features. Contact your registered representative or our administrative office. (See prospectus back cover Inquiries.)
78
TRANSAMERICA® ASSOCIATE FREEDOM ELITE BUILDER
TRANSAMERICA PREMIER LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
MALE ISSUE AGE 35
Specified Amount | $400,000 | Ultimate Select Class | ||||||||
Annual Premium | $3,104 | Option Type A |
Using Current Cost of Insurance Rates
DEATH BENEFIT Assuming Hypothetical Gross and Net Annual Investment Return of |
CASH VALUE Assuming Hypothetical Gross and Net Annual Investment Return of |
|||||||||||||||||||||||
End of Policy Year |
0% (Gross) -1.19% (Net) |
6% (Gross) 4.81% (Net) |
10% (Gross) 8.81% (Net) |
0% (Gross) -1.19% (Net) |
6% (Gross) 4.81% (Net) |
10% (Gross) 8.81% (Net) |
||||||||||||||||||
1 | 400,000 | 400,000 | 400,000 | 2,844 | 3,024 | 3,144 | ||||||||||||||||||
2 | 400,000 | 400,000 | 400,000 | 5,607 | 6,144 | 6,515 | ||||||||||||||||||
3 | 400,000 | 400,000 | 400,000 | 8,254 | 9,325 | 10,089 | ||||||||||||||||||
4 | 400,000 | 400,000 | 400,000 | 10,796 | 12,576 | 13,887 | ||||||||||||||||||
5 | 400,000 | 400,000 | 400,000 | 13,234 | 15,899 | 17,928 | ||||||||||||||||||
6 | 400,000 | 400,000 | 400,000 | 15,572 | 19,298 | 22,230 | ||||||||||||||||||
7 | 400,000 | 400,000 | 400,000 | 17,807 | 22,769 | 26,808 | ||||||||||||||||||
8 | 400,000 | 400,000 | 400,000 | 19,939 | 26,313 | 31,678 | ||||||||||||||||||
9 | 400,000 | 400,000 | 400,000 | 21,959 | 29,920 | 36,853 | ||||||||||||||||||
10 | 400,000 | 400,000 | 400,000 | 23,862 | 33,586 | 42,347 | ||||||||||||||||||
15 | 400,000 | 400,000 | 400,000 | 31,675 | 52,849 | 75,535 | ||||||||||||||||||
20 | 400,000 | 400,000 | 400,000 | 37,518 | 76,578 | 126,665 | ||||||||||||||||||
25 | 400,000 | 400,000 | 400,000 | 38,097 | 101,825 | 200,911 | ||||||||||||||||||
30 (Age 65) | 400,000 | 400,000 | 400,000 | 30,945 | 127,478 | 312,530 | ||||||||||||||||||
35 (Age 70) | 400,000 | 400,000 | 561,036 | 16,785 | 155,343 | 483,652 | ||||||||||||||||||
40 (Age 75) | * | 400,000 | 792,225 | * | 188,064 | 740,397 | ||||||||||||||||||
45 (Age 80) | * | 400,000 | 1,183,200 | * | 224,523 | 1,126,858 | ||||||||||||||||||
50 (Age 85) | * | 400,000 | 1,785,244 | * | 266,329 | 1,700,233 | ||||||||||||||||||
55 (Age 90) | * | 400,000 | 2,671,752 | * | 317,375 | 2,544,526 | ||||||||||||||||||
60 (Age 95) | * | 400,000 | 3,848,933 | * | 395,062 | 3,810,825 | ||||||||||||||||||
65 (Age 100) | * | 510,297 | 5,752,775 | * | 510,297 | 5,752,775 |
NET SURRENDER VALUE Assuming Hypothetical Gross and Net Annual Investment Return of | ||||||||||||||
End of Policy Year |
0% (Gross) -1.19% (Net) |
6% (Gross) 4.81% (Net) |
10% (Gross) 8.81% (Net) |
End of Policy Year |
0% (Gross) -1.19% (Net) |
6% (Gross) 4.81% (Net) |
10% (Gross) 8.81% (Net) | |||||||
1 | 2,844 | 3,024 | 3,144 | 20 | 37,518 | 76,578 | 126,665 | |||||||
2 | 5,607 | 6,144 | 6,515 | 25 | 38,097 | 101,825 | 200,911 | |||||||
3 | 8,254 | 9,325 | 10,089 | 30 (Age 65) | 30,945 | 127,478 | 312,530 | |||||||
4 | 10,796 | 12,576 | 13,887 | 35 (Age 70) | 16,785 | 155,343 | 483,652 | |||||||
5 | 13,234 | 15,899 | 17,928 | 40 (Age 75) | * | 188,064 | 740,397 | |||||||
6 | 15,572 | 19,298 | 22,230 | 45 (Age 80) | * | 224,523 | 1,126,858 | |||||||
7 | 17,807 | 22,769 | 26,808 | 50 (Age 85) | * | 266,329 | 1,700,233 | |||||||
8 | 19,939 | 26,313 | 31,678 | 55 (Age 90) | * | 317,375 | 2,544,526 | |||||||
9 | 21,959 | 29,920 | 36,853 | 60 (Age 95) | * | 395,062 | 3,810,825 | |||||||
10 | 23,862 | 33,586 | 42,347 | 65 (Age 100) | * | 510,297 | 5,752,775 | |||||||
15 | 31,675 | 52,849 | 75,535 |
* In the absence of an additional payment, the Policy would lapse.
79
TRANSAMERICA® ASSOCIATE FREEDOM ELITE BUILDER
TRANSAMERICA PREMIER LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
MALE ISSUE AGE 35
Specified Amount | $400,000 | Ultimate Select Class | ||||||||
Annual Premium | $3,104 | Option Type A |
Using Guaranteed Cost of Insurance Rates
DEATH BENEFIT Assuming Hypothetical Gross and Net Annual Investment Return of |
CASH VALUE Assuming Hypothetical Gross and Net Annual Investment Return of |
|||||||||||||||||||||||
End of Policy Year |
0% (Gross) -1.19% (Net) |
6% (Gross) 4.81% (Net) |
10% (Gross) 8.81% (Net) |
0% (Gross) -1.19% (Net) |
6% (Gross) 4.81% (Net) |
10% (Gross) 8.81% (Net) |
||||||||||||||||||
1 | 400,000 | 400,000 | 400,000 | 2,595 | 2,767 | 2,882 | ||||||||||||||||||
2 | 400,000 | 400,000 | 400,000 | 5,100 | 5,605 | 5,954 | ||||||||||||||||||
3 | 400,000 | 400,000 | 400,000 | 7,521 | 8,521 | 9,234 | ||||||||||||||||||
4 | 400,000 | 400,000 | 400,000 | 9,845 | 11,501 | 12,722 | ||||||||||||||||||
5 | 400,000 | 400,000 | 400,000 | 12,079 | 14,552 | 16,438 | ||||||||||||||||||
6 | 400,000 | 400,000 | 400,000 | 14,221 | 17,674 | 20,395 | ||||||||||||||||||
7 | 400,000 | 400,000 | 400,000 | 16,264 | 20,858 | 24,601 | ||||||||||||||||||
8 | 400,000 | 400,000 | 400,000 | 18,199 | 24,094 | 29,064 | ||||||||||||||||||
9 | 400,000 | 400,000 | 400,000 | 20,022 | 27,380 | 33,797 | ||||||||||||||||||
10 | 400,000 | 400,000 | 400,000 | 21,725 | 30,705 | 38,810 | ||||||||||||||||||
15 | 400,000 | 400,000 | 400,000 | 28,496 | 47,960 | 68,884 | ||||||||||||||||||
20 | 400,000 | 400,000 | 400,000 | 32,261 | 66,187 | 109,929 | ||||||||||||||||||
25 | 400,000 | 400,000 | 400,000 | 30,803 | 83,185 | 165,169 | ||||||||||||||||||
30 (Age 65) | 400,000 | 400,000 | 400,000 | 21,531 | 96,337 | 241,238 | ||||||||||||||||||
35 (Age 70) | * | 400,000 | 407,016 | * | 100,444 | 350,876 | ||||||||||||||||||
40 (Age 75) | * | 400,000 | 546,516 | * | 86,690 | 510,763 | ||||||||||||||||||
45 (Age 80) | * | 400,000 | 774,292 | * | 29,278 | 737,421 | ||||||||||||||||||
50 (Age 85) | * | * | 1,099,845 | * | * | 1,047,471 | ||||||||||||||||||
55 (Age 90) | * | * | 1,533,499 | * | * | 1,460,475 | ||||||||||||||||||
60 (Age 95) | * | * | 2,060,026 | * | * | 2,039,630 | ||||||||||||||||||
65 (Age 100) | * | * | 2,921,641 | * | * | 2,921,641 |
NET SURRENDERVALUE Assuming Hypothetical Gross and Net Annual Investment Return of | ||||||||||||||
End of Policy Year |
0% (Gross) -1.19% (Net) |
6% (Gross) 4.81% (Net) |
10% (Gross) 8.81% (Net) |
End of Policy Year |
0% (Gross) -1.19% (Net) |
6% (Gross) 4.81% (Net) |
10% (Gross) 8.81% (Net) | |||||||
1 | 2,595 | 2,767 | 2,882 | 20 | 32,261 | 66,187 | 109,929 | |||||||
2 | 5,100 | 5,605 | 5,954 | 25 | 30,803 | 83,185 | 165,169 | |||||||
3 | 7,521 | 8,521 | 9,234 | 30 (Age 65) | 21,531 | 96,337 | 241,238 | |||||||
4 | 9,845 | 11,501 | 12,722 | 35 (Age 70) | * | 100,444 | 350,876 | |||||||
5 | 12,079 | 14,552 | 16,438 | 40 (Age 75) | * | 86,690 | 510,763 | |||||||
6 | 14,221 | 17,674 | 20,395 | 45 (Age 80) | * | 29,278 | 737,421 | |||||||
7 | 16,264 | 20,858 | 24,601 | 50 (Age 85) | * | * | 1,047,471 | |||||||
8 | 18,199 | 24,094 | 29,064 | 55 (Age 90) | * | * | 1,460,475 | |||||||
9 | 20,022 | 27,380 | 33,797 | 60 (Age 95) | * | * | 2,039,630 | |||||||
10 | 21,725 | 30,705 | 38,810 | 65 (Age 100) | * | * | 2,921,641 | |||||||
15 | 28,496 | 47,960 | 68,884 |
* In the absence of an additional payment, the Policy would lapse.
80
Personalized Illustrations of Policy Benefits
In order to help you understand how your Policy values could vary over time under different sets of assumptions, we will provide you, without charge and upon request, with certain personalized hypothetical illustrations showing the death benefit, net surrender value and cash value. These hypothetical illustrations will be based on the age and insurance risk characteristics of the insured persons under your Policy and such factors as the specified amount band, death benefit option, premium payment amounts, and hypothetical rates of return (within limits) that you request. The illustrations are not a representation or guarantee of investment returns or cash value.
Inquiries
To learn more about the Policy, you should read the SAI dated the same date as this prospectus. The SAI has been filed with the SEC and is incorporated herein by reference.
For a free copy of the SAI, for other information about the Policy, and to obtain personalized illustrations, please contact your registered representative, or send your request to our mailing address at:
Transamerica Premier Life Insurance Company 4333 Edgewood Rd. NE. Cedar Rapids, Iowa 52499-0001 1-800-851-9777 Facsimile: 1-727-299-1620 (Monday - Friday from 8:30 a.m. - 7:00 p.m. Eastern Time) www.premier.transamerica.com |
More information about the Registrant (including the SAI) may be reviewed and copied at the SECs Public Reference Room in Washington, D.C. For information on the operation of the Public Reference Room, please contact the SEC at 202-551-8090. You may also obtain copies of reports and other information about the Registrant on the SECs website at http://www.sec.gov and copies of this information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC at 100 F Street, NE, Washington, D.C. 20549-0002. The Registrants file numbers are listed below.
TCI serves as the principal underwriter for the Policies. More information about TCI is available at http://www.finra.org or by calling 1-800-289-9999. You also can obtain an investor brochure from the Financial Industry Regulatory Authority (FINRA) describing its Public Disclosure Program.
SEC File No. 333-199059/811-4420
05/2017
81
TRANSAMERICA® ASSOCIATE FREEDOM ELITE BUILDER
Issued by
TRANSAMERICA LIFE INSURANCE COMPANY
(Former Depositor, Transamerica Premier Life Insurance Company)
WRL Series Life Account
Supplement dated October 1, 2020
to the
Statement of Additional Information dated
May 1, 2017
Home Office: 4333 Edgewood Road NE
Cedar Rapids, Iowa 52249
Service Center: 4333 Edgewood Road NE
Cedar Rapids, Iowa 52499-0001
Phone: (800) 333-6524
This Supplement updates certain information contained in the Statement of Additional Information dated May 1, 2017 for Transamerica® Associate Freedom Elite Builder policy (the Policy). Please read this Supplement carefully and retain it for future reference. Capitalized terms not otherwise defined in this supplement have the same meaning given to them in the Statement of Additional Information. Except as modified in this supplement, all other terms and information in the Statement of Additional Information remain unchanged.
Effective on October 1, 2020 Transamerica Premier Life Insurance Company (TPLIC); formerly known as Western Reserve Life Assurance Co. of Ohio) merged with and into its affiliate Transamerica Life Insurance Company (TLIC). Before the merger, TPLIC was the issuer of the policies. Upon consummation of the Merger, TPLICs corporate existence ceased by operation of law, and TLIC assumed legal ownership of all of the assets of TPLIC, including the WRL Series Life Account (the Separate Account) that funds the Policy, and the assets of the Separate Account. As a result of the merger, TLIC became responsible for all liabilities and obligations of TPLIC, including those created under the Policy. The Policy has thereby become a flexible premium variable life insurance policy funded by a separate account of TLIC. The information below describes changes to the Statement of Additional Information as a result of the Merger and otherwise updates information in the Statement of Additional Information. Accordingly, all references in the Statement of Additional Information to the issuer of the Policy are amended to refer to Transamerica Life Insurance Company.
TPLIC no longer sells the Policy. Following the Merger, TLIC will not issue new Policies. Although Policies will no longer be sold, additional premium payments will continue to be permitted.
I. | The following hereby replaces the Independent Registered Public Accounting Firm section (p. 4) of the Statement of Additional Information: |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The financial statements of the WRL Series Life Account as of December 31, 2019 and for the years ended December 31, 2019 and 2018, and the statutory-basis financial statements and schedules of Transamerica Life Insurance Company and Transamerica Premier Life Insurance Company as of December 31, 2019 and 2018 and for each of the three years in the period ended December 31, 2019 included in this Statement of Additional Information have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
II. | The following hereby replaces the FINANCIAL STATEMENTS section (p. 5) of the Statement of Additional Information: |
FINANCIAL STATEMENTS
Our financial statements, which are presented in conformity with accounting practices prescribed or permitted by the Iowa Department of Insurance as well as the audited financial statements of the Separate Account are located in the Statement of Additional Information (SAI).
Separate Account
The values of Your interest in the Separate Account will be affected solely by the investment results of the selected Subaccount(s). The statutory-basis financial statements and schedules of Transamerica Life Insurance Company should be considered only as bearing on the ability of us to meet our obligations under the policies. They should not be considered as bearing on the investment performance of the assets held in the Separate Account.
The following financial statements replace the financial statements contained in the Statement of Additional Information
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Amounts presented in thousands
Effective October 1, 2020, Transamerica Life Insurance Company (TLIC, or the Company) will merge with Transamerica Premier Life Insurance Company (TPLIC), an Iowa domiciled affiliate, and MLIC Re I, Inc. (MLRe), a Vermont domiciled affiliate, with TLIC emerging as the surviving entity pursuant to the Plan of Merger, which was approved by the Iowa Insurance Division (IID) and the Department of Financial Regulation of Vermont.
In conjunction with the merger the historical financial statements were combined under NAIC Statutory Accounting Practices and Procedures Manual Statements of Statutory Accounting Principles (SSAP) No. 68 Business Combinations and Goodwill (SSAP 68) Paragraph 10 Statutory Merger, whereby the former statutory bases of accounting are retained.
The unaudited pro forma condensed combined financial information below should be read in conjunction with the notes thereto and audited consolidated financial statements for the year ended December 31, 2019 included herein.
The following unaudited pro forma condensed combined financial information is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the merger been completed on the dates indicated above. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the resulting company. This information does not give effect to (1) our results of operations or other transactions or developments since December 31, 2019, (2) the impact of releasing the letter of credit reflected as an admitted asset by MLRe, (3) the effects of transactions or developments that may occur subsequent to December 31, 2019 after the pro forma financial statements, and (4) the impact of intercompany transactions between entities, including reinsurance, that have not been reflected in historical balances, but will be adjusted on a go forward basis. The foregoing matters could cause both TLICs historical pro forma financial position and results of operations, and TLICs actual future financial position and results of operations, to differ materially from those presented in the following unaudited pro forma condensed combined financial information.
The following unaudited pro forma condensed combined financial information of TLIC gives effect to the merger as if it had been completed as of December 31, 2019. The statutory financial statements for the Company, TPLIC, and MLRe are combined below retaining the historical statutory bases to arrive at merged pro forma financial statements at December 31, 2019 as follows:
Transamerica Life Insurance Co Merged Company
Statutory Condensed Combined Balance Sheet
12/31/2019 Pro forma - Unaudited
($ thousands)
TLIC Dec 31 2019 as Reported |
TPLIC Dec 31 2019 as Reported |
MLRe Dec 31 2019 as Reported |
Eliminations2 Dec 31 2019 |
Merged Dec 31 2019 Pro Forma3 |
||||||||||||||||
ASSETS: |
||||||||||||||||||||
Investments |
41,771,924 | 24,479,103 | 314,148 | | 66,565,175 | |||||||||||||||
Letter of Credit1 |
| | 770,000 | | 770,000 | |||||||||||||||
Other Assets |
2,730,813 | 1,529,256 | 35,731 | | 4,295,800 | |||||||||||||||
Separate Account Assets |
85,720,689 | 26,508,334 | | | 112,229,023 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
TOTAL ADMITTED ASSETS |
130,223,426 | 52,516,693 | 1,119,879 | | 183,859,998 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
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LIABILITIES, CAPITAL & SURPLUS: |
||||||||||||||||||||
Policy Liabilities |
27,308,732.0 | 18,714,626.0 | 770,000.0 | | 46,793,358.0 | |||||||||||||||
Other Liabilities |
10,665,836.0 | 4,992,797.0 | 9,103.0 | | 15,667,736.0 | |||||||||||||||
Separate Account Liabilities |
85,720,688.0 | 26,508,334.0 | | | 112,229,022.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Liabilities |
123,695,256.0 | 50,215,757.0 | 779,103.0 | | 174,690,116.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Capital |
6,762.0 | 10,137.0 | 250.0 | (10,387.0 | ) | 6,762.0 | ||||||||||||||
Surplus Notes |
| 60,000.0 | | | 60,000.0 | |||||||||||||||
Gross Paid in and Contributed Surplus |
2,610,713.0 | 1,057,861.0 | 123,000.0 | | 3,791,574.0 | |||||||||||||||
Aggregate write-in for Special Surplus |
195,434.0 | 1,334.0 | | | 196,768.0 | |||||||||||||||
Unassigned Surplus |
3,715,261.0 | 1,171,604.0 | 217,526.0 | 10,387.0 | 5,114,778.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Capital & Surplus |
6,528,170.0 | 2,300,936.0 | 340,776.0 | | 9,169,882.0 | |||||||||||||||
|
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|
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|
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|
|
|||||||||||
TOTAL LIABILITIES , CAPITAL & SURPLUS |
130,223,426.0 | 52,516,693.0 | 1,119,879.0 | | 183,859,998.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Transamerica Life Insurance Co Merged Company
Statutory Condensed Combined Earnings
12/31/2019 Pro Forma - Unaudited
($ thousands)
TLIC Dec 31 2019 as Reported |
TPLIC Dec 31 2019 as Reported |
MLRe Dec 31 2019 as Reported |
Eliminations2 Dec 31 2019 |
Merged Dec 31 2019 Pro Forma3 |
||||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums and Deposits |
12,146,106.0 | 3,347,881.0 | 198,853.0 | | 15,692,840.0 | |||||||||||||||
Net Investment Income |
1,644,325.0 | 1,094,859.0 | 11,735.0 | | 2,750,919.0 | |||||||||||||||
Comm and Exp Allowance & Reserve Adj Ceded |
444,368.0 | (170,748.0 | ) | | | 273,620.0 | ||||||||||||||
Other |
1,907,252.0 | 362,101.0 | | | 2,269,353.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Revenue |
16,142,051.0 | 4,634,093.0 | 210,588.0 | | 20,986,732.0 | |||||||||||||||
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|
|
|||||||||||
Benefits and Expenses: |
||||||||||||||||||||
Benefits Paid |
17,561,497.0 | 3,534,284.0 | 391,512.0 | | 21,487,293.0 | |||||||||||||||
Policy liability change |
(2,277,561.0 | ) | 961,715.0 | (60,000.0 | ) | | (1,375,846.0 | ) | ||||||||||||
Commissions |
908,521.0 | 512,527.0 | 48,511.0 | | 1,469,559.0 | |||||||||||||||
Expenses and other |
833,410.0 | 503,282.0 | (230,348.0 | ) | | 1,106,344.0 | ||||||||||||||
Transfers to (from) Separate Accounts |
(3,868,617.0 | ) | (1,261,078.0 | ) | | | (5,129,695.0 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Benefits and Expenses |
13,157,250.0 | 4,250,730.0 | 149,675.0 | | 17,557,655.0 | |||||||||||||||
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|
|
|
|
|
|
|
|
|||||||||||
Gain from Operations Before Policyholder Dividends and Taxes |
2,984,801.0 | 383,363.0 | 60,913.0 | | 3,429,077.0 | |||||||||||||||
Policyholder Dividends |
9,236.0 | 1,030.0 | | | 10,266.0 | |||||||||||||||
Taxes |
(77,933.0 | ) | 39,259.0 | (202.0 | ) | | (38,876.0 | ) | ||||||||||||
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|
|
|
|||||||||||
Gain from Operations Before Net Realized Capital Gains (Losses) |
3,053,498.0 | 343,074.0 | 61,115.0 | | 3,457,687.0 | |||||||||||||||
Realized Capital Gains (Losses) |
240,524.0 | 229,130.0 | (47.0 | ) | | 469,607.0 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Statutory Income |
3,294,022.0 | 572,204.0 | 61,068.0 | | 3,927,294.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Footnote references from financial statements:
1: | As of December 31, 2019, MLRe had a permitted practice with explicit permission of the Deputy Commissioner of Captive Insurance of the State of Vermont that allows the admission on the U.S. statutory statement of a letter of credit. The letter of credit was $770,000 at December 31, 2019 and is included in the Total Admitted Assets balance of MLRe presented above. Upon MLRe being merged into TLIC, the permitted practice will no longer exist and the letter of credit will not transfer into the merged entity. Pursuant to the plan of merger approved by the IID, the LOC will be presented in the historical combined financial statements as of year-end 2019. |
2: | Merger proforma includes the elimination of $10,387 of Unassigned Surplus with an offsetting charge to Capital on the balance sheet is related to the cancellation of the common stock ownership of TPLIC by the Company, and was eliminated based on the requirements set forth in SSAP 68 requiring adjustment of the capital accounts of entities to reflect appropriate par values of the new entity. |
3: | On May 15, 2020, TPLIC paid a dividend to its parent company, Commonwealth General Corporation (CGC), in the amount of $700,000. The dividend and contribution included $76,604 in cash and $623,396 in securities. The December 31, 2019 amounts presented above do not reflect that transaction. |
Subsequent Events:
Additional subsequent events have been evaluated for disclosure through September 29, 2020.
On June 30, 2020, the Company received $96,035 from Transamerica Financial Life Insurance Company (TFLIC) as consideration for TFLICs repurchase of its remaining 1,254 common stock shares held by the Company. The shares were redeemed at par of $125 with total par value of $157 and paid-in surplus of $95,878.
On June 30, 2020, the Company, Transamerica Pacific Re, Inc. (TPRe), a newly formed AXXX captive and affiliate, and Transamerica Pacific Insurance Company, Ltd (TPIC) entered into a novation agreement whereby the Company consented to the assignment, transfer and novation of TPICs obligations under the TLIC/TPIC universal life coinsurance agreements to TPRe. The novation resulted in no gain or loss. The Company then entered into a recapture agreement with TPRe to recapture certain universal life insurance risks for consideration of $2,124,341 equal to the statutory reserves recaptured resulting in no gain or loss. With approval from the IID, subsequent to the novation and the recapture on June 30, 2020, the Company and TPRe amended the agreements to cover the secondary guarantee only.
Effective July 1, 2020, the Company entered into a reinsurance agreement with Wilton Reassurance Company to novate corporate owned life insurance policies previously issued by the Company to TPLIC. The Company novated $173,052 of reserves and claim reserves and paid a ceding commission of $7,400. The transaction resulted in a pre-tax loss of $7,400 which has been included in the Statements of Operations.
Basis of Presentation
The accompanying pro forma financial statements have been prepared in conformity with accounting practices prescribed or permitted by the IID, which practices differ from accounting principles generally accepted in the United States of America (GAAP).
The IID recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company, and for determining its solvency under the Iowa Insurance Law. The NAIC Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed practices by the State of Iowa. Prescribed statutory accounting practices include state laws and regulations. Permitted statutory accounting practices encompass accounting practices that are not prescribed. See the audited financials for a summary of the accounting practices permitted and prescribed by the IID and reflected in the Companys financial statements.
The pro forma financial statements and any financial reporting restatements with respect to the newly merged entity will be prepared in accordance with NAIC SAP. More specifically, the pro forma reflects the statutory merger with the assets, liabilities and surplus of the reported statutory entities carried forward from the historical statutory accounting basis.
Use of Estimates
The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
The accompanying pro forma financial statements should be read in conjunction with the related historical information for the Company and are not necessarily indicative of the results that would have been attained had the merger taken place as of the presentation date.
Impacts of Merger
As demonstrated in the pro formas above, the historical balances for the companies involved in the merger have been retained, as outlined in the Plan of Merger approved by the IID. There are intercompany transactions between entities, including reinsurance, that have not been eliminated in historical balances, but will be adjusted on a go forward basis. While the adjustments may be material to individual line items, the eliminations have no impact on the merged company capital and surplus.
Before the merger, TPLIC was the issuer of the variable policies. Upon consummation of the merger, TPLICs corporate existence ceased by operation of law, and TLIC assumed legal ownership of all of the assets of TPLIC, including all of TPLICs separate accounts (the Separate Accounts) that fund TPLICs variable policies, and the assets of the Separate Accounts. As a result of the merger, TLIC became responsible for all liabilities and obligations of TPLIC, including those created under TPLICs variable policies. Accordingly, all references in the variable policy prospectuses to Transamerica Premier Life Insurance Company are amended to refer to Transamerica Life Insurance Company.
The merger did not affect the terms of, or the rights and obligations under, the variable policies, other than to change the insurance company that provides policy benefits from TPLIC to TLIC. The merger also did not result in any adverse tax consequences for any policy owners, and policy owners will not be charged additional fees or expenses as a result of the merger. The account value or unit values of the policies will not change as a result of the merger.
FINANCIAL STATEMENTS STATUTORY BASIS
AND SUPPLEMENTARY INFORMATION
Transamerica Life Insurance Company
Years Ended December 31, 2019, 2018 and 2017
Transamerica Life Insurance Company
Financial Statements Statutory Basis
and Supplementary Information
Years Ended December 31, 2019, 2018 and 2017
1 | ||||
Audited Financial Statements |
||||
3 | ||||
4 | ||||
Statements of Changes in Capital and Surplus Statutory Basis |
5 | |||
7 | ||||
Notes to Financial Statements Statutory Basis | ||||
9 | ||||
2. Basis of Presentation and Summary of Significant Accounting Policies |
11 | |||
26 | ||||
30 | ||||
39 | ||||
6. Premium and Annuity Considerations Deferred and Uncollected |
60 | |||
60 | ||||
72 | ||||
77 | ||||
84 | ||||
87 | ||||
88 | ||||
90 | ||||
95 | ||||
15. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities |
101 | |||
104 | ||||
105 | ||||
106 | ||||
Statutory-Basis Financial Statement Schedules |
||||
Summary of Investments Other Than Investments in Related Parties |
110 | |||
111 | ||||
112 |
Report of Independent Auditors
To the Board of Directors of
Transamerica Life Insurance Company
We have audited the accompanying statutory-basis financial statements of Transamerica Life Insurance Company (the Company), which comprise the balance sheets statutory basis as of December 31, 2019 and 2018, and the related statements of operations statutory basis, of changes in capital and surplus statutory basis, and of cash flow statutory basis for each of the three years in the period ended December 31, 2019, including the related notes and schedules of supplementary insurance information and reinsurance as of December 31, 2019, 2018 and for each of the three years in the period ended December 31, 2019 and summary of investmentsother than investments in related parties as of December 31, 2019 listed in the accompanying index (collectively referred to as the financial statements).
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the Iowa Insurance Division. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles
As described in Note 2 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the Iowa Insurance Division, which is a basis of accounting other than accounting principles generally accepted in the United States of America.
The effects on the financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.
PricewaterhouseCoopers LLP, 1 N Upper Wacker Drive, Chicago, IL 60606
T: 312-298-2000, F: , www.pwc.com
Adverse Opinion on U.S. Generally Accepted Accounting Principles
In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2019 and 2018 or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2019.
Opinion on Statutory Basis of Accounting
In our opinion, the financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities and surplus of the Company as of December 31, 2019 and 2018 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in accordance with the accounting practices prescribed or permitted by the Iowa Insurance Division described in Note 2.
Emphasis of Matters
As discussed in Note 1 to the financial statements, the financial statements give retroactive effect to the merger of Transamerica Advisors Life Insurance Company into the Company on July 1, 2019 in a transaction accounted for as a statutory merger. Our opinion is not modified with respect to this matter.
As discussed in Note 3 to the financial statements, in 2019 the Company changed its valuation basis for variable annuities. Our opinion is not modified with respect to this matter.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
April 27, 2020
PricewaterhouseCoopers LLP, 1 N Upper Wacker Drive, Chicago, IL 60606
T: 312-298-2000, F: , www.pwc.com
Transamerica Life Insurance Company
Balance Sheets Statutory Basis
(Dollars in Thousands)
December 31 | ||||||||
2019 | 2018 | |||||||
Admitted assets |
||||||||
Cash, cash equivalents and short-term investments |
$ | 1,693,803 | $ | 2,331,468 | ||||
Bonds |
25,412,467 | 27,627,135 | ||||||
Preferred stocks |
111,630 | 104,793 | ||||||
Common stocks |
3,217,206 | 2,998,481 | ||||||
Mortgage loans on real estate |
5,096,613 | 4,600,493 | ||||||
Real estate |
51,546 | 114,446 | ||||||
Policy loans |
1,099,596 | 1,139,853 | ||||||
Securities lending reinvested collateral assets |
1,246,827 | 1,835,122 | ||||||
Derivatives |
1,718,025 | 2,097,951 | ||||||
Other invested assets |
2,124,211 | 1,666,946 | ||||||
|
|
|
|
|||||
Total cash and invested assets |
41,771,924 | 44,516,688 | ||||||
Accrued investment income |
404,846 | 428,558 | ||||||
Premiums deferred and uncollected |
286,843 | 115,235 | ||||||
Net deferred income tax asset |
475,358 | 627,639 | ||||||
Variable annuity reserve hedge offset deferral |
195,067 | 231,853 | ||||||
Other assets |
1,368,699 | 1,472,587 | ||||||
Separate account assets |
85,720,689 | 76,783,392 | ||||||
|
|
|
|
|||||
Total admitted assets |
$ | 130,223,426 | $ | 124,175,952 | ||||
|
|
|
|
|||||
Liabilities and capital and surplus |
||||||||
Aggregate reserves for policies and contracts |
$ | 26,237,936 | 27,294,949 | |||||
Policy and contract claim reserves |
479,226 | 527,901 | ||||||
Liability for deposit-type contracts |
591,570 | 967,757 | ||||||
Other policyholders funds |
21,831 | 17,617 | ||||||
Transfers from separate accounts due or accrued |
(898,597 | ) | (1,034,929 | ) | ||||
Funds held under reinsurance treaties |
4,094,413 | 3,785,867 | ||||||
Asset valuation reserve |
879,143 | 694,388 | ||||||
Interest maintenance reserve |
308,453 | 299,928 | ||||||
Derivatives |
1,851,801 | 975,974 | ||||||
Payable for collateral under securities loaned and other transactions |
1,731,464 | 3,080,656 | ||||||
Borrowed money |
1,274,504 | 3,052,991 | ||||||
Other liabilities |
1,402,824 | 1,452,027 | ||||||
Separate account liabilities |
85,720,688 | 76,783,391 | ||||||
|
|
|
|
|||||
Total liabilities |
123,695,256 | 117,898,517 | ||||||
|
|
|
|
|||||
Total capital and surplus |
6,528,170 | 6,277,435 | ||||||
|
|
|
|
|||||
Total liabilities and capital and surplus |
$ | 130,223,426 | $ | 124,175,952 | ||||
|
|
|
|
See accompanying notes.
3
Transamerica Life Insurance Company
Statements of Operations Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Revenues |
||||||||||||
Premiums and other considerations |
$ | 12,146,106 | $ | 10,813,518 | $ | (3,514,168 | ) | |||||
Net investment income |
1,644,325 | 1,667,172 | 2,516,282 | |||||||||
Commissions and expense allowances on reinsurance ceded |
527,860 | 835,062 | 608,958 | |||||||||
Reserve adjustment on reinsurance ceded |
(83,492 | ) | (67,838 | ) | (1,210,892 | ) | ||||||
Consideration received on reinsurance recapture and novations |
15,485 | 217,258 | 462,313 | |||||||||
Separate accounts net gain from operations |
| | 139,852 | |||||||||
Fee revenue and other income |
1,891,767 | 1,971,474 | 1,996,610 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
16,142,051 | 15,436,646 | 998,955 | |||||||||
Benefits and expenses |
||||||||||||
Death benefits |
1,706,779 | 1,760,272 | 1,588,061 | |||||||||
Annuity benefits |
1,173,639 | 1,183,691 | 1,207,143 | |||||||||
Accident and health benefits |
281,435 | 295,343 | 141,823 | |||||||||
Surrender benefits |
14,231,385 | 14,536,177 | 13,109,739 | |||||||||
Other benefits |
168,259 | 156,157 | 156,951 | |||||||||
Net increase (decrease) in reserves |
(2,277,561 | ) | 228,055 | (12,826,051 | ) | |||||||
Commissions |
908,521 | 912,831 | 927,565 | |||||||||
Net transfers to (from) separate accounts |
(3,868,617 | ) | (4,075,245 | ) | (2,619,683 | ) | ||||||
IMR adjustment due to reinsurance |
| (13,229 | ) | (2,065,984 | ) | |||||||
General insurance expenses and other |
833,410 | 1,219,389 | 1,033,737 | |||||||||
|
|
|
|
|
|
|||||||
Total benefits and expenses |
13,157,250 | 16,203,441 | 653,301 | |||||||||
|
|
|
|
|
|
|||||||
Gain (loss) from operations before dividends and federal income taxes |
2,984,801 | (766,795 | ) | 345,654 | ||||||||
|
|
|
|
|
|
|||||||
Dividends to policyholders |
9,236 | 5,953 | 8,057 | |||||||||
|
|
|
|
|
|
|||||||
Gain (loss) from operations before federal income taxes |
2,975,565 | (772,748 | ) | 337,597 | ||||||||
Federal income tax (benefit) expense |
(77,933 | ) | (63,062 | ) | (1,035,106 | ) | ||||||
|
|
|
|
|
|
|||||||
Net gain (loss) from operations |
3,053,498 | (709,686 | ) | 1,372,703 | ||||||||
Net realized capital gains (losses), after tax and amounts transferred to interest maintenance reserve |
240,524 | (714,132 | ) | (575,050 | ) | |||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | 3,294,022 | $ | (1,423,818 | ) | $ | 797,653 | |||||
|
|
|
|
|
|
See accompanying notes.
4
Transamerica Life Insurance Company
Statements of Changes in Capital and Surplus Statutory Basis
(Dollars in Thousands)
Balance at January 1, 2017 | Common Stock | Preferred Stock |
Treasury Stock |
Surplus Notes |
Paid-in Surplus |
Special Surplus Funds |
Unassigned Surplus |
Total Capital and Surplus |
||||||||||||||||||||||||
As originally presented |
$ | 6,762 | $ | 1,282 | $ | (58,000 | ) | $ | 150,000 | $ | 3,653,830 | $ | 577,936 | $ | 2,135,591 | 6,467,401 | ||||||||||||||||
Merger of Transamerica Advisors Life Insurance Company (TALIC) |
| | | | 242,198 | | 453,845 | 696,043 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at January 1, 2017 (TALIC Merger) |
6,762 | 1,282 | (58,000 | ) | 150,000 | 3,896,028 | 577,936 | 2,589,436 | 7,163,444 | |||||||||||||||||||||||
Net income (loss) |
| | | | | | 797,653 | 797,653 | ||||||||||||||||||||||||
Change in net unrealized capital gains/losses, net of taxes |
| | | | | (489,076 | ) | 1,172,461 | 683,385 | |||||||||||||||||||||||
Change in net deferred income tax asset |
| | | | | | (956,486 | ) | (956,486 | ) | ||||||||||||||||||||||
Change in nonadmitted assets |
| | | | | | 474,981 | 474,981 | ||||||||||||||||||||||||
Change in asset valuation reserve |
| | | | | | 124,240 | 124,240 | ||||||||||||||||||||||||
Change in surplus in separate accounts |
| | | | | | (117,876 | ) | (117,876 | ) | ||||||||||||||||||||||
Change in surplus as a result of reinsurance |
| | | | | | 230,908 | 230,908 | ||||||||||||||||||||||||
Dividends to stockholders |
| | | | | | (620,523 | ) | (620,523 | ) | ||||||||||||||||||||||
Return of capital |
| | | | (422,572 | ) | | | (422,572 | ) | ||||||||||||||||||||||
Other changesnet |
| (298 | ) | | | (626 | ) | 981 | (5,738 | ) | (5,681 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2017 |
$ | 6,762 | $ | 984 | $ | (58,000 | ) | $ | 150,000 | $ | 3,472,830 | $ | 89,841 | $ | 3,689,056 | $ | 7,351,473 | |||||||||||||||
Net income (loss) |
| | | | | | (1,423,818 | ) | (1,423,818 | ) | ||||||||||||||||||||||
Change in net unrealized capital gains/losses, net of taxes |
| | | | | 145,059 | 1,145,316 | 1,290,375 | ||||||||||||||||||||||||
Change in net deferred income tax asset |
| | | | | | 164,466 | 164,466 | ||||||||||||||||||||||||
Change in nonadmitted assets |
| | | | | | 45,646 | 45,646 | ||||||||||||||||||||||||
Change in asset valuation reserve |
| | | | | | 16,359 | 16,359 | ||||||||||||||||||||||||
Change in surplus as a result of reinsurance |
| | | | | | 17,616 | 17,616 | ||||||||||||||||||||||||
Dividends to stockholders |
| | | | | | (624,567 | ) | (624,567 | ) | ||||||||||||||||||||||
Return of capital |
| | | | (558,740 | ) | | | (558,740 | ) | ||||||||||||||||||||||
Other changesnet |
| (559 | ) | | | 2,576 | (3,047 | ) | (345 | ) | (1,375 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2018 |
$ | 6,762 | $ | 425 | $ | (58,000 | ) | $ | 150,000 | $ | 2,916,666 | $ | 231,853 | $ | 3,029,729 | $ | 6,277,435 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continued on next page.
5
Transamerica Life Insurance Company
Statements of Changes in Capital and Surplus Statutory Basis
(Dollars in Thousands)
Common Stock |
Preferred Stock |
Treasury Stock |
Surplus Notes |
Paid-in Surplus | Special Surplus Funds |
Unassigned Surplus |
Total Capital and Surplus |
|||||||||||||||||||||||||
Balance at December 31, 2018 |
$ | 6,762 | $ | 425 | $ | (58,000 | ) | $ | 150,000 | $ | 2,916,666 | $ | 231,853 | $ | 3,029,729 | $ | 6,277,435 | |||||||||||||||
Net income (loss) |
| | | | | | 3,294,022 | 3,294,022 | ||||||||||||||||||||||||
Change in net unrealized capital gains/losses, net of tax |
| | | | | (36,786 | ) | (290,676 | ) | (327,462 | ) | |||||||||||||||||||||
Change in net deferred income tax asset |
| | | | | | (164,812 | ) | (164,812 | ) | ||||||||||||||||||||||
Change in nonadmitted assets |
| | | | | | 105,654 | 105,654 | ||||||||||||||||||||||||
Change in reserve on account of change in valuation basis |
| | | | | | (1,248,411 | ) | (1,248,411 | ) | ||||||||||||||||||||||
Change in asset valuation reserve |
| | | | | | (184,755 | ) | (184,755 | ) | ||||||||||||||||||||||
Change in surplus as a result of reinsurance |
| | | | | | (146,952 | ) | (146,952 | ) | ||||||||||||||||||||||
Change in surplus notes |
| | | (150,000 | ) | | | | (150,000 | ) | ||||||||||||||||||||||
Change in treasury stock |
| | 58,000 | | | 58,000 | ||||||||||||||||||||||||||
Return of capital |
| | | | (307,578 | ) | | | (307,578 | ) | ||||||||||||||||||||||
Dividends to stockholders |
| | | | | | (725,000 | ) | (725,000 | ) | ||||||||||||||||||||||
Other changesnet |
| (425 | ) | | | 1,625 | 367 | 46,462 | 48,029 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2019 |
$ | 6,762 | $ | | $ | | $ | | $ | 2,610,713 | $ | 195,434 | $ | 3,715,261 | $ | 6,528,170 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
6
Transamerica Life Insurance Company
Statements of Cash Flow Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Operating activities |
||||||||||||
Premiums and annuity considerations |
$ | 11,959,055 | $ | 10,836,714 | $ | 5,030,303 | ||||||
Net investment income |
1,853,706 | 1,826,005 | 2,524,319 | |||||||||
Other income |
2,295,448 | 2,891,089 | 6,905,408 | |||||||||
Benefit and loss related payments |
(17,435,718 | ) | (17,958,301 | ) | (16,076,467 | ) | ||||||
Net transfers from separate accounts |
4,005,482 | 4,343,398 | 2,904,380 | |||||||||
Commissions and operating expenses |
(1,898,769 | ) | (1,892,868 | ) | (2,050,512 | ) | ||||||
Dividends paid to policyholders |
(5,889 | ) | (6,350 | ) | (7,348 | ) | ||||||
Federal income taxes (paid) received |
(139,992 | ) | 939,301 | 438,896 | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
633,323 | 978,988 | (331,021 | ) | ||||||||
Investing activities |
||||||||||||
Proceeds from investments sold, matured or repaid |
$ | 15,951,729 | $ | 9,086,610 | $ | 10,468,686 | ||||||
Costs of investments acquired |
(13,028,169 | ) | (7,574,764 | ) | (8,455,291 | ) | ||||||
Net change in policy loans |
40,258 | 48,668 | 52,058 | |||||||||
|
|
|
|
|
|
|||||||
Net cost of investments acquired |
(12,987,911 | ) | (7,526,096 | ) | (8,403,233 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) investing activities |
$ | 2,963,818 | $ | 1,560,514 | $ | 2,065,453 | ||||||
Financing and miscellaneous activities |
||||||||||||
Repayment of surplus notes |
$ | (150,000 | ) | $ | | $ | | |||||
Capital and paid in surplus received (returned) |
(248,376 | ) | (556,833 | ) | (434,179 | ) | ||||||
Dividends to stockholders |
(725,000 | ) | (564,220 | ) | (620,523 | ) | ||||||
Net deposits (withdrawals) on deposit-type contracts |
(429,725 | ) | (201,168 | ) | (2,167,303 | ) | ||||||
Net change in borrowed money |
(1,765,528 | ) | (1,151,474 | ) | 1,874,369 | |||||||
Net change in funds held under reinsurance treaties |
(60,731 | ) | (271,793 | ) | (75,583 | ) | ||||||
Net change in payable for collateral under securities lending and other transactions |
(1,347,778 | ) | (15,819 | ) | (125,030 | ) | ||||||
Other cash (applied) provided |
492,332 | 587,583 | 98,001 | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing and miscellaneous activities |
(4,234,806 | ) | (2,173,724 | ) | (1,450,248 | ) | ||||||
Net increase (decrease) in cash, cash equivalents and short-term investments |
(637,665 | ) | 365,778 | 284,184 | ||||||||
Cash, cash equivalents and short-term investments: |
||||||||||||
Beginning of year |
2,331,468 | 1,965,690 | 1,681,506 | |||||||||
|
|
|
|
|
|
|||||||
End of year |
$ | 1,693,803 | $ | 2,331,468 | $ | 1,965,690 | ||||||
|
|
|
|
|
|
See accompanying notes.
7
Transamerica Life Insurance Company
Statements of Cash Flow (supplemental) Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
Supplemental disclosures of cash flow information | 2019 | 2018 | 2017 | |||||||||
Non-cash activities during the year not included in the Statutory Statement of Cash Flows: |
||||||||||||
Stock cancellations |
$ | 57,575 | $ | | $ | | ||||||
Non-cash dividend to parent company |
| 60,347 | | |||||||||
Investments received for insured securities losses |
| 16,489 | | |||||||||
Write off of prepaid real estate related assets |
| 2,727 | | |||||||||
Non-cash capital contribution to investment subsidiary |
| 1,971 | | |||||||||
Transfer of bonds and mortgage loans related to reinsurance agreement with third party |
| | 7,196,754 | |||||||||
Transfer of bonds, mortgage loans, and derivatives related to affiliated reinsurance amendment |
| | 5,650,741 | |||||||||
Transfer of bonds to settle reinsurance obligations |
| | 22,479 | |||||||||
Asset transfer of ownership between hedge funds |
| | 125,036 |
8
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2019
1. Organization and Nature of Business
Transamerica Life Insurance Company (the Company) is a stock life insurance company owned by Commonwealth General Corporation (CGC). CGC is an indirect, wholly-owned subsidiary of Aegon N.V., a holding company organized under the laws of The Netherlands.
On July 1, 2019, the Company completed a merger with Transamerica Advisors Life Insurance Company (TALIC), an Arkansas-domiciled affiliate. On October 1, 2018, the Company completed a merger with Firebird Re Corp (FReC), an Arizona-domiciled affiliate. The mergers were accounted for in accordance with the Statement of Statutory Accounting Principles (SSAP) No. 68, Business Combinations and Goodwill, as a statutory merger. As such, financial statements for periods prior to the mergers were combined and the recorded assets, liabilities and surplus of TALIC and FReC on a US statutory basis were carried forward to the merged company. As a result of the mergers, TALIC and FReCs common stock was deemed cancelled by operation of law. Each share of the Companys capital stock issued and outstanding immediately before the merger shall continue to represent one share of the capital stock. As a result of the merger, the business previously ceded from the Company to FReC is no longer reflected as ceded risk in the restated merged financials. As a result of the merger, the business previously ceded from TALIC to the Company is no longer reflected as assumed risk in the restated merged financials.
Summarized financial information for the Company and TALIC presented separately for periods prior to the merger is as follows. The amounts presented for the Companys revenues are reflective of the revision as described in Note 3:
Year Ended December 31 | ||||||||
2018 | 2017 | |||||||
Revenues: |
||||||||
Company |
$ | 15,206,362 | $ | 730,065 | ||||
TALIC |
230,284 | 268,890 | ||||||
|
|
|
|
|||||
$ | 15,436,646 | $ | 998,955 | |||||
|
|
|
|
|||||
Net income (loss): |
||||||||
Company |
$ | (1,353,504 | ) | $ | 603,700 | |||
TALIC |
(70,314 | ) | 193,953 | |||||
|
|
|
|
|||||
$ | (1,423,818 | ) | $ | 797,653 | ||||
|
|
|
|
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 |
||||
Assets: |
||||
Company |
$ | 117,015,550 | ||
TALIC |
7,204,454 | |||
Reclassification to conform to current year presentation: Current federal income tax recoverable |
(44,052 | ) | ||
|
|
|||
$ | 124,175,952 | |||
|
|
|||
Liabilities: |
||||
Company |
$ | 111,237,254 | ||
TALIC |
6,705,315 | |||
Reclassification to conform to current year presentation: Other liabilities |
(44,052 | ) | ||
|
|
|||
$ | 117,898,517 | |||
|
|
|||
Capital and Surplus: |
||||
Company |
$ | 5,778,296 | ||
TALIC |
499,139 | |||
|
|
|||
$ | 6,277,435 | |||
|
|
Nature of Business
The Company sells individual non-participating whole life, endowment and term contracts, and pension products, as well as a broad line of single fixed and flexible premium annuity products and guaranteed investment contracts. In addition, the Company offers group life, universal life, credit life, and individual and specialty health coverages. The Company is licensed in 49 states and the District of Columbia, Guam, Puerto Rico and US Virgin Islands. Sales of the Companys products are primarily through a network of agents, brokers, and financial institutions.
10
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Iowa Insurance Division (IID), which practices differ from accounting principles generally accepted in the United States of America (GAAP).
The IID recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company, and for determining its solvency under the Iowa Insurance Law. The National Association of Insurance Commissioners (NAIC) Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed practices by the State of Iowa. Prescribed statutory accounting practices include state laws and regulations. Permitted statutory accounting practices encompass accounting practices that are not prescribed.
The following is a summary of the accounting practices permitted and prescribed by the IID and reflected in the Companys financial statements which differs from NAIC SAP:
The State of Iowa has adopted a prescribed accounting practice that differs from that found in the NAIC SAP related to the reported value of the assets supporting the Companys guaranteed separate accounts. As prescribed by Iowa Administrative Code 508A.1.4, the Commissioner found that the Company is entitled to value the assets of the guaranteed separate account at amortized cost, whereas the assets would be required to be reported at fair value under SSAP No. 56, Separate Accounts, of the NAIC SAP. There is no impact to the Companys income or surplus as a result of utilizing this prescribed practice.
11
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
A reconciliation of the Companys net income (loss) and capital and surplus between NAIC SAP and practices prescribed and permitted by the State of Iowa is shown below:
SSAP# | F/S Page |
F/S Line | 2019 | 2018 | 2017 | |||||||||||||||||||
Net income (loss), State of Iowa basis |
XXX | XXX | XXX | $ | 3,294,022 | $ | (1,423,818 | ) | $ | 797,653 | ||||||||||||||
State prescribed practices that are an increase(decrease) from NAIC SAP: |
||||||||||||||||||||||||
Separate account asset valuation |
56 | NA | NA | | | | ||||||||||||||||||
State permitted practices that are an increase(decrease) from NAIC SAP: |
||||||||||||||||||||||||
None |
| | | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Net income (loss), NAIC SAP |
XXX | XXX | XXX | $ | 3,294,022 | $ | (1,423,818 | ) | $ | 797,653 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Statutory surplus, state of Iowa basis |
XXX | XXX | XXX | $ | 6,528,170 | $ | 6,277,435 | $ | 7,351,473 | |||||||||||||||
State prescribed practices that are an increase(decrease) from NAIC SAP: |
||||||||||||||||||||||||
Separate account asset valuation |
56 | NA | NA | | | | ||||||||||||||||||
State permitted practices that are an increase(decrease) from NAIC SAP: |
||||||||||||||||||||||||
Hedge reserve offset deferral |
86 |
|
Balance Sheet;
Statement of |
|
|
Variable annuity reserve hedge offset deferral Special surplus fundsChange in net unrealized capital gains/ losses |
|
| (231,853 | ) | (86,794 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Statutory surplus, NAIC SAP |
XXX | XXX | XXX | $ | 6,528,170 | $ | 6,045,582 | $ | 7,264,679 | |||||||||||||||
|
|
|
|
|
|
The Company elected early adoption of SSAP No. 108, Derivatives Hedging Variable Annuities Guarantees (SSAP 108) effective July 1, 2019. The early adoption allowed for transition from and release of a similar permitted practice in place with the IID since October 1, 2016 (the Permitted Practice). The Company received approval from the IID on September 4, 2019. Please refer to Note 3 for additional information.
Use of Estimates
The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
12
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The effects of the following variances from GAAP on the accompanying statutory-basis financial statements have not been determined by the Company, but are presumed to be material. Significant accounting policies and variances from GAAP are as follows:
Investments
Investments in bonds, except those to which the Securities Valuation Office (SVO) of the NAIC has ascribed a NAIC designation of 6, are reported at amortized cost using the interest method. Bonds containing call provisions, except make-whole call provisions, are amortized to the call or maturity value/date which produces the lowest asset value, often referred to as yield-to-worst method. Bonds ascribed a NAIC designation of 6 are reported at the lower of amortized cost or fair value with unrealized gains and losses reported in changes in capital and surplus. Prepayment penalty or acceleration fees received in the event a bond is liquidated prior to its scheduled termination date are reported as investment income.
Hybrid securities, as defined by the NAIC, are securities designed with characteristics of both debt and equity and provide protection to the issuers senior note holders. These securities meet the definition of a bond, in accordance with SSAP No. 26R, Bonds, and therefore, are reported at amortized cost or fair value based upon their NAIC rating.
For GAAP, such fixed maturity investments would be designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments would be reported at amortized cost, and the remaining fixed maturity investments would be reported at fair value with unrealized holding gains and losses reported in earnings for those designated as trading and as a separate component of other comprehensive income (OCI) for those designated as available-for-sale.
Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method, including anticipated prepayments, except for those with an initial NAIC designation of 6, which are valued at the lower of amortized cost or fair value. These securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium using either the retrospective or prospective methods. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. For statutory reporting, the retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities, which are valued using the prospective method.
For GAAP, all securities purchased or retained that represent beneficial interests in securitized assets, other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If high credit quality securities are adjusted, the retrospective method is used.
The Company closely monitors below investment grade holdings and investment grade issuers where the Company has concerns to determine if an other-than-temporary impairment (OTTI) has occurred. The Company also regularly monitors industry sectors. The Company considers relevant facts and circumstances in evaluating whether the impairment is other-than-temporary including: (1) the probability of the Company collecting all amounts due according to the
13
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
contractual terms of the security in effect at the date of acquisition; (2) the Companys decision to sell a security prior to its maturity at an amount below its carrying amount; and (3) the Companys ability to hold a structured security for a period of time to allow for recovery of the value to its carrying amount. Additionally, financial condition, near term prospects of the issuer and nationally recognized credit rating changes are monitored. Non-structured securities in unrealized loss positions that are considered other-than-temporary are written down to fair value. The Company will record a charge to the statements of operations for the amount of the impairment.
For structured securities, cash flow trends and underlying levels of collateral are monitored. An OTTI is considered to have occurred if the fair value of the structured security is less than its amortized cost basis and the entity intends to sell the security or the entity does not have the intent and ability to hold the security for a period of time sufficient to recover the amortized cost basis. An OTTI is also considered to have occurred if the discounted estimated future cash flows are less than the amortized cost basis of the security and the security is in an unrealized loss position. Structured securities considered other-than-temporarily impaired are written down to discounted estimated cash flows if the impairment is the result of cash flow analysis. If the Company has an intent to sell or lack of ability to hold a structured security, it is written down to fair value. The Company will record a charge to the statements of operations for the amount of the impairments.
For GAAP, if it is determined that a decline in fair value is other-than-temporary and the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the OTTI is recognized in earnings equal to the entire difference between the amortized cost basis and its fair value at the impairment date. If the entity does not intend to sell the security or the entity will likely not be required to sell the security before recovery, the OTTI should be separated into a) the amount representing the credit loss, which is recognized in earnings, and b) the amount related to all other factors, which is recognized in OCI, net of applicable taxes.
Investments in both affiliated and unaffiliated preferred stocks in good standing (those with NAIC designations RP1 to RP3 and P1 to P3), are reported at cost or amortized cost, depending on the characteristics of the securities. Investments in both affiliated and unaffiliated preferred stocks not in good standing (those with NAIC designations RP4 to RP6 and P4 to P6), are reported at the lower of cost, amortized cost, or fair value, depending on the characteristics of the securities. The related net unrealized capital gains and losses for all NAIC designations are reported in changes in capital and surplus.
Common stocks of affiliated noninsurance subsidiaries are reported based on underlying audited GAAP equity. The net change in the subsidiaries equity is included in net unrealized capital gains or losses and are reported in changes in capital and surplus.
Common stocks of unaffiliated companies, which include shares of mutual funds, are reported at fair value and the related net unrealized capital gains or losses are reported in changes in capital and surplus.
14
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company owns stock issued by the Federal Home Loan Bank (FHLB), which is only redeemable at par, and its fair value is presumed to be par, unless other-than-temporarily impaired.
If the Company determines that a decline in the fair value of a common stock or a preferred stock is other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the statements of operations. The Company considers the following factors in determining whether a decline in value is other-than-temporary: (a) the financial condition and prospects of the issuer; (b) whether or not the Company has made a decision to sell the investment; and (c) the length of time and extent to which the value has been below cost.
Mortgage loans are reported at unpaid principal balances, less an allowance for impairment. A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines the impairment is other-than-temporary, the mortgage loan is written down to realizable value and a realized loss is recognized. Prepayment penalty or acceleration fees received in the event a loan is liquidated prior to its scheduled termination date are reported as investment income.
Valuation allowances are established for mortgage loans, if necessary, based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. Under GAAP, such allowances are based on the present value of expected future cash flows discounted at the loans effective interest rate or, if foreclosure is probable, on the estimated fair value of the collateral.
The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus as part of the change in asset valuation reserve (AVR), rather than being included as a component of earnings as would be required under GAAP.
Land is reported at cost. Real estate occupied by the Company is reported at depreciated cost net of encumbrances. Real estate held for the production of income is reported at depreciated cost net of related obligations. Real estate the Company classifies as held for sale is measured at lower of carrying amount or fair value less cost to sell. Depreciation is calculated on a straight-line basis over the estimated useful lives of the properties. The Company recognizes an impairment loss if the Company determines that the carrying amount of the real estate is not recoverable and exceeds its fair value. The Company deems that the carrying amount of the asset is not recoverable if the carrying amount exceeds the sum of undiscounted cash flows expected to result from the use and disposition. The impairment loss is measured as the amount by which the assets carrying value exceeds its fair value.
Investments in real estate are reported net of related obligations rather than on a gross basis as for GAAP. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset as under GAAP, and investment income and operating expenses for statutory reporting include rent for the Companys occupancy of those properties. Changes between depreciated cost and admitted amounts are credited or charged directly to unassigned surplus rather than to income as would be required under GAAP.
15
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company has interests in joint ventures and limited partnerships. The Company carries these investments based on its interest in the underlying audited GAAP equity of the investee.
For a decline in the fair value of an investment in a joint venture or limited partnership which is determined to be other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the statements of operations. The Company considers an impairment to have occurred if it is probable that the Company will be unable to recover the carrying amount of the investment or if there is evidence indicating inability of the investee to sustain earnings which would justify the carrying amount of the investment.
Investments in Low Income Housing Tax Credit (LIHTC) properties are valued at amortized cost. Tax credits are recognized in operations in the tax reporting year in which the tax credit is utilized by the Company. The carrying value is amortized over the life of the investment. Amortization is calculated as a ratio of the current year tax credits and tax benefits compared to the total expected tax credits and tax benefits over the life of the investment.
Cash equivalents are short-term highly liquid investments with original maturities of three months or less (principally stated at amortized cost) or money market mutual funds which are reported at fair value.
Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost.
Policy loans are reported at unpaid principal balances.
Realized capital gains and losses are determined using the specific identification method and are recorded net of related federal income taxes. Changes in admitted asset carrying amounts of bonds, mortgage loans, common and preferred stocks are credited or charged directly to unassigned surplus.
Interest income is recognized on an accrual basis. The Company does not accrue income on bonds in default, mortgage loans on real estate in default and/or foreclosure or which are delinquent more than twelve months, or real estate where rent is in arrears for more than three months. Income is also not accrued when collection is uncertain. Due and accrued amounts determined to be uncollectible are written off through the statements of operations.
Valuation Reserves
Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, primarily bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals into net investment income over the remaining period to maturity of the bond or mortgage loan based on groupings of individual securities sold in five year bands. The net deferral is reported as the
16
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
interest maintenance reserve (IMR) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the statements of operations on a pre-tax basis in the period that the assets giving rise to the gains or losses are sold.
The AVR provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus; AVR is not recognized for GAAP.
In 2019, the NAIC revised the AVR Factors (basic contribution, reserve objective and maximum reserve) to be consistent with the risk-based capital (RBC) after-tax factors, which were amended in 2018 as a result of federal tax reform. The AVR factor changes are effective for year-end 2019. As of December 31, 2019, the factor changes decreased Capital and Surplus by $127,960. The changes were recorded to the Change in Asset Valuation Reserve line of the Statements of Changes in Capital and Surplus.
Derivative Instruments
Overview: The Company may use various derivative instruments (options, caps, floors, swaps, forwards, and futures) to manage risks related to its ongoing business operations. On the transaction date of the derivative instrument, the Company designates the derivative as either (A) hedging (fair value, foreign currency fair value, cash flow, foreign currency cash flow, forecasted transactions, or net investment in a foreign operation), (B) replication, (C) income generation, or (D) held for other investment/risk management activities, which do not qualify for hedge accounting under SSAP No. 86Derivatives.
(A) | Derivative instruments used in hedging transactions that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability (amortized cost or fair value). Embedded derivatives are not accounted for separately from the host contract. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value, and the changes in the fair value are recorded in unassigned surplus as unrealized gains and losses. Under GAAP, the effective and ineffective portions of a single hedge are accounted for separately, and the change in fair value for cash flow hedges is credited or charged directly to a separate component of OCI rather than to income as required for fair value hedges, and an embedded derivative within a contract that is not clearly and closely related to the economic characteristics and the risk of the host contract is accounted for separately from the host contract and valued and reported at fair value. |
(B) | Derivative instruments are also used in replication (synthetic asset) transactions. A replication transaction is a derivative transaction entered into in conjunction with a cash instrument to reproduce the investment characteristics of an otherwise permissible investment. In these transactions, the derivative is accounted for in a manner consistent with the cash instrument and replicated asset. For GAAP, the derivative is reported at fair value, with the changes in fair value reported in income. |
17
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
(C) | Derivative instruments used in income generation relationships are accounted for on a basis that is consistent with the associated covered asset or underlying interest to which the derivative relates (amortized cost or fair value). |
(D) | Derivative instruments held for other investment/risk management activities are measured at fair value with value adjustments recorded in unassigned surplus. |
Derivative instruments are subject to market risk, which is the possibility that future changes in market prices may make the instruments less valuable. The Company uses derivatives as hedges, consequently, when the value of the hedged asset or liability changes, the value of the hedging derivative is expected to move in the opposite direction. Market risk is a consideration when changes in the value of the derivative and the hedged item do not completely offset (correlation or basis risk) which is mitigated by active measuring and monitoring.
The Company is exposed to credit-related losses in the event of non-performance by counterparties to derivative instruments, but it does not expect any counterparties to fail to meet their obligations given their high credit rating of BBB or better. The credit exposure of interest rate swaps and currency swaps is represented by the fair value of contracts, aggregated at a counterparty level, with a positive fair value at the reporting date. The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets on the Companys behalf. The posted amount is equal to the difference between the net positive fair value of the contracts and an agreed upon threshold that is based on the credit rating of the counterparty. Inversely, if the net fair value of all contracts with this counterparty is negative, then the Company is required to post assets instead.
Instruments:
Interest rate swaps are used in the overall asset/liability management process to modify the interest rate characteristics of the underlying asset or liability. These interest rate swaps generally provide for the exchange of the difference between fixed and floating rate amounts based on an underlying notional amount. Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.
Cross currency swaps are utilized to mitigate risks when the Company holds foreign denominated assets or liabilities; therefore, converting the asset or liability to a U.S. dollar denominated security. These cross currency swap agreements involve the exchange of two principal amounts in two different currencies at the prevailing currency rate at contract inception. During the life of the swap, the counterparties exchange fixed or floating rate interest payments in the swapped currencies. At maturity, the principal amounts are again swapped at a pre-determined rate of exchange. Each asset or liability is hedged individually where the terms of the swap must meet the terms of the hedged instrument. For swaps qualifying for hedge accounting, the premium or discount is amortized into income over the life of the contract and the foreign currency translation
18
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
adjustment is recorded as unrealized gain/loss in capital and surplus. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus. If a swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the hedged instrument receives that treatment.
Total return swaps are used in the asset/liability management process to mitigate the market risk on minimum guarantee insurance contracts linked to an index. These total return swaps generally provide for the exchange of the difference between fixed leg (tied to the Standard & Poors (S&P) or other global market financial index) and floating leg (tied to the London Interbank Offered Rate (LIBOR)) amounts based on an underlying notional amount (also tied to the underlying index). Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.
Variance swaps are used in the asset/liability management process to mitigate the gamma risk created when the Company has issued minimum guarantee insurance contracts linked to an index. These variance swaps are similar to volatility options where the underlying index provides for the market value movements. Variance swaps do not accrue interest. Typically, no cash is exchanged at the outset of initiating the variance swap, and a single receipt or payment occurs at the maturity or termination of the contract. Variance swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.
Bond forwards are used to hedge the interest rate risk that future liability claims increase as rates decrease, leading to higher guarantee values.
Futures contracts are used to hedge the liability risk when the Company issues products providing the customer a return based on various global market indices. Futures are marked to market on a daily basis whereby a cash payment is made or received by the Company. These payments are recognized as realized gains or losses in the financial statements.
The Company issues products providing the customer a return based on the various global equity market indices. The Company uses options to hedge the liability option risk associated with these products. Options are marked to fair value in the balance sheets and fair value adjustments are recorded as capital and surplus in the financial statements. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment.
19
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Caps are used in the asset/liability management process to mitigate the interest rate risk created due to a rapidly rising interest rate environment. The caps are similar to options where the underlying interest rate index provides for the market value movements. The caps do not accrue interest until the interest rate environment exceeds the caps strike rate. Cash is exchanged at the onset, and a single receipt or payment occurs at the maturity or termination of the contract. Caps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Caps that do not meet hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.
The Company uses zero cost collars to hedge the interest rate risk associated with rising short term interest rates, whereby the exposure would otherwise adversely impact the Companys capital generation. The collar position(s) help range bound the floating rate by combining a cap and floor position.
The Company may sell products with expected benefit payments extending beyond investment assets currently available in the market. Because assets will have to be purchased in the future to fund future liability cash flows, the Company is exposed to the risk of future investments made at lower yields than what is assumed at the time of pricing. Forward-starting interest rate swaps are utilized to lock-in the current forward rate. The accrual of income begins at the forward date, rather than at the inception date. These forward-starting swaps meet hedge accounting rules and are carried at cost in the financial statements. Gains and losses realized upon termination of the forward-starting swap are deferred and used to adjust the basis of the asset purchased in the hedged forecasted period. The basis adjustment is then amortized into income as a yield adjustment to the asset over its life.
The Company issues fixed liabilities that have a guaranteed minimum crediting rate. The Company uses receiver swaptions, whereby the swaption is designed to generate cash flows to offset lower yields on assets during a low interest rate environment. The Company pays a single premium at the beginning of the contract and is amortized throughout the life of the swaption. These swaptions are marked to fair value in the balance sheets and the fair value adjustment is recorded in unassigned surplus. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment.
The Company replicates investment grade corporate bonds or sovereign debt by combining a highly rated security as a cash component with a written credit default swap which, in effect, converts the high quality asset into an investment grade corporate asset or a sovereign debt. The benefits of using the swap market to replicate credit include possible enhanced relative values as well as ease of executing larger transactions in a shortened time frame. Generally, a premium is received by the Company on a periodic basis and recognized in investment income. In the event the representative issuer defaults on its debt obligation referenced in the contract, a payment equal to the notional amount of the contract will be made by the Company and recognized as a capital loss.
20
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Securities Lending Assets and Liabilities
The Company loans securities to third parties under agent-managed securities lending programs accounted for as secured borrowings. Cash collateral received which may be sold or repledged by the Company is reflected as a one-line entry on the balance sheets (securities lending reinvested collateral assets) and a corresponding liability is established to record the obligation to return the cash collateral. Non-cash collateral received which may not be sold or repledged is not recorded on the Companys balance sheets. Under GAAP, the reinvested collateral is included within invested assets (i.e. it is not one-line reported).
Repurchase Agreements
For dollar repurchase agreements accounted for as secured borrowings, the Company receives cash collateral in an amount at least equal to the fair value of the securities transferred by the Company in the transaction as of the transaction date. The securities transferred are not removed from the balance sheets, and the cash received as collateral is invested as needed or used for general corporate purposes of the Company. A liability is established to record the obligation to return the cash collateral and included in Borrowed Money on the Balance Sheets.
Offsetting of Assets and Liabilities
Financial assets and liabilities are offset in the Balance Sheets when the Company has a legally enforceable right to offset and has the intention to settle the asset and liability on a net basis.
Other Assets and Other Liabilities
Other assets consist primarily of reinsurance receivable, accounts receivable and company owned life insurance. Company owned life insurance is carried at cash surrender value.
Other liabilities consist primarily of remittances, amounts withheld by the Company, accrued expenses, payable for securities and municipal repurchase agreements. Municipal repurchase agreements are investment contracts issued to municipalities that pay either a fixed or floating rate of interest on the guaranteed deposit balance. The floating interest rate is based on a market index. The related liabilities are equal to the policyholder deposit and accumulated interest. These municipal repurchase agreements require a minimum of 95% of the fair value of the securities transferred to be maintained as collateral.
Separate Accounts
The majority of separate accounts held by the Company, primarily for individual policyholders as well as for group pension plans, do not have any minimum guarantees, and the investment risks associated with fair value changes are borne by the policyholder. The assets in the accounts, carried at estimated fair value, consist of underlying mutual fund shares, common stocks, long-term bonds and short-term investments.
21
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Certain other separate accounts held by the Company provide a minimum guaranteed return of 3% of the average investment balance to policyholders. The assets consist of long-term bonds and short-term investments which are carried at amortized cost.
Certain other non-indexed guaranteed separate accounts represent funds invested by the Company for the benefit of the contract holders who are guaranteed certain returns as specified in the contracts. Separate account asset performance different than the guaranteed requirements is either transferred to or received from the general account and reported in the statements of operations. Non-indexed guaranteed separate account assets and liabilities are carried at fair value. These guarantees are included in the general account due to the nature of the guaranteed return.
Assets held in trust for purchases of variable life, variable universal life, variable annuity, and modified guaranteed annuity contracts and the Companys corresponding obligation to the contract owners are shown separately in the balance sheets. The assets in the separate accounts are valued at fair value.
Income and gains and losses with respect to the assets in the separate accounts accrue to the benefit of the contract owners and, accordingly, the operations of the separate accounts are not included in the accompanying financial statements. The investment risks associated with fair value changes of the separate accounts are borne entirely by the policyholders except in cases where minimum guarantees exist.
Income and gains and losses with respect to the assets in the separate accounts supporting modified guaranteed annuity contracts are included in the statements of operations as a component of net transfers from separate accounts.
Surplus funds transferred from the general account to the separate accounts, commonly referred to as seed money, and earnings accumulated on seed money are reported as surplus in the separate accounts until transferred or repatriated to the general account. The transfer of such funds between the separate account and the general account is reported as surplus contributed or withdrawn during the year.
Aggregate Reserves for Policies and Contracts
Life, annuity and accident and health benefit reserves are calculated by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed cash value, or the amount required by law.
For GAAP, policy reserves are calculated based on estimated expected experience or actual account balances.
Surrender values are not promised in excess of the legally computed reserves. For annual premium variable life insurance there is an extra premium charged to the policyholder before the premium is transferred to the Separate Accounts. An additional reserve for this policy is held in the General Account that is a multiple of the reserve that would otherwise be held. For interest sensitive whole life, the reserves held in the General Account are equal to the cash surrender value.
22
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
In accordance with SSAP No. 51R, Life Contracts, and No. 54R, Individual and Group Accident and Health Contracts, the Company reports the amount of insurance, if any, for which the gross premiums are less than the net premiums according to the valuation standards and any related premium deficiency reserve established. Anticipated investment income is included as a factor in the health contract premium deficiency calculation, respectively.
Policy and Contract Claim Reserves
Claim reserves represent the estimated accrued liability for claims reported to the Company and claims incurred but not yet reported through the balance sheets date. These reserves are estimated using either individual case-basis valuations or statistical analysis techniques. These estimates are subject to the effects of trends in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes available.
Deposit-Type Contracts
Deposit-type contracts do not incorporate risk from the death or disability of policyholders. These types of contracts may include guaranteed investment contracts (GICs), funding agreements and other annuity contracts. Deposits and withdrawals on these contracts are recorded as a direct increase or decrease, respectively, to the liability balance and are not reported as premiums, benefits or changes in reserves in the statements of operations. Interest on these policies is reflected in other benefits.
Premiums and Annuity Considerations
Revenues for life and annuity policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received. Benefits incurred represent surrenders and death benefits paid and the change in policy reserves. Under GAAP, for universal life policies, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent interest credited to the account values and the excess of benefits paid over the policy account value. Under GAAP, for all annuity policies without significant mortality risk, premiums received and benefits paid would be recorded directly to the reserve liability using deposit accounting.
Policyholder Dividends
Policyholder dividends are recognized when declared rather than over the term of the related policies as would be required under GAAP.
23
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Reinsurance
Coinsurance premiums, commissions, expense reimbursements and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies and the terms of the reinsurance contracts. Gains associated with reinsurance of in force blocks of business are included in unassigned surplus and amortized into income as earnings emerge on the reinsured block of business. Premiums ceded and recoverable losses have been reported as a reduction of premium income and benefits, respectively. Policy liabilities and accruals are reported in the accompanying financial statements net of reinsurance ceded.
Any reinsurance amounts deemed to be uncollectible have been written off through a charge to operations. In addition, a liability for reinsurance balances would be established for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability are credited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.
Losses associated with an indemnity reinsurance transaction are reported within income when incurred rather than being deferred and amortized over the remaining life of the underlying reinsured contracts as would be required under GAAP.
Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.
Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.
Under GAAP, for certain reinsurance agreements whereby assets are retained by the ceding insurer (such as funds withheld or modified coinsurance) and a return is paid based on the performance of underlying investments, the assets and liabilities for these reinsurance arrangements must be adjusted to reflect the fair value of the invested assets. The NAIC SAP does not contain a similar requirement.
Deferred Income Taxes
The Company computes deferred income taxes in accordance with SSAP No. 101, Income Taxes. Unlike GAAP, SSAP No. 101 does not consider state income taxes in the measurement of deferred taxes. SSAP No. 101 also requires additional testing to measure gross deferred tax assets. The additional testing limits gross deferred tax asset admission to 1) the amount of federal income taxes paid in prior years recoverable through hypothetical loss carrybacks of existing temporary differences expected to reverse during a timeframe corresponding with the Internal Revenue Service tax loss carryback provisions, not to exceed three years, plus 2) the amount of remaining gross deferred tax assets expected to be realized within three years limited to an amount that is no greater than 15% of current periods adjusted statutory capital and surplus, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities after considering character (i.e. ordinary versus capital) and reversal patterns. The Companys reported net deferred tax asset or liability is the sum of gross deferred tax assets admitted through this three part test plus the sum of all deferred tax liabilities.
24
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Policy Acquisition Costs
The costs of acquiring and renewing business are expensed when incurred. Under GAAP, incremental costs directly related to the successful acquisition of insurance and investment contracts are deferred. For traditional life insurance and certain long-duration accident and health insurance, to the extent recoverable from future policy revenues, acquisition costs are deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality and expense margins.
Value of Business Acquired
Under GAAP, value of business acquired (VOBA) is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future contracts and contract changes, premiums, mortality and morbidity, separate account performance, surrenders, operation expenses, investment returns, nonperformance risk adjustment and other factors. VOBA is not recognized under the NAIC SAP.
Subsidiaries and Affiliated Companies
Investments in subsidiaries, controlled and affiliated companies (SCA) are stated in accordance with the Purposes and Procedures Manual of the NAIC SVO, as well as SSAP No. 97 Investments in Subsidiary, Controlled and Affiliated Entities.
The accounts and operations of the Companys subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP. Dividends or distributions received from an investee are recognized in investment income when declared to the extent that they are not in excess of the undistributed accumulated earnings attributable to an investee. Changes in investments in SCAs are recorded as a change to the carrying value of the investment with a corresponding amount recorded directly to unrealized gain/loss (capital and surplus).
Surplus Notes
Surplus notes are reported as surplus rather than as liabilities as would be required under GAAP.
Nonadmitted Assets
Certain assets designated as nonadmitted, primarily net deferred tax assets and other assets not specifically identified as an admitted asset within the NAIC SAP, are excluded from the accompanying balance sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the balance sheets to the extent that they are not impaired.
25
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Statements of Cash Flow
Cash, cash equivalents and short-term investments in the statements of cash flow represent cash balances and investments with initial maturities of one year or less and money market mutual funds. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less.
3. Accounting Changes and Corrections of Errors
The Companys policy is to disclose as recent accounting pronouncements the adopted accounting guidance with a current year effective date that has been classified by the NAIC as a substantive change, as well as items classified as nonsubstantive changes that have had a material impact on the financial position or results of operations of the Company.
Recent Accounting Pronouncements
As of July 1, 2019, the Company has received IID approval on an approach for transitioning from a prior permitted practice into full implementation of SSAP No. 108. The approved transition approach will not result in adjustment to the Companys historical statutory reporting or existing unamortized deferral balances established under the permitted practice at the time of transition. The Company will continue amortizing deferral balances established under the permitted practice according to the amortization schedule previously approved. This amortization will be reported as net realized capital gains (losses) in the Statements of Operations. The net deferral is re-classed from unassigned to special surplus and is presented in the Variable annuity reserve hedge offset deferral financial statement line item on the balance sheets. As of the date of transition, current period fair value fluctuations in the designated derivative instruments offset by the current period Valuation Manual section 21 (VM-21) liability change attributed to the hedged risk (natural offset) will be included in net realized capital gains (losses) in the Statements of Operations. As of the date of transition, the Company is fully compliant with the provisions of SSAP 108. The adoption of SSAP 108 and the contemporaneous release of the Permitted Practice will not impact historical statutory reporting or remaining residual balances established under the Permitted Practice and will not have a significantly different impact, in comparison to the Permitted Practice, on the Companys statutory capital position or RBC ratio. Differences include reporting the natural offset as net realized capital gains/losses in the statements of operations compared to previously being included within the change in unrealized gains/losses with no impact to capital and surplus. Additionally, the deferral amortization under SSAP 108 begins in the subsequent reporting period as opposed to starting in the period it was established, as with the Permitted Practice. The delay in deferral amortization impacts the timing and flow through statutory capital and surplus, but does not create material differences from the Permitted Practice.
Effective January 1, 2019, the NAIC adopted revisions to SSAP No. 30, Unaffiliated Common Stock, which updated the definition of common stock to include SEC registered closed-end funds and unit investment trusts. The adoption of this guidance did not impact the financial position or results of operations of the Company.
26
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Change in Valuation Basis
As of December 31, 2019, the Company has received IID approval on an approach for adoption of the NAIC 2020 VM-21 and related Risk Based Capital C3P2 changes documented in the VM-21 2020 NAIC Valuation Manual: Requirements for Principle-Based Reserves for Variable Annuities. The Company has elected to early adopt the VM-21 requirements for variable annuities effective December 31, 2019. The approved transition approach did not result in an adjustment to the Companys historical statutory reporting or existing balances at the time of transition. The Company reported the increase to the VM-21 reserve of $1,248,411. As a result, the Company released the voluntary reserve that was recorded to account for the adoption in the amount of $850,000 which was developed considering Q4 2018 balances and factors. The change year-over-year is due to significant market factor changes such as bond yields and treasury rates. As of the date of transition, the Company is fully compliant with the provisions of VM-21.
27
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Revision to Prior Years
During 2019, the Company identified errors in prior year financial statements for which the Company has determined it appropriate to revise. The Company assessed the materiality of these revisions and concluded these revisions are not material to the December 31, 2018 and 2017 financial statements as a whole. The following tables show the impact of the revision after the effect of the TALIC merger as described in Note 1:
Year Ended December 31, 2018 | ||||||||||||
As Revised for the Merger |
Adjustment | As Revised | ||||||||||
Statements of Operations |
||||||||||||
Revenues |
||||||||||||
Premiums and other considerations |
$ | 11,448,988 | $(635,470 | ) | $ | 10,813,518 | ||||||
Fee revenue and other income |
1,977,174 | (5,700 | ) | 1,971,474 | ||||||||
|
|
|
|
|
|
|||||||
Total revenue |
$ | 16,077,816 | $ | (641,170 | ) | $ | 15,436,646 | |||||
|
|
|
|
|
|
|||||||
Benefits and expenses |
||||||||||||
Surrender benefits |
$ | 15,154,347 | $ | (618,170 | ) | $ | 14,536,177 | |||||
|
|
|
|
|
|
|||||||
Total benefits and expenses |
16,821,611 | (618,170 | ) | 16,203,441 | ||||||||
Gain (loss) from operations before dividends and federal income taxes |
(743,795 | ) | (23,000 | ) | (766,795 | ) | ||||||
|
|
|
|
|
|
|||||||
Federal income tax (benefit) expense |
(55,012 | ) | (8,050 | ) | (63,062 | ) | ||||||
Net gain (loss) from operations |
(694,736 | ) | (14,950 | ) | (709,686 | ) | ||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | (1,408,868 | ) | $ | (14,950 | ) | $ | (1,423,818 | ) | |||
|
|
|
|
|
|
|||||||
Statements of Changes in Capital and Surplus |
||||||||||||
Balance at December 31, 2017 |
||||||||||||
Net income (loss) |
$ | (1,408,868 | ) | $ | (14,950 | ) | $ | (1,423,818 | ) | |||
Other changesnet |
(16,325 | ) | 14,950 | (1,375 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2018 |
$ | 6,277,435 | $ | | $ | 6,277,435 | ||||||
|
|
|
|
|
|
|||||||
Statements of Cash Flows |
||||||||||||
Operating activities |
||||||||||||
Premiums and annuity considerations |
$ | 11,449,184 | $ | (612,470 | ) | $ | 10,836,714 | |||||
Other income |
2,896,789 | (5,700 | ) | 2,891,089 | ||||||||
Benefit and loss related payments |
(18,576,471 | ) | 618,170 | (17,958,301 | ) | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
978,988 | | 978,988 | |||||||||
Financing and miscellaneous activities |
||||||||||||
Net deposits (withdrawals) on deposit-type contracts |
$ | (146,883 | ) | $ | (54,285 | ) | $ | (201,168 | ) | |||
Other cash (applied) provided |
533,298 | 54,285 | 587,583 | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing and miscellaneous activities |
(2,173,724 | ) | | (2,173,724 | ) | |||||||
Net increase (decrease) in cash, cash equivalents and short-term investments |
365,778 | | 365,778 | |||||||||
Cash, cash equivalents and short-term investments: |
||||||||||||
Beginning of year |
1,965,690 | | 1,965,690 | |||||||||
|
|
|
|
|
|
|||||||
End of year |
$ | 2,331,468 | $ | | $ | 2,331,468 | ||||||
|
|
|
|
|
|
28
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Year Ended December 31, 2017 | ||||||||||||
As Revised for the Merger |
Adjustment | As Revised | ||||||||||
Statements of Operations |
||||||||||||
Revenues |
||||||||||||
Premiums and other considerations |
$ | (3,098,001 | ) | $ | (416,167 | ) | $ | (3,514,168 | ) | |||
Fee revenue and other income |
1,997,110 | (500 | ) | 1,996,610 | ||||||||
|
|
|
|
|
|
|||||||
Total revenue |
$ | 1,415,622 | $ | (416,667 | ) | $ | 998,955 | |||||
|
|
|
|
|
|
|||||||
Benefits and expenses |
||||||||||||
Surrender benefits |
$ | 13,526,406 | $ | (416,667 | ) | $ | 13,109,739 | |||||
|
|
|
|
|
|
|||||||
Total benefits and expenses |
1,069,968 | (416,667 | ) | 653,301 | ||||||||
Gain (loss) from operations before dividends and federal income taxes |
345,654 | | 345,654 | |||||||||
|
|
|
|
|
|
|||||||
Net gain (loss) from operations |
1,372,703 | | 1,372,703 | |||||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | 797,653 | $ | | $ | 797,653 | ||||||
|
|
|
|
|
|
|||||||
Statements of Cash Flows |
||||||||||||
Operating activities |
||||||||||||
Premiums and annuity considerations |
$ | 5,446,470 | $ | (416,167 | ) | $ | 5,030,303 | |||||
Other income |
6,905,908 | (500 | ) | 6,905,408 | ||||||||
Benefit and loss related payments |
(16,493,134 | ) | 416,667 | (16,076,467 | ) | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
(331,021 | ) | | (331,021 | ) | |||||||
Financing and miscellaneous activities |
||||||||||||
Net deposits (withdrawals) on deposit-type contracts |
$ | (2,130,022 | ) | $ | (37,281 | ) | $ | (2,167,303 | ) | |||
Other cash (applied) provided |
60,720 | 37,281 | 98,001 | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing and miscellaneous activities |
(1,450,248 | ) | | (1,450,248 | ) | |||||||
Net increase (decrease) in cash, cash equivalents and short-term investments |
284,184 | | 284,184 | |||||||||
Cash, cash equivalents and short-term investments: |
||||||||||||
Beginning of year |
1,681,506 | | 1,681,506 | |||||||||
|
|
|
|
|
|
|||||||
End of year |
$ | 1,965,690 | $ | | $ | 1,965,690 | ||||||
|
|
|
|
|
|
Management has determined that the amounts primarily relate to misclassifications of balances within the Statements of Operations and Cash Flows for the years ended December 31, 2018 and 2017 related to accounting for retirement plan cash flows and other cash flow presentation reclassifications. This error resulted in offsetting misstatements to premiums and other considerations, fee revenue and other income, and surrender benefits and corresponding offsetting misstatements within the cash provided by (used in) operating activities and cash provided by (used in) financing and miscellaneous activities. The misclassifications had no impact to the Companys net income or capital and surplus in the prior years.
In addition, Management reclassified certain prior year out of period adjustments from income to capital and surplus per SSAP No. 3, Accounting Changes and Corrections of Errors.
29
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Reclassifications
Certain amounts in prior year financial statement balances and footnote disclosures have been reclassified to conform to the current year presentation.
4. Fair Values of Financial Instruments
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Determination of fair value
The fair values of financial instruments are determined by management after taking into consideration several sources of data. When available, the Company uses quoted market prices in active markets to determine the fair value of its investments. The Companys valuation policy utilizes a pricing hierarchy which dictates that publicly available prices are initially sought from indices and third-party pricing services. In the event that pricing is not available from these sources, those securities are submitted to brokers to obtain quotes. Lastly, securities are priced using internal cash flow modeling techniques. These valuation methodologies commonly use reported trades, bids, offers, issuer spreads, benchmark yields, estimated prepayment speeds, and/or estimated cash flows.
To understand the valuation methodologies used by third-party pricing services, the Company reviews and monitors their applicable methodology documents. Any changes to their methodologies are noted and reviewed for reasonableness. In addition, the Company performs in-depth reviews of prices received from third-party pricing services on a sample basis. The objective for such reviews is to demonstrate the Company can corroborate detailed information such as assumptions, inputs and methodologies used in pricing individual securities against documented pricing methodologies. Only third-party pricing services and brokers with a substantial presence in the market and with appropriate experience and expertise are used.
Each month, the Company performs an analysis of the information obtained from indices, third-party services, and brokers to ensure the information is reasonable and produces a reasonable estimate of fair value. The Company considers both qualitative and quantitative factors as part of this analysis, including but not limited to, recent transactional activity for similar securities, review of pricing statistics and trends, and consideration of recent relevant market events. Other controls and procedures over pricing received from indices, third-party pricing services, or brokers include validation checks such as exception reports which highlight significant price changes, stale prices or un-priced securities.
30
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Fair value hierarchy
The Companys financial assets and liabilities carried at fair value are classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100R, Fair Value. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An assets or a liabilitys classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:
Level 1 - | Unadjusted quoted prices for identical assets or liabilities in active markets accessible at the measurement date. | |
Level 2 - | Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following: | |
a) Quoted prices for similar assets or liabilities in active markets | ||
b) Quoted prices for identical or similar assets or liabilities in non-active markets | ||
c) Inputs other than quoted market prices that are observable | ||
d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means | ||
Level 3 - | Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect the Companys own assumptions about the assumptions a market participant would use in pricing the asset or liability. |
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:
Cash Equivalents and Short-Term Investments: The carrying amounts reported in the accompanying balance sheets for these financial instruments is either reported at fair value or amortized cost (which approximates fair value). Cash is not included in the below tables.
Short-Term Notes Receivable from Affiliates: The carrying amounts reported in the accompanying balance sheets for these financial instruments approximate their fair value.
Bonds and Stocks: The NAIC allows insurance companies to report the fair value determined by the SVO or to determine the fair value by using a permitted valuation method. The fair values of bonds and stocks are reported or determined using the following pricing sources: indices, third-party pricing services, brokers, external fund managers and internal models.
Fair values for fixed maturity securities (including redeemable preferred stock) actively traded are determined from third-party pricing services, which are determined as discussed above in the description of Level 1 and Level 2 values within the fair value hierarchy. For fixed maturity
31
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
securities (including redeemable preferred stock) not actively traded, fair values are estimated using values obtained from third-party pricing services, or are based on non-binding broker quotes or internal models. In the case of private placements, fair values are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit and maturity of the investments.
Mortgage Loans on Real Estate: The fair values for mortgage loans on real estate are estimated utilizing discounted cash flow analyses, using interest rates reflective of current market conditions and the risk characteristics of the loans.
Real Estate: Real estate held for sale is typically valued utilizing independent external appraisers in conjunction with reviews by qualified internal appraisers. Valuations are primarily based on active market prices, adjusted for any difference in the nature, location or condition of the specific property. If such information is not available, other valuation methods are applied, considering the value that the propertys net earning power will support, the value indicated by recent sales of comparable properties and the current cost of reproducing or replacing the property.
Other Invested Assets: The fair values for other invested assets, which include investments in surplus notes issued by other insurance companies and fixed or variable rate investments with underlying characteristics of bonds were determined primarily by using indices, third-party pricing services and internal models.
Derivative Financial Instruments: The fair value of futures and forwards are based upon the latest quoted market price and spot rates at the balance sheets date. The estimated fair values of equity and interest rate options (calls, puts, caps) are based upon the latest quoted market price at the balance sheets date. The estimated fair values of swaps, including equity, interest rate and currency swaps, are based on pricing models or formulas using current assumptions. The estimated fair values of credit default swaps are based upon active market data, including interest rate quotes, credit spreads, and recovery rates, which are then used to calculate probabilities of default for the fair value calculation. The Company accounts for derivatives that receive and pass hedge accounting in the same manner as the underlying hedged instrument. If that instrument is held at amortized cost, then the derivative is also held at amortized cost.
Policy Loans: The book value of policy loans is considered to approximate the fair value of the loan, which is stated at unpaid principal balance.
Securities Lending Reinvested Collateral: The cash collateral from securities lending is reinvested in various short-term and long-term debt instruments. The fair values of these investments are determined using the methods described above under Cash Equivalents and Short-Term Investments and Bonds and Stocks.
Separate Account Assets and Annuity Liabilities: The fair value of separate account assets are based on quoted market prices when available. When not available, they are primarily valued either using third-party pricing services or are valued in the same manner as the general account assets as further described in this note. However, some separate account assets are valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or
32
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
internal modeling which utilizes input that are not market observable. The fair value of separate account annuity liabilities is based on the account value for separate accounts business without guarantees. For separate accounts with guarantees, fair value is based on discounted cash flows.
Investment Contract Liabilities: Fair value for the Companys liabilities under investment contracts, which include deferred annuities and GICs, are estimated using discounted cash flow calculations. For those liabilities that are short in duration, carrying amount approximates fair value. For investment contracts with no defined maturity, fair value is estimated to be the present surrender value.
Deposit-Type Contracts: The carrying amounts of deposit-type contracts reported in the accompanying balance sheets approximate their fair values. These are included in the Investment Contract Liabilities.
Fair values for the Companys insurance contracts other than investment-type contracts (including separate account universal life liabilities) are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Companys overall management of interest rate risk, such that the Companys exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.
The Company accounts for its investments in affiliated common stock in accordance with SSAP No. 97, as such, they are not included in the following disclosures.
33
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables set forth a comparison of the estimated fair values and carrying amounts of the Companys financial instruments, including those not measured at fair value in the balance sheets, as of December 31, 2019 and 2018, respectively:
December 31, 2019 | ||||||||||||||||||||||||||||
Aggregate Fair Value |
Admitted Value |
(Level 1) | (Level 2) | (Level 3) | Net Asset Value (NAV) |
Not Practicable (Carrying Value) |
||||||||||||||||||||||
Admitted assets |
||||||||||||||||||||||||||||
Cash equivalents and short-term investments, other than affiliates | $ | 1,298,116 | $ | 1,298,076 | $ | 1,042,719 | $ | 255,397 | $ | | $ | | $ | | ||||||||||||||
Short-term notes receivable from affiliates | 240,300 | 240,300 | | 240,300 | | | | |||||||||||||||||||||
Bonds | 28,644,195 | 25,412,467 | 5,355,305 | 22,844,657 | 444,233 | | | |||||||||||||||||||||
Preferred stocks, other than affiliates | 109,845 | 111,630 | | 108,849 | 996 | | | |||||||||||||||||||||
Common stocks, other than affiliates | 80,789 | 80,789 | 10,227 | 19 | 70,543 | | | |||||||||||||||||||||
Mortgage loans on real estate | 5,383,132 | 5,096,613 | | | 5,383,132 | | | |||||||||||||||||||||
Other invested assets | 262,406 | 218,682 | | 243,524 | 18,882 | | | |||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||
Options |
311,739 | 311,739 | | 311,739 | | | | |||||||||||||||||||||
Interest rate swaps |
1,363,717 | 1,363,526 | | 1,363,717 | | | | |||||||||||||||||||||
Currency swaps |
8,929 | 7,304 | | 8,929 | | | | |||||||||||||||||||||
Credit default swaps |
59,599 | 34,248 | | 59,599 | | | | |||||||||||||||||||||
Equity swaps |
55 | 55 | | 55 | | | | |||||||||||||||||||||
Interest rate futures |
467 | 467 | 467 | | | | | |||||||||||||||||||||
Equity futures |
686 | 686 | 686 | | | | | |||||||||||||||||||||
Derivative assets total |
1,745,192 | 1,718,025 | 1,153 | 1,744,039 | | | | |||||||||||||||||||||
Policy loans | 1,099,596 | 1,099,596 | | 1,099,596 | | | | |||||||||||||||||||||
Securities lending reinvested collateral | 987,763 | 987,763 | 96 | 987,667 | | | | |||||||||||||||||||||
Separate account assets | 85,275,020 | 85,209,155 | 81,391,463 | 3,878,274 | 5,283 | | | |||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||
Investment contract liabilities | 16,687,551 | 11,934,145 | | 218,239 | 16,469,312 | | | |||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||
Options |
151,696 | 151,696 | | 151,696 | | | | |||||||||||||||||||||
Interest rate swaps |
1,279,477 | 1,442,132 | | 1,279,477 | | | | |||||||||||||||||||||
Currency swaps |
2,279 | 4,328 | | 2,279 | | | | |||||||||||||||||||||
Credit default swaps |
(3,740 | ) | 13,450 | | (3,740 | ) | | | | |||||||||||||||||||
Equity swaps |
211,606 | 211,606 | | 211,606 | | | | |||||||||||||||||||||
Interest rate futures |
22,916 | 22,916 | 22,916 | | | | | |||||||||||||||||||||
Equity futures |
5,673 | 5,673 | 5,673 | | | | | |||||||||||||||||||||
Derivative liabilities total |
1,669,907 | 1,851,801 | 28,589 | 1,641,318 | | | | |||||||||||||||||||||
Dollar repurchase agreements | 448,829 | 448,829 | | 448,829 | | | | |||||||||||||||||||||
Payable for securities lending | 1,246,827 | 1,246,827 | | 1,246,827 | | | | |||||||||||||||||||||
Payable for derivative cash collateral | 484,637 | 484,637 | | 484,637 | | | | |||||||||||||||||||||
Separate account annuity liabilities | 78,615,086 | 78,617,102 | 2,783 | 78,565,537 | 46,766 | | |
34
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | ||||||||||||||||||||||||||||
Aggregate Fair Value |
Admitted Value |
(Level 1) | (Level 2) | (Level 3) | Net Asset Value (NAV) |
Not Practicable (Carrying Value) |
||||||||||||||||||||||
Admitted assets |
||||||||||||||||||||||||||||
Cash equivalents and short-term investments, other than affiliates |
$ | 1,966,071 | $ | 1,966,071 | $ | 1,385,771 | $ | 580,300 | $ | | $ | | $ | | ||||||||||||||
Short-term notes receivable from affiliates |
261,000 | 261,000 | | 261,000 | | | | |||||||||||||||||||||
Bonds |
28,352,356 | 27,627,135 | 7,005,814 | 20,905,525 | 441,017 | | | |||||||||||||||||||||
Preferred stocks, other than affiliates |
97,812 | 104,793 | | 94,815 | 2,997 | | | |||||||||||||||||||||
Common stocks, other than affiliates |
171,979 | 171,979 | 15,401 | 6 | 156,572 | | | |||||||||||||||||||||
Mortgage loans on real estate |
4,647,770 | 4,600,493 | | | 4,647,770 | | | |||||||||||||||||||||
Other invested assets |
241,689 | 214,934 | | 229,963 | 11,726 | | | |||||||||||||||||||||
Derivative assets: |
||||||||||||||||||||||||||||
Options |
996,427 | 996,427 | | 996,427 | | | | |||||||||||||||||||||
Interest rate swaps |
710,817 | 711,165 | | 710,817 | | | | |||||||||||||||||||||
Currency swaps |
15,288 | 15,495 | | 15,288 | | | | |||||||||||||||||||||
Credit default swaps |
52,360 | 52,579 | | 52,360 | | | | |||||||||||||||||||||
Equity swaps |
281,457 | 281,457 | | 281,457 | | | | |||||||||||||||||||||
Interest rate futures |
20,639 | 20,639 | 20,639 | | | | | |||||||||||||||||||||
Equity futures |
20,189 | 20,189 | 20,189 | | | | | |||||||||||||||||||||
Derivative assets total |
2,097,177 | 2,097,951 | 40,828 | 2,056,349 | | | | |||||||||||||||||||||
Policy loans |
1,139,853 | 1,139,853 | | 1,139,853 | | | | |||||||||||||||||||||
Securities lending reinvested collateral |
1,660,683 | 1,660,683 | 71,045 | 1,589,638 | | | | |||||||||||||||||||||
Separate account assets |
76,150,197 | 76,130,173 | 72,461,882 | 3,684,492 | 3,823 | | | |||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||
Investment contract liabilities |
13,297,887 | 12,379,779 | | 243,143 | 13,054,743 | | | |||||||||||||||||||||
Derivative liabilities: |
||||||||||||||||||||||||||||
Options |
344,808 | 344,808 | | 344,808 | | | | |||||||||||||||||||||
Interest rate swaps |
376,095 | 591,999 | | 376,095 | | | | |||||||||||||||||||||
Currency swaps |
1,706 | 645 | | 1,706 | | | | |||||||||||||||||||||
Credit default swaps |
(1,309 | ) | 13,394 | | (1,309 | ) | | | | |||||||||||||||||||
Equity swaps |
16,890 | 16,890 | | 16,890 | | | | |||||||||||||||||||||
Interest rate futures |
6,999 | 6,999 | 6,999 | | | | | |||||||||||||||||||||
Equity futures |
1,239 | 1,239 | 1,239 | | | | | |||||||||||||||||||||
Derivative liabilities total |
746,428 | 975,974 | 8,238 | 738,190 | | | | |||||||||||||||||||||
Dollar repurchase agreements |
214,357 | 214,357 | | 214,357 | | | | |||||||||||||||||||||
Payable for securities lending |
1,835,122 | 1,835,122 | | 1,835,122 | | | | |||||||||||||||||||||
Payable for derivative cash collateral |
1,245,534 | 1,245,534 | | 1,245,534 | | | | |||||||||||||||||||||
Separate account annuity liabilities |
69,914,071 | 69,915,907 | 3,069 | 69,874,047 | 36,955 | | |
35
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables provide information about the Companys financial assets and liabilities measured at fair value as of December 31, 2019 and 2018:
2019 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Asset Value (NAV) |
Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Bonds |
||||||||||||||||||||
Industrial and miscellaneous |
$ | | $ | 15,615 | $ | 4,075 | $ | | $ | 19,690 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total bonds |
| 15,615 | 4,075 | | 19,690 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock |
||||||||||||||||||||
Industrial and miscellaneous |
| 41 | 996 | | 1,037 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total preferred stock |
| 41 | 996 | | 1,037 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock |
||||||||||||||||||||
Mutual funds |
5,049 | | | | 5,049 | |||||||||||||||
Industrial and miscellaneous |
5,178 | 19 | 70,543 | | 75,740 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total common stock |
10,227 | 19 | 70,543 | | 80,789 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash equivalents and short-term |
||||||||||||||||||||
Money market mutual funds |
1,042,719 | | | | 1,042,719 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash equivalents and short-term |
1,042,719 | | | | 1,042,719 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securities lending reinvested collateral |
96 | | | | 96 | |||||||||||||||
Derivative assets |
1,153 | 1,671,609 | | | 1,672,762 | |||||||||||||||
Separate account assets |
81,255,681 | 3,293,963 | 4,271 | | 84,553,915 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 82,309,876 | $ | 4,981,247 | $ | 79,885 | $ | | $ | 87,371,008 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Derivative liabilities |
$ | 28,589 | $ | 1,633,210 | $ | | $ | | 1,661,799 | |||||||||||
Separate account liabilities |
2,783 | | | | 2,783 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 31,372 | $ | 1,633,210 | $ | | $ | | $ | 1,664,582 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2018 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Asset Value (NAV) |
Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Bonds |
||||||||||||||||||||
Government |
$ | | $ | 900 | $ | | $ | | $ | 900 | ||||||||||
Industrial and miscellaneous |
| 26,472 | 8,205 | | 34,677 | |||||||||||||||
Hybrid securities |
| 2,282 | | | 2,282 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total bonds |
| 29,654 | 8,205 | | 37,859 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock |
||||||||||||||||||||
Industrial and miscellaneous |
| 1,601 | 2,997 | | 4,598 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total preferred stock |
| 1,601 | 2,997 | | 4,598 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock |
||||||||||||||||||||
Mutual funds |
12,648 | | | | 12,648 | |||||||||||||||
Industrial and miscellaneous |
2,753 | 6 | 156,572 | | 159,331 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total common stock |
15,401 | 6 | 156,572 | | 171,979 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash equivalents and short-term |
||||||||||||||||||||
Money market mutual funds |
1,385,771 | | | | 1,385,771 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash equivalents and short-term |
1,385,771 | | | | 1,385,771 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securities lending reinvested collateral |
71,045 | | | | 71,045 | |||||||||||||||
Derivative assets |
40,828 | 1,995,419 | | | 2,036,247 | |||||||||||||||
Separate account assets |
72,321,900 | 3,124,101 | 3,823 | | 75,449,824 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 73,834,945 | $ | 5,150,781 | $ | 171,597 | $ | | $ | 79,157,323 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Derivative liabilities |
$ | 8,238 | $ | 811,965 | $ | | $ | | $ | 820,203 | ||||||||||
Separate account liabilities |
3,069 | | | | 3,069 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 11,307 | $ | 811,965 | $ | | $ | | $ | 823,272 | ||||||||||
|
|
|
|
|
|
|
|
|
|
36
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Bonds classified as Level 3 are primarily those valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilize significant inputs that are not market observable.
Preferred stock classified as Level 3 are internally valued using significant unobservable inputs.
Common stock classified as Level 3 are comprised primarily of shares in the FHLB of Des Moines, which are valued at par as a proxy for fair value as a result of restrictions that allow redemptions only by FHLB.
The following tables summarize the changes in assets classified as Level 3 for 2019 and 2018:
Beginning Balance at January 1, 2019 |
Transfers in (Level 3) |
Transfers out (Level 3) |
Total Gains (Losses) Included in Net income (a) |
Total Gains (Losses) Included in Surplus (b) |
||||||||||||||||
Bonds |
||||||||||||||||||||
RMBS |
$ | | $ | 5 | $ | | $ | | $ | (5 | ) | |||||||||
Other |
8,206 | | 1,829 | 72 | 398 | |||||||||||||||
Preferred stock |
2,997 | | | | (2,654 | ) | ||||||||||||||
Common stock |
156,572 | | 4,197 | (5,874 | ) | 3,296 | ||||||||||||||
Separate account assets |
3,824 | 1,264 | 807 | (3 | ) | (789 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 171,598 | $ | 1,269 | $ | 6,833 | $ | (5,805 | ) | $ | 246 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases | Issuances | Sales | Settlements | Ending Balance at December 31, 2019 |
||||||||||||||||
Bonds |
||||||||||||||||||||
RMBS |
$ | | $ | | $ | | $ | | $ | | ||||||||||
Other |
| | | 2,772 | 4,075 | |||||||||||||||
Preferred stock |
653 | | | | 996 | |||||||||||||||
Common stock |
4,645 | 6,702 | 90,600 | 1 | 70,543 | |||||||||||||||
Separate account assets |
848 | | (27 | ) | 93 | 4,271 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 6,146 | $ | 6,702 | $ | 90,573 | $ | 2,866 | $ | 79,885 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations |
(b) | Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus |
37
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Beginning Balance at January 1, 2018 |
Transfers in (Level 3) |
Transfers out (Level 3) |
Total Gains (Losses) Included in Net income (a) |
Total Gains (Losses) Included in Surplus (b) |
||||||||||||||||
Bonds |
||||||||||||||||||||
Government |
$ | | $ | | $ | | $ | (3 | ) | $ | 3 | |||||||||
RMBS |
| | | (26 | ) | 26 | ||||||||||||||
Other |
14,619 | | 5,465 | 108 | 423 | |||||||||||||||
Preferred stock |
3,180 | | | | (754 | ) | ||||||||||||||
Common stock |
197,751 | | 270 | (2,000 | ) | 3,398 | ||||||||||||||
Other long term |
| 920 | 1,040 | | (310 | ) | ||||||||||||||
Derivatives |
29,230 | | | (84,445 | ) | (29,230 | ) | |||||||||||||
Separate account assets |
51,040 | 1,394 | 249 | (43,234 | ) | (77 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 295,820 | $ | 2,314 | $ | 7,024 | $ | (129,600 | ) | $ | (26,521 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
Purchases | Issuances | Sales | Settlements | Ending Balance at December 31, 2018 |
||||||||||||||||
Bonds |
||||||||||||||||||||
Government |
$ | | $ | | $ | | $ | | $ | | ||||||||||
RMBS |
| | | | | |||||||||||||||
Other |
| | | 1,479 | 8,206 | |||||||||||||||
Preferred stock |
828 | | 259 | | 2,997 | |||||||||||||||
Common stock |
| 216 | 42,400 | 123 | 156,572 | |||||||||||||||
Other long term |
430 | | | | | |||||||||||||||
Derivatives |
| | (3,869 | ) | (80,576 | ) | | |||||||||||||
Separate account assets |
100 | | 3,490 | 1,660 | 3,824 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 1,358 | $ | 216 | $ | 42,280 | $ | (77,314 | ) | $ | 171,598 | |||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations |
(b) | Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus |
Transfers between fair value hierarchy levels are recognized at the beginning of the reporting period.
Nonrecurring fair value measurements
As indicated in Note 2, real estate held for sale is measured at the lower of carrying amount or fair value less cost to sell. As of December 31, 2019, the Company held no properties as held-for-sale, where fair value was less than its carrying value. As of December 31, 2019, the Company held one property as held-for sale, where carrying amount of $576 was equal to fair value.
Fair value was determined by utilizing an external appraisal following the sales comparison approach. The fair value measurements are classified as Level 3 as the comparable sales and adjustments for the specific attributes of these properties are not market observable inputs.
38
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Bonds and Stocks
The carrying amounts and estimated fair value of investments in bonds and stocks are as follows:
Book Adjusted Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
December 31, 2019 |
||||||||||||||||
Bonds: |
||||||||||||||||
United States Government and agencies |
$ | 4,280,658 | $ | 775,293 | $ | 372 | $ | 5,055,579 | ||||||||
State, municipal and other government |
1,174,675 | 125,422 | 16,509 | 1,283,588 | ||||||||||||
Hybrid securities |
271,982 | 42,062 | 1,464 | 312,580 | ||||||||||||
Industrial and miscellaneous |
15,555,330 | 2,013,749 | 42,420 | 17,526,659 | ||||||||||||
Mortgage and other asset-backed securities |
4,129,822 | 351,694 | 15,727 | 4,465,789 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total unaffiliated bonds |
25,412,467 | 3,308,220 | 76,492 | 28,644,195 | ||||||||||||
Unaffiliated preferred stocks |
111,630 | 6,330 | 8,115 | 109,845 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 25,524,097 | $ | 3,314,550 | $ | 84,607 | $ | 28,754,040 | |||||||||
|
|
|
|
|
|
|
|
Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated common stocks |
$ | 58,311 | $ | 22,545 | $ | 67 | $ | 80,789 | ||||||||
|
|
|
|
|
|
|
|
Book Adjusted Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
December 31, 2018 |
||||||||||||||||
Bonds: |
||||||||||||||||
United States Government and agencies |
$ | 6,578,120 | $ | 277,575 | $ | 121,838 | $ | 6,733,857 | ||||||||
State, municipal and other government |
761,458 | 35,634 | 19,456 | 777,636 | ||||||||||||
Hybrid securities |
260,707 | 13,182 | 8,417 | 265,472 | ||||||||||||
Industrial and miscellaneous |
15,824,266 | 731,481 | 383,320 | 16,172,427 | ||||||||||||
Mortgage and other asset-backed securities |
4,202,584 | 265,837 | 65,457 | 4,402,964 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total unaffiliated bonds |
27,627,135 | 1,323,709 | 598,488 | 28,352,356 | ||||||||||||
Unaffiliated preferred stocks |
104,793 | 3,022 | 10,003 | 97,812 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 27,731,928 | $ | 1,326,731 | $ | 608,491 | $ | 28,450,168 | |||||||||
|
|
|
|
|
|
|
|
Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated common stocks |
$ | 154,552 | $ | 18,557 | $ | 1,130 | $ | 171,979 | ||||||||
|
|
|
|
|
|
|
|
39
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The carrying amount and estimated fair value of bonds at December 31, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
2019 | ||||||||
December 31: | Carrying Value | Fair Value | ||||||
Due in one year or less |
$ | 715,115 | $ | 721,686 | ||||
Due after one year through five years |
4,446,683 | 4,713,256 | ||||||
Due after five years through ten years |
5,108,090 | 5,808,153 | ||||||
Due after ten years |
11,012,757 | 12,935,311 | ||||||
|
|
|
|
|||||
21,282,645 | 24,178,406 | |||||||
Mortgage and other asset-backed securities |
4,129,822 | 4,465,789 | ||||||
|
|
|
|
|||||
$ | 25,412,467 | $ | 28,644,195 | |||||
|
|
|
|
The estimated fair value of bonds, preferred stocks and common stocks with gross unrealized losses at December 31, 2019 and 2018 is as follows:
2019 | ||||||||||||||||
Equal to or Greater than 12 Months |
Less than 12 Months | |||||||||||||||
Estimated Fair Value |
Gross Unrealized Losses |
Estimated Fair Value |
Gross Unrealized Losses |
|||||||||||||
United States Government and agencies |
$ | 896 | $ | 4 | $ | 10,513 | $ | 368 | ||||||||
State, municipal and other government |
37,638 | 10,695 | 96,166 | 5,814 | ||||||||||||
Hybrid securities |
18,613 | 1,464 | | | ||||||||||||
Industrial and miscellaneous |
349,475 | 31,808 | 398,580 | 10,612 | ||||||||||||
Mortgage and other asset-backed securities |
217,019 | 12,486 | 503,736 | 3,241 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total bonds |
623,641 | 56,457 | 1,008,995 | 20,035 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred stocks-unaffiliated |
47,696 | 8,025 | 4,511 | 90 | ||||||||||||
Common stocks-unaffiliated |
| | 739 | 67 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 671,337 | $ | 64,482 | $ | 1,014,245 | $ | 20,192 | |||||||||
|
|
|
|
|
|
|
|
40
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 | ||||||||||||||||
Equal to or Greater than 12 Months |
Less than 12 Months | |||||||||||||||
Estimated Fair Value |
Gross Unrealized Losses |
Estimated Fair Value |
Gross Unrealized Losses |
|||||||||||||
United States Government and agencies |
$ | 415,707 | $ | 25,873 | $ | 3,771,379 | $ | 95,965 | ||||||||
State, municipal and other government |
84,973 | 6,723 | 192,550 | 12,733 | ||||||||||||
Hybrid securities |
13,815 | 2,063 | 114,678 | 6,354 | ||||||||||||
Industrial and miscellaneous |
1,584,834 | 141,445 | 4,936,668 | 241,875 | ||||||||||||
Mortgage and other asset-backed securities |
796,932 | 39,004 | 828,836 | 26,453 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total bonds |
2,896,261 | 215,108 | 9,844,111 | 383,380 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred stocks-unaffiliated |
23,579 | 6,575 | 38,576 | 3,428 | ||||||||||||
Common stocks-unaffiliated |
| | 11,083 | 1,130 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$2,919,840 | $221,683 | $9,893,770 | $387,938 | |||||||||||||
|
|
|
|
|
|
|
|
During 2019, there were $4,294 of loan-backed or structured securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold for a period of time to recover the amortized cost basis. During 2018 and 2017, there were no loan-backed or structured securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold for a period of time to recover the amortized cost basis.
For loan-backed and structured securities with a recognized OTTI due to the Companys cash flow analysis, in which the security is written down to estimated future cash flows discounted at the securitys effective yield, in 2019, 2018 and 2017 the Company recognized OTTI of $5,546, $4,339 and $7,960, respectively.
41
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following loan-backed and structured securities were held at December 31, 2019, for which an OTTI was recognized during the current reporting period:
CUSIP |
Amortized Cost Before Current Period OTTI |
Present Value of Projected Cash Flows |
Recognized OTTI |
Amortized Cost After OTTI |
Fair Value at Time of OTTI |
Date of Financial Statement Where Reported |
||||||||||||||||||
87266TAJ1 |
$ | 1,299 | $ | 1,056 | $ | 243 | $ | 1,056 | $ | 869 | 3/31/2019 | |||||||||||||
79548KXQ6 |
295 | 271 | 24 | 271 | 228 | 3/31/2019 | ||||||||||||||||||
14984WAA8 |
1,399 | 1,295 | 104 | 1,295 | 1,295 | 6/30/2019 | ||||||||||||||||||
87266TAJ1 |
587 | 484 | 103 | 484 | 387 | 6/30/2019 | ||||||||||||||||||
79548KXQ6 |
250 | 250 | | 250 | 209 | 6/30/2019 | ||||||||||||||||||
41161PPQ0 |
19,646 | 18,718 | 928 | 18,718 | 17,362 | 9/30/2019 | ||||||||||||||||||
36828QQK5 |
2,493 | 2,237 | 256 | 2,237 | 1,754 | 9/30/2019 | ||||||||||||||||||
79548KXQ6 |
221 | 203 | 18 | 203 | 58 | 9/30/2019 | ||||||||||||||||||
126671ZS8 |
4 | 4 | | 4 | 4 | 9/30/2019 | ||||||||||||||||||
585525ES3 |
491 | 480 | 11 | 480 | 424 | 9/30/2019 | ||||||||||||||||||
15032GAC8 |
2,245 | 2,245 | | 2,245 | 2,245 | 9/30/2019 | ||||||||||||||||||
41161PPQ0 |
18,422 | 18,368 | 54 | 18,368 | 16,944 | 12/31/2019 | ||||||||||||||||||
36828QQK5 |
2,237 | 1,134 | 1,103 | 1,134 | 1,751 | 12/31/2019 | ||||||||||||||||||
52108MDN0 |
3,049 | 366 | 2,683 | 366 | 1,870 | 12/31/2019 | ||||||||||||||||||
22541SGE2 |
432 | 417 | 15 | 417 | 426 | 12/31/2019 | ||||||||||||||||||
585525ES3 |
428 | 424 | 4 | 424 | 381 | 12/31/2019 | ||||||||||||||||||
|
|
|||||||||||||||||||||||
$ | 5,546 | |||||||||||||||||||||||
|
|
The unrealized losses of loan-backed and structured securities where fair value is less than cost or amortized cost for which an OTTI has not been recognized in earnings as of December 31, 2019 and 2018 is as follows:
2019 | 2018 | |||||||||||||||
Losses 12 Months or More |
Losses Less Than 12 Months |
Losses 12 Months or More |
Losses Less Than 12 Months |
|||||||||||||
Year ended December 31: |
||||||||||||||||
The aggregate amount of unrealized losses |
$ | 12,486 | $ | 15,728 | $ | 39,004 | $40,117 | |||||||||
The aggregate related fair value of securities with unrealized losses |
217,019 | 517,385 | 796,932 | 850,568 |
At December 31, 2019 and 2018, respectively, for bonds and preferred stocks that have been in a continuous loss position for greater than or equal to twelve months, the Company held 199 and 663 securities with a carrying amount of $735,818 and $3,141,523, and an unrealized loss of $64,482 and $221,683. Of this portfolio, 65.2% and 90.7% were investment grade with associated unrealized losses of $19,696 and $165,913, respectively.
At December 31, 2019 and 2018, respectively, for bonds and preferred stocks that have been in a continuous loss position for less than twelve months, the Company held 245 and 1,411 securities with a carrying amount of $1,033,633 and $10,269,495 and an unrealized loss of $20,125 and $386,809. Of this portfolio, 91.1% and 89.7% were investment grade with associated unrealized losses of $11,888 and $302,186, respectively.
42
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019 and 2018, there were no common stocks that have been in a continuous loss position for greater than or equal to twelve months.
At December 31, 2019 and 2018, respectively, for common stocks that have been in a continuous loss position for less than twelve months, the Company held 7 and 13 securities with a cost of $807 and $12,212 and an unrealized loss of $67 and $1,130.
The following table provides the number of 5GI securities, aggregate book adjusted carrying value and aggregate fair value by investment type:
Number of 5GI Securities |
Book / Adjusted Carrying Value |
Fair Value | ||||||||||
December 31, 2019 |
||||||||||||
Bond, amortized cost |
2 | $ | 18,813 | $ | 18,169 | |||||||
Loan-backed and structured securities, amortized cost |
3 | 6,719 | 6,719 | |||||||||
Preferred stock, amortized cost |
1 | 996 | 996 | |||||||||
|
|
|
|
|
|
|||||||
Total |
6 | $ | 26,528 | $ | 25,884 | |||||||
|
|
|
|
|
|
|||||||
December 31, 2018 |
||||||||||||
Bond, amortized cost |
3 | $ | 29,647 | $ | 29,725 | |||||||
Loan-backed and structured securities, amortized cost |
1 | 8 | 8 | |||||||||
Preferred stock, amortized cost |
1 | 2,996 | 2,996 | |||||||||
|
|
|
|
|
|
|||||||
Total |
5 | $ | 32,651 | $ | 32,729 | |||||||
|
|
|
|
|
|
The tables below present the Companys gross and net receivable for securities and borrowed money financial statement line items that were subject to offsetting:
December 31, 2019 | Gross Amount Recognized |
Amount Offset | Net Amount Presented on Financial Statements |
|||||||||
Assets: |
||||||||||||
Receivables for securities |
$ | 120,009 | $ | 101,474 | $ | 18,535 | ||||||
Liabilities: |
||||||||||||
Borrowed money |
$ | 550,303 | $ | 101,474 | $ | 448,829 |
43
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | Gross Amount Recognized |
Amount Offset | Net Amount Presented on Financial Statements |
|||||||||
Assets: |
||||||||||||
Receivables for securities |
$ | 273,566 | $ | 149,607 | $ | 123,959 | ||||||
Liabilities: |
||||||||||||
Borrowed money |
$ | 353,860 | $ | 149,607 | $ | 204,253 |
During 2019 and 2018, the Company sold, redeemed or otherwise disposed of 175 and 159 securities as a result of a callable feature which generated investment income of $13,296 and $18,683 as a result of a prepayment penalty and/or acceleration fee.
Proceeds from sales and other disposals of bonds and preferred stock and related gross realized capital gains and losses are reflected in the following table. The amounts exclude maturities and include transfers associated with reinsurance agreements.
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Proceeds |
$ | 13,048,390 | $ | 5,928,234 | $ | 18,171,710 | ||||||
|
|
|
|
|
|
|||||||
Gross realized gains |
$ | 133,153 | $ | 86,626 | $ | 2,375,500 | ||||||
Gross realized losses |
(37,677 | ) | (209,899 | ) | (151,723 | ) | ||||||
|
|
|
|
|
|
|||||||
Net realized capital gains (losses) |
$ | 95,476 | $ | (123,273 | ) | $ | 2,223,777 | |||||
|
|
|
|
|
|
The Company had gross realized losses, which relate to losses recognized on other-than-temporary declines in the fair value of bonds and preferred stocks, for the years ended December 31, 2019, 2018 and 2017 of $30,802, $10,795 and $19,101, respectively.
At December 31, 2019 and 2018, the Company had no investments in restructured securities.
44
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Mortgage Loans
The credit quality of mortgage loans by type of property for the years ended December 31, 2019 and 2018 were as follows:
December 31, 2019 |
||||||||||||
Farm | Commercial | Total | ||||||||||
AAA - AA |
$ | 10,519 | $ | 3,000,254 | $ | 3,010,773 | ||||||
A |
31,600 | 1,812,978 | 1,844,578 | |||||||||
BBB |
6,458 | 217,779 | 224,237 | |||||||||
BB |
8,536 | 4,089 | 12,625 | |||||||||
B |
| 4,400 | 4,400 | |||||||||
|
|
|
|
|
|
|||||||
$ | 57,113 | $ | 5,039,500 | $ | 5,096,613 | |||||||
|
|
|
|
|
|
December 31, 2018 |
||||||||||||
Farm | Commercial | Total | ||||||||||
AAA - AA |
$ | 219 | $ | 2,635,041 | $ | 2,635,260 | ||||||
A |
42,814 | 1,745,127 | 1,787,941 | |||||||||
BBB |
6,690 | 157,753 | 164,443 | |||||||||
BB |
8,730 | 4,119 | 12,849 | |||||||||
B |
| | | |||||||||
|
|
|
|
|
|
|||||||
$ | 58,453 | $ | 4,542,040 | $ | 4,600,493 | |||||||
|
|
|
|
|
|
The credit quality for commercial and farm mortgage loans was determined based on an internal credit rating model which assigns a letter rating to each mortgage loan in the portfolio as an indicator of the credit quality of the mortgage loan. The internal credit rating model was designed based on rating agency methodology, then modified for credit risk associated with the Companys mortgage lending process, taking into account such factors as projected future cash flows, net operating income, and collateral value. The model produces a credit rating score and an associated letter rating which is intended to align with S&P ratings as closely as possible. Information supporting the credit risk rating process is updated at least annually.
During 2019, the Company issued mortgage loans with a maximum interest rate of 5.52% and a minimum interest rate of 3.50% for commercial loans. The maximum percentage of any one mortgage loan to the value of the underlying real estate originated or acquired during the year ending December 31, 2019 at the time of origination was 82%. During 2018, the Company issued mortgage loans with a maximum interest rate of 5.57% and a minimum interest rate of 3.95% for commercial loans. The maximum percentage of any one mortgage loan to the value of the underlying real estate originated or acquired during the year ending December 31, 2018 at the time of origination was 69%.
During 2019 and 2018, the Company did not reduce the interest rate on any outstanding mortgage loans.
45
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The age analysis of mortgage loans and identification in which the Company is a participant or co-lender in a mortgage loan agreement is as follows for December 31, 2019 and 2018.
Commercial | ||||||||||||
Farm | All Other | Total | ||||||||||
December 31, 2019 |
||||||||||||
Recorded Investment (All) |
||||||||||||
(a) Current |
$ | 57,113 | $ | 4,958,605 | $ | 5,015,718 | ||||||
(b) 30-59 Days Past Due |
| | | |||||||||
(c) 60-89 Days Past Due |
| | | |||||||||
(d) 90-179 Days Past Due |
| | | |||||||||
(e) 180+ Days Past Due |
| 80,895 | 80,895 | |||||||||
Accruing interest 90-179 days past due |
||||||||||||
(a) Recorded investment |
| | | |||||||||
(b) Interest accrued |
| | | |||||||||
Participant or Co-lender in Mortgage Loan Agreement |
||||||||||||
(a) Recorded Investment |
$ | 33,658 | $ | 1,483,157 | $ | 1,516,815 |
Commercial | ||||||||||||
Farm | All Other | Total | ||||||||||
December 31, 2018 |
||||||||||||
Recorded Investment (All) |
||||||||||||
(a) Current |
$ | 50,576 | $ | 4,461,023 | $ | 4,511,599 | ||||||
(b) 30-59 Days Past Due |
| | | |||||||||
(c) 60-89 Days Past Due |
| 57,005 | 57,005 | |||||||||
(d) 90-179 Days Past Due |
7,875 | | 7,875 | |||||||||
(e) 180+ Days Past Due |
| 24,014 | 24,014 | |||||||||
Accruing interest 90-179 days past due |
||||||||||||
(a) Recorded investment |
7,876 | | 7,876 | |||||||||
(b) Interest accrued |
96 | | 96 | |||||||||
Participant or Co-lender in Mortgage Loan Agreement |
||||||||||||
(a) Recorded Investment |
$ | 31,524 | $ | 1,286,604 | $ | 1,318,128 |
At December 31, 2019 and 2018, respectively, multiple mortgage loans with a carrying value of $80,895 and $24,014 were non-income producing for the previous 180 days. There was no accrued interest related to these mortgage loans at December 31, 2019 and 2018. The Company has a mortgage or deed of trust on the property thereby creating a lien which gives it the right to take possession of the property (among other things) if the borrower fails to perform according to the terms of the loan documents. The Company requires all mortgaged properties to carry fire insurance equal to the value of the underlying property. At December 31, 2019 and 2018, there were no taxes, assessments and other amounts advanced and not included in the mortgage loan total.
At December 31, 2019 and 2018, the Company held no impaired loans with related allowance for credit losses. There were no impaired mortgage loans held without an allowance for credit losses as of December 31, 2019 and 2018, respectively. There were no impaired mortgage loans held without an allowance for credit losses as of December 31, 2019 and 2018, respectively, that were subject to participant or co-lender mortgage loan agreement for which the Company is restricted from unilaterally foreclosing on the mortgage loans. The average recorded investment in impaired loans during 2019 and 2018 was $0 and $49,118, respectively.
46
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table provides a reconciliation of the beginning and ending balances for the allowance for credit losses on mortgage loans:
Year Ended December 31 |
||||||||||||
2019 | 2018 | 2017 | ||||||||||
Balance at beginning of period |
$ | | $ | 26,618 | $ | 1,421 | ||||||
Additions, net charged to operations |
| | 26,618 | |||||||||
Recoveries in amounts previously charged off |
| (26,618 | ) | (1,421 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at end of period |
$ | | $ | | $ | 26,618 | ||||||
|
|
|
|
|
|
As of December 31, 2019 and 2018, the Company had no mortgage loans derecognized as a result of foreclosure.
The Company accrues interest income on impaired loans to the extent deemed collectible (delinquent less than 91 days) and the loan continues to perform under its original or restructured contractual terms. Interest income on nonperforming loans generally is recognized on a cash basis. For the years ended December 31, 2019, 2018 and 2017, respectively, the Company recognized $0, $852 and $5,359 of interest income on impaired loans. Interest income of $0, $860 and $2,806, respectively, was recognized on a cash basis for the years ended December 31, 2019, 2018 and 2017.
At December 31, 2019 and 2018, the Company held a mortgage loan loss reserve in the AVR of $69,202 and $46,436, respectively.
The Companys mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:
Geographic Distribution |
Property Type Distribution |
|||||||||||||||||
December 31 |
December 31 |
|||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
Pacific |
25 | % | 28 | % | Apartment | 47 | % | 47 | % | |||||||||
South Atlantic |
23 | 22 | Retail | 19 | 21 | |||||||||||||
Middle Atlantic |
16 | 16 | Office | 15 | 16 | |||||||||||||
E. North Central |
9 | 8 | Industrial | 15 | 12 | |||||||||||||
W. North Central |
8 | 8 | Other | 2 | 2 | |||||||||||||
W. South Central |
8 | 7 | Agricultural | 1 | 1 | |||||||||||||
Mountain |
7 | 6 | Medical | 1 | 1 | |||||||||||||
E. South Central |
3 | 4 | ||||||||||||||||
New England |
1 | 1 |
47
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019, 2018 and 2017, the Company had mortgage loans with a total net admitted asset value of $20,550, $23,144 and $83,445, respectively, which had been restructured in accordance with SSAP No. 36, Troubled Debt Restructuring. There were no realized losses during the years ended December 31, 2019, 2018 and 2017 related to such restructurings. At December 31, 2019 and 2018, there were no commitments to lend additional funds to debtors owing receivables.
Real Estate
The fair value of property is determined based on an appraisal from a third-party appraiser, along with information obtained from discussions with internal asset managers and a listing broker regarding recent comparable sales data and other relevant property information. Impairment losses of $5,078, $26,231 and $4,033 were taken on real estate in 2019, 2018 and 2017, respectively, to write the book value down to the current fair value, and included in net realized capital gains (losses), within the Statements of Operations, for the year ended December 31, 2019.
As of December 31, 2019, there were four properties classified as held for sale. As of December 31, 2018, there were nine properties classified as held for sale. The Company is working with an external commercial real estate advisor firm to actively market the properties and negotiate with potential buyers. During 2019, one property classified as held for sale was disposed of resulting in a net realized gain of $1,788. During 2018, six properties classified as held for sale were disposed of resulting in a net realized gain of $4,579. These gains and losses were included in net realized capital gains (losses) within the Statements of Operations.
The Company also disposed of other properties during 2019 and 2018 resulting in net realized gains of $9,047 and $26,756, respectively.
The carrying value of the Companys real estate assets at December 31, 2019 and 2018 was as follows:
2019 | 2018 | |||||||
Home office properties |
$ | 45,831 | $ | 52,466 | ||||
Investment properties |
| 18,953 | ||||||
Properties held for sale |
5,715 | 43,027 | ||||||
|
|
|
|
|||||
$ | 51,546 | $ | 114,446 | |||||
|
|
|
|
Accumulated depreciation on real estate at December 31, 2019 and 2018, was $47,188 and $72,083, respectively.
Other Invested Assets
During 2019, the Company recorded impairments of $5,488, $3,363, and $13,867 throughout 2019, 2018 and 2017. These impairments were primarily related to private equity funds, except for 2017, which also included an impairment for a tax credit fund. The impairments were taken because the decline in fair value of the funds were deemed to be other than temporary and a recovery in value from the remaining underlying investments in the funds were not anticipated.
48
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
These write-downs are included in net realized capital gains (losses) within the Statements of Operations.
During 2017, the Company reassigned its ownership interest in the Prisma Spectrum Fund for an additional interest in the Zero Beta Fund in the amount of $125,036, which resulted in a realized gain of $19,443.
Tax Credits
At December 31, 2019, the Company had ownership interests in forty-six LIHTC investments with a carrying value of $58,163. The remaining years of unexpired tax credits ranged from one to twelve, and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to sixteen years. The amount of contingent equity commitments expected to be paid during the years 2020 to 2029 is $26,728. Tax credits recognized in 2019 were $81,690, and other tax benefits recognized in 2019 were $2,795. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.
At December 31, 2018, the Company had ownership interests in forty-seven LIHTC investments with a carrying value of $33,212. The remaining years of unexpired tax credits ranged from one to eleven, and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to sixteen years. The amount of contingent equity commitments expected to be paid during the years 2019 to 2029 is $55,107. Tax credits recognized during 2018 was $76,141. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.
The following tables provide the carrying value of transferable state tax credits gross of any related tax liabilities and total unused transferable tax credits by state and in total as of December 31, 2019 and 2018:
December 31, 2019 | ||||||||||
Description of State Transferable and Non- transferable Tax Credits |
State | Carrying Value | Unused Amount* | |||||||
Low-Income Housing Tax Credits |
MA | $ | 2,683 | $ | 5,024 | |||||
Economic Redevelopment and Growth Tax Credits |
NJ | 5,281 | 20,948 | |||||||
|
|
|
|
|||||||
Total |
$ | 7,964 | $ | 25,972 | ||||||
|
|
|
|
December 31, 2018 | ||||||||||
Description of State Transferable and Non- transferable Tax Credits |
State | Carrying Value | Unused Amount | |||||||
Low-Income Housing Tax Credits |
MA | $ | 3,880 | $ | 6,220 | |||||
Economic Redevelopment and Growth Tax Credits |
NJ | 3,994 | 20,948 | |||||||
|
|
|
|
|||||||
Total |
$ | 7,874 | $ | 27,168 | ||||||
|
|
|
|
* | The unused amount reflects credits that the Company deems will be realizable in the period 2019-2030. |
The Company did not have any non-transferable state tax credits.
49
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company estimated the utilization of the remaining state transferable tax credits by projecting a future tax liability based on projected premium, tax rates and tax credits, and comparing the projected future tax liability to the availability of remaining state transferable tax credits. The Company had no impairment losses related to state transferable tax credits.
Derivatives
Amounts disclosed in this Derivatives section do not include derivatives utilized in the hedging of variable annuity guarantees in accordance with SSAP 108. Please see the subsequent section Derivatives Hedging Variable Annuity Guarantees for results associated with those derivatives.
The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets (cash or securities) on the Companys behalf in an amount equal to the difference between the net positive fair value of the contracts and an agreed upon threshold based on the credit rating of the counterparty. If the net fair value of all contracts with this counterparty is negative, then the Company is required to post similar assets (cash or securities). Fair value of derivative contracts, aggregated at a counterparty level at December 31, 2019 and 2018 was as follows:
2019 | 2018 | |||||||
Fair value - positive |
$ | 647,378 | $ | 2,285,546 | ||||
Fair value - negative |
(646,157 | ) | (934,798 | ) |
At December 31, 2019, 2018 and 2017, the Company has recorded unrealized gains (losses) of ($257,972), $858,229 and ($131,678), respectively, for the component of derivative instruments utilized for hedging purposes that did not qualify for hedge accounting. The Company did not recognize any unrealized gains or losses during 2019, 2018 and 2017 that represented the component of derivative instruments gain or loss that was excluded from the assessment of hedge effectiveness.
The maximum term over which the Company is hedging its exposure to the variability of future cash flows is approximately 24 years for forecasted hedge transactions. At December 31, 2019 and 2018, none of the Companys cash flow hedges have been discontinued as it was probable that the original forecasted transactions would occur by the end of the originally specified time period documented at inception of the hedging relationship. As of December 31, 2019 and 2018, the Company has accumulated deferred gains in the amount of $2,334 and $0, respectively, related to the termination of swaps that were hedging forecasted transactions. It is expected that these gains will be used as basis adjustments on future asset purchases expected to transpire throughout 2020.
50
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Summary of realized gains (losses) by derivative type for the years ended December 31, 2019, 2018 and 2017:
2019 | 2018 | 2017 | ||||||||||
Options: |
||||||||||||
Calls |
$ | (15,424 | ) | $ | 59,693 | $ | 2,473 | |||||
Caps |
| | (1,203 | ) | ||||||||
Puts |
| (26,491 | ) | (7,634 | ) | |||||||
|
|
|
|
|
|
|||||||
Total options |
$ | (15,424 | ) | $ | 33,202 | $ | (6,364 | ) | ||||
|
|
|
|
|
|
|||||||
Swaps: |
||||||||||||
Interest rate |
$ | 95,162 | $ | (299,024 | ) | $ | 307,519 | |||||
Credit |
(3,099 | ) | (14,288 | ) | 8,209 | |||||||
Total return |
(611,814 | ) | (205,341 | ) | (1,443,432 | ) | ||||||
|
|
|
|
|
|
|||||||
Total swaps |
$ | (519,751 | ) | $ | (518,653 | ) | $ | (1,127,704 | ) | |||
|
|
|
|
|
|
|||||||
Futuresnet positions |
535,875 | (310,914 | ) | 60,205 | ||||||||
Lehman settlements |
106 | 537 | 1,195 | |||||||||
|
|
|
|
|
|
|||||||
Total realized gains (losses) |
$ | 806 | $ | (795,828 | ) | $ | (1,072,668 | ) | ||||
|
|
|
|
|
|
The average estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019 and 2018:
Asset(1) | Liability(1) | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative component of RSATs |
||||||||||||||||
Credit default swaps |
$ | 56,455 | $ | 55,387 | $ | (9,504 | ) $ | (6,341 | ) | |||||||
Interest rate swaps |
3,225 | 1,650 | | 8,598 |
(1) | Asset and liability classification is based on the positive (asset) or negative (liability) book/adjusted carrying value of each derivative. |
The estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019 and 2018:
Asset(1) | Liability(1) | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative component of RSATs |
||||||||||||||||
Credit default swaps |
$ | 59,599 | $ | 43,455 | $ | (11,589 | ) | $ | (1,309 | ) | ||||||
Interest rate swaps |
3,972 | 2,188 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 63,571 | $ | 45,643 | $ | (11,589 | ) | $ | (1,309 | ) | ||||||
|
|
|
|
|
|
|
|
(1) | Asset and liability classification is based on the positive (asset) or negative (liability) book/adjusted carrying value of each derivative. |
51
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The net realized gains (losses) on the derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019, 2018 and 2017:
2019 | 2018 | 2017 | ||||||||||
Derivative component of RSATs |
||||||||||||
Credit default swaps |
$ | (3,099 | ) | $ | (4,476 | ) | $ | 8,209 | ||||
Interest rate swaps |
| (8,207 | ) | (59,357 | ) | |||||||
|
|
|
|
|
|
|||||||
Total |
$ | (3,099 | ) | $ | (12,683 | ) | $ | (51,148 | ) | |||
|
|
|
|
|
|
As stated in Note 2, the Company replicates investment grade corporate bonds, sovereign debt, or commercial mortgage backed securities by writing credit default swaps. As a writer of credit swaps, the Company actively monitors the underlying asset, being careful to note any events (default or similar credit event) that would require the Company to perform on the credit swap. If such events would take place, a payment equal to the notional amount of the contract, less any potential recoveries as determined by the underlying agreement, will be made by the Company to the counterparty to the swap.
The following tables present the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at December 31, 2019 and 2018:
2019 | ||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations (1) |
NAIC Designation |
Estimated Fair Value of Credit Default Swaps |
Maximum Amount of Future Payments under Credit Default Swaps |
Weighted Average Years to Maturity (2) |
||||||||||||
AAA/AA/A |
1 | |||||||||||||||
Single name credit default swaps (3) |
$ | 6,522 | $ | 441,000 | 1.9 | |||||||||||
Credit default swaps referencing indices |
108 | 10,000 | 39.9 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
6,630 | 451,000 | 2.7 | |||||||||||||
|
|
|
|
|||||||||||||
BBB |
2 | |||||||||||||||
Single name credit default swaps (3) |
41,004 | 1,781,035 | 1.8 | |||||||||||||
Credit default swaps referencing indices |
23,093 | 1,192,624 | 2.9 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
64,097 | 2,973,659 | 2.3 | |||||||||||||
|
|
|
|
|||||||||||||
BB |
3 | |||||||||||||||
Single name credit default swaps (3) |
462 | 50,000 | 1.2 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
462 | 50,000 | 1.2 | |||||||||||||
|
|
|
|
|||||||||||||
Total |
$ | 71,189 | $ | 3,474,659 | 2.3 | |||||||||||
|
|
|
|
(1) | The rating agency designations are based on availability and the blending of the applicable ratings among Moodys Investors Service (Moodys), Standard and Poors Rating Services (S&P), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used. |
(2) | The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. |
(3) | Includes corporate, foreign government and state entities. |
52
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 | ||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations (1) |
NAIC Designation |
Estimated Fair Value of Credit Default Swaps |
Maximum Amount of Future Payments under Credit Default Swaps |
Weighted Average Years to Maturity (2) |
||||||||||||
AAA/AA/A |
1 | |||||||||||||||
Single name credit default swaps (3) |
$ | 5,534 | $ | 468,085 | 2.6 | |||||||||||
Credit default swaps referencing indices |
(109 | ) | 10,000 | 40.9 | ||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
5,425 | 478,085 | 3.4 | |||||||||||||
|
|
|
|
|||||||||||||
BBB |
2 | |||||||||||||||
Single name credit default swaps (3) |
32,228 | 1,905,450 | 2.7 | |||||||||||||
Credit default swaps referencing indices |
7,806 | 907,000 | 3.3 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
40,034 | 2,812,450 | 2.9 | |||||||||||||
|
|
|
|
|||||||||||||
BB |
3 | |||||||||||||||
Single name credit default swaps (3) |
2,427 | 145,500 | 2.7 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
2,427 | 145,500 | 2.7 | |||||||||||||
|
|
|
|
|||||||||||||
B |
4 | |||||||||||||||
Single name credit default swaps (3) |
(2,809 | ) | 27,000 | 2.7 | ||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
(2,809 | ) | 27,000 | 2.7 | ||||||||||||
|
|
|
|
|||||||||||||
CCC and lower |
5 | |||||||||||||||
Single name credit default swaps (3) |
(312 | ) | 5,000 | 1.0 | ||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
(312 | ) | 5,000 | 1.0 | ||||||||||||
|
|
|
|
|||||||||||||
Total |
$ | 44,765 | $ | 3,468,035 | 2.9 | |||||||||||
|
|
|
|
(1) | The rating agency designations are based on availability and the blending of the applicable ratings among Moodys Investors Service (Moodys), Standard and Poors Rating Services (S&P), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used. |
(2) | The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. |
(3) | Includes corporate, foreign government and state entities. |
The Company may enter into credit default swaps to purchase credit protection on certain of the referenced credit obligations in the table above. At December 31, 2019, the maximum amounts of potential future recoveries available to offset the $3,474,659 from the table above were $0. At December 31, 2018, the maximum amounts of potential future recoveries available to offset the $3,468,035 from the table above were $0.
53
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019 and 2018, the Companys outstanding derivative instruments, shown in notional or contract amounts and fair value, are summarized as follows:
Contract or Notional Amount* | Fair Value | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative assets: |
||||||||||||||||
Credit default swaps |
$ | 2,402,624 | $ | 2,509,467 | $ | 59,599 | $ | 52,360 | ||||||||
Currency swaps |
88,501 | 129,622 | 8,929 | 15,288 | ||||||||||||
Equity futures |
| 22 | 686 | 20,189 | ||||||||||||
Equity swaps |
209,341 | 3,706,430 | 55 | 281,457 | ||||||||||||
Interest rate futures |
| 38 | | 20,639 | ||||||||||||
Interest rate swaps |
33,735 | 24,881,535 | 5,147 | 710,817 | ||||||||||||
Options |
21,196,796 | 23,094,442 | 311,739 | 996,427 | ||||||||||||
Derivative liabilities: |
||||||||||||||||
Credit default swaps |
1,446,000 | 1,318,568 | (3,740 | ) | (1,309 | ) | ||||||||||
Currency swaps |
142,704 | 18,459 | 2,279 | 1,706 | ||||||||||||
Equity futures |
(12 | ) | (1 | ) | 5,673 | 1,239 | ||||||||||
Equity swaps |
4,823,034 | 145,269 | 211,606 | 16,890 | ||||||||||||
Interest rate futures |
| (19 | ) | | 6,999 | |||||||||||
Interest rate swaps |
3,366,493 | 15,261,493 | 17,420 | 376,095 | ||||||||||||
Options |
(3,676,923 | ) | (3,815,570 | ) | 151,696 | 344,808 |
* | Futures are presented in contract format. Swaps and options are presented in notional format. |
Derivatives Hedging Variable Annuity Guarantees
The hedged obligation consists of guaranteed benefits on variable annuity contracts and resembles a long dated put option where claim payment is made whenever account value is less than a guaranteed amount, adjusted for applicable fees. Changes in interest rates impact the present value of future product cash flows (discount rate) as well as the value of investments comprising the account value to be assessed against the guarantee. Under this VM-21 compliant clearly defined hedging strategy (CDHS), interest rate risk may be hedged by a duration matched portfolio of interest sensitive derivatives such as treasury bond forwards, treasury futures, interest rate swaps, interest rate swaptions or treasury future options. The hedging strategy is unchanged from the prior reporting period, and the total return on the designated portfolio of derivatives has been highly effective in covering the interest rate risk (rho) of the hedged obligation. Hedge effectiveness is measured in accordance with the requirements outlined under SSAP 108 and entails assessment of the total return on the designated portfolio of derivatives against changes in the fair value of the hedged obligation due to interest rate movements on a cumulative basis.
54
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Scheduled amortization for SSAP 108 derivatives as of December 31, 2019 is as follows:
Amortization Year |
Deferred Assets | Deferred Liabilities | ||||||
2020 |
$ | 68,503 | $ | 18,702 | ||||
2021 |
60,234 | 18,702 | ||||||
2022 |
39,808 | 18,702 | ||||||
2023 |
39,808 | 18,702 | ||||||
2024 |
39,808 | 18,702 | ||||||
2025 |
39,808 | 18,702 | ||||||
2026 |
29,176 | 18,702 | ||||||
2027 |
22,720 | 18,702 | ||||||
2028 |
17,393 | 18,702 | ||||||
2029 |
20,155 | 14,028 | ||||||
|
|
|
|
|||||
Total |
$ | 377,413 | $ | 182,346 | ||||
|
|
|
|
As discussed in Note 2 and 3, the Company elected to adopt SSAP 108 effective July 1, 2019.
The following table is a reconciliation of the total deferred balance of SSAP 108 derivatives from the date of adoption through December 31, 2019. The beginning deferred balance was the deferral under a previous permitted practice described in Note 2.
1. | Total Deferred Balance, July 1, 2019 | $ | 189,601 | |||
2. | Current Year Amortization | 19,002 | ||||
3. | Current Year Deferred Recognition | (24,468 | ) | |||
|
|
|||||
4. | Ending Deferred Balance [1-(2+3)] | $ | 195,067 | |||
|
|
The following tables provide information regarding SSAP 108 hedging instruments:
12/31/2019 | 7/1/2019 | |||||||
Amortized cost |
$ | (51 | ) | $ | (53 | ) | ||
Fair value |
$ | 74,063 | $ | 447,385 |
Net Investment Income |
Realized Gain (Loss) |
Unrealized Gain (Loss) |
Total | |||||||||||||
Derivative performance |
$ | 23,639 | $ | 495,410 | $ | (373,324 | ) | $ | 145,725 | |||||||
SSAP 108 Adjustments |
||||||||||||||||
Portion of the derivative performance attributed to natural offset |
| (184,385 | ) | 14,192 | (170,193 | ) | ||||||||||
Deferred |
(23,639 | ) | (311,025 | ) | 359,132 | 24,468 |
55
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Prior year fair value of hedged item |
$ | (2,294,125 | ) | |
Current year fair value of hedged item |
(2,573,520 | ) | ||
|
|
|||
Change in fair value attributable to interest rates |
$ | (279,395 | ) | |
|
|
|||
Portion of the fair value change attributed to the hedged risk |
$ | (232,394 | ) | |
|
|
Restricted Assets
The following tables show the pledged or restricted assets as of December 31, 2019 and 2018, respectively:
Gross Restricted (Admitted & Nonadmitted) 2019 |
||||||||||||||||||||
Restricted Asset Category |
Total General Account (G/A) |
G/A Supporting Separate Account (S/A) |
Total S/A Restricted Assets |
S/A Assets Supporting G/A Activity |
Total | |||||||||||||||
Collateral held under security lending agreements |
$ | 1,246,827 | $ | | $ | | $ | | $ | 1,246,827 | ||||||||||
Subject to repurchase agreements |
113,025 | | | | 113,025 | |||||||||||||||
Subject to dollar repurchase agreements |
550,333 | | | | 550,333 | |||||||||||||||
FHLB capital stock |
42,800 | | | | 42,800 | |||||||||||||||
On deposit with states |
43,813 | | | | 43,813 | |||||||||||||||
Pledged as collateral to FHLB (including assets backing funding agreements) |
1,259,059 | | | | 1,259,059 | |||||||||||||||
Pledged as collateral not captured in other categories |
736,696 | | | | 736,696 | |||||||||||||||
Other restricted assets |
1,170,136 | | | | 1,170,136 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total restricted assets |
$ | 5,162,689 | $ | | $ | | $ | | $ | 5,162,689 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Gross (Admitted & Nonadmitted) Restricted | Percentage | |||||||||||||||||||||||
Restricted Asset Category |
Total From Prior Year (2018) |
Increase/ (Decrease) |
Total Nonadmitted Restricted |
Total Admitted Restricted |
Gross (Admitted & Nonadmitted) Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
||||||||||||||||||
Collateral held under security lending agreements |
$ | 1,842,557 | $ | (595,730 | ) | $ | | $ | 1,246,827 | 0.96 | % | 0.96 | % | |||||||||||
Subject to repurchase agreements |
205,405 | (92,380 | ) | | 113,025 | 0.09 | % | 0.09 | % | |||||||||||||||
Subject to dollar repurchase agreements |
371,260 | 179,073 | | 550,333 | 0.42 | % | 0.42 | % | ||||||||||||||||
FHLB capital stock |
133,400 | (90,600 | ) | | 42,800 | 0.03 | % | 0.03 | % | |||||||||||||||
On deposit with states |
43,908 | (95 | ) | | 43,813 | 0.03 | % | 0.03 | % | |||||||||||||||
Pledged as collateral to FHLB (including assets backing funding agreements) |
4,405,503 | (3,146,444 | ) | | 1,259,059 | 0.97 | % | 0.97 | % | |||||||||||||||
Pledged as collateral not captured in other categories |
687,891 | 48,805 | | 736,696 | 0.56 | % | 0.56 | % | ||||||||||||||||
Other restricted assets |
1,172,934 | (2,798 | ) | | 1,170,136 | 0.90 | % | 0.90 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total restricted assets |
$ | 8,862,858 | $ | (3,700,169 | ) | $ | | $ | 5,162,689 | 3.96 | % | 3.96 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The amounts reported as other restricted assets in the table above represent assets held in trust related to reinsurance.
56
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables show the pledged or restricted assets in other categories as of December 31, 2019 and 2018, respectively:
Gross (Admitted & Nonadmitted) Restricted 2019 |
||||||||||||||||||||
Description of Assets |
Total General Account (G/A) |
G/A Supporting S/A Activity |
Total Separate Account (S/A) Restricted Assets |
S/A Assets Supporting G/A Activity |
Total | |||||||||||||||
Derivatives |
$ | 728,018 | $ | | $ | | $ | | $ | 728,018 | ||||||||||
Secured funding agreements |
6,357 | | | | 6,357 | |||||||||||||||
AMBAC |
2,321 | | | | 2,321 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 736,696 | $ | | $ | | $ | | $ | 736,696 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Gross (Admitted & Nonadmitted) Restricted |
Percentage | |||||||||||||||||||
Description of Assets |
Total From Prior Year (2018) |
Increase/ (Decrease) |
Total Current Year Admitted Restricted |
Gross (Admitted & Nonadmitted) Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
|||||||||||||||
Derivatives |
$ | 638,025 | $ | 89,993 | $ | 728,018 | 0.56 | % | 0.56 | % | ||||||||||
Secured funding agreements |
46,723 | (40,366 | ) | 6,357 | 0.00 | % | 0.00 | % | ||||||||||||
AMBAC |
3,143 | (822 | ) | 2,321 | 0.00 | % | 0.00 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 687,891 | $ | 48,805 | $ | 736,696 | 0.56 | % | 0.56 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
The following tables show the collateral received and reflected as assets within the financial statements as of December 31, 2019 and 2018:
2019 |
||||||||||||||||
Collateral Assets |
Carrying Value |
Fair Value | Total Assets (Admitted and Nonadmitted) |
% of CV to Total Admitted Assets |
||||||||||||
Cash |
$ | 898,267 | $ | 898,267 | 2.02 | % | 2.02 | % | ||||||||
Securities lending collateral assets |
1,246,827 | 1,246,827 | 2.80 | 2.80 | ||||||||||||
Other |
35,199 | 35,199 | 0.08 | 0.08 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral assets |
$ | 2,180,293 | $ | 2,180,293 | 4.90 | % | 4.90 | % | ||||||||
|
|
|
|
|
|
|
|
Amount | % of Liability to Total Liabilities |
|||||||
Recognized obligation to return collateral asset |
$ | 2,181,672 | 5.75 | % |
57
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 |
||||||||||||||||
Collateral Assets |
Carrying Value |
Fair Value | Total Assets (Admitted and Nonadmitted) |
% of CV to Total Admitted Assets |
||||||||||||
Cash |
$ | 1,453,892 | $ | 1,453,892 | 3.05 | % | 3.06 | % | ||||||||
Securities lending collateral assets |
1,835,122 | 1,835,122 | 3.85 | 3.87 | ||||||||||||
Other |
5,999 | 5,999 | 0.01 | 0.01 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral assets |
$ | 3,295,013 | $ | 3,295,013 | 6.91 | % | 6.94 | % | ||||||||
|
|
|
|
|
|
|
|
Amount | % of Liability to Total Liabilities |
|||||||
Recognized obligation to return collateral asset |
$ | 3,296,139 | 8.01 | % |
Net Investment Income
Detail of net investment income is presented below:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Income: |
||||||||||||
Bonds |
$ | 1,185,232 | $ | 1,276,258 | $ | 1,660,465 | ||||||
Preferred stocks |
6,230 | 8,251 | 6,160 | |||||||||
Common stocks |
143,184 | 100,616 | 214,463 | |||||||||
Mortgage loans on real estate |
226,766 | 204,434 | 245,562 | |||||||||
Real estate |
21,899 | 20,190 | 20,862 | |||||||||
Policy loans |
67,366 | 69,773 | 72,733 | |||||||||
Cash, cash equivalents and short-term investments |
59,292 | 39,557 | 24,772 | |||||||||
Derivatives |
16,562 | 32,673 | 82,507 | |||||||||
Other invested assets |
49,846 | 73,164 | 295,840 | |||||||||
|
|
|
|
|
|
|||||||
Gross investment income |
1,776,377 | 1,824,916 | 2,623,364 | |||||||||
Less: investment expenses |
171,238 | 205,794 | 172,388 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income before amortization of IMR |
1,605,139 | 1,619,122 | 2,450,976 | |||||||||
Amortization of IMR |
39,186 | 48,050 | 65,306 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income |
$ | 1,644,325 | $ | 1,667,172 | $ | 2,516,282 | ||||||
|
|
|
|
|
|
58
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Realized Capital Gains (Losses)
Net realized capital gains (losses) on investments, including OTTI, are summarized below:
Realized | ||||||||||||
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Bonds |
$ | 62,739 | $ | (135,605 | ) | $ | 2,204,142 | |||||
Preferred stocks |
1,933 | 1,539 | 535 | |||||||||
Common stocks |
25,384 | (3,690 | ) | (1,978 | ) | |||||||
Mortgage loans on real estate |
388 | (25,696 | ) | 93,149 | ||||||||
Real estate |
5,756 | 5,104 | (4,101 | ) | ||||||||
Cash, cash equivalents and short-term investments |
239 | (51 | ) | (202 | ) | |||||||
Derivatives |
311,724 | (796,365 | ) | (1,073,863 | ) | |||||||
Variable annuity reserve hedge offset |
(159,833 | ) | | | ||||||||
Other invested assets |
82,951 | 113,854 | 118,984 | |||||||||
|
|
|
|
|
|
|||||||
Change in realized capital gains (losses), before taxes |
331,281 | (840,910 | ) | 1,336,666 | ||||||||
Federal income tax effect |
(43,047 | ) | 4,006 | (197,937 | ) | |||||||
Transfer from (to) interest maintenance reserve |
(47,710 | ) | 122,772 | (1,713,779 | ) | |||||||
|
|
|
|
|
|
|||||||
Net realized capital gains (losses) on investments |
$ | 240,524 | $ | (714,132 | ) | $ | (575,050 | ) | ||||
|
|
|
|
|
|
Unrealized Capital Gains (Losses)
The changes in net unrealized capital gains and losses on investments, including the changes in net unrealized foreign capital gains and losses were as follows:
Change in Unrealized | ||||||||||||
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Bonds |
$ | 48,719 | $ | 34,184 | $ | 65,937 | ||||||
Preferred stocks |
(2,504 | ) | (859 | ) | (564 | ) | ||||||
Common stocks |
5,052 | 1,874 | 1,468 | |||||||||
Affiliated entities |
447,273 | 157,530 | 398,521 | |||||||||
Mortgage loans on real estate |
| 26,618 | (25,197 | ) | ||||||||
Cash equivalents and short-term investments |
(31 | ) | 145 | 6 | ||||||||
Derivatives |
(761,219 | ) | 1,093,543 | (66,675 | ) | |||||||
Other invested assets |
18,228 | 32,164 | 182,596 | |||||||||
|
|
|
|
|
|
|||||||
Change in unrealized capital gains (losses), before taxes |
(244,482 | ) | 1,345,199 | 556,092 | ||||||||
Taxes on unrealized capital gains (losses) |
(82,980 | ) | (54,824 | ) | 123,327 | |||||||
|
|
|
|
|
|
|||||||
Change in unrealized capital gains (losses), net of tax |
$ | (327,462 | ) | $ | 1,290,375 | $ | 679,419 | |||||
|
|
|
|
|
|
59
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
6. Premium and Annuity Considerations Deferred and Uncollected
Deferred and uncollected life premium and annuity considerations, net of reinsurance, at December 31, 2019 and 2018 were as follows:
2019 | 2018 | |||||||||||||||
Gross | Net of Loading | Gross | Net of Loading | |||||||||||||
Life and annuity: |
||||||||||||||||
Ordinary first-year business |
$ | 1,003 | $ | 168 | $ | 1,077 | $ | 173 | ||||||||
Ordinary renewal business |
278,922 | 256,376 | 94,286 | 84,273 | ||||||||||||
Group life direct business |
17,843 | 9,477 | 16,474 | 7,911 | ||||||||||||
Credit direct business |
9 | 9 | 13 | 13 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 297,777 | $ | 266,030 | $ | 111,850 | $ | 92,370 | |||||||||
|
|
|
|
|
|
|
|
7. Policy and Contract Attributes
Insurance Liabilities
Policy reserves, deposit-type contracts and policy claims at December 31, 2019 and 2018 were as follows:
Year Ended December 31 | ||||||||
2019 | 2018 | |||||||
Life insurance reserves |
$ | 11,472,311 | $ | 12,368,680 | ||||
Annuity reserves and supplementary contracts with life contingencies |
14,094,715 | 14,244,431 | ||||||
Accident and health reserves (including long term care) |
670,910 | 681,838 | ||||||
|
|
|
|
|||||
Total policy reserves |
$ | 26,237,936 | $ | 27,294,949 | ||||
Deposit-type contracts |
591,570 | 967,757 | ||||||
Policy claims |
479,226 | 527,901 | ||||||
|
|
|
|
|||||
Total policy reserves, deposit-type contracts and claim liabilities |
$ | 27,308,732 | $ | 28,790,607 | ||||
|
|
|
|
Life Insurance Reserves
The aggregate policy reserves for life insurance policies are based upon the 1941, 1958, 1980, 2001 and 2017 Commissioners Standard Ordinary Mortality and American Experience Mortality Tables. The reserves are calculated using interest rates ranging from 2.00 to 6.00 percent and are computed principally on the Net Level Premium Valuation and the Commissioners Reserve Valuation Method. Reserves for universal life policies are based on account balances adjusted for the Commissioners Reserve Valuation Method or Actuarial Guideline XXXVIII. Effective July 1, 2017, term insurance issued follows Valuation Manual section 20 (VM-20) reserve requirements.
Tabular interest, tabular less actual reserves released and tabular cost have been determined by formula.
60
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the date of death. Additional premiums are charged or additional mortality charges are assessed for policies issued on substandard lives according to underwriting classification. Effective July 1, 2017, for substandard term insurance policies, per VM-20 requirements, the substandard rating is applied to the reserve mortality. For certain flexible premium and fixed premium universal life insurance products, reserves are calculated utilizing the Commissioners Reserve Valuation Method for universal life policies and recognizing any substandard ratings.
As of December 31, 2019 and 2018, the Company had insurance in force aggregating $59,712,049 and $78,179,488, respectively, in which the gross premiums are less than the net premiums required by the valuation standards established by the IID. The Company established policy reserves of $1,608,260 and $1,667,131 to cover these deficiencies as of December 31, 2019 and 2018, respectively.
Participating life insurance policies were issued by the Company in prior years which entitle policyholders to a share in the earnings of the participating policies, provided that a dividend distribution, which is determined annually based on mortality and persistency experience of the participating policies, is authorized by the Company. Participating insurance constituted less than 0.05% of ordinary life insurance in force at December 31, 2019 and 2018.
Annuity Reserves and Supplementary Contracts Involving Life Contingencies
Deferred annuity reserves are calculated according to the Commissioners Annuity Reserve Valuation Method including excess interest reserves to cover situations where the future interest guarantees plus the decrease in surrender charges are in excess of the maximum valuation rates of interest.
Reserves for immediate annuities and supplementary contracts with and without life contingencies are equal to the present value of future payments assuming interest rates ranging from 2.25 to 11.25 percent and mortality rates, where appropriate, from a variety of tables.
Annuity reserves also include GICs and funding agreements classified as life-type contracts as defined in SSAP No. 50, Classifications of Insurance or Managed Care Contracts. These liabilities have annuitization options at guaranteed rates and consist of floating interest rate and fixed interest rate contracts. The contract reserves are carried at the greater of the account balance or the value as determined for an annuity with cash settlement option, on a change in fund basis, according to the Commissioners Annuity Reserve Valuation Method.
For variable annuities with guaranteed living benefits and variable annuities with minimum guaranteed death benefits the Company complies with VM-21. VM-21 specifies statutory reserve requirements for variable annuity contracts with benefit guarantees (VACARVM) and without benefit guarantees and related products. The VM-21 reserve calculation covers all variable annuity products. Examples of covered guaranteed benefits include guaranteed minimum accumulation benefits, return of premium death benefits, guaranteed minimum income benefits, guaranteed minimum withdrawal benefits and guaranteed payout annuity floors. The aggregate reserve for contracts falling within the scope of VM-21 is equal to the stochastic reserves plus the additional standard projection amount.
61
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Both the stochastic reserves and the standard projection are determined as the conditional tail expectation (CTE)-70 of the scenario reserves. To determine the CTE-70 values, the Company used 1,000 of the pre-packaged scenarios developed by the American Academy of Actuaries (AAA) and Society of Actuaries. The stochastic reserves uses prudent estimate assumptions based on Company experience, while the standard projection uses the assumptions prescribed in VM-21 for determining the additional standard projection amount.
Accident and Health Liabilities
Accident and health policy reserves are equal to the greater of the gross unearned premiums or any required mid-terminal reserves plus net unearned premiums and the present value of amounts not yet due on both reported and unreported claims.
At December 31, 2019 and 2018, the Company had no premium deficiency reserve related to accident and health policies.
For indeterminate premium products, a full schedule of current and anticipated premium rates is developed at the point of issue. Premium rate adjustments are considered when anticipated future experience foretells deviations from the original profit standards. The source of deviation (mortality, persistency, expense, etc.) is an important consideration in the re-rating decision as well as the potential effect of a rate change on the future experience of the existing block of business.
Liabilities for losses and loss/claim adjustment expenses for accident and health contracts are estimated using statistical claim development models to develop best estimates of liabilities for medical expense business and using tabular reserves employing mortality/morbidity tables and discount rates meeting minimum regulatory requirements for other business. Unpaid claims include amounts for losses and related adjustment expenses and are estimates of the ultimate net costs of all losses, reported and unreported. These estimates are subject to the impact of future changes in claim severity, frequency and other factors.
62
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Activity in the liability for unpaid claims and related processing costs net of reinsurance is summarized as follows:
Unpaid Claims Liability Beginning of Year |
Claims Incurred |
Claims Paid |
Unpaid Claims Liability End of Year |
|||||||||||||
Year ended December 31, 2019 |
||||||||||||||||
2019 |
$ | | $ | 276,850 | $ | 201,741 | $ | 75,109 | ||||||||
2018 and prior |
135,241 | 2,690 | 86,381 | 51,550 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
135,241 | $ | 279,540 | $ | 288,122 | 126,659 | |||||||||||
|
|
|
|
|||||||||||||
Active life reserve |
$ | 632,180 | $ | 623,147 | ||||||||||||
|
|
|
|
|||||||||||||
Total accident and health reserves |
$ | 767,421 | $ | 749,806 | ||||||||||||
|
|
|
|
Unpaid Claims Liability Beginning of Year |
Claims Incurred |
Claims Paid |
Unpaid Claims Liability End of Year |
|||||||||||||
Year ended December 31, 2018 |
||||||||||||||||
2018 |
$ | | $ | 308,983 | $ | 225,500 | $ | 83,483 | ||||||||
2017 and prior |
157,201 | (21,859 | ) | 83,584 | 51,758 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
157,201 | $ | 287,124 | $ | 309,084 | 135,241 | |||||||||||
|
|
|
|
|||||||||||||
Active life reserve |
$ | 657,543 | $ | 632,180 | ||||||||||||
|
|
|
|
|||||||||||||
Total accident and health reserves |
$ | 814,744 | $ | 767,421 | ||||||||||||
|
|
|
|
The change in the Companys unpaid claims reserve was $2,690 and ($21,859) for the years ended December 31, 2019 and 2018, respectively, for health claims that were incurred prior to those balance sheets dates. The change in 2019 was in normal range. The change in 2018 resulted primarily from variances in the estimated frequency of claims and claim severity.
Activity in the liability for unpaid claims adjustment expense is summarized as follows:
Liability Beginning of Year |
Incurred | Paid | Liability End of Year |
|||||||||||||
Year ended December 31, 2019 |
||||||||||||||||
2019 |
$ | | $ | 17,934 | $ | 17,219 | $ | 715 | ||||||||
2018 and prior |
3,091 | (1,017 | ) | 1,584 | 490 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 3,091 | $ | 16,917 | $ | 18,803 | $ | 1,205 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Year ended December 31, 2018 |
||||||||||||||||
2018 |
$ | | $ | 16,859 | $ | 14,951 | $ | 1,908 | ||||||||
2017 and prior |
3,279 | (325 | ) | 1,771 | 1,183 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ 3,279 | $16,534 | $ 16,722 | $ 3,091 | |||||||||||||
|
|
|
|
|
|
|
|
63
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company did not increase or decrease the claim adjustment expense provision for insured events of prior years during 2019.
Deposit-type Contracts
Tabular interest on funds not involving life contingencies has been determined primarily by formula.
The Company issues certain funding agreements with well-defined class-based annuity purchase rates defining either specific or maximum purchase rate guarantees. However, these funding agreements are not issued to or for the benefit of an identifiable individual or group of individuals. These contracts are classified as deposit-type contracts in accordance with SSAP No. 50.
Withdrawal Characteristics of Annuity Reserves and Deposit Funds
A portion of the Companys policy reserves and other policyholders funds (including separate account liabilities) relates to liabilities established on a variety of the Companys annuity, deposit fund and life products. There may be certain restrictions placed upon the amount of funds that can be withdrawn without penalty. The amount of reserves on annuity and deposit fund products, by withdrawal characteristics, is summarized as follows:
December 31 2019 | ||||||||||||||||||||
Individual Annuities: | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 541,753 | $ | 561 | $ | | $ | 542,314 | 1 | % | ||||||||||
At book value less surrender charge of 5% or more |
907,255 | | | 907,255 | 1 | |||||||||||||||
At fair value |
3,842 | | 49,151,231 | 49,155,073 | 80 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
1,452,850 | 561 | 49,151,231 | 50,604,642 | 82 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
7,800,086 | | | 7,800,086 | 13 | |||||||||||||||
Not subject to discretionary withdrawal provision |
2,498,084 | | 264,646 | 2,762,730 | 5 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total individual annuity reserves |
11,751,020 | 561 | 49,415,877 | 61,167,458 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
2,833,026 | | | 2,833,026 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net individual annuities reserves |
$ | 8,917,994 | $ | 561 | $ | 49,415,877 | $ | 58,334,432 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
8 | | | 8 | ||||||||||||||||
|
|
|
|
|
|
|
|
64
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2019 | ||||||||||||||||||||
Group Annuities: | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 1,107,433 | $ | 18,568 | $ | | $ | 1,126,001 | 3 | % | ||||||||||
At book value less surrender charge of 5% or more |
235 | | | 235 | | |||||||||||||||
At fair value |
| | 29,101,801 | 29,101,801 | 84 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
1,107,668 | 18,568 | 29,101,801 | 30,228,037 | 87 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
2,475,633 | | | 2,475,633 | 7 | |||||||||||||||
Not subject to discretionary withdrawal provision |
2,189,501 | | 38,174 | 2,227,675 | 6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total group annuities reserves |
5,772,802 | 18,568 | 29,139,975 | 34,931,345 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
377,165 | | | 377,165 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net group annuities reserves |
$ | 5,395,637 | $ | 18,568 | $29,139,975 | $ | 34,554,180 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
| | | | ||||||||||||||||
|
|
|
|
|
|
|
|
December 31 2019 |
||||||||||||||||||||
Deposit-type contracts (no life contingencies): | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 4,789 | $ | | $ | | $ | 4,789 | 1 | % | ||||||||||
At book value less surrender charge of 5% or more |
| | | | | |||||||||||||||
At fair value |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
4,789 | | | 4,789 | 1 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
775 | | | 775 | | |||||||||||||||
Not subject to discretionary withdrawal provision |
375,756 | 48,782 | 9,686 | 434,224 | 99 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposit-type contracts |
381,320 | 48,782 | 9,686 | 439,788 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
8,666 | | | 8,666 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net deposit-type contracts |
$ | 372,654 | $ | 48,782 | $ | 9,686 | $ | 431,122 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
| | | | ||||||||||||||||
|
|
|
|
|
|
|
|
65
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Reconcililation to the Annual Statement: | Amount | |||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Annuities section, total (net) |
$ | 13,457,795 | ||
Exhibit 5, Supp contracts with life contingencies section, total (net) |
636,920 | |||
Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance |
591,570 | |||
|
|
|||
Subtotal |
14,686,285 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Annuities section, total |
78,311,341 | |||
Exhibit 3, Supp contracts with life contingencies section, total |
263,640 | |||
Other contract deposit funds |
58,468 | |||
|
|
|||
Subtotal |
78,633,449 | |||
|
|
|||
Combined total |
$ | 93,319,734 | ||
|
|
December 31 2018 |
||||||||||||||||||||
Individual Annuities: | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 528,969 | $ | 1,279 | $ | | $ | 530,248 | 1 | % | ||||||||||
At book value less surrender charge of 5% or more |
501,977 | | | 501,977 | 1 | |||||||||||||||
At fair value |
97,877 | | 44,202,566 | 44,300,443 | 77 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
1,128,823 | 1,279 | 44,202,566 | 45,332,668 | 79 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
8,701,240 | | | 8,701,240 | 15 | |||||||||||||||
Not subject to discretionary withdrawal provision |
3,209,969 | | 214,506 | 3,424,475 | 6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total individual annuity reserves |
13,040,032 | 1,279 | 44,417,072 | 57,458,383 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
2,819,439 | | | 2,819,439 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net individual annuity reserves |
$ | 10,220,593 | $ | 1,279 | $ | 44,417,072 | $ | 54,638,944 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
| | | | ||||||||||||||||
|
|
|
|
|
|
|
|
66
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 | ||||||||||||||||||||
Group Annuities: | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 653,206 | $ | 25,742 | $ | | $ | 678,948 | 2 | % | ||||||||||
At book value less surrender charge of 5% or more |
127 | | | 127 | | |||||||||||||||
At fair value |
| | 25,390,084 | 25,390,084 | 82 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
653,333 | 25,742 | 25,390,084 | 26,069,159 | 84 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
2,543,431 | | | 2,543,431 | 8 | |||||||||||||||
Not subject to discretionary withdrawal provision |
2,273,676 | | 31,585 | 2,305,261 | 8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total group annuity reserves |
5,470,440 | 25,742 | 25,421,669 | 30,917,851 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
398,265 | | | 398,265 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net group annuity reserves |
$ | 5,072,175 | $ | 25,742 | $ | 25,421,669 | $ | 30,519,586 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
| | | | ||||||||||||||||
|
|
|
|
|
|
|
|
December 31 2018 | ||||||||||||||||||||
Deposit-type contracts (no life contingencies): | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 4,718 | $ | | $ | | $ | 4,718 | 1 | % | ||||||||||
At book value less surrender charge of 5% or more |
| | | | | |||||||||||||||
At fair value |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
4,718 | | | 4,718 | 1 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
761 | | | 761 | | |||||||||||||||
Not subject to discretionary withdrawal provision |
731,816 | 38,792 | 8,286 | 778,894 | 99 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposit-type contracts |
737,295 | 38,792 | 8,286 | 784,373 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
8,174 | | | 8,174 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net deposit-type contracts |
$ | 729,121 | $ | 38,792 | $ | 8,286 | $ | 776,199 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
| | | | ||||||||||||||||
|
|
|
|
|
|
|
|
67
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Amount | ||||
Reconcililation to the Annual Statement: |
||||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Annuities section, total (net) |
$ | 14,401,938 | ||
Exhibit 5, Supp contracts with life contingencies section, total (net) |
652,194 | |||
Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance |
967,757 | |||
|
|
|||
Subtotal |
16,021,889 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Annuities section, total |
69,652,375 | |||
Exhibit 3, Supp contracts with life contingencies section, total |
213,387 | |||
Other contract deposit funds |
47,078 | |||
|
|
|||
Subtotal |
69,912,840 | |||
|
|
|||
Combined total |
$ | 85,934,729 | ||
|
|
The amount of reserves on life products, by withdrawal characteristics, is summarized as follows:
December 31 2019 | ||||||||||||||||||||||||
General Account | Separate AccountGuaranteed and Nonguaranteed |
|||||||||||||||||||||||
Account Value | Cash Value | Reserve | Account Value | Cash Value | Reserve | |||||||||||||||||||
Subject to discretionary withdrawal, |
||||||||||||||||||||||||
Term policies with cash value |
$ | 127,240 | $ | 174,114 | $ | 294,514 | $ | | $ | | $ | | ||||||||||||
Universal life |
8,928,502 | 8,652,284 | 12,290,308 | | | | ||||||||||||||||||
Universal life with secondary guarantees |
3,583,462 | 3,496,533 | 8,994,292 | | | | ||||||||||||||||||
Indexed universal life with secondary guarantees |
138,016 | 98,875 | 127,312 | | | | ||||||||||||||||||
Other permanent cash value life insurance |
272,553 | 1,009,143 | 1,542,059 | | | | ||||||||||||||||||
Variable universal life |
42,258 | 41,415 | 924,560 | 4,151,215 | 4,149,688 | 5,473,280 | ||||||||||||||||||
Not subject to discretionary withdrawal or no cash values |
||||||||||||||||||||||||
Term policies without cash value |
| | 7,946,544 | | | | ||||||||||||||||||
Accidental death benefits |
| | 36,530 | | | | ||||||||||||||||||
Disability- active lives |
| | 31,521 | | | | ||||||||||||||||||
Disability- disabled lives |
| | 55,431 | | | | ||||||||||||||||||
Miscellaneous reserves |
| | 2,244,758 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (gross) |
13,092,031 | 13,472,364 | 34,487,829 | 4,151,215 | 4,149,688 | 5,473,280 | ||||||||||||||||||
Reinsurance ceded |
4,155,647 | 4,155,691 | 23,015,518 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (net) |
$ | 8,936,384 | $ | 9,316,673 | $ | 11,472,311 | $ | 4,151,215 | $ | 4,149,688 | $ | 5,473,280 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Reconcililation to the Annual Statement: | Amount | |||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Life insurance section, total (net) |
$ | 10,549,729 | ||
Exhibit 5, Accidental death benefits section total (net) |
8,050 | |||
Exhibit 5, Disabilityactive lives section, total (net) |
7,441 | |||
Exhibit 5, Disabilitydisabled lives section, total (net) |
38,391 | |||
Exhibit 5, Miscellaneous reserves section, total (net) |
868,700 | |||
|
|
|||
Subtotal |
11,472,311 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Life insurance section, total |
5,473,280 | |||
|
|
|||
Subtotal |
5,473,280 | |||
|
|
|||
Combined total |
$ | 16,945,591 | ||
|
|
68
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 | ||||||||||||||||||||||||
General Account | Separate AccountGuaranteed and Nonguaranteed |
|||||||||||||||||||||||
Account Value | Cash Value | Reserve | Account Value | Cash Value | Reserve | |||||||||||||||||||
Subject to discretionary withdrawal, |
||||||||||||||||||||||||
Term policies with cash value |
$ | 119,933 | $ | 164,337 | $ | 278,907 | $ | | $ | | $ | | ||||||||||||
Universal life |
8,754,568 | 8,450,724 | 12,226,647 | | | | ||||||||||||||||||
Universal life with secondary guarantees |
3,675,642 | 3,595,227 | 8,938,774 | | | | ||||||||||||||||||
Indexed universal life with secondary guarantees |
128,144 | 83,151 | 117,301 | | | | ||||||||||||||||||
Other permanent cash value life insurance |
262,629 | 1,033,222 | 1,574,909 | | | | ||||||||||||||||||
Variable universal life |
46,724 | 45,526 | 983,103 | 3,882,674 | 3,880,143 | 5,068,091 | ||||||||||||||||||
Not subject to discretionary withdrawal or no cash values |
||||||||||||||||||||||||
Term policies without cash value |
| | 7,708,101 | | | | ||||||||||||||||||
Accidental death benefits |
| | 37,849 | | | | ||||||||||||||||||
Disability- active lives |
| | 32,726 | | | | ||||||||||||||||||
Disability- disabled lives |
| | 57,672 | | | | ||||||||||||||||||
Miscellaneous reserves |
| | 2,139,264 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (gross) |
12,987,640 | 13,372,187 | 34,095,253 | 3,882,674 | 3,880,143 | 5,068,091 | ||||||||||||||||||
Reinsurance ceded |
4,106,880 | 4,106,881 | 22,536,273 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (net) |
$ | 8,880,760 | $ | 9,265,306 | $ | 11,558,980 | $ | 3,882,674 | $ | 3,880,143 | $ | 5,068,091 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Reconcililation to the Annual Statement: | Amount | |||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Life insurance section, total (net) |
$ | 10,812,154 | ||
Exhibit 5, Accidental death benefits section total (net) |
7,954 | |||
Exhibit 5, Disabilityactive lives section, total (net) |
8,226 | |||
Exhibit 5, Disabilitydisabled lives section, total (net) |
40,261 | |||
Exhibit 5, Miscellaneous reserves section, total (net) |
1,500,085 | |||
|
|
|||
Subtotal |
12,368,680 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Life insurance section, total |
5,068,091 | |||
|
|
|||
Subtotal |
5,068,091 | |||
|
|
|||
Combined total |
$ | 17,436,771 | ||
|
|
Separate Accounts
Certain separate and variable accounts held by the Company relate to individual variable life insurance policies. The benefits provided on the policies are determined by the performance and/or fair value of the investments held in the separate account. The net investment experience of the separate account is credited directly to the policyholder and can be positive or negative. The assets of these separate accounts are carried at fair value. The life insurance policies typically provide a guaranteed minimum death benefit.
Certain separate accounts held by the Company represent funds which are administered for pension plans. The assets consist primarily of fixed maturities and equity securities and are carried at fair value. The Company provides a minimum guaranteed return to policyholders of certain separate accounts. Certain other separate accounts do not have any minimum guarantees and the investment risks associated with fair value changes are borne entirely by the policyholder.
69
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Information regarding the separate accounts of the Company as of and for the years ended December 31, 2019, 2018 and 2017 is as follows:
Guaranteed Indexed |
Nonindexed Guarantee Less Than or Equal to 4% |
Nonindexed Guarantee Greater Than 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2019 |
$ | | $ | | $ | 11,868 | $ | 8,778,459 | $ | 8,790,327 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts as of December 31, 2019 with assets at: |
||||||||||||||||||||
Fair value |
$ | | $ | 49,425 | $ | 18,485 | $ | 83,386,230 | $ | 83,454,140 | ||||||||||
Amortized cost |
| 652,587 | | | 652,587 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total as of December 31, 2019 |
$ | | $ | 702,012 | $ | 18,485 | $ | 83,386,230 | $ | 84,106,727 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts by withdrawal characteristics as of |
||||||||||||||||||||
December 31, 2019: |
||||||||||||||||||||
With fair value adjustment |
$ | | $ | 19,128 | $ | | $ | | $ | 19,128 | ||||||||||
At fair value |
| | | 83,073,724 | 83,073,724 | |||||||||||||||
At book value without fair value adjustment and with current surrender charge of less than 5% |
| 652,587 | | | 652,587 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
| 671,715 | | 83,073,724 | 83,745,439 | |||||||||||||||
Not subject to discretionary withdrawal |
| 30,297 | 18,485 | 312,506 | 361,288 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total separate account reserve liabilities at December 31, 2019 |
$ | | $ | 702,012 | $ | 18,485 | $ | 83,386,230 | $ | 84,106,727 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Guaranteed Indexed |
Nonindexed Guarantee Less Than or Equal to 4% |
Nonindexed Guarantee Greater Than 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2018 |
$ | | $ | | $ | 11,732 | $ | 8,859,114 | $ | 8,870,846 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts as of December 31, 2018 with assets at: |
||||||||||||||||||||
Fair value |
$ | | $ | 51,005 | $ | 14,808 | $ | 74,268,245 | $ | 74,334,058 | ||||||||||
Amortized cost |
| 646,872 | | | 646,872 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total as of December 31, 2018 |
$ | | $ | 697,877 | $ | 14,808 | $ | 74,268,245 | $ | 74,980,930 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
By withdrawal characteristics: |
||||||||||||||||||||
Reserves for separate accounts by withdrawal characteristics as of |
||||||||||||||||||||
December 31, 2018: |
||||||||||||||||||||
With fair value adjustment |
$ | | $ | 27,021 | $ | | $ | | $ | 27,021 | ||||||||||
At fair value |
| | | 74,013,868 | 74,013,868 | |||||||||||||||
At book value without fair value adjustment and with current surrender charge of less than 5% |
| 646,872 | | | 646,872 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
| 673,893 | | 74,013,868 | 74,687,761 | |||||||||||||||
Not subject to discretionary withdrawal |
| 23,984 | 14,808 | 254,377 | 293,169 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total separate account reserve liabilities at December 31, 2018 |
$ | | $ | 697,877 | $ | 14,808 | $ | 74,268,245 | $ | 74,980,930 | ||||||||||
|
|
|
|
|
|
|
|
|
|
70
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Guaranteed Indexed |
Nonindexed Guarantee Less Than or Equal to 4% |
Nonindexed Guarantee Greater Than 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2017 |
$ | | $ | 80 | $ | 10,782 | $ | 8,536,011 | $ | 8,546,873 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts as of December 31, 2017 with assets at: |
||||||||||||||||||||
Fair value |
$ | | $ | 57,965 | $ | 19,569 | $ | 83,794,485 | $ | 83,872,019 | ||||||||||
Amortized cost |
| 633,003 | | | 633,003 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total as of December 31, 2017 |
$ | | $ | 690,968 | $ | 19,569 | $ | 83,794,485 | $ | 84,505,022 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts by withdrawal characteristics as of December 31, 2017: |
||||||||||||||||||||
With fair value adjustment |
$ | | $ | 32,619$ | | $ | | $ | 32,619 | |||||||||||
At fair value |
| | | 83,719,277 | 83,719,277 | |||||||||||||||
At book value without fair value adjustment and with current surrender charge of less than 5% |
| 633,003 | | | 633,003 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
| 665,622 | | 83,719,277 | 84,384,899 | |||||||||||||||
Not subject to discretionary withdrawal |
| 25,346 | 19,569 | 75,208 | 120,123 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total separate account reserve liabilities at December 31, 2017 |
$ | | $ | 690,968 | $ | 19,569 | $ | 83,794,485 | $ | 84,505,022 | ||||||||||
|
|
|
|
|
|
|
|
|
|
A reconciliation of the amounts transferred to and from the Companys separate accounts is presented below:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Transfer as reported in the summary of operations of the separate accounts statement: |
||||||||||||
Transfers to separate accounts |
$ | 9,249,559 | $ | 9,208,119 | $ | 8,751,721 | ||||||
Transfers from separate accounts |
(12,987,554 | ) | (13,130,804 | ) | (11,815,503 | ) | ||||||
|
|
|
|
|
|
|||||||
Net transfers from separate accounts |
(3,737,995 | ) | (3,922,685 | ) | (3,063,782 | ) | ||||||
Miscellaneous reconciling adjustments |
(130,622 | ) | (152,560 | ) | 444,099 | |||||||
|
|
|
|
|
|
|||||||
Net transfers as reported in the summary of operations of the life, accident and health annual statement |
$ | (3,868,617 | ) | $ | (4,075,245 | ) | $ | (2,619,683 | ) | |||
|
|
|
|
|
|
71
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The legal insulation of separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account. At December 31, 2019 and 2018, the Companys separate account statement included legally insulated assets of $85,698,798 and $76,754,148, respectively. The assets legally insulated from general account claims at December 31, 2019 and 2018 are attributed to the following products:
2019 | 2018 | |||||||
Group annuities |
$ | 27,466,046 | $ | 23,941,313 | ||||
Variable annuities |
52,062,801 | 46,955,172 | ||||||
Fixed universal life |
684,149 | 695,569 | ||||||
Variable universal life |
4,124,798 | 3,737,005 | ||||||
Variable life |
1,338,413 | 1,409,360 | ||||||
Modified separate accounts |
9,646 | 4,813 | ||||||
Registered market value annuity productSPL |
12,945 | 10,916 | ||||||
|
|
|
|
|||||
Total separate account assets |
$ | 85,698,798 | $ | 76,754,148 | ||||
|
|
|
|
At December 31, 2019 and 2018, the Company held separate account assets not legally insulated from the general account in the amount of $21,891 and $29,244, respectively, related to variable annuity products.
Some separate account liabilities are guaranteed by the general account. In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the general account. To compensate the general account for the risk taken, the separate account paid risk charges of $542,322, $538,628, $525,773, $504,689, and $456,558, to the general account in 2019, 2018, 2017, 2016, and 2015, respectively. During the years ended December 31, 2019, 2018, 2017, 2016, and 2015 the general account of the Company had paid $73,992, $68,367, $69,207, $103,800, and $250,471 respectively, toward separate account guarantees.
At December 31, 2019 and 2018, the Company reported guaranteed separate account assets at amortized cost in the amount of $653,181 and $643,109, respectively, based upon the prescribed practice granted by the State of Iowa as described in Note 2. These assets had a fair value of $719,048 and $679,964 at December 31, 2019 and 2018, respectively, which would have resulted in an unrealized gain of $65,867 and $36,855, respectively, had these assets been reported at fair value.
The Company does not participate in securities lending transactions within the separate account.
Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The Company reinsures portions of the risk on certain insurance policies which exceed its established limits, thereby providing a greater diversification of risk and minimizing exposure on larger risks. The Company remains contingently liable with respect to any insurance ceded, and this would become an actual liability in the event that the assuming insurance company became unable to meet its obligation under the reinsurance treaty.
72
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Premiums earned reflect the following reinsurance amounts:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Direct premiums |
$ | 14,573,402 | $ | 13,848,720 | $ | 13,209,093 | ||||||
Reinsurance assumednon affiliates |
1,225,065 | 1,268,615 | 1,351,628 | |||||||||
Reinsurance assumedaffiliates |
106,627 | 125,367 | 325,332 | |||||||||
Reinsurance cedednon affiliates |
(2,436,179 | ) | (3,044,184 | ) | (15,104,247 | ) | ||||||
Reinsurance cededaffiliates |
(1,322,809 | ) | (1,385,000 | ) | (3,295,974 | ) | ||||||
|
|
|
|
|
|
|||||||
Net premiums earned |
$ | 12,146,106 | $ | 10,813,518 | $ | (3,514,168 | ) | |||||
|
|
|
|
|
|
The Company received reinsurance recoveries in the amount of $3,943,015, $3,729,097 and $3,736,461, during 2019, 2018 and 2017, respectively. At December 31, 2019 and 2018, estimated amounts recoverable from reinsurers that have been deducted from policy and contract claim reserves totaled $1,146,686 and $1,061,987. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2019 and 2018 of $42,515,411 and $42,224,573, respectively, of which $21,356,465 and $20,685,636 were ceded to affiliates.
During 2019, 2018 and 2017, amortization of deferred gains associated with previously transacted reinsurance agreements was released into income in the amount of $219,496 ($142,972 after tax), $514,911 ($335,855 after tax) and $90,556 ($62,716 after tax), respectively.
During 2019, 2018 and 2017, the Company obtained letters of credit of $26,675, $56,994 and $55,017, respectively, for the benefit of affiliated and nonaffiliated companies that have reinsured business to the Company where the ceding companys state of domicile does not recognize the Company as an authorized reinsurer.
Effective January 1, 2019, the Company recaptured term insurance business of a reinsurance treaty with an affiliate, LIICA Re II, Inc. The universal life with secondary guarantees remained reinsured under the treaty. The Company received cash of $15,079, recaptured $67,590 in policyholder reserves, $371 of claim reserves, and net due, deferred and advance premiums of $2,279. The transaction resulted in a pre-tax loss of $50,603, which has been included in the Statements of Operations. In addition, the Company released into income a previously deferred unamortized gain resulting from the original cession of this business to LIICA Re II in the amount of $13,826 with a corresponding charge to unassigned surplus.
In January 2018, Scottish Re Group (SRUS) announced a sale and restructuring plan and commenced Chapter 11 (reorganization) procedures for some of its subsidiaries. In December 2018, the Delaware Department of Insurance began oversight procedures of Scottish Re (U.S.), Inc. (SRUS), with whom the Company is a counterparty for some of its reinsurance activities. SRUS was ordered into receivership for the purposes of rehabilitation on March 6, 2019. The IID suspended the certificate of authority for SRUS on May 16, 2019. The IID has continued to allow reinsurance credit for contracts in force as of May 16, 2019. At December 31, 2019, the Companys reserves ceded to Scottish Re Group were $102,181. The receiver currently has committed to the court it will provide a rehabilitation plan or a recommendation to move to liquidation in 2020.
73
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Effective October 1, 2018, the Company recaptured credit insurance business from an affiliate, Ironwood Re Corp. The Company released $1,812 in funds withheld liability, recaptured $2,430 of policyholder reserves and $426 of claim reserves. The transaction resulted in a pre-tax loss of $1,044 which has been included in the Statements of Operations. In addition, the Company released into income a previously deferred unamortized gain resulting from the original cession of this business to Ironwood in the amount of $1,262 ($821 after-tax) with a corresponding charge to unassigned surplus.
Effective October 1, 2018, an affiliate, Transamerica Premier Life Insurance Company (TPLIC) recaptured group health insurance business from the Company. The Company paid consideration of $33,799 and released $13,767 of policyholder reserves, $980 of unearned premium reserve and $7,366 of claim reserves. The transaction resulted in a pre-tax loss of $11,686 which has been included in the Statements of Operations.
Effective July 1, 2018, the Company recaptured term insurance business from an affiliate, Stonebridge Reinsurance Company. The Company received cash of $137,447, recaptured $680,477 in policyholder reserves, $28,815 in claim reserves, net due premiums and commissions of $11,764 and $10,560 in interest maintenance reserve liability. The transaction resulted in a pre-tax loss of $570,641 which was included in the Statements of Operations. In addition, as a result of this transaction, amounts previously deferred to surplus under SSAP No. 61R, were released resulting in an increase to earnings, net of tax, of $184,144.
Effective July 1, 2018, the Company entered into a reinsurance agreement to cede an in force block of term insurance business to SCOR Global Life Americas. The Company paid consideration of $260,000, ceded $674,799 in policyholder reserves, $27,884 in claim reserves, $8,289 in due premium (net of commissions), and $13,229 in interest maintenance reserves liability. The transaction resulted in a pre-tax gain of $447,623 which will be identified separately on the insurers statutory financial statement as a surplus item. Recognition of the surplus increase as income shall be reflected on a net of tax basis as earnings emerge from the business reinsured.
Effective June 29, 2018, the Company and Wilton Re U. S. Holdings, Inc. (Wilton Re) entered into an agreement as to the Final Net Settlement Statements and Other Matters (NSS) associated with the reinsurance agreement between the two companies that was effective April 1, 2017. This agreement related to the reinsurance of the payout annuity and BOLI/COLI business to Wilton Re. As a result of the mutual concessions between the parties, Wilton Re will pay the Company $47,221. In addition, the Company released a reinsurance receivable in the amount of $3,234 related to the initial proposed final NSS that was used for closing. The net pretax impact to Capital and Surplus of these adjustments was $43,986.
Effective June 29, 2018, the Company and Wilton Re agreed to Amendment No. 1 to the Reinsurance Agreement dated June 28, 2017. This amendment converted risks that were ceded on a modified coinsurance basis to a coinsurance basis by reducing the amount of reinsurance ceded in the NSS and reducing the modco reserves ceded. At the close of the original transaction,
74
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
the Company offset the reserve ceded related to a modified separate account contract. Within the amendment to the Master Transaction Agreement, the Company agrees to pay Wilton Re an amount in cash equal to $95,386, which will be offset in full against an equivalent balance of other amounts due and payable to the Company, such that no cash or other assets shall be required to be transferred by the Parties.
Effective December 1, 2017, the Company entered into an agreement with TPLIC, an affiliate, to convert the modified coinsurance agreement to coinsurance and funds withheld. As a result, TLIC transferred cash and invested assets to TPLIC. Assets that were not able to be transferred were retained in a FWH portfolio by TLIC until they mature, are sold or can be transferred. The Company transferred cash and invested assets with a market value of $6,487,360 to TPLIC. The reserves of $4,543,045 and claim reserves of $199,940 net of due and advance premium of $5,815 previously held on a modco basis were transferred to TPLIC. As a result of the transaction $18,642 existing IMR and $1,125,506 newly created IMR ($1,731,547 pre-tax gains) was released and transferred to TPLIC. The transaction results in a pre-tax loss of $606,042 which has been included in the Statements of Operations. Realized gains on the sale of assets supporting the business resulted in gains that offset the impact of the pre-tax loss related to the transaction. The Company ceded modified coinsurance reserves of $4,536,010 as of December 31, 2016 for certain stand-alone long-term care policies under the indemnity reinsurance agreement with TPLIC.
Effective October 1, 2017, the Company recaptured credit life business from an affiliate, Southwest Equity Life Insurance Company. Subsequently, the mortgage life and disability insurance business was recaptured from the Company by TPLIC.
Effective October 1, 2017, the Company recaptured term insurance business from an affiliate, Transamerica International Reinsurance (Bermuda) Ltd. The Company received cash of $346,458, recaptured $1,260,767 in policyholder reserves, $35,798 claim reserves, $3,502 commissions payable and $26,595 due premium. The transaction results in a pre-tax loss of $927,014 which has been included in the Statements of Operations. The Company subsequently entered into an agreement with SCOR Global Life Americas to assume business related to this recapture at the same consideration. The gain related to this reinsurance agreement was deferred to surplus. The combination of the transaction results in no impact to the surplus of the Company.
Effective October 1, 2017, the Company recaptured term insurance business from an affiliate, LIICA Re I. The Company received cash of $113,953, recaptured $724,596 in policyholder reserves, $19,768 claim reserves and $11,124 in interest maintenance reserve liability. The transaction results in a pre-tax loss of $641,535 which has been included in the Statements of Operations. The Company subsequently entered into an agreement with SCOR Global Life Americas to assume business related to this recapture.
Effective October 1, 2017, the Company recaptured certain term insurance business from an affiliate, Transamerica Pacific Insurance Company (TPIC). The Company received cash of $1,902 and recaptured $17,310 in policyholder reserves, $2,897 claim reserves and $325 due premium (net of commission). The transaction results in a pre-tax loss of $17,980 which has been included in the Statements of Operations. The Company subsequently entered into an agreement with SCOR Global Life Americas to assume business related to this recapture.
75
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Effective October 1, 2017, the Company novated the reinsurance agreement between TPIC and Transamerica International Re (Bermuda) Ltd. No cash or invested asset or net reserves were transferred as a result of this novation. The transaction results in no pre-tax gain or loss.
Subsequently effective October 1, 2017, the Company entered into a reinsurance agreement to cede an in force block of term insurance business to SCOR Global Life Americas. The Company accrued to a funds withheld payable of $314,000 ceding $737,678 in policyholder reserves, $21,886 claim reserves, $10,958 due premium (net of commissions), offset by a reinsurance recoverable of $6,000 receivable and $11,124 in interest maintenance reserves liability. The transaction results in a pre-tax gain of $451,730 which has been identified separately on the insurers statutory financial statement as a surplus item and recognition of the surplus increase as income shall be reflected on a net of tax basis as earnings emerge from the business reinsured. The funds withheld balance was paid to SCOR Global Life Americas on December 29, 2017.
On June 28, 2017, Transamerica completed a transaction to reinsure its payout annuity business and Bank Owned Life Insurance/Corporate Owned Life Insurance business (BOLI/COLI). Under the terms of the Master Agreement, the Company entered into a 100% coinsurance (general account liabilities)/100% modified coinsurance (separate account liabilities) reinsurance agreement with Wilton Reassurance Company, with an effective date of April 1, 2017. The Company transferred assets in the amount of $8,312,263, which included a negative ceding commission of $112,183, and released policy and deposit-type reserves of $7,186,330 and reinsurance deposit, policy loans and other balances related to the business of $191,144. Modified coinsurance separate account reserves of $3,695,331 were retained by the Company. As a part of the transaction, the Company realized $972,360 in net gains on the assets that were transferred of which $627,872 were deferred to IMR. The IMR liability simultaneously was released along with historical deferrals associated with the blocks of business in the amount of $921,322, resulting in a pretax loss of $51,266, which has been included in the Statements of Operations.
Effective January 1, 2017, three affiliated reinsurance treaties with TLB were amended to include the cession of all business with secondary guarantee universal life (SGUL) issued or novated by the Company. The Company increased cessions from 80 to 100% coinsurance and increased the expense allowance by fifteen basis points of account value on all business ceded based on the end of the period account value. As consideration for the cessions, the Company received cash and invested assets of $206,742, equal to the additional U.S. statutory reserves, resulting in no gain or loss on the transaction.
76
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The net deferred income tax asset at December 31, 2019 and 2018 and the change from the prior year are comprised of the following components:
December 31, 2019 | ||||||||||||
Ordinary | Capital | Total | ||||||||||
Gross Deferred Tax Assets |
$ | 1,422,652 | $ | 101,290 | $ | 1,523,942 | ||||||
Statutory Valuation Allowance Adjustment |
13,747 | | 13,747 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
1,408,905 | 101,290 | 1,510,195 | |||||||||
Deferred Tax Assets Nonadmitted |
| | | |||||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
1,408,905 | 101,290 | 1,510,195 | |||||||||
Deferred Tax Liabilities |
843,226 | 191,611 | 1,034,837 | |||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 565,679 | $ | (90,321 | ) | $ | 475,358 | |||||
|
|
|
|
|
|
December 31, 2018 | ||||||||||||
Ordinary | Capital | Total | ||||||||||
Gross Deferred Tax Assets |
$ | 1,618,151 | $ | 132,884 | $ | 1,751,035 | ||||||
Statutory Valuation Allowance Adjustment |
| | | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
1,618,151 | 132,884 | 1,751,035 | |||||||||
Deferred Tax Assets Nonadmitted |
96,652 | | 96,652 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
1,521,499 | 132,884 | 1,654,383 | |||||||||
Deferred Tax Liabilities |
816,662 | 210,082 | 1,026,744 | |||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 704,837 | $ | (77,198 | ) | $ | 627,639 | |||||
|
|
|
|
|
|
Change | ||||||||||||
Ordinary | Capital | Total | ||||||||||
Gross Deferred Tax Assets |
$ | (195,499 | ) | $ | (31,594 | ) | $ | (227,093 | ) | |||
Statutory Valuation Allowance Adjustment |
13,747 | | 13,747 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
(209,246 | ) | (31,594 | ) | (240,840 | ) | ||||||
Deferred Tax Assets Nonadmitted |
(96,652 | ) | | (96,652 | ) | |||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
(112,594 | ) | (31,594 | ) | (144,188 | ) | ||||||
Deferred Tax Liabilities |
26,564 | (18,471 | ) | 8,093 | ||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | (139,158 | ) | $ | (13,123 | ) | $ | (152,281 | ) | |||
|
|
|
|
|
|
77
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The main components of deferred income tax amounts are as follows:
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Deferred Tax Assets: | ||||||||||||
Ordinary |
||||||||||||
Policyholder reserves |
$ | 486,010 | $ | 601,605 | $ | (115,595 | ) | |||||
Investments |
328,516 | 295,047 | 33,469 | |||||||||
Deferred acquisition costs |
255,732 | 225,485 | 30,247 | |||||||||
Policyholder dividends accrual |
1,914 | 1,232 | 682 | |||||||||
Fixed assets |
4,933 | 17,844 | (12,911 | ) | ||||||||
Compensation and benefits accrual |
19,346 | 21,148 | (1,802 | ) | ||||||||
Receivablesnonadmitted |
11,594 | 13,038 | (1,444 | ) | ||||||||
Tax credit carry-forward |
259,638 | 349,547 | (89,909 | ) | ||||||||
Other (including items <5% of total ordinary tax assets) |
54,969 | 93,205 | (38,236 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
1,422,652 | 1,618,151 | (195,499 | ) | ||||||||
Statutory valuation allowance adjustment |
13,747 | | 13,747 | |||||||||
Nonadmitted |
| 96,652 | (96,652 | ) | ||||||||
|
|
|
|
|
|
|||||||
Admitted ordinary deferred tax assets |
1,408,905 | 1,521,499 | (112,594 | ) | ||||||||
Capital: |
||||||||||||
Investments |
101,290 | 132,884 | (31,594 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
101,290 | 132,884 | (31,594 | ) | ||||||||
Statutory valuation allowance adjustment |
| | | |||||||||
Nonadmitted |
| | | |||||||||
|
|
|
|
|
|
|||||||
Admitted capital deferred tax assets |
101,290 | 132,884 | (31,594 | ) | ||||||||
|
|
|
|
|
|
|||||||
Admitted deferred tax assets |
$ | 1,510,195 | $ | 1,654,383 | $ | (144,188 | ) | |||||
|
|
|
|
|
|
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Deferred Tax Liabilities: | ||||||||||||
Ordinary |
||||||||||||
Investments |
$ | 657,801 | $ | 602,167 | $ | 55,634 | ||||||
Policyholder reserves |
185,248 | 177,087 | 8,161 | |||||||||
Other (including items <5% of total ordinary tax liabilities) |
177 | 37,408 | (37,231 | ) | ||||||||
Subtotal |
843,226 | 816,662 | 26,564 | |||||||||
|
|
|
|
|
|
|||||||
Capital |
||||||||||||
Investments |
191,611 | 210,082 | (18,471 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
191,611 | 210,082 | (18,471 | ) | ||||||||
|
|
|
|
|
|
|||||||
Deferred tax liabilities |
1,034,837 | 1,026,744 | 8,093 | |||||||||
|
|
|
|
|
|
|||||||
Net deferred tax assets/liabilities | $ | 475,358 | $ | 627,639 | $ | (152,281 | ) | |||||
|
|
|
|
|
|
As a result of the 2017 Tax Cuts and Jobs Act (TCJA), the Companys tax reserve deductible temporary difference increased by $49,757. This change results in an offsetting ($49,757) taxable temporary difference that will be amortized into taxable income evenly over the eight years subsequent to 2017. The remaining amortizable balance is included within the Policyholder Reserves line items above.
78
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019, the Company recorded a tax valuation allowance of $13,747 for deferred tax assets related to its foreign tax credit carryover. Due to the TCJA reduction in the U.S. Federal tax rate, Management no longer believes it is more likely than not that the Company will realize the benefit of its foreign tax credit carryover. The ultimate realization of this deferred tax asset depends on generation of sufficient future foreign source taxable income before the foreign tax credit carryover expires in 2027. Management considers the projected foreign source taxable income, credit expirations and tax planning strategies in making the assessment.
As discussed in Note 2, for the years ended December 31, 2019 and 2018 the Company admits deferred income tax assets pursuant to SSAP No. 101. The amount of admitted adjusted gross deferred income tax assets under each component of SSAP No. 101 is as follows:
December 31, 2019 | ||||||||||||||
Ordinary | Capital | Total | ||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | | $ | | $ | | |||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) | 557,252 | 31,779 | 589,031 | ||||||||||
1. Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date | 557,252 | 31,779 | 589,031 | |||||||||||
2. Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold | XXX | XXX | 907,922 | |||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities | 851,653 | 69,511 | 921,164 | ||||||||||
|
|
|
|
|
|
|||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) | $ | 1,408,905 | $ | 101,290 | $ | 1,510,195 | |||||||
|
|
|
|
|
|
79
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | ||||||||||||||
Ordinary | Capital | Total | ||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | | $ | | $ | | |||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) |
596,212 | 34,054 | 630,266 | ||||||||||
1. Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date |
596,212 | 34,054 | 630,266 | |||||||||||
2. Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold |
XXX | XXX | 847,469 | |||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities |
925,287 | 98,830 | 1,024,117 | ||||||||||
|
|
|
|
|
|
|||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) |
$ | 1,521,499 | $ | 132,884 | $ | 1,654,383 | |||||||
|
|
|
|
|
|
Change | ||||||||||||||
Ordinary | Capital | Total | ||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks |
$ | | $ | | $ | | |||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) |
(38,960 | ) | (2,275 | ) | (41,235 | ) | |||||||
1. Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date |
(38,960 | ) | (2,275 | ) | (41,235 | ) | ||||||||
2. Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold |
XXX | XXX | 60,453 | |||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities |
(73,634 | ) | (29,319 | ) | (102,953 | ) | |||||||
|
|
|
|
|
|
|||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) |
$ | (112,594 | ) | $ | (31,594 | ) | $ | (144,188 | ) | ||||
|
|
|
|
|
|
December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Ratio Percentage Used To Determine Recovery Period and Threshold Limitation Amount |
848 | % | 818 | % | 30 | % | ||||||
|
|
|
|
|
|
|||||||
Amount of Adjusted Capital and Surplus Used To Determine Recovery Period and Threshold Limitation in 2(b)2 Above |
$ | 6,052,812 | $ | 5,649,795 | $ | 403,017 | ||||||
|
|
|
|
|
|
80
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The impact of tax planning strategies at December 31, 2019 and 2018 was as follows:
December 31, 2019 | ||||||||||||
Ordinary Percent |
Capital Percent |
Total Percent | ||||||||||
Impact of Tax Planning Strategies: |
||||||||||||
(% of Total Adjusted Gross DTAs) |
0 | % | 0 | % | 0 | % | ||||||
|
|
|
|
|
|
|||||||
(% of Total Net Admitted Adjusted Gross DTAs) |
1 | % | 0 | % | 1 | % | ||||||
|
|
|
|
|
|
December 31, 2018 | ||||||||||||
Ordinary Percent |
Capital Percent |
Total Percent | ||||||||||
Impact of Tax Planning Strategies: |
||||||||||||
(% of Total Adjusted Gross DTAs) |
0 | % | 0 | % | 0 | % | ||||||
|
|
|
|
|
|
|||||||
(% of Total Net Admitted Adjusted Gross DTAs) |
2 | % | 24 | % | 4 | % | ||||||
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|
|
The Companys tax planning strategies do not include the use of reinsurance-related tax planning strategies.
Current income taxes incurred consist of the following major components:
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Current Income Tax |
||||||||||||
Federal |
$ | (77,933 | ) | $ | (63,062 | ) | $ | (14,871 | ) | |||
Foreign |
| | | |||||||||
|
|
|
|
|
|
|||||||
Subtotal |
(77,933 | ) | (63,062 | ) | (14,871 | ) | ||||||
Federal income tax on net capital gains |
43,047 | (4,006 | ) | 47,053 | ||||||||
|
|
|
|
|
|
|||||||
Federal and foreign income taxes incurred |
$ | (34,886 | ) | $ | (67,068 | ) | $ | 32,182 | ||||
|
|
|
|
|
|
Year Ended December 31 | ||||||||||||
2018 | 2017 | Change | ||||||||||
Current Income Tax |
||||||||||||
Federal |
$ | (63,062 | ) | $ | (1,035,137 | ) | $ | 972,075 | ||||
Foreign |
| 31 | (31 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
(63,062 | ) | (1,035,106 | ) | 972,044 | |||||||
Federal income tax on net capital gains |
(4,006 | ) | 197,937 | (201,943 | ) | |||||||
|
|
|
|
|
|
|||||||
Federal and foreign income taxes incurred |
$ | (67,068 | ) | $ | (837,169 | ) | $ | 770,101 | ||||
|
|
|
|
|
|
81
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Companys current income tax incurred and change in deferred income tax differs from the amount obtained by applying the federal statutory rate to income before tax as follows:
Year Ended December 31 |
||||||||||||
2019 | 2018 | 2017 | ||||||||||
Current income taxes incurred |
$ | (34,886 | ) | $ | (67,068 | ) | $ | (837,169 | ) | |||
Change in deferred income taxes (without tax on unrealized gains and losses) |
164,812 | (164,466 | ) | 956,486 | ||||||||
|
|
|
|
|
|
|||||||
Total income tax reported |
$ | 129,926 | $ | (231,534 | ) | $ | 119,317 | |||||
|
|
|
|
|
|
|||||||
Income before taxes |
$ | 3,306,846 | $ | (1,613,658 | ) | $ | 1,674,439 | |||||
21.00 | % | 21.00 | % | 35.00 | % | |||||||
|
|
|
|
|
|
|||||||
Expected income tax expense (benefit) at statutory rate |
$ | 694,438 | $ | (338,868 | ) | $ | 586,054 | |||||
Increase (decrease) in actual tax reported resulting from: |
||||||||||||
Pre-tax income of disregarded subsidiaries |
$ | 22,600 | $ | 13,405 | $ | 343,013 | ||||||
Dividends received deduction |
(58,418 | ) | (51,477 | ) | (233,578 | ) | ||||||
Tax-exempt income |
(9,681 | ) | (2,455 | ) | (3,063 | ) | ||||||
Nondeductible expenses |
5,058 | 5,176 | 64,514 | |||||||||
Pre-tax items reported net of tax |
(39,457 | ) | (9,892 | ) | (712,769 | ) | ||||||
Tax credits |
(29,037 | ) | (52,239 | ) | (54,076 | ) | ||||||
Prior period tax return adjustment |
10,746 | 10,586 | (5,969 | ) | ||||||||
Change in statutory valuation allowance |
13,747 | (2,432 | ) | (11,576 | ) | |||||||
Change in tax rates |
| | 18,760 | |||||||||
Change in uncertain tax positions |
(241 | ) | 3,104 | 3,668 | ||||||||
Deferred tax change on other items in surplus |
(480,743 | ) | 207,024 | 140,162 | ||||||||
Other |
914 | (13,466 | ) | (15,823 | ) | |||||||
|
|
|
|
|
|
|||||||
Total income tax reported |
$ | 129,926 | $ | (231,534 | ) | $ | 119,317 | |||||
|
|
|
|
|
|
On December 22, 2017, the TCJA reduced the federal tax rate to 21%. As a result, the Company reduced its net deferred tax asset balance by $18,760, excluding $42,500 of net deferred tax asset reduction on unrealized gains (losses) in the 2017 financial statements.
The effects of the U.S. tax reform were reflected in the 2017 financial statements as determined or as reasonably estimated provisional amounts based on available information subject to interpretation in accordance with the SECs Staff Accounting Bulletin No. 118 (SAB 118), as adopted by NAIC SAPWG INT 18-01. SAB 118 provides guidance on accounting for the effects of U.S. tax reform where the Companys determinations are incomplete but the Company can determine a reasonable estimate. The TCJA related disclosures and figures in the 2018 financials represent final impacts with no estimated figures remaining.
The Companys federal income tax return is consolidated with other included affiliated companies. Please see the listing of companies in Appendix A. The method of allocation between the companies is subject to a written tax allocation agreement. Under the terms of the tax allocation agreement, allocations are based on separate income tax return calculations. The Company is entitled to recoup federal income taxes paid in the event the future losses and credits reduce the greater of the Companys separately computed income tax liability or the consolidated
82
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
groups income tax liability in the year generated. The Company is also entitled to recoup federal income taxes paid in the event the losses and credits reduce the greater of the Companys separately computed income tax liability or the consolidated groups income tax liability in any carryback or carryforward year when so applied. Intercompany income tax balances are settled within thirty days of payment to or filing with the Internal Revenue Service. A tax return has not been filed for 2019.
The amounts, origination dates and expiration dates of operating loss and tax credit carryforwards available for tax purposes:
Description |
Amounts | Origination Dates | Expiration Dates | |||||||||
Foreign Tax Credit |
$ | 13,747 | 12/31/2017 | 12/31/2027 | ||||||||
|
|
|||||||||||
Foreign Tax Credit Total |
$ | 13,747 | ||||||||||
|
|
|||||||||||
General Business Credit |
$ | 29,094 | 12/31/2009 | 12/31/2029 | ||||||||
General Business Credit |
51,443 | 12/31/2010 | 12/31/2030 | |||||||||
General Business Credit |
46,730 | 12/31/2011 | 12/31/2031 | |||||||||
General Business Credit |
30,962 | 12/31/2012 | 12/31/2032 | |||||||||
General Business Credit |
24,765 | 12/31/2013 | 12/31/2033 | |||||||||
General Business Credit |
20,930 | 12/31/2014 | 12/31/2034 | |||||||||
General Business Credit |
18,131 | 12/31/2015 | 12/31/2035 | |||||||||
General Business Credit |
2,935 | 12/31/2016 | 12/31/2036 | |||||||||
General Business Credit |
5,189 | 12/31/2017 | 12/31/2037 | |||||||||
General Business Credit |
5,280 | 12/31/2018 | 12/31/2038 | |||||||||
General Business Credit |
10,431 | 12/31/2019 | 12/31/2039 | |||||||||
|
|
|||||||||||
General Business Credit Total |
$ | 245,890 | ||||||||||
|
|
Gross AMT Credit Recognized as:
(1) Gross AMT credit recognized as: |
||||
a. Current year recoverable |
$ | 14,515 | ||
b. Deferred tax asset (DTA) |
| |||
(2) Beginning balance of AMT credit carryforward |
14,515 | |||
(3) Amounts recovered |
14,515 | |||
(4) Adjustments |
| |||
|
|
|||
(5) Ending balance of AMT credit carryforward (5=2-3-4) |
| |||
(6) Reduction for sequestration |
| |||
(7) Nonadmitted by reporting entity |
| |||
|
|
|||
(8) Reporting entity ending balance (8=5-6-7) |
$ | | ||
|
|
The Company elected to account for its alternative minimum tax credit carryforward as a deferred tax asset.
83
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The total amount of the unrecognized tax benefits that if recognized, would affect the effective income tax rate:
Unrecognized Tax Benefits |
||||
Balance at January 1, 2018 |
$ | 15,486 | ||
Tax positions taken during prior period |
3,105 | |||
|
|
|||
Balance at December 31, 2018 |
$ | 18,591 | ||
Tax positions taken during prior period |
(241 | ) | ||
|
|
|||
Balance at December 31, 2019 |
$ | 18,350 | ||
|
|
The Company classifies interest and penalties related to income taxes as income tax expense. The amount of interest and penalties accrued on the balance sheets as income taxes includes the following:
Total payable | ||||||||||||
Interest | Penalties | (receivable) | ||||||||||
Balance at January 1, 2017 |
$ | 11,926 | $ | | $ | 11,926 | ||||||
Interest expense (benefit) |
(5,815 | ) | | (5,815 | ) | |||||||
Cash received (paid) |
(9,212 | ) | | (9,212 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2017 |
$ | (3,101 | ) | $ | | $ | (3,101 | ) | ||||
Interest expense (benefit) |
2,727 | | 2,727 | |||||||||
Cash received (paid) |
1,810 | | 1,810 | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2018 |
$ | 1,436 | $ | | $ | 1,436 | ||||||
Interest expense (benefit) |
5,709 | | 5,709 | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2019 |
$ | 7,145 | $ | | $ | 7,145 | ||||||
|
|
|
|
|
|
The Company has no federal income tax returns currently under examination. The Internal Revenue Service completed its examination for years 2009 through 2013 resulting in tax return adjustments for which an appeals conference was requested. Federal income tax returns filed in 2014 through 2018 remain open, subject to potential future examination. The Company believes that there are adequate defenses against or sufficient provisions established related to any open or contested tax positions.
The Company had authorized 1,000,000 common stock shares at $10 per share par value of which 676,190 shares were issued and outstanding at December 31, 2019 and 2018.
The Company has 42,500 Series A preferred shares authorized, 0 shares issued and outstanding. On December 26, 2006, the Company repurchased its Series A preferred shares for $58,000. The Company previously reported 42,500 shares of Series A preferred stock outstanding at $10 par, carried as treasury stock. It has been determined that these shares were cancelled by operation of law as they were not stipulated by the Board of Directors to be treasury shares at the time they were repurchased. The cancellation and removal of the preferred stock had no impact to Capital and Surplus of the Company. The Company also has 250,000 Series B preferred non-voting shares authorized at $10 per share par value, of which 0 shares were issued and outstanding at December 31, 2019. The Company paid its parent company to redeem the Series B non-voting preferred stock at par value on the following dates: December 13, 2018: 55,930 shares for $559; December 27, 2017: 29,787 shares for $297 and December 22, 2016: 31,437 shares for $314.
84
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company is subject to limitations, imposed by the State of Iowa, on the payment of dividends to its stockholders. Generally, dividends during any twelve-month period may not be paid, without prior regulatory approval, in excess of the greater of (a) 10 percent of the Companys statutory surplus as of the preceding December 31, or (b) the Companys statutory gain from operations before net realized capital gains (losses) on investments for the preceding year. Subject to the availability of unassigned surplus at the time of such dividend, the maximum payment which may be made in 2020, without the prior approval of insurance regulatory authorities, is $3,053,498.
On December 20, 2019, the Company paid extraordinary common stock dividends of $725,000 to its parent company.
On June 21, 2019, the Company paid an extraordinary dividend of $400,000 split between a return of capital of $250,000 to its parent company and paid off the remaining balance of a surplus note of $150,000 to Transamerica Corporation (TA Corp).
On December 31, 2018, the Company provided a non-cash distribution of the Pension Plan for U.S. Agents of TLIC asset valued at $60,347 to its parent company in order to facilitate the approved plan merger of the Pension Plan for U.S. Agents of TLIC maintained by the Company into the Transamerica Employee Pension Plan maintained by TA Corp.
The Company paid an extraordinary preferred stock dividend and an extraordinary common stock dividend of $16,732 and $47,488, respectively, to its parent company on December 13, 2018.
The Company provided cash returns of capital to its parent company in the amount of $558,740 on December 13, 2018.
The Company paid an ordinary preferred stock dividend and an ordinary common stock dividend of $16,920 and $283,080, respectively, to its parent company on June 29, 2018.
Prior to the merger, TALIC paid an ordinary dividend of $200,000 to its parent company, TA Corp, on April 20, 2018.
On December 31, 2019, the Company received ordinary common stock dividends of $100,000 from TLIC Oakbrook Reinsurance, Inc. (TORI).
On December 20, 2019, the Company received $99,982 from Transamerica Financial Life Insurance Company (TFLIC) as consideration for repurchase of 821 of the Companys common stock shares in TFLIC at $125 par value. These shares were subsequently cancelled by operation of law.
On December 17, 2019, the Company received a $28,220 common stock dividend from Transamerica Life (Bermuda) Ltd. (TLB).
85
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
On June 21, 2019, the Company received an ordinary common stock dividend of $9,075 from its affiliate, TFLIC.
On March 29, 2019, the Company received ordinary common stock dividend of $60,000 from LIICA Re II, Inc.
The Company received ordinary common stock dividends from TFLIC in the amount of $12,105 on June 29, 2018. On December 13, 2018, the Company received preferred stock dividends of $430 from TFLIC.
On December 18, 2018, the Company received common stock dividends of $23,520 from its subsidiary TLB.
On December 13, 2018, the Company received $7,162 from TFLIC as a redemption of preferred stock.
On August 6, 2018, the Company received a common stock dividend in the amount of $140,000 from Stonebridge Reinsurance Company (SRC) prior to its merger with LIICA Re II, Inc.
On December 31, 2018, the Company made a non-cash capital contribution in the amount of $1,971 to REAP 3A.
Life and health insurance companies are subject to certain RBC requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life or health insurance company is to be determined based on various risk factors. At December 31, 2019, the Company meets the minimum RBC requirements.
The Companys surplus notes are held by TA Corp. These notes are due 20 years from the date of issuance at an interest rate of 6%, and are subordinate and junior in right of payment to all obligations and liabilities of the Company. In the event of liquidation of the Company, the holders of the issued and outstanding preferred stock shall be entitled to priority only with respect to accumulated but unpaid dividends before the holder of the surplus notes and full payment of the surplus notes shall be made before the holders of common stock become entitled to any distribution of the remaining assets of the Company. The Company received approval from the IID prior to paying quarterly interest payments.
On June 21, 2019, the Company repaid in full its $150,000 surplus note with TA Corp. The Company received approval from the IID prior to its repayment of the surplus note as well as prior to making quarterly interest payments.
Additional information related to the outstanding surplus notes at December 31, 2019 and 2018 is as follows:
For Year Ending |
Balance Outstanding |
Interest Paid Current Year |
Cumulative Interest Paid |
Accrued Interest |
||||||||||||
2019 |
$ | | $ | 4,275 | $ | 148,275 | $ | | ||||||||
2018 |
$ | 150,000 | $ | 9,000 | $ | 144,000 | $ | 2,250 |
86
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company participates in an agent-managed securities lending program in which the Company primarily loans out US Treasuries and other bonds. The Company receives collateral equal to 102% of the fair value of the loaned government or other domestic securities as of the transaction date. If the fair value of the collateral is at any time less than 102% of the fair value of the loaned securities, the counterparty is mandated to deliver additional collateral, the fair value of which, together with the collateral already held in connection with the lending transaction, is at least equal to 102% of the fair value of the loaned government or other domestic securities. In the event the Company loans a foreign security and the denomination of the currency of the collateral is other than the denomination of the currency of the loaned foreign security, the Company receives and maintains collateral equal to 105% of the fair value of the loaned security.
At December 31, 2019 and 2018, respectively, securities with a fair value of $1,121,274 and $1,791,674 were on loan under securities lending agreements. At December 31, 2019 and 2018, the collateral the Company received from securities lending activities was in the form of cash and on open terms. This cash collateral is reinvested and is not available for general corporate purposes. The reinvested cash collateral has a fair value of $1,246,827 and $1,835,122 at December 31, 2019 and 2018, respectively.
The contractual maturities of the securities lending collateral positions are as follows:
Fair Value | ||||||||
2019 | 2018 | |||||||
Open |
$ | 1,246,827 | $ | 1,842,557 | ||||
|
|
|
|
|||||
Total |
1,246,827 | 1,842,557 | ||||||
Securities received |
| | ||||||
|
|
|
|
|||||
Total collateral received |
$ | 1,246,827 | $ | 1,842,557 | ||||
|
|
|
|
The Company receives primarily cash collateral in an amount in excess of the fair value of the securities lent. The Company reinvests the cash collateral into higher yielding securities than the securities which the Company has lent to other entities under the arrangement.
87
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The maturity dates of the reinvested securities lending collateral are as follows:
2019 | 2018 | |||||||||||||||
Amortized Cost |
Fair Value | Amortized Cost |
Fair Value | |||||||||||||
Open |
$ | 43,483 | $ | 43,483 | $ | 245,460 | $ | 245,460 | ||||||||
30 days or less |
342,947 | 342,947 | 478,305 | 478,305 | ||||||||||||
31 to 60 days |
509,716 | 509,716 | 335,517 | 335,517 | ||||||||||||
61 to 90 days |
124,351 | 124,351 | 190,847 | 190,847 | ||||||||||||
91 to 120 days |
121,552 | 121,552 | 329,816 | 329,816 | ||||||||||||
121 to 180 days |
104,778 | 104,778 | 251,440 | 251,440 | ||||||||||||
1 to 2 years |
| | 417 | 417 | ||||||||||||
2 to 3 years |
| | 935 | 935 | ||||||||||||
Greater than 3 years |
| | 2,385 | 2,385 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
1,246,827 | 1,246,827 | 1,835,122 | 1,835,122 | ||||||||||||
Securities received |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral reinvested |
$ | 1,246,827 | $ | 1,246,827 | $ | 1,835,122 | $ | 1,835,122 | ||||||||
|
|
|
|
|
|
|
|
Collateral for securities lending transactions that extend beyond one year from the report date is as follows:
Description of collateral |
2019 | 2018 | ||||||
ABS Autos |
$ | | $ | 1,352 | ||||
ABS Credit Cards |
| 2,385 | ||||||
|
|
|
|
|||||
Total collateral extending beyond one year of the reporting date |
$ | | $ | 3,737 | ||||
|
|
|
|
For securities lending, the Companys source of cash used to return the cash collateral is dependent upon the liquidity of the current market conditions. Under current conditions, the Company has securities with a par value of $1,248,011 (fair value of $1,246,827) that are currently tradable securities that could be sold and used to pay for the $1,246,827 in collateral calls that could come due under a worst-case scenario.
12. Retirement and Compensation Plans
Defined Contribution Plans
The Companys employees participate in a contributory defined contribution plan sponsored by TA Corp which is qualified under Section 401(k) of the Internal Revenue Code (IRC). Generally, employees of the Company who customarily work at least 20 hours per week and meet the other eligibility requirements are participants of the plan. Participants may elect to contribute up to 100% of eligible earnings, subject to government or other plan restrictions for certain key employees. The Company will match an amount up to three percent of the participants eligible earnings. Participants may direct all of their contributions and plan balances to be invested in a variety of investment options. The plan is subject to the reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Benefits expense of $11,926, $12,769 and $13,133 was allocated to the Company for the years ended December 31, 2019, 2018 and 2017 respectively.
88
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Defined Benefit Plans
The Companys employees participate in a qualified defined benefit pension plan sponsored by TA Corp. Generally, employees of the Company who customarily work at least 20 hours per week and complete six months of continuous service and meet the other eligibility requirements are participants of the plan. The Company has no legal obligation for the plan. The benefits are based on years of service and the employees eligible compensation. The plan provides benefits based on a traditional final average formula or a cash balance formula. The plan is subject to the reporting and disclosure requirements of ERISA.
TA Corp sponsors supplemental retirement plans to provide the Companys senior management with benefits in excess of normal pension benefits. The Company has no legal obligation for the plan. The plans are noncontributory and benefits are based on years of service and the employees eligible compensation. The plan provides benefits based on a traditional final average formula or cash balance formula. The plans are unfunded and nonqualified under the IRC.
The Company recognizes pension expense equal to its allocation from TA Corp. The pension expense related to both the qualified defined pension plan and the supplemental retirement plans is allocated among the participating companies based on International Accounting Standards 19 (IAS 19), Accounting for Employee Benefits, and based upon actuarial participant benefit calculations, which is within the guidelines of SSAP No. 102, Pensions. Pension expenses were $23,904, $23,481 and $30,676 for the years ended December 31, 2019, 2018 and 2017, respectively.
In addition to pension benefits, TA Corp sponsors unfunded plans that provide health care and life insurance benefits to retired Company employees meeting certain eligibility requirements. The Company has no legal obligation for the plan. Portions of the medical and dental plans are contributory. The expenses of the postretirement plans are allocated among the participating companies based on IAS 19 and based upon actuarial participant benefit calculations which is within the guidelines of SSAP No. 92, Postretirement Benefits Other Than Pensions. The Companys allocation of postretirement expenses was $5,037, $5,027 and $7,332 for the years ended December 31, 2019, 2018 and 2017, respectively.
Other Plans
TA Corp has established deferred compensation plans for certain key employees of the Company. The Companys allocation of expense for these plans for each of the years ended December 31, 2019, 2018 and 2017 was insignificant.
89
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
13. Related Party Transactions
The Company shares certain officers, employees and general expenses with affiliated companies.
The Company is party to a shared services and cost sharing agreement among and between the Transamerica companies, under which various affiliated companies may perform specified administrative functions in connection with the operation of the Company, in consideration of reimbursement of actual costs of services rendered. The Company is also party to a service agreement with TFLIC, in which the Company provides services, including accounting, data processing and other professional services, in consideration of reimbursement of the actual costs of services rendered. The Company is also a party to a Management and Administrative and Advisory agreement with AEGON USA Realty Advisors, LLC whereby the advisor serves as the administrator and advisor for the Companys mortgage loan operations. AEGON USA Investment Management, LLC acts as a discretionary investment manager under an Investment Management Agreement with the Company. The amount received by the Company as a result of being a party to these agreements was $920,368, $894,440 and $1,117,864 during 2019, 2018 and 2017, respectively. The amount paid as a result of being a party to these agreements was $559,946, $596,861 and $826,172 during 2019, 2018 and 2017, respectively. Fees charged between affiliates approximate their cost. The Company has an administration service agreement with Transamerica Asset Management, Inc. to provide administrative services to the Transamerica Series Trust. The Company received $130,182, $138,490 and $150,063 for these services during 2019, 2018 and 2017, respectively.
Transamerica Capital, Inc. provides wholesaling distribution services for the Company under a distribution agreement. The Company incurred expenses under this agreement of $50,537, $40,865 and $37,060 for the years ended December 31, 2019, 2018 and 2017, respectively.
Receivables from and payables to affiliates bear interest at the thirty-day commercial paper rate. During 2019, 2018 and 2017, the Company received (paid) net interest of ($1,760), ($476) and ($869) from (to) affiliates, respectively. At December 31, 2019 and 2018, respectively, the Company reported net payables from affiliates of $29,972 and $44,462. Terms of settlement require that these amounts are settled within 60 days.
At December 31, 2019, the Company had short-term intercompany notes receivable of $240,300 as follows. In accordance with SSAP No. 25, Affiliates and Other Related Parties, these notes are reported as short-term investments.
Receivable from |
Amount | Due By | Interest Rate |
|||||||||
TA Corp |
$ | 77,700 | September 4, 2020 | 2.04 | % | |||||||
TA Corp |
1,400 | September 5, 2020 | 2.04 | % | ||||||||
TA Corp |
43,700 | September 19, 2020 | 2.04 | % | ||||||||
TA Corp |
49,000 | October 21, 2020 | 1.92 | % | ||||||||
TA Corp |
43,500 | December 26, 2020 | 1.61 | % | ||||||||
TA Corp |
25,000 | December 29, 2020 | 1.61 | % |
90
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2018, the Company had short-term intercompany notes receivable of $261,000.
Receivable from |
Amount | Due By | Interest Rate | |||||||||
TA Corp |
$ | 220,500 | December 13, 2019 | 2.31 | % | |||||||
TA Corp |
40,500 | December 21, 2019 | 2.31 | % |
In prior years, the Company purchased life insurance policies covering the lives of certain employees of the Company from an affiliate, TPLIC. At December 31, 2019 and 2018, the cash surrender value of these policies was $182,753 and $179,004, respectively, and is included in Other assets on the balance sheets. In addition, the Company also issued life insurance policies to an affiliate, TPLIC, covering the lives of certain employees of that affiliate. Aggregate reserves for policies and contracts related to these policies are $170,124 and $167,126 at December 31, 2019 and 2018, respectively, and is included in Aggregate reserves for policies and contracts on the Balance Sheets.
The Company utilizes the look-through approach in valuing its investment in the following entities.
Real Estate Alternatives Portfolio 2, LLC |
$ | 22,345 | ||
Real Estate Alternatives Portfolio 3, LLC |
$ | 18,419 | ||
Real Estate Alternatives Portfolio 4 HR, LLC |
$ | 95,091 | ||
Real Estate Alternatives Portfolio 4 MR, LLC |
$ | 6,085 | ||
Aegon Multi-Family Equity Fund, LLC |
$ | 55,911 | ||
Aegon Workforce Housing Fund 2, L.P. |
$ | 154,601 | ||
Aegon Workforce Housing Fund 3, L.P. |
$ | 12,477 | ||
Natural Resources Alternatives Portfolio I, LLC |
$ | 170,193 | ||
Natural Resources Alternatives Portfolio II, LLC |
$ | 1 | ||
Natural Resources Alternatives Portfolio 3, LLC |
$ | 125,161 | ||
Zero Beta Fund, LLC |
$ | 257,897 |
These entitys financial statements are not audited and the Company has limited the value of its investment in these entities to the value contained in the audited financial statements of the underlying LP/LLC investments, including adjustments required by SSAP No. 97 entities and/or non-SCA SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies, entities owned by these entities. All liabilities, commitments, contingencies, guarantees or obligations of these entities which are required to be recorded as liabilities, commitments, contingencies, guarantees or obligations under applicable accounting guidance, are reflected in the Companys determination of the carrying value of the investment in these entities.
Effective December 31, 2017, the Company received a liquidating distribution from Investors Warranty of America, LLC (IWA), a wholly owned limited liability company reported using the equity method outlined in SSAP No. 48, fully redeeming the Companys membership interest therein. The Company received $176,999 cash, $57,050 directly held real estate, $17,602 real estate LLC membership, $4,328 intercompany receivable, and $2,684 tax refund receivable in redemption of the Companys equity method basis in IWA. The transaction resulted in a pre-tax realized loss of $39,953 reported on the Statements of Operations which is offset by a pre-tax $40,097 unrealized loss reduction that is reported on the Statement of Changes in Capital and Surplus.
91
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables shows the disclosures for all SCA investments, except 8bi entities, and balance sheet value (admitted and nonadmitted) as of December 31, 2019 and 2018:
December 31, 2019 |
||||||||||||||||
SCA Entity |
Percentage of SCA Ownership |
Gross Amount | Admitted Amount |
Nonadmitted Amount |
||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||
None |
| % | $ | | $ | | $ | | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8a Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||
None |
| % | $ | | $ | | $ | | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(ii) Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
54 | % | $ | 12,963 | $ | 12,963 | $ | | ||||||||
GARNET ASSURANCE CORP |
100 | | | | ||||||||||||
LIFE INVESTORS ALLIANCE LLC |
100 | | | | ||||||||||||
ASIA INVESTMENT HOLDING LTD |
100 | | | | ||||||||||||
AEGON FINANCIAL SERVICES GROUP |
100 | | | | ||||||||||||
GARNET ASSURANCE CORP III |
100 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iii) Entities |
XXX | $ | 12,963 | $ | 12,963 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||
TRANSAMERICA LIFE (BERMUDA) LTD |
94 | % | $ | 1,261,461 | $ | 1,261,461 | $ | | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iv) Entities |
XXX | $ | 1,261,461 | $ | 1,261,461 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
XXX | $ | 1,274,424 | $ | 1,274,424 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Aggregate Total |
XXX | $ | 1,274,424 | $ | 1,274,424 | $ | | |||||||||
|
|
|
|
|
|
|
|
December 31, 2018 |
||||||||||||||||
SCA Entity |
Percentage of SCA Ownership |
Gross Amount |
Admitted Amount |
Nonadmitted Amount |
||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||
None |
| % | $ | | $ | | $ | | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8a Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||
None |
| % | $ | | $ | | $ | | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(ii) Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
54 | % | $ | 22,419 | $ | 22,419 | $ | | ||||||||
GARNET ASSURANCE CORP |
100 | | | | ||||||||||||
LIFE INVESTORS ALLIANCE LLC |
100 | | | | ||||||||||||
AEGON FINANCIAL SERVICES GROUP |
100 | | | | ||||||||||||
GARNET ASSURANCE CORP III |
100 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iii) Entities |
XXX | $ | 22,419 | $ | 22,419 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||
TRANSAMERICA LIFE (BERMUDA) LTD |
94 | % | $ | 1,000,646 | $ | 1,000,646 | $ | | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iv) Entities |
XXX | $ | 1,000,646 | $ | 1,000,646 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
XXX | $ | 1,023,065 | $ | 1,023,065 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Aggregate Total |
XXX | $ | 1,023,065 | $ | 1,023,065 | $ | | |||||||||
|
|
|
|
|
|
|
|
92
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table shows the NAIC responses for the SCA filings (except 8bi entities):
December 31, 2019 | ||||||||||||||||||||||||
SCA Entity |
Type of NAIC Filing* |
Date of Filing to the NAIC |
NAIC Valuation Amount |
NAIC Response Received Y/N |
NAIC Disallowed Entities Valuation Method, Submission Required Y/N |
Code** | ||||||||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||||||||||
None |
$ | | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8a Entities |
| | $ | | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||||||||||
None |
$ | | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(ii) Entities |
| | $ | | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
S2 | 10/31/2019 | $ | 20,940 | Y | N | I | |||||||||||||||||
GARNET ASSURANCE CORP |
NA | | | | | I | ||||||||||||||||||
LIFE INVESTORS ALLIANCE LLC |
NA | | | | | I | ||||||||||||||||||
ASIA INVESTMENT HOLDING LTD |
NA | | | | | I | ||||||||||||||||||
AEGON FINANCIAL SERVICES GROUP |
NA | | | | | I | ||||||||||||||||||
GARNET ASSURANCE CORP III |
NA | | | | | I | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iii) Entities |
| | $ | 20,940 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||||||||||
TRANSAMERICA LIFE (BERMUDA) LTD |
S2 | 1/21/2020 | $ | 608,633 | Y | N | I | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iv) Entities |
| | $ | 608,633 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
| | $ | 629,573 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
Aggregate Total |
| | $ | 629,573 | | | | |||||||||||||||||
|
|
* | S1 Sub1, S2 Sub2 or RDF Resubmission of Disallowed Filing |
** | I Immaterial or M Material |
(1) | NAIC Valuation Amount is as of the Filing Date to the NAIC |
93
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | ||||||||||||||||||||||||
SCA Entity |
Type of NAIC Filing* |
Date of Filing to the NAIC |
NAIC Valuation Amount |
NAIC Response Received Y/N |
NAIC Disallowed Entities Valuation Method, Submission Required Y/N |
Code** | ||||||||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||||||||||
None |
$ | | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8a Entities |
| | $ | | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||||||||||
None |
$ | | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(ii) Entities |
| | $ | | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
S2 | 12/21/2018 | $ | 16,471 | Y | N | I | |||||||||||||||||
GARNET ASSURANCE CORP |
NA | | | Y | N | I | ||||||||||||||||||
LIFE INVESTORS ALLIANCE LLC |
NA | | | Y | N | I | ||||||||||||||||||
AEGON FINANCIAL SERVICES GROUP |
NA | | | Y | N | I | ||||||||||||||||||
GARNET ASSURANCE CORP III |
NA | | | N | N | I | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iii) Entities |
| | $ | 16,471 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||||||||||
TRANSAMERICA LIFE (BERMUDA) LTD |
S2 | 10/8/2018 | $ | 815,587 | N | N | I | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iv) Entities |
| | $ | 815,587 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
| | $ | 832,058 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
Aggregate Total |
| | $ | 832,058 | | | | |||||||||||||||||
|
|
* | S1 Sub1, S2 Sub2 or RDF Resubmission of Disallowed Filing |
** | I Immaterial or M Material |
(1) | NAIC Valuation Amount is as of the Filing Date to the NAIC |
The Company reports an investment in the following insurance SCAs for which the reported statutory equity reflects a departure from NAIC SAP. Each of the insurance SCAs listed in the table below reflects an admitted asset, equal to the value of the letter of credit provided by an unaffiliated company, whereas this would not be an admitted asset recognized by SSAP No. 4, Assets and Non Admitted Assets.
LIICA Re II, Inc. | Excess of loss reinsurance asset | |||
Pine Falls Re (PFRe) | Letter of credit | |||
MLIC Re I, Inc. (MLIC Re) | Letter of credit |
94
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company has two Limited Purpose Subsidiaries (LPS) with prescribed practices whereby under Iowa Administrative Code 191-99.11(3), the LPS are entitled to admit the following assets that would not be admissible under the NAIC SAP:
TLIC Oakbrook Reinsurance, Inc. (TORI) | Credit linked note | |||
TLIC Watertree Reinsurance, Inc. (TWRI) | Excess of loss reinsurance asset |
The monetary effect on net income and surplus as a result of using an accounting practice that differed from NAIC SAP, the amount of the investment in the insurance SCA per reported statutory equity, and amount of the investment if the insurance SCA has completed statutory financial statements in accordance with the NAIC SAP. The SCAs are valued in the Companys financial statements at zero in accordance with SSAP No. 97.
Monetary Effect on NAIC SAP | Amount of Investment | |||||||||||||||
SCA Entity |
Net Income Increase (Decrease) |
Surplus Increase (Decrease) |
Per Reported Statutory Equity |
If the Insurance SCA Had Completed Statutory Financial Statements* |
||||||||||||
LIICA Re II** |
$ | | $ | (2,298,765 | ) | $ | | $ | | |||||||
Pine Falls Re** |
| (1,100,000 | ) | | | |||||||||||
MLIC Re** |
| (770,000 | ) | | | |||||||||||
TLIC Oakbrook Reinsurance, Inc. |
| (3,383,614 | ) | 1,238,107 | | |||||||||||
TLIC Watertree Reinsurance, Inc. |
| (858,258 | ) | 544,597 | |
* | Per AP&P Manual (without permitted or prescribed practices) |
** | The SCA is valued at zero in the Companys financial statements |
Had the above SCA entities not been permitted to recognize the letters of credit, excess of loss reinsurance assets, or the credit linked note as admitted assets in the financial statements, the risk-based capital would have been below the mandatory control level which would have triggered a regulatory event.
Information regarding the Companys affiliated reinsurance transactions is available in Note 8. Reinsurance.
Information regarding the Companys affiliated guarantees is available in Note 14. Commitments and Contingencies.
14. Commitments and Contingencies
At December 31, 2019 and 2018, the Company has mortgage loan commitments of $177,098 and $238,370, respectively.
The Company has contingent commitments of $732,478 and $718,870 as of December 31, 2019 and 2018, respectively, to provide additional funding for various joint ventures, partnerships, and limited liability companies, which includes LIHTC commitments of $26,728 and $55,107, respectively.
95
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company leases office buildings and equipment under various non-cancelable operating lease agreements. Rental expense for the years 2019 and 2018 was $12,478 and $11,086, respectively.
Private placement commitments outstanding as of December 31, 2019 and 2018 were $81,493 and $78,516, respectively.
The Company sold $101,473 and $1,658 of to-be-announced (TBA) securities as of December 31, 2019 and 2018, respectively. Due to different counterparties, the receivable related to these TBAs was not reclassed.
The Company may pledge cash as collateral for derivative transactions. When cash is pledged as collateral, it is derecognized and a receivable is recorded to reflect the eventual return of that cash by the counterparty. The amount of cash collateral pledged by the Company as of December 31, 2019 and 2018, respectively, was $80,993 and $6,782.
At December 31, 2019 and 2018, securities in the amount of $46,975 and $254,930, respectively, were posted to the Company as collateral from derivative counterparties. The securities were not included on the Companys balance sheets as the Company does not have the ability to sell or repledge the collateral.
The Company has provided back-stop guarantees for the performance of non-insurance affiliates or subsidiaries that are involved in the guaranteed sale of investments in low-income housing tax credit partnerships. The nature of the obligation is to provide third party investors with a minimum guaranteed annual and cumulative return on their contributed capital which is based on tax credits and tax losses generated from the low income housing tax credit partnerships. Guarantee payments arise if low income housing tax credit partnerships experience unexpected significant decreases in tax credits and tax losses or there are compliance issues with the partnerships. A significant portion of the remaining term of the guarantees is between 13-18 years. In the event the Company is required to make a payment under this guarantee, the payment would be reflected in the Companys financial statements as a decrease in net investment income. No payments are required as of December 31, 2019. The current assessment of risk of making payments under these guarantees is remote.
The Company has guaranteed to the Monetary Authority of Singapore (MAS) that it will provide adequate funds to make up for any liquidity shortfall in its wholly-owned foreign life insurance subsidiary, Transamerica Life Bermuda LTD (TLB) (Singapore Branch), and continue to meet, pay and settle all present and future obligations of TLB. As of December 31, 2019, there is no payment or performance risk because TLB has adequate liquidity as of this date.
The Company has guaranteed to the Hong Kong Insurance Authority that it will provide the financial support to TLB for maintaining TLBs solvency at all times so as to enable TLB to promptly meet its obligations and liabilities. If at any time the value of TLBs assets do not exceed its liabilities by the prevailing acceptable level of solvency, the Company will increase the
96
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
paid up share capital of TLB or provide financial assistance to TLB to maintain the acceptable level of solvency. An acceptable level of solvency is net assets at one hundred and fifty percent of the required margin of solvency as stipulated under the Insurance Companies (Margin of Solvency) Regulation. As of December 31, 2019, there is no payment or performance risk because TLB is able to meet its obligations and has assets in excess of its liabilities by the prevailing level of solvency as of this date.
The Company has guaranteed that TLB will (1) maintain tangible net worth of at least equal to the greater of 165% of Standard & Poors Risk-Based Capital and the minimum required by regulatory authorities in all jurisdictions in which TLB operates, (2) have, at all times, sufficient cash to pay all contractual obligations in a timely manner and (3) have a maximum operating leverage ratio of 20 times. TLIC can terminate this agreement upon thirty days written notice, but not until TLB attains a rating from Standard & Poors the same as without the support from this agreement, or the entire book of TLB business is transferred provided that it is transferred to an entity with a rating from S&P that is the same as or better than TLICs then current rating or AA, whichever is lower. As of December 31, 2019, there is no payment or performance risk because TLB has adequate tangible net worth, sufficient cash to meet its obligations and an operating leverage ratio not in excess of 20 times as of this date.
The Company is not able to estimate the financial statement impact or the maximum potential amount of future payments it could be required to make under these three guarantees as they are considered to be unlimited under the provisions of SSAP No. 5R.
The Company has provided a guarantee to TLBs (Singapore Branch) policyholders. If TLB fails to pay a valid claim solely by reason of it becoming insolvent as defined by Bermuda law, then the Company shall pay directly to the policy owner or named beneficiary the amount of the valid claim. At December 31, 2019 and 2018, TLB holds related statutory-basis policy and claim reserves of $2,334,649 and $2,212,527, respectively, which would be the maximum potential amount of future payments the Company could be required to make under this guarantee. In the event the Company is required to make a payment under this guarantee, the payment would be reflected in the Companys financial statements as an increase to incurred claims. As of December 31, 2019, there is no payment or performance risk because TLB is not insolvent as of this date.
The Company has provided a guarantee to TLBs (Hong Kong Branch) policyholders. If TLB fails to pay a valid claim solely by reason of it becoming insolvent as defined by Bermuda law, then the Company shall pay directly to the policy owner or named beneficiary the amount of the valid claim. At December 31, 2019 and 2018, TLB policies covered by this guarantee would have resulted in US statutory policy and claim reserves of $3,585,273 and $3,458,012, respectively, which would represent a fair measure of the maximum potential amount of future payments the Company under this guarantee based on the US statutory reserve requirements. TLB is a subsidiary of the Company and TLB has invested assets supporting these policies which mitigates this risk. In the event the Company is required to make a payment under this guarantee, the payment would be reflected in the Companys financial statements as an increase to incurred claims. As of December 31, 2019, there is no payment or performance risk because TLB is not insolvent as of this date.
97
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company did not recognize a liability for any of the TLB guarantees due to the adoption of SSAP No. 5R, as a liability is not required for guarantees to or on behalf of a wholly-owned subsidiary. Management monitors TLBs financial condition, and there are no indications that TLB will become insolvent. As such, management feels the risk of payment under these guarantees on behalf of TLB is remote.
The Company is a party to a fee agreement with TLB whereby the Company continues to provide the guarantees with respect to TLB described in the paragraphs above. The Company received $577 and $587 under this agreement in 2019 and 2018, respectively.
The Company has provided guarantees for the obligations of noninsurance affiliates who have accepted assignments of structured settlement payment obligations from other insurers and purchase structured settlement insurance policies from subsidiaries of the Company that match those obligations. The guarantees made by the Company are specific to each structured settlement contract and vary in date and duration of the obligation. These are numerous and are backed by the reserves established by the Company to represent the present value of the future payments for those contracts. The direct statutory reserve established at December 31, 2019 and 2018 for the total payout block is $3,154,349 and $3,235,571, respectively. As this reserve is already recorded on the balance sheets of the Company, there was no additional liability recorded due to the adoption of SSAP No. 5R.
During 2019, the Company entered into an agreement with Aegon USA Realty Advisors, LLC to commit to purchase certain tax credit investments up to a maximum of $100,000. Under the terms of the agreement, the Company provides certain commitments to purchase tax credit investments that are part of tax credit funds in the event certain conditions are met. The Company did not acquire any tax credit investments during 2019 under this agreement. As of December 31, 2019, the commit to purchase amount is $47,890.
The following table provides an aggregate compilation of guarantee obligations as of December 31, 2019 and 2018:
December 31 | ||||||||
2019 | 2018 | |||||||
Aggregate maximum potential of future payments of all guarantees (undiscounted) |
$ | 5,919,933 | $ | 5,670,570 | ||||
|
|
|
|
|||||
Current liability recognized in financial statements: |
||||||||
Noncontingent liabilities |
| | ||||||
|
|
|
|
|||||
Contingent liabilities |
| | ||||||
|
|
|
|
|||||
Ultimate financial statement impact if action required: |
||||||||
Incurred claims |
5,919,922 | 5,670,539 | ||||||
Other |
11 | 31 | ||||||
|
|
|
|
|||||
Total impact if action required |
$ | 5,919,933 | $ | 5,670,570 | ||||
|
|
|
|
98
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company is a member of the FHLB of Des Moines. Through its membership, the Company has conducted business activity (borrowings) with the FHLB. It is part of the Companys strategy to utilize these funds for asset and liability management and spread lending purposes. The Company has determined the actual/estimated long-term maximum borrowing capacity as $3,472,120. The Company calculated this amount in accordance with the terms and conditions of agreement with FHLB of Des Moines.
At December 31, 2019 and 2018, the Company purchased/owned the following FHLB stock as part of the agreement:
Year Ended December 31 | ||||||||
2019 | 2018 | |||||||
Membership Stock: |
||||||||
Class A |
$ | | $ | | ||||
Class B |
10,000 | 10,000 | ||||||
Activity Stock |
32,800 | 123,400 | ||||||
Excess Stock |
| | ||||||
|
|
|
|
|||||
Total |
$ | 42,800 | $ | 133,400 | ||||
|
|
|
|
At December 31, 2019 and 2018, Membership Stock (Class A and B) Eligible for Redemption and the anticipated timeframe for redemption was as follows:
Less Than 6 Months |
6 Months to Less Than 1 Year |
1 to Less Than 3 Years |
3 to 5 Years |
|||||||||||||
December 31, 2019 |
||||||||||||||||
Membership Stock |
||||||||||||||||
Class A |
$ | | $ | | $ | | $ | | ||||||||
Class B |
| | | 10,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | | $ | | $ | | $ | 10,000 | ||||||||
|
|
|
|
|
|
|
|
Less Than 6 Months |
6 Months to Less Than 1 Year |
1 to Less Than 3 Years |
3 to 5 Years |
|||||||||||||
December 31, 2018 |
||||||||||||||||
Membership Stock |
||||||||||||||||
Class A |
$ | | $ | | $ | | $ | | ||||||||
Class B |
| | | 10,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | | $ | | $ | | $ | 10,000 | ||||||||
|
|
|
|
|
|
|
|
99
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019 and 2018, the amount of collateral pledged and the maximum amount pledged to the FHLB was as follows:
Fair Value | Carry Value | |||||||
December 31, 2019 |
||||||||
Total Collateral Pledged |
$ | 1,334,507 | $ | 1,259,059 | ||||
Maximum Collateral Pledged |
4,031,902 | 4,029,873 |
Fair Value | Carry Value | |||||||
December 31, 2018 |
||||||||
Total Collateral Pledged |
$ | 4,379,240 | $ | 4,405,503 | ||||
Maximum Collateral Pledged |
5,176,835 | 5,131,250 |
At December 31, 2019 and 2018, the borrowings from the FHLB were as follows:
December 31, 2019 | December 31, 2018 | |||||||||||||||
General Account |
Funding Agreements Reserves Established |
General Account |
Funding Agreements Reserves Established |
|||||||||||||
Debt1 |
$ | 820,000 | $ | | $ | 2,820,000 | $ | | ||||||||
Funding agreements2 |
| | 265,000 | 266,742 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 820,000 | $ | | $ | 3,085,000 | $ | 266,742 | ||||||||
|
|
|
|
|
|
|
|
1 The maximum amount of borrowing during 2019 was $2,695,000
2 The maximum amount of borrowing during 2019 was $0
As of December 31, 2019, the weighted average interest rate on FHLB advances was 2.183% with a weighted average term of 2.3 years. As of December 31, 2018, the weighted average interest rate on FHLB advances was 2.602% with a weighted average term of 4.3 years.
At December 31, 2019, the borrowings from the FHLB were not subject to prepayment penalties.
The Company has issued synthetic GIC contracts to benefit plan sponsors totaling $1,953,828 and $1,905,244 as of December 31, 2019 and 2018, respectively. A synthetic GIC is an off-balance sheet fee-based product sold primarily to tax qualified plans, where the plan sponsor retains ownership and control of the related plan assets and the Company provides book value benefit responsiveness to qualified participant withdrawals, in the event withdrawals requested exceeds plan cash flows. In certain contracts, the Company agrees to make advances to meet benefit withdrawal needs and earns a market interest rate on these advances. A periodically adjusted contract-crediting rate is a means by which investment and benefit responsiveness experience is passed through to participants. In return for the book value benefit responsiveness guarantee, the Company receives a premium that varies based on such elements as benefit responsiveness exposure and contract size. The Company underwrites the plans for the possibility of having to make benefit payments and also must agree to the investment guidelines ensuring the appropriate credit quality and cash flow. Funding requirements to date have been minimal and management does not anticipate any future material funding requirements to have a material impact on the reported financial results. In compliance with statutory guidelines, no reserves were recorded at December 31, 2019.
100
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company is party to legal proceedings involving a variety of issues incidental to its business, including class action lawsuits. Lawsuits may be brought in any federal or state court in the United States or in an arbitral forum. In addition, there continues to be significant federal and state regulatory activity relating to financial services companies. The Companys legal proceedings are subject to many variables, and given their complexity and scope, outcomes cannot be predicted with certainty. Although legal proceedings sometimes includes substantial demands for compensatory and punitive damages, and injunctive relief, damages arising from such demands are typically not to be material to the Companys financial position.
The Company has been named in class actions and individual lawsuits relating to increases in monthly deduction rates (MDR) on universal life products. The Company continues to defend against various lawsuits initiated by opt outs of one federal class action filed in the Central District of California that was settled in 2018 and approved in 2019. While the settlement has been administered for participating class members, the Company continues to hold a provision for opt out policyholder litigation. The Company also continues to defend other class actions and individual actions relating to MDR increases on different blocks of universal life insurance policies.
The Company is subject to insurance guaranty laws in the states in which it writes business. These laws provide for assessments against insurance companies for the benefit of policyholders and claimants in the event of insolvency of other insurance companies. Assessments are charged to operations when received by the Company, except where right of offset against other taxes paid is allowed by law. Amounts available for future offsets are recorded as an asset on the Companys balance sheets. The future obligation for known insolvencies has been accrued based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Associations. Potential future obligations for unknown insolvencies are not determinable by the Company and are not required to be accrued for financial reporting purposes. The Company has established a reserve of $7,066 and $7,893 and an offsetting premium tax benefit $5,402 and $6,198 at December 31, 2019 and 2018, respectively, for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. The guaranty fund (benefit) expense was $2,296, $400 and $216, for the years ended December 31, 2019, 2018 and 2017, respectively.
15. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities
The Company is party to municipal repurchase agreements which were established via bilateral trades and accounted for as secured borrowings. For municipal repurchase agreements, the Company rigorously manages asset/liability risks via an integrated risk management framework. The Companys liquidity position is monitored constantly, and factors heavily in the management of the asset portfolio. Projections comparing liquidity needs to available resources in both adverse and routine scenarios are refreshed monthly. The results of these projections on time horizons ranging from 16 months to 24 months are the basis for the near-term liquidity planning. This liquidity model excludes new business (non applicable for the spread business), renewals and other sources of cash and assumes all liabilities are paid off on the earliest dates required. Interest rate risk is carefully managed, in part through rigorously defined and monitored derivatives programs.
101
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables provide information on the securities sold under the municipal repurchase agreements for four quarters of 2019 and 2018:
December 31, 2019 | ||||||||||||||||
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
|||||||||||||
Maximum Amount |
||||||||||||||||
BACV |
XXX | XXX | XXX | $ | 113,025 | |||||||||||
Fair Value |
$ | 218,538 | $ | 207,007 | $ | 231,989 | $ | 125,603 | ||||||||
Ending Balance |
||||||||||||||||
BACV |
XXX | XXX | XXX | $ | 113,025 | |||||||||||
Fair Value |
$ | 170,891 | $ | 207,007 | $ | 231,989 | $ | 125,603 |
December 31, 2018 | ||||||||||||||||
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
|||||||||||||
Maximum Amount |
||||||||||||||||
BACV |
XXX | XXX | XXX | $ | 215,269 | |||||||||||
Fair Value |
$ | 171,138 | $ | 190,768 | $ | 225,811 | $ | 225,409 | ||||||||
Ending Balance |
||||||||||||||||
BACV |
XXX | XXX | XXX | $ | 205,405 | |||||||||||
Fair Value |
$ | 171,138 | $ | 188,120 | $ | 225,811 | $ | 217,575 |
2019 | 2018 | |||||||||||||||||||||||
NAIC 1 | NAIC 2 | Total | NAIC 1 | NAIC 2 | Total | |||||||||||||||||||
BondsBACV |
$ | 111,825 | $ | 1,200 | $ | 113,025 | $ | 193,398 | $ | 12,007 | $ | 205,405 | ||||||||||||
BondsFV |
124,403 | 1,200 | 125,603 | 205,526 | 12,049 | 217,575 |
These securities have maturity dates that range from 2020 to 2097.
102
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table provides information on the cash collateral received and liability to return collateral under the municipal repurchase agreements for four quarters of 2019 and 2018:
December 31, 2019 | ||||||||||||||||
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
|||||||||||||
Maximum Amount |
||||||||||||||||
Cash |
$ | 125,952 | $ | 157,496 | $ | 174,120 | $ | 99,794 | ||||||||
Ending Balance (1) |
||||||||||||||||
Cash |
$ | 125,952 | $ | 154,345 | $ | 78,286 | $ | 97,858 |
(1) | The remaining collateral held was greater than 90 days from contractual maturity. |
December 31, 2018 | ||||||||||||||||
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
|||||||||||||
Maximum Amount |
||||||||||||||||
Cash |
$ | 122,018 | $ | 152,634 | $ | 167,228 | $ | 98,835 | ||||||||
Ending Balance |
||||||||||||||||
Cash |
$ | 121,892 | $ | 148,082 | $ | 78,013 | $ | 95,515 |
The Company enters into dollar repurchase agreements in which securities are delivered to the counterparty once adequate collateral has been received. At December 31, 2019 and 2018, the Company had dollar repurchase agreements outstanding in the amount of $450,208 and $215,483, respectively, which is included in borrowed money on the balance sheets. Those amounts include accrued interest of $1,379 and $1,125, at December 31, 2019 and 2018, respectively. At December 31, 2019, securities with a book value of $550,333 and a fair value of $551,504 were subject to dollar repurchase agreements. These securities have maturity dates that range from October 1, 2034 to October 1, 2049. At December 31, 2018, securities with a book value of $371,260 and a fair value of $368,256 were subject to dollar repurchase agreements. The Company does not have the legal right to recall or substitute the underlying assets prior to the transactions scheduled termination. Upon scheduled termination, the counterparty is obligated to return substantially similar assets.
The contractual maturities of the dollar repurchase agreement positions are as follows:
Fair Value | ||||||||
2019 | 2018 | |||||||
Open |
$ | 448,829 | $ | 214,357 | ||||
|
|
|
|
|||||
Total |
448,829 | 214,357 | ||||||
Securities received |
| | ||||||
|
|
|
|
|||||
Total collateral received |
$ | 448,829 | $ | 214,357 | ||||
|
|
|
|
103
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
In the course of the Companys asset management, securities are sold and reacquired within 30 days of the sale date to enhance the Companys yield on its investment portfolio. The details by NAIC designation 3 or below of securities sold during 2019 and reacquired within 30 days of the sale date are:
Number of Transactions | Book Value of Securities Sold |
Cost of Securities Repurchased |
Gains (Losses) | |||||||||||||
Common stocks |
6 | $ | 26 | $ | 12 | $ | 17 |
16. Reconciliation to Statutory Statement
The following is a reconciliation of amounts previously reported to the Iowa Department of Financial Regulation in the 2019 Annual Statement, to those reported in the accompanying statutory-basis financial statements:
December 31 | ||||||||
2019 | 2018 | |||||||
Balance Sheets |
||||||||
Total assets as reported in the Companys Annual Statement |
$ | 130,191,350 | $ | 124,175,952 | ||||
Increase in other assets |
23,416 | | ||||||
Increase in net deferred income tax asset |
8,660 | | ||||||
|
|
|
|
|||||
Total assets as reported in the accompanying audited statutory basis balance sheet |
$ | 130,223,426 | $ | 124,175,952 | ||||
|
|
|
|
|||||
Total liabilities as reported in the Companys Annual Statement |
$ | 123,630,600 | $ | 117,898,517 | ||||
Increase in other liabilities |
23,416 | | ||||||
Increase in aggregate reserves for policies and contracts |
41,240 | | ||||||
|
|
|
|
|||||
Total liabilities as reported in the accompanying audited statutory basis balance sheet |
$ | 123,695,256 | $ | 117,898,517 | ||||
|
|
|
|
|||||
Total capital and surplus as reported in the Companys Annual Statement |
$ | 6,560,750 | $ | 6,277,435 | ||||
Decrease in premiums |
| (14,950 | ) | |||||
Increase in change in aggregate reserves |
(41,240 | ) | | |||||
Increase in change in net deferred income tax asset |
8,660 | | ||||||
Increase in other changesnet |
| 14,950 | ||||||
|
|
|
|
|||||
Total capital and surplus as reported in the accompanying audited statutory basis balance sheet |
$ | 6,528,170 | $ | 6,277,435 | ||||
|
|
|
|
|||||
Statements of Operations |
||||||||
Statutory net income as reported in the Companys Annual Statement |
$ | 3,335,262 | $ | (1,408,868 | ) | |||
Decrease in premiums and other considerations |
(653,203 | ) | (635,470 | ) | ||||
Decrease in fee revenue and other income |
| (5,700 | ) | |||||
Decrease in surrender benefits |
653,203 | 618,170 | ||||||
Increase in change in aggregate reserves |
(41,240 | ) | | |||||
Increase in federal income tax (benefit) expense |
| (8,050 | ) | |||||
|
|
|
|
|||||
Total net income as reported in the accompanying audited statutory basis statement of operations |
$ | 3,294,022 | $ | (1,423,818 | ) | |||
|
|
|
|
The reconciling differences to the Annual Statement is driven by Managements decision to revise prior year amounts. Please refer to Revision to Prior Years in Note 3 for further details.
104
Transamerica Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Other adjustments relate to actuarial modeling errors and reclassification errors. The Company considered the impacts of each of these errors to be not material both individually and in the aggregate and concluded that none were significant for individual categorization herein.
The financial statements are adjusted to reflect events that occurred between the balance sheets date and the date when the financial statements are available to be issued, provided they give evidence of conditions that existed at the balance sheets date (Type I). The Company has not identified any Type I subsequent events for the year ended December 31, 2019 through April 27, 2020.
Events that are indicative of conditions that arose after the balance sheets date are disclosed, but do not result in an adjustment of the financial statements themselves (Type II). The Company has identified Type II subsequent events for the year ended December 31, 2019.
Since January 2020, the Coronavirus disease (COVID-19) outbreak is causing disruption to business, markets, and industry. The Company is continuously monitoring the market, and the economic factors that impact the Company, to proactively manage the associated risks. At this point, management believes that the most significant risks the Company faces are related to financial markets (particularly credit, equity, and interest rates risks), and underwriting risks (particularly related to mortality, morbidity and policyholder behavior). As of the audit report release date, the Company continues to monitor and evaluate the impacts of the COVID-19 crisis on the Companys 2020 results through the use of sensitivities and stress testing. While it is too early to provide long-term impacts, if any, management has determined the Company remains strongly capitalized with RBC remaining within target limits set by the capital management policy.
The Company is defending a class action lawsuit and individual lawsuits relating to increases in MDR on universal life products. A settlement announced in the class action lawsuit in early April 2020 will result in the establishment of an estimated $94,000 reserve, which will be reflected in the Companys first quarter of 2020 results. If the settlement is ultimately approved by the court, the Company expects to fund the settlement in third or fourth quarter of 2020.
105
Transamerica Life Insurance Company
Appendix A Listing of Affiliated Companies
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |||
Transamerica Corporation |
42-1484983 | |||
Aegon Asset Management Services Inc |
39-1884868 | |||
Aegon Direct Marketing Services Inc |
42-1470697 | |||
Aegon Financial Services Group Inc |
41-1479568 | |||
Aegon Institutional Markets Inc |
61-1085329 | |||
Aegon Management Company |
35-1113520 | |||
Aegon USA Real Estate Services Inc |
61-1098396 | |||
Aegon USA Realty Advisors of CA |
20-5023693 | |||
AFSG Securities Corporation |
23-2421076 | |||
AUSA Properties Inc |
27-1275705 | |||
Commonwealth General Corporation |
51-0108922 | |||
Creditor Resources Inc |
42-1079584 | |||
CRI Solutions Inc |
52-1363611 | |||
Financial Planning Services Inc |
23-2130174 | |||
Garnet Assurance Corporation |
11-3674132 | |||
Garnet Assurance Corporation II |
14-1893533 | |||
Garnet Assurance Corporation III |
01-0947856 | |||
Intersecurities Ins Agency |
42-1517005 | |||
LIICA RE II |
20-5927773 | |||
Massachusetts Fidelity Trust |
42-0947998 | |||
MLIC RE I Inc |
01-0930908 | |||
Money Services Inc |
42-1079580 | |||
Monumental General Administrators Inc |
52-1243288 | |||
Pearl Holdings Inc I |
20-1063558 | |||
Pearl Holdings Inc II |
20-1063571 | |||
Pine Falls Re Inc |
26-1552330 | |||
Real Estate Alternatives Portfolio 3A Inc |
20-1627078 | |||
River Ridge Insurance Company |
20-0877184 | |||
Short Hills Management |
42-1338496 | |||
Stonebridge Benefit Services Inc |
75-2548428 | |||
Stonebridge Reinsurance Company |
61-1497252 | |||
TCF Asset Management Corp |
84-0642550 |
106
Transamerica Life Insurance Company
Appendix A Listing of Affiliated Companies (continued)
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |||
TCFC Air Holdings Inc |
32-0092333 | |||
TCFC Asset Holdings Inc |
32-0092334 | |||
TLIC Oakbrook Reinsurance Inc. |
47-1026613 | |||
TLIC Riverwood Reinsurance Inc |
45-3193055 | |||
TLIC Watertree Reinsurance, Inc. |
81-3715574 | |||
Tranasmerica Advisors Life Insurance Company |
91-1325756 | |||
Transamerica Accounts Holding Corp |
36-4162154 | |||
Transamerica Affinity Services Inc |
42-1523438 | |||
Transamerica Affordable Housing Inc |
94-3252196 | |||
Transamerica Agency Network Inc |
61-1513662 | |||
Transamerica Asset Management |
59-3403585 | |||
Transamerica Capital Inc |
95-3141953 | |||
Transamerica Casualty Insurance Company |
31-4423946 | |||
Transamerica Commercial Finance Corp I |
94-3054228 | |||
Transamerica Consumer Finance Holding Company |
95-4631538 | |||
Transamerica Corporation (OREGON) |
98-6021219 | |||
Transamerica Distribution Finance Overseas Inc |
36-4254366 | |||
Transamerica Finance Corporation |
95-1077235 | |||
Transamerica Financial Advisors |
59-2476008 | |||
Transamerica Financial Life Insurance Company |
36-6071399 | |||
Transamerica Fund Services Inc |
59-3403587 | |||
Transamerica Home Loan |
95-4390993 | |||
Transamerica International Re (Bermuda) Ltd |
98-0199561 | |||
Transamerica Investors Securities Corp |
13-3696753 | |||
Transamerica Leasing Holdings Inc |
13-3452993 | |||
Transamerica Life Insurance Company |
39-0989781 | |||
Transamerica Pacific Insurance Co Ltd |
94-3304740 | |||
Transamerica Premier Life Insurance Company |
52-0419790 | |||
Transamerica Resources Inc |
52-1525601 | |||
Transamerica Small Business Capital Inc |
36-4251204 | |||
Transamerica Stable Value Solutions Inc |
27-0648897 | |||
Transamerica Vendor Financial Services Corporation |
36-4134790 |
107
Transamerica Life Insurance Company
Appendix A Listing of Affiliated Companies (continued)
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |||
United Financial Services Inc |
52-1263786 | |||
WFG China Holdings Inc |
20-2541057 | |||
World Fin Group Ins Agency of Massachusetts Inc |
04-3182849 | |||
World Financial Group Inc |
42-1518386 | |||
World Financial Group Ins Agency of Hawaii Inc |
99-0277127 | |||
World Financial Group Insurance Agency of WY Inc |
42-1519076 | |||
World Financial Group Insurance Agency |
95-3809372 | |||
Zahorik Company Inc |
95-2775959 | |||
Zero Beta Fund LLC |
26-1298094 |
108
Statutory-Basis Financial
Statement Schedules
109
Transamerica Life Insurance Company
Summary of Investments Other Than
Investments in Related Parties
(Dollars in Thousands)
December 31, 2019
SCHEDULE I
Type of Investment |
Cost (1) | Fair Value | Amount at Which Shown in the Balance Sheet (2) |
|||||||||
Fixed maturities |
||||||||||||
Bonds: |
||||||||||||
United States government and government agencies and authorities |
$ | 4,124,054 | $ | 5,081,559 | $ | 4,306,199 | ||||||
States, municipalities and political subdivisions |
1,315,704 | 1,407,331 | 1,315,705 | |||||||||
Foreign governments |
349,796 | 369,821 | 349,796 | |||||||||
Hybrid securities |
396,942 | 440,640 | 396,942 | |||||||||
All other corporate bonds |
19,066,967 | 21,344,844 | 19,043,825 | |||||||||
Preferred stocks |
115,659 | 109,845 | 111,630 | |||||||||
|
|
|
|
|
|
|||||||
Total fixed maturities |
25,369,122 | 28,754,040 | 25,524,097 | |||||||||
Equity securities |
||||||||||||
Common stocks: |
||||||||||||
Industrial, miscellaneous and all other |
58,311 | 80,789 | 80,789 | |||||||||
|
|
|
|
|
|
|||||||
Total equity securities |
58,311 | 80,789 | 80,789 | |||||||||
Mortgage loans on real estate |
5,096,613 | 5,096,613 | ||||||||||
Real estate |
51,546 | 51,546 | ||||||||||
Policy loans |
1,099,596 | 1,099,596 | ||||||||||
Other long-term investments |
1,072,720 | 1,072,720 | ||||||||||
Receivable for securities |
18,535 | 18,535 | ||||||||||
Securities lending |
1,246,827 | 1,246,827 | ||||||||||
Cash, cash equivalents and short-term investments |
1,453,503 | 1,453,503 | ||||||||||
|
|
|
|
|||||||||
Total investments |
$ | 35,466,773 | $ | 35,644,226 | ||||||||
|
|
|
|
(1) | Equity securities are reported at original cost. Fixed maturities are reported at original cost reduced by repayments and adjusted for amortization of premiums and accrual of discounts. |
(2) | United States government and corporate bonds of $19,690 are held at fair value rather than amortized cost due to having an NAIC 6 rating. Two preferred stock securities are held at fair value of $1,037 due to having an NAIC 4 and 5 ratings. |
110
Transamerica Life Insurance Company
Supplementary Insurance Information
(Dollars in Thousands)
SCHEDULE III
Future Policy Benefits and Expenses |
Unearned Premiums |
Policy and Contract Liabilities |
Premium Revenue |
Net Investment Income* |
Benefits, Claims Losses and Settlement Expenses |
Other Operating Expenses* |
||||||||||||||||||||||
Year ended December 31, 2019 |
||||||||||||||||||||||||||||
Individual life |
$ | 10,421,944 | $ | | $ | 341,604 | $ | 1,006,977 | $ | 642,673 | $ | 1,171,877 | $ | 422,774 | ||||||||||||||
Individual health |
80,537 | 92,813 | 27,401 | 100,145 | 10,837 | 55,956 | 229,548 | |||||||||||||||||||||
Group life and health |
1,527,571 | 20,356 | 76,891 | 595,324 | 94,785 | 202,901 | 212,660 | |||||||||||||||||||||
Annuity |
14,094,715 | | 33,330 | 10,443,660 | 896,030 | 13,853,202 | (2,991,668 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 26,124,767 | $ | 113,169 | $ | 479,226 | $ | 12,146,106 | $ | 1,644,325 | $ | 15,283,936 | $ | (2,126,686 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended December 31, 2018 |
||||||||||||||||||||||||||||
Individual life |
$ | 11,337,912 | $ | | $ | 378,855 | $ | 87,370 | $ | 746,129 | $ | 1,605,665 | $ | 803,671 | ||||||||||||||
Individual health |
86,822 | 92,364 | 30,578 | 106,230 | 25,370 | 65,813 | 193,680 | |||||||||||||||||||||
Group life and health |
1,512,345 | 21,075 | 81,403 | 638,938 | 95,911 | 306,199 | 276,705 | |||||||||||||||||||||
Annuity |
14,244,431 | | 37,065 | 9,980,980 | 658,084 | 16,182,017 | (3,230,310 | ) | ||||||||||||||||||||
Other |
| | | | 141,678 | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 27,181,510 | $ | 113,439 | $ | 527,901 | $ | 10,813,518 | $ | 1,667,172 | $ | 18,159,694 | $ | (1,956,254 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended December 31, 2017 |
||||||||||||||||||||||||||||
Individual life |
$ | 10,967,747 | $ | | $ | 279,234 | $ | (7,804,573 | ) | $ | (1,001,846 | ) | $ | (1,700,459 | ) | $ | 519,906 | |||||||||||
Individual health |
100,420 | 91,784 | 27,176 | (1,489,124 | ) | 1,344,780 | (4,084,846 | ) | (885,516 | ) | ||||||||||||||||||
Group life and health |
1,528,445 | 23,229 | 100,510 | 508,023 | 238,217 | (36,386 | ) | 186,023 | ||||||||||||||||||||
Annuity |
14,355,269 | | 27,887 | 5,271,506 | 1,497,683 | 9,199,357 | (2,544,778 | ) | ||||||||||||||||||||
Other |
| | | | 437,448 | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 26,951,881 | $ | 115,013 | $ | 434,807 | $ | (3,514,168 | ) | $ | 2,516,282 | $ | 3,377,666 | $ | (2,724,365 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Allocations of net investment income and other operating expenses are based on a number of assumptions and estimates, and the results would change if different methods were applied. |
111
Transamerica Life Insurance Company
(Dollars in Thousands)
SCHEDULE IV
Gross Amount | Ceded to Other Companies |
Assumed From Other Companies |
Net Amount | Percentage of Amount Assumed to Net |
||||||||||||||||
Year ended December 31, 2019 |
||||||||||||||||||||
Life insurance in force |
$ | 503,852,244 | $ | 774,726,771 | $ | 421,298,647 | $ | 150,424,120 | 280 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 2,582,854 | $ | 2,821,951 | $ | 1,246,074 | $ | 1,006,977 | 124 | % | ||||||||||
Individual health |
529,850 | 432,873 | 3,168 | 100,145 | 3 | % | ||||||||||||||
Group life and health |
704,156 | 109,598 | 766 | 595,324 | 0 | % | ||||||||||||||
Annuity |
10,756,542 | 394,566 | 81,684 | 10,443,660 | 1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 14,573,402 | $ | 3,758,988 | $ | 1,331,692 | $ | 12,146,106 | 11 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2018 |
||||||||||||||||||||
Life insurance in force |
$ | 976,929,481 | $ | 831,268,672 | $ | 1,204 | $ | 145,662,013 | 0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 2,460,547 | $ | 3,668,683 | $ | 1,295,506 | $ | 87,370 | 1483 | % | ||||||||||
Individual health |
532,131 | 429,165 | 3,264 | 106,230 | 3 | % | ||||||||||||||
Group life and health |
753,426 | 131,816 | 17,328 | 638,938 | 3 | % | ||||||||||||||
Annuity |
10,102,616 | 199,520 | 77,884 | 9,980,980 | 1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 13,848,720 | $ | 4,429,184 | $ | 1,393,982 | $ | 10,813,518 | 13 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2017 |
||||||||||||||||||||
Life insurance in force |
$ | 537,551,597 | $ | 887,853,357 | $ | 484,570,357 | $ | 134,268,597 | 361 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 2,452,523 | $ | 11,837,526 | $ | 1,580,429 | $ | (7,804,574 | ) | -20 | % | |||||||||
Individual health |
530,052 | 2,022,968 | 3,792 | (1,489,124 | ) | 0 | % | |||||||||||||
Group life and health |
802,090 | 321,533 | 27,466 | 508,023 | 5 | % | ||||||||||||||
Annuity |
9,424,428 | 4,218,194 | 65,273 | 5,271,507 | 1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 13,209,093 | $ | 18,400,221 | $ | 1,676,960 | $ | (3,514,168 | ) | -48 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
112
18. Subsequent Events (Unaudited)
Additional subsequent events have been evaluated for disclosure through September 28, 2020.
On May 15, 2020, TPLIC paid a dividend to its parent company, CGC, in the amount of $700,000. CGC then contributed this amount to TLIC. The dividend and contribution included $76,604 in cash and $623,396 in securities.
On June 30, 2020, the Company received $96,035 from TFLIC as consideration for TFLICs repurchase of its remaining 1,254 common stock shares held by the Company. The shares were redeemed at par of $125 per share with total par value of $157 and paid-in surplus of $95,878.
On June 30, 2020, the Company, Transamerica Pacific Re, Inc. (TPRe), a newly formed AXXX captive and affiliate, and TPIC entered into a novation agreement whereby the Company consented to the assignment, transfer and novation of TPICs obligations under the TLIC/TPIC universal life coinsurance agreements to TPRe. The novation resulted in no gain or loss. The Company then entered into a recapture agreement with TPRe to recapture universal life insurance risks for consideration of $2,124,341 equal to the statutory reserves recaptured resulting in no gain or loss. With approval from the IID, subsequent to the novation and the recapture on June 30, 2020, the Company and TPRe amended the agreements whereby the secondary guarantee is retained by TPRe.
Effective July 1, 2020, the Company entered into a reinsurance agreement with Wilton Reassurance Company to novate corporate owned life insurance policies previously issued by the company to TPLIC. The company novated $173,052 of reserves and claim reserves and paid a ceding commission of $7,400. The transaction resulted in a pre-tax loss of $7,400 which has been included in the Statements of Operations.
Effective October 1, 2020, the Company will merger with TPLIC, an Iowa domiciled affiliate, and MLIC Re, a Vermont domiciled affiliate, with the Company emerging as the surviving entity per the Plan of Merger which was approved by the Iowa Insurance Department and the Department of Financial Regulation of Vermont.
113
FINANCIAL STATEMENTS STATUTORY BASIS
AND SUPPLEMENTARY INFORMATION
Transamerica Premier Life Insurance Company
Years Ended December 31, 2019, 2018 and 2017
Transamerica Premier Life Insurance Company
Financial Statements Statutory Basis
and Supplementary Information
Years Ended December 31, 2019, 2018 and 2017
1 | ||||
Audited Financial Statements |
||||
3 | ||||
4 | ||||
Statements of Changes in Capital and Surplus Statutory Basis |
5 | |||
7 | ||||
Notes to Financial Statements Statutory Basis |
||||
9 | ||||
2. Basis of Presentation and Summary of Significant Accounting Policies |
9 | |||
22 | ||||
22 | ||||
31 | ||||
6. Premium and Annuity Considerations Deferred and Uncollected |
49 | |||
50 | ||||
63 | ||||
66 | ||||
73 | ||||
75 | ||||
76 | ||||
77 | ||||
84 | ||||
84 | ||||
16. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities |
88 | |||
89 | ||||
89 | ||||
91 | ||||
Statutory-Basis Financial Statement Schedules |
||||
Summary of Investments Other Than Investments in Related Parties |
95 | |||
96 | ||||
97 |
2
Report of Independent Auditors
To the Board of Directors of
Transamerica Premier Life Insurance Company
We have audited the accompanying statutory-basis financial statements of Transamerica Premier Life Insurance Company (the Company), which comprise the balance sheets statutory basis as of December 31, 2019 and 2018, and the related statements of operations statutory basis, of changes in capital and surplus statutory basis, and of cash flow statutory basis for each of the three years in the period ended December 31, 2019.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the Iowa Insurance Division. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles
As described in Note 2 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the Iowa Insurance Division, which is a basis of accounting other than accounting principles generally accepted in the United States of America.
The effects on the financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.
Adverse Opinion on U.S. Generally Accepted Accounting Principles
In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2019 and 2018 or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2019.
Opinion on Statutory Basis of Accounting
In our opinion, the financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities and surplus of the Company as of December 31, 2019 and 2018 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in accordance with the accounting practices prescribed or permitted by the Iowa Insurance Division described in Note 2.
Other Matter
Our audit was conducted for the purpose of forming an opinion on the statutory basis financial statements taken as a whole. The Supplemental Schedule of Selected Statutory - Basis Financial Data, Supplemental Schedule of Investment Risks Interrogatories Statutory Basis, and Summary Investment Schedule Statutory Basis (collectively, the supplemental schedules) of the Company as of December 31, 2019 and for the year then ended are presented to comply with the National Association of Insurance Commissioners Annual Statement Instructions and Accounting Practices and Procedures Manual and for purposes of additional analysis and are not a required part of the statutory-basis financial statements. The supplemental schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the statutory-basis financial statements. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the statutory-basis financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the statutory-basis financial statements or to the statutory-basis financial statements themselves and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental schedules are fairly stated, in all material respects, in relation to the statutory-basis financial statements taken as a whole.
/s/PricewaterhouseCoopers LLP
Chicago, Illinois
April 20, 2020
2
Transamerica Premier Life Insurance Company
Balance Sheets Statutory Basis
(Dollars in Thousands)
December 31 | ||||||||
2019 | 2018 | |||||||
Admitted assets |
||||||||
Cash, cash equivalents and short-term investments |
$ | 728,220 | $ | 902,074 | ||||
Bonds |
17,877,965 | 16,814,750 | ||||||
Preferred stocks |
4,955 | 9,958 | ||||||
Common stocks |
158,426 | 150,617 | ||||||
Mortgage loans on real estate |
2,737,109 | 2,436,202 | ||||||
Real estate |
187,639 | 217,646 | ||||||
Policy loans |
962,408 | 936,884 | ||||||
Securities lending reinvested collateral assets |
757,186 | 575,155 | ||||||
Derivatives |
25,531 | 34,933 | ||||||
Other invested assets |
1,039,664 | 808,423 | ||||||
|
|
|
|
|||||
Total cash and invested assets |
24,479,103 | 22,886,642 | ||||||
Accrued investment income |
226,564 | 219,256 | ||||||
Premiums deferred and uncollected |
151,139 | 176,727 | ||||||
Funds held by reinsurer |
524,067 | 453,319 | ||||||
Net deferred income tax asset |
231,249 | 238,949 | ||||||
Other assets |
396,237 | 365,474 | ||||||
Separate account assets |
26,508,334 | 23,296,139 | ||||||
|
|
|
|
|||||
Total admitted assets |
$ | 52,516,693 | $ | 47,636,506 | ||||
|
|
|
|
|||||
Liabilities and capital and surplus |
||||||||
Aggregate reserves for policies and contracts |
$ | 17,894,601 | $ | 16,965,724 | ||||
Policy and contract claim reserves |
463,716 | 434,245 | ||||||
Liability for deposit-type contracts |
356,309 | 584,693 | ||||||
Other policyholders funds |
9,790 | 11,304 | ||||||
Transfers from separate accounts due or accrued |
(26,478 | ) | (41,964 | ) | ||||
Funds held under reinsurance treaties |
641,858 | 689,145 | ||||||
Asset valuation reserve |
384,650 | 317,840 | ||||||
Interest maintenance reserve |
1,039,810 | 1,110,342 | ||||||
Derivatives |
81,072 | 61,290 | ||||||
Payable for collateral under securitites loaned and other transactions |
959,484 | 695,892 | ||||||
Borrowed money |
1,434,416 | 1,290,299 | ||||||
Other liabilities |
468,195 | 256,398 | ||||||
Separate account liabilities |
26,508,334 | 23,296,139 | ||||||
|
|
|
|
|||||
Total liabilities |
50,215,757 | 45,671,347 | ||||||
Capital and surplus |
||||||||
Common stock |
10,137 | 10,137 | ||||||
Preferred stock |
| | ||||||
Treasury stock |
| | ||||||
Surplus notes |
60,000 | 160,000 | ||||||
Paid-in surplus |
1,057,861 | 1,057,857 | ||||||
Special surplus funds |
1,334 | | ||||||
Unassigned surplus |
1,171,604 | 737,165 | ||||||
|
|
|
|
|||||
Total capital and surplus |
2,300,936 | 1,965,159 | ||||||
|
|
|
|
|||||
Total liabilities and capital and surplus |
$ | 52,516,693 | $ | 47,636,506 | ||||
|
|
|
|
See accompanying notes.
3
Transamerica Premier Life Insurance Company
Statements of Operations Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Revenues |
||||||||||||
Premiums and annuity considerations |
$ | 3,347,881 | $ | 3,550,022 | $ | 2,296,304 | ||||||
Net investment income |
1,094,859 | 1,050,408 | 879,492 | |||||||||
Commissions, expense allowances, and reserve adjustments on reinsurance ceded |
(170,748 | ) | (144,423 | ) | 239,322 | |||||||
Fee revenue and other income |
362,101 | 417,003 | 335,473 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
4,634,093 | 4,873,010 | 3,750,591 | |||||||||
Benefits and expenses |
||||||||||||
Death benefits |
384,956 | 376,460 | 339,863 | |||||||||
Accident and health benefits |
831,058 | 828,511 | 1,049,960 | |||||||||
Annuity benefits |
318,391 | 258,654 | 289,541 | |||||||||
Surrender benefits |
1,939,577 | 1,176,594 | 1,071,731 | |||||||||
Other benefits |
60,302 | 67,143 | 68,312 | |||||||||
Net increase (decrease) in reserves |
961,715 | 790,001 | 3,400,067 | |||||||||
Commissions |
512,527 | 628,139 | 1,210,260 | |||||||||
Net transfers to (from) separate accounts |
(1,261,078 | ) | (332,080 | ) | (161,346 | ) | ||||||
Modified coinsurance reserve adjustment assumed |
(7,160 | ) | (13,365 | ) | (4,855,921 | ) | ||||||
IMR adjustment due to reinsurance |
| | 714,351 | |||||||||
General insurance expenses and other |
510,442 | 453,327 | 453,186 | |||||||||
|
|
|
|
|
|
|||||||
Total benefits and expenses |
4,250,730 | 4,233,384 | 3,580,004 | |||||||||
|
|
|
|
|
|
|||||||
Gain (loss) from operations before dividends and federal income taxes |
383,363 | 639,626 | 170,587 | |||||||||
|
|
|
|
|
|
|||||||
Dividends to policyholders |
1,030 | 1,025 | 1,081 | |||||||||
|
|
|
|
|
|
|||||||
Gain (loss) from operations before federal income taxes |
382,333 | 638,601 | 169,506 | |||||||||
Federal income tax (benefit) expense |
39,259 | 30,372 | 903,151 | |||||||||
|
|
|
|
|
|
|||||||
Net gain (loss) from operations |
343,074 | 608,229 | (733,645 | ) | ||||||||
Net realized capital gains (losses), after tax and amounts transferred to interest maintenance reserve |
229,130 | (71,838 | ) | 411,452 | ||||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | 572,204 | $ | 536,391 | $ | (322,193 | ) | |||||
|
|
|
|
|
|
See accompanying notes.
4
Transamerica Premier Life Insurance Company
Statements of Changes in Capital and Surplus Statutory Basis
(Dollars in Thousands)
Class A Common Stock |
Class B Common Stock |
Surplus Notes |
Paid-in Surplus |
Special Surplus Funds |
Unassigned Surplus |
Total Capital and Surplus |
||||||||||||||||||||||
Balance at January 1, 2017 |
$ | 7,364 | $ | 2,773 | $ | 160,000 | $ | 710,131 | $ | 2,105 | $ | 795,304 | $ | 1,677,677 | ||||||||||||||
Net income (loss) |
| | | | | (322,193 | ) | (322,193 | ) | |||||||||||||||||||
Change in net unrealized capital gains/losses, net of taxes |
| | | | | (23,101 | ) | (23,101 | ) | |||||||||||||||||||
Change in net deferred income tax asset |
| | | | | (39,231 | ) | (39,231 | ) | |||||||||||||||||||
Change in nonadmitted assets |
| | | | | (16,230 | ) | (16,230 | ) | |||||||||||||||||||
Change in reserve on account of change in valuation basis |
| | | | | 42,157 | 42,157 | |||||||||||||||||||||
Change in asset valuation reserve |
| | | | | (64,645 | ) | (64,645 | ) | |||||||||||||||||||
Change in surplus as a result of reinsurance |
| | | | | 322,858 | 322,858 | |||||||||||||||||||||
Dividends to stockholders |
| | | | | (350,000 | ) | (350,000 | ) | |||||||||||||||||||
Capital Contribution |
| | | 350,000 | | | 350,000 | |||||||||||||||||||||
Other changes - net |
| | (2,221 | ) | 1,580 | 2,416 | 1,775 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2017 |
7,364 | 2,773 | 160,000 | 1,057,910 | 3,685 | 347,335 | 1,579,067 | |||||||||||||||||||||
Net income (loss) |
| | | | | 536,391 | 536,391 | |||||||||||||||||||||
Change in net unrealized capital gains/losses, net of taxes |
| | | | | 36,958 | 36,958 | |||||||||||||||||||||
Change in net deferred income tax asset |
| | | | | 7,833 | 7,833 | |||||||||||||||||||||
Change in nonadmitted assets |
| | | | | 20,283 | 20,283 | |||||||||||||||||||||
Change in reserve on account of change in valuation basis |
| | | | | (7,030 | ) | (7,030 | ) | |||||||||||||||||||
Change in asset valuation reserve |
| | | | | (27,727 | ) | (27,727 | ) | |||||||||||||||||||
Change in surplus as a result of reinsurance |
| | | | | (179,574 | ) | (179,574 | ) | |||||||||||||||||||
Other changes - net |
| | | (53 | ) | (3,685 | ) | 2,696 | (1,042 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2018 |
$ | 7,364 | $ | 2,773 | $ | 160,000 | $ | 1,057,857 | $ | | $ | 737,165 | $ | 1,965,159 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
Transamerica Premier Life Insurance Company
Statements of Changes in Capital and Surplus Statutory Basis (continued)
(Dollars in Thousands)
Class A Common Stock |
Class B Common Stock |
Surplus Notes |
Paid-in Surplus |
Special Surplus Funds |
Unassigned Surplus |
Total Capital and Surplus |
||||||||||||||||||||||
Balance at December 31, 2018 |
$ | 7,364 | $ | 2,773 | $ | 160,000 | $ | 1,057,857 | $ | | $ | 737,165 | $ | 1,965,159 | ||||||||||||||
Net income (loss) |
| | | | | 572,204 | 572,204 | |||||||||||||||||||||
Change in net unrealized capital gains/losses, net of tax |
| | | | | 51,698 | 51,698 | |||||||||||||||||||||
Change in net deferred income tax asset |
| | | | | 10,084 | 10,084 | |||||||||||||||||||||
Change in nonadmitted assets |
| | | | | 14,015 | 14,015 | |||||||||||||||||||||
Change in reserve on account of change in valuation basis |
| | | | | 30,452 | 30,452 | |||||||||||||||||||||
Change in asset valuation reserve |
| | | | | (66,810 | ) | (66,810 | ) | |||||||||||||||||||
Change in surplus as a result of reinsurance |
| | | | | (181,854 | ) | (181,854 | ) | |||||||||||||||||||
Change in surplus notes |
| (100,000 | ) | | (100,000 | ) | ||||||||||||||||||||||
Dividends to stockholders |
| | | | (8,444 | ) | (8,444 | ) | ||||||||||||||||||||
Other changes - net |
| | | 4 | 1,334 | 13,094 | 14,432 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2019 |
$ | 7,364 | $ | 2,773 | $ | 60,000 | $ | 1,057,861 | $ | 1,334 | $ | 1,171,604 | $ | 2,300,936 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
6
Transamerica Premier Life Insurance Company
Statements of Cash Flow Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Operating activities |
||||||||||||
Premiums and annuity considerations |
$ | 3,374,817 | $ | 3,573,062 | $ | 3,605,127 | ||||||
Net investment income |
1,049,463 | 988,075 | 719,246 | |||||||||
Other income |
119,112 | 184,835 | 208,482 | |||||||||
Benefit and loss related payments |
(3,470,951 | ) | (2,617,277 | ) | (2,662,734 | ) | ||||||
Net transfers from separate accounts |
1,276,609 | 344,666 | 180,649 | |||||||||
Commissions and operating expenses |
(1,151,522 | ) | (1,242,500 | ) | (1,119,469 | ) | ||||||
Dividends paid to policyholders |
(1,091 | ) | | | ||||||||
Federal income taxes (paid) received |
(25,440 | ) | (1,009,824 | ) | (14,189 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
1,170,997 | 221,037 | 917,112 | |||||||||
Investing activities |
||||||||||||
Proceeds from investments sold, matured or repaid |
3,850,764 | 4,220,254 | 3,939,238 | |||||||||
Costs of investments acquired |
(5,233,742 | ) | (4,906,476 | ) | (4,461,555 | ) | ||||||
Net increase (decrease) in policy loans |
(25,524 | ) | (11,481 | ) | 997 | |||||||
|
|
|
|
|
|
|||||||
Net cost of investments acquired |
(5,259,266 | ) | (9,346,512 | ) | (4,460,558 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) investing activities |
(1,408,502 | ) | (697,703 | ) | (521,320 | ) | ||||||
Financing and miscellaneous activities |
||||||||||||
Capital and paid in surplus, less treasury stock |
$ | (100,000 | ) | $ | | $ | | |||||
Capital contribution received (returned) |
4 | 149,947 | 200,000 | |||||||||
Dividends to stockholders |
| | (350,000 | ) | ||||||||
Net deposits (withdrawals) on deposit-type contracts |
(237,635 | ) | (155,020 | ) | (138,376 | ) | ||||||
Net change in borrowed money |
144,774 | (188,058 | ) | 127,948 | ||||||||
Net change in payable for collateral under securities lending and other transactions |
182,031 | 146,987 | (130,411 | ) | ||||||||
Other cash (applied) provided |
74,478 | (56,482 | ) | 168,040 | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing and miscellaneous activities |
63,651 | (102,626 | ) | (122,799 | ) | |||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in cash, cash equivalents and short-term investments |
(173,854 | ) | (579,292 | ) | 272,993 | |||||||
Cash, cash equivalents and short-term investments: |
||||||||||||
Beginning of year |
902,074 | 1,481,366 | 1,208,373 | |||||||||
|
|
|
|
|
|
|||||||
End of year |
$ | 728,220 | $ | 902,074 | $ | 1,481,366 | ||||||
|
|
|
|
|
|
See accompanying notes.
7
Transamerica Premier Life Insurance Company
Statements of Cash Flow (supplemental) Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Supplemental disclosures of cash flow information |
||||||||||||
Significant non-cash activities during the year not included in the Statutory Statements of Cash Flow |
||||||||||||
Transfer of bonds and mortgage loans related to reinsurance agreement with third party |
$ | | $ | | $ | 2,593,112 | ||||||
Receipt of bonds, mortgage loans, and derivatives related to affiliated reinsurance amendment |
| | 5,650,741 | |||||||||
Tranfer of bonds to settle reinsurance obligations |
| | 22,479 | |||||||||
Dividend received from subsidiary |
11,270 | 30,000 | 100,000 | |||||||||
Contribution receivable from parent |
| | 150,000 | |||||||||
Asset transfer of ownership between hedge funds |
| | 88,481 | |||||||||
Release of funds withheld related to affiliated reinsurance recapture |
| | | |||||||||
Investments received for insured securities losses |
| 30,032 | | |||||||||
Noncash contribution (distribution) to affiliate |
(8,444 | ) | 1,360 | | ||||||||
Noncash return of capital from affiliate |
| 5,912 | | |||||||||
Noncash transaction on sale of real estate |
(540 | ) | | |
8
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2019
1. Organization and Nature of Business
Transamerica Premier Life Insurance Company (the Company, formerly known as Monumental Life Insurance Company) is a stock life insurance company owned by Commonwealth General Corporation (CGC). CGC is an indirect, wholly-owned subsidiary of AEGON N.V., a holding company organized under the laws of The Netherlands.
The Company sells a full line of insurance products, including individual, credit, group, indexed universal life, variable universal life and variable annuities, annuity, long term care insurance, and accident and health policies as well as investment products, including guaranteed investment contracts. The Company is licensed in 49 states, the District of Columbia, Guam, and Puerto Rico. Sales of the Companys products are through agents, brokers, financial planners, independent representatives, financial institutions, stockbrokers and direct response methods. The majority of the Companys new life insurance, and a portion of new annuities, are written through an affiliated marketing organization.
2. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Iowa Insurance Division (IID), which practices differ from accounting principles generally accepted in the United States of America (GAAP).
Use of Estimates
The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
The effects of the following variances from GAAP on the accompanying statutory-basis financial statements have not been determined by the Company, but are presumed to be material. Significant accounting policies and variances from GAAP are as follows:
Investments
Investments in bonds, except those to which the Securities Valuation Office (SVO) of the NAIC has ascribed a NAIC designation of 6, are reported at amortized cost using the interest method. Bonds containing call provisions, except make-whole call provisions, are amortized to the call or maturity value/date which produces the lowest asset value, often referred to as yield-to-worst method. Bonds ascribed a NAIC designation of 6 are reported at the lower of amortized cost or fair value with unrealized gains and losses reported in changes in capital and surplus. Prepayment penalty or acceleration fees received in the event a bond is liquidated prior to its scheduled termination date are reported as investment income.
9
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Hybrid securities, as defined by the NAIC, are securities designed with characteristics of both debt and equity and provide protection to the issuers senior note holders. These securities meet the definition of a bond, in accordance with SSAP No. 26R, Bonds, and therefore, are reported at amortized cost or fair value based upon their NAIC rating.
For GAAP, such fixed maturity investments would be designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments would be reported at amortized cost, and the remaining fixed maturity investments would be reported at fair value with unrealized holding gains and losses reported in earnings for those designated as trading and as a separate component of other comprehensive income (OCI) for those designated as available-for-sale.
Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method, including anticipated prepayments, except for those with an initial NAIC designation of 6, which are valued at the lower of amortized cost or fair value. These securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium using either the retrospective or prospective methods. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. For statutory reporting, the retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities, which are valued using the prospective method.
For GAAP, all securities purchased or retained that represent beneficial interests in securitized assets, other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If high credit quality securities are adjusted, the retrospective method is used.
The Company closely monitors below investment grade holdings and investment grade issuers where the Company has concerns to determine if an other-than-temporary impairment (OTTI) has occurred. The Company also regularly monitors industry sectors. The Company considers relevant facts and circumstances in evaluating whether the impairment is other-than-temporary including: (1) the probability of the Company collecting all amounts due according to the contractual terms of the security in effect at the date of acquisition; (2) the Companys decision to sell a security prior to its maturity at an amount below its carrying amount; and (3) the Companys ability to hold a structured security for a period of time to allow for recovery of the value to its carrying amount. Additionally, financial condition, near term prospects of the issuer and nationally recognized credit rating changes are monitored. Non-structured securities in unrealized loss positions that are considered other-than-temporary are written down to fair value. The Company will record a charge to the statements of operations for the amount of the impairment.
For structured securities, cash flow trends and underlying levels of collateral are monitored. An OTTI is considered to have occurred if the fair value of the structured security is less than its amortized cost basis and the entity intends to sell the security or the entity does not have the intent and ability to hold the security for a period of time sufficient to recover the amortized cost basis. An OTTI is also considered to have occurred if the discounted estimated future cash flows are less than the amortized cost basis of the security and the security is in an unrealized loss position. Structured securities considered other-than-
10
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
temporarily impaired are written down to discounted estimated cash flows if the impairment is the result of cash flow analysis. If the Company has an intent to sell or lack of ability to hold a structured security, it is written down to fair value. The Company will record a charge to the statements of operations for the amount of the impairments.
For GAAP, if it is determined that a decline in fair value is other-than-temporary and the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the OTTI is recognized in earnings equal to the entire difference between the amortized cost basis and its fair value at the impairment date. If the entity does not intend to sell the security or the entity will likely not be required to sell the security before recovery, the OTTI should be separated into a) the amount representing the credit loss, which is recognized in earnings, and b) the amount related to all other factors, which is recognized in OCI, net of applicable taxes.
Investments in both affiliated and unaffiliated preferred stocks in good standing (those with NAIC designations RP1 to RP3 and P1 to P3), are reported at cost or amortized cost, depending on the characteristics of the securities. Investments in preferred stocks not in good standing (those with NAIC designations RP4 to RP6 and P4 to P6), are reported at the lower of cost, amortized cost, or fair value, depending on the characteristics of the securities. The related net unrealized capital gains and losses for all NAIC designations are reported in changes in capital and surplus.
Common stocks of affiliated noninsurance subsidiaries are reported based on underlying audited GAAP equity. The net change in the subsidiaries equity is included in net unrealized capital gains or losses and are reported in changes in capital and surplus.
Common stocks of unaffiliated companies, which include shares of mutual funds, are reported at fair value and the related net unrealized capital gains or losses are reported in changes in capital and surplus.
The Company owns stock issued by the Federal Home Loan Bank (FHLB), which is only redeemable at par, and its fair value is presumed to be par, unless other-than-temporarily impaired.
If the Company determines that a decline in the fair value of a common stock or a preferred stock is other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the statements of operations. The Company considers the following factors in determining whether a decline in value is other-than-temporary: (a) the financial condition and prospects of the issuer; (b) whether or not the Company has made a decision to sell the investment; and (c) the length of time and extent to which the value has been below cost.
Mortgage loans are reported at unpaid principal balances, less an allowance for impairment. A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines the impairment is other-than-temporary, the mortgage loan is written down to realizable value and a realized loss is recognized. Prepayment penalty or acceleration fees received in the event a loan is liquidated prior to its scheduled termination date are reported as investment income.
11
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Valuation allowances are established for mortgage loans, if necessary, based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. Under GAAP, such allowances are based on the present value of expected future cash flows discounted at the loans effective interest rate or, if foreclosure is probable, on the estimated fair value of the collateral.
The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus as part of the change in asset valuation reserve (AVR), rather than being included as a component of earnings as would be required under GAAP.
Land is reported at cost. Real estate occupied by the Company is reported at depreciated cost net of encumbrances. Real estate held for the production of income is reported at depreciated cost net of related obligations. Real estate the Company classifies as held for sale is measured at lower of carrying amount or fair value less cost to sell. Depreciation is calculated on a straight-line basis over the estimated useful lives of the properties. The Company recognizes an impairment loss if the Company determines that the carrying amount of the real estate is not recoverable and exceeds its fair value. The Company deems that the carrying amount of the asset is not recoverable if the carrying amount exceeds the sum of undiscounted cash flows expected to result from the use and disposition. The impairment loss is measured as the amount by which the assets carrying value exceeds its fair value.
Investments in real estate are reported net of related obligations rather than on a gross basis as for GAAP. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset as under GAAP, and investment income and operating expenses for statutory reporting include rent for the Companys occupancy of those properties. Changes between depreciated cost and admitted amounts are credited or charged directly to unassigned surplus rather than to income as would be required under GAAP.
The Company has interests in joint ventures and limited partnerships. The Company carries these investments based on its interest in the underlying audited GAAP equity of the investee.
For a decline in the fair value of an investment in a joint venture or limited partnership which is determined to be other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the statements of operations. The Company considers an impairment to have occurred if it is probable that the Company will be unable to recover the carrying amount of the investment or if there is evidence indicating inability of the investee to sustain earnings which would justify the carrying amount of the investment.
The Companys investment in reverse mortgages is recorded net of an appropriate actuarial reserve. The actuarial reserve is calculated using the projected cash flows from the reverse mortgage product. Assumptions used in the actuarial model include an estimate of current home values, projected cash flows from the realization of the appreciated value of the property from its eventual sale (subject to certain limitations in the contract), mortality and termination rates based on group annuity mortality tables adjusted for the Companys experience and a constant interest rate environment.
12
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Investments in Low Income Housing Tax Credit (LIHTC) properties are valued at amortized cost. Tax credits are recognized in operations in the tax reporting year in which the tax credit is utilized by the Company. The carrying value is amortized over the life of the investment. Amortization is calculated as a ratio of the current year tax credits and tax benefits compared to the total expected tax credits and tax benefits over the life of the investment.
Cash equivalents are short-term highly liquid investments with original maturities of three months or less (principally stated at amortized cost) or money market mutual funds which are reported at fair value.
Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost.
Policy loans are reported at unpaid principal balances.
Realized capital gains and losses are determined using the specific identification method and are recorded net of related federal income taxes. Changes in admitted asset carrying amounts of bonds, mortgage loans, common and preferred stocks are credited or charged directly to unassigned surplus.
Interest income is recognized on an accrual basis. The Company does not accrue income on bonds in default, mortgage loans on real estate in default and/or foreclosure or which are delinquent more than twelve months, or real estate where rent is in arrears for more than three months. Income is also not accrued when collection is uncertain. Due and accrued amounts determined to be uncollectible are written off through the statements of operations.
Valuation Reserve
Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, principally bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals into net investment income over the remaining period to maturity of the bond or mortgage loan based on groupings of individual securities sold in five year bands. The net deferral is reported as the interest maintenance reserve (IMR) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the statements of operations on a pre-tax basis in the period that the assets giving rise to the gains or losses are sold.
The AVR provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus; AVR is not recognized for GAAP.
In 2019, the NAIC revised the AVR Factors (basic contribution, reserve objective and maximum reserve) to be consistent with the Risk Based Capital (RBC) after-tax factors, which were amended in 2018 as a result of federal tax reform. The AVR factor changes are effective for year-end 2019. As of December 31, 2019, the factor changes decreased Capital and Surplus by $54,607. The changes were recorded to the Change in Asset Valuation Reserve line of the Statements of Changes in Capital and Surplus.
13
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Derivative Instruments
Overview: The Company may use various derivative instruments (swaps and futures) to manage risks related to its ongoing business operations. On the transaction date of the derivative instrument, the Company designates the derivative as either (A) hedging (fair value, foreign currency fair value, cash flow, foreign currency cash flow, forecasted transactions, or net investment in a foreign operation), (B) replication, (C) income generation, or (D) held for other investment/risk management activities, which do not qualify for hedge accounting under SSAP No. 86 - Derivatives.
(A) | Derivative instruments used in hedging transactions that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability (amortized cost or fair value). Embedded derivatives are not accounted for separately from the host contract. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value, and the changes in the fair value are recorded in unassigned surplus as unrealized gains or losses. Under GAAP, the effective and ineffective portions of a single hedge are accounted for separately, and the change in fair value for cash flow hedges is credited or charged directly to a separate component of OCI rather than to income as required for fair value hedges, and an embedded derivative within a contract that is not clearly and closely related to the economic characteristics and the risk of the host contract is accounted for separately from the host contract and valued and reported at fair value. |
(B) | Derivative instruments are also used in replication (synthetic asset) transactions. A replication transaction is a derivative transaction entered into conjunction with a cash instrument to reproduce the investment characteristics of an otherwise permissible investment. In these transactions, the derivative is accounted for in a manner consistent with the cash instrument and replicated asset. For GAAP, the derivative is reported at fair value, with the changes in fair value reported in income. |
(C) | Derivative instruments used in income generation relationships are accounted for on a basis that is consistent with the associated covered asset or underlying interest to which the derivative relates (amortized cost or fair value). |
(D) | Derivative instruments held for other investment/risk management activities are measured at fair value with value adjustments recorded in unassigned surplus. |
Derivative instruments are subject to market risk, which is the possibility that future changes in market prices may make the instruments less valuable. The Company uses derivatives as hedges; consequently, when the value of the hedged asset or liability changes, the value of the hedging derivative is expected to move in the opposite direction. Market risk is a consideration when changes in the value of the derivative and the hedged item do not completely offset (correlation or basis risk) which is mitigated by active measuring and monitoring.
The Company is exposed to credit-related losses in the event of non-performance by counterparties to derivative instruments, but it does not expect any counterparties to fail to meet their obligations given
14
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
their high credit rating of BBB or better. The credit exposure of interest rate swaps and currency swaps is represented by the fair value of contracts, aggregated at a counterparty level, with a positive fair value at the reporting date. The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets on the Companys behalf. The posted amount is equal to the difference between the net positive fair value of the contracts and an agreed upon threshold that is based on the credit rating of the counterparty. Inversely, if the net fair value of all contracts with this counterparty is negative, then the Company is required to post assets instead.
Instruments:
Interest rate swaps are the primary derivative financial instruments used in the overall asset/liability management process to modify the interest rate characteristics of the underlying asset or liability. These interest rate swaps generally provide for the exchange of the difference between fixed and floating rate amounts based on an underlying notional amount. Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.
Interest rate basis swaps are used in the overall asset/liability management process to modify the interest rate characteristics of the underlying liability to mitigate the basis risk of assets and liabilities resetting on different indices. These interest rate swaps generally provide for the exchange of the difference between a floating rate on one index to a floating rate of another index, based upon an underlying notional amount. Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged at each due date. Swaps meeting hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.
Cross currency swaps are utilized to mitigate risks when the Company holds foreign denominated assets or liabilities; therefore, converting the asset or liability to a U.S. dollar denominated security. These cross currency swap agreements involve the exchange of two principal amounts in two different currencies at the prevailing currency rate at contract inception. During the life of the swap, the counterparties exchange fixed or floating rate interest payments in the swapped currencies. At maturity, the principal amounts are again swapped at a pre-determined rate of exchange. Each asset or liability is hedged individually where the terms of the swap must meet the terms of the hedged instrument. For swaps qualifying for hedge accounting, the premium or discount is amortized into income over the life of the contract, and the foreign currency translation adjustment is recorded as unrealized gain/loss in capital and surplus. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus. If a swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the hedged instrument receives that treatment.
15
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Total return swaps are used in the asset/liability management process to mitigate the market risk on minimum guarantee insurance contracts linked to an index. These total return swaps generally provide for the exchange of the difference between fixed leg (tied to the Standard & Poors (S&P) or other global market financial index) and floating leg (tied to the London Interbank Offered Rate (LIBOR)) amounts based on an underlying notional amount (also tied to the underlying index). Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.
Variance swaps are used in the asset/liability management process to mitigate the gamma risk created when the Company has issued minimum guarantee insurance contracts linked to an index. These variance swaps are similar to volatility options where the underlying index provides for the market value movements. Variance swaps do not accrue interest. Typically, no cash is exchanged at the outset of initiating the variance swap, and a single receipt or payment occurs at the maturity or termination of the contract. Variance swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.
Futures contracts are used to hedge the liability risk when the Company issues products providing the customer a return based on various global market indices. Futures are marked to market on a daily basis whereby a cash payment is made or received by the Company. These payments are recognized as realized gains or losses in the financial statements.
The Company may sell products with expected benefit payments extending beyond investment assets currently available in the market. Because assets will have to be purchased in the future to fund future liability cash flows, the Company is exposed to the risk of future investments made at lower yields than what is assumed at the time of pricing. Forward-starting interest rate swaps are utilized to lock-in the current forward rate. The accrual of income begins at the forward date, rather than at the inception date. These forward-starting swaps meet hedge accounting rules and are carried at cost in the financial statements. Gains and losses realized upon termination of the forward-starting swap are deferred and used to adjust the basis of the asset purchased in the hedged forecasted period. The basis adjustment is then amortized into income as a yield adjustment to the asset over its life.
The Company replicates investment grade corporate bonds or sovereign debt by combining a highly rated security as a cash component with a written credit default swap which, in effect, converts the high quality asset into an investment grade corporate asset or a sovereign debt. The benefits of using the swap market to replicate credit include possible enhanced relative values as well as ease of executing larger transactions in a shortened time frame. Generally, a premium is received by the Company on a periodic basis and recognized in investment income. In the event the representative issuer defaults on its debt obligation referenced in the contract, a payment equal to the notional amount of the contract will be made by the Company and recognized as a capital loss.
16
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Securities Lending Assets and Liabilities
The Company loans securities to third parties under agent-managed securities lending programs accounted for as secured borrowings. Cash collateral received which may be sold or repledged by the Company is reflected as a one-line entry on the balance sheet (securities lending reinvested collateral assets) and a corresponding liability is established to record the obligation to return the cash collateral. Non-cash collateral received which may not be sold or repledged is not recorded on the Companys balance sheet. Under GAAP, the reinvested collateral is included within invested assets (i.e. it is not one-line reported).
Repurchase Agreements
For dollar repurchase agreements accounted for as secured borrowings, the Company receives cash collateral in an amount at least equal to the fair value of the securities transferred by the Company in the transaction as of the transaction date. The securities transferred are not removed from the balance sheet, and the cash received as collateral is invested as needed or used for general corporate purposes of the Company. A liability is established to record the obligation to return the cash collateral and included in Borrowed Money on the Balance Sheets.
Other Assets and Other Liabilities
Other assets consist primarily of general insurance accounts receivable, reinsurance receivable, and company owned life insurance. Other admitted assets are valued principally at cost, as required or permitted by Iowa Insurance Laws.
Other liabilities consist primarily of amounts withheld by the Company, payables for securities, and reinsurance payable.
Separate Accounts
The majority of the separate accounts held by the Company, primarily for individual policyholders, do not have minimum guarantees and the investment risks associated with the fair value changes are borne by the policyholder. Assets held in trust for purchases of variable universal life and variable annuity contracts and the Companys corresponding obligation to the contract owners are shown separately in the balance sheet. The assets in the accounts, carried at estimated fair value, consist of underlying mutual fund shares, common stocks, long-term bonds and short-term investments. All variable account contracts are subject to discretionary withdrawal by the policyholder at the fair value of the underlying assets less the current surrender charge. Separate account contract holders have no claim against the assets of the general account.
Some of the Companys separate accounts provide policyholders with a guaranteed return. In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the general account. These separate accounts are included in the general account due to the nature of the guaranteed return.
17
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Income and gains and losses with respect to the assets in the separate accounts accrue to the benefit of the contract owners and, accordingly, the operations of the separate accounts are not included in the accompanying financial statements.
Aggregate Reserves for Policies and Contracts
Life, annuity and accident and health benefit reserves are calculated by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed cash value, or the amount required by law. For direct business issued after October 1964, the Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the month of death. For policies assumed during 1992 from former affiliates, Monumental General Insurance Company and Monumental Life Insurance Group, Inc., and for all business from company mergers occurring in 1998, the Company waives deduction of deferred fractional premium upon death of the insured and returns any portion of the final premium paid beyond the month of death. For fixed premium life insurance business resulting from company mergers occurring in 2004 and 2007, the Company waives deduction of deferred fractional premiums upon death of the insured and refunds portions of premiums unearned after the date of death. Where appropriate, the Company holds a non-deduction and/or refund reserve. The reserve for these benefits is computed using aggregate methods. The reserves are equal to the greater of the cash surrender value and the legally computed reserve.
In accordance with SSAP No. 51R, Life Contracts, and No. 54R, Individual and Group Accident and Health Contracts, the Company reports the amount of insurance, if any, for which the gross premiums are less than the net premiums according to the valuation standards and any related premium deficiency reserve established. Anticipated investment income is included as a factor in the health contract premium deficiency calculation.
For GAAP, policy reserves are calculated based on estimated expected experience or actual account balances.
Policy and Contract Claim Reserves
Claim reserves represent the estimated accrued liability for claims reported to the Company and claims incurred but not yet reported through the balance sheet date. These reserves are estimated using either individual case-basis valuations or statistical analysis techniques. These estimates are subject to the effects of trends in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes available.
18
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Deposit-Type Contracts
Deposit-type contracts do not incorporate risk from the death or disability of policyholders. These types of contracts may include guaranteed investment contracts (GICs), funding agreements, supplemental contracts and certain annuity contracts. Deposits and withdrawals on these contracts are recorded as a direct increase or decrease, respectively, to the liability balance and are not reported as premiums, benefits or changes in reserves in the statements of operations. Interest on these policies is reflected in other benefits.
Premiums and Annuity Considerations
Revenues for life and annuity policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received. Benefits incurred represent surrenders and death benefits paid and the change in policy reserves. Under GAAP, for universal life policies, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent interest credited to the account values and the excess of benefits paid over the policy account value. Under GAAP, for all annuity policies without significant mortality risk, premiums received and benefits paid would be recorded directly to the reserve liability using deposit accounting.
Policyholder Dividends
Policyholder dividends are recognized when declared rather than over the term of the related policies as would be required under GAAP.
Reinsurance
Reinsurance premiums, commissions, expense reimbursements and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies and the terms of the reinsurance contracts. Gains associated with reinsurance of in force blocks of business are included in unassigned surplus and amortized into income as earnings emerge on the reinsured block of business. Premiums ceded and recoverable losses have been reported as a reduction of premium income and benefits, respectively. Policy liabilities and accruals are reported in the accompanying financial statements net of reinsurance ceded.
Any reinsurance amounts deemed to be uncollectible have been written off through a charge to operations. In addition, a liability for reinsurance balances would be established for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability are credited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.
Losses associated with an indemnity reinsurance transaction are reported within income when incurred rather than being deferred and amortized over the remaining life of the underlying reinsured contracts as would be required under GAAP.
19
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.
Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.
Under GAAP, for certain reinsurance agreements whereby assets are retained by the ceding insurer (such as funds withheld or modified coinsurance) and a return is paid based on the performance of underlying investments, the assets and liabilities for these reinsurance arrangements must be adjusted to reflect the fair value of the invested assets. The NAIC SAP does not contain a similar requirement.
Deferred Income Taxes
The Company computes deferred income taxes in accordance with SSAP No. 101, Income Taxes. Unlike GAAP, SSAP 101 does not consider state income taxes in the measurement of deferred taxes. SSAP 101 also requires additional testing to measure gross deferred tax assets. The additional testing limits gross deferred tax asset admission to 1) the amount of federal income taxes paid in prior years recoverable through hypothetical loss carrybacks of existing temporary differences expected to reverse during a timeframe corresponding with the Internal Revenue Service tax loss carryback provisions, not to exceed three years, plus 2) the amount of remaining gross deferred tax assets expected to be realized within three years limited to an amount that is no greater than 15% of current periods adjusted statutory capital and surplus, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities after considering character (i.e. ordinary versus capital) and reversal patterns. The Companys reported deferred tax asset or liability is the sum of gross deferred tax assets admitted through this three part test plus the sum of all deferred tax liabilities.
Policy Acquisition Costs
The costs of acquiring and renewing business are expensed when incurred. Under GAAP, incremental costs directly related to the successful acquisition of insurance and investment contracts are deferred. For traditional life insurance and certain long-duration accident and health insurance, to the extent recoverable from future policy revenues, acquisition costs are deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality and expense margins.
Value of Business Acquired
Under GAAP, value of business acquired (VOBA) is an intangible asset resulting from a business combination that represents that excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future contracts and contract changes, premiums, mortality and morbidity, separate account performance, surrenders, operation expenses, investment returns, nonperformance risk adjustment and other factors. VOBA is not recognized under the NAIC Accounting Practices and Procedures Manual (NAIC SAP).
20
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Goodwill
Goodwill is measured as the difference between the cost of acquiring the entity and the reporting entitys share of the book value of the acquired entity. Goodwill is admitted subject to an aggregate limitation of ten percent of the capital and surplus in the most recently filed annual statement excluding electronic data processing equipment, operating system software, net deferred income tax assets and net positive goodwill. Excess goodwill is nonadmitted. Goodwill is amortized over ten years. Under GAAP, goodwill is measured as the excess of the consideration transferred plus the fair value of any noncontrolling interest in the acquiree at the acquisition date as compared to the fair values of the identifiable net assets acquired. Goodwill is not amortized but is assessed for impairment on an annual basis, or more frequently if circumstances indicate that a possible impairment has occurred.
Subsidiaries and Affiliated Companies
Investments in subsidiaries, controlled and affiliated companies (SCA) are stated in accordance with the Purposes and Procedures Manual of the NAIC SVO, as well as SSAP No. 97, Investments in Subsidiary, Controlled and Affiliated Entities.
The accounts and operations of the Companys subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP. Dividends or distributions received from an investee are recognized in investment income when declared to the extent that they are not in excess of the undistributed accumulated earnings attributable to an investee. Changes in investments in SCAs are recorded as a change to the carrying value of the investment with a corresponding amount recorded directly to unrealized gain/loss (capital and surplus).
Surplus Notes
Surplus notes are reported as surplus rather than as liabilities as would be required under GAAP.
Nonadmitted Assets
Certain assets designated as nonadmitted, primarily net deferred tax assets and other assets not specifically identified as an admitted asset within the NAIC SAP, are excluded from the accompanying balance sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the balance sheet to the extent that they are not impaired.
Statements of Cash Flow
Cash, cash equivalents and short-term investments in the statements of cash flow represent cash balances and investments with initial maturities of one year or less and money market mutual funds. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less.
21
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Companys policy is to disclose as recent accounting pronouncements the adopted accounting guidance with a current year effective date that has been classified by the NAIC as a substantive change, as well as items classified as nonsubstantive changes that have had a material impact on the financial position or results of operations of the Company.
Recent Accounting Pronouncements
Effective January 1, 2019, the NAIC adopted revisions to SSAP No. 30, Unaffiliated Common Stock, which updated the definition of common stock to include SEC registered closed-end funds and unit investment trusts. The adoption of this guidance did not impact the financial position or results of operations of the Company.
Change in Valuation Basis
As of December 31, 2019, the Company has received IID approval on an approach for adoption of the NAIC 2020 Valuation Manual section 21 (VM-21) and related Risk Based Capital C3P2 changes documented in the VM-21 2020 NAIC Valuation Manual: Requirements for Principle-Based Reserves for Variable Annuities. The Company has elected to early adopt the VM-21 requirements for variable annuities effective December 31, 2019. The approved transition approach did not result in an adjustment to the Companys historical statutory reporting or existing balances at the time of transition. The Company reported the decrease to the VM-21 reserve of $30,452. As of the date of transition, the Company is fully compliant with the provisions of VM-21.
Reclassifications
Certain amounts in prior year financial statement balances and footnote disclosures have been reclassified to conform to the current year presentation.
4. Fair Values of Financial Instruments
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Determination of fair value
The fair values of financial instruments are determined by management after taking into consideration several sources of data. When available, the Company uses quoted market prices in active markets to determine the fair value of its investments. The Companys valuation policy utilizes a pricing hierarchy which dictates that publicly available prices are initially sought from indices and third-party pricing services. In the event that pricing is not available from these sources, those securities are submitted to brokers to obtain quotes. Lastly, securities are priced using internal cash flow modeling techniques. These valuation methodologies commonly use reported trades, bids, offers, issuer spreads, benchmark yields, estimated prepayment speeds, and/or estimated cash flows.
22
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
To understand the valuation methodologies used by third-party pricing services, the Company reviews and monitors their applicable methodology documents. Any changes to their methodologies are noted and reviewed for reasonableness. In addition, the Company performs in-depth reviews of prices received from third-party pricing services on a sample basis. The objective for such reviews is to demonstrate the Company can corroborate detailed information such as assumptions, inputs and methodologies used in pricing individual securities against documented pricing methodologies. Only third-party pricing services and brokers with a substantial presence in the market and with appropriate experience and expertise are used.
Each month, the Company performs an analysis of the information obtained from indices, third-party services, and brokers to ensure the information is reasonable and produces a reasonable estimate of fair value. The Company considers both qualitative and quantitative factors as part of this analysis, including but not limited to, recent transactional activity for similar securities, review of pricing statistics and trends, and consideration of recent relevant market events. Other controls and procedures over pricing received from indices, third-party pricing services, or brokers include validation checks such as exception reports which highlight significant price changes, stale prices or un-priced securities.
Fair value hierarchy
The Companys financial assets and liabilities carried at fair value are classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100R, Fair Value. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An assets or a liabilitys classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:
Level 1 | - | Unadjusted quoted prices for identical assets or liabilities in active markets accessible at the measurement date. | ||||
Level 2 | - | Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following: |
a) | Quoted prices for similar assets or liabilities in active markets |
b) | Quoted prices for identical or similar assets or liabilities in non-active markets |
c) | Inputs other than quoted market prices that are observable |
d) | Inputs that are derived principally from or corroborated by observable market data through correlation or other means |
Level 3 | - | Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect the Companys own assumptions about the assumptions a market participant would use in pricing the asset or liability. |
23
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:
Cash Equivalents and Short-Term Investments: The carrying amounts reported in the accompanying balance sheets for these financial instruments is either reported at fair value or amortized cost (which approximates fair value). Cash is not included in the below tables.
Short-Term Notes Receivable from Affiliates: The carrying amounts reported in the accompanying balance sheets for these financial instruments approximate their fair value.
Bonds and Stocks: The NAIC allows insurance companies to report the fair value determined by the SVO or to determine the fair value by using a permitted valuation method. The fair values of bonds and stocks are reported or determined using the following pricing sources: indices, third-party pricing services, brokers, external fund managers and internal models.
Fair values for fixed maturity securities (including redeemable preferred stock) actively traded are determined from third-party pricing services, which are determined as discussed above in the description of Level 1 and Level 2 values within the fair value hierarchy. For fixed maturity securities (including redeemable preferred stock) not actively traded, fair values are estimated using values obtained from third-party pricing services, or are based on non-binding broker quotes or internal models. In the case of private placements, fair values are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit and maturity of the investments.
Mortgage Loans on Real Estate: The fair values for mortgage loans on real estate are estimated utilizing discounted cash flow analyses, using interest rates reflective of current market conditions and the risk characteristics of the loans.
Real Estate: Real estate held for sale is typically valued utilizing independent external appraisers in conjunction with reviews by qualified internal appraisers. Valuations are primarily based on active market prices, adjusted for any difference in the nature, location or condition of the specific property. If such information is not available, other valuation methods are applied, considering the value that the propertys net earning power will support, the value indicated by recent sales of comparable properties and the current cost of reproducing or replacing the property.
Other Invested Assets: The fair values for other invested assets, which include investments in surplus notes issued by other insurance companies and fixed or variable rate investments with underlying characteristics of bonds were determined primarily by using indices, third-party pricing services and internal models.
24
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Derivative Financial Instruments: The fair value of futures and forwards are based upon the latest quoted market price and spot rates at the balance sheet date. The estimated fair values of equity and interest rate options (calls, puts, caps) are based upon the latest quoted market price at the balance sheet date. The estimated fair values of swaps, including equity, interest rate and currency swaps, are based on pricing models or formulas using current assumptions. The estimated fair values of credit default swaps are based upon active market data, including interest rate quotes, credit spreads, and recovery rates, which are then used to calculate probabilities of default for the fair value calculation. The Company accounts for derivatives that receive and pass hedge accounting in the same manner as the underlying hedged instrument. If that instrument is held at amortized cost, then the derivative is also held at amortized cost.
Policy Loans: The book value of policy loans is considered to approximate the fair value of the loan, which is stated at unpaid principal balance.
Securities Lending Reinvested Collateral: The cash collateral from securities lending is reinvested in various short-term and long-term debt instruments. The fair values of these investments are determined using the methods described above under Cash, Cash Equivalents and Short-Term Investments and Bonds and Stocks.
Separate Account Assets and Annuity Liabilities: The fair value of separate account assets are based on quoted market prices when available. When not available, they are primarily valued either using third-party pricing services or are valued in the same manner as the general account assets as further described in this note. However, some separate account assets are valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilizes input that are not market observable. The fair value of separate account annuity liabilities is based on the account value for separate accounts business without guarantees. For separate accounts with guarantees, fair value is based on discounted cash flows.
Investment Contract Liabilities: Fair value for the Companys liabilities under investment contracts, which include deferred annuities, GICs and funding agreements, are estimated using discounted cash flow calculations. For those liabilities that are short in duration, carrying amount approximates fair value. For investment contracts with no defined maturity, fair value is estimated to be the present surrender value.
Deposit-Type Contracts: The carrying amounts of deposit-type contracts reported in the accompanying balance sheets approximate their fair values. These are included in the Investment Contract Liabilities.
The Company accounts for its investments in affiliated common stock in accordance with SSAP No. 97, as such, they are not included in the following disclosures.
Fair values for the Companys insurance contracts other than investment-type contracts (including separate account universal life liabilities) are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Companys overall management of interest rate risk, such that the Companys exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.
25
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables set forth a comparison of the estimated fair values and carrying amounts of the Companys financial instruments, including those not measured at fair value in the balance sheets, as of December 31, 2019 and 2018, respectively:
December 31, 2019 | ||||||||||||||||||||||||||||
Aggregate Fair Value |
Admitted Value |
(Level 1) | (Level 2) | (Level 3) | Net Asset Value (NAV) |
Not Practicable (Carrying Value) |
||||||||||||||||||||||
Admitted assets |
||||||||||||||||||||||||||||
Cash equivalents and short-term investments, other than affiliates |
$ | 631,215 | $ | 631,185 | $ | 441,346 | $ | 189,869 | $ | | $ | | $ | | ||||||||||||||
Short-term notes receivable from affiliates |
102,900 | 102,900 | | 102,900 | | | | |||||||||||||||||||||
Bonds |
19,995,877 | 17,877,965 | 2,000,037 | 17,791,417 | 204,423 | | | |||||||||||||||||||||
Preferred stocks, other than affiliates |
4,361 | 4,955 | | 2,089 | 2,272 | | | |||||||||||||||||||||
Common stocks, other than affiliates |
59,057 | 59,057 | 1,872 | | 57,185 | | | |||||||||||||||||||||
Mortgage loans on real estate |
2,876,259 | 2,737,109 | | | 2,876,259 | | | |||||||||||||||||||||
Other invested assets |
190,192 | 172,968 | | 189,214 | 978 | | | |||||||||||||||||||||
Derivative assets: |
||||||||||||||||||||||||||||
Interest rate swaps |
11,171 | 8,635 | | 11,171 | | | | |||||||||||||||||||||
Currency swaps |
13,458 | 4,365 | | 13,458 | | | | |||||||||||||||||||||
Credit default swaps |
19,459 | 10,576 | | 19,459 | | | | |||||||||||||||||||||
Interest rate futures |
7 | 7 | 7 | | | | | |||||||||||||||||||||
Equity futures |
1,948 | 1,948 | 1,948 | | | | | |||||||||||||||||||||
Derivative assets total |
46,043 | 25,531 | 1,955 | 44,088 | | | | |||||||||||||||||||||
Policy loans |
962,408 | 962,408 | | 962,408 | | | | |||||||||||||||||||||
Securities lending reinvested collateral |
599,859 | 599,859 | 58 | 599,801 | | | | |||||||||||||||||||||
Separate account assets |
25,337,229 | 25,337,230 | 23,358,660 | 1,978,570 | | | | |||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||
Investment contract liabilities |
2,272,404 | 1,461,721 | | 45,313 | 2,227,090 | | | |||||||||||||||||||||
Derivative liabilities: |
||||||||||||||||||||||||||||
Interest rate swaps |
(75,597 | ) | 58,916 | | (75,597 | ) | | | | |||||||||||||||||||
Currency swaps |
17,050 | 14,733 | | 17,050 | | | | |||||||||||||||||||||
Credit default swaps |
(2,855 | ) | 1,169 | | (2,855 | ) | | | | |||||||||||||||||||
Equity swaps |
4,361 | 4,361 | | 4,361 | | | | |||||||||||||||||||||
Interest rate futures |
544 | 544 | 544 | | | | | |||||||||||||||||||||
Equity futures |
1,349 | 1,349 | 1,349 | | | | | |||||||||||||||||||||
Derivative liabilities total |
(55,148 | ) | 81,072 | 1,893 | (57,041 | ) | | | | |||||||||||||||||||
Dollar repurchase agreements |
254,814 | 254,814 | | 254,814 | | | | |||||||||||||||||||||
Payable for securities lending |
757,186 | 757,186 | | 757,186 | | | | |||||||||||||||||||||
Payable for derivative cash collateral |
202,298 | 202,298 | | 202,298 | | | | |||||||||||||||||||||
Separate account annuity liabilities |
22,578,162 | 22,578,162 | 13 | 22,578,149 | | | |
26
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | ||||||||||||||||||||||||||||
Aggregate Fair Value |
Admitted Value |
(Level 1) | (Level 2) | (Level 3) | Net Asset Value (NAV) |
Not Practicable (Carrying Value) |
||||||||||||||||||||||
Admitted assets |
||||||||||||||||||||||||||||
Cash equivalents and short-term investments, other than affiliates |
$ | 718,998 | $ | 718,998 | $ | 656,505 | $ | 62,493 | $ | | $ | | $ | | ||||||||||||||
Short-term notes receivable from affiliates |
194,600 | 194,600 | | 194,600 | | | | |||||||||||||||||||||
Bonds |
16,943,037 | 16,814,750 | 1,833,213 | 14,958,270 | 151,554 | | | |||||||||||||||||||||
Preferred stocks, other than affiliates |
9,214 | 9,958 | | 2,380 | 6,834 | | | |||||||||||||||||||||
Common stocks, other than affiliates |
67,063 | 67,063 | 134 | | 66,929 | | | |||||||||||||||||||||
Mortgage loans on real estate |
2,433,036 | 2,436,202 | | | 2,433,036 | | | |||||||||||||||||||||
Other invested assets |
178,709 | 174,272 | | 177,480 | 1,229 | | | |||||||||||||||||||||
Derivative assets: |
||||||||||||||||||||||||||||
Interest rate swaps |
9,174 | 4,634 | | 9,174 | | | | |||||||||||||||||||||
Currency swaps |
14,877 | 7,633 | | 14,877 | | | | |||||||||||||||||||||
Credit default swaps |
13,304 | 15,582 | | 13,304 | | | | |||||||||||||||||||||
Equity swaps |
4,589 | 4,589 | | 4,589 | | | | |||||||||||||||||||||
Interest rate futures |
213 | 213 | 213 | | | | | |||||||||||||||||||||
Equity futures |
2,282 | 2,282 | 2,282 | | | | | |||||||||||||||||||||
Derivative assets total |
44,439 | 34,933 | 2,495 | 41,944 | | | | |||||||||||||||||||||
Policy loans |
936,884 | 936,884 | | 936,884 | | | | |||||||||||||||||||||
Securities lending reinvested collateral |
518,646 | 518,646 | 24,677 | 493,969 | | | | |||||||||||||||||||||
Separate account assets |
22,017,523 | 22,017,523 | 19,752,326 | 2,265,141 | 56 | | | |||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||
Investment contract liabilities |
1,919,385 | 1,799,337 | | 45,337 | 1,874,048 | | | |||||||||||||||||||||
Derivative liabilities: |
||||||||||||||||||||||||||||
Interest rate swaps |
(44,671 | ) | 49,173 | | (44,671 | ) | | | | |||||||||||||||||||
Currency swaps |
15,155 | 9,391 | | 15,155 | | | | |||||||||||||||||||||
Credit default swaps |
(1,148 | ) | 2,352 | | (1,148 | ) | | | | |||||||||||||||||||
Equity swaps |
208 | 208 | | 208 | | | | |||||||||||||||||||||
Interest rate futures |
39 | 39 | 39 | | | | | |||||||||||||||||||||
Equity futures |
127 | 127 | 127 | | | | | |||||||||||||||||||||
Derivative liabilities total |
(30,290 | ) | 61,290 | 166 | (30,456 | ) | | | | |||||||||||||||||||
Dollar repurchase agreements |
110,040 | 110,040 | | 110,040 | | | | |||||||||||||||||||||
Payable for securities lending |
575,155 | 575,155 | | 575,155 | | | | |||||||||||||||||||||
Payable for derivative cash collateral |
120,737 | 120,737 | | 120,737 | | | | |||||||||||||||||||||
Separate account annuity liabilities |
20,027,327 | 20,027,327 | 3,278 | 20,024,049 | | | |
27
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables provide information about the Companys financial assets and liabilities measured at fair value as of December 31, 2019 and 2018:
2019 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Asset Value (NAV) |
Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Bonds |
||||||||||||||||||||
Government |
$ | | $ | 129 | $ | | $ | | $ | 129 | ||||||||||
Industrial and miscellaneous |
| 336 | 2,791 | | 3,127 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total bonds |
| 465 | 2,791 | | 3,256 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock |
||||||||||||||||||||
Industrial and miscellaneous |
| | 2,272 | | 2,272 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total preferred stock |
| | 2,272 | | 2,272 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock |
||||||||||||||||||||
Industrial and miscellaneous |
1,872 | | 57,185 | | 59,057 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total common stock |
1,872 | | 57,185 | | 59,057 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash equivalents and short-term |
||||||||||||||||||||
Money market mutual funds |
441,346 | | | | 441,346 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash equivalents and short-term |
441,346 | | | | 441,346 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securities lending reinvested collateral |
58 | | | | 58 | |||||||||||||||
Derivative assets |
1,955 | 8,556 | | | 10,511 | |||||||||||||||
Separate account assets |
23,358,660 | 1,978,570 | | | 25,337,230 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 23,803,891 | $ | 1,987,591 | $ | 62,248 | $ | | $ | 25,853,730 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Derivative liabilities |
$ | 1,893 | $ | 16,699 | $ | | $ | | $ | 18,592 | ||||||||||
Separate account liabilities |
13 | | | | 13 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 1,906 | $ | 16,699 | $ | | $ | | $ | 18,605 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
2018 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Asset Value (NAV) |
Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Bonds |
||||||||||||||||||||
Industrial and miscellaneous |
$ | | $ | 30,077 | $ | 4,858 | $ | | $ | 34,935 | ||||||||||
Hybrid securities |
| 16,037 | | | 16,037 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total bonds |
| 46,114 | 4,858 | | 50,972 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock |
||||||||||||||||||||
Industrial and miscellaneous |
| | 6,834 | | 6,834 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total preferred stock |
| | 6,834 | | 6,834 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock |
||||||||||||||||||||
Industrial and miscellaneous |
134 | | 66,929 | | 67,063 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total common stock |
134 | | 66,929 | | 67,063 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash equivalents and short-term |
||||||||||||||||||||
Money market mutual funds |
656,505 | | | | 656,505 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash equivalents and short-term |
656,505 | | | | 656,505 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securities lending reinvested collateral |
24,677 | | | | 24,677 | |||||||||||||||
Derivative assets |
2,495 | 9,144 | | | 11,639 | |||||||||||||||
Separate account assets |
19,752,326 | 2,265,141 | 56 | | 22,017,523 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 20,436,137 | $ | 2,320,399 | $ | 78,677 | $ | | $ | 22,835,213 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Derivative liabilities |
$ | 166 | $ | 10,091 | $ | | $ | | $ | 10,257 | ||||||||||
Separate account liabilities |
3,278 | | | | 3,278 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 3,444 | $ | 10,091 | $ | | $ | | $ | 13,535 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Bonds classified as Level 3 are primarily those valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilize significant inputs that are not market observable.
Preferred stock classified as Level 3 is internally valued using significant unobservable inputs.
28
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Common stocks classified as Level 3 are comprised primarily of shares in the FHLB of Des Moines, which are valued at par as a proxy for fair value as a result of restrictions that allow redemptions only by FHLB.
The following tables summarize the changes in assets classified as Level 3 for 2019 and 2018.
Beginning Balance at January 1, 2019 |
Transfers in (Level 3) |
Transfers out (Level 3) |
Total Gains (Losses) Included in Net income (a) |
Total Gains (Losses) Included in Surplus (b) |
||||||||||||||||
Bonds |
||||||||||||||||||||
Other |
$ | 4,858 | $ | | $ | 622 | $ | 44 | $ | 247 | ||||||||||
Preferred stock |
6,834 | | | | (6,052 | ) | ||||||||||||||
Common stock |
66,929 | | 1,700 | (553 | ) | (28 | ) | |||||||||||||
Separate account assets |
56 | | 53 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 78,677 | $ | | $ | 2,375 | $ | (509 | ) | $ | (5,833 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases | Issuances | Sales | Settlements | Ending Balance at December 31, 2019 |
||||||||||||||||
Bonds |
||||||||||||||||||||
Other |
$ | | $ | | $ | | $ | 1,736 | $ | 2,791 | ||||||||||
Preferred stock |
1,490 | | | | 2,272 | |||||||||||||||
Common stock |
811 | 1,526 | 9,800 | | 57,185 | |||||||||||||||
Separate account assets |
| | | 3 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 2,301 | $ | 1,526 | $ | 9,800 | $ | 1,739 | $ | 62,248 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations |
(b) | Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus |
29
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Beginning Balance at January 1, 2018 |
Transfers in (Level 3) |
Transfers out (Level 3) |
Total Gains (Losses) Included in Net income (a) |
Total Gains (Losses) Included in Surplus (b) |
||||||||||||||||
Bonds |
||||||||||||||||||||
Other |
$ | 4,974 | $ | 287 | $ | | $ | 78 | $ | (26 | ) | |||||||||
Preferred stock |
7,390 | | | | (1,856 | ) | ||||||||||||||
Common stock |
70,335 | | 34 | (27 | ) | (1,173 | ) | |||||||||||||
Separate account assets |
67 | | | 1 | (1 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 82,766 | $ | 287 | $ | 34 | $ | 52 | $ | (3,056 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases | Issuances | Sales | Settlements | Ending Balance at December 31, 2018 |
||||||||||||||||
Bonds |
||||||||||||||||||||
Other |
$ | | $ | | $ | | $ | 455 | $ | 4,858 | ||||||||||
Preferred stock |
1,888 | | 588 | | 6,834 | |||||||||||||||
Common stock |
| 28 | 2,200 | | 66,929 | |||||||||||||||
Separate account assets |
| | | 11 | 56 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 1,888 | $ | 28 | $ | 2,788 | $ | 466 | $ | 78,677 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations |
(b) | Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus |
Nonrecurring fair value measurements
As indicated in Note 2, real estate held for sale is measured at the lower of carrying amount or fair value less cost to sell. As of December 31, 2019 the Company has 1 property that is held for sale. This property is carried at fair value less cost to sell, which amounts to $745.
The Company also had three properties that were held for sale as of December 31, 2018. The carrying amount for each of these properties was less than their fair value and, therefore, they are not measured at fair value.
Fair value was determined by utilizing an external appraisal following the sales comparison approach. The fair value measurements are classified as Level 3 as the comparable sales and adjustments for the specific attributes of these properties are not market observable inputs.
30
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Bonds and Stocks
The carrying amounts and estimated fair values of investments in bonds and stocks are as follows:
Book Adjusted Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
December 31, 2019 |
||||||||||||||||
Unaffiliated bonds: |
||||||||||||||||
United States Government and agencies |
$ | 1,601,214 | $ | 247,311 | $ | 357 | $ | 1,848,168 | ||||||||
State, municipal and other government |
699,845 | 36,231 | 8,841 | 727,235 | ||||||||||||
Hybrid securities |
139,964 | 18,294 | 2,490 | 155,768 | ||||||||||||
Industrial and miscellaneous |
13,440,685 | 1,677,600 | 43,652 | 15,074,633 | ||||||||||||
Mortgage and other asset-backed securities |
1,996,257 | 199,752 | 5,936 | 2,190,073 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total unaffiliated bonds |
17,877,965 | 2,179,188 | 61,276 | 19,995,877 | ||||||||||||
Unaffiliated preferred stocks |
4,955 | 66 | 660 | 4,361 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 17,882,920 | $ | 2,179,254 | $ | 61,936 | $ | 20,000,238 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated common stocks |
58,999 | 111 | 53 | 59,057 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Book Adjusted Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
December 31, 2018 |
||||||||||||||||
Unaffiliated bonds: |
||||||||||||||||
United States Government and agencies |
$ | 1,645,120 | $ | 69,542 | $ | 33,955 | $ | 1,680,707 | ||||||||
State, municipal and other government |
416,752 | 12,733 | 13,939 | 415,546 | ||||||||||||
Hybrid securities |
145,271 | 9,152 | 7,013 | 147,410 | ||||||||||||
Industrial and miscellaneous |
12,911,155 | 528,970 | 550,783 | 12,889,342 | ||||||||||||
Mortgage and other asset-backed securities |
1,696,452 | 134,037 | 20,457 | 1,810,032 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total unaffiliated bonds |
16,814,750 | 754,434 | 626,147 | 16,943,037 | ||||||||||||
Unaffiliated preferred stocks |
9,958 | 56 | 800 | 9,214 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 16,824,708 | $ | 754,490 | $ | 626,947 | $ | 16,952,251 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated common stocks |
67,017 | 67 | 21 | 67,063 | ||||||||||||
|
|
|
|
|
|
|
|
31
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The carrying amount and estimated fair value of bonds at December 31, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
2019 | ||||||||
December 31: | Carrying Value | Fair Value | ||||||
Due in one year or less |
$ | 330,436 | $ | 332,890 | ||||
Due after one year through five years |
2,673,811 | 2,820,295 | ||||||
Due after five years through ten years |
3,000,633 | 3,362,510 | ||||||
Due after ten years |
9,876,828 | 11,290,108 | ||||||
|
|
|
|
|||||
15,881,708 | 17,805,803 | |||||||
Mortgage and other asset-backed securities |
1,996,257 | 2,190,074 | ||||||
|
|
|
|
|||||
Total |
$ | 17,877,965 | $ | 19,995,877 | ||||
|
|
|
|
The estimated fair value of bonds, preferred stocks and common stocks with gross unrealized losses at December 31, 2019 and 2018 is as follows:
2019 | ||||||||||||||||
Equal to or Greater than 12 Months |
Less than 12 Months | |||||||||||||||
Estimated Fair Value |
Gross Unrealized Losses |
Estimated Fair Value |
Gross Unrealized Losses |
|||||||||||||
United States Government and agencies |
$ | | $ | | $ | 11,224 | $ | 357 | ||||||||
State, municipal and other government |
17,582 | 2,010 | 232,694 | 6,831 | ||||||||||||
Hybrid securities |
26,780 | 2,475 | 3,302 | 15 | ||||||||||||
Industrial and miscellaneous |
262,510 | 29,928 | 387,345 | 13,724 | ||||||||||||
Mortgage and other asset-backed securities |
60,442 | 2,868 | 369,603 | 3,067 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total bonds |
367,314 | 37,281 | 1,004,168 | 23,994 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred stocks-unaffiliated |
1,340 | 660 | | | ||||||||||||
Common stocks-unaffiliated |
| | 609 | 53 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 368,654 | $ | 37,941 | $ | 1,004,777 | $ | 24,047 | ||||||||
|
|
|
|
|
|
|
|
32
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 | ||||||||||||||||
Equal to or Greater than 12 Months |
Less than 12 Months | |||||||||||||||
Estimated Fair Value |
Gross Unrealized Losses |
Estimated Fair Value |
Gross Unrealized Losses |
|||||||||||||
United States Government and agencies |
$ | 63,881 | $ | 4,817 | $ | 707,210 | $ | 29,138 | ||||||||
State, municipal and other government |
33,780 | 2,461 | 158,447 | 11,478 | ||||||||||||
Hybrid securities |
12,595 | 1,893 | 44,591 | 5,120 | ||||||||||||
Industrial and miscellaneous |
1,180,161 | 67,218 | 6,509,117 | 483,565 | ||||||||||||
Mortgage and other asset-backed securities |
213,966 | 10,505 | 418,923 | 9,952 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total bonds |
1,504,383 | 86,894 | 7,838,288 | 539,253 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred stocks-unaffiliated |
1,200 | 800 | | | ||||||||||||
Common stocks-unaffiliated |
| | 165 | 21 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,505,583 | $ | 87,694 | $ | 7,838,453 | $ | 539,274 | ||||||||
|
|
|
|
|
|
|
|
During 2019, 2018, and 2017, respectively, there were $2,799, $99,187 and $0 of loan-backed and structured securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold.
For loan-backed and structured securities with a recognized OTTI due to the Companys cash flow analysis, in which the security is written down to estimated future cash flows discounted at the securitys effective yield, in 2019, 2018 and 2017 the Company recognized OTTI of $503, $6,003, and $2,512, respectively.
The following loan-backed and structured securities were held at December 31, 2019, for which an OTTI was recognized during the current reporting period:
CUSIP |
Amortized Cost Before Current Period OTTI |
Present Value of Projected Cash Flows |
Recognized OTTI |
Amortized Cost After OTTI |
Fair Value at Time of OTTI |
Date of Financial Statement Where Reported |
||||||||||||||||||
87266TAJ1 | $ | 170 | $ | 163 | $ | 7 | $ | 163 | $ | 114 | 03/31/2019 | |||||||||||||
79548KXQ6 | 189 | 173 | 16 | 173 | 154 | 03/31/2019 | ||||||||||||||||||
14984WAA8 | 2,799 | 2,591 | 208 | 2,591 | 2,591 | 6/30/2019 | ||||||||||||||||||
87266TAJ1 | 154 | 127 | 27 | 127 | 102 | 6/30/2019 | ||||||||||||||||||
79548KXQ6 | 159 | 79 | 80 | 80 | 142 | 6/30/2019 | ||||||||||||||||||
36828QQK5 | 277 | 249 | 28 | 249 | 195 | 9/30/2019 | ||||||||||||||||||
026935AC0 | 2,080 | 2,066 | 14 | 2,066 | 1,968 | 12/31/2019 | ||||||||||||||||||
36828QQK5 | 249 | 126 | 123 | 126 | 195 | 12/31/2019 | ||||||||||||||||||
|
|
|||||||||||||||||||||||
$ | 503 | |||||||||||||||||||||||
|
|
33
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The unrealized losses of loan-backed and structured securities where fair value is less than cost or amortized cost for which an OTTI has not been recognized in earnings as of December 31, 2019 and 2018 is as follows:
2019 | 2018 | |||||||||||||||
Losses 12 Months or More |
Losses Less Than 12 Months |
Losses 12 Months or More |
Losses Less Than 12 Months |
|||||||||||||
Year ended December 31: |
||||||||||||||||
The aggregate amount of unrealized losses |
$ | 2,868 | $ | 3,417 | $ | 10,505 | $ | 17,168 | ||||||||
The aggregate related fair value of securities with unrealized losses |
60,442 | 372,394 | 213,966 | 465,773 |
At December 31, 2019 and 2018, respectively, for bonds and preferred stocks that have been in a continuous loss position for greater than or equal to twelve months, the Company held 104 and 374 securities with a carrying amount of $406,595 and $1,593,276 and an unrealized loss of $37,941 and $87,694. Of this portfolio, 66.8% and 88.0% were investment grade with associated unrealized losses of $10,107 and $62,824, respectively.
At December 31, 2019 and 2018, respectively, for bonds and preferred stocks that have been in a continuous loss position for less than twelve months, the Company held 214 and 1209 securities with a carrying amount of $1,028,162 and $8,377,542 and an unrealized loss of $23,994 and $539,253. Of this portfolio, 95.6% and 92.8% were investment grade with associated unrealized losses of $21,691 and $476,336, respectively.
At December 31, 2019 and 2018, respectively, there were no common stocks that have been in a continuous loss position for greater than or equal to twelve months.
At December 31, 2019 and 2018, respectively, for common stocks that have been in a continuous loss position for less than twelve months, the Company held 5 and 6 securities with a cost of $661 and $186 and an unrealized loss of $53 and $21.
The following table provides the number of 5GI securities, aggregate book adjusted carrying value and aggregate fair value by investment type:
Number of 5GI Securities |
Book / Adjusted Carrying Value |
Fair Value | ||||||||||
December 31, 2019 |
||||||||||||
Bond, amortized cost |
3 | $ | 5,561 | $ | 5,401 | |||||||
Loan-backed and structured securities, amortized cost |
1 | 3,138 | 3,138 | |||||||||
Preferred stock, amortized cost |
1 | 2,272 | 2,272 | |||||||||
|
|
|
|
|
|
|||||||
Total |
5 | $ | 10,971 | $ | 10,811 | |||||||
December 31, 2018 |
||||||||||||
Bond, amortized cost |
3 | $ | 6,034 | $ | 6,010 | |||||||
Preferred stock, amortized cost |
1 | 6,835 | 6,834 | |||||||||
|
|
|
|
|
|
|||||||
Total |
4 | $ | 12,869 | $ | 12,844 |
34
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
During 2019 and 2018, the Company sold, redeemed or otherwise disposed of 75 and 57 securities as a result of a callable feature which generated investment income of $5,927 and $16,484, as a result of prepayment penalty and/or acceleration fee.
Proceeds from sales and other disposals of bonds and preferred stock and related gross realized capital gains and losses are reflected in the following table. The amounts exclude maturities and include transfers associated with reinsurance agreements.
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Proceeds |
$ | 2,953,444 | $ | 3,505,561 | $ | 5,152,507 | ||||||
|
|
|
|
|
|
|||||||
Gross realized gains |
$ | 24,798 | $ | 23,436 | $ | 574,671 | ||||||
Gross realized losses |
(18,768 | ) | (168,483 | ) | (12,699 | ) | ||||||
|
|
|
|
|
|
|||||||
Net realized capital gains (losses) |
$ | 6,030 | $ | (145,047 | ) | $ | 561,972 | |||||
|
|
|
|
|
|
The Company had gross realized losses which relate to losses recognized on other-than-temporary declines in the fair value of bonds and preferred stocks for the years ended December 31, 2019, 2018 and 2017 of $8,476, $25,453 and $2,992, respectively.
At December 31, 2019, and 2018, the Company had no investments in restructured securities.
Mortgage Loans
The credit quality of mortgage loans by type of property for the years ended December 31, 2019 and 2018 were as follows:
December 31, 2019 | Farm | Commercial | Total | |||||||||
AAA - AA |
$ | | $ | 1,372,173 | $ | 1,372,173 | ||||||
A |
9,890 | 1,254,899 | 1,264,789 | |||||||||
BBB |
| 98,796 | 98,796 | |||||||||
|
|
|
|
|
|
|||||||
$ | 9,890 | $ | 2,725,868 | $ | 2,735,758 | |||||||
|
|
|
|
|
|
|||||||
December 31, 2018 | Farm | Commercial | Total | |||||||||
AAA - AA |
$ | | $ | 1,048,151 | $ | 1,048,151 | ||||||
A |
10,000 | 1,304,089 | 1,314,089 | |||||||||
BBB |
| 72,347 | 72,347 | |||||||||
|
|
|
|
|
|
|||||||
$ | 10,000 | $ | 2,424,587 | $ | 2,434,587 | |||||||
|
|
|
|
|
|
The above tables exclude residential mortgage loans
35
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The credit quality for commercial and farm mortgage loans was determined based on an internal credit rating model which assigns a letter rating to each mortgage loan in the portfolio as an indicator of the credit quality of the mortgage loan. The internal credit rating model was designed based on rating agency methodology, then modified for credit risk associated with the Companys mortgage lending process, taking into account such factors as projected future cash flows, net operating income, and collateral value. The model produces a credit rating score and an associated letter rating which is intended to align with S&P ratings as closely as possible. Information supporting the credit risk rating process is updated at least annually.
During 2019, the Company issued mortgage loans with a maximum interest rate of 5.57% and a minimum interest rate of 3.50% for commercial loans. The maximum percentage of any one mortgage loan to the value of the underlying real estate originated or acquired during the year ending December 31, 2019 at the time of origination was 70%. During 2018, the Company issued mortgage loans with a maximum interest rate of 5.23% and a minimum interest rate of 3.78% for commercial loans. The maximum percentage of any one mortgage loan to the value of the underlying real estate originated or acquired during the year ending December 31, 2018 at the time of origination was 74%.
The age analysis of mortgage loans and identification in which the Company is a participant or co-lender in a mortgage loan agreement is as follows for December 31, 2019 and 2018.
Residential | Commercial | |||||||||||||||
Farm | All Other | All Other | Total | |||||||||||||
December 31, 2019 |
|
|||||||||||||||
Recorded Investment (All) |
||||||||||||||||
(a) Current |
$ | 9,890 | $ | 303 | $ | 2,700,403 | $ | 2,710,596 | ||||||||
(b) 30-59 Days Past Due |
| 886 | | 886 | ||||||||||||
(c) 60-89 Days Past Due |
| 131 | | 131 | ||||||||||||
(d) 90-179 Days Past Due |
| 25 | 3,500 | 3,525 | ||||||||||||
(e) 180+ Days Past Due |
| 6 | 21,965 | 21,971 | ||||||||||||
Accruing interest 90-179 days past due |
||||||||||||||||
(a) Recorded investment |
| 25 | | 25 | ||||||||||||
(b) Interest accrued |
| | | | ||||||||||||
Participant or Co-lender in |
||||||||||||||||
Mortgage Loan Agreement |
||||||||||||||||
(a) Recorded Investment |
$ | 9,890 | $ | | $ | 1,046,933 | $ | 1,056,823 |
36
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Residential | Commercial | |||||||||||||||
Farm | All Other | All Other | Total | |||||||||||||
December 31, 2018 |
|
|||||||||||||||
Recorded Investment (All) |
||||||||||||||||
(a) Current |
$ | 10,000 | $ | 431 | $ | 2,399,122 | $ | 2,409,553 | ||||||||
(b) 30-59 Days Past Due |
| 1,045 | | 1,045 | ||||||||||||
(c) 60-89 Days Past Due |
| 40 | 25,465 | 25,505 | ||||||||||||
(d) 90-179 Days Past Due |
| 93 | | 93 | ||||||||||||
(e) 180+ Days Past Due |
| 7 | | 7 | ||||||||||||
Accruing interest 90-179 days past due |
||||||||||||||||
(a) Recorded investment |
| 93 | | 93 | ||||||||||||
(b) Interest accrued |
| | | | ||||||||||||
Participant or Co-lender in |
||||||||||||||||
Mortgage Loan Agreement |
||||||||||||||||
(a) Recorded Investment |
$ | 10,000 | $ | | $ | 832,611 | $ | 842,611 |
At December 31, 2019 and 2018, there were no recorded investments in impaired loans with a related allowance for credit losses. The Company held no allowances for credit losses on mortgage loans at December 31, 2019 or December 31, 2018. There was no average recorded investment in impaired loans during 2019 or 2018. There were no impaired mortgage loans held without an allowance for credit losses as of December 31, 2019 and 2018, respectively, that were subject to participant or co-lender mortgage loan agreement for which the Company is restricted from unilaterally foreclosing on the mortgage loans.
As of December 31, 2019 and 2018, the Company had no mortgage loans derecognized as a result of foreclosure.
The Company accrues interest income on impaired loans to the extent deemed collectible (delinquent less than 91 days) and the loan continues to perform under its original or restructured contractual terms. Interest income on non-performing loans generally is recognized on a cash basis. The Company recognized no interest income on impaired loans for the years ended December 31, 2019, 2018 and 2017, respectively. The Company recognized no interest income on a cash basis for the years ended December 31, 2019, 2018 and 2017, respectively.
At December 31, 2019 and 2018, the Company held a mortgage loan loss reserve in the AVR of $36,207 and $25,537, respectively.
37
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Companys mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:
Geographic Distribution |
Property Type Distribution |
|||||||||||||||||
December 31 | December 31 | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
South Atlantic |
27 | % | 28 | % | Apartment | 53 | % | 55 | % | |||||||||
Pacific |
25 | 22 | Retail | 14 | 14 | |||||||||||||
Middle Atlantic |
10 | 10 | Industrial | 14 | 12 | |||||||||||||
E. North Central |
8 | 9 | Office | 11 | 9 | |||||||||||||
Mountain |
8 | 9 | Other | 6 | 7 | |||||||||||||
W. South Central |
8 | 8 | Medical | 2 | 2 | |||||||||||||
W. North Central |
7 | 7 | Agricultural | | 1 | |||||||||||||
E. South Central |
4 | 4 | ||||||||||||||||
New England |
3 | 3 |
At December 31, 2019, 2018 and 2017, the Company held mortgage loans with a total net admitted asset value of $208, $239, and $268, respectively, which had been restructured in accordance with SSAP No. 36, Troubled Debt Restructuring. There were no realized losses during the years ended December 31, 2019, 2018 and 2017 related to such restructurings. There were no unfunded commitments to existing borrowers whose debt had been restructured at December 31, 2019, 2018 and 2017.
Real Estate
The fair value of property is determined based on an appraisal from a third-party appraiser, along with information obtained from discussions with internal asset managers and a listing broker regarding recent comparable sales data and other relevant property information.
The carrying value of the Companys real estate assets at December 31, 2019 and 2018 was as follows:
2019 | 2018 | |||||||
Investment properties |
$ | 186,894 | $ | 187,420 | ||||
Properties held for sale |
745 | 30,226 | ||||||
|
|
|
|
|||||
$ | 187,639 | $ | 217,646 |
As of December 31, 2019, there was one property classified as held-for-sale. As of December 31, 2018, there were three properties held-for-sale. The Company is working with an external commercial real estate advisor firm to actively market the property and negotiate with potential buyers. During 2019, the Company disposed of three properties throughout 2019, resulting in a net realized gains of $24,201. During 2018, one property classified as held-for-sale was disposed of resulting in a net realized loss of $8.
The Company disposed of one other property throughout 2019, resulting in a net realized loss of $57.
The Company does not engage in retail land sales operations.
38
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company does not hold any real estate investments with participating mortgage loans.
Accumulated depreciation on real estate at December 31, 2019 and 2018, was $58,540 and $63,664, respectively.
There were no impairment losses taken on real estate in 2019 and 2018. Impairment losses of $696 were taken on real estate in 2017 to write the book value down to the current fair value, and were reflected as net realized losses in the statements of operations.
Reverse Mortgages
The company has reverse mortgages, which are reported as Other Invested Assets on the balance sheet. The carrying amount of the investment in reverse mortgages of $6,920 and $11,118 at December 31, 2019 and 2018, respectively, is net of the reserve of $2,891 and $4,197, respectively. Interest income of $523 and $814 was recognized for the years ended December 31, 2019 and 2018 respectively. The Companys commitment includes making advances to the borrower until termination of the contract. The contract is terminated at the time the borrower moves, sells the property, dies, repays the loan balance or violates the provisions of the loan contract.
During 2019 and 2018, respectively, reverse mortgages of $1,584 and $0 were foreclosed or acquired by deed and transferred to real estate.
Other Invested Assets
During 2019, 2018 and 2017, the Company did not recognize any impairment write down for its investments in joint ventures, partnerships or limited liability companies.
During 2017, the Company reassigned its ownership interest in the Prisma Spectrum Fund for an additional interest in the Zero Beta Fund in the amount of $88,481, which resulted in a realized gain of $43,498.
Tax Credits
For the year ending December 31, 2019, the Company had ownership interests in twenty-nine LIHTC properties with a carrying value of . The remaining years of unexpired tax credits ranged from one to twelve and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to seventeen years. The amount of contingent equity commitments expected to be paid during the years 2020 to 2029 is $66,571. Tax credits recognized in 2019 were $12,733, and other tax benefits recognized in 2019 were $1,546. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.
For the year ending December 31, 2018, the Company had ownership interests in twenty-seven LIHTC properties with a carrying value of $35,907. The remaining years of unexpired tax credits ranged from two to twelve and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to seventeen years. The amount of contingent equity commitments
39
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
expected to be paid during the years 2019 to 2029 is $77,186. Tax credits recognized in 2018 were $7,866, and other tax benefits recognized in 2018 were $2,964. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.
The following tables provide the carrying value of state transferable tax credits gross of any related tax liabilities and total unused transferable tax credits by state and in total as of December 31, 2019 and 2018:
December 31, 2019 | ||||||||||||
Description of State Transferable and Non- |
State | Carrying Value | Unused Amount* | |||||||||
Low-Income Housing Tax Credits |
MA | $ | 568 | $ | 1,478 | |||||||
Economic Redevelopment and Growth Tax Credits |
NJ | | 18,700 | |||||||||
|
|
|
|
|||||||||
Total |
$ | 568 | $ | 20,178 | ||||||||
|
|
|
|
|||||||||
December 31, 2018 | ||||||||||||
Description of State Transferable and Non- |
State | Carrying Value | Unused Amount | |||||||||
Low-Income Housing Tax Credits |
MA | $ | 1,268 | $ | 2,178 | |||||||
Economic Redevelopment and Growth Tax Credits |
NJ | | 18,700 | |||||||||
|
|
|
|
|||||||||
Total |
$ | 1,268 | $ | 20,878 | ||||||||
|
|
|
|
* | The unused amount reflects credits that the Company deems will be realizable in the period 2019-2029. |
The Company did not have any non-transferable state tax credits.
The Company estimated the utilization of the remaining state transferable tax credits by projecting a future tax liability based on projected premium, tax rates and tax credits, and comparing the projected future tax liability to the availability of remaining state transferable tax credits. The Company had no impairment losses related to state transferable tax credits as of December 31, 2019, 2018 and 2017.
Derivatives
The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets (cash or securities) on the Companys behalf in an amount equal to the difference between the net positive fair value of the contracts and an agreed upon threshold based on the credit rating of the counterparty. If the net fair value of all contracts with this counterparty is negative, then the Company is required to post similar assets (cash or securities). Fair value of derivative contracts, aggregated at a counterparty level at December 31, 2019 and 2018, was as follows:
2019 | 2018 | |||||||
Fair value - positive |
$ | 218,361 | $ | 168,821 | ||||
Fair value - negative |
(117,169 | ) | (94,091 | ) |
40
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
For the years ended December 31, 2019, 2018 and 2017, the Company has recorded ($7,547), $2,406 and ($3,602), respectively, for the component of derivative instruments utilized for hedging purposes that did not qualify for hedge accounting. This has been recorded directly to unassigned surplus as an unrealized gain (loss). The Company did not recognize any unrealized gains or losses during 2019, 2018, or 2017 that represented the component of derivative instruments gain or loss that was excluded from the assessment of hedge effectiveness.
The maximum term over which the Company is hedging its exposure to the variability of future cash flows is approximately 13 years for forecasted hedge transactions. For the years ended December 31, 2019, 2018 and 2017 none of the Companys cash flow hedges have been discontinued as it was probable that the original forecasted transactions would occur by the end of the originally specified time period documented at inception of the hedging relationship. As of December 31, 2019 and 2018, the Company has accumulated deferred gains in the amount of $1,186 and $1,186, respectively, related to the termination of swaps that were hedging forecasted transactions. It is expected that these gains will be used as basis adjustments on futures asset purchases expected to transpire throughout 2026.
Summary of realized gains (losses) by derivative type for the years ended December 31, 2019, 2018 and 2017:
2019 | 2018 | 2017 | ||||||||||
Options: |
||||||||||||
Calls |
$ | | $ | | $ | 67 | ||||||
Caps |
| | (45,848 | ) | ||||||||
Puts |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total options |
$ | | $ | | $ | (45,781 | ) | |||||
|
|
|
|
|
|
|||||||
Swaps: |
||||||||||||
Interest rate |
$ | 293 | $ | (1,105 | ) | $ | 102,724 | |||||
Credit |
(279 | ) | (2,444 | ) | | |||||||
Total return |
(9,112 | ) | (4,853 | ) | (26,122 | ) | ||||||
|
|
|
|
|
|
|||||||
Total swaps |
$ | (9,098 | ) | $ | (8,402 | ) | $ | 76,602 | ||||
|
|
|
|
|
|
|||||||
Futures - net positions |
216,114 | (81,504 | ) | 167,302 | ||||||||
Lehman settlements |
14 | 55 | 122 | |||||||||
|
|
|
|
|
|
|||||||
Total realized gains (losses) |
$ | 207,030 | $ | (89,851 | ) | $ | 198,245 | |||||
|
|
|
|
|
|
The average estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019 and 2018:
Asset(1) | Liability(1) | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative component of RSATs |
||||||||||||||||
Credit default swaps |
$ | 18,303 | $ | 16,608 | $ | (2,535 | ) | $ | (1,212 | ) | ||||||
Interest rate swaps |
| | | 751 |
(1) | Asset and liability classification is based on the positive (asset) or negative (liability) book/adjusted carrying value of each derivative. |
41
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019 and 2018:
Asset(1) | Liability(1) | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative component of RSATs |
||||||||||||||||
Credit default swaps |
$ | 19,459 | $ | 13,304 | $ | (2,855 | ) | $ | (1,148 | ) | ||||||
Interest rate swaps |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 19,459 | $ | 13,304 | $ | (2,855 | ) | $ | (1,148 | ) | ||||||
|
|
|
|
|
|
|
|
(1) | Asset and liability classification is based on the positive (asset) or negative (liability) book/adjusted carrying value of each derivative. |
The net realized gains (losses) on the derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019, 2018, and 2017:
2019 | 2018 | 2017 | ||||||||||
Derivative component of RSATs |
||||||||||||
Credit default swaps |
$ | (279 | ) | $ | (2,444 | ) | $ | | ||||
Interest rate swaps |
| (616 | ) | | ||||||||
|
|
|
|
|
|
|||||||
Total |
$ | (279 | ) | $ | (3,060 | ) | $ | | ||||
|
|
|
|
|
|
As stated in Note 2, the Company replicates investment grade corporate bonds or sovereign debt by writing credit default swaps. As a writer of credit swaps, the Company actively monitors the underlying asset, being careful to note any events (default or similar credit event) that would require the Company to perform on the credit swap. If such events would take place, a payment equal to the notional amount of the contract, less any potential recoveries as determined by the underlying agreement, will be made by the Company to the counterparty to the swap.
42
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables present the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at December 31, 2019 and 2018:
2019 | ||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations (1) |
NAIC Designation |
Estimated Fair Value of Credit Default Swaps |
Maximum Amount of Future Payments under Credit Default Swaps |
Weighted Average Years to Maturity (2) |
||||||||||||
AAA/AA/A |
1 | |||||||||||||||
Single name credit default swaps (3) |
$ | 3,915 | $ | 273,200 | 1.7 | |||||||||||
Credit default swaps referencing indices |
7 | 10,000 | 41.7 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
3,922 | 283,200 | 3.1 | |||||||||||||
|
|
|
|
|||||||||||||
BBB |
2 | |||||||||||||||
Single name credit default swaps (3) |
9,747 | 560,760 | 2.0 | |||||||||||||
Credit default swaps referencing indices |
5,721 | 315,700 | 2.6 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
15,468 | 876,460 | 2.2 | |||||||||||||
|
|
|
|
|||||||||||||
BB |
3 | |||||||||||||||
Single name credit default swaps (3) |
2,924 | 28,350 | 2.3 | |||||||||||||
Credit default swaps referencing indices |
| | | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
2,924 | 28,350 | 2.3 | |||||||||||||
|
|
|
|
|||||||||||||
Total |
$ | 22,314 | $ | 1,188,010 | 2.4 | |||||||||||
|
|
|
|
(1) | The rating agency designations are based on availability and the blending of the applicable ratings among Moodys Investors Service (Moodys), Standard and Poors Rating Services (S&P), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used. |
(2) | The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. |
(3) | Includes corporate, foreign government and state entities. |
43
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 | ||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations (1) |
NAIC Designation |
Estimated Fair Value of Credit Default Swaps |
Maximum Amount of Future Payments under Credit Default Swaps |
Weighted Average Years to Maturity (2) |
||||||||||||
AAA/AA/A |
1 | |||||||||||||||
Single name credit default swaps (3) |
$ | 3,556 | $ | 259,450 | 2.6 | |||||||||||
Credit default swaps referencing indices |
| | | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
3,556 | 259,450 | 2.6 | |||||||||||||
|
|
|
|
|||||||||||||
BBB |
2 | |||||||||||||||
Single name credit default swaps (3) |
5,635 | 590,510 | 3.0 | |||||||||||||
Credit default swaps referencing indices |
2,588 | 291,500 | 3.4 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
8,223 | 882,010 | 3.1 | |||||||||||||
|
|
|
|
|||||||||||||
BB |
3 | |||||||||||||||
Single name credit default swaps (3) |
2,674 | 28,350 | 3.3 | |||||||||||||
Credit default swaps referencing indices |
| | | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
2,674 | 28,350 | 3.3 | |||||||||||||
|
|
|
|
|||||||||||||
Total |
$ | 14,453 | $ | 1,169,810 | 3.0 | |||||||||||
|
|
|
|
(1) | The rating agency designations are based on availability and the blending of the applicable ratings among Moodys Investors Service (Moodys), Standard and Poors Rating Services (S&P), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used. |
(2) | The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. |
(3) | Includes corporate, foreign government and state entities. |
44
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019 and 2018, the Companys outstanding derivative instruments, shown in notional or contract amounts and fair value, are summarized as follows:
Contract or Notional Amount* | Fair Value | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative assets: |
||||||||||||||||
Credit default swaps |
$ | 900,200 | $ | 886,000 | $ | 19,459 | $ | 13,304 | ||||||||
Currency swaps |
51,684 | 73,235 | 13,458 | 14,877 | ||||||||||||
Equity futures |
5 | 2 | 1,948 | 2,282 | ||||||||||||
Equity swaps |
| 61,739 | | 4,589 | ||||||||||||
Interest rate futures |
| | 7 | 213 | ||||||||||||
Interest rate swaps |
365,450 | 247,450 | 11,171 | 9,174 | ||||||||||||
Derivative liabilities: |
||||||||||||||||
Credit default swaps |
287,810 | 283,810 | (2,855 | ) | (1,148 | ) | ||||||||||
Currency swaps |
257,493 | 180,599 | 17,050 | 15,155 | ||||||||||||
Equity futures |
12 | 3 | 1,349 | 127 | ||||||||||||
Equity swaps |
78,802 | 100 | 4,361 | 208 | ||||||||||||
Interest rate futures |
1 | | 544 | 39 | ||||||||||||
Interest rate swaps |
2,131,433 | 2,579,033 | (75,597 | ) | (44,671 | ) |
* | Futures are presented in contract format. Swaps and options are presented in notional format. |
Restricted Assets
The following tables show the pledged or restricted assets as of December 31, 2019 and 2018, respectively:
Gross Restricted (Admitted & Nonadmitted) 2019 | ||||||||||||||||||||
Restricted Asset Category |
Total General Account (G/A) |
G/A Supporting Separate Account (S/A) Activity |
Total S/A Restricted Assets |
S/A Assets Supporting G/A Activity |
Total | |||||||||||||||
Collateral held under security lending agreements |
$ | 757,186 | $ | | $ | | $ | | $ | 757,186 | ||||||||||
Subject to dollar repurchase agreements |
254,966 | | | | 254,966 | |||||||||||||||
FHLB capital stock |
57,000 | | | | 57,000 | |||||||||||||||
On deposit with states |
4,180 | | | | 4,180 | |||||||||||||||
Pledged as collateral to FHLB (including assets backing funding agreements) |
1,829,750 | | | | 1,829,750 | |||||||||||||||
Pledged as collateral not captured in other categories |
249,326 | | | | 249,326 | |||||||||||||||
Other restricted assets |
182,479 | | | | 182,479 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Restricted Assets |
$ | 3,334,887 | $ | | $ | | $ | | $ | 3,334,887 | ||||||||||
|
|
|
|
|
|
|
|
|
|
45
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Gross (Admitted & Nonadmitted) Restricted | Percentage | |||||||||||||||||||||||
Restricted Asset Category |
Total From Prior Year (2018) |
Increase/ (Decrease) |
Total Nonadmitted Restricted |
Total Admitted Restricted (5 minus 8) |
Gross (Admitted & Nonadmitted) Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
||||||||||||||||||
Collateral held under security lending agreements |
$ | 574,886 | $ | 182,300 | $ | | $ | 757,186 | 1.43 | % | 1.44 | % | ||||||||||||
Subject to dollar repurchase agreements |
109,657 | 145,309 | | 254,966 | 0.48 | % | 0.49 | % | ||||||||||||||||
FHLB capital stock |
66,800 | (9,800 | ) | | 57,000 | 0.11 | % | 0.11 | % | |||||||||||||||
On deposit with states |
4,730 | (550 | ) | | 4,180 | 0.01 | % | 0.01 | % | |||||||||||||||
Pledged as collateral to FHLB (including assets backing funding agreements) |
2,086,543 | (256,793 | ) | | 1,829,750 | 3.46 | % | 3.48 | % | |||||||||||||||
Pledged as collateral not captured in other categories |
266,068 | (16,742 | ) | | 249,326 | 0.47 | % | 0.47 | % | |||||||||||||||
Other restricted assets |
195,728 | (13,249 | ) | | 182,479 | 0.34 | % | 0.35 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Restricted Assets |
$ | 3,304,412 | $ | 30,475 | $ | | $ | 3,334,887 | 6.30 | % | 6.35 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The following tables show the pledged or restricted assets in other categories as of December 31, 2019 and 2018, respectively:
Gross (Admitted & Nonadmitted) Restricted 2019 | ||||||||||||||||||||
Description of Assets |
Total General Account (G/A) |
G/A Supporting S/A Activity |
Total Separate Account (S/A) Restricted Assets |
S/A Assets Supporting G/A Activity |
Total | |||||||||||||||
Derivatives |
$ | 249,326 | $ | | $ | | $ | | $ | 249,326 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 249,326 | $ | | $ | | $ | | $ | 249,326 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Gross (Admitted & Nonadmitted) Restricted |
Percentage | |||||||||||||||||||
Description of Assets |
Total From Prior Year (2018) |
Increase/ (Decrease) |
Total Current Year Admitted Restricted |
Gross (Admitted & Nonadmitted) Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
|||||||||||||||
Derivatives |
$ | 266,068 | $ | (16,742 | ) | $ | 249,326 | 0.47 | % | 0.47 | % | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 266,068 | $ | (16,742 | ) | $ | 249,326 | 0.47 | % | 0.47 | % | |||||||||
|
|
|
|
|
|
|
|
|
|
46
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table shows the collateral received and reflected as assets within the financial statements as of December 31, 2019 and 2018.
2019 |
||||||||||||||||
Collateral Assets |
Carrying Value | Fair Value | % of CV to Total Assets (Admitted and Nonadmitted) |
% of CV to Total Admitted Assets |
||||||||||||
Cash |
$ | 456,116 | $ | 456,116 | 1.72 | % | 1.75 | % | ||||||||
Securities lending collateral assets |
757,186 | 757,186 | 2.86 | 2.91 | ||||||||||||
Other |
997 | 997 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral assets |
$ | 1,214,299 | $ | 1,214,299 | 4.58 | % | 4.66 | % | ||||||||
|
|
|
|
|
|
|
|
Amount | % of Liability to Total Liabilities |
|||||||
Recognized obligation to return collateral asset |
$ | 1,214,975 | 5.13 | % |
2018 |
||||||||||||||||
Collateral Assets |
Carrying Value | Fair Value | % of CV to Total Assets (Admitted and Nonadmitted) |
% of CV to Total Admitted Assets |
||||||||||||
Cash |
$ | 229,777 | $ | 229,777 | 0.93 | % | 0.94 | % | ||||||||
Securities lending collateral assets |
575,155 | 575,155 | 2.32 | 2.36 | ||||||||||||
Other |
1,000 | 1,000 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral assets |
$ | 805,932 | $ | 805,932 | 3.25 | % | 3.30 | % | ||||||||
|
|
|
|
|
|
|
|
Amount | % of Liability to Total Liabilities |
|||||||
Recognized obligation to return collateral asset |
$ | 806,292 | 3.60 | % |
47
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Net Investment Income
Detail of net investment income is presented below:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Income: |
||||||||||||
Bonds |
$ | 780,857 | $ | 763,422 | $ | 579,022 | ||||||
Preferred stocks |
1,617 | 1,441 | 1,364 | |||||||||
Common stocks |
91,649 | 63,241 | 102,361 | |||||||||
Mortgage loans on real estate |
119,009 | 104,675 | 72,505 | |||||||||
Real estate |
33,040 | 35,371 | 35,366 | |||||||||
Policy loans |
49,354 | 49,379 | 49,680 | |||||||||
Cash, cash equivalents and short-term investments |
20,104 | 13,218 | 10,218 | |||||||||
Derivatives |
25,690 | 26,047 | 23,631 | |||||||||
Other invested assets |
14,736 | 11,521 | 33,533 | |||||||||
|
|
|
|
|
|
|||||||
Gross investment income |
1,136,056 | 1,068,315 | 907,680 | |||||||||
Less: investment expenses |
110,855 | 97,376 | 81,193 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income before amortization of IMR |
$ | 1,025,201 | $ | 970,939 | $ | 826,487 | ||||||
Amortization of IMR |
69,658 | 79,469 | 53,005 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income, including IMR |
$ | 1,094,859 | $ | 1,050,408 | $ | 879,492 | ||||||
|
|
|
|
|
|
Realized Capital Gains (Losses)
Net realized capital gains (losses) on investments, including OTTI, are summarized below:
Realized Year Ended December 31 |
||||||||||||
2019 | 2018 | 2017 | ||||||||||
Bonds |
$ | (5,516 | ) | $ | (170,936 | ) | $ | 559,366 | ||||
Preferred stocks |
78 | | | |||||||||
Common stocks |
(590 | ) | 1,051 | 39,352 | ||||||||
Mortgage loans on real estate |
(582 | ) | (1,394 | ) | 10,955 | |||||||
Real estate |
24,177 | (8 | ) | (663 | ) | |||||||
Cash, cash equivalents and short-term investments |
45 | (17 | ) | 19 | ||||||||
Derivatives |
207,015 | (89,906 | ) | 198,123 | ||||||||
Other invested assets |
12,226 | 23,531 | 67,295 | |||||||||
|
|
|
|
|
|
|||||||
Change in realized capital gains (losses), before taxes |
236,853 | (237,679 | ) | 874,447 | ||||||||
Federal income tax effect |
(8,597 | ) | 47,135 | (94,516 | ) | |||||||
Transfer from (to) interest maintenance reserve |
874 | 118,706 | (368,479 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net realized capital gains (losses) on investments |
$ | 229,130 | $ | (71,838 | ) | $ | 411,452 | |||||
|
|
|
|
|
|
48
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Unrealized Capital Gains (Losses)
The changes in net unrealized capital gains and losses on investments, including the changes in net unrealized foreign capital gains and losses were as follows:
Change in Unrealized | ||||||||||||
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Bonds |
$ | 25,237 | $ | 8,468 | $ | 32,575 | ||||||
Preferred stocks |
(6,052 | ) | (1,856 | ) | (1,182 | ) | ||||||
Common stocks |
12 | (1,197 | ) | (37,604 | ) | |||||||
Affiliated entities |
19,774 | 29,355 | 10,774 | |||||||||
Cash equivalents and short-term investments |
(13 | ) | 29 | 35 | ||||||||
Derivatives |
(25,855 | ) | (4,952 | ) | 36,372 | |||||||
Other invested assets |
48,659 | 10,159 | (49,430 | ) | ||||||||
|
|
|
|
|
|
|||||||
Change in unrealized capital gains (losses), before taxes |
61,762 | 40,006 | (8,460 | ) | ||||||||
Taxes on unrealized capital gains (losses) |
(10,064 | ) | (3,048 | ) | (13,166 | ) | ||||||
|
|
|
|
|
|
|||||||
Change in unrealized capital gains (losses), net of tax |
$ | 51,698 | $ | 36,958 | $ | (21,626 | ) | |||||
|
|
|
|
|
|
6. Premium and Annuity Considerations Deferred and Uncollected
Deferred and uncollected life premium and annuity considerations, net of reinsurance, at December 31, 2019 and 2018 were as follows:
2019 | 2018 | |||||||||||||||
Gross | Net of Loading | Gross | Net of Loading | |||||||||||||
Life and annuity: |
||||||||||||||||
Ordinary first-year business |
$ | 8,311 | $ | 1,553 | $ | 9,413 | $ | 1,652 | ||||||||
Ordinary renewal business |
143,173 | 113,543 | 149,737 | 117,652 | ||||||||||||
Group life direct business |
5,805 | 4,051 | 6,768 | 4,753 | ||||||||||||
Credit direct business |
22 | 22 | 86 | 86 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 157,311 | $ | 119,169 | $ | 166,004 | $ | 124,143 | |||||||||
|
|
|
|
|
|
|
|
49
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
7. Policy and Contract Attributes
Insurance Liabilities
Policy reserves, deposit-type contracts and policy claims at December 31, 2019 and 2018 were as follows:
Year Ended December 31 | ||||||||
2019 | 2018 | |||||||
Life insurance reserves |
$ | 10,444,776 | $ | 9,567,419 | ||||
Annuity reserves and supplementary contracts with life contingencies |
1,383,733 | 1,466,569 | ||||||
Accident and health reserves (including long term care) |
6,066,092 | 5,931,736 | ||||||
|
|
|
|
|||||
Total policy reserves |
$ | 17,894,601 | 16,965,724 | |||||
Deposit-type contracts |
356,309 | 584,693 | ||||||
Policy claims |
463,716 | 434,245 | ||||||
|
|
|
|
|||||
Total policy reserves, deposit-type contracts and claim liabilities |
$ | 18,714,626 | $ | 17,984,662 | ||||
|
|
|
|
Life Insurance Reserves
The aggregate policy reserves for life insurance policies are based upon the 1941, 1958, 1980, 2001 and 2017 Commissioners Standard Ordinary Mortality Tables, the 1912, 1941 and 1961 Standard Industrial Mortality Tables, the 1960 Commissioners Standard Group Mortality Table, and the American Men, Actuaries and American Experience Mortality Tables. The reserves are calculated using interest rates ranging from 2.00 to 6.50 percent and are computed principally on the Net Level Premium Valuation and the Commissioners Reserve Valuation Method. Reserves for universal life policies are based on account balances adjusted for the Commissioners Reserve Valuation Method.
Tabular interest, tabular less actual reserves released and tabular cost have been determined by formula.
The Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the date of death. Additional premiums are charged or additional mortality charges are assessed for policies issued on substandard lives according to underwriting classification. Generally, mean reserves are determined by computing the regular mean reserve for the plan at the true age and holding, in addition, one-half (1/2) of the extra premium charge for the year. For certain flexible premium and fixed premium universal life insurance products, reserves are calculated utilizing the Commissioners Reserve Valuation Method for universal life policies and recognizing any substandard ratings.
At December 31, 2019 and 2018, the Company had insurance in force aggregating $3,797,278 and $4,392,920 respectively, in which the gross premiums are less than the net premiums required by the valuation standards established by the Iowa Insurance Division. The Company established policy reserves of $44,585 and $49,923 to cover these deficiencies at December 31, 2019 and 2018, respectively.
50
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Participating life insurance policies were issued by the Company which entitle policyholders to a share in the earnings of the participating policies, provided that a dividend distribution, which is determined annually based on mortality and persistency experience of the participating policies, is authorized by the Company. Participating insurance constituted less than 1% of ordinary life insurance in force at December 31, 2019 and 2018.
For the years ended December 31, 2019, 2018 and 2017, premiums for participating life insurance policies were $920, $963 and $1,003, respectively. The Company accounts for its policyholder dividends based on dividend scales and experience of the policies. The Company paid dividends in the amount of $1,030, $1,025 and $1,081 to policyholders during 2019, 2018 and 2017, respectively, and did not allocate any additional income to such policyholders.
Annuity Reserves and Supplementary Contracts Involving Life Contingencies
Deferred annuity reserves are calculated according to the Commissioners Annuity Reserve Valuation Method including excess interest reserves to cover situations where the future interest guarantees plus the decrease in surrender charges are in excess of the maximum valuation rates of interest. Reserves for immediate annuities and supplementary contracts with and without life contingencies are equal to the present value of future payments assuming interest rates ranging from 1.25 to 11.25 percent and mortality rates, where appropriate, from a variety of tables.
Annuity reserves also include GICs and funding agreements classified as life-type contracts as defined in SSAP No. 50, Classifications of Insurance or Managed Care Contracts. These liabilities have annuitization options at guaranteed rates and consist of floating interest rate and fixed interest rate contracts. The contract reserves are carried at the greater of the account balance or the value as determined for an annuity with cash settlement option, on a change in fund basis, according to the Commissioners Annuity Reserve Valuation Method.
The liabilities related to guaranteed investment contracts and policyholder funds left on deposit with the Company generally are equal to fund balances less applicable surrender charges.
For variable annuities with guaranteed living benefits and variable annuities with minimum guaranteed death benefits the Company complies with VM-21. VM-21 specifies statutory reserve requirements for variable annuity contracts with benefit guarantees (VACARVM) and without benefit guarantees and related products. The VM-21 reserve calculation covers all variable annuity products. Examples of covered guaranteed benefits include guaranteed minimum accumulation benefits, guaranteed minimum death benefits, guaranteed minimum withdrawal benefits, guaranteed minimum income benefits, and variable payout annuity with guaranteed floors. The aggregate reserve for contracts falling within the scope of VM-21 is equal to the stochastic reserves plus the additional standard projection amount.
Both the stochastic reserves and the standard projection are determined as the CTE70 of the scenario reserves. To determine the CTE70 values, the Company used 1,000 of the pre-packaged scenarios developed by the American Academy of Actuaries (AAA) and the Society of Actuaries. The stochastic reserves use and prudent estimate assumptions based on company experience, while the standard projection uses the assumptions prescribed in VM-21 for determining the additional standard projection amount.
51
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Accident and Health Liabilities
Accident and health policy reserves are equal to the greater of the gross unearned premiums or any required mid-terminal reserves plus net unearned premiums and the present value of amounts not yet due on both reported and unreported claims.
At December 31, 2019 and 2018, the Company had no premium deficiency reserve related to accident and health policies.
The Companys primary method utilized to estimate premium adjustments for contracts subject to redetermination is to review experience periodically and to adjust premiums for differences between the experience anticipated at the time of redetermination and that underlying the original premiums. The Company has not limited its degree of discretion contractually; however, in some states it has agreed not to raise premiums in order to recoup past losses. The Company forgoes premium changes on existing policies at its option if the administrative cost and other business issues associated with the change outweigh the direct financial impact of the change. Also, the Company has extra-contractually guaranteed the current premium scale for certain policies.
Liabilities for losses and loss/claim adjustment expenses for accident and health contracts are estimated using statistical claim development models to develop best estimates of liabilities for medical expense business and using tabular reserves employing mortality/morbidity tables and discount rates meeting minimum regulatory requirements for other business.
The Company does not write any accident and health business that is subject to the Affordable Care Act risk sharing provisions.
Liabilities for losses and loss/claim adjustment expenses for accident and health contracts are estimated using statistical claim development models to develop best estimates of liabilities for medical expense business and using tabular reserves employing mortality/morbidity tables and discount rates meeting minimum regulatory requirements for other business. Unpaid claims include amounts for losses and related adjustment expenses and are estimates of the ultimate net costs of all losses, reported and unreported. These estimates are subject to the impact of future changes in claim severity, frequency and other factors.
52
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Activity in the liability for unpaid claims and related processing costs net of reinsurance is summarized as follows:
Unpaid Claims Liability Beginning of Year |
Claims Incurred |
Claims Paid |
Unpaid Claims Liability End of Year |
|||||||||||||
Year ended December 31, 2019 |
||||||||||||||||
2019 |
$ | | $ | 864,693 | $ | 266,218 | $ | 598,474 | ||||||||
2018 and prior |
1,860,793 | (18,289 | ) | 558,704 | 1,283,801 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,860,793 | $ | 846,404 | $ | 824,922 | 1,882,276 | |||||||||||
|
|
|
|
|||||||||||||
Active life reserve |
$ | 4,390,665 | $ | 4,512,675 | ||||||||||||
|
|
|
|
|||||||||||||
Total accident and health reserves |
$ | 6,251,458 | $ | 6,394,951 | ||||||||||||
|
|
|
|
|||||||||||||
Unpaid Claims Liability Beginning of Year |
Claims Incurred |
Claims Paid |
Unpaid Claims Liability End of Year |
|||||||||||||
Year ended December 31, 2018 |
||||||||||||||||
2018 |
$ | | $ | 954,895 | $ | 294,034 | $ | 660,861 | ||||||||
2017 and prior |
1,751,452 | (12,178 | ) | 539,342 | 1,199,932 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,751,452 | $ | 942,717 | $ | 833,376 | 1,860,793 | |||||||||||
|
|
|
|
|||||||||||||
Active life reserve |
$ | 4,238,123 | $ | 4,390,665 | ||||||||||||
|
|
|
|
|||||||||||||
Total accident and health reserves |
$ | 5,989,575 | $ | 6,251,458 | ||||||||||||
|
|
|
|
The Companys unpaid claims reserve was increased (decreased) by $(18,289) and $(12,178) for the years ended December 31, 2019 and 2018, respectively, for health claims that were incurred prior to those balance sheet dates. The change in 2019 and 2018 resulted primarily from variances in the estimated frequency of claims and claim severity.
53
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Activity in the liability for unpaid claims adjustment expense is summarized as follows:
Liability Beginning of Year |
Incurred | Paid | Liability End of Year |
|||||||||||||
Year ended December 31, 2019 |
||||||||||||||||
2019 |
$ | | $ | 15,113 | $ | 1,428 | $ | 13,685 | ||||||||
2018 and prior |
46,226 | (14,407 | ) | 2,464 | 29,355 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 46,226 | $ | 706 | $ | 3,892 | $ | 43,040 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Year ended December 31, 2018 |
||||||||||||||||
2018 |
$ | | $ | 19,236 | $ | 2,819 | $ | 16,417 | ||||||||
2017 and prior |
43,512 | (11,813 | ) | 1,890 | 29,809 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 43,512 | $ | 7,423 | $ | 4,709 | $ | 46,226 | |||||||||
|
|
|
|
|
|
|
|
The Company did not increase or decrease the claim adjustment expense provision for insured events of prior years during 2019 or 2018.
Deposit-type Contracts
Tabular interest on funds not involving life contingencies has been determined primarily by formula.
The Company issues certain funding agreements with well-defined class-based annuity purchase rates defining either specific or maximum purchase rate guarantees. However, these funding agreements are not issued to or for the benefit of an identifiable individual or group of individuals. These contracts are classified as deposit-type contracts in accordance with SSAP No. 50.
Included in the liability for deposit-type contracts at December 31, 2019 and 2018 are approximately $11,288 and $11,543, respectively, of funding agreements issued to special purpose entities in conjunction with non-recourse medium-term note programs. Under these programs, the proceeds from each note series issuance are used to purchase a funding agreement from the Company which secures that particular series of notes. In general, the payment terms of the note series match the payment terms of the funding agreement that secures that series. Claims for the principal and interest for these funding agreements are afforded equal priority as other policyholders.
54
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Withdrawal Characteristics of Annuity Reserves and Deposit Funds
A portion of the Companys policy reserves and other policyholders funds (including separate account liabilities) relates to liabilities established on a variety of the Companys annuity, deposit fund and life products. There may be certain restrictions placed upon the amount of funds that can be withdrawn without penalty. The amount of reserves on annuity and deposit fund products, by withdrawal characteristics, is summarized as follows:
December 31 2019 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Individual Annuities: |
||||||||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 7,602 | $ | 6,629 | $ | | $ | 14,230 | 0 | % | ||||||||||
At book value less surrender charge of 5% or more |
2,535 | | | 2,535 | 0 | |||||||||||||||
At fair value |
85 | | 20,282,900 | 20,282,984 | 93 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
10,221 | 6,629 | 20,282,900 | 20,299,749 | 93 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
963,508 | | | 963,508 | 4 | |||||||||||||||
Not subject to discretionary withdrawal provision |
321,922 | | 134,490 | 456,411 | 2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total individual annuity reserves |
1,295,651 | 6,629 | 20,417,389 | 21,719,669 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
210,156 | | | 210,156 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net individual annuity reserves |
$ | 1,085,496 | $ | 6,629 | $ | 20,417,389 | $ | 21,509,514 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
December 31 2019 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Group Annuities |
||||||||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 711 | $ | 8,844 | $ | | $ | 9,555 | 0 | % | ||||||||||
At fair value |
| | 2,142,869 | 2,142,869 | 86 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
711 | 8,844 | 2,142,869 | 2,152,424 | 86 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
318,578 | | | 318,578 | 13 | |||||||||||||||
Not subject to discretionary withdrawal provision |
29,631 | | | 29,631 | 1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total group annuity reserves |
348,920 | 8,844 | 2,142,869 | 2,500,633 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
| | | | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net group annuity reserves |
$ | 348,920 | $ | 8,844 | $ | 2,142,869 | $ | 2,500,633 | ||||||||||||
|
|
|
|
|
|
|
|
55
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2019 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Deposit-type contracts (no life contingencies): | ||||||||||||||||||||
Not subject to discretionary withdrawal provision |
$ | 320,770 | $ | | $ | 2,417 | $ | 323,187 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposit-type contracts |
320,770 | | 2,417 | 323,187 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
15,143 | | | 15,143 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net deposit- type contracts |
$ | 305,627 | $ | | $ | 2,417 | $ | 308,044 | ||||||||||||
|
|
|
|
|
|
|
|
Amount | ||||
Reconcililation to the Annual Statement: | ||||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Annuities section, total (net) |
$ | 1,145,835 | ||
Exhibit 5, Supp contracts with life contingencies section, total (net) |
237,898 | |||
Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance |
356,309 | |||
|
|
|||
Subtotal |
1,740,042 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Annuities section, total |
22,441,205 | |||
Exhibit 3, Supp contracts with life contingencies section, total |
134,526 | |||
Other contract deposit funds |
2,417 | |||
|
|
|||
Subtotal |
22,578,149 | |||
|
|
|||
Combined total |
$ | 24,318,191 | ||
|
|
December 31 2018 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Individal Annuities: | ||||||||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 7,885 | $ | 6,677 | $ | | $ | 14,562 | 0 | % | ||||||||||
At book value less surrender charge of 5% or more |
3,458 | | | 3,458 | 0 | |||||||||||||||
At fair value |
3,038 | | 17,464,766 | 17,467,804 | 92 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
14,380 | 6,677 | 17,464,766 | 17,485,824 | 92 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
1,011,556 | | | 1,011,556 | 5 | |||||||||||||||
Not subject to discretionary withdrawal provision |
405,171 | | 103,186 | 508,357 | 3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total individual annuity reserves |
1,431,107 | 6,677 | 17,567,953 | 19,005,737 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
287,593 | | | 287,593 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net individual annuities reserves |
$ | 1,143,514 | $ | 6,677 | $ | 17,567,953 | $ | 18,718,144 | ||||||||||||
|
|
|
|
|
|
|
|
56
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Group Annuities: | ||||||||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 648 | $ | 9,780 | $ | | $ | 10,427 | 0 | % | ||||||||||
At fair value |
| | 2,437,946 | 2,437,946 | 86 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
648 | 9,780 | 2,437,946 | 2,448,373 | 87 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
343,252 | | | 343,252 | 12 | |||||||||||||||
Not subject to discretionary withdrawal provision |
30,091 | | | 30,091 | 1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total group annuities reserves |
373,991 | 9,780 | 2,437,946 | 2,821,716 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
| | | | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net group annuities reserves |
$ | 373,991 | $ | 9,780 | $ | 2,437,946 | $ | 2,821,716 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
December 31 2018 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Deposit-type contracts (no life contingencies): | ||||||||||||||||||||
provision |
$ | 549,673 | $ | | $ | 1,693 | $ | 551,366 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposit-type contracts |
549,673 | | 1,693 | 551,366 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
15,916 | | | 15,916 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net deposit-type contracts |
$ | 533,756 | $ | | $ | 1,693 | $ | 535,450 | ||||||||||||
|
|
|
|
|
|
|
|
Amount | ||||
Reconcililation to the Annual Statement: |
||||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Annuities section, total (net) |
$ | 1,252,507 | ||
Exhibit 5, Supp contracts with life contingencies section, total (net) |
214,062 | |||
Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance |
584,693 | |||
|
|
|||
Subtotal |
2,051,261 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Annuities section, total |
19,919,133 | |||
Exhibit 3, Supp contracts with life contingencies section, total |
103,223 | |||
Other contract deposit funds |
1,693 | |||
|
|
|||
Subtotal |
20,024,049 | |||
|
|
|||
Combined total |
$ | 22,075,310 | ||
|
|
57
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Amount of reserves on life products, by withdrawal characteristics, is summarized as follow:
December 31 2019 |
||||||||||||||||||||||||
General Account | Separate Account - Guaranteed and Nonguaranteed |
|||||||||||||||||||||||
Account Value | Cash Value | Reserve | Account Value | Cash Value | Reserve | |||||||||||||||||||
Subject to discretionary withdrawal, surrender values, or policy loans: |
||||||||||||||||||||||||
Term policies with cash value |
$ | 46,855 | $ | 49,165 | $ | 82,395 | $ | | $ | | $ | | ||||||||||||
Universal life |
1,465,607 | 1,286,331 | 1,547,962 | | | | ||||||||||||||||||
Universal life with secondary guarantees |
2,375 | 2,338 | 2,391 | | | | ||||||||||||||||||
Indexed universal life with secondary guarantees |
3,825,616 | 2,436,729 | 3,500,501 | | | | ||||||||||||||||||
Other permanent cash value life Insurance |
3,299,189 | 3,513,583 | 5,450,095 | | | | ||||||||||||||||||
Variable universal life |
604,929 | 592,688 | 635,586 | 3,909,192 | 3,878,306 | 3,884,304 | ||||||||||||||||||
Not subject to discretionary withdrawal or no cash values |
||||||||||||||||||||||||
Term policies without cash value |
| | 498,864 | | | | ||||||||||||||||||
Accidental death benefits |
| | 15,453 | | | | ||||||||||||||||||
Disability- active lives |
| | 35,660 | | | | ||||||||||||||||||
Disability- disabled lives |
| | 116,543 | | | | ||||||||||||||||||
Miscellaneous reserves |
| | 360,709 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (gross) |
9,244,572 | 7,880,834 | 12,246,159 | 3,909,192 | 3,878,306 | 3,884,304 | ||||||||||||||||||
Reinsurance ceded |
179 | 179 | 1,801,384 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (net) |
$ | 9,244,394 | $ | 7,880,656 | $ | 10,444,776 | $ | 3,909,192 | $ | 3,878,306 | $ | 3,884,304 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Amount | ||||
Reconciliation to the Annual Statement: |
||||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Life insurance section, total (net) |
$ | 9,935,044 | ||
Exhibit 5, Accidental death benefits section total (net) |
15,453 | |||
Exhibit 5, Disability - active lives section, total (net) |
32,467 | |||
Exhibit 5, Disability - disabled lives section, total (net) |
115,629 | |||
Exhibit 5, Miscellaneous reserves section, total (net) |
346,182 | |||
|
|
|||
Subtotal |
10,444,776 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Life insurance section, total |
3,884,304 | |||
|
|
|||
Subtotal |
3,884,304 | |||
|
|
|||
Combined total |
$ | 14,329,079 | ||
|
|
58
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 |
||||||||||||||||||||||||
General Account | Separate Account - Guaranteed and Nonguaranteed |
|||||||||||||||||||||||
Account Value | Cash Value | Reserve | Account Value | Cash Value | Reserve | |||||||||||||||||||
Subject to discretionary withdrawal, surrender values, or policy loans: |
||||||||||||||||||||||||
Term policies with cash value |
$ | 43,796 | $ | 46,558 | $ | 81,109 | $ | | $ | | $ | | ||||||||||||
Universal life |
1,225,940 | 1,112,843 | 1,614,862 | | | | ||||||||||||||||||
Universal life with secondary guarantees |
2,429 | 2,366 | 2,432 | | | | ||||||||||||||||||
Indexed universal life with secondary guarantees |
3,204,343 | 1,978,577 | 2,888,016 | | | | ||||||||||||||||||
Other permanent cash value life Insurance |
3,914,841 | 4,136,607 | 5,386,907 | | | | ||||||||||||||||||
Variable universal life |
596,517 | 576,230 | 631,725 | 3,244,160 | 3,208,949 | 3,208,268 | ||||||||||||||||||
Not subject to discretionary withdrawal or no cash values |
||||||||||||||||||||||||
Term policies without cash value |
| | 503,026 | | | | ||||||||||||||||||
Accidental death benefits |
| | 16,248 | | | | ||||||||||||||||||
Disability- active lives |
| | 34,741 | | | | ||||||||||||||||||
Disability- disabled lives |
| | 119,414 | | | | ||||||||||||||||||
Miscellaneous reserves |
| | 117,498 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (gross) |
8,987,866 | 7,853,181 | 11,395,979 | 3,244,160 | 3,208,949 | 3,208,268 | ||||||||||||||||||
Reinsurance ceded |
5,974 | 5,974 | 1,828,560 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (net) |
$ | 8,981,892 | $ | 7,847,206 | $ | 9,567,419 | $ | 3,244,160 | $ | 3,208,949 | $ | 3,208,268 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Amount | ||||
Reconciliation to the Annual Statement: | ||||
Life & Accident & Health Annual Statement: |
| |||
Exhibit 5, Life insurance section, total (net) |
$ | 9,299,306 | ||
Exhibit 5, Accidental death benefits section total (net) |
16,248 | |||
Exhibit 5, Disability - active lives section, total (net) |
31,530 | |||
Exhibit 5, Disability - disabled lives section, total (net) |
118,484 | |||
Exhibit 5, Miscellaneous reserves section, total (net) |
101,851 | |||
|
|
|||
Subtotal |
9,567,419 | |||
Separate Accounts Annual Statement: |
| |||
Exhibit 3, Life insurance section, total |
3,208,268 | |||
|
|
|||
Subtotal |
3,208,268 | |||
|
|
|||
Combined total |
$ | 12,775,687 | ||
|
|
Separate Accounts
Certain separate and variable accounts held by the Company represent funds for which the benefit is determined by the performance and/or fair value of the investments held in the separate account. The assets of these are carried at fair value. These variable annuities generally provide an additional minimum guaranteed death benefit. Some variable annuities also provide a minimum guaranteed income benefit. The Companys Guaranteed Indexed separate accounts provide customers a return based on the total performance of a specified financial index plus an enhancement. Hedging instruments that return the chosen index are purchased by the Company and held within the separate account. The assets in the accounts, carried at fair value, consist primarily of long-term bonds.
59
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Information regarding the separate accounts of the Company as of and for the year ended December 31, 2019, 2018 and 2017 is as follows:
Nonindexed Guarantee Less Than or Equal to 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2019 |
$ | 47 | $ | 844,837 | $ | 844,884 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts as of December 31, 2019 with assets at: |
||||||||||||
Fair value |
$ | 15,473 | $ | 26,446,979 | $ | 26,462,452 | ||||||
|
|
|
|
|
|
|||||||
Total as of December 31, 2019 |
$ | 15,473 | $ | 26,446,979 | $ | 26,462,452 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts by withdrawal characteristics as of December 31, 2019: |
||||||||||||
With fair value adjustment |
$ | 15,473 | $ | | $ | 15,473 | ||||||
At fair value |
| 26,310,072 | 26,310,072 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal |
$ | 15,473 | $ | 26,310,072 | $ | 26,325,545 | ||||||
Not subject to discretionary withdrawal |
| 136,907 | 136,907 | |||||||||
|
|
|
|
|
|
|||||||
Total separate account reserve liabilities at December 31, 2019 |
$ | 15,473 | $ | 26,446,979 | $ | 26,462,452 | ||||||
|
|
|
|
|
|
60
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Nonindexed Guarantee Less Than or Equal to 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2018 |
$ | 166 | $ | 995,559 | $ | 995,725 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts as of December 31, 2018 with assets at: |
||||||||||||
Fair value |
$ | 16,457 | $ | 23,215,860 | $ | 23,232,317 | ||||||
|
|
|
|
|
|
|||||||
Total as of December 31, 2018 |
$ | 16,457 | $ | 23,215,860 | $ | 23,232,317 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts by withdrawal characteristics as of December 31, 2018: |
||||||||||||
With fair value adjustment |
$ | 16,457 | $ | | $ | 16,457 | ||||||
At fair value |
| 23,110,980 | 23,110,980 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal |
$ | 16,457 | $ | 23,110,980 | $ | 23,127,437 | ||||||
Not subject to discretionary withdrawal |
| 104,880 | 104,880 | |||||||||
|
|
|
|
|
|
|||||||
Total separate account reserve liabilities at December 31, 2018 |
$ | 16,457 | $ | 23,215,860 | $ | 23,232,317 | ||||||
|
|
|
|
|
|
61
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Nonindexed Guarantee Less Than or Equal to 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2017 |
$ | 128 | $ | 1,005,564 | $ | 1,005,692 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts as of December 31, 2017 with assets at: |
||||||||||||
Fair value |
$ | 17,955 | $ | 24,836,712 | $ | 24,854,667 | ||||||
|
|
|
|
|
|
|||||||
Total as of December 31, 2017 |
$ | 17,955 | $ | 24,836,712 | $ | 24,854,667 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts by withdrawal characteristics as of December 31, 2017: |
||||||||||||
With fair value adjustment |
$ | 17,955 | $ | | $ | 17,955 | ||||||
At fair value |
| 24,725,399 | 24,725,399 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal |
$ | 17,955 | $ | 24,725,399 | $ | 24,743,354 | ||||||
Not subject to discretionary withdrawal |
| 111,313 | 111,313 | |||||||||
|
|
|
|
|
|
|||||||
Total separate account reserve liabilities at December 31, 2017 |
$ | 17,955 | $ | 24,836,712 | $ | 24,854,667 | ||||||
|
|
|
|
|
|
A reconciliation of the amounts transferred to and from the Companys separate accounts is presented below:
2019 | 2018 | 2017 | ||||||||||
Transfer as reported in the summary of operations of the separate accounts statement: |
||||||||||||
Transfers to separate accounts |
$ | 866,291 | $ | 1,010,534 | $ | 1,024,418 | ||||||
Transfers from separate accounts |
(2,228,421 | ) | (1,460,192 | ) | (1,290,485 | ) | ||||||
|
|
|
|
|
|
|||||||
Net transfers from separate accounts |
(1,362,130 | ) | (449,658 | ) | (266,067 | ) | ||||||
Miscellaneous reconciling adjustments |
101,052 | 117,578 | 104,721 | |||||||||
|
|
|
|
|
|
|||||||
Net transfers as reported in the summary of operations of the life, accident and health annual statement |
$ | (1,261,078 | ) | $ | (332,080 | ) | $ | (161,346 | ) | |||
|
|
|
|
|
|
62
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The legal insulation of separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account. The assets legally insulated from general account claims at December 31, 2019 and 2018 are attributed to the following products:
2019 | 2018 | |||||||
Group annuities |
$ | 2,146,648 | $ | 2,446,903 | ||||
Variable annuities |
20,425,457 | 17,578,936 | ||||||
Variable universal life |
3,909,194 | 3,244,160 | ||||||
Modified separate account |
17,709 | 17,970 | ||||||
WRL asset accumulator |
9,326 | 8,170 | ||||||
|
|
|
|
|||||
Total separate account assets |
$ | 26,508,334 | $ | 23,296,139 | ||||
|
|
|
|
To compensate the general account for the risk taken, the separate account paid risk charges of $9,441, $11,344, $12,133, $11,993, and $12,368 to the general account in 2019, 2018, 2017, 2016 and 2015, respectively. During the years ended December 31, 2019, 2018, 2017, 2016 and 2015, the general account of the Company had paid $540, $480, $750, $15,371, and $43,256, respectively, toward separate account guarantees.
The Company does not participate in securities lending transactions within the separate account.
Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The Company reinsures portions of the risk on certain insurance policies which exceed its established limits, thereby providing a greater diversification of risk and minimizing exposure on larger risks. The Company remains contingently liable with respect to any insurance ceded, and this would become an actual liability in the event that the assuming insurance company became unable to meet its obligation under the reinsurance treaty.
Premiums and annuity considerations earned reflect the following reinsurance amounts:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Direct premiums |
$ | 3,348,455 | $ | 3,578,753 | $ | 3,656,349 | ||||||
Reinsurance assumed - non affiliates |
54,209 | 68,724 | 76,854 | |||||||||
Reinsurance assumed - affiliates |
414,063 | 405,528 | 2,153,409 | |||||||||
Reinsurance ceded - non affiliates |
(103,725 | ) | (75,864 | ) | (3,181,521 | ) | ||||||
Reinsurance ceded - affiliates |
(365,122 | ) | (427,119 | ) | (408,787 | ) | ||||||
|
|
|
|
|
|
|||||||
Net premiums earned |
$ | 3,347,881 | $ | 3,550,022 | $ | 2,296,304 | ||||||
|
|
|
|
|
|
The Company received reinsurance recoveries in the amount of $587,197, $591,703 and $558,976 during 2019, 2018 and 2017, respectively. At December 31, 2019 and 2018, estimated amounts recoverable from
63
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
reinsurers that have been deducted from policy and contract claim reserves totaled $31,033 and $29,604. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2019 and 2018 of $4,161,453 and $4,320,660, respectively, of which $1,920,004 and $2,016,383 were ceded to affiliates.
During 2019, 2018 and 2017, amortization of deferred gains associated with previously transacted reinsurance agreements was released into income in the amount of $279,776 ($181,854 after tax), $276,268 ($179,574 after tax) and $109,601 ($71,241 after tax), respectively, into earnings on a net of tax basis with a corresponding charge to unassigned surplus.
Letters of credit held for all unauthorized reinsurers as of December 31, 2019, 2018 and 2017 were $1,235,644, $1,285,244 and $1,330,944 respectively.
Effective July 1, 2019, the Company recaptured indexed universal life and variable universal life insurance business from an affiliate, WFG Reinsurance Limited. The Company paid cash of $39,039, recaptured $1,725 in policyholder reserves, $488 in claim reserves and policy loans of $1,176. The transaction resulted in a pre-tax loss of $40,076 which was partially offset by a commission expense allowance of $6,472 as unamortized amounts previously deferred to unassigned surplus related to the original inforce reinsurance transactions were released.
Effective October 1, 2018, the Company recaptured credit insurance business from an affiliate, Ironwood Re Corp. The Company released $248 of funds withheld liability, recaptured $335 of policyholder reserves and $68 of claim reserves. The transaction resulted in a pre-tax loss of $155 which has been included in the Statements of Operations. In addition, the Company released into income a previously deferred unamortized gain resulting from the original cession of this business to Ironwood in the amount of $309 ($201 after-tax) with a corresponding charge to unassigned surplus.
Effective October 1, 2018, the Company recaptured insurance business from an affiliate, Harbor View Re Corp. The Company paid cash of $1,400, released a funds withheld liability of $9,750 and assumed $10,387 of policyholder reserves, $144 of claim reserves and net due premiums and commissions of $781. The transaction resulted in a pre-tax loss of $1,400 which has been included in the Statements of Operations.
Effective October 1, 2018, the Company recaptured group health insurance business from Transamerica Life Insurance Company (TLIC), an affiliate. The Company received cash of $33,799, recaptured $13,767 of policyholder reserves, $980 of unearned premium reserve and $7,366 of claim reserves. The transaction resulted in a pre-tax gain of $11,686 which has been included in the Statements of Operations. In addition, the Company released into income a previously deferred unamortized gain resulting from the original transaction in the amount of $2,191 ($1,424 after-tax) with a corresponding charge to unassigned surplus.
Effective June 29th, 2018, the Company and Wilton Re U. S. Holdings, Inc. (Wilton Re) entered into an agreement as to the Final Net Settlement Statements and Other Matters (NSS) associated with the reinsurance agreement between the two companies that was effective April 1, 2017. This agreement related to the reinsurance of the payout annuity and BOLI/COLI business to Wilton Re. As a result of the
64
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
mutual concessions between the parties, Wilton Re paid the Company $19,084. In addition, the Company released a reinsurance receivable in the amount of $8,428 related to the initial proposed NSS used for closing. The net pretax impact to capital and surplus of these adjustments was $10,656.
Effective December 1, 2017, the Company entered into an agreement with TLIC to convert the modified coinsurance agreement to coinsurance and funds withheld. As a result, TLIC transferred cash and invested assets to the Company. Assets that were not able to be transferred were retained in a FWH portfolio by TLIC until they mature, are sold or can be transferred. The company received cash and invested assets with a market value of $6,487,360 along with policy reserves of $4,543,045 and claim reserves of $199,940 net of due an advance premium of $5,815 from TLIC (which the Company previously assumed on a modco basis). As a result of the transaction $1,144,148 of IMR were released from TLIC and transferred to the Company. The transaction results in a pre-tax gain of $606,041 ($393,926 net of tax) which has been reported in surplus. Recognition of the surplus increase as income shall be reflected on a net of tax basis as earnings emerge from the business reinsured.
On June 28, 2017, Transamerica completed a transaction to reinsure its payout annuity business and Bank Owned Life Insurance/ Corporate Owned Life Insurance business (BOLI/COLI). Under the terms of the Master Agreement, the Company entered into a 100% coinsurance (general account liabilities)/modified coinsurance (separate account liabilities) reinsurance agreement with Wilton Reassurance Company, with an effective date of April 1, 2017. The Company transferred assets in the amount of $3,063,865, which included a ceding commission of $135,819, and released policy and deposit-type reserves of $2,264,229 and policy loans of $7,545 related to the business. Modified coinsurance separate account reserves of $401,609 were retained by the company. As a part of the transaction, the company realized $568,029 in net gains on the assets that were transferred of which $363,243 were deferred to IMR. The IMR liability simultaneously was released along with historical deferrals associated with the blocks of business in the amount of $429,415, resulting in a pretax loss of $172,980, which has been included in the Statements of Operations.
Effective January 1, 2017, the Company entered into a coinsurance retrocession agreement with TLIC Watertree Reinsurance, Inc. (TWRI), an affiliate, under which TWRI coinsures to the Company accelerated death benefits on a product ceded from Transamerica Life Insurance Company to TWRI.
Effective April 14, 2015, the reinsurance agreement dated December 31, 2008 reinsuring variable annuity reinsurance between the Company and Transamerica International Re (Bermuda) Ltd (TIRe), an affiliate, was novated to Firebird Re Corp. (FReC), also an affiliate. Subsequent to the novation, the Companies entered into an amended and restated reinsurance agreement related to the block of business. The modified coinsurance reinsurance reserves were converted to coinsurance reserves and a general account funds withheld was established. During 2017, the Company received invested assets in the amount of $22,479 from FReC as settlement of reinsurance receivables. FReC merged into TLIC, an affiliate, effective October 1, 2018, so the reinsurance agreement is now with TLIC. In 2018, all reinsurance between the Company and TLIC (FReC) was settled in cash.
65
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The net deferred income tax asset at December 31, 2019 and 2018 and the change from the prior year are comprised of the following components:
Ordinary | December 31, 2019 Capital |
Total | ||||||||||
Gross Deferred Tax Assets |
$ | 708,175 | $ | 31,638 | $ | 739,813 | ||||||
Statutory Valuation Allowance Adjustment |
| | | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
708,175 | 31,638 | 739,813 | |||||||||
Deferred Tax Assets Nonadmitted |
334,893 | | 334,893 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
373,282 | 31,638 | 404,920 | |||||||||
Deferred Tax Liabilities |
129,055 | 44,616 | 173,671 | |||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 244,227 | $ | (12,978 | ) | $ | 231,249 | |||||
|
|
|
|
|
|
|||||||
December 31, 2018 | ||||||||||||
Ordinary | Capital | Total | ||||||||||
Gross Deferred Tax Assets |
$ | 693,441 | $ | 51,157 | $ | 744,598 | ||||||
Statutory Valuation Allowance Adjustment |
| | | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
693,441 | 51,157 | 744,598 | |||||||||
Deferred Tax Assets Nonadmitted |
335,913 | | 335,913 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
357,528 | 51,157 | 408,685 | |||||||||
Deferred Tax Liabilities |
123,272 | 46,464 | 169,736 | |||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 234,256 | $ | 4,693 | $ | 238,949 | ||||||
|
|
|
|
|
|
|||||||
Ordinary | Change Capital |
Total | ||||||||||
Gross Deferred Tax Assets |
$ | 14,734 | $ | (19,519 | ) | $ | (4,785 | ) | ||||
Statutory Valuation Allowance Adjustment |
| | | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
14,734 | (19,519 | ) | (4,785 | ) | |||||||
Deferred Tax Assets Nonadmitted |
(1,020 | ) | | (1,020 | ) | |||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
15,754 | (19,519 | ) | (3,765 | ) | |||||||
Deferred Tax Liabilities |
5,783 | (1,848 | ) | 3,935 | ||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 9,971 | $ | (17,671 | ) | $ | (7,700 | ) | ||||
|
|
|
|
|
|
66
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The main components of deferred income tax amounts are as follows:
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Deferred Tax Assets: |
||||||||||||
Ordinary |
||||||||||||
Policyholder reserves |
$ | 364,402 | $ | 361,776 | $ | 2,626 | ||||||
Investments |
74,613 | 68,973 | 5,640 | |||||||||
Deferred acquisition costs |
237,251 | 227,453 | 9,798 | |||||||||
Policyholder dividends accrual |
196 | 210 | (14 | ) | ||||||||
Fixed assets |
1,590 | 420 | 1,170 | |||||||||
Compensation and benefits accrual |
383 | 358 | 25 | |||||||||
Receivables - nonadmitted |
19,999 | 23,535 | (3,536 | ) | ||||||||
Other (including items <5% of total ordinary tax assets) |
9,741 | 10,716 | (975 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
708,175 | 693,441 | 14,734 | |||||||||
Nonadmitted |
334,893 | 335,913 | (1,020 | ) | ||||||||
|
|
|
|
|
|
|||||||
Admitted ordinary deferred tax assets |
373,282 | 357,528 | 15,754 | |||||||||
Capital: |
||||||||||||
Investments |
31,638 | 51,157 | (19,519 | ) | ||||||||
Subtotal |
31,638 | 51,157 | (19,519 | ) | ||||||||
Admitted capital deferred tax assets |
31,638 | 51,157 | (19,519 | ) | ||||||||
|
|
|
|
|
|
|||||||
Admitted deferred tax assets |
$ | 404,920 | $ | 408,685 | $ | (3,765 | ) | |||||
|
|
|
|
|
|
|||||||
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Deferred Tax Liabilities: |
||||||||||||
Ordinary |
||||||||||||
Investments |
$ | 72,740 | $ | 66,130 | $ | 6,610 | ||||||
Policyholder reserves |
53,123 | 53,653 | (530 | ) | ||||||||
Other (including items <5% of total ordinary tax liabilities) |
3,191 | 3,489 | (298 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
129,054 | 123,272 | 5,782 | |||||||||
Capital |
||||||||||||
Investments |
44,617 | 46,464 | (1,847 | ) | ||||||||
Subtotal |
44,617 | 46,464 | (1,847 | ) | ||||||||
|
|
|
|
|
|
|||||||
Deferred tax liabilities |
173,671 | 169,736 | 3,935 | |||||||||
|
|
|
|
|
|
|||||||
Net deferred tax assets/liabilities |
$ | 231,249 | $ | 238,949 | $ | (7,700 | ) | |||||
|
|
|
|
|
|
As a result of the 2017 Tax Cuts and Jobs Act (TCJA), the Companys tax reserve deductible temporary difference decreased by ($400,000). This change results in an offsetting $400,000 deductible temporary difference that will be amortized into taxable income evenly over the eight years subsequent to 2017. The remaining amortizable balance is included within the Policyholder Reserves line items above.
67
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
As discussed in Note 2, for the years ended December 31, 2019 and 2018 the Company admits deferred income tax assets pursuant to SSAP No. 101. The amount of admitted adjusted gross deferred income tax assets under each component of SSAP No. 101 is as follows:
December 31, 2019 | ||||||||||||||||
Ordinary | Capital | Total | ||||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | | $ | 11,238 | $ | 11,238 | |||||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) | 220,011 | | 220,011 | ||||||||||||
1. | Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date | 220,011 | | 220,011 | ||||||||||||
2. | Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold | XXX | XXX | 310,453 | ||||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a)and 2(b) above) Offset by Gross Deferred Tax Liabilities | 153,271 | 20,400 | 173,671 | ||||||||||||
|
|
|
|
|
|
|||||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) | $ | 373,282 | $ | 31,638 | $ | 404,920 | |||||||||
|
|
|
|
|
|
|||||||||||
Ordinary | December 31, 2018 Capital |
Total | ||||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | | $ | 17,086 | $ | 17,086 | |||||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) | 221,863 | | 221,863 | ||||||||||||
1. | Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date | 221,863 | | 221,863 | ||||||||||||
2. | Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold | XXX | XXX | 258,932 | ||||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a)and 2(b) above) Offset by Gross Deferred Tax Liabilities | 135,665 | 34,071 | 169,736 | ||||||||||||
|
|
|
|
|
|
|||||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) | $ | 357,528 | $ | 51,157 | $ | 408,685 | |||||||||
|
|
|
|
|
|
68
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Ordinary | Change Capital |
Total | ||||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | | $ | (5,848 | ) | $ | (5,848 | ) | |||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) | (1,852 | ) | | (1,852 | ) | ||||||||||
1. | Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date | (1,852 | ) | | (1,852 | ) | ||||||||||
2. | Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold | XXX | XXX | 51,521 | ||||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities | 17,606 | (13,671 | ) | 3,935 | |||||||||||
|
|
|
|
|
|
|||||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) | $ | 15,754 | $ | (19,519 | ) | $ | (3,765 | ) | |||||||
|
|
|
|
|
|
|||||||||||
December 31 | ||||||||||||||||
2019 | 2018 | Change | ||||||||||||||
Ratio Percentage Used To Determine Recovery Period and Threshold Limitation Amount |
877 | % | 758 | % | 119 | % | ||||||||||
|
|
|
|
|
|
|||||||||||
Amount of Adjusted Capital and Surplus Used To Determine Recovery Period and Threshold Limitation in 2(b)2 Above |
$ | 2,069,687 | $ | 1,726,211 | $ | 343,476 | ||||||||||
|
|
|
|
|
|
69
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The impact of tax planning strategies at December 31, 2019 and 2018 was as follows:
December 31, 2019 | ||||||||||||
Ordinary Percent |
Capital Percent |
Total Percent |
||||||||||
Impact of Tax Planning Strategies: |
||||||||||||
(% of Total Adjusted Gross DTAs) |
0 | % | 0 | % | 0 | % | ||||||
|
|
|
|
|
|
|||||||
(% of Total Net Admitted Adjusted Gross DTAs) |
2 | % | 0 | % | 2 | % | ||||||
|
|
|
|
|
|
|||||||
December 31, 2018 | ||||||||||||
Ordinary Percent |
Capital Percent |
Total Percent |
||||||||||
Impact of Tax Planning Strategies: |
||||||||||||
(% of Total Adjusted Gross DTAs) |
0 | % | 0 | % | 0 | % | ||||||
|
|
|
|
|
|
|||||||
(% of Total Net Admitted Adjusted Gross DTAs) |
0 | % | 30 | % | 4 | % | ||||||
|
|
|
|
|
|
The Companys tax planning strategies do not include the use of reinsurance-related tax planning strategies.
Current income taxes incurred consist of the following major components:
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Current Income Tax |
||||||||||||
Federal |
$ | 39,259 | $ | 30,372 | $ | 8,887 | ||||||
|
|
|
|
|
|
|||||||
Subtotal |
39,259 | 30,372 | 8,887 | |||||||||
Federal income tax on net capital gains |
8,597 | (47,135 | ) | 55,732 | ||||||||
|
|
|
|
|
|
|||||||
Federal and foreign income taxes incurred |
$ | 47,856 | $ | (16,763 | ) | $ | 64,619 | |||||
|
|
|
|
|
|
|||||||
Year Ended December 31 | ||||||||||||
2018 | 2017 | Change | ||||||||||
Current Income Tax |
||||||||||||
Federal |
$ | 30,372 | $ | 903,151 | $ | (872,779 | ) | |||||
|
|
|
|
|
|
|||||||
Subtotal |
30,372 | 903,151 | (872,779 | ) | ||||||||
Federal income tax on net capital gains |
(47,135 | ) | 94,516 | (141,651 | ) | |||||||
|
|
|
|
|
|
|||||||
Federal and foreign income taxes incurred |
$ | (16,763 | ) | $ | 997,667 | $ | (1,014,430 | ) | ||||
|
|
|
|
|
|
70
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Companys current income tax incurred and change in deferred income tax differs from the amount obtained by applying the federal statutory rate to income before tax as follows:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Current income taxes incurred |
$ | 47,856 | $ | (16,763 | ) | $ | 997,667 | |||||
Change in deferred income taxes (without tax on unrealized gains and losses) |
(10,084 | ) | (7,833 | ) | 39,231 | |||||||
|
|
|
|
|
|
|||||||
Total income tax reported |
$ | 37,772 | $ | (24,596 | ) | $ | 1,036,898 | |||||
|
|
|
|
|
|
|||||||
Income before taxes |
$ | 619,186 | $ | 400,924 | $ | 1,058,153 | ||||||
21.00 | % | 21.00 | % | 35.00 | % | |||||||
|
|
|
|
|
|
|||||||
Expected income tax expense (benefit) at statutory rate |
$ | 130,029 | $ | 84,194 | $ | 370,354 | ||||||
Increase (decrease) in actual tax reported resulting from: |
||||||||||||
Pre-tax income of disregarded subsidiaries |
$ | (2,007 | ) | $ | (2,411 | ) | $ | (1,074 | ) | |||
Dividends received deduction |
(31,895 | ) | (25,962 | ) | (46,859 | ) | ||||||
Tax-exempt income |
(861 | ) | (1,102 | ) | (1,663 | ) | ||||||
Nondeductible expenses |
252 | 604 | 304 | |||||||||
Pre-tax items reported net of tax |
(52,817 | ) | (54,399 | ) | 344,472 | |||||||
Tax credits |
(13,951 | ) | (9,199 | ) | (6,892 | ) | ||||||
Prior period tax return adjustment |
4,028 | (21,398 | ) | 4,029 | ||||||||
Change in tax rates |
| | 357,034 | |||||||||
Change in uncertain tax positions |
| 948 | (3,844 | ) | ||||||||
Deferred tax expense on other items in surplus |
4,916 | 3,900 | 20,986 | |||||||||
Other |
78 | 229 | 51 | |||||||||
|
|
|
|
|
|
|||||||
Total income tax reported |
$ | 37,772 | $ | (24,596 | ) | $ | 1,036,898 | |||||
|
|
|
|
|
|
On December 22, 2017, the TCJA reduced the federal tax rate to 21%. As a result, the Company reduced its net deferred tax asset balance by $357,034, excluding $23,017 of net deferred tax asset reduction on unrealized gains/(losses) in the 2017 financial statements.
The effects of the U.S. tax reform were reflected in the 2017 financial statements as determined or as reasonably estimated provisional amounts based on available information subject to interpretation in accordance with the SECs Staff Accounting Bulletin No. 118 (SAB 118), as adopted by NAIC SAPWG INT 18-01. SAB 118 provides guidance on accounting for the effects of U.S. tax reform where the Companys determinations are incomplete but the Company can determine a reasonable estimate. The TCJA related disclosures and figures in the 2018 financials represent final impacts with no estimated figures remaining.
The Companys federal income tax return is consolidated with other included affiliated companies. Please see the listing of companies in Appendix A. The method of allocation between the companies is subject to a written tax allocation agreement. Under the terms of the tax allocation agreement, allocations are based
71
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
on separate income tax return calculations. The Company is entitled to recoup federal income taxes paid in the event the future losses and credits reduce the greater of the Companys separately computed income tax liability or the consolidated groups income tax liability in the year generated. The Company is also entitled to recoup federal income taxes paid in the event the losses and credits reduce the greater of the Companys separately computed income tax liability or the consolidated groups income tax liability in any carryback or carryforward year when so applied. Intercompany income tax balances are settled within thirty days of payment to or filing with the Internal Revenue Service. A tax return has not been filed for 2019.
The following is income tax expense for current year and preceding years that is available for recoupment in the event of future losses:
Total | ||||
2019 |
$ | 7,361 | ||
2018 |
$ | | ||
2017 |
$ | 72,284 |
The total amount of the unrecognized tax benefits that, if recognized, would affect the effective income tax rate:
Unrecognized Tax Benefits |
||||
Balance at January 1, 2018 |
$ | 1,804 | ||
Tax positions taken during prior period |
948 | |||
|
|
|||
Balance at December 31, 2018 |
$ | 2,752 | ||
|
|
|||
Balance at December 31, 2019 |
$ | 2,752 | ||
|
|
The Company classifies interest and penalties related to income taxes as income tax expense. The amount of interest and penalties accrued on the balance sheet as income taxes includes the following:
Interest | Penalties | Total payable (receivable) | ||||||||||
Balance at January 1, 2017 |
$ | 236 | $ | | $ | 236 | ||||||
Interest expense (benefit) |
(20 | ) | | (20 | ) | |||||||
Penalties expense (benefit) |
| | | |||||||||
Cash (paid) received |
| | | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2017 |
$ | 216 | $ | | $ | 216 | ||||||
Interest expense (benefit) |
419 | | 419 | |||||||||
Penalties expense (benefit) |
| | | |||||||||
Cash (paid) received |
| | | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2018 |
$ | 635 | $ | | $ | 635 | ||||||
Interest expense (benefit) |
264 | | 264 | |||||||||
Penalties expense (benefit) |
| | | |||||||||
Cash (paid) received |
| | | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2019 |
$ | 899 | $ | | $ | 899 | ||||||
|
|
|
|
|
|
72
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company has no federal income tax returns currently under examination. The Internal Revenue Service completed its examination for years 2009 through 2013 resulting in tax return adjustments for which an appeals conference was requested. Federal income tax returns filed in 2014 through 2018 remain open, subject to potential future examination. The Company believes that there are adequate defenses against or sufficient provisions established related to any open or contested tax positions.
The Company has two classes of common stock, Class A and Class B. Each outstanding share of Class A is entitled to four votes for any matter submitted to a vote at a meeting of stockholders, whereas each outstanding share of Class B is entitled to one such vote. The Company has 10,000 shares of Class A and 10,000 shares of Class B common shares authorized at $750 per share par value of which, 9,819 of Class A and 3,697 of Class B were issued and outstanding at December 31, 2019 and 2018.
The Company has no preferred stock authorized.
The Company is subject to limitations, imposed by the State of Iowa, on the payment of dividends to its stockholders. Generally, dividends during any twelve-month period may not be paid, without prior regulatory approval, in excess of the greater of (a) 10 percent of the Companys statutory surplus as of the preceding December 31, or (b) the Companys statutory gain from operations before net realized capital gains (losses) on investments for the preceding year. Subject to the availability of unassigned surplus at the time of such dividend, the maximum payment which may be made in 2019, without the prior approval of insurance regulatory authorities, is $349,625.
On February 1, 2019, the Company paid ordinary common stock dividends of $8,444 to Commonwealth General Corporation.
The Company received ordinary common stock dividends of $30,000, $20,000, $15,000, and $15,000 from World Financial Group Insurance Agency, Inc. on March 29, 2019, June 21, 2019, September 30, 2019, and December 20, 2019, respectively.
On December 20, 2019, Transamerica Realty paid ordinary common stock dividends of $2,826 to the Company.
The Company reported a contribution receivable from parent of $150,000 at December 31, 2017. The contribution was received on February 1, 2018.
On December 31, 2018 the Company received a $6 contribution from its subsidiary Transamerica Asset Management, Inc. On December 31, 2018, the Company paid a $1,360 non-cash contribution to its subsidiary, Real Estate Alternatives Portfolio 3A, Inc. (REAP 3A). On December 19, 2018, the Company received a common stock dividend from its subsidiary, World Financial Group Insurance Agency, Inc. in the amount of $30,000. On September 27, 2018, the Company received a non-cash common stock dividend from its subsidiary, World Financial Group Insurance Agency, Inc. in the amount of $30,000.
73
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Life and health insurance companies are subject to certain RBC requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life or health insurance company is to be determined based on the various risk factors related to it. At December 31, 2019, the Company meets the minimum RBC requirements.
The Companys surplus notes are held by CGC and Transamerica Corporation (TA Corp). These notes are due 20 years from the date of issuance at an interest rate of 6% and are subordinate and junior in right of payment to all obligations and liabilities of the Company. In the event of liquidation of the Company, full payment of the surplus notes shall be made before the holders of common stock become entitled to any distribution of the remaining assets of the Company. The Company received approval from the Iowa Insurance Division prior to paying quarterly interest payments.
On December 20, 2019, the Company repaid in full its $57,266 surplus note with Transamerica Corporation and made a partial repayment of $42,734 on its surplus note with Commonwealth General Corporation. The Company received IID approval for this transaction. Additional information related to the outstanding surplus notes at December 31, 2019 and 2018 is as follows:
For Year Ending |
Balance Outstanding |
Interest Paid Current Year |
Cumulative Interest Paid |
Accrued Interest |
||||||||||||
2019 |
||||||||||||||||
CGC |
$ | 60,000 | $ | 6,306 | $ | 98,822 | $ | 300 | ||||||||
TA Corp |
| 3,627 | 45,724 | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 60,000 | $ | 9,933 | $ | 144,546 | $ | 300 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
2018 |
||||||||||||||||
CGC |
$ | 102,734 | $ | 6,164 | $ | 92,515 | $ | 514 | ||||||||
TA Corp |
57,266 | 3,436 | 42,097 | 286 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 160,000 | $ | 9,600 | $ | 134,612 | $ | 800 | ||||||||
|
|
|
|
|
|
|
|
74
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company participates in an agent-managed securities lending program in which the Company primarily loans out US Treasuries and other bonds. The Company receives collateral equal to 102% of the fair value of the loaned government or other domestic securities as of the transaction date. If the fair value of the collateral is at any time less than 102% of the fair value of the loaned securities, the counterparty is mandated to deliver additional collateral, the fair value of which, together with the collateral already held in connection with the lending transaction, is at least equal to 102% of the fair value of the loaned government or other domestic securities. In the event the Company loans a foreign security and the denomination of the currency of the collateral is other than the denomination of the currency of the loaned foreign security, the Company receives and maintains collateral equal to 105% of the fair value of the loaned security.
At December 31, 2019 and 2018, respectively, securities with a fair value of $716,001 and $555,825 were on loan under securities lending agreements as part of this program. At December 31, 2019 and 2018, the collateral the Company received from securities lending activities was in the form of cash and on open terms. This cash collateral is reinvested and is not available for general corporate purposes. The reinvested cash collateral has a fair value of $757,186 and $575,155 at December 31, 2019 and 2018, respectively.
The contractual maturities of the securities lending collateral positions are as follows:
Fair Value | ||||||||
2019 | 2018 | |||||||
Open |
$ | 757,186 | $ | 574,886 | ||||
|
|
|
|
|||||
Total |
757,186 | 574,886 | ||||||
Securities received |
| | ||||||
|
|
|
|
|||||
Total collateral received |
$ | 757,186 | $ | 574,886 | ||||
|
|
|
|
The Company receives primarily cash collateral in an amount in excess of the fair value of the securities lent. The Company reinvests the cash collateral into higher yielding securities than the securities which the Company has lent to other entities under the arrangement.
75
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The maturity dates of the reinvested securities lending collateral are as follows:
2019 | 2018 | |||||||||||||||
Amortized Cost |
Fair Value | Amortized Cost |
Fair Value | |||||||||||||
Open |
$ | 26,407 | $ | 26,407 | $ | 85,260 | $ | 85,260 | ||||||||
30 days or less |
208,268 | 208,268 | 140,236 | 140,236 | ||||||||||||
31 to 60 days |
309,546 | 309,546 | 104,248 | 104,249 | ||||||||||||
61 to 90 days |
75,517 | 75,517 | 60,156 | 60,155 | ||||||||||||
91 to 120 days |
73,818 | 73,818 | 104,653 | 104,653 | ||||||||||||
121 to 180 days |
63,630 | 63,630 | 80,602 | 80,602 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
757,186 | 757,186 | 575,155 | 575,155 | ||||||||||||
Securities received |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral reinvested |
$ | 757,186 | $ | 757,186 | $ | 575,155 | $ | 575,155 | ||||||||
|
|
|
|
|
|
|
|
For securities lending, the Companys source of cash used to return the cash collateral is dependent upon the liquidity of the current market conditions. Under current conditions, the Company has securities with a par value of $757,905 (fair value of $757,186) that are currently tradable securities that could be sold and used to pay for the $757,186 in collateral calls that could come due under a worst-case scenario.
12. Retirement and Compensation Plans
Defined Contribution Plans
The Companys employees participate in a contributory defined contribution plan sponsored by TA Corp which is qualified under Section 401(k) of the Internal Revenue Code. Generally, employees of the Company who customarily work at least 20 hours per week and meet the other eligibility requirements are participants of the plan. Participants may elect to contribute up to 100% of eligible earnings, subject to government or other plan restrictions for certain key employees. The Company will match an amount up to three percent of the participants eligible earnings. Participants may direct all of their contributions and plan balances to be invested in a variety of investment options. The plan is subject to the reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Benefits expense was $1,746, $1,767 and $1,805 was allocated to the Company for the years ended December 31, 2019, 2018 and 2017, respectively.
Defined Benefit Plans
The Companys employees participate in a qualified defined benefit pension plan sponsored by TA Corp. Generally, employees of the Company who customarily work at least 20 hours per week and complete six months of continuous service and meet the other eligibility requirements are participants of the plan. The Company has no legal obligation for the plan. The benefits are based on years of service and the employees eligible compensation. The plan provides benefits based on a traditional final average formula or a cash balance formula. The plan is subject to the reporting and disclosure requirements of the ERISA.
76
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
TA Corp sponsors supplemental retirement plans to provide the Companys senior management with benefits in excess of normal pension benefits. The Company has no legal obligation for the plan. The plans are noncontributory and benefits are based on years of service and the employees eligible compensation. The plan provides benefits based on a traditional final average formula or cash balance formula. The plans are unfunded and nonqualified under the Internal Revenue Service Code.
The Company recognizes pension expense equal to its allocation from TA Corp. The pension expense related to both the defined pension plan and the supplemental retirement plans is allocated among the participating companies based on International Accounting Standards 19 (IAS 19), Accounting for Employee Benefits, and based upon actuarial participant benefit calculations, which is within the guidelines of SSAP No. 102, Pensions. Pension expenses were $3,889, $3,832 and $4,166, for the years ended December 31, 2019, 2018 and 2017, respectively.
In addition to pension benefits, TA Corp sponsors unfunded plans that provide health care and life insurance benefits to retired Company employees meeting certain eligibility requirements. The Company has no legal obligation for the plan. Portions of the medical and dental plans are contributory. The expenses of the postretirement plans are allocated among the participating companies based on IAS 19 and based upon actuarial participant benefit calculations which is within the guidelines of SSAP No. 92, Postretirement Benefits Other Than Pensions. The Company expensed $585, $710 and $769 related to these plans for the years ended December 31, 2019, 2018 and 2017, respectively.
Other Plans
TA Corp has established deferred compensation plans for certain key employees of the Company. The Companys allocation of expense for these plans for each of the years ended December 31, 2019, 2018 and 2017 was insignificant.
13. Related Party Transactions
The Company shares certain officers, employees and general expenses with affiliated companies.
The Company is party to a shared services and cost sharing agreement among and between the Transamerica companies, under which various affiliated companies may perform specified administrative functions in connection with the operation of the Company, in consideration of reimbursement of actual costs of services rendered. The Company is also a party to a Management and Administrative and Advisory agreement with AEGON USA Realty Advisors, LLC. whereby the advisor serves as the administrator and advisor for the Companys mortgage loan operations. AEGON USA Investment Management, LLC acts as a discretionary investment manager under an Investment Management Agreement with the Company. The Company provides office space, marketing and administrative services to certain affiliates. The amount received by the Company as a result of being a party to these agreements was $121,914, $101,998 and $50,807 during 2019, 2018 and 2017, respectively. The amount paid as a result of being a party to these agreements was $449,378, $477,650 and $328,319 during 2019, 2018 and 2017, respectively.
77
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Transamerica Capital, Inc. provides wholesaling distribution services for the Company under a distribution agreement. The Company incurred expenses under this agreement of $19, $24 and $41 for the years ended December 31, 2019, 2018 and 2017, respectively.
At December 31, 2019 and 2018, the Company reported a net amount of $28,746 and ($12,506) (payable to)/receivable from parent, subsidiary and affiliated companies, respectively. Terms of settlement require that these amounts be settled within 90 days. Receivables from and payables to affiliates bear interest at the thirty-day commercial paper rate.
During 2019, 2018 and 2017, the Company (paid)/received net interest of ($37), ($582) and ($75), respectively, to affiliates.
The Company has an administration service agreement with Transamerica Asset Management, Inc. to provide administrative services to the Transamerica Series Trust. The Company received $20,792, $21,516 and $22,070 for these services during 2019, 2018 and 2017, respectively.
At December 31, 2019, the Company had short-term intercompany notes receivable of $102,900 as follows. In accordance with SSAP No. 25, Affiliates and Other Related Parties, these notes are reported as short-term investments.
Receivable from |
Amount | Due By |
Interest Rate | |||||||
Transamerica Corporation |
$ | 8,600 | December 18, 2020 | 1.61 | % | |||||
Transamerica Corporation |
94,300 | December 30, 2020 | 1.61 | % |
At December 31, 2018, the Company had short-term intercompany notes receivable of $194,600 as follows.
Receivable from |
Amount | Due By |
Interest Rate | |||||||
Transamerica Corporation |
$ | 24,100 | September 21, 2019 | 1.99 | % | |||||
Transamerica Corporation |
22,500 | October 3, 2019 | 2.15 | % | ||||||
Transamerica Corporation |
12,800 | October 5, 2019 | 2.15 | % | ||||||
Transamerica Corporation |
29,200 | October 26, 2019 | 2.15 | % | ||||||
Transamerica Corporation |
106,000 | December 14, 2019 | 2.31 | % |
In prior years, the Company purchased life insurance policies covering the lives of certain employees of the Company from an affiliate, TLIC. At December 31, 2019 and 2018, the cash surrender value of these policies was $170,124 and $167,126, respectively.
During 1998, TLIC issued life insurance policies to LIICA, covering the lives of certain LIICA employees. The Company entered into an assumption reinsurance transaction with TLIC effective September 30, 2008, resulting in the Company assuming all liabilities of TLIC arising under these policies. Accordingly, the Company held aggregate reserves for policies and contracts related to these policies of $181,648 and $179,004 at December 31, 2019 and 2018, respectively.
78
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Information regarding the Companys affiliated reinsurance transactions is available in Note 8. Reinsurance.
Information regarding the Companys affiliated guarantees is available in Note 15. Commitments and Contingencies.
The Company utilizes the look-through approach in valuing its investment in the following ten entities.
Real Estate Alternatives Portfolio 3, LLC |
$ | 6,338 | ||
Real Estate Alternatives Portfolio 4 HR, LLC |
$ | 47,545 | ||
Real Estate Alternatives Portfolio 4 MR, LLC |
$ | 3,043 | ||
Aegon Multi-Family Equity Fund, LLC |
$ | 14,713 | ||
Aegon Workforce Housing Fund 2, L.P. |
$ | 40,684 | ||
Aegon Workforce Housing Fund 3, L.P. |
$ | 6,238 | ||
Natural Resources Alternatives Portfolio I, LLC |
$ | 85,097 | ||
Natural Resources Alternatives Portfolio II, LLC |
$ | 2 | ||
Natural Resources Alternatives Portfolio 3, LLC |
$ | 79,648 | ||
Zero Beta Fund, LLC |
$ | 283,925 |
These entitys financial statements are not audited and the Company has limited the value of its investment in these entities to the value contained in the audited financial statements of the underlying LP/LLC investments, including adjustments required by SSAP No. 97 entities and/or non-SCA SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies, entities owned by these entities. All liabilities, commitments, contingencies, guarantees or obligations of these entities which are required to be recorded as liabilities, commitments, contingencies, guarantees or obligations under applicable accounting guidance, are reflected in the Companys determination of the carrying value of the investment in these entities.
79
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables shows the disclosures for all SCA investments, except 8bi entities, and balance sheet value (admitted and nonadmitted) as of December 31, 2019 and 2018:
December 31, 2019
SCA Entity |
Percentage of SCA Ownership |
Gross Amount | Admitted Amount |
Nonadmitted Amount |
||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||
| % | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8a Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||
| % | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(ii) Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
37 | % | $ | 8,949 | $ | 8,949 | $ | | ||||||||
INTERSECURITIES INS AGENCY INC |
100 | | | | ||||||||||||
TRANSAMERICA ASSET MANAGEMENT INC |
77 | 90,420 | 90,420 | | ||||||||||||
TRANSAMERICA FUND SERVICES INC |
44 | | | | ||||||||||||
WORLD FIN GRP INSURANCE AGENCY INC |
100 | | | | ||||||||||||
AEGON DIRECT MARKETING SVC INC |
73 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iii) Entities |
XXX | $ | 99,369 | $ | 99,369 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||
0 |
| % | $ | | $ | | $ | | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iv) Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
XXX | $ | 99,369 | $ | 99,369 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Aggregate Total |
XXX | $ | 99,369 | $ | 99,369 | $ | | |||||||||
|
|
|
|
|
|
|
|
80
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018
SCA Entity |
Percentage of SCA Ownership |
Gross Amount | Admitted Amount |
Nonadmitted Amount |
||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||
None |
| % | $ | | $ | | $ | | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8a Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||
None |
| % | $ | | $ | | $ | | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(ii) Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
37 | % | $ | 15,475 | $ | 15,475 | $ | | ||||||||
INTERSECURITIES INS AGENCY INC |
100 | | | | ||||||||||||
TRANSAMERICA ASSET MANAGEMENT INC |
77 | 68,079 | 68,079 | | ||||||||||||
TRANSAMERICA FUND SERVICES INC |
44 | | | | ||||||||||||
WORLD FIN GRP INSURANCE AGENCY INC |
100 | | | | ||||||||||||
AEGON DIRECT MARKETING SVC INC |
74 | | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iii) Entities |
XXX | $ | 83,554 | $ | 83,554 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||
None |
| % | $ |
|
|
$ |
|
|
$ | | ||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iv) Entities |
XXX | $ | | $ | | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
XXX | $ | 83,554 | $ | 83,554 | $ | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Aggregate Total |
XXX | $ | 83,554 | $ | 83,554 | $ | | |||||||||
|
|
|
|
|
|
|
|
81
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table shows the NAIC responses for the SCA filings (except 8bi entities) as of December 31, 2019 and 2018:
December 31, 2019
SCA Entity |
Type of NAIC Filing* |
Date of Filing to the NAIC |
NAIC Valuation Amount |
NAIC Response Received Y/N |
NAIC Disallowed Entities Valuation Method, Submission Required Y/N |
Code** | ||||||||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||||||||||
$ | | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8a Entities |
| | | | | | ||||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||||||||||
$ | | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(ii) Entities |
| | $ | | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
S2 | 1/6/2020 | $ | 14,455 | Y | N | I | |||||||||||||||||
INTERSECURITIES INS AGENCY INC |
NA | | | | I | |||||||||||||||||||
TRANSAMERICA ASSET MANAGEMENT INC |
S2 | 8/30/2019 | 66,705 | Y | N | I | ||||||||||||||||||
TRANSAMERICA FUND SERVICES INC |
NA | | | | I | |||||||||||||||||||
WORLD FIN GRP INSURANCE AGENCY INC |
NA | | | | I | |||||||||||||||||||
AEGON DIRECT MARKETING SVC INC |
NA | | | | I | |||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iii) Entities |
| | $ | 81,160 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||||||||||
$ | | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iv) Entities |
| | $ | | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
| | $ | 81,160 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
Aggregate Total |
| | $ | 81,160 | | | | |||||||||||||||||
|
|
* | S1 Sub1, S2 Sub2 or RDF Resubmission of Disallowed Filing |
** | I Immaterial or M Material |
(1) | NAIC Valuation Amount is as of the Filing Date to the NAIC |
82
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018
SCA Entity |
Type of NAIC Filing* |
Date of Filing to the NAIC |
NAIC Valuation Amount |
NAIC Response Received Y/N |
NAIC Disallowed Entities Valuation Method, Submission Required Y/N |
Code** | ||||||||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||||||||||
None |
| $ | | | | | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8a Entities |
| | $ | | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||||||||||
None |
| $ | | | | | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(ii) Entities |
| | $ | | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
S2 | 12/21/2018 | $ | 11,370 | Y | N | I | |||||||||||||||||
INTERSECURITIES INS AGENCY INC |
NA | | | | I | |||||||||||||||||||
TRANSAMERICA ASSET MANAGEMENT INC |
S2 | 2/19/2019 | 39,532 | Y | N | I | ||||||||||||||||||
TRANSAMERICA FUND SERVICES INC |
NA | | | | I | |||||||||||||||||||
WORLD FIN GRP INSURANCE AGENCY INC |
NA | | | | I | |||||||||||||||||||
AEGON DIRECT MARKETING SVC INC |
NA | | | | I | |||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iii) Entities |
| | $ | 50,902 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||||||||||
None |
| $ | | | | | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iv) Entities |
| | $ | | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
| | $ | 50,902 | | | | |||||||||||||||||
|
|
|||||||||||||||||||||||
Aggregate Total |
| | $ | 50,902 | | | | |||||||||||||||||
|
|
* | S1 Sub1, S2 Sub2 or RDF Resubmission of Disallowed Filing |
** | I Immaterial or M Material |
(1) | NAIC Valuation Amount is as of the Filing Date to the NAIC |
83
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company utilizes managing general agents (MGA) and third-party administrators (TPA) in its operation. Information regarding these entities for the year ended December 31, 2019 is as follows:
Name and Address of
Managing |
FEIN | Exclusive Contract |
Types of Business Written |
Types of Authority Granted |
Total Direct Premiums Written/ Produced By |
|||||||||||||||
The Vanguard Group, Inc., 100 Vanguard Blvd., Malvern, PA 19355 |
23-1945930 | NO | |
Deferred and Income Annuities |
|
C,B,P,U | $ | 631,289 | ||||||||||||
|
|
|||||||||||||||||||
Total |
$ | 631,289 | ||||||||||||||||||
|
|
C- | Claims Payment |
B- | Binding Authority1% |
P- | Premium Collection |
U- | Underwriting |
For the years ended December 31, 2019, 2018 and 2017, respectively, direct premiums of $631,289, $783,938 and $928,060 were written by MGAs and TPAs.
15. Commitments and Contingencies
The Company has issued synthetic GIC contracts to benefit plan sponsors on assets totaling $50,276,331 and $52,252,582 as of December 31, 2019 and 2018, respectively. A synthetic GIC is an off-balance sheet fee-based product sold primarily to tax qualified plans. The plan sponsor retains ownership and control of the related plan assets. The Company provides book value benefit responsiveness in the event that qualified plan benefit requests exceed plan cash flows. In certain contracts, the Company agrees to make advances to meet benefit payment needs and earns a market interest rate on these advances. The periodically adjusted contract-crediting rate is the means by which investment and benefit responsive experience is passed through to participants. In return for the book value benefit responsive guarantee, the Company receives a premium that varies based on such elements as benefit responsive exposure and contract size. The Company underwrites the plans for the possibility of having to make benefit payments and also must agree to the investment guidelines to ensure appropriate credit quality and cash flow. There has been no contract reserve established for the possibility of unexpected benefit payments at below market interest rates at December 31, 2019 and 2018, respectively. Effective July 1, 2017, the Company entered into a coinsurance agreement under which the Company cedes 50% of its outstanding synthetic GIC notional.
At December 31, 2019 and 2018, the Company has mortgage loan commitments of $205,984 and $166,585, respectively.
84
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company has contingent commitments of $457,896 and $311,089 at December 31, 2019 and 2018, respectively, to provide additional funding for various joint ventures, partnerships and limited liability companies, which includes LIHTC commitments of $66,571 and $77,186.
Private placement commitments outstanding as of December 31, 2019 were $73,260. Private placement commitments outstanding as of December 31, 2018 were and $34,030.
There were no securities acquired (sold) on a TBA basis as of December 31, 2019 and 2018, respectively.
The Company may pledge cash as collateral for derivative transactions. When cash is pledged as collateral, it is derecognized and a receivable is recorded to reflect the eventual return of that cash by the counterparty. The amount of cash collateral pledged by the Company as of December 31, 2019 and 2018, respectively, was $0 and $11,500.
At December 31, 2019 and 2018, securities in the amount of $0 and $1,777, respectively, were posted to the Company as collateral from derivative counterparties. The securities were not included on the Companys balance sheet as the Company does not have the ability to sell or repledge the collateral.
The Company is a member of the FHLB of Des Moines. Through its membership, the Company has conducted business activity (borrowings) with the FHLB. It is part of the Companys strategy to utilize these funds to improve spread lending liquidity. The Company has determined the actual/estimated maximum borrowing capacity as $1,866,170. The Company calculated this amount in accordance with the terms and conditions of agreement with FHLB of Des Moines.
At December 31, 2019 and 2018, the Company purchased/owned the following FHLB stock as part of the agreement:
Year Ended December 31 | ||||||||
2019 | 2018 | |||||||
Membership Stock: |
||||||||
Class A |
$ | | $ | | ||||
Class B |
10,000 | 10,000 | ||||||
Activity Stock |
47,000 | 56,800 | ||||||
Excess Stock |
| | ||||||
|
|
|
|
|||||
Total |
$ | 57,000 | $ | 66,800 | ||||
|
|
|
|
85
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019, Membership Stock (Class A and B) Eligible for Redemption and the anticipated timeframe for redemption was as follows:
Less Than 6 Months |
6 Months to Less Than 1 Year |
1 to Less Than 3 Years |
3 to 5 Years |
|||||||||||||
Membership Stock |
||||||||||||||||
Class A |
$ | | $ | | $ | | $ | | ||||||||
Class B |
| | | 10,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | | $ | | $ | | $ | 10,000 | ||||||||
|
|
|
|
|
|
|
|
At December 31, 2019 and 2018, the amount of collateral pledged and the maximum amount pledged to the FHLB during the reporting period was as follows:
Fair Value | Carry Value | |||||||
December 31, 2019 |
||||||||
Total Collateral Pledged |
$ | 1,928,082 | $ | 1,829,749 | ||||
Maximum Collateral Pledged |
1,918,144 | 1,872,037 | ||||||
Fair Value | Carry Value | |||||||
Decemeber 31, 2018 |
||||||||
Total Collateral Pledged |
$ | 2,063,593 | $ | 2,086,543 | ||||
Maximum Collateral Pledged |
2,066,367 | 2,135,128 |
At December 31, 2019 and 2018, the borrowings from the FHLB were as follows:
December 31, 2019 | December 31, 2018 | |||||||||||||||
General Account |
Funding Agreements Reserves Established |
General Account |
Funding Agreements Reserves Established |
|||||||||||||
Debt1 |
$ | 1,175,000 | $ | | $ | 1,175,000 | $ | | ||||||||
Funding agreements2 |
| | 245,000 | 246,610 | ||||||||||||
Other |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,175,000 | $ | | $ | 1,420,000 | $ | 246,610 | ||||||||
|
|
|
|
|
|
|
|
1 | The maximum amount of borrowing during 2019 was $1,175,000 |
2 | The maximum amount of borrowing during 2019 was $0 |
86
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
As of December 31, 2019 , the weighted average interest rate on FHLB advances was 2.120% with a weighted average term of 0.8 years. During 2018, the weighted average interest rate on FHLB advances was 2.738% with a weighted average term of 2.1 years.
At December 31, 2019, the borrowings from the FHLB were not subject to prepayment penalties.
The Company has provided guarantees for the obligations of noninsurance affiliates who have accepted assignments of structured settlement payment obligations from other insurers and purchase structured settlement insurance policies from subsidiaries of the Company that match those obligations. The guarantees made by the Company are specific to each structured settlement contract and vary in date and duration of the obligation. These are numerous and are backed by the reserves established by the Company to represent the present value of the future payments for those contracts. The statutory reserve established at December 31, 2019 for the total payout block is $2,124,229. As this reserve is already recorded on the balance sheet of the Company, there was no additional liability recorded due to the adoption of SSAP No. 5R.
The Company is a party to legal proceedings involving a variety of issues incidental to its business, including class actions lawsuits. Lawsuits may be brought in nearly any federal or state court in the United States or in an arbitral forum. In addition, there continues to be significant federal and state regulatory activity relating to financial services companies. The Companys legal proceedings are subject to many variables, and given its complexity and scope, outcomes cannot be predicted with certainty. Although legal proceedings sometimes include substantial demands for compensatory and punitive damages, and injunctive relief, it is managements opinion that damages arising from such demands will not be material to the Companys financial position.
In addition, the insurance industry has increasingly and routinely been the subject of litigation, investigations, regulatory activity and challenges by various governmental and enforcement authorities and policyholder advocate groups concerning certain practices. For example, unclaimed property administrators and state insurance regulators are performing unclaimed property examinations of the life insurance industry in the U.S., including the Company. These are in some cases multi-state examinations that include the collective action of many of the states. Additionally, some states are conducting separate examinations or instituting separate enforcement actions in regard to unclaimed property laws and related claims practices. As other insurers in the United States have done, the Company identified certain additional internal processes that it has implemented or is in the process of implementing. As of December 31, 2019 and 2018, the Companys reserves related to this matter were not material to the Companys financial position.
The Company is subject to insurance guaranty laws in the states in which it writes business. These laws provide for assessments against insurance companies for the benefit of policyholders and claimants in the event of insolvency of other insurance companies. Assessments are charged to operations when received by the Company, except where right of offset against other taxes paid is allowed by law. Amounts available for future offsets are recorded as an asset on the Companys balance sheet. The future obligation for known insolvencies has been accrued based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Associations. Potential future obligations for unknown insolvencies are not determinable by the Company and are not required to be accrued for
87
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
financial reporting purposes. The Company has established a reserve of $2,780 and $3,122, and an offsetting premium tax benefit of $2,125 and $2,456 at December 31, 2019 and 2018, respectively, for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. The guaranty fund (benefit) expense was $1,122, $386 and $1,193 for the years ended December 31, 2019, 2018 and 2017.
16. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities
The Company enters into dollar repurchase agreements in which securities are delivered to the counterparty once adequate collateral has been received. At December 31, 2019 and 2018, the Company had dollar repurchase agreements outstanding in the amount of $255,491 and $110,400, respectively, which is included in borrowed money on the balance sheets. Those amounts include accrued interest of $677 and $360, at December 31, 2019 and 2018, respectively. At December 31, 2019, securities with a book value of $254,966 and a fair value of $255,467 were subject to dollar repurchase agreements. These securities have maturity dates that range from January 1, 2033 to November 1, 2049. At December 31, 2018, securities with a book value of $109,657 and a fair value of $111,051 were subject to dollar repurchase agreements. The Company does not have the legal right to recall or substitute the underlying assets prior to the transactions scheduled termination. Upon scheduled termination, the counterparty is obligated to return substantially similar assets.
The contractual maturities of dollar repurchase agreements are as follows:
Fair Value | ||||||||
2019 | 2018 | |||||||
Open |
$ | 254,814 | $ | 110,040 | ||||
30 days or less |
| | ||||||
31 to 60 days |
| | ||||||
61 to 90 days |
| | ||||||
Greater than 90 days |
| | ||||||
|
|
|
|
|||||
Total |
254,814 | 110,040 | ||||||
Securities received |
| | ||||||
|
|
|
|
|||||
Total collateral received |
$ | 254,814 | $ | 110,040 | ||||
|
|
|
|
In the course of the Companys asset management, securities are sold and reacquired within 30 days of the sale date to enhance the Companys yield on its investment portfolio. There were no securities of NAIC designation 3 or below sold during 2019 and reacquired within 30 days of the sale date.
88
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
17. Reconciliation to Statutory Statement
The following is a reconciliation of amounts previously reported to the Iowa Department of Financial Regulation in the 2019 Annual Statement, to those reported in the accompanying statutory-basis financial statements:
December 31 2019 |
||||
Balance Sheets |
||||
Total assets as reported in the Companys Annual Statement |
$ | 52,514,952 | ||
Increase in other assets |
1,741 | |||
|
|
|||
Total assets as reported in the accompanying audited statutory basis balance sheet |
$ | 52,516,693 | ||
|
|
|||
Total liabilities as reported in the Companys Annual Statement |
$ | 50,207,465 | ||
Increase in policy and contract claim reserves |
8,292 | |||
|
|
|||
Total liabilities as reported in the accompanying audited statutory basis balance sheet |
$ | 50,215,757 | ||
|
|
|||
Total capital and surplus as reported in the Companys Annual Statement |
$ | 2,307,487 | ||
Decrease in net income |
(6,551 | ) | ||
|
|
|||
Total capital and surplus as reported in the accompanying audited statutory basis balance sheet |
$ | 2,300,936 | ||
|
|
|||
Statements of Operations |
||||
Statutory net income as reported in the Companys Annual Statement |
$ | 578,755 | ||
Decrease in federal income tax (benefit) expense |
1,741 | |||
Increase in death benefits |
(8,292 | ) | ||
|
|
|||
Total net income as reported in the accompanying audited statutory basis statement of operations |
$ | 572,204 | ||
|
|
The reconciling differences to the Annual Statement are driven by Managements decision to record a current year adjustment identified after annual statement reporting.
The financial statements are adjusted to reflect events that occurred between the balance sheet date and the date when the financial statements are available to be issued, provided they give evidence of conditions that existed at the balance sheet date (Type I). The Company has not identified any Type I subsequent events for the year ended December 31, 2019 through April 20, 2020.
Events that are indicative of conditions that arose after the balance sheet date are disclosed, but do not result in an adjustment of the financial statements themselves (Type II). The Company has identified the following Type II subsequent events for the year ended December 31, 2019:
89
Transamerica Premier Life Insurance Company
Notes to Financial Statements Statutory Basis
(Dollars in Thousands, Except per Share amounts)
In January 2020, management entered into a letter of intent for the sale of the Pyramid Center Complex owned by the Company. The estimated pre-tax gain on the transaction is $450,000. The letter of intent is consistent with the Companys objective to reduce its commercial real estate exposure and is expected to close in the second quarter of 2020.
Since January 2020, the Coronavirus disease (COVID-19) outbreak is causing disruption to business, markets, and industry. The Company is continuously monitoring the market, and the economic factors that impact the Company, to proactively manage the associated risks. At this point, management believes the most significant risks the Company faces are related to financial markets (particularly credit, equity, and interest rates risks), and underwriting risks (particularly related to mortality, morbidity and policyholder behavior). As of the audit report release date, the Company continues to monitor and evaluate the impacts of the COVID-19 crisis on the Companys 2020 results through the use of sensitivities and stress testing. While it is too early to provide long-term impacts, if any, management has determined the Company remains strongly capitalized with RBC remaining within target limits set by the capital management policy.
90
Transamerica Premier Life Insurance Company
Appendix A Listing of Affiliated Companies
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |
Transamerica Corporation |
42-1484983 | |
Aegon Asset Management Services Inc |
39-1884868 | |
Aegon Direct Marketing Services Inc |
42-1470697 | |
Aegon Financial Services Group Inc |
41-1479568 | |
Aegon Institutional Markets Inc |
61-1085329 | |
Aegon Management Company |
35-1113520 | |
Aegon USA Real Estate Services Inc |
61-1098396 | |
Aegon USA Realty Advisors of CA |
20-5023693 | |
AFSG Securities Corporation |
23-2421076 | |
AUSA Properties Inc |
27-1275705 | |
Commonwealth General Corporation |
51-0108922 | |
Creditor Resources Inc |
42-1079584 | |
CRI Solutions Inc |
52-1363611 | |
Financial Planning Services Inc |
23-2130174 | |
Garnet Assurance Corporation |
11-3674132 | |
Garnet Assurance Corporation II |
14-1893533 | |
Garnet Assurance Corporation III |
01-0947856 | |
Intersecurities Ins Agency |
42-1517005 | |
LIICA RE II |
20-5927773 | |
Massachusetts Fidelity Trust |
42-0947998 | |
MLIC RE I Inc |
01-0930908 | |
Money Services Inc |
42-1079580 | |
Monumental General Administrators Inc |
52-1243288 | |
Pearl Holdings Inc I |
20-1063558 | |
Pearl Holdings Inc II |
20-1063571 | |
Pine Falls Re Inc |
26-1552330 | |
Real Estate Alternatives Portfolio 3A Inc |
20-1627078 | |
River Ridge Insurance Company |
20-0877184 | |
Short Hills Management |
42-1338496 | |
Stonebridge Benefit Services Inc |
75-2548428 | |
Stonebridge Reinsurance Company |
61-1497252 | |
TCF Asset Management Corp |
84-0642550 |
91
Transamerica Premier Life Insurance Company
Appendix A Listing of Affiliated Companies (continued)
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |
TCFC Air Holdings Inc |
32-0092333 | |
TCFC Asset Holdings Inc |
32-0092334 | |
TLIC Oakbrook Reinsurance Inc. |
47-1026613 | |
TLIC Riverwood Reinsurance Inc |
45-3193055 | |
TLIC Watertree Reinsurance, Inc. |
81-3715574 | |
Tranasmerica Advisors Life Insurance Company |
91-1325756 | |
Transamerica Accounts Holding Corp |
36-4162154 | |
Transamerica Affinity Services Inc |
42-1523438 | |
Transamerica Affordable Housing Inc |
94-3252196 | |
Transamerica Agency Network Inc |
61-1513662 | |
Transamerica Asset Management |
59-3403585 | |
Transamerica Capital Inc |
95-3141953 | |
Transamerica Casualty Insurance Company |
31-4423946 | |
Transamerica Commercial Finance Corp I |
94-3054228 | |
Transamerica Consumer Finance Holding Company |
95-4631538 | |
Transamerica Corporation (OREGON) |
98-6021219 | |
Transamerica Distribution Finance Overseas Inc |
36-4254366 | |
Transamerica Finance Corporation |
95-1077235 | |
Transamerica Financial Advisors |
59-2476008 | |
Transamerica Financial Life Insurance Company |
36-6071399 | |
Transamerica Fund Services Inc |
59-3403587 | |
Transamerica Home Loan |
95-4390993 | |
Transamerica International Re (Bermuda) Ltd |
98-0199561 | |
Transamerica Investors Securities Corp |
13-3696753 | |
Transamerica Leasing Holdings Inc |
13-3452993 | |
Transamerica Life Insurance Company |
39-0989781 | |
Transamerica Pacific Insurance Co Ltd |
94-3304740 | |
Transamerica Premier Life Insurance Company |
52-0419790 | |
Transamerica Resources Inc |
52-1525601 | |
Transamerica Small Business Capital Inc |
36-4251204 | |
Transamerica Stable Value Solutions Inc |
27-0648897 | |
Transamerica Vendor Financial Services Corporation |
36-4134790 |
92
Transamerica Premier Life Insurance Company
Appendix A Listing of Affiliated Companies (continued)
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |
United Financial Services Inc |
52-1263786 | |
WFG China Holdings Inc |
20-2541057 | |
World Fin Group Ins Agency of Massachusetts Inc |
04-3182849 | |
World Financial Group Inc |
42-1518386 | |
World Financial Group Ins Agency of Hawaii Inc |
99-0277127 | |
World Financial Group Insurance Agency of WY Inc |
42-1519076 | |
World Financial Group Insurance Agency |
95-3809372 | |
Zahorik Company Inc |
95-2775959 | |
Zero Beta Fund LLC |
26-1298094 |
93
Statutory-Basis Financial
Statement Schedules
94
Transamerica Premier Life Insurance Company
Summary of Investments Other Than
Investments in Related Parties
(Dollars in Thousands)
December 31, 2019
SCHEDULE I
Type of Investment |
Cost (1) | Fair Value |
Amount at Which Shown in the Balance Sheet (2) |
|||||||||
Fixed maturities |
||||||||||||
Bonds: |
||||||||||||
United States government and government agencies and authorities |
$ | 1,560,785 | $ | 1,862,567 | $ | 1,615,584 | ||||||
States, municipalities and political subdivisions |
833,144 | 850,566 | 833,144 | |||||||||
Foreign governments |
137,981 | 148,272 | 137,879 | |||||||||
Hybrid securities |
196,725 | 212,249 | 196,725 | |||||||||
All other corporate bonds |
15,095,418 | 16,922,223 | 15,094,633 | |||||||||
Preferred stocks |
14,277 | 4,361 | 4,955 | |||||||||
|
|
|
|
|
|
|||||||
Total fixed maturities |
17,838,330 | 20,000,237 | 17,882,922 | |||||||||
Equity securities |
||||||||||||
Common stocks: |
||||||||||||
Industrial, miscellaneous and all other |
59,000 | 59,056 | 59,056 | |||||||||
|
|
|
|
|
|
|||||||
Total equity securities |
59,000 | 59,056 | 59,056 | |||||||||
Mortgage loans on real estate |
2,737,109 | 2,737,109 | ||||||||||
Real estate |
187,639 | 187,639 | ||||||||||
Policy loans |
962,408 | 962,408 | ||||||||||
Other long-term investments |
395,529 | 395,529 | ||||||||||
Receivable for securities |
117 | 117 | ||||||||||
Securities lending |
757,186 | 757,186 | ||||||||||
Cash, cash equivalents and short-term investments |
625,320 | 625,320 | ||||||||||
|
|
|
|
|||||||||
Total investments |
$ | 23,562,638 | $ | 23,607,286 | ||||||||
|
|
|
|
(1) | Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts. |
(2) | United States government and corporate bonds of $3,256 are held at fair value rather than amortized cost due to having an NAIC 6 rating. Two preferred stock securities are held at fair value of $2,272 due to having an NAIC 5 rating. |
95
Transamerica Premier Life Insurance Company
Supplementary Insurance Information
(Dollars in Thousands)
Future Policy Benefits and Expenses |
Unearned Premiums |
Policy and Contract Liabilities |
Premium Revenue |
Net Investment Income* |
Benefits, Claims Losses and Settlement Expenses |
Other Operating Expenses* |
||||||||||||||||||||||
Year ended December 31, 2019 |
||||||||||||||||||||||||||||
Individual life |
$ | 9,986,959 | $ | | $ | 130,291 | $ | 1,662,742 | $ | 599,147 | $ | 1,101,732 | $ | 752,986 | ||||||||||||||
Individual health |
5,486,208 | 91,920 | 271,895 | 649,805 | 346,063 | 978,406 | 90,735 | |||||||||||||||||||||
Group life and health |
935,594 | 10,187 | 60,863 | 270,557 | 60,130 | 267,918 | 93,548 | |||||||||||||||||||||
Annuity |
1,383,733 | | 667 | 764,777 | 89,519 | 2,147,944 | (1,182,538 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 17,792,494 | $ | 102,107 | $ | 463,716 | $ | 3,347,881 | $ | 1,094,859 | $ | 4,495,999 | $ | (245,269 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended December 31, 2018 |
||||||||||||||||||||||||||||
Individual life |
$ | 9,092,422 | $ | | $ | 108,676 | $ | 1,564,433 | $ | 461,112 | $ | 1,126,141 | $ | 699,006 | ||||||||||||||
Individual health |
5,352,657 | 87,849 | 239,105 | 623,162 | 355,005 | 849,323 | 69,107 | |||||||||||||||||||||
Group life and health |
949,395 | 16,832 | 85,766 | 454,695 | 55,332 | 298,180 | 191,302 | |||||||||||||||||||||
Annuity |
1,466,569 | | 698 | 907,732 | 87,245 | 1,223,719 | (223,394 | ) | ||||||||||||||||||||
Other |
| | | | 91,714 | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 16,861,043 | $ | 104,681 | $ | 434,245 | $ | 3,550,022 | $ | 1,050,408 | $ | 3,497,363 | $ | 736,021 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended December 31, 2017 |
||||||||||||||||||||||||||||
Individual life |
$ | 8,490,074 | $ | | $ | 102,824 | $ | 1,030,788 | $ | 1,190,643 | $ | 1,233,999 | $ | 784,581 | ||||||||||||||
Individual health |
5,104,517 | 86,651 | 232,622 | 2,206,192 | (984,774 | ) | 5,013,202 | (2,848,263 | ) | |||||||||||||||||||
Group life and health |
948,227 | 25,767 | 98,609 | 739,799 | 20,356 | 758,598 | (26,525 | ) | ||||||||||||||||||||
Annuity |
1,513,456 | | 466 | (1,680,475 | ) | 559,012 | (786,325 | ) | (563,464 | ) | ||||||||||||||||||
Other |
| | | | 94,255 | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 16,056,274 | $ | 112,418 | $ | 434,521 | $ | 2,296,304 | $ | 879,492 | $ | 6,219,474 | $ | (2,653,671 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Allocations of net investment income and other operating expenses are based on a number of assumptions and estimates, and the results would change if different methods were applied. |
96
Transamerica Premier Life Insurance Company
(Dollars in Thousands)
Gross Amount | Ceded to Other Companies |
Assumed From Other Companies |
Net Amount | Percentage of Amount Assumed to Net |
||||||||||||||||
Year ended December 31, 2019 |
||||||||||||||||||||
Life insurance in force |
$ | 228,583,374 | $ | 58,822,199 | $ | 733,656 | $ | 170,494,831 | 0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 1,992,383 | $ | 352,503 | $ | 22,863 | $ | 1,662,743 | 1 | % | ||||||||||
Individual health |
266,540 | 21 | 383,287 | 649,806 | 59 | % | ||||||||||||||
Group life and health |
263,504 | 55,112 | 62,165 | 270,557 | 23 | % | ||||||||||||||
Annuity |
826,029 | 61,210 | (43 | ) | 764,776 | 0 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 3,348,455 | $ | 468,847 | $ | 468,272 | $ | 3,347,881 | 14 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2018 |
||||||||||||||||||||
Life insurance in force |
$ | 225,354,149 | $ | 65,732,854 | $ | 797,813 | $ | 160,419,108 | 0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 1,931,651 | $ | 391,966 | $ | 24,748 | $ | 1,564,433 | 2 | % | ||||||||||
Individual health |
241,100 | 129 | 382,191 | 623,162 | 61 | % | ||||||||||||||
Group life and health |
454,075 | 66,673 | 67,292 | 454,695 | 15 | % | ||||||||||||||
Annuity |
951,927 | 44,216 | 21 | 907,732 | 0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 3,578,753 | $ | 502,984 | $ | 474,252 | $ | 3,550,022 | 13 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2017 |
||||||||||||||||||||
Life insurance in force |
$ | 221,055,780 | $ | 69,201,990 | $ | 987,895 | $ | 152,841,685 | 1 | % | ||||||||||
|
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|
|
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|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 1,851,802 | $ | 846,830 | $ | 25,816 | $ | 1,030,788 | 3 | % | ||||||||||
Individual health |
227,972 | (137 | ) | 1,978,082 | 2,206,191 | 90 | % | |||||||||||||
Group life and health |
603,267 | 89,820 | 226,352 | 739,799 | 31 | % | ||||||||||||||
Annuity |
973,308 | 2,653,795 | 13 | (1,680,474 | ) | 0 | % | |||||||||||||
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|
|
|
|
|||||||||||
$ | 3,656,349 | $ | 3,590,308 | $ | 2,230,263 | $ | 2,296,304 | 97 | % | |||||||||||
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97
19. Subsequent Events (Unaudited)
Additional subsequent events have been evaluated for disclosure through September 28, 2020.
As discussed in Note 18 to the audited financial statements, the Company entered into a letter of intent for the sale of the Pyramid Center Complex owned by the Company. On June 30, 2020, a purchase and sale agreement was reached with a sales price of $650,000 and expected closure by the end of 2020. As such, the asset has been classified as held for sale beginning on June 30, 2020 until final sale closure.
On May 15, 2020, the Company paid a dividend to its parent company, CGC, in the amount $700,000. The dividend included $76,604 in cash and $623,396 in securities.
On June 22, 2020, the Company repaid $60,000 of a surplus note to CGC. The Company received approval from the IID prior to its repayment of the surplus note as well as prior to making interest payments.
On June 30, 2020, the Company provided $5,000 to Transamerica Pacific Re, Inc. (TPRe), a newly formed AXXX captive reinsurance related party entity, in consideration for 5,000 shares of its stock becoming the sole shareholder of TPRe. The Company provided an additional capital contribution of $70,000 to TPRe on June 30, 2020.
With approval from the IID, the Company entered into a reinsurance agreement with Wilton Reassurance Company to novate life owned life insurance policies previously issued by the Company to TLIC effective July 1, 2020. The company novated $183,967 of reserves and claim reserves, which was recorded as an adjustment to the balance sheet, and paid a ceding commission of $7,400. The transaction resulted in a pre-tax loss of $7,400 which has been included in the Statements of Operations.
Effective October 1, 2020, the Company was merged with TLIC, an Iowa domiciled affiliate, with TLIC emerging as the surviving entity per the Plan of Merger which was approved by the Iowa Insurance Division.
98
FINANCIAL STATEMENTS
Transamerica Premier Life Insurance Company
WRL Series Life Account
Years Ended December 31, 2019 and 2018
Transamerica Premier Life Insurance Company
WRL Series Life Account
Financial Statements
Years Ended December 31, 2019 and 2018
1 | ||
Financial Statements |
||
2 | ||
4 | ||
18 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Transamerica Premier Life Insurance Company and the Contract Owners of WRL Series Life Account
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities of each of the subaccounts of WRL Series Life Account indicated in the table below as of December 31, 2019, and the related statements of operations and changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the subaccounts of WRL Series Life Account as of December 31, 2019, and the results of each of their operations and the changes in each of their net assets for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
AB Balanced Wealth Strategy Class B Shares | TA Aegon High Yield Bond Initial Class | |
Access VP High Yield | TA Aegon U.S. Government Securities Initial Class | |
Fidelity® VIP Contrafund® Service Class 2 | TA Barrow Hanley Dividend Focused Initial Class | |
Fidelity® VIP Equity-Income Service Class 2 | TA BlackRock Global Allocation Initial Class | |
Fidelity® VIP Growth Opportunities Service Class 2 | TA BlackRock Global Real Estate Securities Initial Class | |
Fidelity® VIP Index 500 Service Class 2 | TA BlackRock Government Money Market Initial Class | |
Franklin Allocation Class 4 Shares | TA BlackRock iShares Edge 40 Initial Class | |
ProFund VP Asia 30 | TA BlackRock Tactical Allocation Initial Class | |
ProFund VP Basic Materials | TA Greystone International Growth Initial Class | |
ProFund VP Bull | TA Janus Balanced Initial Class | |
ProFund VP Consumer Services | TA Janus Mid-Cap Growth Initial Class | |
ProFund VP Emerging Markets | TA JPMorgan Asset Allocation - Conservative Initial Class | |
ProFund VP Europe 30. | TA JPMorgan Asset Allocation - Growth Initial Class | |
ProFund VP Falling U.S. Dollar | TA JPMorgan Asset Allocation - Moderate Initial Class | |
ProFund VP Financials | TA JPMorgan Asset Allocation - Moderate Growth Initial Class | |
ProFund VP Government Money Market | TA JPMorgan Core Bond Initial Class | |
ProFund VP International | TA JPMorgan Enhanced Index Initial Class | |
ProFund VP Japan | TA JPMorgan International Moderate Growth Initial Class | |
ProFund VP Mid-Cap | TA JPMorgan Mid Cap Value Initial Class | |
ProFund VP NASDAQ-100 | TA JPMorgan Tactical Allocation Initial Class | |
ProFund VP Oil & Gas | TA Managed Risk - Balanced ETF Initial Class | |
ProFund VP Pharmaceuticals | TA Managed Risk - Growth ETF Initial Class | |
ProFund VP Precious Metals | TA Morgan Stanley Capital Growth Initial Class | |
ProFund VP Short Emerging Markets | TA Multi-Managed Balanced Initial Class | |
ProFund VP Short International | TA PIMCO Tactical - Balanced Initial Class | |
ProFund VP Short NASDAQ-100 | TA PIMCO Tactical - Conservative Initial Class | |
ProFund VP Short Small-Cap | TA PIMCO Tactical - Growth Initial Class | |
ProFund VP Small-Cap | TA PIMCO Total Return Initial Class | |
ProFund VP Small-Cap Value | TA QS Investors Active Asset Allocation - Conservative Initial Class | |
ProFund VP Telecommunications | TA QS Investors Active Asset Allocation - Moderate Initial Class | |
ProFund VP U.S. Government Plus | TA QS Investors Active Asset Allocation - Moderate Growth Initial Class | |
ProFund VP UltraNASDAQ-100 | TA Small/Mid Cap Value Initial Class | |
ProFund VP UltraSmall-Cap | TA T. Rowe Price Small Cap Initial Class | |
ProFund VP Utilities | TA WMC US Growth Initial Class |
Basis for Opinions
These financial statements are the responsibility of the Transamerica Premier Life Insurance Companys management. Our responsibility is to express an opinion on the financial statements of each of the subaccounts of WRL Series Life Account based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to each of the subaccounts of WRL Series Life Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of investments owned as of December 31, 2019 by correspondence with the investee mutual funds. We believe that our audits provide a reasonable basis for our opinions.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
April 17, 2020
We have served as the auditor of one or more of the subaccounts of WRL Series Life Account since 2014
1
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2019
Subaccount | Number of Shares | Cost | Assets at Market Value |
Due (to)/from General Account |
Net Assets | Units Outstanding | Range of Unit Values | |||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
AB Balanced Wealth Strategy Class B Shares | 238,608.170 | $ | 2,542,694 | $ | 2,409,943 | $ | (3 | ) | $ | 2,409,940 | 112,692 | $ | 17.288068 | $ | 25.604189 | |||||||||||||||||
Access VP High Yield | 131,723.265 | 3,641,738 | 3,781,775 | 2 | 3,781,777 | 202,947 | 15.913869 | 22.908445 | ||||||||||||||||||||||||
Fidelity® VIP Contrafund® Service Class 2 | 670,948.481 | 21,805,685 | 24,221,240 | (44 | ) | 24,221,196 | 821,073 | 24.786119 | 34.443463 | |||||||||||||||||||||||
Fidelity® VIP Equity-Income Service Class 2 | 475,072.013 | 9,983,883 | 10,974,164 | - | 10,974,164 | 434,957 | 22.353823 | 28.106812 | ||||||||||||||||||||||||
Fidelity® VIP Growth Opportunities Service Class 2 | 295,104.202 | 10,525,388 | 14,179,757 | 9 | 14,179,766 | 414,182 | 31.433150 | 38.821347 | ||||||||||||||||||||||||
Fidelity® VIP Index 500 Service Class 2 | 183,656.807 | 48,111,002 | 58,103,504 | (23 | ) | 58,103,481 | 1,850,484 | 26.576169 | 36.046717 | |||||||||||||||||||||||
Franklin Allocation Class 4 Shares | 318,239.933 | 2,244,829 | 2,218,132 | 1 | 2,218,133 | 102,803 | 16.879273 | 26.214427 | ||||||||||||||||||||||||
ProFund VP Asia 30 | 133,782.977 | 7,977,493 | 8,314,612 | (10 | ) | 8,314,602 | 755,203 | 10.433791 | 11.602461 | |||||||||||||||||||||||
ProFund VP Basic Materials | 42,122.605 | 2,735,052 | 2,725,754 | 24 | 2,725,778 | 220,118 | 11.335819 | 13.248951 | ||||||||||||||||||||||||
ProFund VP Bull | 90,553.878 | 4,417,565 | 4,855,499 | (7 | ) | 4,855,492 | 202,079 | 22.094742 | 24.388786 | |||||||||||||||||||||||
ProFund VP Consumer Services | 56,472.212 | 4,148,197 | 4,685,499 | (6 | ) | 4,685,493 | 145,291 | 30.263850 | 37.052846 | |||||||||||||||||||||||
ProFund VP Emerging Markets | 362,553.400 | 9,834,605 | 10,543,053 | 1 | 10,543,054 | 1,172,076 | 8.079833 | 10.149505 | ||||||||||||||||||||||||
ProFund VP Europe 30 | 39,927.610 | 914,811 | 938,299 | 4 | 938,303 | 86,170 | 9.873723 | 12.548209 | ||||||||||||||||||||||||
ProFund VP Falling U.S. Dollar | 10,920.274 | 196,298 | 192,197 | (2 | ) | 192,195 | 31,372 | 5.291848 | 6.672844 | |||||||||||||||||||||||
ProFund VP Financials | 102,387.003 | 4,179,847 | 4,715,945 | 75 | 4,716,020 | 259,303 | 15.410425 | 23.503991 | ||||||||||||||||||||||||
ProFund VP Government Money Market | 11,493,911.860 | 11,493,912 | 11,493,912 | (55 | ) | 11,493,857 | 1,178,410 | 8.558324 | 10.681863 | |||||||||||||||||||||||
ProFund VP International | 117,704.222 | 2,257,509 | 2,314,065 | 61 | 2,314,126 | 234,501 | 9.313478 | 12.055869 | ||||||||||||||||||||||||
ProFund VP Japan | 15,611.446 | 835,011 | 859,566 | (62 | ) | 859,504 | 55,149 | 12.007918 | 19.382885 | |||||||||||||||||||||||
ProFund VP Mid-Cap | 137,095.711 | 3,193,006 | 3,275,217 | 96 | 3,275,313 | 160,109 | 19.482484 | 23.051364 | ||||||||||||||||||||||||
ProFund VP NASDAQ-100 | 409,955.440 | 18,381,486 | 21,186,497 | 8 | 21,186,505 | 535,387 | 33.557475 | 46.259114 | ||||||||||||||||||||||||
ProFund VP Oil & Gas | 181,372.638 | 5,805,512 | 5,415,787 | (4 | ) | 5,415,783 | 721,703 | 6.296298 | 8.077792 | |||||||||||||||||||||||
ProFund VP Pharmaceuticals | 146,320.626 | 5,302,319 | 5,017,334 | 2 | 5,017,336 | 220,283 | 22.209690 | 24.714985 | ||||||||||||||||||||||||
ProFund VP Precious Metals | 311,299.981 | 6,125,757 | 7,763,822 | (28 | ) | 7,763,794 | 1,720,769 | 4.387136 | 4.878883 | |||||||||||||||||||||||
ProFund VP Short Emerging Markets | 10,257.683 | 431,501 | 352,351 | 2 | 352,353 | 95,356 | 2.422158 | 5.242957 | ||||||||||||||||||||||||
ProFund VP Short International | 8,333.931 | 329,214 | 293,104 | (2 | ) | 293,102 | 82,689 | 2.734038 | 4.585385 | |||||||||||||||||||||||
ProFund VP Short NASDAQ-100 | 113,424.985 | 3,866,945 | 3,618,257 | 2 | 3,618,259 | 2,249,113 | 0.873939 | 1.735850 | ||||||||||||||||||||||||
ProFund VP Short Small-Cap | 50,322.379 | 563,171 | 513,288 | (4 | ) | 513,284 | 326,282 | 1.202592 | 2.738119 | |||||||||||||||||||||||
ProFund VP Small-Cap | 125,379.201 | 4,376,674 | 4,438,424 | (6 | ) | 4,438,418 | 223,149 | 19.122410 | 21.042711 | |||||||||||||||||||||||
ProFund VP Small-Cap Value | 83,330.199 | 4,042,806 | 4,055,681 | 59 | 4,055,740 | 192,718 | 20.558978 | 23.647128 | ||||||||||||||||||||||||
ProFund VP Telecommunications | 22,658.214 | 741,276 | 714,413 | (1 | ) | 714,412 | 49,609 | 13.652011 | 15.590765 | |||||||||||||||||||||||
ProFund VP U.S. Government Plus | 158,179.493 | 4,022,986 | 4,294,573 | 8 | 4,294,581 | 229,830 | 17.234390 | 20.645378 | ||||||||||||||||||||||||
ProFund VP UltraNASDAQ-100 | 293,048.509 | 28,134,235 | 35,807,597 | 2 | 35,807,599 | 487,770 | 68.889622 | 75.645431 | ||||||||||||||||||||||||
ProFund VP UltraSmall-Cap | 334,416.707 | 7,134,474 | 7,932,364 | 16 | 7,932,380 | 285,041 | 25.617519 | 30.804372 | ||||||||||||||||||||||||
ProFund VP Utilities | 125,028.423 | 5,971,379 | 6,306,434 | (10 | ) | 6,306,424 | 291,707 | 18.098697 | 24.081616 | |||||||||||||||||||||||
TA Aegon High Yield Bond Initial Class | 2,321,374.417 | 18,156,420 | 18,060,293 | (29 | ) | 18,060,264 | 827,671 | 16.638803 | 26.652437 | |||||||||||||||||||||||
TA Aegon U.S. Government Securities Initial Class | 583,685.166 | 6,197,158 | 6,373,842 | 16 | 6,373,858 | 450,314 | 12.194975 | 16.019108 | ||||||||||||||||||||||||
TA Barrow Hanley Dividend Focused Initial Class | 3,042,844.892 | 63,668,509 | 68,677,009 | (44 | ) | 68,676,965 | 2,125,815 | 18.936541 | 49.103831 | |||||||||||||||||||||||
TA BlackRock Global Allocation Initial Class | 636,493.706 | 5,591,165 | 5,779,363 | 11 | 5,779,374 | 394,579 | 13.680679 | 15.194159 | ||||||||||||||||||||||||
TA BlackRock Global Real Estate Securities Initial Class | 3,060,506.565 | 38,062,660 | 41,010,788 | 57 | 41,010,845 | 1,629,517 | 15.184039 | 42.384862 | ||||||||||||||||||||||||
TA BlackRock Government Money Market Initial Class | 30,217,717.600 | 30,217,718 | 30,217,718 | (94 | ) | 30,217,624 | 2,233,056 | 8.846837 | 20.071794 | |||||||||||||||||||||||
TA BlackRock iShares Edge 40 Initial Class | 306,105.904 | 2,938,570 | 2,874,334 | (19 | ) | 2,874,315 | 165,466 | 12.738090 | 20.882133 | |||||||||||||||||||||||
TA BlackRock Tactical Allocation Initial Class | 2,834,687.561 | 27,145,199 | 25,483,841 | (10 | ) | 25,483,831 | 1,596,129 | 14.898961 | 16.790618 |
See accompanying notes. | 2 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Assets and Liabilities
December 31, 2019
Subaccount | Number of Shares | Cost | Assets at Market Value |
Due (to)/from General Account |
Net Assets | Units Outstanding | Range of Unit Values | |||||||||||||||||||||||||
TA Greystone International Growth Initial Class | 4,378,034.349 | $ | 36,627,481 | $ | 36,425,246 | $ | (108 | ) | $ | 36,425,138 | 2,140,122 | $ | 14.438690 | $ | 21.479484 | |||||||||||||||||
TA Janus Balanced Initial Class | 767,273.602 | 11,457,407 | 13,105,033 | (8 | ) | 13,105,025 | 702,584 | 17.827991 | 20.845493 | |||||||||||||||||||||||
TA Janus Mid-Cap Growth Initial Class | 9,998,270.608 | 302,274,320 | 395,731,551 | (107 | ) | 395,731,444 | 8,475,626 | 21.289064 | 112.725357 | |||||||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Initial Class | 2,313,291.705 | 24,301,301 | 24,659,690 | (66 | ) | 24,659,624 | 1,349,901 | 14.719264 | 21.494613 | |||||||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Initial Class | 25,038,482.975 | 293,989,306 | 313,982,577 | (73 | ) | 313,982,504 | 14,617,957 | 17.711483 | 27.436412 | |||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Initial Class | 6,118,466.099 | 71,775,049 | 73,482,778 | (128 | ) | 73,482,650 | 3,883,875 | 16.017384 | 23.813757 | |||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class | 24,097,269.677 | 295,005,421 | 299,770,035 | (209 | ) | 299,769,826 | 15,058,363 | 16.884772 | 25.606694 | |||||||||||||||||||||||
TA JPMorgan Core Bond Initial Class | 2,569,971.851 | 33,197,592 | 34,000,728 | (82 | ) | 34,000,646 | 1,399,936 | 12.915215 | 50.951502 | |||||||||||||||||||||||
TA JPMorgan Enhanced Index Initial Class | 497,269.597 | 10,504,264 | 10,944,904 | 5 | 10,944,909 | 352,818 | 26.997576 | 36.101491 | ||||||||||||||||||||||||
TA JPMorgan International Moderate Growth Initial Class | 1,130,656.667 | 11,120,601 | 11,283,954 | (20 | ) | 11,283,934 | 819,530 | 12.668774 | 15.466326 | |||||||||||||||||||||||
TA JPMorgan Mid Cap Value Initial Class | 408,242.530 | 7,143,856 | 6,646,188 | (1 | ) | 6,646,187 | 187,027 | 24.238862 | 43.664432 | |||||||||||||||||||||||
TA JPMorgan Tactical Allocation Initial Class | 2,754,766.583 | 39,229,302 | 41,541,880 | (23 | ) | 41,541,857 | 1,953,351 | 12.300041 | 44.962614 | |||||||||||||||||||||||
TA Managed Risk - Balanced ETF Initial Class | 230,471.570 | 2,829,561 | 2,996,130 | (1 | ) | 2,996,129 | 185,551 | 15.708237 | 17.905218 | |||||||||||||||||||||||
TA Managed Risk - Growth ETF Initial Class | 366,208.974 | 3,919,654 | 4,042,947 | 9 | 4,042,956 | 234,232 | 17.034304 | 18.912131 | ||||||||||||||||||||||||
TA Morgan Stanley Capital Growth Initial Class | 5,770,175.289 | 100,255,943 | 106,517,436 | (43 | ) | 106,517,393 | 2,574,775 | 32.569213 | 54.956742 | |||||||||||||||||||||||
TA Multi-Managed Balanced Initial Class | 8,081,176.146 | 105,541,298 | 125,581,477 | (81 | ) | 125,581,396 | 4,222,210 | 20.364593 | 32.263441 | |||||||||||||||||||||||
TA PIMCO Tactical - Balanced Initial Class | 486,448.986 | 5,754,339 | 6,138,986 | (17 | ) | 6,138,969 | 402,997 | 14.505327 | 17.002916 | |||||||||||||||||||||||
TA PIMCO Tactical - Conservative Initial Class | 856,504.865 | 9,800,841 | 10,552,140 | (19 | ) | 10,552,121 | 743,974 | 13.434882 | 16.044951 | |||||||||||||||||||||||
TA PIMCO Tactical - Growth Initial Class | 998,496.739 | 11,651,660 | 12,581,059 | (16 | ) | 12,581,043 | 853,922 | 13.802378 | 16.935124 | |||||||||||||||||||||||
TA PIMCO Total Return Initial Class | 1,785,395.508 | 20,760,275 | 20,996,251 | (21 | ) | 20,996,230 | 1,309,198 | 13.003080 | 19.011683 | |||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Conservative Initial Class | 406,846.768 | 4,402,829 | 4,430,561 | (11 | ) | 4,430,550 | 324,549 | 12.728711 | 14.702743 | |||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Initial Class | 215,767.143 | 2,478,014 | 2,518,003 | (9 | ) | 2,517,994 | 180,588 | 13.054065 | 14.506647 | |||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Growth Initial Class | 2,343,707.336 | 26,464,914 | 27,046,383 | (30 | ) | 27,046,353 | 1,882,826 | 13.362750 | 16.174145 | |||||||||||||||||||||||
TA Small/Mid Cap Value Initial Class | 6,602,867.362 | 130,642,379 | 128,821,942 | (26 | ) | 128,821,916 | 3,983,695 | 22.231582 | 46.530740 | |||||||||||||||||||||||
TA T. Rowe Price Small Cap Initial Class | 3,642,296.035 | 56,149,640 | 59,806,501 | (36 | ) | 59,806,465 | 1,661,544 | 27.931533 | 46.901378 | |||||||||||||||||||||||
TA WMC US Growth Initial Class | 36,297,174.737 | 952,328,438 | 1,246,807,952 | (195 | ) | 1,246,807,757 | 30,981,983 | 26.708542 | 43.039369 |
See accompanying notes. | 3 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
AB Balanced Wealth Strategy Class B Shares |
Access VP High Yield | Fidelity® VIP Contrafund® Service Class 2 |
Fidelity® VIP Equity-Income Service Class 2 |
Fidelity® VIP Growth Opportunities Service Class 2 |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 2,657,289 | $ | 3,242,904 | $ | 22,638,242 | $ | 11,550,024 | $ | 8,736,075 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
41,858 | 102,071 | 98,582 | 218,490 | 8,496 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
20,439 | 29,674 | 144,341 | 70,108 | 60,687 | |||||||||||||||
Net Investment Income (Loss) |
21,419 | 72,397 | (45,759 | ) | 148,382 | (52,191 | ) | |||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
187,325 | 70,928 | 1,996,160 | 521,138 | 543,518 | |||||||||||||||
Realized Gain (Loss) on Investments |
(38,169 | ) | (232,791 | ) | 595,072 | (18,483 | ) | 316,403 | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
149,156 | (161,863 | ) | 2,591,232 | 502,655 | 859,921 | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
|
(342,828 |
) |
34,838 | (4,047,233 | ) | (1,604,512 | ) | 178,273 | |||||||||||
Net Gain (Loss) on Investment |
(193,672 | ) | (127,025 | ) | (1,456,001 | ) | (1,101,857 | ) | 1,038,194 | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(172,253 | ) | (54,628 | ) | (1,501,760 | ) | (953,475 | ) | 986,003 | |||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(250,327 | ) | 115,833 | (1,381,590 | ) | (1,036,203 | ) | (189,336 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
(422,580 | ) | 61,205 | (2,883,350 | ) | (1,989,678 | ) | 796,667 | ||||||||||||
Net Assets as of December 31, 2018: |
$ | 2,234,709 | $ | 3,304,109 | $ | 19,754,892 | $ | 9,560,346 | $ | 9,532,742 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
54,083 | 200,492 | 48,729 | 189,292 | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
18,149 | 28,449 | 139,740 | 65,837 | 74,664 | |||||||||||||||
Net Investment Income (Loss) |
35,934 | 172,043 | (91,011 | ) | 123,455 | (74,664 | ) | |||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
280,567 | - | 2,578,194 | 689,944 | 963,293 | |||||||||||||||
Realized Gain (Loss) on Investments |
(60,537 | ) | 68,461 | (119,866 | ) | (86,054 | ) | 580,245 | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
220,030 | 68,461 | 2,458,328 | 603,890 | 1,543,538 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
115,879 | 203,232 | 3,475,822 | 1,659,938 | 2,420,324 | |||||||||||||||
Net Gain (Loss) on Investment |
335,909 | 271,693 | 5,934,150 | 2,263,828 | 3,963,862 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
371,843 | 443,736 | 5,843,139 | 2,387,283 | 3,889,198 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(196,612 | ) | 33,932 | (1,376,835 | ) | (973,465 | ) | 757,826 | ||||||||||||
Total Increase (Decrease) in Net Assets |
175,231 | 477,668 | 4,466,304 | 1,413,818 | 4,647,024 | |||||||||||||||
Net Assets as of December 31, 2019: |
$ | 2,409,940 | $ | 3,781,777 | $ | 24,221,196 | $ | 10,974,164 | $ | 14,179,766 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
4 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
Fidelity® VIP Index 500 Service Class 2 |
Franklin Allocation Class 4 Shares |
ProFund VP Asia 30 | ProFund VP Basic Materials | ProFund VP Bull | ||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 47,478,979 | $ | 2,494,958 | $ | 8,723,348 | $ | 4,507,974 | $ | 4,665,839 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
782,925 | 64,996 | 23,462 | 13,873 | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
356,658 | 18,844 | 45,145 | 25,846 | 31,914 | |||||||||||||||
Net Investment Income (Loss) |
426,267 | 46,152 | (21,683 | ) | (11,973 | ) | (31,914 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
235,484 | 53,193 | - | - | 459,494 | |||||||||||||||
Realized Gain (Loss) on Investments |
2,875,293 | (34,880 | ) | 736,678 | 364,463 | 172,675 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
3,110,777 | 18,313 | 736,678 | 364,463 | 632,169 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(6,209,348 | ) | (299,647 | ) | (1,535,794 | ) | (1,025,244 | ) | (858,537 | ) | ||||||||||
Net Gain (Loss) on Investment |
(3,098,571 | ) | (281,334 | ) | (799,116 | ) | (660,781 | ) | (226,368 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(2,672,304 | ) | (235,182 | ) | (820,799 | ) | (672,754 | ) | (258,282 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
1,084,255 | (257,609 | ) | (4,198,274 | ) | (1,330,049 | ) | (1,273,222 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
(1,588,049 | ) | (492,791 | ) | (5,019,073 | ) | (2,002,803 | ) | (1,531,504 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 45,890,930 | $ | 2,002,167 | $ | 3,704,275 | $ | 2,505,171 | $ | 3,134,335 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
926,928 | 71,810 | 9,986 | 9,134 | 12,120 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
360,784 | 16,316 | 36,323 | 17,236 | 27,065 | |||||||||||||||
Net Investment Income (Loss) |
566,144 | 55,494 | (26,337 | ) | (8,102 | ) | (14,945 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
763,322 | 138,149 | - | 79,821 | 78,720 | |||||||||||||||
Realized Gain (Loss) on Investments |
3,852,749 | (37,056 | ) | (75,392 | ) | (52,256 | ) | (43,338 | ) | |||||||||||
Net Realized Capital Gains (Losses) on Investments |
4,616,071 | 101,093 | (75,392 | ) | 27,565 | 35,382 | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
8,013,397 | 207,382 | 1,082,320 | 398,603 | 824,754 | |||||||||||||||
Net Gain (Loss) on Investment |
12,629,468 | 308,475 | 1,006,928 | 426,168 | 860,136 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
13,195,612 | 363,969 | 980,591 | 418,066 | 845,191 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(983,061 | ) | (148,003 | ) | 3,629,736 | (197,459 | ) | 875,966 | ||||||||||||
Total Increase (Decrease) in Net Assets |
12,212,551 | 215,966 | 4,610,327 | 220,607 | 1,721,157 | |||||||||||||||
Net Assets as of December 31, 2019: |
$ | 58,103,481 | $ | 2,218,133 | $ | 8,314,602 | $ | 2,725,778 | $ | 4,855,492 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
5 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Consumer Services |
ProFund VP Emerging Markets |
ProFund VP Europe 30 | ProFund VP Falling U.S. Dollar | ProFund VP Financials | ||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 3,954,853 | $ | 10,163,614 | $ | 1,554,182 | $ | 269,359 | $ | 5,425,492 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
- | 16,887 | 35,169 | - | 19,265 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
32,492 | 57,147 | 10,550 | 2,797 | 36,819 | |||||||||||||||
Net Investment Income (Loss) |
(32,492 | ) | (40,260 | ) | 24,619 | (2,797 | ) | (17,554 | ) | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
226,312 | - | - | 35,034 | - | |||||||||||||||
Realized Gain (Loss) on Investments |
254,044 | 1,168,229 | 12,644 | (60,450 | ) | 538,117 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
480,356 | 1,168,229 | 12,644 | (25,416 | ) | 538,117 | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(485,454 | ) | (2,105,352 | ) | (222,499 | ) | (12,562 | ) | (1,033,897 | ) | ||||||||||
Net Gain (Loss) on Investment |
(5,098 | ) | (937,123 | ) | (209,855 | ) | (37,978 | ) | (495,780 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(37,590 | ) | (977,383 | ) | (185,236 | ) | (40,775 | ) | (513,334 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
259,879 | (3,493,424 | ) | (325,859 | ) | 20,722 | (843,106 | ) | ||||||||||||
Total Increase (Decrease) in Net Assets |
222,289 | (4,470,807 | ) | (511,095 | ) | (20,053 | ) | (1,356,440 | ) | |||||||||||
Net Assets as of December 31, 2018: |
$ | 4,177,142 | $ | 5,692,807 | $ | 1,043,087 | $ | 249,306 | $ | 4,069,052 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
- | 30,632 | 27,124 | 90 | 22,358 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
32,688 | 52,355 | 7,908 | 1,298 | 29,712 | |||||||||||||||
Net Investment Income (Loss) |
(32,688 | ) | (21,723 | ) | 19,216 | (1,208 | ) | (7,354 | ) | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
203,683 | - | - | - | 210,050 | |||||||||||||||
Realized Gain (Loss) on Investments |
408,063 | (370,650 | ) | (12,148 | ) | (8,239 | ) | 171,886 | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
611,746 | (370,650 | ) | (12,148 | ) | (8,239 | ) | 381,936 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
378,940 | 1,627,209 | 205,915 | 3,936 | 748,194 | |||||||||||||||
Net Gain (Loss) on Investment |
990,686 | 1,256,559 | 193,767 | (4,303 | ) | 1,130,130 | ||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
957,998 | 1,234,836 | 212,983 | (5,511 | ) | 1,122,776 | ||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(449,647 | ) | 3,615,411 | (317,767 | ) | (51,600 | ) | (475,808 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
508,351 | 4,850,247 | (104,784 | ) | (57,111 | ) | 646,968 | |||||||||||||
Net Assets as of December 31, 2019: |
$ | 4,685,493 | $ | 10,543,054 | $ | 938,303 | $ | 192,195 | $ | 4,716,020 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
6 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Government Money Market |
ProFund VP International | ProFund VP Japan | ProFund VP Mid-Cap | ProFund VP NASDAQ-100 | ||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 9,769,539 | $ | 4,191,633 | $ | 926,938 | $ | 3,998,852 | $ | 14,214,808 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
53,054 | - | - | - | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
87,871 | 15,088 | 6,721 | 29,224 | 129,532 | |||||||||||||||
Net Investment Income (Loss) |
(34,817 | ) | (15,088 | ) | (6,721 | ) | (29,224 | ) | (129,532 | ) | ||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 294,899 | - | 939,779 | 1,477,404 | |||||||||||||||
Realized Gain (Loss) on Investments |
- | 238,880 | 66,229 | (721,676 | ) | 2,380,321 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
- | 533,779 | 66,229 | 218,103 | 3,857,725 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
- | (806,346 | ) | (157,751 | ) | (740,167 | ) | (4,070,260 | ) | |||||||||||
Net Gain (Loss) on Investment |
- | (272,567 | ) | (91,522 | ) | (522,064 | ) | (212,535 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(34,817 | ) | (287,655 | ) | (98,243 | ) | (551,288 | ) | (342,067 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
9,366,091 | (1,766,359 | ) | (62,631 | ) | (98,464 | ) | 475,214 | ||||||||||||
Total Increase (Decrease) in Net Assets |
9,331,274 | (2,054,014 | ) | (160,874 | ) | (649,752 | ) | 133,147 | ||||||||||||
Net Assets as of December 31, 2018: |
$ | 19,100,813 | $ | 2,137,619 | $ | 766,064 | $ | 3,349,100 | $ | 14,347,955 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
104,686 | 5,935 | 1,007 | 6,492 | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
78,136 | 17,402 | 5,949 | 26,364 | 127,729 | |||||||||||||||
Net Investment Income (Loss) |
26,550 | (11,467 | ) | (4,942 | ) | (19,872 | ) | (127,729 | ) | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | - | - | 127,114 | |||||||||||||||
Realized Gain (Loss) on Investments |
- | (105,511 | ) | 58,526 | (547,152 | ) | 1,054,090 | |||||||||||||
Net Realized Capital Gains (Losses) on Investments |
- | (105,511 | ) | 58,526 | (547,152 | ) | 1,181,204 | |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
- | 492,496 | 89,001 | 1,225,600 | 4,628,461 | |||||||||||||||
Net Gain (Loss) on Investment |
- | 386,985 | 147,527 | 678,448 | 5,809,665 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
26,550 | 375,518 | 142,585 | 658,576 | 5,681,936 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(7,633,506 | ) | (199,011 | ) | (49,145 | ) | (732,363 | ) | 1,156,614 | |||||||||||
Total Increase (Decrease) in Net Assets |
(7,606,956 | ) | 176,507 | 93,440 | (73,787 | ) | 6,838,550 | |||||||||||||
Net Assets as of December 31, 2019: |
$ | 11,493,857 | $ | 2,314,126 | $ | 859,504 | $ | 3,275,313 | $ | 21,186,505 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
7 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Oil & Gas | ProFund VP Pharmaceuticals | ProFund VP Precious Metals | ProFund VP Short Emerging Markets |
ProFund VP Short International |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 8,081,643 | $ | 5,994,460 | $ | 5,439,646 | $ | 288,783 | $ | 278,713 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
131,184 | 62,574 | - | - | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
57,846 | 44,931 | 34,520 | 3,593 | 2,326 | |||||||||||||||
Net Investment Income (Loss) |
73,338 | 17,643 | (34,520 | ) | (3,593 | ) | (2,326 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 137,149 | - | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
263,154 | (86,768 | ) | (669,205 | ) | (46,005 | ) | (55,701 | ) | |||||||||||
Net Realized Capital Gains (Losses) on Investments |
263,154 | 50,381 | (669,205 | ) | (46,005 | ) | (55,701 | ) | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(1,837,193 | ) | (484,348 | ) | (39,165 | ) | 119,812 | 102,787 | ||||||||||||
Net Gain (Loss) on Investment |
(1,574,039 | ) | (433,967 | ) | (708,370 | ) | 73,807 | 47,086 | ||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(1,500,701 | ) | (416,324 | ) | (742,890 | ) | 70,214 | 44,760 | ||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(566,955 | ) | (379,052 | ) | (122,686 | ) | 385,825 | 27,559 | ||||||||||||
Total Increase (Decrease) in Net Assets |
(2,067,656 | ) | (795,376 | ) | (865,576 | ) | 456,039 | 72,319 | ||||||||||||
Net Assets as of December 31, 2018: |
$ | 6,013,987 | $ | 5,199,084 | $ | 4,574,070 | $ | 744,822 | $ | 351,032 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
81,803 | 42,914 | 2,051 | 2,415 | 1,645 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
40,611 | 37,397 | 42,888 | 3,679 | 2,257 | |||||||||||||||
Net Investment Income (Loss) |
41,192 | 5,517 | (40,837 | ) | (1,264 | ) | (612 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
193,938 | 625,421 | - | 39,791 | 8,031 | |||||||||||||||
Realized Gain (Loss) on Investments |
(662,789 | ) | (224,564 | ) | 361,001 | (68,969 | ) | 1,669 | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
(468,851 | ) | 400,857 | 361,001 | (29,178 | ) | 9,700 | |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
910,051 | 206,336 | 1,890,385 | (135,617 | ) | (73,037 | ) | |||||||||||||
Net Gain (Loss) on Investment |
441,200 | 607,193 | 2,251,386 | (164,795 | ) | (63,337 | ) | |||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
482,392 | 612,710 | 2,210,549 | (166,059 | ) | (63,949 | ) | |||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(1,080,596 | ) | (794,458 | ) | 979,175 | (226,410 | ) | 6,019 | ||||||||||||
Total Increase (Decrease) in Net Assets |
(598,204 | ) | (181,748 | ) | 3,189,724 | (392,469 | ) | (57,930 | ) | |||||||||||
Net Assets as of December 31, 2019: |
$ | 5,415,783 | $ | 5,017,336 | $ | 7,763,794 | $ | 352,353 | $ | 293,102 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
8 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Short NASDAQ- 100 |
ProFund VP Short Small-Cap | ProFund VP Small-Cap | ProFund VP Small-Cap Value | ProFund VP Telecommunications | ||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 870,919 | $ | 667,558 | $ | 3,732,484 | $ | 3,418,360 | $ | 1,069,305 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
- | - | - | - | 45,710 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
7,059 | 3,733 | 28,882 | 26,396 | 6,240 | |||||||||||||||
Net Investment Income (Loss) |
(7,059 | ) | (3,733 | ) | (28,882 | ) | (26,396 | ) | 39,470 | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | 247,908 | 271,521 | - | |||||||||||||||
Realized Gain (Loss) on Investments |
(134,600 | ) | (56,458 | ) | (348,517 | ) | (195,156 | ) | (91,698 | ) | ||||||||||
Net Realized Capital Gains (Losses) on Investments |
(134,600 | ) | (56,458 | ) | (100,609 | ) | 76,365 | (91,698 | ) | |||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
155,449 | 100,447 | (528,822 | ) | (654,579 | ) | (89,614 | ) | ||||||||||||
Net Gain (Loss) on Investment |
20,849 | 43,989 | (629,431 | ) | (578,214 | ) | (181,312 | ) | ||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
13,790 | 40,256 | (658,313 | ) | (604,610 | ) | (141,842 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
2,101,860 | (281,235 | ) | (831,016 | ) | (1,165,455 | ) | (259,303 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
2,115,650 | (240,979 | ) | (1,489,329 | ) | (1,770,065 | ) | (401,145 | ) | |||||||||||
Net Assets as of December 31, 2018: |
$ | 2,986,569 | $ | 426,579 | $ | 2,243,155 | $ | 1,648,295 | $ | 668,160 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
946 | 468 | - | - | 23,551 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
7,080 | 3,436 | 16,495 | 13,214 | 5,161 | |||||||||||||||
Net Investment Income (Loss) |
(6,134 | ) | (2,968 | ) | (16,495 | ) | (13,214 | ) | 18,390 | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 41,575 | - | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
(127,373 | ) | (49,225 | ) | (106,362 | ) | (68,532 | ) | (66,292 | ) | ||||||||||
Net Realized Capital Gains (Losses) on Investments |
(127,373 | ) | (7,650 | ) | (106,362 | ) | (68,532 | ) | (66,292 | ) | ||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(315,340 | ) | (96,464 | ) | 590,014 | 436,537 | 142,444 | |||||||||||||
Net Gain (Loss) on Investment |
(442,713 | ) | (104,114 | ) | 483,652 | 368,005 | 76,152 | |||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(448,847 | ) | (107,082 | ) | 467,157 | 354,791 | 94,542 | |||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
1,080,537 | 193,787 | 1,728,106 | 2,052,654 | (48,290 | ) | ||||||||||||||
Total Increase (Decrease) in Net Assets |
631,690 | 86,705 | 2,195,263 | 2,407,445 | 46,252 | |||||||||||||||
Net Assets as of December 31, 2019: |
$ | 3,618,259 | $ | 513,284 | $ | 4,438,418 | $ | 4,055,740 | $ | 714,412 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
9 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP U.S. Government Plus |
ProFund VP UltraNASDAQ- 100 |
ProFund VP UltraSmall-Cap | ProFund VP Utilities | TA Aegon High Yield Bond Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 3,673,437 | $ | 24,476,044 | $ | 8,487,733 | $ | 4,365,893 | $ | 19,145,546 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
27,542 | - | - | 81,824 | 1,032,985 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
21,764 | 206,170 | 61,202 | 30,361 | 131,325 | |||||||||||||||
Net Investment Income (Loss) |
5,778 | (206,170 | ) | (61,202 | ) | 51,463 | 901,660 | |||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 10,072,196 | 2,067,083 | 123,343 | - | |||||||||||||||
Realized Gain (Loss) on Investments |
(269,602 | ) | 3,975,914 | 356,167 | (112,925 | ) | 256,269 | |||||||||||||
Net Realized Capital Gains (Losses) on Investments |
(269,602 | ) | 14,048,110 | 2,423,250 | 10,418 | 256,269 | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(80,029 | ) | (17,982,428 | ) | (4,574,035 | ) | (7,669 | ) | (1,693,587 | ) | ||||||||||
Net Gain (Loss) on Investment |
(349,631 | ) | (3,934,318 | ) | (2,150,785 | ) | 2,749 | (1,437,318 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(343,853 | ) | (4,140,488 | ) | (2,211,987 | ) | 54,212 | (535,658 | ) | |||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(97,589 | ) | 2,789,384 | (300,605 | ) | 258,899 | (2,235,080 | ) | ||||||||||||
Total Increase (Decrease) in Net Assets |
(441,442 | ) | (1,351,104 | ) | (2,512,592 | ) | 313,111 | (2,770,738 | ) | |||||||||||
Net Assets as of December 31, 2018: |
$ | 3,231,995 | $ | 23,124,940 | $ | 5,975,141 | $ | 4,679,004 | $ | 16,374,808 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
34,858 | - | - | 78,533 | 1,082,025 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
29,702 | 197,372 | 50,733 | 34,884 | 124,366 | |||||||||||||||
Net Investment Income (Loss) |
5,156 | (197,372 | ) | (50,733 | ) | 43,649 | 957,659 | |||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | - | 294,870 | - | |||||||||||||||
Realized Gain (Loss) on Investments |
307,547 | (2,905,340 | ) | (1,698,223 | ) | 241,650 | (64,182 | ) | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
307,547 | (2,905,340 | ) | (1,698,223 | ) | 536,520 | (64,182 | ) | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
239,285 | 19,257,595 | 4,360,120 | 387,990 | 1,249,819 | |||||||||||||||
Net Gain (Loss) on Investment |
546,832 | 16,352,255 | 2,661,897 | 924,510 | 1,185,637 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
551,988 | 16,154,883 | 2,611,164 | 968,159 | 2,143,296 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
510,598 | (3,472,224 | ) | (653,925 | ) | 659,261 | (457,840 | ) | ||||||||||||
Total Increase (Decrease) in Net Assets |
1,062,586 | 12,682,659 | 1,957,239 | 1,627,420 | 1,685,456 | |||||||||||||||
Net Assets as of December 31, 2019: |
$ | 4,294,581 | $ | 35,807,599 | $ | 7,932,380 | $ | 6,306,424 | $ | 18,060,264 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
10 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA Aegon U.S. Government Securities Initial Class |
TA Barrow Hanley Dividend Focused Initial Class |
TA BlackRock Global Allocation Initial Class |
TA BlackRock Global Real Estate Securities Initial Class |
TA BlackRock Government Money Market Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 8,651,009 | $ | 74,360,907 | $ | 6,348,837 | $ | 43,179,257 | $ | 28,500,890 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
180,106 | 1,505,245 | 134,142 | 3,399,064 | 579,144 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
43,502 | 526,294 | 45,630 | 288,542 | 224,442 | |||||||||||||||
Net Investment Income (Loss) |
136,604 | 978,951 | 88,512 | 3,110,522 | 354,702 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | 104,918 | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
(802,763 | ) | 4,577,990 | 29,507 | 220,704 | - | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
(802,763 | ) | 4,577,990 | 134,425 | 220,704 | - | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
608,476 | (14,309,123 | ) | (712,090 | ) | (7,721,329 | ) | - | ||||||||||||
Net Gain (Loss) on Investment |
(194,287 | ) | (9,731,133 | ) | (577,665 | ) | (7,500,625 | ) | - | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(57,683 | ) | (8,752,182 | ) | (489,153 | ) | (4,390,103 | ) | 354,702 | |||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(2,147,484 | ) | (3,075,808 | ) | (405,088 | ) | (3,765,220 | ) | 7,599,078 | |||||||||||
Total Increase (Decrease) in Net Assets |
(2,205,167 | ) | (11,827,990 | ) | (894,241 | ) | (8,155,323 | ) | 7,953,780 | |||||||||||
Net Assets as of December 31, 2018: |
$ | 6,445,842 | $ | 62,532,917 | $ | 5,454,596 | $ | 35,023,934 | $ | 36,454,670 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
133,355 | 1,602,952 | 107,730 | 357,326 | 623,424 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
47,270 | 472,508 | 40,659 | 274,103 | 223,470 | |||||||||||||||
Net Investment Income (Loss) |
86,085 | 1,130,444 | 67,071 | 83,223 | 399,954 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 9,849,243 | 362,825 | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
37,402 | 3,934,962 | 63,318 | 249,763 | - | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
37,402 | 13,784,205 | 426,143 | 249,763 | - | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
284,002 | (1,118,597 | ) | 408,183 | 8,045,090 | - | ||||||||||||||
Net Gain (Loss) on Investment |
321,404 | 12,665,608 | 834,326 | 8,294,853 | - | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
407,489 | 13,796,052 | 901,397 | 8,378,076 | 399,954 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(479,473 | ) | (7,652,004 | ) | (576,619 | ) | (2,391,165 | ) | (6,637,000 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(71,984 | ) | 6,144,048 | 324,778 | 5,986,911 | (6,237,046 | ) | |||||||||||||
Net Assets as of December 31, 2019: |
$ | 6,373,858 | $ | 68,676,965 | $ | 5,779,374 | $ | 41,010,845 | $ | 30,217,624 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
11 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA BlackRock iShares Edge 40 Initial Class |
TA BlackRock Tactical Allocation Initial Class |
TA Greystone International Growth Initial Class |
TA Janus Balanced Initial Class | TA Janus Mid-Cap Growth Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 3,013,996 | $ | 27,366,726 | $ | 43,373,061 | $ | 11,305,225 | $ | 337,913,344 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
54,141 | 532,904 | 454,303 | 184,536 | 203,600 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
19,664 | 198,532 | 250,680 | 82,479 | 2,707,090 | |||||||||||||||
Net Investment Income (Loss) |
34,477 | 334,372 | 203,623 | 102,057 | (2,503,490 | ) | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 1,899,907 | 193,137 | 263,789 | 15,103,525 | |||||||||||||||
Realized Gain (Loss) on Investments |
63,972 | (730,130 | ) | 1,746,438 | 742,818 | 8,546,283 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
63,972 | 1,169,777 | 1,939,575 | 1,006,607 | 23,649,808 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(237,883 | ) | (2,753,038 | ) | (9,167,456 | ) | (1,165,826 | ) | (26,066,223 | ) | ||||||||||
Net Gain (Loss) on Investment |
(173,911 | ) | (1,583,261 | ) | (7,227,881 | ) | (159,219 | ) | (2,416,415 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(139,434 | ) | (1,248,889 | ) | (7,024,258 | ) | (57,162 | ) | (4,919,905 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(254,046 | ) | (2,083,486 | ) | (5,280,812 | ) | (679,930 | ) | (20,820,941 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(393,480 | ) | (3,332,375 | ) | (12,305,070 | ) | (737,092 | ) | (25,740,846 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 2,620,516 | $ | 24,034,351 | $ | 31,067,991 | $ | 10,568,133 | $ | 312,172,498 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
62,230 | 1,026,884 | 552,871 | 192,619 | 277,961 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
18,262 | 180,824 | 215,855 | 85,286 | 2,819,135 | |||||||||||||||
Net Investment Income (Loss) |
43,968 | 846,060 | 337,016 | 107,333 | (2,541,174 | ) | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
368,111 | 1,925,279 | 5,551,202 | 539,347 | 20,294,136 | |||||||||||||||
Realized Gain (Loss) on Investments |
18,757 | (940,190 | ) | 665,919 | 705,791 | 9,014,826 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
386,868 | 985,089 | 6,217,121 | 1,245,138 | 29,308,962 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(56,653 | ) | 1,982,157 | 1,583,452 | 931,716 | 82,711,840 | ||||||||||||||
Net Gain (Loss) on Investment |
330,215 | 2,967,246 | 7,800,573 | 2,176,854 | 112,020,802 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
374,183 | 3,813,306 | 8,137,589 | 2,284,187 | 109,479,628 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(120,384 | ) | (2,363,826 | ) | (2,780,442 | ) | 252,705 | (25,920,682 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
253,799 | 1,449,480 | 5,357,147 | 2,536,892 | 83,558,946 | |||||||||||||||
Net Assets as of December 31, 2019: |
$ | 2,874,315 | $ | 25,483,831 | $ | 36,425,138 | $ | 13,105,025 | $ | 395,731,444 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
12 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA JPMorgan Asset Allocation - Conservative Initial Class |
TA JPMorgan Asset Allocation - Growth Initial Class |
TA JPMorgan Asset Allocation - Moderate Initial Class |
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
TA JPMorgan Core Bond Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 33,444,895 | $ | 312,891,018 | $ | 76,977,415 | $ | 304,126,820 | $ | 35,983,696 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
576,359 | 5,779,464 | 1,290,818 | 5,518,848 | 1,108,016 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
232,727 | 2,223,931 | 540,424 | 2,124,349 | 263,192 | |||||||||||||||
Net Investment Income (Loss) |
343,632 | 3,555,533 | 750,394 | 3,394,499 | 844,824 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
1,301,143 | 20,126,498 | 3,511,003 | 15,308,673 | - | |||||||||||||||
Realized Gain (Loss) on Investments |
399,253 | 15,477,133 | 3,357,022 | 9,498,201 | (116,592 | ) | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
1,700,396 | 35,603,631 | 6,868,025 | 24,806,874 | (116,592 | ) | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(3,326,217 | ) | (71,809,514 | ) | (11,775,514 | ) | (50,420,119 | ) | (990,772 | ) | ||||||||||
Net Gain (Loss) on Investment |
(1,625,821 | ) | (36,205,883 | ) | (4,907,489 | ) | (25,613,245 | ) | (1,107,364 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(1,282,189 | ) | (32,650,350 | ) | (4,157,095 | ) | (22,218,746 | ) | (262,540 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(8,910,477 | ) | (16,432,893 | ) | (5,713,525 | ) | (16,906,164 | ) | (1,298,136 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(10,192,666 | ) | (49,083,243 | ) | (9,870,620 | ) | (39,124,910 | ) | (1,560,676 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 23,252,229 | $ | 263,807,775 | $ | 67,106,795 | $ | 265,001,910 | $ | 34,423,020 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
610,824 | 5,069,967 | 1,540,241 | 6,205,604 | 912,798 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
164,162 | 1,882,462 | 446,171 | 1,769,877 | 261,566 | |||||||||||||||
Net Investment Income (Loss) |
446,662 | 3,187,505 | 1,094,070 | 4,435,727 | 651,232 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
865,822 | 26,837,389 | 3,991,806 | 23,886,756 | - | |||||||||||||||
Realized Gain (Loss) on Investments |
(158,591 | ) | 10,365,964 | 1,501,352 | 2,841,007 | 175,421 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
707,231 | 37,203,353 | 5,493,158 | 26,727,763 | 175,421 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
1,796,107 | 24,776,221 | 3,659,556 | 18,579,810 | 1,798,590 | |||||||||||||||
Net Gain (Loss) on Investment |
2,503,338 | 61,979,574 | 9,152,714 | 45,307,573 | 1,974,011 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
2,950,000 | 65,167,079 | 10,246,784 | 49,743,300 | 2,625,243 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(1,542,605 | ) | (14,992,350 | ) | (3,870,929 | ) | (14,975,384 | ) | (3,047,617 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
1,407,395 | 50,174,729 | 6,375,855 | 34,767,916 | (422,374 | ) | ||||||||||||||
Net Assets as of December 31, 2019: |
$ | 24,659,624 | $ | 313,982,504 | $ | 73,482,650 | $ | 299,769,826 | $ | 34,000,646 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
13 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA JPMorgan Enhanced Index Initial Class |
TA JPMorgan International Moderate Growth Initial Class |
TA JPMorgan Mid Cap Value Initial Class |
TA JPMorgan Tactical Allocation Initial Class |
TA Managed Risk - Balanced ETF Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 10,203,033 | $ | 12,670,600 | $ | 7,157,522 | $ | 43,708,710 | $ | 1,980,672 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
108,145 | 282,699 | 58,521 | 943,429 | 33,085 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
77,616 | 94,435 | 49,253 | 304,938 | 14,173 | |||||||||||||||
Net Investment Income (Loss) |
30,529 | 188,264 | 9,268 | 638,491 | 18,912 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
423,676 | 118,864 | 152,051 | 1,217,668 | - | |||||||||||||||
Realized Gain (Loss) on Investments |
955,922 | 642,246 | (8,209 | ) | 388,169 | 33,900 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
1,379,598 | 761,110 | 143,842 | 1,605,837 | 33,900 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(2,176,415 | ) | (2,437,902 | ) | (973,394 | ) | (3,796,233 | ) | (149,667 | ) | ||||||||||
Net Gain (Loss) on Investment |
(796,817 | ) | (1,676,792 | ) | (829,552 | ) | (2,190,396 | ) | (115,767 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(766,288 | ) | (1,488,528 | ) | (820,284 | ) | (1,551,905 | ) | (96,855 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(732,978 | ) | (979,217 | ) | (577,441 | ) | 137,051 | (252,668 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
(1,499,266 | ) | (2,467,745 | ) | (1,397,725 | ) | (1,414,854 | ) | (349,523 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 8,703,767 | $ | 10,202,855 | $ | 5,759,797 | $ | 42,293,856 | $ | 1,631,149 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
116,978 | 251,028 | 89,010 | 1,007,811 | 59,946 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
68,196 | 80,846 | 45,835 | 292,811 | 18,412 | |||||||||||||||
Net Investment Income (Loss) |
48,782 | 170,182 | 43,175 | 715,000 | 41,534 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
1,149,521 | 881,789 | 576,227 | 535,536 | 70,348 | |||||||||||||||
Realized Gain (Loss) on Investments |
331,401 | 118,333 | (60,248 | ) | 861,577 | 28,870 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
1,480,922 | 1,000,122 | 515,979 | 1,397,113 | 99,218 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
1,049,319 | 509,288 | 857,744 | 2,490,040 | 178,573 | |||||||||||||||
Net Gain (Loss) on Investment |
2,530,241 | 1,509,410 | 1,373,723 | 3,887,153 | 277,791 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
2,579,023 | 1,679,592 | 1,416,898 | 4,602,153 | 319,325 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(337,881 | ) | (598,513 | ) | (530,508 | ) | (5,354,152 | ) | 1,045,655 | |||||||||||
Total Increase (Decrease) in Net Assets |
2,241,142 | 1,081,079 | 886,390 | (751,999 | ) | 1,364,980 | ||||||||||||||
Net Assets as of December 31, 2019: |
$ | 10,944,909 | $ | 11,283,934 | $ | 6,646,187 | $ | 41,541,857 | $ | 2,996,129 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
14 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA Managed Risk - Growth ETF Initial Class |
TA Morgan Stanley Capital Growth Initial Class |
TA Multi-Managed Balanced Initial Class |
TA PIMCO Tactical - Balanced Initial Class |
TA PIMCO Tactical - Conservative Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 3,522,359 | $ | 63,401,145 | $ | 124,785,035 | $ | 6,615,284 | $ | 9,721,335 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
60,723 | - | 1,720,133 | 216,972 | 339,796 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
25,045 | 501,964 | 969,618 | 46,052 | 71,432 | |||||||||||||||
Net Investment Income (Loss) |
35,678 | (501,964 | ) | 750,515 | 170,920 | 268,364 | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 13,013,554 | 4,711,635 | 458,395 | 595,760 | |||||||||||||||
Realized Gain (Loss) on Investments |
89,991 | 2,765,411 | 2,977,140 | 127,101 | 112,751 | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
89,991 | 15,778,965 | 7,688,775 | 585,496 | 708,511 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(389,625 | ) | (11,655,623 | ) | (13,561,982 | ) | (1,213,979 | ) | (1,525,364 | ) | ||||||||||
Net Gain (Loss) on Investment |
(299,634 | ) | 4,123,342 | (5,873,207 | ) | (628,483 | ) | (816,853 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(263,956 | ) | 3,621,378 | (5,122,692 | ) | (457,563 | ) | (548,489 | ) | |||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(69,211 | ) | (1,542,230 | ) | (8,559,072 | ) | (513,423 | ) | 341,084 | |||||||||||
Total Increase (Decrease) in Net Assets |
(333,167 | ) | 2,079,148 | (13,681,764 | ) | (970,986 | ) | (207,405 | ) | |||||||||||
Net Assets as of December 31, 2018: |
$ | 3,189,192 | $ | 65,480,293 | $ | 111,103,271 | $ | 5,644,298 | $ | 9,513,930 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
79,329 | - | 1,967,094 | 24,881 | 35,633 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
27,410 | 523,538 | 942,240 | 41,139 | 73,027 | |||||||||||||||
Net Investment Income (Loss) |
51,919 | (523,538 | ) | 1,024,854 | (16,258 | ) | (37,394 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
340,179 | 6,521,332 | 7,458,183 | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
117,019 | 2,583,408 | 2,855,819 | (5,799 | ) | 85,116 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
457,198 | 9,104,740 | 10,314,002 | (5,799 | ) | 85,116 | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
121,218 | 8,946,383 | 11,102,784 | 1,052,397 | 1,553,240 | |||||||||||||||
Net Gain (Loss) on Investment |
578,416 | 18,051,123 | 21,416,786 | 1,046,598 | 1,638,356 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
630,335 | 17,527,585 | 22,441,640 | 1,030,340 | 1,600,962 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
223,429 | 23,509,515 | (7,963,515 | ) | (535,669 | ) | (562,771 | ) | ||||||||||||
Total Increase (Decrease) in Net Assets |
853,764 | 41,037,100 | 14,478,125 | 494,671 | 1,038,191 | |||||||||||||||
Net Assets as of December 31, 2019: |
$ | 4,042,956 | $ | 106,517,393 | $ | 125,581,396 | $ | 6,138,969 | $ | 10,552,121 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
15 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA PIMCO Tactical - Growth Initial Class |
TA PIMCO Total Return Initial Class |
TA QS Investors Active Asset Allocation - Conservative Initial Class |
TA QS Investors Active Asset Allocation - Moderate Initial Class |
|||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | |||||||||||||
Net Assets as of December 31, 2017: |
$ | 13,146,326 | $ | 24,393,778 | $ | 4,174,813 | $ | 2,429,683 | ||||||||
Investment Income: |
||||||||||||||||
Reinvested Dividends |
412,354 | 553,437 | 80,427 | 41,784 | ||||||||||||
Investment Expense: |
||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
95,857 | 163,494 | 31,399 | 19,150 | ||||||||||||
Net Investment Income (Loss) |
316,497 | 389,943 | 49,028 | 22,634 | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||
Capital Gain Distributions |
1,235,692 | 109,121 | - | - | ||||||||||||
Realized Gain (Loss) on Investments |
269,348 | (166,422 | ) | 48,215 | 24,347 | |||||||||||
Net Realized Capital Gains (Losses) on Investments |
1,505,040 | (57,301 | ) | 48,215 | 24,347 | |||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(2,853,828 | ) | (682,106 | ) | (231,550 | ) | (156,957 | ) | ||||||||
Net Gain (Loss) on Investment |
(1,348,788 | ) | (739,407 | ) | (183,335 | ) | (132,610 | ) | ||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(1,032,291 | ) | (349,464 | ) | (134,307 | ) | (109,976 | ) | ||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(856,325 | ) | (2,948,706 | ) | 111,487 | (37,177 | ) | |||||||||
Total Increase (Decrease) in Net Assets |
(1,888,616 | ) | (3,298,170 | ) | (22,820 | ) | (147,153 | ) | ||||||||
Net Assets as of December 31, 2018: |
$ | 11,257,710 | $ | 21,095,608 | $ | 4,151,993 | $ | 2,282,530 | ||||||||
Investment Income: |
||||||||||||||||
Reinvested Dividends |
- | 526,145 | 98,697 | 50,864 | ||||||||||||
Investment Expense: |
||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
86,377 | 153,015 | 31,047 | 18,319 | ||||||||||||
Net Investment Income (Loss) |
(86,377 | ) | 373,130 | 67,650 | 32,545 | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||
Capital Gain Distributions |
- | - | 327,617 | 167,456 | ||||||||||||
Realized Gain (Loss) on Investments |
157,658 | 375,260 | 3,519 | 10,462 | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
157,658 | 375,260 | 331,136 | 177,918 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
2,231,514 | 630,539 | 39,149 | 31,279 | ||||||||||||
Net Gain (Loss) on Investment |
2,389,172 | 1,005,799 | 370,285 | 209,197 | ||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
2,302,795 | 1,378,929 | 437,935 | 241,742 | ||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(979,462 | ) | (1,478,307 | ) | (159,378 | ) | (6,278 | ) | ||||||||
Total Increase (Decrease) in Net Assets |
1,323,333 | (99,378 | ) | 278,557 | 235,464 | |||||||||||
Net Assets as of December 31, 2019: |
$ | 12,581,043 | $ | 20,996,230 | $ | 4,430,550 | $ | 2,517,994 | ||||||||
See Accompanying Notes. (1) See Footnote 1 |
16 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA QS Investors Active Asset Allocation - Moderate Growth Initial Class |
TA Small/Mid Cap Value Initial Class | TA T. Rowe Price Small Cap Initial Class |
TA WMC US Growth Initial Class |
|||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | |||||||||||||
Net Assets as of December 31, 2017: |
$ | 30,221,332 | $ | 139,162,267 | $ | 57,593,105 | $ | 1,009,620,361 | ||||||||
Investment Income: |
||||||||||||||||
Reinvested Dividends |
447,891 | 1,198,851 | - | 5,138,239 | ||||||||||||
Investment Expense: |
||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
215,802 | 983,288 | 424,475 | 8,383,805 | ||||||||||||
Net Investment Income (Loss) |
232,089 | 215,563 | (424,475 | ) | (3,245,566 | ) | ||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||
Capital Gain Distributions |
- | 12,972,199 | 3,241,190 | 88,666,806 | ||||||||||||
Realized Gain (Loss) on Investments |
1,131,945 | 421,598 | 2,291,169 | 16,083,486 | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
1,131,945 | 13,393,797 | 5,532,359 | 104,750,292 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(3,187,579 | ) | (29,073,132 | ) | (8,672,509 | ) | (102,042,923 | ) | ||||||||
Net Gain (Loss) on Investment |
(2,055,634 | ) | (15,679,335 | ) | (3,140,150 | ) | 2,707,369 | |||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(1,823,545 | ) | (15,463,772 | ) | (3,564,625 | ) | (538,197 | ) | ||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(2,179,636 | ) | (10,627,062 | ) | (6,906,753 | ) | (65,153,576 | ) | ||||||||
Total Increase (Decrease) in Net Assets |
(4,003,181 | ) | (26,090,834 | ) | (10,471,378 | ) | (65,691,773 | ) | ||||||||
Net Assets as of December 31, 2018: |
$ | 26,218,151 | $ | 113,071,433 | $ | 47,121,727 | $ | 943,928,588 | ||||||||
Investment Income: |
||||||||||||||||
Reinvested Dividends |
524,197 | 1,205,324 | - | 1,467,441 | ||||||||||||
Investment Expense: |
||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
190,884 | 859,814 | 367,049 | 8,707,262 | ||||||||||||
Net Investment Income (Loss) |
333,313 | 345,510 | (367,049 | ) | (7,239,821 | ) | ||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||
Capital Gain Distributions |
1,773,079 | 9,600,856 | 6,131,130 | 95,562,429 | ||||||||||||
Realized Gain (Loss) on Investments |
934,450 | (1,989,612 | ) | 1,510,130 | 13,707,524 | |||||||||||
Net Realized Capital Gains (Losses) on Investments |
2,707,529 | 7,611,244 | 7,641,260 | 109,269,953 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(245,310 | ) | 18,684,298 | 7,262,258 | 257,141,749 | |||||||||||
Net Gain (Loss) on Investment |
2,462,219 | 26,295,542 | 14,903,518 | 366,411,702 | ||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
2,795,532 | 26,641,052 | 14,536,469 | 359,171,881 | ||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(1,967,330 | ) | (10,890,569 | ) | (1,851,731 | ) | (56,292,712 | ) | ||||||||
Total Increase (Decrease) in Net Assets |
828,202 | 15,750,483 | 12,684,738 | 302,879,169 | ||||||||||||
Net Assets as of December 31, 2019: |
$ | 27,046,353 | $ | 128,821,916 | $ | 59,806,465 | $ | 1,246,807,757 | ||||||||
See Accompanying Notes. (1) See Footnote 1 |
17 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
December 31, 2019
1. Organization
WRL Series Life Account (the Separate Account) is a segregated investment account of Transamerica Premier Life Insurance Company (TPLIC), an indirect wholly owned subsidiary of AEGON N.V., a holding company organized under the laws of the Netherlands.
The Separate Account is registered with the Securities and Exchange Commission as a Unit Investment Trust pursuant to provisions of the Investment Company Act of 1940. TPLIC and the Separate Account are regulated by the Securities and Exchange Commission. The assets and liabilities of the Separate Account are clearly identified and distinguished from TPLICs other assets and liabilities. The Separate Account consists of multiple investment subaccounts. Each subaccount invests exclusively in the corresponding portfolio of a Mutual Fund. Each Mutual Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended. Activity in these specified investment subaccounts is available to contract owners of WRL Financial Freedom Builder, WRL Freedom Elite, WRL Freedom Equity Protector, WRL Freedom Wealth Protector, WRL Freedom Elite Builder, WRL Freedom Elite Builder II, WRL Freedom Elite Advisor, WRL Freedom Excelerator, WRL SP Plus, and WRL For Life.
Subaccount Investment by Mutual Fund:
Subaccount |
Mutual Fund | |
AB Variable Products Series Fund |
AB Variable Products Series Fund | |
AB Balanced Wealth Strategy Class B Shares |
AB Balanced Wealth Strategy Portfolio Class B Shares | |
Access One Trust |
Access One Trust | |
Access VP High Yield |
Access VP High Yield | |
Fidelity® Variable Insurance Products Fund |
Fidelity® Variable Insurance Products Fund | |
Fidelity® VIP Contrafund® Service Class 2 |
Fidelity® VIP Contrafund® Portfolio Service Class 2 | |
Fidelity® VIP Equity-Income Service Class 2 |
Fidelity® VIP Equity-Income Portfolio Service Class 2 | |
Fidelity® VIP Growth Opportunities Service Class 2 |
Fidelity® VIP Growth Opportunities Portfolio Service Class 2 | |
Fidelity® VIP Index 500 Service Class 2 |
Fidelity® VIP Index 500 Portfolio Service Class 2 | |
Franklin Templeton Variable Insurance Products Trust |
Franklin Templeton Variable Insurance Products Trust | |
Franklin Founding Funds Allocation Class 4 Shares |
Franklin Founding Funds Allocation Fund Class 4 Shares | |
ProFunds |
ProFunds | |
ProFund VP Asia 30 |
ProFund VP Asia 30 | |
ProFund VP Basic Materials |
ProFund VP Basic Materials | |
ProFund VP Bull |
ProFund VP Bull | |
ProFund VP Consumer Services |
ProFund VP Consumer Services | |
ProFund VP Emerging Markets |
ProFund VP Emerging Markets | |
ProFund VP Europe 30 |
ProFund VP Europe 30 | |
ProFund VP Falling U.S. Dollar |
ProFund VP Falling U.S. Dollar | |
ProFund VP Financials |
ProFund VP Financials | |
ProFund VP Government Money Market |
ProFund VP Government Money Market | |
ProFund VP International |
ProFund VP International | |
ProFund VP Japan |
ProFund VP Japan | |
ProFund VP Mid-Cap |
ProFund VP Mid-Cap | |
ProFund VP NASDAQ-100 |
ProFund VP NASDAQ-100 | |
ProFund VP Oil & Gas |
ProFund VP Oil & Gas | |
ProFund VP Pharmaceuticals |
ProFund VP Pharmaceuticals | |
ProFund VP Precious Metals |
ProFund VP Precious Metals | |
ProFund VP Short Emerging Markets |
ProFund VP Short Emerging Markets | |
ProFund VP Short International |
ProFund VP Short International | |
ProFund VP Short NASDAQ-100 |
ProFund VP Short NASDAQ-100 | |
ProFund VP Short Small-Cap |
ProFund VP Short Small-Cap | |
ProFund VP Small-Cap |
ProFund VP Small-Cap |
18 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
1. Organization (continued)
Subaccount Investment by Mutual Fund:
Subaccount |
Mutual Fund | |
ProFunds |
ProFunds | |
ProFund VP Small-Cap Value |
ProFund VP Small-Cap Value | |
ProFund VP Telecommunications |
ProFund VP Telecommunications | |
ProFund VP U.S. Government Plus |
ProFund VP U.S. Government Plus | |
ProFund VP UltraNASDAQ-100 |
ProFund VP UltraNASDAQ-100 | |
ProFund VP UltraSmall-Cap |
ProFund VP UltraSmall-Cap | |
ProFund VP Utilities |
ProFund VP Utilities | |
Transamerica Series Trust |
Transamerica Series Trust | |
TA Aegon High Yield Bond Initial Class |
Transamerica Aegon High Yield Bond VP Initial Class | |
TA Aegon U.S. Government Securities Initial Class |
Transamerica Aegon U.S. Government Securities VP Initial Class | |
TA Barrow Hanley Dividend Focused Initial Class |
Transamerica Barrow Hanley Dividend Focused VP Initial Class | |
TA BlackRock Global Allocation Initial Class |
Transamerica BlackRock Global Allocation VP Initial Class | |
TA BlackRock Global Real Estate Securities Initial Class |
Transamerica BlackRock Global Real Estate Securities VP Initial Class | |
TA BlackRock Government Money Market Initial Class |
Transamerica BlackRock Government Money Market VP Initial Class | |
TA BlackRock iShares Edge 40 Initial Class |
Transamerica BlackRock iShares Edge 40 VP Initial Class | |
TA BlackRock Tactical Allocation Initial Class |
Transamerica BlackRock Tactical Allocation VP Initial Class | |
TA Greystone International Growth Initial Class |
Transamerica Greystone International Growth VP Initial Class | |
TA Janus Balanced Initial Class |
Transamerica Janus Balanced VP Initial Class | |
TA Janus Mid-Cap Growth Initial Class |
Transamerica Janus Mid-Cap Growth VP Initial Class | |
TA JPMorgan Asset Allocation - Conservative Initial Class |
Transamerica JPMorgan Asset Allocation - Conservative VP Initial Class | |
TA JPMorgan Asset Allocation - Growth Initial Class |
Transamerica JPMorgan Asset Allocation - Growth VP Initial Class | |
TA JPMorgan Asset Allocation - Moderate Initial Class |
Transamerica JPMorgan Asset Allocation - Moderate VP Initial Class | |
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
Transamerica JPMorgan Asset Allocation - Moderate Growth VP Initial Class | |
TA JPMorgan Core Bond Initial Class |
Transamerica JPMorgan Core Bond VP Initial Class | |
TA JPMorgan Enhanced Index Initial Class |
Transamerica JPMorgan Enhanced Index VP Initial Class | |
TA JPMorgan International Moderate Growth Initial Class |
Transamerica JPMorgan International Moderate Growth VP Initial Class | |
TA JPMorgan Mid Cap Value Initial Class |
Transamerica JPMorgan Mid Cap Value VP Initial Class | |
TA JPMorgan Tactical Allocation Initial Class |
Transamerica JPMorgan Tactical Allocation VP Initial Class | |
TA Managed Risk - Balanced ETF Initial Class |
Transamerica Managed Risk - Balanced ETF VP Initial Class | |
TA Managed Risk - Growth ETF Initial Class |
Transamerica Managed Risk - Growth ETF VP Initial Class | |
TA Morgan Stanley Capital Growth Initial Class |
Transamerica Morgan Stanley Capital Growth VP Initial Class | |
TA Multi-Managed Balanced Initial Class |
Transamerica Multi-Managed Balanced VP Initial Class | |
TA PIMCO Tactical - Balanced Initial Class |
Transamerica PIMCO Tactical - Balanced VP Initial Class | |
TA PIMCO Tactical - Conservative Initial Class |
Transamerica PIMCO Tactical - Conservative VP Initial Class | |
TA PIMCO Tactical - Growth Initial Class |
Transamerica PIMCO Tactical - Growth VP Initial Class | |
TA PIMCO Total Return Initial Class |
Transamerica PIMCO Total Return VP Initial Class | |
TA QS Investors Active Asset Allocation - Conservative Initial Class |
Transamerica QS Investors Active Asset Allocation - Conservative VP Initial Class | |
TA QS Investors Active Asset Allocation - Moderate Initial Class |
Transamerica QS Investors Active Asset Allocation - Moderate VP Initial Class | |
TA QS Investors Active Asset Allocation - Moderate Growth Initial Class |
Transamerica QS Investors Active Asset Allocation - Moderate Growth VP Initial Class | |
TA Small/Mid Cap Value Initial Class |
Transamerica Small/Mid Cap Value VP Initial Class | |
TA T. Rowe Price Small Cap Initial Class |
Transamerica T. Rowe Price Small Cap VP Initial Class | |
TA WMC US Growth Initial Class |
Transamerica WMC US Growth VP Initial Class |
19
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
1. Organization (continued)
The following subaccount name changes were made effective during the fiscal year ended December 31, 2019:
Subaccount |
Formerly | |
Franklin Allocation Class 4 Shares |
Franklin Founding Funds Allocation Class 4 Shares | |
TA BlackRock iShares Edge 40 Initial Class |
TA BlackRock Smart Beta 40 Initial Class |
During the current year the following subaccounts were liquidated and subsequently reinvested:
Reinvested Subaccount |
Liquidated Subaccount | |
TA Morgan Stanley Capital Growth Initial Class |
TA Jennison Growth Initial Class | |
TA WMC US Growth Initial Class |
TA Torray Concentrated Growth Initial Class |
20 |
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
2. Summary of Significant Accounting Policies
The financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for variable life separate accounts registered as unit investment trusts. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions regarding matters that affect the reported amount of assets and liabilities. Actual results could differ from those estimates.
Investments
Net purchase payments received by the Separate Account are invested in the portfolios of the Mutual Funds as selected by the contract owner. Investments are stated at the closing net asset values per share on December 31, 2019.
Realized capital gains and losses from sales of shares in the Separate Account are determined on the first-in, first-out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date. Unrealized gains or losses from investments in the Mutual Funds are included in the Statements of Operations and Changes in Net Assets.
Dividend Income
Dividends received from the Mutual Fund investments are reinvested to purchase additional mutual fund shares.
Fair Value Measurements and Fair Value Hierarchy
The Accounting Standards Codification (ASC) 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the nature of inputs used to measure fair value and enhances disclosure requirements for fair value measurements.
The Separate Account has categorized its financial instruments into a three level hierarchy which is based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.
Financial assets and liabilities recorded at fair value on the Statements of Assets and Liabilities are categorized as follows:
Level 1. Unadjusted quoted prices for identical assets or liabilities in an active market.
Level 2. Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:
a) Quoted prices for similar assets or liabilities in active markets
b) Quoted prices for identical or similar assets or liabilities in non-active markets
c) Inputs other than quoted market prices that are observable
d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means.
Level 3. Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect managements own assumptions about the assumptions a market participant would use in pricing the asset or liability.
All investments in the Mutual Funds included in the Statements of Assets and Liabilities are stated at fair value and are based upon published closing NAV per share and therefore are considered Level 1.
There were no transfers between Level 1, Level 2 and Level 3 during the year ended December 31, 2019.
21
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
3. Investments
The aggregate cost of purchases and proceeds from sales of investments for the period ended December 31, 2019 were as follows:
Subaccount | Purchases | Sales | ||||||
AB Balanced Wealth Strategy Class B Shares |
$ | 739,319 | $ | 619,430 | ||||
Access VP High Yield |
3,271,849 | 3,065,877 | ||||||
Fidelity® VIP Contrafund® Service Class 2 |
3,577,781 | 2,467,422 | ||||||
Fidelity® VIP Equity-Income Service Class 2 |
1,598,400 | 1,758,466 | ||||||
Fidelity® VIP Growth Opportunities Service Class 2 |
3,760,906 | 2,114,454 | ||||||
Fidelity® VIP Index 500 Service Class 2 |
17,134,042 | 16,787,631 | ||||||
Franklin Allocation Class 4 Shares |
623,433 | 577,794 | ||||||
ProFund VP Asia 30 |
8,791,869 | 5,188,465 | ||||||
ProFund VP Basic Materials |
1,333,517 | 1,459,258 | ||||||
ProFund VP Bull |
3,208,780 | 2,269,037 | ||||||
ProFund VP Consumer Services |
1,459,163 | 1,737,812 | ||||||
ProFund VP Emerging Markets |
10,275,704 | 6,682,010 | ||||||
ProFund VP Europe 30 |
2,200,323 | 2,498,874 | ||||||
ProFund VP Falling U.S. Dollar |
92,661 | 145,469 | ||||||
ProFund VP Financials |
1,226,451 | 1,499,580 | ||||||
ProFund VP Government Money Market |
29,311,080 | 36,918,014 | ||||||
ProFund VP International |
299,732 | 510,220 | ||||||
ProFund VP Japan |
2,440,964 | 2,495,041 | ||||||
ProFund VP Mid-Cap |
4,400,537 | 5,152,788 | ||||||
ProFund VP NASDAQ-100 |
19,041,185 | 17,885,182 | ||||||
ProFund VP Oil & Gas |
3,996,459 | 4,841,922 | ||||||
ProFund VP Pharmaceuticals |
1,667,705 | 1,831,225 | ||||||
ProFund VP Precious Metals |
4,763,303 | 3,824,957 | ||||||
ProFund VP Short Emerging Markets |
926,932 | 1,114,813 | ||||||
ProFund VP Short International |
169,497 | 156,058 | ||||||
ProFund VP Short NASDAQ-100 |
7,784,662 | 6,710,253 | ||||||
ProFund VP Short Small-Cap |
1,448,458 | 1,216,064 | ||||||
ProFund VP Small-Cap |
2,685,959 | 974,343 | ||||||
ProFund VP Small-Cap Value |
2,600,466 | 561,034 | ||||||
ProFund VP Telecommunications |
287,128 | 317,028 | ||||||
ProFund VP U.S. Government Plus |
4,783,493 | 4,267,732 | ||||||
ProFund VP UltraNASDAQ-100 |
24,076,624 | 27,746,218 | ||||||
ProFund VP UltraSmall-Cap |
4,576,527 | 5,281,196 | ||||||
ProFund VP Utilities |
4,495,387 | 3,497,602 | ||||||
TA Aegon High Yield Bond Initial Class |
4,982,468 | 4,482,643 | ||||||
TA Aegon U.S. Government Securities Initial Class |
4,401,348 | 4,794,736 |
22
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
3. Investments (continued)
Subaccount | Purchases | Sales | ||||||
TA Barrow Hanley Dividend Focused Initial Class |
$ | 22,525,513 | $ | 19,197,823 | ||||
TA BlackRock Global Allocation Initial Class |
1,292,497 | 1,439,223 | ||||||
TA BlackRock Global Real Estate Securities Initial Class |
4,380,066 | 6,688,020 | ||||||
TA BlackRock Government Money Market Initial Class |
10,694,830 | 16,931,821 | ||||||
TA BlackRock iShares Edge 40 Initial Class |
820,978 | 529,280 | ||||||
TA BlackRock Tactical Allocation Initial Class |
5,908,339 | 5,500,824 | ||||||
TA Greystone International Growth Initial Class |
12,024,645 | 8,916,840 | ||||||
TA Janus Balanced Initial Class |
3,798,780 | 2,899,392 | ||||||
TA Janus Mid-Cap Growth Initial Class |
41,974,993 | 50,142,631 | ||||||
TA JPMorgan Asset Allocation - Conservative Initial Class |
5,810,889 | 6,041,005 | ||||||
TA JPMorgan Asset Allocation - Growth Initial Class |
82,324,043 | 67,291,469 | ||||||
TA JPMorgan Asset Allocation - Moderate Initial Class |
19,285,504 | 18,070,523 | ||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
81,019,215 | 67,672,079 | ||||||
TA JPMorgan Core Bond Initial Class |
6,510,796 | 8,907,177 | ||||||
TA JPMorgan Enhanced Index Initial Class |
3,499,231 | 2,638,808 | ||||||
TA JPMorgan International Moderate Growth Initial Class |
2,392,026 | 1,938,563 | ||||||
TA JPMorgan Mid Cap Value Initial Class |
732,526 | 643,633 | ||||||
TA JPMorgan Tactical Allocation Initial Class |
10,205,593 | 14,309,210 | ||||||
TA Managed Risk - Balanced ETF Initial Class |
1,643,500 | 485,963 | ||||||
TA Managed Risk - Growth ETF Initial Class |
1,579,370 | 963,847 | ||||||
TA Morgan Stanley Capital Growth Initial Class |
46,326,169 | 16,818,847 | ||||||
TA Multi-Managed Balanced Initial Class |
13,433,476 | 12,913,923 | ||||||
TA PIMCO Tactical - Balanced Initial Class |
949,389 | 1,501,314 | ||||||
TA PIMCO Tactical - Conservative Initial Class |
2,389,878 | 2,990,038 | ||||||
TA PIMCO Tactical - Growth Initial Class |
2,056,974 | 3,122,721 | ||||||
TA PIMCO Total Return Initial Class |
18,996,193 | 20,101,368 | ||||||
TA QS Investors Active Asset Allocation - Conservative Initial Class |
1,130,846 | 894,956 | ||||||
TA QS Investors Active Asset Allocation - Moderate Initial Class |
702,179 | 508,453 | ||||||
TA QS Investors Active Asset Allocation - Moderate Growth Initial Class |
8,616,054 | 8,476,979 | ||||||
TA Small/Mid Cap Value Initial Class |
24,386,667 | 25,330,857 | ||||||
TA T. Rowe Price Small Cap Initial Class |
19,008,663 | 15,096,295 | ||||||
TA WMC US Growth Initial Class |
122,563,543 | 90,533,575 |
23
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
4. Change in Units
The change in units outstanding were as follows:
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
||||||||||||||||||||||
AB Balanced Wealth Strategy Class B Shares | 23,056 | (29,746 | ) | (6,690 | ) | 19,688 | (29,556 | ) | (9,868 | ) | ||||||||||||||||||
Access VP High Yield | 186,144 | (175,584 | ) | 10,560 | 264,731 | (253,433 | ) | 11,298 | ||||||||||||||||||||
Fidelity® VIP Contrafund® Service Class 2 | 35,698 | (86,450 | ) | (50,752 | ) | 63,394 | (101,923 | ) | (38,529 | ) | ||||||||||||||||||
Fidelity® VIP Equity-Income Service Class 2 | 32,371 | (71,925 | ) | (39,554 | ) | 53,654 | (93,635 | ) | (39,981 | ) | ||||||||||||||||||
Fidelity® VIP Growth Opportunities Service Class 2 | 97,939 | (70,413 | ) | 27,526 | 76,923 | (89,252 | ) | (12,329 | ) | |||||||||||||||||||
Fidelity® VIP Index 500 Service Class 2 | 566,836 | (594,778 | ) | (27,942 | ) | 498,684 | (424,935 | ) | 73,749 | |||||||||||||||||||
Franklin Allocation Class 4 Shares | 20,233 | (26,937 | ) | (6,704 | ) | 28,544 | (34,619 | ) | (6,075 | ) | ||||||||||||||||||
ProFund VP Asia 30 | 846,172 | (521,545 | ) | 324,627 | 381,110 | (771,107 | ) | (389,997 | ) | |||||||||||||||||||
ProFund VP Basic Materials | 106,309 | (124,511 | ) | (18,202 | ) | 121,736 | (236,933 | ) | (115,197 | ) | ||||||||||||||||||
ProFund VP Bull | 143,103 | (108,159 | ) | 34,944 | 108,145 | (172,612 | ) | (64,467 | ) | |||||||||||||||||||
ProFund VP Consumer Services | 43,441 | (57,198 | ) | (13,757 | ) | 53,857 | (43,892 | ) | 9,965 | |||||||||||||||||||
ProFund VP Emerging Markets | 1,181,295 | (828,078 | ) | 353,217 | 848,392 | (1,246,933 | ) | (398,541 | ) | |||||||||||||||||||
ProFund VP Europe 30 | 197,949 | (224,122 | ) | (26,173 | ) | 60,492 | (93,810 | ) | (33,318 | ) | ||||||||||||||||||
ProFund VP Falling U.S. Dollar | 14,533 | (22,692 | ) | (8,159 | ) | 175,706 | (175,792 | ) | (86 | ) | ||||||||||||||||||
ProFund VP Financials | 53,676 | (89,434 | ) | (35,758 | ) | 104,766 | (177,310 | ) | (72,544 | ) | ||||||||||||||||||
ProFund VP Government Money Market | 2,991,842 | (3,781,840 | ) | (789,998 | ) | 3,383,267 | (2,419,524 | ) | 963,743 | |||||||||||||||||||
ProFund VP International | 29,208 | (53,607 | ) | (24,399 | ) | 159,046 | (306,557 | ) | (147,511 | ) | ||||||||||||||||||
ProFund VP Japan | 148,318 | (157,313 | ) | (8,995 | ) | 45,809 | (50,507 | ) | (4,698 | ) | ||||||||||||||||||
ProFund VP Mid-Cap | 232,232 | (273,113 | ) | (40,881 | ) | 112,855 | (117,550 | ) | (4,695 | ) | ||||||||||||||||||
ProFund VP NASDAQ-100 | 578,411 | (513,585 | ) | 64,826 | 556,917 | (527,222 | ) | 29,695 | ||||||||||||||||||||
ProFund VP Oil & Gas | 492,672 | (639,706 | ) | (147,034 | ) | 492,744 | (552,898 | ) | (60,154 | ) | ||||||||||||||||||
ProFund VP Pharmaceuticals | 47,391 | (86,842 | ) | (39,451 | ) | 62,774 | (82,233 | ) | (19,459 | ) | ||||||||||||||||||
ProFund VP Precious Metals | 1,276,089 | (1,028,417 | ) | 247,672 | 1,186,730 | (1,221,025 | ) | (34,295 | ) | |||||||||||||||||||
ProFund VP Short Emerging Markets | 178,551 | (267,307 | ) | (88,756 | ) | 360,155 | (256,552 | ) | 103,603 | |||||||||||||||||||
ProFund VP Short International | 35,743 | (36,887 | ) | (1,144 | ) | 81,419 | (76,694 | ) | 4,725 | |||||||||||||||||||
ProFund VP Short NASDAQ-100 | 4,741,428 | (4,382,253 | ) | 359,175 | 3,652,899 | (2,353,658 | ) | 1,299,241 | ||||||||||||||||||||
ProFund VP Short Small-Cap | 824,755 | (712,622 | ) | 112,133 | 768,089 | (944,302 | ) | (176,213 | ) |
24
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
4. Change in Unit Dollars (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
||||||||||||||||||||||
ProFund VP Small-Cap | 139,231 | (52,332 | ) | 86,899 | 286,802 | (345,126 | ) | (58,324 | ) | |||||||||||||||||||
ProFund VP Small-Cap Value | 126,590 | (28,336 | ) | 98,254 | 210,430 | (282,396 | ) | (71,966 | ) | |||||||||||||||||||
ProFund VP Telecommunications | 18,816 | (22,495 | ) | (3,679 | ) | 11,269 | (30,667 | ) | (19,398 | ) | ||||||||||||||||||
ProFund VP U.S. Government Plus | 275,239 | (248,563 | ) | 26,676 | 261,891 | (275,574 | ) | (13,683 | ) | |||||||||||||||||||
ProFund VP UltraNASDAQ-100 | 414,480 | (488,477 | ) | (73,997 | ) | 618,128 | (592,815 | ) | 25,313 | |||||||||||||||||||
ProFund VP UltraSmall-Cap | 185,695 | (218,910 | ) | (33,215 | ) | 165,175 | (180,945 | ) | (15,770 | ) | ||||||||||||||||||
ProFund VP Utilities | 197,945 | (174,392 | ) | 23,553 | 173,741 | (164,469 | ) | 9,272 | ||||||||||||||||||||
TA Aegon High Yield Bond Initial Class | 213,035 | (199,843 | ) | 13,192 | 271,728 | (365,788 | ) | (94,060 | ) | |||||||||||||||||||
TA Aegon U.S. Government Securities Initial Class | 323,260 | (349,962 | ) | (26,702 | ) | 272,490 | (418,308 | ) | (145,818 | ) | ||||||||||||||||||
TA Barrow Hanley Dividend Focused Initial Class | 503,053 | (691,567 | ) | (188,514 | ) | 419,155 | (375,119 | ) | 44,036 | |||||||||||||||||||
TA BlackRock Global Allocation Initial Class | 61,188 | (104,379 | ) | (43,191 | ) | 96,057 | (127,158 | ) | (31,101 | ) | ||||||||||||||||||
TA BlackRock Global Real Estate Securities Initial Class | 229,616 | (249,658 | ) | (20,042 | ) | 176,074 | (245,706 | ) | (69,632 | ) | ||||||||||||||||||
TA BlackRock Government Money Market Initial Class | 823,163 | (1,172,341 | ) | (349,178 | ) | 2,244,834 | (1,765,605 | ) | 479,229 | |||||||||||||||||||
TA BlackRock iShares Edge 40 Initial Class | 25,659 | (30,975 | ) | (5,316 | ) | 26,071 | (37,297 | ) | (11,226 | ) | ||||||||||||||||||
TA BlackRock Tactical Allocation Initial Class | 196,664 | (359,849 | ) | (163,185 | ) | 227,177 | (376,355 | ) | (149,178 | ) | ||||||||||||||||||
TA Greystone International Growth Initial Class | 405,819 | (559,631 | ) | (153,812 | ) | 230,455 | (518,626 | ) | (288,171 | ) | ||||||||||||||||||
TA Janus Balanced Initial Class | 180,911 | (162,316 | ) | 18,595 | 143,937 | (184,840 | ) | (40,903 | ) | |||||||||||||||||||
TA Janus Mid-Cap Growth Initial Class | 943,251 | (1,439,605 | ) | (496,354 | ) | 683,340 | (894,657 | ) | (211,317 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Initial Class | 276,058 | (337,959 | ) | (61,901 | ) | 320,715 | (716,990 | ) | (396,275 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Initial Class | 2,859,418 | (3,061,822 | ) | (202,404 | ) | 2,447,470 | (2,530,514 | ) | (83,044 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Initial Class | 869,678 | (917,962 | ) | (48,284 | ) | 952,422 | (977,030 | ) | (24,608 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class | 3,119,548 | (3,256,789 | ) | (137,241 | ) | 2,932,230 | (2,854,890 | ) | 77,340 | |||||||||||||||||||
TA JPMorgan Core Bond Initial Class | 338,295 | (400,347 | ) | (62,052 | ) | 358,313 | (284,732 | ) | 73,581 | |||||||||||||||||||
TA JPMorgan Enhanced Index Initial Class | 86,939 | (89,954 | ) | (3,015 | ) | 166,009 | (185,377 | ) | (19,368 | ) | ||||||||||||||||||
TA JPMorgan International Moderate Growth Initial Class | 100,039 | (147,891 | ) | (47,852 | ) | 198,955 | (278,394 | ) | (79,439 | ) | ||||||||||||||||||
TA JPMorgan Mid Cap Value Initial Class | 2,864 | (18,946 | ) | (16,082 | ) | 5,937 | (21,077 | ) | (15,140 | ) | ||||||||||||||||||
TA JPMorgan Tactical Allocation Initial Class | 538,374 | (758,765 | ) | (220,391 | ) | 412,684 | (283,767 | ) | 128,917 |
25
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
4. Change in Unit Dollars (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
||||||||||||||||||||||
TA Managed Risk - Balanced ETF Initial Class | 100,909 | (31,504 | ) | 69,405 | 42,780 | (60,999 | ) | (18,219 | ) | |||||||||||||||||||
TA Managed Risk - Growth ETF Initial Class | 73,867 | (59,405 | ) | 14,462 | 57,425 | (61,775 | ) | (4,350 | ) | |||||||||||||||||||
TA Morgan Stanley Capital Growth Initial Class | 1,053,429 | (391,556 | ) | 661,873 | 479,034 | (487,651 | ) | (8,617 | ) | |||||||||||||||||||
TA Multi-Managed Balanced Initial Class | 188,710 | (443,033 | ) | (254,323 | ) | 218,700 | (488,526 | ) | (269,826 | ) | ||||||||||||||||||
TA PIMCO Tactical - Balanced Initial Class | 66,650 | (103,378 | ) | (36,728 | ) | 94,449 | (129,429 | ) | (34,980 | ) | ||||||||||||||||||
TA PIMCO Tactical - Conservative Initial Class | 185,255 | (219,175 | ) | (33,920 | ) | 194,080 | (161,897 | ) | 32,183 | |||||||||||||||||||
TA PIMCO Tactical - Growth Initial Class | 160,091 | (223,070 | ) | (62,979 | ) | 175,832 | (228,933 | ) | (53,101 | ) | ||||||||||||||||||
TA PIMCO Total Return Initial Class | 1,282,839 | (1,353,056 | ) | (70,217 | ) | 561,303 | (699,989 | ) | (138,686 | ) | ||||||||||||||||||
TA QS Investors Active Asset Allocation - Conservative Initial Class | 54,150 | (67,049 | ) | (12,899 | ) | 112,123 | (103,779 | ) | 8,344 | |||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Initial Class | 36,374 | (37,482 | ) | (1,108 | ) | 40,313 | (43,108 | ) | (2,795 | ) | ||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Growth Initial Class | 467,026 | (614,439 | ) | (147,413 | ) | 316,839 | (484,145 | ) | (167,306 | ) | ||||||||||||||||||
TA Small/Mid Cap Value Initial Class | 618,638 | (785,100 | ) | (166,462 | ) | 571,543 | (659,031 | ) | (87,488 | ) | ||||||||||||||||||
TA T. Rowe Price Small Cap Initial Class | 441,775 | (454,209 | ) | (12,434 | ) | 654,350 | (807,565 | ) | (153,215 | ) | ||||||||||||||||||
TA WMC US Growth Initial Class | 899,197 | (2,354,899 | ) | (1,455,702 | ) | 682,883 | (2,532,164 | ) | (1,849,281 | ) |
26
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
4. Change in Unit Dollars (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
||||||||||||||||||||||
AB Balanced Wealth Strategy Class B Shares | $ | 411,457 | $ | (608,069 | ) | $ | (196,612 | ) | $ | 356,130 | $ | (606,457 | ) | $ | (250,327 | ) | ||||||||||||
Access VP High Yield | 3,082,946 | (3,049,014 | ) | 33,932 | 4,310,596 | (4,194,763 | ) | 115,833 | ||||||||||||||||||||
Fidelity® VIP Contrafund® Service Class 2 | 994,027 | (2,370,862 | ) | (1,376,835 | ) | 1,401,715 | (2,783,305 | ) | (1,381,590 | ) | ||||||||||||||||||
Fidelity® VIP Equity-Income Service Class 2 | 740,210 | (1,713,675 | ) | (973,465 | ) | 1,124,120 | (2,160,323 | ) | (1,036,203 | ) | ||||||||||||||||||
Fidelity® VIP Growth Opportunities Service Class 2 | 2,829,933 | (2,072,107 | ) | 757,826 | 1,895,441 | (2,084,777 | ) | (189,336 | ) | |||||||||||||||||||
Fidelity® VIP Index 500 Service Class 2 | 15,603,761 | (16,586,822 | ) | (983,061 | ) | 12,453,589 | (11,369,334 | ) | 1,084,255 | |||||||||||||||||||
Franklin Allocation Class 4 Shares | 419,857 | (567,860 | ) | (148,003 | ) | 477,257 | (734,866 | ) | (257,609 | ) | ||||||||||||||||||
ProFund VP Asia 30 | 8,797,606 | (5,167,870 | ) | 3,629,736 | 4,099,262 | (8,297,536 | ) | (4,198,274 | ) | |||||||||||||||||||
ProFund VP Basic Materials | 1,251,838 | (1,449,297 | ) | (197,459 | ) | 1,564,740 | (2,894,789 | ) | (1,330,049 | ) | ||||||||||||||||||
ProFund VP Bull | 3,126,946 | (2,250,980 | ) | 875,966 | 2,256,129 | (3,529,351 | ) | (1,273,222 | ) | |||||||||||||||||||
ProFund VP Consumer Services | 1,270,780 | (1,720,427 | ) | (449,647 | ) | 1,497,136 | (1,237,257 | ) | 259,879 | |||||||||||||||||||
ProFund VP Emerging Markets | 10,264,515 | (6,649,104 | ) | 3,615,411 | 7,133,579 | (10,627,003 | ) | (3,493,424 | ) | |||||||||||||||||||
ProFund VP Europe 30 | 2,176,858 | (2,494,625 | ) | (317,767 | ) | 701,720 | (1,027,579 | ) | (325,859 | ) | ||||||||||||||||||
ProFund VP Falling U.S. Dollar | 93,090 | (144,690 | ) | (51,600 | ) | 1,208,487 | (1,187,765 | ) | 20,722 | |||||||||||||||||||
ProFund VP Financials | 1,005,669 | (1,481,477 | ) | (475,808 | ) | 1,838,975 | (2,682,081 | ) | (843,106 | ) | ||||||||||||||||||
ProFund VP Government Money Market | 29,238,533 | (36,872,039 | ) | (7,633,506 | ) | 32,842,402 | (23,476,311 | ) | 9,366,091 | |||||||||||||||||||
ProFund VP International | 300,867 | (499,878 | ) | (199,011 | ) | 1,450,844 | (3,217,203 | ) | (1,766,359 | ) | ||||||||||||||||||
ProFund VP Japan | 2,442,333 | (2,491,478 | ) | (49,145 | ) | 730,569 | (793,200 | ) | (62,631 | ) | ||||||||||||||||||
ProFund VP Mid-Cap | 4,406,250 | (5,138,613 | ) | (732,363 | ) | 2,116,144 | (2,214,608 | ) | (98,464 | ) | ||||||||||||||||||
ProFund VP NASDAQ-100 | 18,963,942 | (17,807,328 | ) | 1,156,614 | 17,313,374 | (16,838,160 | ) | 475,214 | ||||||||||||||||||||
ProFund VP Oil & Gas | 3,738,224 | (4,818,820 | ) | (1,080,596 | ) | 4,222,373 | (4,789,328 | ) | (566,955 | ) | ||||||||||||||||||
ProFund VP Pharmaceuticals | 1,015,623 | (1,810,081 | ) | (794,458 | ) | 1,386,055 | (1,765,107 | ) | (379,052 | ) | ||||||||||||||||||
ProFund VP Precious Metals | 4,783,726 | (3,804,551 | ) | 979,175 | 3,818,454 | (3,941,140 | ) | (122,686 | ) | |||||||||||||||||||
ProFund VP Short Emerging Markets | 886,245 | (1,112,655 | ) | (226,410 | ) | 1,542,614 | (1,156,789 | ) | 385,825 | |||||||||||||||||||
ProFund VP Short International | 160,718 | (154,699 | ) | 6,019 | 297,894 | (270,335 | ) | 27,559 | ||||||||||||||||||||
ProFund VP Short NASDAQ-100 | 7,786,474 | (6,705,937 | ) | 1,080,537 | 5,610,779 | (3,508,919 | ) | 2,101,860 | ||||||||||||||||||||
ProFund VP Short Small-Cap | 1,407,767 | (1,213,980 | ) | 193,787 | 1,545,598 | (1,826,833 | ) | (281,235 | ) |
27
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
4. Change in Unit Dollars (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
||||||||||||||||||||||
ProFund VP Small-Cap | $ | 2,692,784 | $ | (964,678 | ) | $ | 1,728,106 | $ | 5,772,276 | $ | (6,603,292 | ) | $ | (831,016 | ) | |||||||||||||
ProFund VP Small-Cap Value | 2,606,007 | (553,353 | ) | 2,052,654 | 4,590,586 | (5,756,041 | ) | (1,165,455 | ) | |||||||||||||||||||
ProFund VP Telecommunications | 265,550 | (313,840 | ) | (48,290 | ) | 158,547 | (417,850 | ) | (259,303 | ) | ||||||||||||||||||
ProFund VP U.S. Government Plus | 4,760,819 | (4,250,221 | ) | 510,598 | 4,108,305 | (4,205,894 | ) | (97,589 | ) | |||||||||||||||||||
ProFund VP UltraNASDAQ-100 | 24,174,913 | (27,647,137 | ) | (3,472,224 | ) | 32,519,616 | (29,730,232 | ) | 2,789,384 | |||||||||||||||||||
ProFund VP UltraSmall-Cap | 4,600,387 | (5,254,312 | ) | (653,925 | ) | 4,416,584 | (4,717,189 | ) | (300,605 | ) | ||||||||||||||||||
ProFund VP Utilities | 4,138,488 | (3,479,227 | ) | 659,261 | 3,070,642 | (2,811,743 | ) | 258,899 | ||||||||||||||||||||
TA Aegon High Yield Bond Initial Class | 3,941,509 | (4,399,349 | ) | (457,840 | ) | 5,340,866 | (7,575,946 | ) | (2,235,080 | ) | ||||||||||||||||||
TA Aegon U.S. Government Securities Initial Class | 4,285,756 | (4,765,229 | ) | (479,473 | ) | 3,555,216 | (5,702,700 | ) | (2,147,484 | ) | ||||||||||||||||||
TA Barrow Hanley Dividend Focused Initial Class | 11,179,726 | (18,831,730 | ) | (7,652,004 | ) | 9,150,029 | (12,225,837 | ) | (3,075,808 | ) | ||||||||||||||||||
TA BlackRock Global Allocation Initial Class | 842,279 | (1,418,898 | ) | (576,619 | ) | 1,299,380 | (1,704,468 | ) | (405,088 | ) | ||||||||||||||||||
TA BlackRock Global Real Estate Securities Initial Class | 4,102,242 | (6,493,407 | ) | (2,391,165 | ) | 2,798,490 | (6,563,710 | ) | (3,765,220 | ) | ||||||||||||||||||
TA BlackRock Government Money Market Initial Class | 10,152,451 | (16,789,451 | ) | (6,637,000 | ) | 29,487,211 | (21,888,133 | ) | 7,599,078 | |||||||||||||||||||
TA BlackRock iShares Edge 40 Initial Class | 398,057 | (518,441 | ) | (120,384 | ) | 379,863 | (633,909 | ) | (254,046 | ) | ||||||||||||||||||
TA BlackRock Tactical Allocation Initial Class | 3,026,916 | (5,390,742 | ) | (2,363,826 | ) | 3,307,886 | (5,391,372 | ) | (2,083,486 | ) | ||||||||||||||||||
TA Greystone International Growth Initial Class | 5,987,715 | (8,768,157 | ) | (2,780,442 | ) | 3,537,674 | (8,818,486 | ) | (5,280,812 | ) | ||||||||||||||||||
TA Janus Balanced Initial Class | 3,102,834 | (2,850,129 | ) | 252,705 | 2,265,759 | (2,945,689 | ) | (679,930 | ) | |||||||||||||||||||
TA Janus Mid-Cap Growth Initial Class | 21,815,894 | (47,736,576 | ) | (25,920,682 | ) | 14,737,440 | (35,558,381 | ) | (20,820,941 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Initial Class | 4,387,448 | (5,930,053 | ) | (1,542,605 | ) | 4,762,745 | (13,673,222 | ) | (8,910,477 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Initial Class | 50,829,650 | (65,822,000 | ) | (14,992,350 | ) | 42,425,821 | (58,858,714 | ) | (16,432,893 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Initial Class | 13,885,434 | (17,756,363 | ) | (3,870,929 | ) | 14,439,815 | (20,153,340 | ) | (5,713,525 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class | 51,346,695 | (66,322,079 | ) | (14,975,384 | ) | 47,067,004 | (63,973,168 | ) | (16,906,164 | ) | ||||||||||||||||||
TA JPMorgan Core Bond Initial Class | 5,676,381 | (8,723,998 | ) | (3,047,617 | ) | 5,914,892 | (7,213,028 | ) | (1,298,136 | ) | ||||||||||||||||||
TA JPMorgan Enhanced Index Initial Class | 2,260,024 | (2,597,905 | ) | (337,881 | ) | 4,345,799 | (5,078,777 | ) | (732,978 | ) | ||||||||||||||||||
TA JPMorgan International Moderate Growth Initial Class | 1,295,544 | (1,894,057 | ) | (598,513 | ) | 2,624,359 | (3,603,576 | ) | (979,217 | ) | ||||||||||||||||||
TA JPMorgan Mid Cap Value Initial Class | 67,837 | (598,345 | ) | (530,508 | ) | 135,142 | (712,583 | ) | (577,441 | ) |
28
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
4. Change in Unit Dollars (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
||||||||||||||||||||||
TA JPMorgan Tactical Allocation Initial Class | $ | 8,737,476 | $ | (14,091,628 | ) | $ | (5,354,152 | ) | $ | 6,327,412 | $ | (6,190,361 | ) | $ | 137,051 | |||||||||||||
TA Managed Risk - Balanced ETF Initial Class | 1,520,703 | (475,048 | ) | 1,045,655 | 629,459 | (882,127 | ) | (252,668 | ) | |||||||||||||||||||
TA Managed Risk - Growth ETF Initial Class | 1,171,256 | (947,827 | ) | 223,429 | 899,380 | (968,591 | ) | (69,211 | ) | |||||||||||||||||||
TA Morgan Stanley Capital Growth Initial Class | 40,001,471 | (16,491,956 | ) | 23,509,515 | 16,801,997 | (18,344,227 | ) | (1,542,230 | ) | |||||||||||||||||||
TA Multi-Managed Balanced Initial Class | 4,173,929 | (12,137,444 | ) | (7,963,515 | ) | 4,354,407 | (12,913,479 | ) | (8,559,072 | ) | ||||||||||||||||||
TA PIMCO Tactical - Balanced Initial Class | 943,063 | (1,478,732 | ) | (535,669 | ) | 1,260,451 | (1,773,874 | ) | (513,423 | ) | ||||||||||||||||||
TA PIMCO Tactical - Conservative Initial Class | 2,387,511 | (2,950,282 | ) | (562,771 | ) | 2,425,074 | (2,083,990 | ) | 341,084 | |||||||||||||||||||
TA PIMCO Tactical - Growth Initial Class | 2,097,876 | (3,077,338 | ) | (979,462 | ) | 2,220,250 | (3,076,575 | ) | (856,325 | ) | ||||||||||||||||||
TA PIMCO Total Return Initial Class | 18,521,674 | (19,999,981 | ) | (1,478,307 | ) | 7,742,618 | (10,691,324 | ) | (2,948,706 | ) | ||||||||||||||||||
TA QS Investors Active Asset Allocation - Conservative Initial Class | 718,592 | (877,970 | ) | (159,378 | ) | 1,413,066 | (1,301,579 | ) | 111,487 | |||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Initial Class | 492,275 | (498,553 | ) | (6,278 | ) | 525,764 | (562,941 | ) | (37,177 | ) | ||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Growth Initial Class | 6,395,569 | (8,362,899 | ) | (1,967,330 | ) | 4,395,302 | (6,574,938 | ) | (2,179,636 | ) | ||||||||||||||||||
TA Small/Mid Cap Value Initial Class | 13,776,478 | (24,667,047 | ) | (10,890,569 | ) | 12,442,405 | (23,069,467 | ) | (10,627,062 | ) | ||||||||||||||||||
TA T. Rowe Price Small Cap Initial Class | 12,994,054 | (14,845,785 | ) | (1,851,731 | ) | 18,447,095 | (25,353,848 | ) | (6,906,753 | ) | ||||||||||||||||||
TA WMC US Growth Initial Class | 26,368,163 | (82,660,875 | ) | (56,292,712 | ) | 16,515,411 | (81,668,987 | ) | (65,153,576 | ) |
29
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
5. Financial Highlights
The Separate Account offers various death benefit options, which have differing fees that are charged against the contract owners account balance. These charges are discussed in more detail in the individuals policy. Differences in the fee structures for these units result in different unit values, expense ratios, and total returns.
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair Value Corresponding to Lowest to Highest Expense Ratio |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
AB Balanced Wealth Strategy Class B Shares |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 112,692 | $ | 25.60 | to | $ | 21.84 | $ | 2,409,940 | 2.32 | % | 0.00 | % | to | 1.50 | % | 18.20 | % | to | 16.46 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 119,382 | 21.66 | to | 18.76 | 2,234,709 | 1.69 | 0.00 | to | 1.50 | (6.41 | ) | to | (7.80 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 129,250 | 23.14 | to | 20.34 | 2,657,289 | 1.86 | 0.00 | to | 1.50 | 15.62 | to | 13.92 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 140,901 | 20.02 | to | 17.86 | 2,528,013 | 1.83 | 0.00 | to | 1.50 | 4.44 | to | 2.90 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 143,029 | 19.17 | to | 17.35 | 2,554,505 | 2.11 | 0.00 | to | 1.50 | 1.29 | to | (0.20 | ) | |||||||||||||||||||||||||||||||||||||||||
Access VP High Yield |
|
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12/31/2019 | 202,947 | 22.91 | to | 19.01 | 3,781,777 | 4.93 | 0.00 | to | 1.50 | 12.43 | to | 10.77 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 192,387 | 20.38 | to | 17.16 | 3,304,109 | 2.63 | 0.00 | to | 1.50 | (0.61 | ) | to | (2.09 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 181,089 | 20.50 | to | 17.53 | 3,242,904 | 3.74 | 0.00 | to | 1.50 | 4.79 | to | 3.25 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 201,970 | 19.56 | to | 16.98 | 3,508,714 | 3.10 | 0.00 | to | 1.50 | 9.00 | to | 7.39 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 172,093 | 17.95 | to | 15.81 | 2,791,841 | 3.70 | 0.00 | to | 1.50 | 0.15 | to | (1.33 | ) | |||||||||||||||||||||||||||||||||||||||||
Fidelity® VIP Contrafund® Service Class 2 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 821,073 | 24.79 | to | 34.05 | 24,221,196 | 0.22 | 0.30 | to | 0.90 | 30.88 | to | 30.10 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 871,825 | 18.94 | to | 26.17 | 19,754,892 | 0.43 | 0.30 | to | 0.90 | (6.92 | ) | to | (7.48 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 910,354 | 20.35 | to | 28.29 | 22,638,242 | 0.77 | 0.30 | to | 0.90 | 21.22 | to | 20.51 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 941,893 | 16.78 | to | 23.47 | 20,270,933 | 0.62 | 0.30 | to | 0.90 | 7.41 | to | 6.77 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 985,254 | 15.63 | to | 21.99 | 20,862,584 | 0.78 | 0.30 | to | 0.90 | 0.12 | to | (0.48 | ) | |||||||||||||||||||||||||||||||||||||||||
Fidelity® VIP Equity-Income Service Class 2 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 434,957 | 22.35 | to | 27.79 | 10,974,164 | 1.82 | 0.30 | to | 0.90 | 26.73 | to | 25.97 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 474,511 | 17.64 | to | 22.06 | 9,560,346 | 2.04 | 0.30 | to | 0.90 | (8.81 | ) | to | (9.36 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 514,492 | 19.34 | to | 24.34 | 11,550,024 | 1.48 | 0.30 | to | 0.90 | 12.31 | to | 11.65 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 529,514 | 17.22 | to | 21.80 | 11,037,774 | 2.18 | 0.30 | to | 0.90 | 17.36 | to | 16.66 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 535,288 | 14.68 | to | 18.68 | 9,857,106 | 2.90 | 0.30 | to | 0.90 | (4.52 | ) | to | (5.09 | ) | ||||||||||||||||||||||||||||||||||||||||
Fidelity® VIP Growth Opportunities Service Class 2 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 414,182 | 38.82 | to | 31.43 | 14,179,766 | - | 0.30 | to | 0.90 | 40.07 | to | 39.24 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 386,656 | 27.71 | to | 22.57 | 9,532,742 | 0.09 | 0.30 | to | 0.90 | 11.87 | to | 11.20 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 398,985 | 24.77 | to | 20.30 | 8,736,075 | 0.11 | 0.30 | to | 0.90 | 33.78 | to | 32.98 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 385,655 | 18.52 | to | 15.27 | 6,152,567 | 0.05 | 0.30 | to | 0.90 | (0.24 | ) | to | (0.83 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 458,127 | 18.56 | to | 15.39 | 7,155,211 | - | 0.30 | to | 0.90 | 5.03 | to | 4.40 | ||||||||||||||||||||||||||||||||||||||||||
Fidelity® VIP Index 500 Service Class 2 |
|
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12/31/2019 | 1,850,484 | 29.74 | to | 26.58 | 58,103,481 | 1.78 | 0.00 | to | 1.50 | 31.02 | to | 29.08 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,878,426 | 22.70 | to | 20.59 | 45,890,930 | 1.62 | 0.00 | to | 1.50 | (4.73 | ) | to | (6.15 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,804,677 | 23.82 | to | 21.94 | 47,478,979 | 1.61 | 0.00 | to | 1.50 | 21.41 | to | 19.62 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,575,244 | 19.62 | to | 18.34 | 35,119,328 | 1.40 | 0.00 | to | 1.50 | 11.58 | to | 9.94 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,431,885 | 17.59 | to | 16.68 | 29,355,484 | 1.82 | 0.00 | to | 1.50 | 1.08 | to | (0.41 | ) | |||||||||||||||||||||||||||||||||||||||||
Franklin Allocation Class 4 Shares |
|
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12/31/2019 | 102,803 | 26.21 | to | 22.36 | 2,218,133 | 3.34 | 0.00 | to | 1.50 | 19.56 | to | 17.79 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 109,507 | 21.93 | to | 18.99 | 2,002,167 | 2.79 | 0.00 | to | 1.50 | (9.58 | ) | to | (10.92 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 115,582 | 24.25 | to | 21.31 | 2,494,958 | 2.58 | 0.00 | to | 1.50 | 11.78 | to | 10.13 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 125,006 | 21.69 | to | 19.35 | 2,439,233 | 3.67 | 0.00 | to | 1.50 | 12.92 | to | 11.26 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 121,175 | 19.21 | to | 17.39 | 2,174,203 | 2.75 | 0.00 | to | 1.50 | (6.24 | ) | to | (7.63 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Asia 30 |
|
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12/31/2019 | 755,203 | 11.60 | to | 11.44 | 8,314,602 | 0.19 | 0.00 | to | 1.50 | 26.31 | to | 24.44 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 430,576 | 9.19 | to | 9.20 | 3,704,275 | 0.40 | 0.00 | to | 1.50 | (18.59 | ) | to | (19.81 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 820,573 | 11.28 | to | 11.47 | 8,723,348 | - | 0.00 | to | 1.50 | 32.87 | to | 30.92 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 560,320 | 8.49 | to | 8.76 | 4,476,330 | 1.03 | 0.00 | to | 1.50 | 0.64 | to | (0.84 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 435,476 | 8.44 | to | 8.83 | 3,462,185 | 0.28 | 0.00 | to | 1.50 | (9.38 | ) | to | (10.72 | ) |
30
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair Value Corresponding to Lowest to Highest Expense Ratio |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
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ProFund VP Basic Materials |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 220,118 | $ | 13.25 | to | $ | 11.34 | $ | 2,725,778 | 0.34 | % | 0.00 | % | to | 1.50 | % | 17.72 | % | to | 15.98 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 238,320 | 11.25 | to | 9.77 | 2,505,171 | 0.39 | 0.00 | to | 1.50 | (17.66 | ) | to | (18.88 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 353,517 | 13.67 | to | 12.05 | 4,507,974 | 0.38 | 0.00 | to | 1.50 | 22.96 | to | 21.15 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 342,923 | 11.12 | to | 9.95 | 3,568,051 | 0.40 | 0.00 | to | 1.50 | 18.49 | to | 16.74 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 273,931 | 9.38 | to | 8.52 | 2,414,831 | 0.59 | 0.00 | to | 1.50 | (13.92 | ) | to | (15.19 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Bull |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 202,079 | 24.18 | to | 22.09 | 4,855,492 | 0.32 | 0.00 | to | 1.50 | 28.88 | to | 26.98 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 167,135 | 18.76 | to | 17.40 | 3,134,335 | - | 0.00 | to | 1.50 | (6.15 | ) | to | (7.54 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 231,602 | 19.99 | to | 18.82 | 4,665,839 | - | 0.00 | to | 1.50 | 19.34 | to | 17.58 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 331,447 | 16.75 | to | 16.01 | 5,644,107 | - | 0.00 | to | 1.50 | 9.66 | to | 8.04 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 428,545 | 15.27 | to | 14.81 | 6,714,298 | - | 0.00 | to | 1.50 | (0.46 | ) | to | (1.93 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Consumer Services |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 145,291 | 37.05 | to | 34.84 | 4,685,493 | - | 0.00 | to | 1.50 | 24.64 | to | 22.80 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 159,048 | 29.73 | to | 28.37 | 4,177,142 | - | 0.00 | to | 1.50 | 0.62 | to | (0.88 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 149,083 | 29.55 | to | 28.62 | 3,954,853 | - | 0.00 | to | 1.50 | 18.37 | to | 16.62 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 163,438 | 24.96 | to | 24.54 | 3,722,987 | - | 0.00 | to | 1.50 | 4.18 | to | 2.65 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 190,269 | 23.96 | to | 23.91 | 4,223,671 | - | 0.00 | to | 1.50 | 4.69 | to | 3.14 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Emerging Markets |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,172,076 | 8.98 | to | 8.49 | 10,543,054 | 0.41 | 0.00 | to | 1.50 | 24.23 | to | 22.40 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 818,859 | 7.23 | to | 6.93 | 5,692,807 | 0.22 | 0.00 | to | 1.50 | (15.27 | ) | to | (16.53 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,217,400 | 8.54 | to | 8.31 | 10,163,614 | 0.07 | 0.00 | to | 1.50 | 33.26 | to | 31.29 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 717,341 | 6.41 | to | 6.33 | 4,420,456 | 0.22 | 0.00 | to | 1.50 | 11.01 | to | 9.37 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 461,587 | 5.77 | to | 5.78 | 2,529,081 | 0.96 | 0.00 | to | 1.50 | (17.36 | ) | to | (18.59 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Europe 30 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 86,170 | 11.29 | to | 9.87 | 938,303 | 2.37 | 0.00 | to | 1.50 | 17.79 | to | 16.05 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 112,343 | 9.58 | to | 8.51 | 1,043,087 | 2.52 | 0.00 | to | 1.50 | (14.13 | ) | to | (15.41 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 145,661 | 11.16 | to | 10.06 | 1,554,182 | 2.22 | 0.00 | to | 1.50 | 19.71 | to | 17.95 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 123,591 | 9.32 | to | 8.53 | 1,090,839 | 3.01 | 0.00 | to | 1.50 | 7.81 | to | 6.22 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 136,433 | 8.65 | to | 8.03 | 1,117,414 | 4.75 | 0.00 | to | 1.50 | (10.88 | ) | to | (12.20 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Falling U.S. Dollar |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 31,372 | 6.40 | to | 5.29 | 192,195 | 0.05 | 0.00 | to | 1.50 | (2.34 | ) | to | (3.78 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 39,531 | 6.55 | to | 5.50 | 249,306 | - | 0.00 | to | 1.50 | (6.31 | ) | to | (7.70 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 39,617 | 6.99 | to | 5.96 | 269,359 | - | 0.00 | to | 1.50 | 8.46 | to | 6.86 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 44,786 | 6.45 | to | 5.58 | 275,533 | - | 0.00 | to | 1.50 | (5.86 | ) | to | (7.25 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 76,535 | 6.85 | to | 6.01 | 505,042 | - | 0.00 | to | 1.50 | (10.01 | ) | to | (11.34 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Financials |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 259,303 | 17.14 | to | 18.52 | 4,716,020 | 0.51 | 0.00 | to | 1.50 | 30.27 | to | 28.35 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 295,061 | 13.15 | to | 14.43 | 4,069,052 | 0.38 | 0.00 | to | 1.50 | (10.43 | ) | to | (11.76 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 367,605 | 14.69 | to | 16.35 | 5,425,492 | 0.34 | 0.00 | to | 1.50 | 18.19 | to | 16.45 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 338,073 | 12.43 | to | 14.04 | 4,108,516 | 0.34 | 0.00 | to | 1.50 | 15.32 | to | 13.62 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 287,364 | 10.78 | to | 12.36 | 2,994,973 | 0.34 | 0.00 | to | 1.50 | (1.49 | ) | to | (2.95 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Government Money Market |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,178,410 | 10.68 | to | 8.56 | 11,493,857 | 0.78 | 0.00 | to | 1.50 | 0.77 | to | (0.72 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,968,408 | 10.60 | to | 8.62 | 19,100,813 | 0.42 | 0.00 | to | 1.50 | 0.42 | to | (1.07 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,004,665 | 10.56 | to | 8.71 | 9,769,539 | 0.02 | 0.00 | to | 1.50 | 0.02 | to | (1.45 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,058,271 | 10.55 | to | 8.84 | 10,369,020 | 0.02 | 0.00 | to | 1.50 | 0.02 | to | (1.45 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,630,675 | 10.55 | to | 8.97 | 16,093,644 | 0.02 | 0.00 | to | 1.50 | 0.02 | to | (1.45 | ) | |||||||||||||||||||||||||||||||||||||||||
ProFund VP International |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 234,501 | 10.36 | to | 9.42 | 2,314,126 | 0.27 | 0.00 | to | 1.50 | 19.27 | to | 17.51 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 258,900 | 8.68 | to | 8.01 | 2,137,619 | - | 0.00 | to | 1.50 | (15.76 | ) | to | (17.01 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 406,411 | 10.31 | to | 9.66 | 4,191,633 | - | 0.00 | to | 1.50 | 21.80 | to | 20.00 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 144,517 | 8.46 | to | 8.05 | 1,166,852 | - | 0.00 | to | 1.50 | (0.93 | ) | to | (2.39 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 162,334 | 8.54 | to | 8.24 | 1,319,773 | - | 0.00 | to | 1.50 | (3.52 | ) | to | (4.95 | ) |
31
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair Value Corresponding to Lowest to Highest Expense Ratio |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
ProFund VP Japan |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 55,149 | $ | 13.80 | to | $ | 12.01 | $ | 859,504 | 0.11 | % | 0.00 | % | to | 1.50 | % | 20.00 | % | to | 18.22 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 64,144 | 11.50 | to | 10.16 | 766,064 | - | 0.00 | to | 1.50 | (11.63 | ) | to | (12.95 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 68,842 | 13.02 | to | 11.67 | 926,938 | - | 0.00 | to | 1.50 | 18.45 | to | 16.71 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 103,751 | 10.99 | to | 10.00 | 1,119,515 | - | 0.00 | to | 1.50 | 0.41 | to | (1.07 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 259,368 | 10.94 | to | 10.11 | 2,766,547 | - | 0.00 | to | 1.50 | 5.81 | to | 4.25 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Mid-Cap |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 160,109 | 23.05 | to | 20.30 | 3,275,313 | 0.17 | 0.00 | to | 1.50 | 23.53 | to | 21.70 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 200,990 | 18.66 | to | 16.68 | 3,349,100 | - | 0.00 | to | 1.50 | (12.86 | ) | to | (14.16 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 205,685 | 21.42 | to | 19.43 | 3,998,852 | - | 0.00 | to | 1.50 | 13.43 | to | 11.76 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 391,109 | 18.88 | to | 17.39 | 6,758,644 | - | 0.00 | to | 1.50 | 18.19 | to | 16.44 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 204,135 | 15.97 | to | 14.93 | 3,034,728 | - | 0.00 | to | 1.50 | (4.45 | ) | to | (5.86 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP NASDAQ-100 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 535,387 | 45.16 | to | 36.83 | 21,186,505 | - | 0.00 | to | 1.50 | 36.70 | to | 34.68 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 470,561 | 33.04 | to | 27.35 | 14,347,955 | - | 0.00 | to | 1.50 | (1.87 | ) | to | (3.33 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 440,866 | 33.67 | to | 28.29 | 14,214,808 | - | 0.00 | to | 1.50 | 30.37 | to | 28.45 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 397,360 | 25.82 | to | 22.02 | 10,123,687 | - | 0.00 | to | 1.50 | 5.26 | to | 3.70 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 445,017 | 24.53 | to | 21.24 | 10,857,808 | - | 0.00 | to | 1.50 | 7.45 | to | 5.87 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Oil & Gas |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 721,703 | 8.08 | to | 6.30 | 5,415,783 | 1.42 | 0.00 | to | 1.50 | 8.51 | to | 6.91 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 868,737 | 7.44 | to | 5.89 | 6,013,987 | 1.72 | 0.00 | to | 1.50 | (20.22 | ) | to | (21.41 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 928,891 | 9.33 | to | 7.49 | 8,081,643 | 1.27 | 0.00 | to | 1.50 | (3.17 | ) | to | (4.60 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 960,671 | 9.64 | to | 7.85 | 8,659,629 | 1.41 | 0.00 | to | 1.50 | 24.18 | to | 22.35 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 900,764 | 7.76 | to | 6.42 | 6,554,109 | 0.62 | 0.00 | to | 1.50 | (23.37 | ) | to | (24.51 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Pharmaceuticals |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 220,283 | 24.71 | to | 22.21 | 5,017,336 | 0.85 | 0.00 | to | 1.50 | 14.04 | to | 12.36 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 259,734 | 21.67 | to | 19.77 | 5,199,084 | 1.07 | 0.00 | to | 1.50 | (6.20 | ) | to | (7.59 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 279,193 | 23.10 | to | 21.39 | 5,994,460 | 0.95 | 0.00 | to | 1.50 | 10.36 | to | 8.73 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 345,205 | 20.94 | to | 19.67 | 6,749,993 | 0.94 | 0.00 | to | 1.50 | (3.73 | ) | to | (5.15 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 455,798 | 21.75 | to | 20.74 | 9,303,317 | 0.48 | 0.00 | to | 1.50 | 4.44 | to | 2.90 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Precious Metals |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,720,769 | 4.88 | to | 4.42 | 7,763,794 | 0.03 | 0.00 | to | 1.50 | 45.98 | to | 43.82 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,473,097 | 3.34 | to | 3.07 | 4,574,070 | - | 0.00 | to | 1.50 | (13.47 | ) | to | (14.76 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,507,392 | 3.86 | to | 3.61 | 5,439,646 | - | 0.00 | to | 1.50 | 5.28 | to | 3.73 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,777,677 | 3.67 | to | 3.48 | 6,099,905 | - | 0.00 | to | 1.50 | 55.81 | to | 53.52 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,280,202 | 2.35 | to | 2.26 | 2,835,371 | - | 0.00 | to | 1.50 | (32.85 | ) | to | (33.85 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Short Emerging Markets |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 95,356 | 3.09 | to | 2.42 | 352,353 | 0.45 | 0.00 | to | 1.50 | (20.99 | ) | to | (22.16 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 184,112 | 3.92 | to | 3.11 | 744,822 | - | 0.00 | to | 1.50 | 12.59 | to | 10.91 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 80,509 | 3.48 | to | 2.81 | 288,783 | - | 0.00 | to | 1.50 | (27.84 | ) | to | (28.91 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 186,560 | 4.82 | to | 3.95 | 947,222 | - | 0.00 | to | 1.50 | (16.24 | ) | to | (17.48 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 122,578 | 5.75 | to | 4.78 | 724,605 | - | 0.00 | to | 1.50 | 11.52 | to | 9.87 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Short International |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 82,689 | 3.47 | to | 2.73 | 293,102 | 0.52 | 0.00 | to | 1.50 | (17.42 | ) | to | (18.64 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 83,833 | 4.20 | to | 3.36 | 351,032 | - | 0.00 | to | 1.50 | 15.47 | to | 13.76 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 79,108 | 3.63 | to | 2.95 | 278,713 | - | 0.00 | to | 1.50 | (20.64 | ) | to | (21.81 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 128,281 | 4.58 | to | 3.78 | 560,218 | - | 0.00 | to | 1.50 | (5.90 | ) | to | (7.28 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 95,098 | 4.87 | to | 4.07 | 439,797 | - | 0.00 | to | 1.50 | (3.78 | ) | to | (5.20 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Short NASDAQ-100 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 2,249,113 | 1.01 | to | 0.87 | 3,618,259 | 0.07 | 0.00 | to | 1.50 | (28.06 | ) | to | (29.12 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,889,938 | 1.40 | to | 1.23 | 2,986,569 | - | 0.00 | to | 1.50 | (2.89 | ) | to | (4.33 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 590,697 | 1.44 | to | 1.29 | 870,919 | - | 0.00 | to | 1.50 | (25.25 | ) | to | (26.35 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 596,809 | 1.93 | to | 1.75 | 1,126,767 | - | 0.00 | to | 1.50 | (10.06 | ) | to | (11.39 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 362,766 | 2.15 | to | 1.97 | 750,478 | - | 0.00 | to | 1.50 | (13.04 | ) | to | (14.33 | ) |
32
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair Value Corresponding to Lowest to Highest Expense Ratio |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
ProFund VP Short Small-Cap |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 326,282 | $ | 1.64 | to | $ | 1.20 | $ | 513,284 | 0.10 | % | 0.00 | % | to | 1.50 | % | (20.78 | ) % | to | (21.96 | ) % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 214,149 | 2.07 | to | 1.54 | 426,579 | - | 0.00 | to | 1.50 | 10.39 | to | 8.75 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 390,362 | 1.88 | to | 1.42 | 667,558 | - | 0.00 | to | 1.50 | (14.20 | ) | to | (15.47 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 500,897 | 2.19 | to | 1.68 | 1,051,128 | - | 0.00 | to | 1.50 | (21.60 | ) | to | (22.75 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 263,480 | 2.79 | to | 2.17 | 619,952 | - | 0.00 | to | 1.50 | (0.82 | ) | to | (2.29 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Small-Cap |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 223,149 | 21.04 | to | 20.17 | 4,438,418 | - | 0.00 | to | 1.50 | 23.60 | to | 21.78 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 136,250 | 17.02 | to | 16.56 | 2,243,155 | - | 0.00 | to | 1.50 | (12.89 | ) | to | (14.19 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 194,574 | 19.54 | to | 19.30 | 3,732,484 | - | 0.00 | to | 1.50 | 12.43 | to | 10.77 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 437,377 | 17.38 | to | 17.43 | 7,507,148 | - | 0.00 | to | 1.50 | 19.68 | to | 17.92 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 244,845 | 14.53 | to | 14.78 | 3,577,901 | - | 0.00 | to | 1.50 | (6.21 | ) | to | (7.59 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Small-Cap Value |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 192,718 | 23.65 | to | 21.73 | 4,055,740 | - | 0.00 | to | 1.50 | 22.56 | to | 20.75 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 94,464 | 19.29 | to | 18.00 | 1,648,295 | - | 0.00 | to | 1.50 | (14.21 | ) | to | (15.49 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 166,430 | 22.49 | to | 21.29 | 3,418,360 | 0.01 | 0.00 | to | 1.50 | 9.71 | to | 8.09 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 386,675 | 20.50 | to | 19.70 | 7,280,442 | - | 0.00 | to | 1.50 | 28.77 | to | 26.88 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 136,649 | 15.92 | to | 15.53 | 2,027,849 | - | 0.00 | to | 1.50 | (8.28 | ) | to | (9.63 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Telecommunications |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 49,609 | 15.23 | to | 13.65 | 714,412 | 3.24 | 0.00 | to | 1.50 | 14.77 | to | 13.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 53,288 | 13.27 | to | 12.07 | 668,160 | 5.55 | 0.00 | to | 1.50 | (15.10 | ) | to | (16.37 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 72,686 | 15.63 | to | 14.44 | 1,069,305 | 4.01 | 0.00 | to | 1.50 | (2.12 | ) | to | (3.57 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 168,362 | 15.97 | to | 14.97 | 2,521,360 | 1.86 | 0.00 | to | 1.50 | 21.65 | to | 19.86 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 83,864 | 13.12 | to | 12.49 | 1,037,938 | 1.53 | 0.00 | to | 1.50 | 1.52 | to | 0.02 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP U.S. Government Plus |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 229,830 | 20.65 | to | 17.23 | 4,294,581 | 0.83 | 0.00 | to | 1.50 | 18.22 | to | 16.47 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 203,154 | 17.46 | to | 14.80 | 3,231,995 | 0.94 | 0.00 | to | 1.50 | (5.42 | ) | to | (6.83 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 216,837 | 18.46 | to | 15.88 | 3,673,437 | 0.43 | 0.00 | to | 1.50 | 9.49 | to | 7.87 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 394,826 | 16.86 | to | 14.72 | 6,160,130 | - | 0.00 | to | 1.50 | (0.31 | ) | to | (1.78 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 256,958 | 16.92 | to | 14.99 | 4,052,870 | - | 0.00 | to | 1.50 | (5.64 | ) | to | (7.04 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP UltraNASDAQ-100 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 487,770 | 75.65 | to | 68.89 | 35,807,599 | - | - | to | 1.50 | 79.13 | to | 77.01 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 561,767 | 42.13 | to | 38.92 | 23,124,940 | - | 0.30 | to | 1.50 | (9.90 | ) | to | (10.98 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 536,454 | 46.76 | to | 43.72 | 24,476,044 | - | 0.30 | to | 1.50 | 67.83 | to | 65.85 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 445,062 | 27.86 | to | 26.36 | 12,124,081 | - | 0.30 | to | 1.50 | 8.30 | to | 7.02 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 617,642 | 25.73 | to | 24.63 | 15,594,241 | - | 0.30 | to | 1.50 | 13.26 | to | 11.92 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP UltraSmall-Cap |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 285,041 | 28.49 | to | 27.65 | 7,932,380 | - | 0.00 | to | 1.50 | 47.33 | to | 45.15 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 318,256 | 19.34 | to | 19.05 | 5,975,141 | - | 0.00 | to | 1.50 | (26.95 | ) | to | (28.04 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 334,026 | 26.47 | to | 26.47 | 8,487,733 | - | 0.00 | to | 1.50 | 25.20 | to | 23.35 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 374,082 | 21.14 | to | 21.46 | 7,577,278 | - | 0.00 | to | 1.50 | 39.59 | to | 37.53 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 395,475 | 15.15 | to | 15.60 | 5,703,293 | - | 0.00 | to | 1.50 | (12.97 | ) | to | (14.26 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Utilities |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 291,707 | 22.36 | to | 18.10 | 6,306,424 | 1.55 | 0.00 | to | 1.50 | 22.88 | to | 21.06 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 268,154 | 18.20 | to | 14.95 | 4,679,004 | 1.99 | 0.00 | to | 1.50 | 2.89 | to | 1.36 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 258,882 | 17.69 | to | 14.75 | 4,365,893 | 2.03 | 0.00 | to | 1.50 | 10.64 | to | 9.01 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 397,813 | 15.99 | to | 13.53 | 6,006,825 | 1.62 | 0.00 | to | 1.50 | 15.07 | to | 13.38 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 247,102 | 13.89 | to | 11.93 | 3,258,508 | 2.08 | 0.00 | to | 1.50 | (6.40 | ) | to | (7.79 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Aegon High Yield Bond Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 827,671 | 23.42 | to | 19.22 | 18,060,264 | 6.30 | 0.00 | to | 1.50 | 14.21 | to | 12.53 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 814,479 | 20.51 | to | 17.08 | 16,374,808 | 6.03 | 0.00 | to | 1.50 | (2.35 | ) | to | (3.80 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 908,539 | 21.00 | to | 17.76 | 19,145,546 | 5.93 | 0.00 | to | 1.50 | 7.44 | to | 5.86 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 922,333 | 19.55 | to | 16.77 | 18,909,800 | 5.86 | 0.00 | to | 1.50 | 15.34 | to | 13.64 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 744,419 | 16.95 | to | 14.76 | 14,024,320 | 5.88 | 0.00 | to | 1.50 | (4.22 | ) | to | (5.64 | ) |
33
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair Value Corresponding to Lowest to Highest Expense Ratio |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA Aegon U.S. Government Securities Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 450,314 | $ | 15.93 | to | $ | 12.36 | $ | 6,373,858 | 1.89 | % | 0.00 | % | to | 1.50 | % | 6.60 | % | to | 5.03 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 477,016 | 14.95 | to | 11.77 | 6,445,842 | 2.91 | 0.00 | to | 1.50 | 0.26 | to | (1.23 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 622,834 | 14.91 | to | 11.92 | 8,651,009 | 3.74 | 0.00 | to | 1.50 | 2.66 | to | 1.14 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 582,207 | 14.52 | to | 11.78 | 8,268,214 | 0.66 | 0.00 | to | 1.50 | 0.30 | to | (1.18 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 610,031 | 14.48 | to | 11.92 | 8,753,320 | 2.12 | 0.00 | to | 1.50 | 0.10 | to | (1.38 | ) | |||||||||||||||||||||||||||||||||||||||||
TA Barrow Hanley Dividend Focused Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 2,125,815 | 21.38 | to | 18.94 | 68,676,965 | 2.40 | 0.00 | to | 1.50 | 23.91 | to | 22.08 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 2,314,329 | 17.25 | to | 15.51 | 62,532,917 | 2.14 | 0.00 | to | 1.50 | (11.50 | ) | to | (12.82 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,270,293 | 19.49 | to | 17.79 | 74,360,907 | 2.32 | 0.00 | to | 1.50 | 16.43 | to | 14.71 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,280,104 | 16.74 | to | 15.51 | 68,871,227 | 2.12 | 0.00 | to | 1.50 | 14.91 | to | 13.22 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,357,254 | 14.57 | to | 13.70 | 66,699,906 | 1.85 | 0.00 | to | 1.50 | (3.59 | ) | to | (5.02 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock Global Allocation Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 394,579 | 15.19 | to | 13.68 | 5,779,374 | 1.91 | - | to | 1.50 | 17.85 | to | 16.46 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 437,770 | 12.86 | to | 11.75 | 5,454,596 | 2.20 | 0.30 | to | 1.50 | (7.68 | ) | to | (8.78 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 468,871 | 13.93 | to | 12.88 | 6,348,837 | 2.00 | 0.30 | to | 1.50 | 13.41 | to | 12.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 497,686 | 12.28 | to | 11.49 | 5,948,994 | 0.98 | 0.30 | to | 1.50 | 4.62 | to | 3.39 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 541,955 | 11.74 | to | 11.11 | 6,219,680 | 2.95 | 0.30 | to | 1.50 | (1.29 | ) | to | (2.46 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock Global Real Estate Securities Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,629,517 | 15.64 | to | 15.18 | 41,010,845 | 0.90 | 0.00 | to | 1.50 | 25.19 | to | 23.34 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,649,559 | 12.49 | to | 12.31 | 35,023,934 | 8.62 | 0.00 | to | 1.50 | (10.09 | ) | to | (11.43 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,719,191 | 13.89 | to | 13.90 | 43,179,257 | 3.64 | 0.00 | to | 1.50 | 11.32 | to | 9.68 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,748,145 | 12.48 | to | 12.67 | 43,864,350 | 1.75 | 0.00 | to | 1.50 | 0.62 | to | (0.86 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,731,597 | 12.40 | to | 12.78 | 48,016,426 | 4.40 | 0.00 | to | 1.50 | (0.60 | ) | to | (2.07 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock Government Money Market Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 2,233,056 | 11.27 | to | 8.85 | 30,217,624 | 1.96 | 0.00 | to | 1.50 | 1.97 | to | 0.47 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 2,582,234 | 11.05 | to | 8.81 | 36,454,670 | 1.82 | 0.00 | to | 1.50 | 1.81 | to | 0.29 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,103,005 | 10.86 | to | 8.78 | 28,500,890 | 0.01 | 0.00 | to | 1.50 | 0.01 | to | (1.47 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,421,818 | 10.86 | to | 8.91 | 35,815,432 | 0.01 | 0.00 | to | 1.50 | 0.01 | to | (1.47 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,289,766 | 10.86 | to | 9.04 | 36,829,733 | 0.01 | 0.00 | to | 1.50 | 0.01 | to | (1.47 | ) | |||||||||||||||||||||||||||||||||||||||||
TA BlackRock iShares Edge 40 Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 165,466 | 16.73 | to | 12.74 | 2,874,315 | 2.23 | 0.00 | to | 1.50 | 15.31 | to | 13.60 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 170,782 | 14.51 | to | 11.21 | 2,620,516 | 1.91 | 0.00 | to | 1.50 | (4.14 | ) | to | (5.56 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 182,008 | 15.13 | to | 11.87 | 3,013,996 | 1.75 | 0.00 | to | 1.50 | 9.74 | to | 8.13 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 197,400 | 13.79 | to | 10.98 | 3,092,227 | 1.47 | 0.00 | to | 1.50 | 2.22 | to | 0.72 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 203,856 | 13.49 | to | 10.90 | 3,288,538 | 1.24 | 0.00 | to | 1.50 | (0.08 | ) | to | (1.55 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock Tactical Allocation Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,596,129 | 16.79 | to | 14.90 | 25,483,831 | 4.10 | 0.00 | to | 1.50 | 17.43 | to | 15.69 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,759,314 | 14.30 | to | 12.88 | 24,034,351 | 2.02 | 0.00 | to | 1.50 | (4.21 | ) | to | (5.64 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,908,492 | 14.93 | to | 13.65 | 27,366,726 | 2.69 | 0.00 | to | 1.50 | 12.02 | to | 10.37 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,075,714 | 13.33 | to | 12.36 | 26,720,762 | 3.90 | 0.00 | to | 1.50 | 5.16 | to | 3.61 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,204,740 | 12.67 | to | 11.93 | 27,165,866 | 2.87 | - | to | 1.50 | 0.06 | to | (1.42 | ) | |||||||||||||||||||||||||||||||||||||||||
TA Greystone International Growth Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 2,140,122 | 15.75 | to | 14.62 | 36,425,138 | 1.62 | 0.00 | to | 1.50 | 27.68 | to | 25.80 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 2,293,934 | 12.34 | to | 11.62 | 31,067,991 | 1.21 | 0.00 | to | 1.50 | (17.70 | ) | to | (18.93 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,582,105 | 14.99 | to | 14.34 | 43,373,061 | 1.39 | 0.00 | to | 1.50 | 27.24 | to | 25.37 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,430,919 | 11.78 | to | 11.43 | 33,839,961 | 1.51 | 0.00 | to | 1.50 | 0.08 | to | (1.40 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,506,005 | 11.77 | to | 11.60 | 37,962,670 | 1.68 | 0.00 | to | 1.50 | 0.08 | to | (1.40 | ) | |||||||||||||||||||||||||||||||||||||||||
TA Janus Balanced Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 702,584 | 20.85 | to | 17.83 | 13,105,025 | 1.59 | 0.00 | to | 1.50 | 22.08 | to | 20.28 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 683,989 | 17.08 | to | 14.82 | 10,568,133 | 1.65 | 0.00 | to | 1.50 | 0.22 | to | (1.27 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 724,892 | 17.04 | to | 15.01 | 11,305,225 | 1.58 | 0.00 | to | 1.50 | 17.05 | to | 15.32 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 715,770 | 14.56 | to | 13.02 | 9,685,373 | 1.22 | 0.00 | to | 1.50 | 4.33 | to | 2.79 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 759,586 | 13.95 | to | 12.67 | 9,971,177 | 0.91 | 0.00 | to | 1.50 | 0.34 | to | (1.14 | ) |
34
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair Value Corresponding to Lowest to Highest Expense Ratio |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA Janus Mid-Cap Growth Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 8,475,626 | $ | 33.81 | to | $ | 25.72 | $ | 395,731,444 | 0.07 | % | 0.00 | % | to | 1.50 | % | 36.71 | % | to | 34.69 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 8,971,980 | 24.73 | to | 19.09 | 312,172,498 | 0.06 | 0.00 | to | 1.50 | (1.22 | ) | to | (2.69 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 9,183,297 | 25.03 | to | 19.62 | 337,913,344 | 0.10 | 0.00 | to | 1.50 | 29.01 | to | 27.11 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 9,076,020 | 19.40 | to | 15.44 | 282,519,239 | - | 0.00 | to | 1.50 | (2.04 | ) | to | (3.49 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 8,691,872 | 19.81 | to | 15.99 | 317,339,375 | - | 0.00 | to | 1.50 | (5.03 | ) | to | (6.44 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,349,901 | 18.23 | to | 14.86 | 24,659,624 | 2.56 | 0.00 | to | 1.50 | 13.90 | to | 12.22 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,411,802 | 16.00 | to | 13.24 | 23,252,229 | 1.90 | 0.00 | to | 1.50 | (3.98 | ) | to | (5.41 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,808,077 | 16.66 | to | 14.00 | 33,444,895 | 2.07 | 0.00 | to | 1.50 | 12.81 | to | 11.15 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,828,993 | 14.77 | to | 12.59 | 31,056,638 | 2.03 | 0.00 | to | 1.50 | 4.62 | to | 3.08 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,928,238 | 14.12 | to | 12.22 | 32,182,847 | 2.24 | 0.00 | to | 1.50 | (1.96 | ) | to | (3.41 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 14,617,957 | 20.58 | to | 17.71 | 313,982,504 | 1.72 | 0.00 | to | 1.50 | 26.05 | to | 24.19 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 14,820,361 | 16.33 | to | 14.26 | 263,807,775 | 1.88 | 0.00 | to | 1.50 | (10.39 | ) | to | (11.73 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 14,903,405 | 18.22 | to | 16.16 | 312,891,018 | 1.45 | 0.00 | to | 1.50 | 24.63 | to | 22.80 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 14,967,195 | 14.62 | to | 13.16 | 264,735,115 | 2.18 | 0.00 | to | 1.50 | 6.08 | to | 4.51 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 15,502,585 | 13.78 | to | 12.59 | 269,244,867 | 1.64 | 0.00 | to | 1.50 | (1.93 | ) | to | (3.38 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 3,883,875 | 19.58 | to | 16.02 | 73,482,650 | 2.18 | 0.00 | to | 1.50 | 16.42 | to | 14.70 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 3,932,159 | 16.82 | to | 13.96 | 67,106,795 | 1.74 | 0.00 | to | 1.50 | (5.13 | ) | to | (6.54 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 3,956,767 | 17.73 | to | 14.94 | 76,977,415 | 1.86 | 0.00 | to | 1.50 | 16.47 | to | 14.75 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 4,086,087 | 15.22 | to | 13.02 | 71,525,376 | 2.20 | 0.00 | to | 1.50 | 5.56 | to | 4.01 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 4,313,192 | 14.42 | to | 12.52 | 73,628,323 | 2.01 | 0.00 | to | 1.50 | (2.23 | ) | to | (3.67 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 15,058,363 | 20.03 | to | 16.88 | 299,769,826 | 2.18 | 0.00 | to | 1.50 | 20.01 | to | 18.24 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 15,195,604 | 16.69 | to | 14.28 | 265,001,910 | 1.87 | 0.00 | to | 1.50 | (7.07 | ) | to | (8.45 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 15,118,264 | 17.96 | to | 15.60 | 304,126,820 | 1.72 | 0.00 | to | 1.50 | 19.77 | to | 18.01 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 15,259,736 | 15.00 | to | 13.22 | 269,751,359 | 2.03 | 0.00 | to | 1.50 | 6.55 | to | 4.98 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 15,834,085 | 14.08 | to | 12.59 | 272,495,299 | 2.19 | 0.00 | to | 1.50 | (2.23 | ) | to | (3.68 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Core Bond Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,399,936 | 18.25 | to | 14.00 | 34,000,646 | 2.59 | 0.00 | to | 1.50 | 8.53 | to | 6.92 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,461,988 | 16.82 | to | 13.09 | 34,423,020 | 3.26 | 0.00 | to | 1.50 | 0.08 | to | (1.41 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,388,407 | 16.81 | to | 13.28 | 35,983,696 | 2.91 | 0.00 | to | 1.50 | 3.66 | to | 2.14 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,437,967 | 16.21 | to | 13.00 | 40,055,708 | 2.17 | 0.00 | to | 1.50 | 2.39 | to | 0.88 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,234,740 | 15.83 | to | 12.89 | 37,344,012 | 2.00 | 0.00 | to | 1.50 | 0.61 | to | (0.87 | ) | |||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Enhanced Index Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 352,818 | 29.79 | to | 27.00 | 10,944,909 | 1.18 | 0.00 | to | 1.50 | 31.03 | to | 29.10 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 355,833 | 22.73 | to | 20.91 | 8,703,767 | 1.05 | 0.00 | to | 1.50 | (6.01 | ) | to | (7.41 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 375,201 | 24.19 | to | 22.59 | 10,203,033 | 0.59 | 0.00 | to | 1.50 | 21.15 | to | 19.37 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 351,180 | 19.96 | to | 18.92 | 8,082,798 | 0.40 | 0.00 | to | 1.50 | 11.35 | to | 9.71 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 402,793 | 17.93 | to | 17.25 | 8,472,411 | 0.94 | 0.00 | to | 1.50 | (0.07 | ) | to | (1.55 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan International Moderate Growth Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 819,530 | 15.47 | to | 12.67 | 11,283,934 | 2.33 | 0.00 | to | 1.50 | 17.77 | to | 16.03 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 867,382 | 13.13 | to | 10.92 | 10,202,855 | 2.37 | 0.00 | to | 1.50 | (11.58 | ) | to | (12.90 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 946,821 | 14.85 | to | 12.54 | 12,670,600 | 1.83 | 0.00 | to | 1.50 | 21.78 | to | 19.99 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 979,021 | 12.20 | to | 10.45 | 10,835,853 | 2.10 | 0.00 | to | 1.50 | 1.22 | to | (0.27 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,011,083 | 12.05 | to | 10.48 | 11,146,400 | 1.96 | 0.00 | to | 1.50 | (1.64 | ) | to | (3.09 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Mid Cap Value Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 187,027 | 24.72 | to | 43.66 | 6,646,187 | 1.39 | 0.00 | to | 0.90 | 25.83 | to | 25.08 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 203,109 | 19.60 | to | 34.91 | 5,759,797 | 0.86 | 0.30 | to | 0.90 | (12.07 | ) | to | (12.60 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 218,249 | 22.29 | to | 39.94 | 7,157,522 | 0.78 | 0.30 | to | 0.90 | 13.14 | to | 12.46 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 236,161 | 19.70 | to | 35.51 | 7,277,280 | 2.08 | 0.30 | to | 0.90 | 14.25 | to | 13.57 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 252,964 | 17.24 | to | 31.27 | 7,312,430 | 0.87 | 0.30 | to | 0.90 | (3.03 | ) | to | (3.60 | ) |
35
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair Value Corresponding to Lowest to Highest Expense Ratio |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Tactical Allocation Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,953,351 | $ | 15.54 | to | $ | 12.30 | $ | 41,541,857 | 2.36 | % | 0.00 | % | to | 1.50 | % | 12.18 | % | to | 10.52 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 2,173,742 | 13.86 | to | 11.13 | 42,293,856 | 2.23 | 0.00 | to | 1.50 | (2.94 | ) | to | (4.38 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,044,825 | 14.27 | to | 11.64 | 43,708,710 | 1.84 | 0.00 | to | 1.50 | 8.75 | to | 7.15 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,962,394 | 13.13 | to | 10.86 | 43,892,286 | 1.35 | 0.00 | to | 1.50 | 4.46 | to | 2.92 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,083,125 | 12.57 | to | 10.55 | 49,165,930 | 1.26 | 0.00 | to | 1.50 | (0.11 | ) | to | (1.58 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Managed Risk - Balanced ETF Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 185,551 | 17.91 | to | 15.98 | 2,996,129 | 2.53 | 0.00 | to | 1.50 | 15.92 | to | 14.21 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 116,146 | 15.45 | to | 13.99 | 1,631,149 | 1.77 | 0.00 | to | 1.50 | (4.33 | ) | to | (5.75 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 134,365 | 16.15 | to | 14.85 | 1,980,672 | 1.81 | 0.00 | to | 1.50 | 13.72 | to | 12.04 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 110,976 | 14.20 | to | 13.25 | 1,460,057 | 1.89 | 0.00 | to | 1.50 | 3.94 | to | 2.41 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 103,015 | 13.66 | to | 12.94 | 1,313,571 | 1.38 | 0.00 | to | 1.50 | (1.50 | ) | to | (2.95 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Managed Risk - Growth ETF Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 234,232 | 18.91 | to | 17.25 | 4,042,956 | 2.10 | 0.00 | to | 1.50 | 19.74 | to | 17.97 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 219,770 | 15.79 | to | 14.62 | 3,189,192 | 1.81 | 0.00 | to | 1.50 | (6.99 | ) | to | (8.37 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 224,120 | 16.98 | to | 15.96 | 3,522,359 | 1.89 | 0.00 | to | 1.50 | 18.78 | to | 17.03 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 267,686 | 14.30 | to | 13.63 | 3,564,335 | 1.92 | 0.00 | to | 1.50 | 4.97 | to | 3.42 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 360,027 | 13.62 | to | 13.18 | 4,601,357 | 1.64 | 0.00 | to | 1.50 | (3.17 | ) | to | (4.60 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Morgan Stanley Capital Growth Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 2,574,775 | 38.92 | to | 35.25 | 106,517,393 | - | 0.00 | to | 1.50 | 23.74 | to | 21.91 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,912,902 | 31.45 | to | 28.92 | 65,480,293 | - | 0.00 | to | 1.50 | 6.68 | to | 5.10 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,921,519 | 29.48 | to | 27.52 | 63,401,145 | - | 0.00 | to | 1.50 | 43.59 | to | 41.48 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,695,157 | 20.53 | to | 19.45 | 42,402,687 | - | 0.00 | to | 1.50 | (2.26 | ) | to | (3.70 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,796,549 | 21.01 | to | 20.20 | 51,149,612 | - | 0.00 | to | 1.50 | 11.79 | to | 10.14 | ||||||||||||||||||||||||||||||||||||||||||
TA Multi-Managed Balanced Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 4,222,210 | 27.15 | to | 22.24 | 125,581,396 | 1.64 | 0.00 | to | 1.50 | 21.77 | to | 19.97 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 4,476,533 | 22.30 | to | 18.54 | 111,103,271 | 1.42 | 0.00 | to | 1.50 | (3.66 | ) | to | (5.09 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 4,746,359 | 23.14 | to | 19.54 | 124,785,035 | 0.85 | 0.00 | to | 1.50 | 14.14 | to | 12.45 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 4,932,676 | 20.28 | to | 17.37 | 117,567,654 | 0.96 | 0.00 | to | 1.50 | 7.87 | to | 6.28 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 5,184,106 | 18.80 | to | 16.34 | 117,750,424 | 1.37 | 0.00 | to | 1.50 | 0.21 | to | (1.27 | ) | |||||||||||||||||||||||||||||||||||||||||
TA PIMCO Tactical - Balanced Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 402,997 | 17.00 | to | 14.51 | 6,138,969 | 0.42 | 0.00 | to | 1.50 | 19.90 | to | 18.13 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 439,725 | 14.18 | to | 12.28 | 5,644,298 | 3.46 | 0.00 | to | 1.50 | (6.75 | ) | to | (8.13 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 474,705 | 15.21 | to | 13.37 | 6,615,284 | 0.53 | 0.00 | to | 1.50 | 12.42 | to | 10.76 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 510,821 | 13.53 | to | 12.07 | 6,408,762 | 0.51 | 0.00 | to | 1.50 | 5.65 | to | 4.09 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 546,907 | 12.80 | to | 11.59 | 6,578,349 | - | 0.00 | to | 1.50 | (2.27 | ) | to | (3.72 | ) | ||||||||||||||||||||||||||||||||||||||||
TA PIMCO Tactical - Conservative Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 743,974 | 16.04 | to | 13.69 | 10,552,121 | 0.35 | 0.00 | to | 1.50 | 17.86 | to | 16.12 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 777,894 | 13.61 | to | 11.79 | 9,513,930 | 3.53 | 0.00 | to | 1.50 | (4.92 | ) | to | (6.33 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 745,711 | 14.32 | to | 12.59 | 9,721,335 | 1.48 | 0.00 | to | 1.50 | 10.70 | to | 9.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 776,246 | 12.93 | to | 11.54 | 9,288,937 | 0.59 | 0.00 | to | 1.50 | 5.22 | to | 3.67 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 830,914 | 12.29 | to | 11.13 | 9,582,563 | 0.39 | 0.00 | to | 1.50 | (1.77 | ) | to | (3.22 | ) | ||||||||||||||||||||||||||||||||||||||||
TA PIMCO Tactical - Growth Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 853,922 | 16.94 | to | 14.45 | 12,581,043 | - | 0.00 | to | 1.50 | 21.97 | to | 20.17 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 916,901 | 13.88 | to | 12.02 | 11,257,710 | 3.25 | 0.00 | to | 1.50 | (7.49 | ) | to | (8.87 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 970,002 | 15.01 | to | 13.19 | 13,146,326 | 0.61 | 0.00 | to | 1.50 | 15.13 | to | 13.44 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,008,345 | 13.04 | to | 11.63 | 12,091,793 | - | 0.00 | to | 1.50 | 5.09 | to | 3.54 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,065,236 | 12.41 | to | 11.23 | 12,341,887 | - | 0.00 | to | 1.50 | (3.16 | ) | to | (4.60 | ) | ||||||||||||||||||||||||||||||||||||||||
TA PIMCO Total Return Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,309,198 | 18.02 | to | 13.99 | 20,996,230 | 2.34 | 0.00 | to | 1.50 | 8.41 | to | 6.81 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,379,415 | 16.63 | to | 13.09 | 21,095,608 | 2.52 | 0.00 | to | 1.50 | (0.65 | ) | to | (2.13 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,518,101 | 16.74 | to | 13.38 | 24,393,778 | - | 0.00 | to | 1.50 | 4.88 | to | 3.34 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,462,201 | 15.96 | to | 12.95 | 23,475,769 | 2.34 | 0.00 | to | 1.50 | 2.71 | to | 1.20 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,418,569 | 15.53 | to | 12.79 | 22,905,154 | 2.83 | 0.00 | to | 1.50 | 0.69 | to | (0.80 | ) |
36
Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair Value Corresponding to Lowest to Highest Expense Ratio |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Conservative Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 324,549 | $ | 14.70 | to | $ | 12.73 | $ | 4,430,550 | 2.27 | % | 0.00 | % | to | 1.50 | % | 11.47 | % | to | 9.82 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 337,448 | 13.19 | to | 11.59 | 4,151,993 | 1.93 | 0.00 | to | 1.50 | (2.61 | ) | to | (4.05 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 329,104 | 13.54 | to | 12.08 | 4,174,813 | 1.95 | 0.00 | to | 1.50 | 11.92 | to | 10.27 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 365,468 | 12.10 | to | 10.96 | 4,166,203 | 1.48 | 0.00 | to | 1.50 | 2.87 | to | 1.36 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 382,954 | 11.76 | to | 10.81 | 4,268,573 | 1.09 | 0.00 | to | 1.50 | (2.13 | ) | to | (3.58 | ) | ||||||||||||||||||||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 180,588 | 14.51 | to | 13.05 | 2,517,994 | 2.10 | - | to | 1.50 | 11.10 | to | 9.79 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 181,696 | 13.03 | to | 11.89 | 2,282,530 | 1.75 | 0.30 | to | 1.50 | (4.27 | ) | to | (5.40 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 184,491 | 13.61 | to | 12.57 | 2,429,683 | 1.71 | 0.30 | to | 1.50 | 15.36 | to | 14.00 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 219,017 | 11.79 | to | 11.03 | 2,512,939 | 1.46 | 0.30 | to | 1.50 | 2.13 | to | 0.92 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 235,947 | 11.55 | to | 10.93 | 2,659,690 | 1.11 | 0.30 | to | 1.50 | (4.34 | ) | to | (5.47 | ) | ||||||||||||||||||||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Growth Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,882,826 | 16.17 | to | 13.36 | 27,046,353 | 1.94 | 0.00 | to | 1.50 | 11.59 | to | 9.94 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 2,030,239 | 14.49 | to | 12.15 | 26,218,151 | 1.56 | 0.00 | to | 1.50 | (5.67 | ) | to | (7.07 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,197,545 | 15.36 | to | 13.08 | 30,221,332 | 1.53 | 0.00 | to | 1.50 | 20.55 | to | 18.78 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,356,485 | 12.75 | to | 11.01 | 27,030,879 | 1.32 | 0.00 | to | 1.50 | 2.32 | to | 0.81 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,613,777 | 12.46 | to | 10.92 | 29,499,304 | 1.18 | 0.00 | to | 1.50 | (6.38 | ) | to | (7.76 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Small/Mid Cap Value Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 3,983,695 | 35.31 | to | 23.30 | 128,821,916 | 0.97 | 0.00 | to | 1.50 | 25.28 | to | 23.43 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 4,150,157 | 28.19 | to | 18.88 | 113,071,433 | 0.90 | 0.00 | to | 1.50 | (11.46 | ) | to | (12.77 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 4,237,645 | 31.83 | to | 21.64 | 139,162,267 | 1.13 | 0.00 | to | 1.50 | 15.55 | to | 13.85 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 4,252,175 | 27.55 | to | 19.01 | 130,924,094 | 0.80 | 0.00 | to | 1.50 | 21.13 | to | 19.34 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 4,116,437 | 22.74 | to | 15.93 | 114,210,807 | 1.01 | 0.00 | to | 1.50 | (2.51 | ) | to | (3.95 | ) | ||||||||||||||||||||||||||||||||||||||||
TA T. Rowe Price Small Cap Initial Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,661,544 | 41.15 | to | 33.53 | 59,806,465 | - | 0.00 | to | 1.50 | 32.77 | to | 30.81 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,673,978 | 30.99 | to | 25.63 | 47,121,727 | - | 0.00 | to | 1.50 | (7.08 | ) | to | (8.46 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,827,193 | 33.35 | to | 28.00 | 57,593,105 | - | 0.00 | to | 1.50 | 22.39 | to | 20.59 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,842,107 | 27.25 | to | 23.22 | 50,509,301 | - | 0.00 | to | 1.50 | 11.22 | to | 9.58 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,688,075 | 24.50 | to | 21.19 | 43,938,629 | - | 0.00 | to | 1.50 | 2.43 | to | 0.92 | ||||||||||||||||||||||||||||||||||||||||||
TA WMC US Growth Initial Class |
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12/31/2019 | 30,981,983 | 31.08 | to | 26.71 | 1,246,807,757 | 0.13 | 0.00 | to | 1.50 | 40.05 | to | 37.98 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 32,437,685 | 22.19 | to | 19.36 | 943,928,588 | 0.48 | 0.00 | to | 1.50 | 0.21 | to | (1.28 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 34,286,966 | 22.15 | to | 19.61 | 1,009,620,361 | 0.42 | 0.00 | to | 1.50 | 29.20 | to | 27.29 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 35,944,589 | 17.14 | to | 15.40 | 839,304,146 | 0.40 | 0.00 | to | 1.50 | 2.81 | to | 1.30 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 38,121,323 | 16.67 | to | 15.21 | 884,496,470 | 0.73 | 0.00 | to | 1.50 | 6.85 | to | 5.27 |
(1) | See Footnote 1 |
* | These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the Mutual Fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the Mutual Fund in which the subaccounts invest. |
** | These amounts represent the annualized contract expenses of the subaccount, consisting primarily of mortality and expense charges, for each period indicated. These ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the Mutual Fund have been excluded. |
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Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
5. Financial Highlights (continued)
*** | These amounts represent the total return for the periods indicated, including changes in the value of the Mutual Fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. Total returns reflect a full twelve month period and total returns for subaccounts opened during the year have not been disclosed as they may not be indicative of a full year return. Expense ratios not in effect for the full twelve months are not reflected in the total return as they may not be indicative of a full year return. |
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Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
6. Administrative and Mortality and Expense Risk Charges
Under some forms of the contracts, a sales charge and premium taxes are deducted by TPLIC prior to allocation of policy owner payments to the subaccounts. Contingent surrender charges may also apply. Under all forms of the contracts, monthly charges against policy cash values are made to compensate TPLIC for costs of insurance provided. A daily charge equal to an annual rate from 0.00% and 1.50% of average daily net assets is assessed to compensate TPLIC for assumption of mortality and expense risks in connection with the issuance and administration of the contracts. This charge (not assessed at the individual contract level) effectively reduces the value of a unit outstanding during the year. Charges reflected above are those currently assessed and may be subject to change. Contract owners should see their actual policy and any related attachments to determine their specific charges.
7. Income Tax
Operations of the Separate Account form a part of TPLIC, which is taxed as a life insurance company under Subchapter L of the Internal Revenue Code of 1986, as amended (the Code). The operations of the Separate Account are accounted for separately from other operations of TPLIC for purposes of federal income taxation. The Separate Account is not separately taxable as a regulated investment company under Subchapter M of the Code and is not otherwise taxable as an entity separate from TPLIC. Under existing federal income tax laws, the income of the Separate Account is not taxable to TPLIC, as long as earnings are credited under the variable life contracts.
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Transamerica Premier Life Insurance Company
WRL Series Life Account
Notes to Financial Statements
December 31, 2019
8. Subsequent Events
The Separate Account has evaluated the financial statements for subsequent events through the date which the financial statements were issued. During this period, there were no subsequent events requiring recognition in the financial statements.
Events that are indicative of conditions that arose after the balance sheet date are disclosed, but do not result in an adjustment of the financial statements themselves. Since January 2020, the Coronavirus disease (COVID-19) pandemic and economic uncertainties have arisen which have impacted the Separate Accounts net assets. The extent to which the COVID-19 pandemic will continue to impact the net assets will depend on future developments, which are highly uncertain and cannot be estimated, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.
9. Related Parties
Transamerica Capital, Inc. (TCI), a wholesaling broker-dealer, is an affiliated entity of TPLIC and an indirect wholly owned subsidiary of AEGON N.V. TCI distributes TPLICs products through broker-dealers and other financial intermediaries.
The subaccounts invest in the mutual funds listed in Footnote 1. These investments include funds managed by Transamerica Asset Management, Inc. (TAM). Transamerica Fund Services, Inc. (TFS) serves as a transfer agent to TAM, and AEGON USA Asset Management Holding, LLC (AAM) serves as a sub-advisor for certain funds managed by TAM. TAM, TFS and AAM are affiliated entities of TPLIC and indirect wholly owned subsidiaries of AEGON N.V. Funds managed by TAM are identified by their fund name, which includes reference to Aegon, Transamerica or both. The Separate Account pays management fees to the related funds as detailed in the fund prospectus.
No charges other than those disclosed in Footnote 6 are deducted for the service rendered by related parties.
Contract owners may transfer funds between available subaccount options within the Separate Account. These transfers are performed at unit value at the time of the transfer.
10. Subsequent Events (Unaudited)
Effective October 1, 2020, TPLIC merged into Transamerica Life Insurance Company (TLIC) and the Separate Account became a segregated investment account of TLIC, an indirect wholly owned subsidiary of AEGON N.V., a holding company organized under the laws of the Netherlands. There is no anticipated impact to the financial statements or contract holders.
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May 1, 2017
STATEMENT OF ADDITIONAL INFORMATION
ASSOCIATE FREEDOM ELITE BUILDER®
issued through
WRL Series Life Account
by
Transamerica Premier Life Insurance Company
(former Depositor, Western Reserve Assurance Co. of Ohio)
Administrative Office:
570 Carillon Parkway
St. Petersburg, Florida 33716-1294
Please direct transactions, claim forms, payments and other correspondence and notices as follows:
Transaction Type | Direct or Send to | |
Telephonic Transaction | 1-727- 299-1800 or 1-800-851-9777 (toll free) | |
Facsimile Transaction | 1-727-299-1648 (subaccount transfers only) 1-727-299-1620 (all other facsimile transactions) | |
Electronic Transaction | www.premier.transamerica.com | |
All payments made by check, and all claims, correspondence and notices | Mailing Address: 4333 Edgewood Road N.E. Cedar Rapids, IA 52499-0001 |
This Statement of Additional Information (SAI) expands upon subjects discussed in the current prospectus for the Associate Freedom Elite Builder® a flexible premium variable life insurance policy offered by Transamerica Premier Life Insurance Company (TPLIC or Transamerica Premier). You may obtain a copy of the prospectus dated May 1, 2016 as supplemented, by calling our administrative office at 1-800-851-9777 (Monday Friday from 8:30 a.m. 7:00 p.m. Eastern time), or by writing us at our mailing address at, Transamerica Premier Life, 4333 Edgewood Road N.E., Cedar Rapids, IA 52499-0001. The prospectus sets forth information that a prospective investor should know before investing in a Policy. Terms used in this SAI have the same meanings as in the prospectus for the Policy.
This SAI is not a prospectus and should be read only in conjunction with the prospectuses for the Policy and the AEGON/Transamerica Series Trust Initial Class, Fidelity Variable Insurance Products Service Class 2 Shares, the ProFunds, the Access One Trust, the AllianceBernstein Variable Products Series Fund, and the Franklin Templeton Variable Insurance Products Trust.
05/2017
In order to supplement the description in the prospectus, the following provides additional information about Transamerica Premier and the Policy, which may be of interest to a prospective purchaser.
The Policy General Provisions |
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The Policy belongs to the owner named in the application. The owner may exercise all of the rights and options described in the Policy. The owner is the insured unless the application specifies a different person as the insured. If the owner dies before the insured and no contingent owner is named, then ownership of the Policy will pass to the owners estate. The owner may exercise certain rights described below.
Changing the Owner | Change the owner by providing written notice to us in good order, at our mailing address at any time while the insured is alive and the Policy is in force. Change is effective as of the date that the written notice is accepted by us at our mailing address. Changing the owner does not automatically change the beneficiary. Changing the owner may have tax consequences. You should consult a tax advisor before changing the owner. We are not liable for payments we made before we received the written notice at our mailing address. | |
Choosing the Beneficiary | The owner designates the beneficiary (the person to receive the death benefit when the insured dies) in the application. If the owner designates more than one beneficiary, then each beneficiary shares equally in any death benefit proceeds unless the beneficiary designation states otherwise. If the beneficiary dies before the insured, then any contingent beneficiary becomes the beneficiary. If both the beneficiary and contingent beneficiary die before the insured, then the death benefit will be paid to the owner or the owners estate upon the insureds death. | |
Changing the Beneficiary | The owner changes the beneficiary by providing written notice to us in good order, at our mailing address. Change is effective as of the date the owner signs the written notice. We are not liable for any payments we made before we received the written notice at our mailing address. | |
Assigning the Policy | The owner may assign Policy rights while the insured is alive. The owner retains any ownership rights that are not assigned. Assignee may not change the owner or the beneficiary, and may not elect or change an optional method of payment. Any amount payable to the assignee will be paid in a lump sum. Claims under any assignment are subject to proof of interest and the extent of the assignment. We are not: > bound by any assignment unless we receive a written notice of the assignment at our mailing address; > responsible for the validity of any assignment; > liable for any payment we made before we received written notice of the assignment at our mailing address; or > bound by any assignment which results in adverse tax consequences to the owner, insured(s) or beneficiary(ies). Assigning the Policy may have tax consequences. You should consult a tax advisor before assigning the Policy. |
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Our Right to Contest the Policy
In issuing this Policy, we rely on all statements made by or for the insured in the application or in a supplemental application. Therefore, if you make any material misrepresentation of a fact in the application (or any supplemental application), then we may contest the Policys validity or may resist a claim under the Policy for two years from the Policy date. For any portion of the specified amount that is issued as a result of a conversion, the contestability period is measured from the later of the policy date of the policy that was converted or the latest effective date of reinstatement of the converted policy.
A new two year contestability period shall apply to each increase in specified amount beginning on the effective date of each increase and will apply only to statements made in the application for the increase.
In the absence of fraud, we cannot bring any legal action to contest the validity of the Policy after the Policy (or requested increase in specified amount) has been in force during the insureds lifetime for two years from the Policy date, or if reinstated, for two years from the date of reinstatement. For any portion of the specified amount that is issued as a result of a conversion, the suicide period is measured from the later of the policy date of the policy that was converted or the latest effective date of reinstatement of the converted policy.
If the insured commits suicide, while sane or insane, within two years of the Policy date (or two years from the reinstatement date, if the Policy lapses and is reinstated), the Policy will terminate and our liability is limited to an amount equal to the premiums paid, less any outstanding loan amount, and less any cash withdrawals. We will pay this amount to the owner in one sum.
If the insured commits suicide, while sane or insane, within two years from the effective date of any increase in specified amount, our liability with respect to such increase will be limited to its cost of insurance.
If the age or gender of the insured was stated incorrectly in the application or any supplemental application, then the death benefit will be adjusted based on what the cost of insurance charge for the most recent monthly deduction would have purchased based on the insureds correct age and gender.
Modifying the Policy
Only our President or Secretary may modify the Policy or waive any of our rights or requirements under the Policy. Any modification or waiver must be in writing. No registered representative may bind us by making any promise not contained in the Policy.
If we modify the Policy, we will provide you notice and we will make appropriate endorsements to the Policy.
The underlying fund portfolios may serve as investment vehicles for variable life insurance policies, variable annuity contracts and retirement plans (mixed funding) and shares of the underlying fund portfolios also may be sold to separate accounts of other insurance companies (shared funding). While the Company currently does not foresee any disadvantages to owners and participants arising from either mixed or shared funding, it is possible that the interests of owners of various contracts and/or participants in various plans for which the underlying fund portfolios serve as investments might at some time be in conflict. The Company and each underlying fund portfolios Board of Directors intend to monitor events in order to identify any material conflicts and to determine what action, if any, to take. Such action could include the sale of underlying fund portfolio shares by one or more of the separate accounts, which could have adverse consequences. Such action could also include a decision that separate funds should be established for variable life and variable annuity separate accounts. In such an event, the Company would bear the attendant expenses, but owners and plan participants would no longer have the economies of scale resulting from a larger combined fund. Please read the prospectuses for the underlying fund portfolios, which discuss the underlying fund portfolios risks regarding mixed and shared funding, as applicable.
Addition, Deletion, or Substitution of Portfolios
We do not guarantee that each portfolio will always be available for investment through the Policy. We reserve the right, subject to compliance with applicable law, to add new portfolios, close existing portfolios, or substitute portfolio shares that are held by any subaccount for shares of a different portfolio. New or substitute portfolios may have different fees and expenses and their availability may be limited to certain classes of purchasers. We will only add, delete or substitute shares of another portfolio of a fund (or of another open-end, registered investment company) if the shares of a portfolio are no longer available for investment, or if in our judgment further
2
investment in any portfolio would become inappropriate in view of the purposes of the separate account. We will not add, delete or substitute any shares attributable to your interest in a subaccount without notice to you and prior approval of the SEC, to the extent required by the 1940 Act or other applicable law. We may also decide to purchase securities from other portfolios for the separate account. We reserve the right to transfer separate account assets to another separate account that we determine to be associated with the class of contracts to which the Policy belongs.
We also reserve the right to establish additional subaccounts of the separate account, each of which would invest in a new portfolio of a fund, or in shares of another investment company, with specified investment objectives. We may establish new subaccounts when, in our sole discretion, marketing, tax or investment conditions warrant. We will make any new subaccounts available to existing owners on a basis we determine. We may also eliminate one or more subaccounts for the same reasons as stated above.
In the event of any such substitution or change, we may make such changes in this and other policies as may be necessary or appropriate to reflect such substitution or change. If we deem it to be in the best interests of persons having voting rights under the Policies, and when permitted by law, the separate account may be (1) operated as a management company under the 1940 Act, (2) deregistered under the 1940 Act in the event such registration is no longer required, (3) managed under the direction of a committee, or (4) combined with one or more other separate accounts, or subaccounts.
Additional Information |
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Additional Information about Transamerica Premier and the Separate Account
Transamerica Premier Life Insurance Company (Transamerica Premier) was originally founded in 1858 in the state of Maryland as Maryland Mutual Life and Fire Insurance Company of Baltimore and was the states first insurance company; it then changed its name to Monumental Life Insurance Company in 1935. Monumental Life Insurance Company changed its name to Transamerica Premier Life Insurance Company on July 31, 2014. Transamerica Premier is incorporated under Iowa law and is principally engaged in offering life insurance policies and annuity contracts. Transamerica Premier is licensed to sell insurance in all states (except New York), Puerto Rico, Guam, and in the District of Columbia. Transamerica Premier submits annual statements on its operations and finances to insurance officials in all states and jurisdictions in which it does business. The Policy described in the prospectus has been filed with, and where required, approved by, insurance officials in those jurisdictions in which it is sold.
Transamerica Premier established the separate account as a separate investment account under Ohio law in 1985 and the separate account was re-domesticated to Iowa in 2014. Transamerica Premier owns the assets in the separate account and is obligated to pay all benefits under the Policies. The separate account is used to support other life insurance policies of Transamerica Premier, as well as for other purposes permitted by law. The separate account is registered with the SEC as a unit investment trust under the 1940 Act and qualifies as a separate account within the meaning of the federal securities laws.
Transamerica Premier holds the assets of the separate account physically segregated and apart from the general account. Transamerica Premier maintains records of all purchases and sales of portfolio shares by each of the subaccounts. A blanket bond was issued to AEGON USA, Inc. (AEGON USA) in the aggregate amount of $12 million, covering all of the employees of AEGON USA and its affiliates, including Transamerica Premier. A Stockbrokers Blanket Bond, issued to AEGON U.S.A. Securities, Inc. providing fidelity coverage, covers the activities of registered representatives of TCI to a limit of $10 million.
Arthur D. Woods, Esquire, of Transamerica Premier, has provided legal advice on certain matters in connection with the issuance of the Policy.
Variations in Policy Provisions
Certain provisions of the Policy may vary from the descriptions in the prospectus, depending on when and where the Policy was issued, in order to comply with different state laws. These variations may include differences in charges, or Policy features may be unavailable or known by a different name. Please refer to your Policy; any variations will be included in your Policy or in riders or endorsements attached to your Policy.
Personalized Illustrations of Policy Benefits
In order to help you understand how your Policy values would vary over time under different sets of assumptions, we will provide you with certain personalized illustrations upon request. These will be based on the age and insurance risk characteristics of the insured persons under your Policy and such factors as the specified amount, death benefit option, premium payment amounts, and rates of return (within limits) that you request.
3
The illustrations are not a representation or guarantee of investment returns or cash value. You may request illustrations that reflect the expenses of the portfolios in which you intend to invest.
We currently offer the Policies on a continuous basis. We anticipate continuing to offer the Policies, but reserve the right to discontinue the offering.
Transamerica Capital, Inc. (TCI), serves as principal underwriter for the Policies. TCIs home office is located at 1801 California Street, Suite 5200, Denver, Colorado 80202. TCI is an affiliate of Transamerica Premier and, like Transamerica Premier, is an indirect, wholly-owned subsidiary of AEGON USA. TCI is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and is a member of Financial Industry Regulatory Authority (FINRA). TCI is not a member of the Securities Investor Protection Corporation.
The Policies are offered to the public through sales representatives of broker-dealers (selling firms) that have entered into selling agreements with us and with TCI. Sales representatives are appointed as our insurance agents.
During fiscal years 2016, 2015 and 2014, the amounts paid to TCI in connection with all Policies sold through the separate account were $ 9,270,817.70, $ 11,011.021.02, and $12,269,613.55, respectively. TCI passes through to selling firms commissions it receives to selling firms for their sales, and does not retain any portion of any commissions. Our parent company provides paid-in capital to TCI and pays for TCIs (and paid for AFSGs) operating and other expenses, including overhead, legal and accounting fees.
We and/or TCI or Transamerica Financial Advisors Inc. (TFA) may pay certain selling firms additional cash amounts for: (1) preferred product treatment of the Policies in their marketing programs, which may include marketing services and increased access to their sales representatives; (2) sales promotions relating to the Policies; (3) costs associated with sales conferences and educational seminars for their sales representatives; and (4) other expenses of the firm. These additional payments are not offered to all selling firms, and the terms of any particular agreement governing the payments may vary among selling firms. Differences in compensation paid to a selling firm or its sales representatives for selling one product over another may create conflicts of interests for such firms or its sales representatives.
At least once each year, or more often as required by law, we will mail to policyowners at their last known address a report showing the following information as of the end of the report period:
> the current cash value |
> any activity since the last report | |
> the current net surrender value |
> projected values | |
> the current death benefit |
> investment experience of each subaccount | |
> outstanding loans |
> any other information required by law |
You may request additional copies of reports, but we may charge a fee for such additional copies. In addition, we will send written confirmations of any premium payments and other financial transactions you request including: changes in specified amount, changes in death benefit option, transfers, partial withdrawals, increases in loan amount, loan interest payments, loan repayments, lapses and reinstatements. We also will send copies of the annual and semi-annual report to shareholders for each portfolio in which you are indirectly invested.
We will maintain all records relating to the separate account and the fixed account.
Independent Registered Public Accounting Firms
The financial statements of the WRL Series Life Account as of December 31, 2016 and for the years ended December 31, 2016 and 2015, and the statutory-basis financial statements and schedules of Transamerica Premier Life Insurance Company as of December 31, 2016 and 2015, and for the three years ended December 31, 2016 included in this Statement of Additional Information, have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given upon the authority of such firm as experts in accounting and auditing.
PricewaterhouseCoopers LLP,
One North Wacker Drive
Chicago, IL 60606
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Underwriters |
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The Policy uses mortality tables that distinguish between men and women. As a result, the Policy pays different benefits to men and women of the same age. Montana prohibits our use of actuarial tables that distinguish between males and females to determine premiums and policy benefits for policies issued on the lives of its residents. Therefore, we will base the premiums and benefits in Policies that we issue in Montana, to insure residents of that state, on actuarial tables that do not differentiate on the basis of gender.
Your cost of insurance charge is based on a number of factors, including, but not limited to, the insureds gender, issue age on the Policy date, issue age at the time of any increase in specified amount, specified amount band, length of time from the Policy date or from the date of any increase in specified amount, and underwriting class. We currently place insureds into the following underwriting classes:
| ultimate select (preferred) non-tobacco use; |
| select (non-preferred) non-tobacco use; |
| ultimate standard (preferred) tobacco use; |
| standard (non-preferred) tobacco use; and |
| juvenile-under 18. |
We also place insureds in various sub-standard underwriting classes, which involve a higher mortality risk and higher charges. We generally charge higher rates for insureds who use tobacco. We currently charge lower cost of insurance rates for insureds who are in an ultimate class. An ultimate class is only available if our underwriting guidelines require you to take a blood test because of the specified amount you have chosen.
Transamerica Premiers Published Ratings
We may publish you the ratings and other information that an independent ratings organization assigns to us, in advertisements, sales literature, or reports.. These organizations include: A.M. Best Company, Moodys Investors Service, Inc., S&P Global, and Fitch Ratings. These ratings are opinions regarding an operating insurance companys financial capacity to meet the obligations of its insurance policies in accordance with their terms. These ratings do not apply to the separate account, the subaccounts, the funds or their portfolios, or to their performance. Ratings are subject to change.
Financial Statements |
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Transamerica Premiers statutory-basis financial statements and schedules, which include the Report of Independent Registered Public Accounting Firm, appear on the following pages. These statutory-basis financial statements and schedules should be distinguished from the separate accounts financial statements, and you should consider these statutory-basis financial statements and schedules only as bearing upon Transamerica Premiers ability to meet its obligations under the Policies. You should not consider our statutory-basis financial statements and schedules as bearing upon the investment performance of the assets held in the separate account.
Transamerica Premiers statutory-basis financial statements and schedules as of December 31, 2016 and 2015, and for each of the three years in the period ended December 31, 2016, have been prepared on the basis of statutory accounting principles rather than U.S. generally accepted accounting principles.
The separate accounts financial statements for the period ended December 31, 2016, which include the Report of the Independent Registered Public Accounting Firm, also appear on the following pages.
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PART C - OTHER INFORMATION
(1) | This exhibit was previously filed on Post-Effective Amendment No. 16 to Form S-6 Registration Statement dated April 21, 1998 (File No. 33-31140) and is incorporated herein by reference. |
(2) | This exhibit was previously filed on Post-Effective Amendment No. 4 to Form S-6 Registration Statement dated April 21, 1999 (File No. 333-23359) and is incorporated herein by reference. |
(3) | This exhibit was previously filed on Post-Effective Amendment No. 3 to Form S-6 Registration Statement dated February 28, 2002 (File No. 333-58322) and is incorporated herein by reference. |
(4) | This exhibit was previously filed on the Initial Registration Statement to Form S-6 dated April 5, 2001 (File No. 333-58322) and is incorporated herein by reference. |
(5) | This exhibit was previously filed on Pre-Effective Amendment No. 1 to Form N-6 Registration Statement dated January 31, 2003 (File No. 333-100993). |
(6) | This exhibit was previously filed on Post-Effective Amendment No. 5 to Form N-6 Registration Statement dated February 10, 2003 (File No. 333-58322) and is incorporated herein by reference. |
(7) | This exhibit was previously filed on Initial Registration Statement to Form N-6 Registration Statement dated June 14, 2006 (File No. 333-135005) and is incorporated herein by reference. |
(8) | This exhibit was previously filed on Post-Effective Amendment No. 8 to Form N-6 Registration Statement dated April 25, 2008 (File No. 333-61654) and is incorporated herein by reference. |
(9) | This exhibit was previously filed on Post-Effective Amendment No. 6 to Form N-6 Registration Statement dated April 11, 2008 (File No. 333-110315) and is incorporated herein by reference. |
(10) | This exhibit was previously filed on Post-Effective Amendment No. 6 to Form N-6 Registration Statement dated April 27, 2009 (File No. 333-135005) and is no longer applicable. |
(11) | This exhibit was previously filed on Post-Effective Amendment No. 13 to Form N-6 Registration Statement dated April 18, 2011 (File No. 333-135005) and is incorporated herein by reference. |
(12) | This exhibit previously filed on Post-Effective amendment No. 16 to Form N-6 Registration Statement dated April 18, 2012 (File No. 333-107705) and is incorporated herein by reference. |
(13) | This exhibit previously filed on Post-Effective Amendment No. 15 to Form N-6 Registration Statement dated April 22, 2013 (File No. 333-110315) and is incorporated herein by reference. |
(14) | This exhibit previously filed on Post-Effective Amendment No. 16 to Form N-6 Registration Statement dated April 29, 2014 (File No. 333-110315) and is incorporated herein by reference. |
(15) | This exhibit was previously filed on Post-Effective Amendment No. 2 to Form N-6 Registration Statement dated April 30, 2014 (File No. 333-157211) and is incorporated herein by reference. |
(16) | This exhibit was previously filed on the Initial Filing to Form N-6 Registration Statement dated October 1, 2014 (File No. 333-199047) and is incorporated herein by reference. |
(17) | This exhibit was previously filed on Post-Effective amendment No. 5 to Form N-4 Registration Statement dated April 29, 2009 (File No. 333-146323) and is incorporated herein by reference. |
(18) | This exhibit was previously filed on Post-Effective amendment No. 9 to Form N-4 Registration Statement dated April 25, 2013 (File No. 333-146323) and is incorporated herein by reference. |
(19) | This exhibit was previously filed on Post-Effective amendment No. 10 to Form N-4 Registration Statement dated April 30, 2014 (File No. 333-146323) and is incorporated herein by reference. |
(20) | This exhibit was previously filed on Post-Effective amendment No. 9 to Form N-4 Registration Statement dated April 25, 2013 (File No. 333-146323) and is no longer applicable. |
(21) | This exhibit was previously filed on Post-Effective amendment No. 1 to Form N-6 Registration Statement dated April 28, 2015 (File No. 333-199047) and is incorporated herein by reference. |
(22) | This exhibit was previously filed on Post-Effective amendment No. 2 to Form N-6 Registration Statement dated April 27, 2016 (File No. 333-199047) and is incorporated herein by reference. |
(23) | This exhibit was previously filed on Post-Effective amendment No. 3 to Form N-6 Registration Statement dated April 26, 2017 (File No. 333-199047) and is incorporated herein by reference. |
(24) | This exhibit was previously filed on Post-Effective Amendment No.4 to Form N-6 Registration Statement dated April 25, 2018 (File No. 333-199047) and is incorporated herein by reference. |
(25) | This exhibit was previously filed on Post-Effective Amendment No.5 to Form N-6 dated Registration Statement April 26, 2019 (File No. 333-199047) and is incorporated herein by reference. |
(26) | This exhibit was previously filed on Post-Effective Amendment No.6 to Form N-6 Registration Statement dated April 24, 2020 (File No. 333-199047) and is incorporated herein by reference. |
(27) | This exhibit was previously filed on Pre-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-185573) filed on April 10, 2013and is incorporated herein by reference. |
(28) | This exhibit was previously filed on Initial Filing of Form N-4 Registration Statement (File No. 333-169445) filed on September 17, 2010, and is incorporated herein by reference. |
(29) | This exhibit was previously filed on Pre-Effective Amendment No. 1 to Form N-6 Registration Statement dated April 22, 2003 (File No. 333-100993). |
(30) | Filed herewith. |
Item 27. Directors and Officers of the Depositor
Name |
Principal Business |
Position and Offices with Depositor | ||
Address |
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Blake S. Bostwick | (1) | Director and President | ||
Fred Gingerich | (3) | Controller and Vice President | ||
Mark W. Mullin | (2) | Director and Chairman of the Board | ||
David Schulz | (3) | Director, Chief Tax Officer and Senior Vice President | ||
C. Michiel van Katwijk | (2) | Director, Chief Financial Officer, Executive Vice President, and Treasurer | ||
Karyn Polak | (2) | Director, Secretary, General Counsel and Senior Vice President |
(1) | 1801 California Street, Suite 5200, Denver, CO 80202-2642 |
(2) | 100 Light St., Baltimore, MD 21202 |
(3) | 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-0001 |
Item 28. Persons Controlled by or under Common Control with the Depositor or Registrant
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
25 East 38th Street, LLC
|
Delaware | Sole Member: Yarra Rapids, LLC | Real estate investments | |||
239 West 20th Street, LLC
|
Delaware | Sole Member: Yarra Rapids, LLC | Real estate investments | |||
313 East 95th Street, LLC
|
Delaware | Sole Member: Yarra Rapids, LLC | Real estate investments | |||
319 East 95th Street, LLC
|
Delaware | Sole Member: Yarra Rapids, LLC | Real estate investments | |||
AEGON Affordable Housing Debt Fund I, LLC | Delaware | Members: AHDF Manager I, LLC (0.01%), Managing Member; Transamerica Life Insurance Company (5%); non-AEGON affiliates: Dominium Taxable Fund I, LLC (94.99%)
|
Affordable housing loans | |||
AEGON AM Funds, LLC | Delaware | AEGON USA Investment Management, LLC is the Manager; equity will be owned by clients/Investors of AEGON USA Investment Management, LLC
|
To serve as a fund for a client and offer flexibility to accommodate other similarly situated clients. | |||
AEGON Asset Management Services, Inc. | Delaware | 100% AUSA Holding, LLC
|
Registered investment advisor | |||
Aegon Community Investments 50, LLC | Delaware | Members: Aegon Community Investments 50, LLC (0.10%); Transamerica Financial Life Insurance Company (25.49750%); Transamerica Premier Life Insurance Company (25.49750%); non-AEGON affiliate, Citibank, N.A. (48.9950%)
|
Investments | |||
Aegon Community Investments 51, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 52, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 53, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 54, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 55, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 56, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 57, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 58, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 59, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 60, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 61, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 62, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
AEGON Direct Marketing Services, Inc. | Maryland | Transamerica Premier Life Insurance Company owns 103,324 shares; Commonwealth General Corporation owns 37,161 shares
|
Marketing company | |||
AEGON Direct Marketing Services International, LLC
|
Maryland | 100% AUSA Holding, LLC | Marketing arm for sale of mass marketed insurance coverage | |||
AEGON Direct Marketing Services Mexico, S.A. de C.V.
|
Mexico | 100% AEGON DMS Holding B.V. | Provide management advisory and technical consultancy services. | |||
AEGON Direct Marketing Services Mexico Servicios, S.A. de C.V. | Mexico | 100% AEGON DMS Holding B.V. | Provide marketing, trading, telemarketing and advertising services in favor of any third party, particularly in favor of insurance and reinsurance companies.
| |||
AEGON Energy Management, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
AEGON Financial Services Group, Inc. | Minnesota | 100% Transamerica Life Insurance Company
|
Marketing | |||
AEGON Funding Company, LLC. | Delaware | Sole Member: Transamerica Corporation | Issue debt securities-net proceeds used to make loans to affiliates
| |||
Aegon Global Services, LLC | Iowa | Sole Member: Commonwealth General Corporation
|
Holding company | |||
AEGON Institutional Markets, Inc. | Delaware | 100% Commonwealth General Corporation | Provider of investment, marketing and administrative services to insurance companies
| |||
AEGON Life Insurance Agency Inc. | Taiwan | 100% AEGON Direct Marketing Services, Inc. (Taiwan Domiciled)
|
Life insurance | |||
Aegon LIHTC Fund 50, LLC | Delaware | Members: Aegon Community Investments 50, LLC (0.01%); Transamerica Financial Life Insurance Company (25.49750%); Transamerica Premier Life Insurance Company (25.49750%); non-affiliate of AEGON, Citibank, N.A. (48.9950%)
|
Investments | |||
Aegon LIHTC Fund 51, LLC | Delaware | Members: Aegon Community Investments 51, LLC (.01%) as Managing Member; non-affiliate of AEGON, Citibank, N.A. (99.99%)
|
Investments | |||
Aegon LIHTC Fund 52, LLC | Delaware | Members: Transamerica Financial Life Insurance Company (10.18%); Transamerica Life Insurance Company (1%); Managing Member - Aegon Community Investments 52, LLC (0.01%); non-affiliates of AEGON, Citibank, N.A. (49%); California Bank & Trust (5.21%); Pacific West Bank (7.58%); Ally Bank (11.35%); US Bank (7.58%); Bank of the West (7.46%)
|
Investments | |||
Aegon LIHTC Fund 54, LLC | Delaware | Non-Member Manager Aegon Community Investments 54, LLC (0%); Members: non-affiliate of Aegon, FNBC Leasing Corporation (100%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Aegon LIHTC Fund 55, LLC | Delaware | Members: Managing Member - Aegon Community Investments 55, LLC (.01%); Transamerica Premier Life Insurance Company (2.82%); non-affiliates of AEGON, Bank of Hope (14.26%); CMFG Life Insurance Company (9.72%); Citibank, N.A. (21.69%); ZB National Association (1.81%); Ally Bank (8.21%); U.S. Bancorp Community Development Corporation (22.10%); Lake City Bank (1.47%); The Guardian Life Insurance Company of America (10.45%); Minnesota Life Insurance Company (7.46%)
|
Investments | |||
Aegon LIHTC Fund 57, LLC | Delaware | Members: Managing Member - Aegon Community Investments 57, LLC (.01%); non-affiliate of AEGON, Bank of America, N.A. as Investor Member (99.99%)
|
Investments | |||
Aegon LIHTC Fund 58, LLC | Delaware | Members: Managing Member - Aegon Community Investments 58, LLC (0.01%); Transamerica Premier Life Insurance Company (12%); non-affiliates of AEGON, Allstate Insurance Company (12%); Allstate Life Insurance Company (12%); Ally Bank (17%); CMFG Life Insurance Company (8.05%); Santander Bank, N.A. (22.25%); U.S. Bancorp Community Development Corporation (19.47%); Zions Bancorporation, N.A. (6.35%)
|
Investments | |||
Aegon LIHTC Fund 60, LLC | Delaware | Sole Member: Aegon Community Investments 60, LLC
|
Investments | |||
Aegon LIHTC Fund 61, LLC | Delaware | Non-Member Manager Aegon Community Investments 61, LLC (0%); Members: non-affiliate of Aegon, HSBC Bank, N.A. (100%)
|
Investments | |||
Aegon LIHTC Fund 62, LLC | Delaware | Sole Member: Aegon Community Investments 62, LLC
|
Investments | |||
AEGON Managed Enhanced Cash, LLC | Delaware | Members: Transamerica Life Insurance Company (62.9705%) ; Transamerica Premier Life Insurance Company (37.0295%)
|
Investment vehicle for securities lending cash collateral | |||
AEGON Management Company | Indiana | 100% Transamerica Corporation
|
Holding company | |||
Aegon Market Neutral Income Fund, LLC | Delaware | AEGON USA Investment Management, LLC is the sole Member until the first Investor buys in, then the entity will be managed by a 3-Member Board of Managers.
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Aegon Multi-Family Equity Fund, LLC | Delaware | Members: Transamerica Life Insurance Company (15.83333%); Transamerica Financial Life Insurance Company (5%); Transamerica Premier Life Insurance Company (4.16667%); non-affiliates of AEGON: Landmark Real Estate Partners VIII, L.P. (72.1591%)
|
Investments | |||
Aegon Opportunity Zone Fund Joint Venture 1, LLC
|
Delaware | Sole Member: Aegon OZF Investments 1, LLC | Investments | |||
Aegon OZF Investments 1, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
Aegon Private Opportunities Partners I, LLC | Delaware | Sole member: Transamerica Life Insurance Company
|
Investments (private equity) | |||
Aegon Upstream Energy Fund, LLC | Delaware | Sole Member: AEGON Energy Management, LLC
|
Investments | |||
AEGON USA Asset Management Holding, LLC
|
Iowa | Sole Member: AUSA Holding, LLC | Holding company | |||
AEGON USA Investment Management, LLC | Iowa | Sole Member: AEGON USA Asset Management Holding, LLC
|
Investment advisor | |||
AEGON USA Real Estate Services, Inc. | Delaware | 100% AEGON USA Realty Advisors, Inc. | Real estate and mortgage holding company
| |||
AEGON USA Realty Advisors, LLC | Iowa | Sole Member: AEGON USA Asset Management Holding, LLC
|
Administrative and investment services | |||
AEGON USA Realty Advisors of California, Inc.
|
Iowa | 100% AEGON USA Realty Advisors, Inc. | Investments | |||
Aegon Workforce Housing Boynton Place REIT, LLC | Delaware | Sole Member: Aegon Worforce Housing Separate Account 1, LLC
|
Multifamily private equity structure with third-party Investor | |||
Aegon Workforce Housing Fund 2 Holding Company, LLC | Delaware | Sole Member: Aegon Workforce Housing Fund 2, LP
|
Holding company | |||
Aegon Workforce Housing Fund 2, LP | Delaware | General Partner is AWHF2 General Partner, LLC. Fund Partners: Transamerica Life Insurance Company (63%), Transamerica Financial Life Insurance Company (20%) and Transamerica Premier Life Insurance Company (17%)
|
Investments | |||
Aegon Workforce Housing Fund 3 Holding Company, LLC | Delaware | Sole Member: Aegon Workforce Housing Fund 3, LP
|
Holding company | |||
Aegon Workforce Housing Fund 3, LP | Delaware | General Partner is AWHF3 General Partner, LLC. Fund Partners: Transamerica Life Insurance Company (60%), Transamerica Financial Life Insurance Company (10%) and Transamerica Premier Life Insurance Company (30%)
|
Investments | |||
Aegon Workforce Housing Park at Via Rosa REIT, LLC | Delaware | Sole Member: Aegon Worforce Housing Separate Account 1, LLC
|
Multifamily private equity structure with third-party Investor | |||
Aegon Workforce Housing Separate Account 1, LLC | Delaware | Undecided as of 11/1/19 | Multifamily private equity structure with third-party Investor
|
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
AHDF Manager I, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
ALH Properties Eight LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Eleven LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Four LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Nine LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Seven LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Seventeen LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Sixteen LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Ten LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Twelve LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Two LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
AMFETF Manager, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
AMTAX HOLDINGS 308, LLC | Ohio | TAHP Fund II, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 347, LLC | Ohio | TAHP Fund II, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 388, LLC | Ohio | TAHP Fund II, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 483, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 559, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 561, LLC | Ohio | TAHP Fund VII, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 588, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 613, LLC | Ohio | Garnet LIHTC Fund VII, LLC - 99% Member; Cupples State LIHTC Investors, LLC - 1% Member; TAH Pentagon Funds, LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 639, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 649, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 672, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
AMTAX HOLDINGS 713, LLC | Ohio | TAHP Fund II, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
Apollo Housing Capital Arrowhead Gardens, LLC | Delaware | Sole Member: Garnet LIHTC Fund XXXV, LLC
|
Affordable housing | |||
AUIM Credit Opportunities Fund, LLC | Delaware | Members: AEGON USA Investment Management, LLC (98.36%); non-affiliate of AEGON (1.64%)
|
Investment vehicle | |||
AUSA Holding, LLC | Maryland | Sole Member: 100% Transamerica Corporation
|
Holding company | |||
AUSA Properties, Inc. | Iowa | 100% AEGON USA Realty Advisors, LLC
|
Own, operate and manage real estate | |||
AWHF2 General Partner, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
AWHF3 General Partner, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
AWHSA Manager 1, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Multifamily private equity structure with third-party Investor | |||
Barfield Ranch Associates, LLC | Florida | Members: Mitigation Manager, LLC (50%); non-affiliate of AEGON, OBPFL-Barfield, LLC (50%)
|
Investments | |||
Bay State Community Investments I, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments in low income housing tax credit properties | |||
Bay State Community Investments II, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments in low income housing tax credit properties | |||
Carle Place Leasehold SPE, LLC | Delaware | Sole Member: Transamerica Financial Life Insurance Company
|
Lease holder | |||
Cedar Funding, Ltd. | Cayman Islands | 100% Transamerica Life Insurance Company
|
Investments | |||
Commonwealth General Corporation | Delaware | 100% Transamerica Corporation
|
Holding company | |||
Creditor Resources, Inc. | Michigan | 100% AUSA Holding, LLC
|
Credit insurance | |||
CRI Solutions Inc. | Maryland | 100% Creditor Resources, Inc.
|
Sales of reinsurance and credit insurance | |||
Cupples State LIHTC Investors, LLC | Delaware | Sole Member: Garnet LIHTC Fund VIII, LLC
|
Investments | |||
Equitable AgriFinance, LLC | Delaware | Members: AEGON USA Realty Advisors, LLC (50%); AXA Equitable Life Insurance Company, a non-affiliate of AEGON (50%)
|
Agriculturally-based real estate advisory services | |||
FD TLIC, Limited Liability Company | New York | 100% Transamerica Life Insurance Company
|
Broadway production | |||
FGH Realty Credit LLC | Delaware | Sole Member: FGH USA, LLC
|
Real estate | |||
FGH USA LLC | Delaware | Sole Member: RCC North America LLC
|
Real estate |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Fifth FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Financial Planning Services, Inc. | District of Columbia | 100% Commonwealth General Corporation
|
Management services | |||
First FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Fourth FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Garnet Assurance Corporation | Kentucky | 100% Transamerica Life Insurance Company
|
Investments | |||
Garnet Assurance Corporation II | Iowa | 100% Commonwealth General Corporation
|
Business investments | |||
Garnet Assurance Corporation III | Iowa | 100% Transamerica Life Insurance Company
|
Business investments | |||
Garnet Community Investments, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments III, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Business investments | |||
Garnet Community Investments IV, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments V, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments VI, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments VII, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments VIII, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments IX, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments X, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments XI, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments XII, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments XVIII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XX, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXIV, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXV, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investment XXVI, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXVII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investment XXVIII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXIX, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXX, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet Community Investments XXXI, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXIII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXIV, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXV, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXVI, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXVII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXVIII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXIX, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XL, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLI, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLIII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLIV, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLVI, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLVII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLVIII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLIX, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet ITC Fund XLIII, LLC | Delaware | Members: Garnet Community Investments XLIII, LLC (0%) asset Manager: non-affiliate of AEGON, Solar TC Corp. (100%) Investor Member
|
Investments | |||
Garnet LIHTC Fund III, LLC | Delaware | Members: Transamerica Life Insurance Company (.01%); non-affiliate of AEGON, Aegon Community Investments III, (99.99%)
|
Investments | |||
Garnet LIHTC Fund IV, LLC | Delaware | Members: Garnet Community Investments IV, LLC (99.99%); Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund V, LLC | Delaware | Members: Garnet Community Investments V, LLC (99.99%); Transamerica Life Insurance Company (.01%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund VI, LLC | Delaware | Members: Garnet Community Investments VI, LLC (99.99%); Transamerica Life Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund VII, LLC | Delaware | Members: Garnet Community Investments VII, LLC (99.99%); Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund VIII, LLC | Delaware | Members: Garnet Community Investments VIII, LLC (99.99%); Transamerica Life Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund IX, LLC | Delaware | Members: Garnet Community Investments IX, LLC (99.99%); Transamerica Life Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund X, LLC | Delaware | Members: Garnet Community Investments X, LLC (0.01%); Goldenrod Asset Management, a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XI, LLC | Delaware | Members: Garnet Community Investments XI, LLC (99.99%) and Transamerica Life
Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund XII, LLC | Delaware | Members: Managing Member, Garnet Community Investments XII (.01%), Garnet LIHTC Fund XII-B (13.30%), Garnet LIHTC Fund XII-C (13.30%); non-affiliate of Aegon, Bank of America, N.A. (73.39%)
|
Investments | |||
Garnet LIHTC Fund XII-A, LLC | Delaware | Members: Garnet Community Investments XII, LLC (0.01%); Bank of America, N.A., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XII-B, LLC | Delaware | Members: Garnet Community Investments XII, LLC (99.99%) and Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund XII-C, LLC | Delaware | Members: Garnet Community Investments XII, LLC (99.99%) and Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund XIII, LLC | Delaware | Members: Managing Member, Garnet Community Investments .01%; Garnet LIHTC Fund XIII-A (68.10%); Garnet LIHTC Fund XIII-B (31.89%)
|
Investments | |||
Garnet LIHTC Fund XIII-A, LLC | Delaware | Members: Managing Member, Garnet Community Investments XIII, LLC (99.99%) and Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund XIII-B, LLC | Delaware | Members: Managing Member, Garnet Community Investments XIII, LLC (99.99%) and Transamerica Life Insurance Company (.01%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund XIV, LLC | Delaware | Members: 0.01% Garnet Community Investments, LLC (0.01%); Wells Fargo Bank, N.A. (49.995%); and Goldenrod Asset Management, Inc.(49.995%), both non-AEGON affiliates
|
Investments | |||
Garnet LIHTC Fund XV, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); Bank of America, N.A., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XVI, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); FNBC Leasing Corporation, a non-AEGON entity (99.99%)
|
Investments | |||
Garnet LIHTC Fund XVII, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); Special Situations Investing Group II, LLC, a non-affiliate of AEGON (99.99%)
|
Investments | |||
Garnet LIHTC Fund XVIII, LLC | Delaware | Members: Garnet Community Investments XVIII, LLC (0.01%); Verizon Capital Corp., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XIX, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); Bank of America, N.A., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XX, LLC | Delaware | Sole Member - Garnet Community Investments XX, LLC
|
Investments | |||
Garnet LIHTC Fund XXI, LLC | Delaware | Sole Member: Garnet Community Investments, LLC
|
Investments | |||
Garnet LIHTC Fund XXII, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); NorLease, Inc., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXIII, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); Idacorp Financial Services, Inc., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXIV, LLC | Delaware | Members: Garnet Community Investments XXIV, LLC (0.01% as Managing Member); Transamerica Life Insurance Company (21.26%); non-affiliates of AEGON: New York Life Insurance Company (25.51%), New York Life Insurance and Annuity Corporation (21.73%) and Principal Life Insurance Company (31.49%)
|
Investments | |||
Garnet LIHTC Fund XXV, LLC | Delaware | Members: Garnet Community Investment XXV, LLC (0.01%); Garnet LIHTC Fund XXVIII LLC (1%); non-affiliates of AEGON: Mt. Hamilton Fund, LLC (97.99%); Google Affordable housing I LLC (1%)
|
Investments | |||
Garnet LIHTC Fund XXVI, LLC | Delaware | Members: Garnet Community Investments XXVI, LLC (0.01%); American Income Life Insurance Company, a non-affiliate of AEGON (99.99%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund XXVII, LLC | Delaware | Members: Garnet Community Investments XXVII, LLC (0.01%); Transamerica Life Insurance Company (16.7045%); non-affiliates of AEGON: Aetna Life Insurance Company (30.2856%); New York Life Insurance Company (22.7142%); ProAssurance Casualty Company (3.6343%); ProAssurance Indemnity Company (8.4800%); State Street Bank and Trust Company (18.1714%)
|
Investments | |||
Garnet LIHTC Fund XXVIII, LLC | Delaware | Members: Garnet Community Investments XXVIII LLC (0.01%); non-affiliates of AEGON: USAA Casualty Insurance Company (17.998%); USAA General Indemnity Company (19.998%); USAA Life Insurance Company (3.999%); United Services Automobile Association (57.994%)
|
Investments | |||
Garnet LIHTC Fund XXIX, LLC | Delaware | Members: Garnet Community Investments XXIX, LLC (.01%); non-affiliate of AEGON: Bank of America, N.A. (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXX, LLC | Delaware | Members: Garnet Community Investments XXX, LLC (0.01%); non-affiliate of AEGON, New York Life Insurance Company (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXXI, LLC | Delaware | Members: Garnet Community Investments XXXI, LLC (0.1%); non-affiliates of AEGON: Thunderbolt Peak Fund, LLC (98.99%); Google Affordable Housing I, LLC (1%)
|
Investments | |||
Garnet LIHTC Fund XXXII, LLC | Delaware | Sole Member: Garnet Community Investments XXXVII, LLC.
|
Investments | |||
Garnet LIHTC Fund XXXIII, LLC | Delaware | Members: Garnet Community Investment XXXIII, LLC (0.01%); non-affiliate of AEGON, NorLease, Inc. (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXXIV, LLC | Delaware | Members: Garnet Community Investments XXXIV, LLC (99.99%) and Transamerica Premier Life Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund XXXV, LLC | Delaware | Members: Garnet Community Investment XXXV, LLC (0.01%); non-affiliate of AEGON, Microsoft Corporation (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXXVI, LLC | Delaware | Members: Garnet Community Investments XXXVI, LLC (1%) as Managing Member; JPM Capital Corporation, a non-AEGON affiliate (99%) as Investor Member
|
Investments | |||
Garnet LIHTC Fund XXXVII, LLC | Delaware | Members: Garnet Community Investments XXXVII, LLC (.01%); LIH Realty Corporation, a non-AEGON affiliate (99.99%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund XXXVIII, LLC | Delaware | Members: Garnet Community Investments XXXVIII, LLC, non-Member Manager; non-affiliate of AEGON, Norlease, Inc. (100%)
|
Investments | |||
Garnet LIHTC Fund XXXIX, LLC | Delaware | Members: Garnet Community Investments XXXIX, LLC a Managing Member (1%); non-AEGON affiliate, FNBC Leasing Corporation as Investor Member (99%)
|
Investments | |||
Garnet LIHTC Fund XL, LLC | Delaware | Members: Garnet Community Investments XL, LLC (.01%); non-AEGON affiliate, Partner Reinsurance Company of the U.S. (99.99%)
|
Investments | |||
Garnet LIHTC Fund XLI, LLC | Delaware | Members: Transamerica Life Insurance Company (9.990%) and Garnet Community Investments XLI, LLC (.01% Managing Member); non-AEGON affiliates : BBCN Bank (1.2499%), East West Bank (12.4988%), Opus Bank (12.4988%), Standard Insurance Company (24.9975%), Mutual of Omaha (12.4988%), Pacific Western Bank (7.4993%) and Principal Life Insurance Company (18.7481%).
|
Investments | |||
Ganet LIHTC Fund XLII, LLC | Delaware | Members: Garnet Community Investments XLII, LLC (.01%) Managing Member; non-affiliates of AEGON: Community Trust Bank (83.33%) Investor Member; Metropolitan Bank (16.66%) Investor Member.
|
Investments | |||
Garnet LIHTC Fund XLIVA, LLC | Delaware | Sole Member: ING Capital, LLC; Asset Manager: Garnet Community Investments XLIV, LLC (0% interest)
|
Investments | |||
Garnet LIHTC Fund XLIV-B, LLC | Delaware | Sole Member: Lion Capital Delaware, Inc.; Asset Manager: Garnet Community Investments XLIV, LLC (0% interest)
|
Investments | |||
Garnet LIHTC Fund XLVI, LLC | Delaware | Members: Garnet Community Investments XLVI, LLC (0.01%) Managing Member; non-affiliate of AEGON, Standard Life Insurance Company (99.99%) Investor Member
|
Investments |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund XLVII, LLC | Delaware | Members: Garnet Community Investments XLVII, LLC (1%) Managing Member; Transamerica Premier Life Insurance Company (14%) Investor Member; non-affiliate of AEGON: Citibank, N.A. (49%) Investor Member; New York Life Insurance Company (20.5%) Investor Member and New York Life Insurance and Annuity Corporation (15.5%) Investor Member
|
Investments | |||
Garnet LIHTC Fund XLVIII, LLC | Delaware | Members: Transamerica Financial Life Insurance Company (75.18%) and Garnet Community Investments XXXLVIII, LLC (.01%); non-affiliates of AEGON: U.S. Bancorp Community Development Corporation (21.04%), American Republic Insurance Company (2.84%), Bank of Hope (.93%)
|
Investments | |||
Horizons Acquisition 5, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Development company | |||
Horizons St. Lucie Development, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Development company | |||
Imani Fe, LP | California | Partners: Garnet LIHTC Fund XIV, LL (99.99% Investor limited partner); Transamerica Affordable Housing, Inc. (non-owner special limited partner); non-affiliates of AEGON: ABS Imani Fe, LLC (.0034% class A limited partner); TAH Imani Fe GP, LLC (.0033% co-general partner); Grant Housing and Economic Development Corporation (.0033% Managing general partner)
|
Affordable housing | |||
InterSecurities Insurance Agency, Inc. | California | 100% Transamerica Premier Life Insurance Company
|
Insurance agency | |||
Investors Warranty of America, LLC | Iowa | Sole Member: RCC North America LLC
|
Leases business equipment | |||
Ironwood Re Corp. | Hawaii | 100% Commonwealth General Corporation
|
Captive insurance company | |||
LCS Associates, LLC | Delaware | Sole Member: RCC North America LLC
|
Investments | |||
Life Investors Alliance LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Purchase, own, and hold the equity interest of other entities | |||
LIHTC Fund 53, LLC | Delaware | Non-Member Manager, AEGON Community Investments 53, LLC (0%); non-affiliates of AEGON: Bank of America, National Association (98%); MUFG Union Bank, N.A. (2%)
|
Investments |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
LIHTC Fund 56, LLC | Delaware | Members: Managing Member - Aegon Community Investments 56, LLC (0%); non-affiliates of AEGON, Bank of America, National Association (90%) and MUFG Union Bank, N.A. (10%)
|
Investments | |||
LIHTC Fund 59, LLC | Delaware | Members: Non-Member Manager Aegon Community Investments 59, LLC (0%); non-affiliates of AEGON, Bank of America, National Association (99.99%); Dominium Taxable Fund II, LLC (0.01%)
|
Investments | |||
LIHTC Fund XLV, LLC | Delaware | Non-Member Manager: Garnet Community Investments XLV, LLC (0%)
|
Investments | |||
LIHTC Fund XLIX, LLC | Delaware | Sole Member: Garnet Community Investments XLIX, LLC
|
Investments | |||
LIICA Re II, Inc. | Vermont | 100% Transamerica Life Insurance Company
|
Captive insurance company | |||
Massachusetts Fidelity Trust Company | Iowa | 100% AUSA Holding, LLC
|
Trust company | |||
Mitigation Manager, LLC | Delaware | Sole Member: RCC North America LLC
|
Investments | |||
MLIC Re I, Inc. | Vermont | 100% Transamerica Life Insurance Company
|
Captive insurance company | |||
Money Services, Inc. | Delaware | 100% AUSA Holding, LLC | Provides certain financial services for affiliates including, but not limited to, certain intellectual property, computer and computer-related software and hardware services, including procurement and contract services to some or all of the Members of the AEGON Group in the United States and Canada.
| |||
Monumental Financial Services, Inc. | Maryland | 100% Transamerica Corporation
|
DBA in the State of West Virginia for United Financial Services, Inc.
| |||
Monumental General Administrators, Inc. | Maryland | 100% AUSA Holding, LLC | Provides management services to unaffiliated third party administrator
| |||
Natural Resources Alternatives Portfolio I, LLC | Delaware | Members: Transamerica Life Insurance Company (64%); Transamerica Premier Life Insurance Company (32%); Transamerica Financial Life Insurance Company (4%); Managing Member: AEGON USA Realty Advisors, LLC
|
Investment vehicle - to invest in Natural Resources | |||
Natural Resources Alternatives Portfolio II, LLC | Delaware | Members: Transamerica Premier Life Insurance Company (60%); Transamerica Life Insurance Company (35%); Transamerica Financial Life Insurance Company (5%)
|
Investment vehicle | |||
Natural Resources Alternatives Portfolio 3, LLC | Delaware | Members: Transamerica Life Insurance Company (55%); Transamerica Premier Life Insurance Company (35%); Transamerica Financial Life Insurance Company (10%)
|
Investment vehicle |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Nomagon Title Grandparent, LLC | Delaware | Sole member is AEGON USA Asset Management Holding, LLC; AEGON USA Realty Advisors, LLC is the non-member manager of this entity
|
Investment vehicle | |||
Nomagon Title Holding 1, LLC | Delaware | Sole member is Nomagon Title Parent, LLC; AEGON USA Realty Advisors, LLC is the non-member manager of this entity
|
Investment vehicle | |||
Nomagon Title Parent, LLC | Delaware | Sole member is Nomagon Title Grandparent, LLC; AEGON USA Realty Advisors, LLC is the non-member manager of this entity
|
Investment vehicle | |||
Osceola Mitigation Partners, LLC | Florida | Members: Mitigation Manager, LLC (50%); non-affiliate of AEGON, OBPFL-MITBK, LLC (50%)
|
Investmetns | |||
Pearl Holdings, Inc. I | Delaware | 100% AEGON USA Asset Management Holding, LLC
|
Holding company | |||
Pearl Holdings, Inc. II | Delaware | 100% AEGON USA Asset Management Holding, LLC
|
Holding company | |||
Peoples Benefit Services, LLC | Pennsylvania | Sole Member - Transamerica Life Insurance Company
|
Marketing non-insurance products | |||
Pine Falls Re, Inc. | Vermont | 100% Transamerica Life Insurance Company
|
Captive insurance company | |||
Placer 400 Investors, LLC | California | Members: RCC North Amerivca LLC (50%); non-affiliate of AEGON, AKT Placer 400 Investors, LLC (50%)
|
Investments | |||
Primus Guaranty, Ltd. | Bermuda | Members: Transamerica Life Insurance Company (20% 13.1%) and non-affiliates of AEGON and the public holders own the remainder.
|
Provides protection from default risk of investment grade corporate and sovereign issues of financial obligations. | |||
PSL Acquisitions Operating, LLC | Iowa | Sole Member: RCC North America LLC
|
Owner of Core subsidiary entities | |||
RCC North America LLC | Delaware | Sole Member: Transamerica Corporation
|
Real estate | |||
Real Estate Alternatives Portfolio 2 LLC | Delaware | Members are: Transamerica Life Insurance Company (92.%); Transamerica Financial Life Insurance Company (7.5%). Manager: AEGON USA Realty Advisors, Inc.
|
Real estate alternatives investment | |||
Real Estate Alternatives Portfolio 3 LLC | Delaware | Members are: Transamerica Life Insurance Company (74.4%); Transamerica Premier Life Insurance Company (25.6%). Manager: AEGON USA Realty Advisors, Inc.
|
Real estate alternatives investment | |||
Real Estate Alternatives Portfolio 3A, Inc. | Delaware | Members: Transamerica Premier Life Insurance Company (37%); Transamerica Financial Life Insurance Company (9.4%); Transamerica Life Insurance Company (53.6%).
|
Real estate alternatives investment |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Real Estate Alternatives Portfolio 4 HR, LLC | Delaware | Members: Transamerica Life Insurance Company (64%); Transamerica Premier Life Insurance Company (32%); Transamerica Financial Life Insurance Company (4%). Manager: AEGON USA Realty Advisors, Inc.
|
Investment vehicle for alternative real estate investments that are established annually for our affiliated companies common investment | |||
Real Estate Alternatives Portfolio 4 MR, LLC | Delaware | Members: Transamerica Life Insurance Company (64%); Transamerica Premier Life Insurance Company (32%); Transamerica Financial Life Insurance Company (4%). Manager: AEGON USA Realty Advisors, Inc.
|
Investment vehicle for alternative real estate investments that are established annually for our affiliated companies common investment | |||
River Ridge Insurance Company | Vermont | 100% AEGON Management Company
|
Captive insurance company | |||
SB Frazer Owner, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Second FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Seventh FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Short Hills Management Company | New Jersey | 100% Transamerica Corporation
|
Dormant | |||
St. Lucie West Development Company, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Development company | |||
Stonebridge Benefit Services, Inc. | Delaware | 100% Commonwealth General Corporation
|
Health discount plan | |||
TA Private Equity Assets, LLC | Delaware | Sole Member - Transamerica Premier Life Insurance Company
|
Investments (private equity) | |||
TABR Realty Services, LLC | Delaware | Sole Member: AUSA Holding, LLC
|
Real estate investments | |||
TAH-MCD IV, LLC | Iowa | Sole Member - Transamerica Affordable Housing, Inc.
|
Serve as the general partner for McDonald Corporate Tax Credit Fund IV Limited Partnership.
| |||
TAH Pentagon Funds, LLC | Iowa | Sole Member - Transamerica Affordable Housing, Inc.
|
Serve as a general partner in a lower-tier tax credit entity | |||
TAHP Fund 1, LLC | Delaware | Sole Member - Garnet LIHTC Fund IX, LLC
|
Real estate investments | |||
TAHP Fund 2, LLC | Delaware | Sole Member - Garnet LIHTC Fund VIII, LLC
|
Low incoming housing tax credit | |||
TAHP Fund VII, LLC | Delaware | Investor Member: Garnet LIHTC Fund XIX, LLC
|
Real estate investments | |||
The AEGON Trust Advisory Board: Onno van Klinken, Mark W. Mullin, Jay Orlandi and Eilard Friese
|
Delaware | 100% AEGON International B.V.
|
Voting Trust |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
THH Acquisitions, LLC | Iowa | Sole Member - Transamerica Life Insurance Company
|
Acquirer of Core South Carolina mortgage loans from Investors Warranty of America, LLC and holder of foreclosed real estate. | |||
TLIC Oakbrook Reinsurance, Inc. | Iowa | 100% Transamerica Life Insurance Company
|
Limited purpose subsidiary life insurance company | |||
TLIC Watertree Reinsurance Inc. | Iowa | 100% Transamerica Life Insurance Company
|
Limited purpose subsidiary life insurance company | |||
Tradition Development Company, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Development company | |||
Tradition Irrigation Company, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Irrigation company | |||
Tradition Land Company, LLC | Iowa | Sole Member: RCC North America LLC
|
Acquirer of Core Florida mortgage loans from Investors Warranty and holder of foreclosed real estate. | |||
Transamerica Affinity Marketing Corretora de Seguros Ltda. | Brazil | 749,000 quota shares owned by AEGON DMS Holding B.V.; 1 quota share owned by AEGON International B.V.
|
Brokerage company | |||
Transamerica Affinity Services, Inc. | Maryland | 100% AEGON Direct Marketing Services, Inc.
|
Marketing company | |||
Transamerica Affordable Housing, Inc. | California | 100% Transamerica Realty Services, LLC
|
General partner LHTC Partnership | |||
Transamerica Agency Network, Inc. | Iowa | 100% AUSA Holding, LLC
|
Special purpose subsidiary | |||
Transamerica Asset Management, Inc. | Florida | Transamerica Premier Life Insurance Company owns 77%; AUSA Holding, LLC owns 23%.
|
Fund advisor | |||
Transamerica (Bermuda) Services Center, Ltd. | Bermuda | 100% AEGON International B.V.
|
Special purpose corporation | |||
Transamerica Capital, Inc. | California | 100% AUSA Holding, LLC
|
Broker/Dealer | |||
Transamerica Casualty Insurance Company | Iowa | 100% Transamerica Corporation
|
Insurance company | |||
Transamerica Corporation | Delaware | 100% The AEGON Trust
|
Major interest in insurance and finance | |||
Transamerica Corporation | Oregon | 100% Transamerica Corporation
|
Holding company | |||
Transamerica Finance Corporation | Delaware | 100% Transamerica Corporation
|
Commercial & Consumer Lending & equipment leasing
| |||
Transamerica Financial Advisors, Inc. | Delaware | 1,000 shares owned by AUSA Holding, LLC; 209 shares owned by Commonwealth
General Corporation;
|
Broker/Dealer | |||
Transamerica Financial Life Insurance Company
|
New York | 100% Transamerica Corporation
|
Insurance |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Transamerica Fund Services, Inc. | Florida | Transamerica Premier Life Insurance Company owns 44%; AUSA Holding, LLC owns 56%
|
Mutual fund | |||
Transamerica Home Loan | California | 100% Transamerica Consumer Finance Holding Company
|
Consumer mortgages | |||
Transamerica Insurance Marketing Asia Pacific Pty Ltd. | Australia | 100% Transamerica Direct Marketing Asia Pacific Pty Ltd.
|
Insurance intermediary | |||
Transamerica International Direct Marketing Consultants, LLC | Maryland | Members: 51% Beth Lewellyn; 49% AEGON Direct Marketing Services, Inc.
|
Provide consulting services ancillary to the marketing of insurance products overseas. | |||
Transamerica International RE (Bermuda) Ltd.
|
Bermuda | 100% Transamerica Corporation | Reinsurance | |||
Transamerica International Re Escritório de Representação no Brasil Ltd | Brazil | 95% Transamerica International Re(Bermuda) Ltd.; 5% Commonwealth General Corporation
|
Insurance and reinsurance consulting | |||
Transamerica Investment Management, LLC | Delaware | Sole Member - AEGON USA Asset Management Holding, LLC
|
Investment advisor | |||
Transamerica Investors Securities Corporation | Delaware | 100% Transamerica Retirement Solutions, LLC
|
Broker/Dealer | |||
Transamerica Leasing Holdings Inc. | Delaware | 100% Transamerica Finance Corporation
|
Holding company | |||
Transamerica Life Insurance Company | Iowa | 100% - Commonwealth General Corporation
|
Insurance | |||
Transamerica Life (Bermuda) Ltd. | Bermuda | 100% Transamerica Life Insurance Company | Long-term life insurer in Bermuda will primarily write fixed universal life and term insurance
| |||
Transamerica Pacific Insurance Company, Ltd.
|
Hawaii | 100% Commonwealth General Corporation | Life insurance | |||
Transamerica Premier Life Insurance Company
|
Iowa | 100% Commonwealth General Corporation | Insurance Company | |||
Transamerica Pyramid Properties LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Realty limited liability company | |||
Transamerica Realty Investment Properties LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Realty limited liability company | |||
Transamerica Redwood Park, LLC | Delaware | Sole Member - Transamerica Corporation | Hold property interests in Redwood Park in California
| |||
Transamerica Resources, Inc. | Maryland | 100% Monumental General Administrators, Inc.
|
Provides education and information regarding retirement and economic issues. | |||
Transamerica Retirement Advisors, LLC | Delaware | Sole Member: Transamerica Retirement Solutions, LLC
|
Investment advisor | |||
Transamerica Retirement Insurance Agency, LLC | Delaware | Sole Member: Transamerica Retirement Solutions, LLC
|
Conduct business as an insurance agency. | |||
Transamerica Retirement Solutions, LLC | Delaware | Sole Member: AUSA Holding, LLC
|
Retirement plan services. | |||
Transamerica Stable Value Solutions Inc. | Delaware | 100% Commonwealth General Corporation
|
Principle Business: Provides management services to the stable value division of AEGON insurers who issue synthetic GIC contracts.
|
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Transamerica Travel and Conference Services, LLC
|
Iowa | Sole Member: Money Services, Inc. | Travel and conference services | |||
Transamerica Ventures, LLC | Delaware | Sole Member: AUSA Holding, LLC
|
Investments | |||
Transamerica Ventures Fund, LLC | Delaware | 100% AUSA Holding, LLC
|
Investments | |||
United Financial Services, Inc. | Maryland | 100% Transamerica Corporation
|
General agency | |||
Universal Benefits, LLC | Iowa | Sole Member: AUSA Holding, LLC
|
Third party administrator | |||
US PENG, INC. | Delaware | Sole Member: AEGON Levensverzekering N.V.
|
Energy investment strategy | |||
WFG Insurance Agency of Puerto Rico, Inc. | Puerto Rico | 100% World Financial Group Insurance Agency, Inc.
|
Insurance agency | |||
WFG Properties Holdings, LLC | Georgia | Sole Member: World Financial Group, Inc.
|
Marketing | |||
WFG Securities Inc. | Canada | 100% World Financial Group Holding Company of Canada, Inc.
|
Mutual fund dealer | |||
World Financial Group Canada Inc. | Canada | 100% World Financial Group Holding Company of Canada Inc.
|
Marketing | |||
World Financial Group Holding Company of Canada Inc.
|
Canada | 100% Commonwealth General Corporation
|
Holding company | |||
World Financial Group, Inc. | Delaware | 100% AEGON Asset Management Services, Inc.
|
Marketing | |||
World Financial Group Insurance Agency of Canada Inc. | Ontario | 50% World Financial Group Holding Co. of Canada Inc.; 50% World Financial Group Subholding Co. of Canada Inc.
|
Insurance agency | |||
World Financial Group Insurance Agency of Hawaii, Inc. | Hawaii | 100% World Financial Group Insurance Agency, Inc.
|
Insurance agency | |||
World Financial Group Insurance Agency of Massachusetts, Inc. | Massachusetts | 100% World Financial Group Insurance Agency, Inc.
|
Insurance agency | |||
World Financial Group Insurance Agency of Wyoming, Inc. | Wyoming | 100% World Financial Group Insurance Agency, Inc.
|
Insurance agency | |||
World Financial Group Insurance Agency, Inc. | California | 100% Transamerica Premier Life Insurance Company
|
Insurance agency | |||
World Financial Group Subholding Company of Canada Inc. | Canada | 100% World Financial Group Holding Company of Canada, Inc.
|
Holding company | |||
Yarra Rapids, LLC | Delaware | Members are: Real Estate Alternatives Portfolio 4MR, LLC (49%) and non-AEGON affiliate (51%)
|
Real estate investments | |||
Zahorik Company, Inc. | California | 100% AUSA Holding, LLC
|
Inactive | |||
Zero Beta Fund, LLC | Delaware | Members are: Transamerica Life Insurance Company (35.86%); Transamerica Premier Life Insurance Company (33.29%); Transamerica Financial Life Insurance Company (16.58%); Transamerica Pacific Insurance Company, Ltd. (14.27%). Manager: AEGON USA Investment Management LLC | Aggregating vehicle formed to hold various fund investments. |
Item 29. | Indemnification |
The Iowa Code (Sections 490.850 et. seq.) provides for permissive indemnification in certain situations, mandatory indemnification in other situations, and prohibits indemnification in certain situations. The Code also specifies procedures for determining when indemnification payments can be made.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Depositor pursuant to the foregoing provisions, or otherwise, the Depositor has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Depositor of expenses incurred or paid by a director, officer or controlling person in connection with the securities being registered), the Depositor will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 30. Principal Underwriter
(a) | Transamerica Capital, Inc. serves as the principal underwriter for: |
Transamerica Capital, Inc. serves as the principal underwriter for the Retirement Builder Variable Annuity Account, Separate Account VA B, Separate Account VA Q, Separate Account VA FF, Separate Account VA HH, Separate Account VA-1, Separate Account VA-2L, Separate Account VA-5, Separate Account VA-6, Separate Account VA-7, Separate Account VA-8, Separate Account Fund B, Separate Account Fund C, Transamerica Corporate Separate Account Sixteen, Transamerica Separate Account R3, Separate Account VL, Separate Account VUL-1; Separate Account VUL-2, Separate Account VUL-3, Separate Account VUL-4, Separate Account VUL-5, Separate Account VUL-6, Separate Account VUL-A, and Variable Life Account A, Merrill Lynch Life Variable Annuity Separate Account, Merrill Lynch Life Variable Annuity Separate Account A, Merrill Lynch Life Variable Annuity Separate Account B, Merrill Lynch Life Variable Annuity Separate Account C, Merrill Lynch Life Variable Annuity Separate Account D, Merrill Lynch Variable Life Separate Account, and Merrill Lynch Life Variable Life Separate Account II, Separate Account VA BB, Separate Account VA CC, Separate Account VA U, Separate Account VA V, Separate Account VA AA, WRL Series Annuity Account, WRL Series Annuity Account B, WRL Series Life Account, WRL Series Life Account G, WRL Series Life Corporate Account and Separate Account VL E. These accounts are separate accounts of Transamerica Life Insurance Company.
Transamerica Capital, Inc. serves as principal underwriter for Separate Account VA BNY, Separate Account VA QNY, TFLIC Separate Account VNY, Separate Account VA-2LNY, TFLIC Separate Account C, Separate Account VA-5NLNY, Separate Account VA-6NY, TFLIC Series Annuity Account, TFLIC Series Life Account, TFLIC Pooled Account No. 44, Transamerica Variable Funds, ML of New York Variable Annuity Separate Account A, ML of New York Variable Annuity Separate Account B, ML of New York Variable Annuity Separate Account C, ML of New York
Variable Annuity Separate Account D and ML of New York Variable Life Separate Account II. These accounts are separate accounts of Transamerica Financial Life Insurance Company.
Transamerica Capital, Inc. also serves as principal underwriter for Transamerica Series Trust, Transamerica Funds, Transamerica Investors, Inc., and Transamerica Asset Allocation Variable Funds.
(b) | Directors and Officers of Transamerica Capital, Inc.: |
Name |
Principal Business Address |
Position and Offices with Underwriter | ||
Brian Beitzel | (2) | Director, Treasurer and Chief Financial Officer | ||
Joe Boan | (1) | Director, Chairman of the Board, Chief Executive Officer and Vice President | ||
Doug Hellerman | (3) | Chief Compliance Officer and Vice President | ||
Gregory E. Miller-Breetz | (1) | Secretary |
(1) | 100 Light Street, Floor B1, Baltimore, MD 21202 |
(2) | 4333 Edgewood Road N.E., Cedar Rapids, IA 52499-0001 |
(3) | 1801 California Street, Suite 5200, Denver, CO 80202 |
(c) | Compensation to Principal Underwriter: |
Name of Principal Underwriter |
Net Underwriting Discounts and Commissions(1) |
Compensation on Redemption |
Brokerage Commissions |
Compensation | ||||
Transamerica Capital, Inc. | 0 | 0 | 0 | 0 |
(1) | Fiscal Year 2019 |
Item 31. | Location of Accounts and Records |
All accounts, books, or other documents required to be maintained by Section 31(a) of the 1940 Act and the rules promulgated thereunder are maintained by the Registrant through Transamerica (for former WRL life accounts) at 570 Carillon Parkway, St. Petersburg, Florida 33716, 12855 Starkey Road, Largo, Florida 33773 or 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-001.
Item 32. | Management Services |
Not Applicable
Item 33. | Fee Representation |
Transamerica Life Insurance Company (Transamerica) hereby represents that the fees and charges deducted under the Transamerica Associate Freedom Elite Builder, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, WRL Series Life Account, has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Denver and in the State of Colorado, on this 30th day of September 2020.
WRL SERIES LIFE ACCOUNT | ||
(Registrant) | ||
TRANSAMERICA LIFE INSURANCE COMPANY | ||
(Depositor) | ||
By: | Blake S. Bostwick | |
Director and President |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signatures |
Title |
Date | ||||
* Blake S. Bostwick |
Director Chairman of the Board and President | September 30, 2020 | ||||
* Fred Gingerich |
Controller and Vice President | September 30, 2020 | ||||
* Mark W. Mullin |
Director and Chairman of the Board | September 30, 2020 | ||||
* David Schulz |
Director, Chief Tax Officer and Senior Vice President | September 30, 2020 | ||||
* C. Michiel van Katwijk |
Director, Executive Vice President, Chief Financial Officer and Treasurer | September 30, 2020 | ||||
/s/Brian Stallworth Brian Stallworth |
Assistant Secretary | September 30, 2020 |
*By: Brian Stallworth - Attorney-in-Fact pursuant to Powers of Attorney filed herewith.
EXHIBIT INDEX
26. (a) (ii) |
Resolution of the Board of Directors of Transamerica Life Insurance Company Approving Plan of Merger with Transamerica Premier Life Insurance Company | |
26. (a) (iii) |
Resolution of the Board of Directors of Transamerica Premier Life Insurance Company Board approving Plan of Merger with Transamerica Life Insurance Company | |
26. (k) (i) |
Opinion of Counsel as to the legality of the securities being registered | |
26. (n) (i) |
Auditors Consent | |
26. (q) (i) |
Memorandum describing Transamerica Life Insurance Companys Issuance, Transfer and Redemption Procedures | |
26. (r) |
Powers of Attorney |
EXHIBIT 26 (a)(ii)
RESOLUTION OF THE BOARD OF DIRECTORS OF TRANSAMERICA LIFE
INSURANCE COMPANY APPROVING PLAN OF MERGER WITH TRANSAMERICA
PREMIER LIFE INSURANCE COMPANY
TRANSAMERICA LIFE INSURANCE COMPANY
SECRETARYS CERTIFICATION
The undersigned, Gregory E. Miller-Breetz, being a duly constituted Deputy Secretary of Transamerica Life Insurance Company, a corporation organized under the laws of the state of Iowa (hereafter referred to as the Company), hereby certifies that the following is a true and correct copy of resolutions duly adopted by the Board of Directors of the Company by unanimous written consent on July 15, 2020, and that said resolutions are still in full force and effect:
RESOLVED, that the Board of Directors of the Company hereby approves the terms and form, as attached, of the Articles of Merger and the Plan of Merger of Transamerica Premier Life Insurance Company, an Iowa corporation, with and into Transamerica Life Insurance Company, an Iowa corporation, wherein Transamerica Life Insurance Company will be the surviving corporation, and that the effective date of the merger will be October 1, 2020, or such later date as the appropriate regulatory authorities have approved such merger.
FURTHER RESOLVED, that the Articles of Merger and the Plan of Merger be submitted and recommended for approval to the sole shareholder of the Company.
FURTHER RESOLVED, that the officers of the Company be and they are hereby authorized to take such actions and execute such documents as they may deem necessary to effectuate the aforesaid Articles of Merger and Plan of Merger. |
IN WITNESS WHEREOF, I have affixed my name in my official capacity of Deputy Secretary of Transamerica Life Insurance Company this 16th day of July, 2020.
/s/ Gregory E. Miller-Breetz |
Gregory E. Miller-Breetz |
Deputy Secretary |
EXHIBIT 26 (a)(iii)
RESOLUTION OF THE BOARD OF DIRECTORS OF TRANSAMERICA PREMIER
LIFE INSURANCE COMPANY APPROVING PLAN OF MERGER WITH
TRANSAMERICA LIFE INSURANCE COMPANY
TRANSAMERICA PREMIER LIFE INSURANCE COMPANY
SECRETARYS CERTIFICATION
The undersigned, Gregory E. Miller-Breetz, being a duly constituted Deputy Secretary of Transamerica Premier Life Insurance Company, a corporation organized under the laws of the state of Iowa (hereafter referred to as the Company), hereby certifies that the following is a true and correct copy of resolutions duly adopted by the Board of Directors of the Company by unanimous written consent on July 15, 2020, and that said resolutions are still in full force and effect:
RESOLVED, that the Board of Directors of the Company hereby approves the terms and form, as attached, of the Articles of Merger and the Plan of Merger of Transamerica Premier Life Insurance Company, an Iowa corporation, with and into Transamerica Life Insurance Company, an Iowa corporation, wherein Transamerica Life Insurance Company will be the surviving corporation, and that the effective date of the merger will be October 1, 2020, or such later date as the appropriate regulatory authorities have approved such merger.
FURTHER RESOLVED, that the Articles of Merger and the Plan of Merger be submitted and recommended for approval to the sole shareholder of the Company.
FURTHER RESOLVED, that the officers of the Company be and they are hereby authorized to take such actions and execute such documents as they may deem necessary to effectuate the aforesaid Articles of Merger and Plan of Merger. |
IN WITNESS WHEREOF, I have affixed my name in my official capacity of Deputy Secretary of Transamerica Premier Life Insurance Company this 16th day of July, 2020.
/s/ Gregory E. Miller-Breetz |
Gregory E. Miller-Breetz |
Deputy Secretary |
Exhibit 26 (k)(i)
OPINION OF COUNSEL AS TO THE
LEGALITY OF THE SECURITIES BEING REGISTERED
[Transamerica Life Insurance Company Letterhead]
September 30, 2020
Transamerica Life Insurance Company
4333 Edgewood Road N.E.
Cedar Rapids, Iowa 52499-0001
Dear Sir/Madam:
With reference to the Registration Statement on Form N-6 by Transamerica Life Insurance Company and WRL Series Life Account with the Securities and Exchange Commission covering individual variable universal life contracts, I have consulted with outside counsel and examined such documents and such law as I considered necessary and appropriate, and on the basis of such examination and consultation, it is my opinion that:
1. | Transamerica Life Insurance Company is duly organized and validly existing under the laws of the State of Iowa and has been duly authorized to issue individual variable universal life contracts by the Department of Insurance of the State of Iowa. |
2. | WRL Series Life Account is a duly authorized and existing separate account established pursuant to the provisions of Section 508A.1 of the Iowa Insurance Code. |
3. | The Individual Variable Universal Life Contracts have been duly authorized by Transamerica Life Insurance Company and, when sold in jurisdictions authorizing such sales, in accordance with and when issued as contemplated by said Form N-6 Registration Statement, will constitute legal, validly issued and binding obligations of Transamerica Life Insurance Company. |
I hereby consent to the filing of this opinion as an exhibit to said N-6 Registration Statement.
Very truly yours,
TRANSAMERICA LIFE INSURANCE COMPANY |
/s/Brian Stallworth |
Brian Stallworth |
Assistant Secretary |
Exhibit 26 (n)(i)
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form N-6 of WRL Series Life Account of our report dated April 17, 2020 relating to the financial statements of the subaccounts listed in such report, and to the use of our report dated April 27, 2020 relating to the financial statements of Transamerica Life Insurance Company and our report dated April 20, 2020 relating to the financial statements of Transamerica Premier Life Insurance Company, which appear in this Registration Statement. We also consent to the reference to us under the heading Independent Registered Public Accounting Firm in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
September 29, 2020
Exhibit 26 (q)(i)
MEMORANDUM DESCRIBING the INSURANCE COMPANYS ISSUANCE, TRANSFER AND REDEMPTION PROCEDURES
Description of Issuance, Transfer and Redemption Procedures
for Associate Freedom Elite Builder
Individual Flexible Premium Variable Life Insurance Policies
Issued by
Transamerica Life Insurance Company
This document sets forth the administrative procedures, as required by Rule 6e-3(T)(b)(12)(iii), that will be followed by Transamerica Life Insurance Company (the Company) in connection with the issuance of Associate Freedom Elite Builder, its individual flexible premium variable life insurance policy (Policy or Policies) and acceptance of payments thereunder, the transfer of assets held thereunder, and the redemption by owners of the Policy (owners) of their interests in those Policies. Terms used herein have the same definitions as in the prospectus for the Policy that is included in the current registration statement on Form N-6 for the Policy (File No. 333- , 811-4420) as filed with the Securities and Exchange Commission (SEC).
TABLE OF CONTENTS
I. Procedures Relating to Purchase and Issuance of the Policies and Acceptance of Premiums
A. | Offer of the Policies, Application, Initial Premium, and Issuance |
Offer of the Policies. The Policies are offered and issued pursuant to established underwriting standards in accordance with state insurance laws for an initial premium determined by the owner, who also has the flexibility to determine the frequency and the amount of premiums to be paid under the Policy. However, before the Policy is issued, the Company may require the owner to pay a premium at least equal to a minimum monthly guarantee premium set forth in the Policy. Insurance is based on the principle of pooling and distribution of mortality risks, which assumes that each owner pays an initial premium commensurate with the insureds mortality risk as actuarially determined utilizing factors such as age, gender, and rate class of the insured. Uniform charges for all insureds would discriminate unfairly in favor of those insureds representing greater risk. Although there is no uniform charge for all insureds, there is a uniform charge for all insureds of the same rate class, age, gender, death benefit option type and same specified amount.
Application. Persons wishing to purchase a Policy must complete an application and submit it to the Company through any licensed life insurance agent who is also a registered representative of a broker-dealer having a selling agreement with the principal underwriter for the Policy. The application must specify the name of the insured(s) and provide certain required information about the insured. The application is generally accompanied by an initial premium, and designates premium allocation percentages and the death benefit option selected, and names the beneficiary. The initial premium is determined by the owner, although, before the Policy is issued, the Company may require the owner to pay a premium at least equal to a minimum monthly guarantee premium set forth in the Policy. Additional premium payments must be at least $50 (and $1,000 if by wire).
The owner selects the specified amount for a Policy. The current minimum specified amount for a Policy is generally $50,000. The Company will not issue a Policy if the insured is over age 85.
Receipt of Application and Underwriting. Upon receipt of the initial premium and a completed application in good order from an applicant, the Company will follow underwriting procedures for life insurance designed to determine whether the proposed insured is insurable. This process may involve such verification procedures as medical examinations and may require that further information be provided about the proposed insured before a determination can be made.
The underwriting process determines the rate class to which the insured is assigned if the application is accepted. The Policy uses mortality tables that distinguish between men and women; as a result, the Policy pays different benefits to men and women of the same age. The Company currently places insureds in the following standard rate classes:
| preferred elite; |
| preferred plus; |
| preferred; |
| non-tobacco; |
| preferred tobacco; |
| tobacco; and |
| juvenile (under age 18). |
The Company also places insureds in various sub-standard rate classes, which involve a higher mortality risk and higher charges. The Company generally charges higher rates for insureds who use tobacco.
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The Company reserves the right to reject an application for any reason permitted by law. If an application is rejected, any premium received will be returned promptly, without interest. The insured must be insurable and acceptable to the Company under its underwriting rules on the later of the date of the application or the date the insured completes all required medical tests and examinations.
Issuance of Policy. If (1) the Companys underwriting process is complete; (2) the application has been approved; (3) an initial premium of sufficient amount has been received; and (4) the insured is alive and in the same condition of health as described in the application when the Policy is delivered to the owner, then full life insurance coverage goes into effect, the Policy is issued, and the Company begins to take the monthly deductions. This is the Policy date. The Policy date is shown on the schedule page of the Policy, and the Company measures Policy months, years, and anniversaries from the Policy date. The Policy date is generally the record date, which is the date the Company records the Policy on the books, unless the Policy is backdated.
Backdating. If the owner requests, the Company may backdate a Policy by assigning a Policy date earlier than the date the Policy is issued. However, in no event will a Policy be backdated earlier than the earliest date allowed by state law or by the Companys underwriting rules. A backdating request must be in writing and, if approved, will amend the application. Cost of insurance charges are based in part on the age of the insured on the Policy date or on the date of any increase in specified amount. Generally, cost of insurance charges are lower at a younger age. The Company will deduct the monthly deduction, including cost of insurance charges, for the period that the Policy is backdated. Premium payments will be credited on the date the Policy is issued, not the backdated Policy date.
Initial Premium and Conditional Insurance Coverage. If an applicant pays the full initial premium listed in the conditional receipt attached to the application, and has met all of the requirements listed in the conditional receipt, and the Company delivers the conditional receipt to the applicant, then the insured will have conditional insurance coverage under the terms of the conditional receipt.The conditional coverage may vary by state and/or underwriting standards. Conditional coverage becomes effective on the later of:
| the date of the application; or |
| the date the insured completes all of the medical examinations, test and other screenings required by the Company, so long as: |
g | each person proposed to be insured is found to have been insurable as of the Policys effective date, exactly as applied for in accordance with the Companys underwriting rules and standards, without any modifications as to plan, amount, or premium rate; and |
g | as of the effective date, all statements and answers given in the application are true; and |
g | the payment made with the application is not less than the full initial premium for the mode of payment chosen in the application and is received at the Companys administrative office within the lifetime of the proposed insured; and |
g | all medical examinations, tests and other screenings required of the proposed insured by the Company are completed and received by the Companys office within 60 days of the date the application was completed; and |
g | all parts of the application, any supplemental application, questionnaires, addendum and/or amendment to the application are signed and received by the Company at its administrative office. |
The amount of conditional coverage is the lesser of the specified amount applied for or $500,000, reduced by all amounts payable under all life insurance applications that the insured has in force or pending with
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the Company. The conditional receipt does not provide benefits for riders or any additional benefits, for which the applicant has applied. If one or more of the conditional receipts have not been met exactly or if the proposed insured commits suicide, the Companys liability will be limited to return of any payment made paid with the application. Because the Company does not accept initial premiums in advance for Policies with a specified amount in excess of $1,000,000, the Company does not offer conditional insurance coverage for Policies issued with a specified amount in excess of $1,000,000.
Conditional insurance coverage is void if the check or draft provided to pay the initial premium is not honored when the Company first presents it for payment. The conditional receipt is void if:
| it is not signed by an agent or authorized Company representative; or |
| any blanks in the conditional receipt have not been completed. |
Conditional coverage automatically terminates on the earliest of:
| 60 days from the date the application was signed; |
| the date the Company either mails notice to the applicant of the rejection of the application and/or mails a refund of any amounts paid with the application; |
| when the insurance applied for goes into effect under the terms of the Policy applied for; or |
| the date the Company offers to provide insurance on terms that differ from the insurance applied for. |
If the Company does not approve and accept the application within 60 days of the date the application was signed, the application will be deemed rejected by the Company and there will be no conditional insurance coverage. In such event, the Companys liability will be to return any payment made upon return of the receipt to the Company.
Tax-Free Exchanges (1035 Exchanges). The Company will accept part or all of the initial premium from one or more policies insuring the same insured that qualify for a tax-free exchange under Section 1035 of the Internal Revenue Code (the Code). Subject to underwriting requirements, the owner may make one additional cash payment within three business days of receipt of the proceeds from the 1035 Exchange before the Company finalizes the Policys specified amount.
B. | Additional Premiums |
Additional Premiums Permitted. The owner generally has flexibility to determine the frequency and the amount of the premiums to be paid under the Policy. Premium payments must be at least $50 ($1,000 if by wire). The Company may return premiums less than $50. The Company will not allow the owner to make any premium payments that would cause the total premiums paid to exceed the current maximum premium limitations which qualify the Policy as life insurance according to federal tax laws. If the owner makes a premium payment that would cause the total premiums to be greater than the maximum premium limitations, the Company will return any excess portion of the premium payment with earnings, within 60 days after the end of that Policy year. The Company will not permit any additional premium payments until they are allowed by the maximum premium limitations. The Company also reserves the right to refund a premium, or require evidence of insurability if such premium would increase the death benefit by more than the amount of the premium. The guideline premium test has additional premium limitations. The company will not accept a payment that will cause the Policy to become a modified endowment contract without the owners consent.
An owner may pay premiums by any method the Company deems acceptable. The Company will also accept premium payments by wire transfer. The Company will treat any payment made as a premium payment unless it is clearly marked as a loan repayment.
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B. | Crediting Premiums |
Initial Premium. Depending on the laws of the state governing the Policy (usually the state where the insured lives), the Company will allocate the initial net premium on the record date either to the reallocation account (which is the portion of the fixed account where the Company holds the premium(s) until the reallocation date) or to the fixed account and the subaccounts selected on the Policy application. If the laws of the state governing the Policy do not require a refund of full premium, then the Company will allocate the initial net premium(s), minus monthly deductions, to the accounts selected.
If the applicants state requires the Company to return the initial premium in the event the free-look period is exercised, then the Company will allocate the net premium on the Policy date (or record date if the Policy is backdated) to the reallocation account (or as otherwise mandated by state law). Net premiums held in the reallocation account will be credited with interest at the current fixed account rate and reduced by any monthly deductions due. The net premiums will remain in the reallocation account until the reallocation date.
On the first valuation date on or after the reallocation date (which is as long as we estimate the free look period to last), the Company will reallocate all cash value held in the reallocation account to the fixed account and subaccounts selected on the application. If the owner selected dollar cost averaging on the application, on the reallocation date the Company will allocate the Policys cash value either to the fixed account, the money market subaccount, or the bond subaccount (depending on which account the owner selected on the application). While held in the reallocation account, net premium(s) will be credited with interest at the current fixed account rate and reduced by any monthly deductions due.
On any day that the Company credits premiums or transfers cash value to a subaccount, the Company will convert the dollar amount of the net premium (or transfer) into subaccount units at the unit value for that subaccount, determined at the end of that valuation date. The Company will credit amounts to the subaccounts only on a valuation date, that is, on a date the New York Stock Exchange (NYSE) is open for trading.
D. | Planned Periodic Payments |
The owner determines a planned periodic payment schedule which allows the owner to pay level premiums at fixed intervals over a specified period of time. The owner is not required to pay premiums according to this schedule. The owner may change the amount, frequency, and the time period over which the owner makes planned periodic payments.
Even if the owner makes planned periodic payments on schedule, the Policy may still lapse. The duration of the Policy depends on the Policys net surrender value. If the net surrender value is not high enough to pay the monthly deduction when due (and the no lapse period has expired) then the Policy will lapse (unless the owner makes the payment the Company specifies during the 61-day grace period).
E. | No Lapse Period Guarantee; Premiums During a Grace Period and Premiums Upon Reinstatement |
The full initial premium is the only premium the owner is required to pay under the Policy. However, the owner greatly increases the risk of lapse if the owner does not regularly pay premiums at least as large as the current minimum monthly guarantee premium.
Until the no lapse date shown on the Policy schedule page, the Company guarantees that the Policy will not lapse, so long as on any Monthiversary the owner has paid total premiums (minus any cash
5
withdrawals, minus any outstanding loan amount, and minus any accrued loan interest) that equal or exceed the sum of the minimum monthly guarantee premiums in effect for each month from the Policy date up to and including the current month. If the owner takes a cash withdrawal, or takes out a loan, or if the owner increases or decreases the specified amount (including specified amount increases generated by the Inflation Fighter Rider Level Premium), adds, increases or decreases a rider, the owner may need to pay additional premiums in order to keep the no lapse period guarantee in place. The no lapse period guarantee will not be in effect if the owner does not pay sufficient minimum monthly guarantee premiums.
The initial minimum monthly guarantee premium is shown on the Policys schedule page, and depends on a number of factors, including the age, gender, rate class of the proposed insured, and the specified amount requested. The minimum monthly guarantee premium will change if the owner changes death benefit options, increases or decreases the specified amount (including specified amount increases generated by the Inflation Fighter Rider Level Premium), or adds, increases, or decreases a rider. If the minimum monthly guarantee premium changes, the Company will notify the owner of the change and its effective date.
The no lapse date is:
| For Policies issued to insureds ages 0-60, the no lapse date is the lesser of the 20th Policy anniversary or the year the insured attains age 65 |
| For Policies issued to insureds ages 61-85, the 5th Policy anniversary. |
After the no lapse period guarantee ends, paying the current minimum monthly guarantee premium each month will not necessarily keep the Policy in force. The owner may need to pay additional premiums to keep the Policy in force.
If the net surrender value is less than the amount of the monthly deduction due on any Monthiversary and the no lapse period guarantee is no longer in effect, then the Policy will be in default and a grace period will begin. The grace period will end 61 days after the date on which the Company sends a grace period notice stating the amount required to be paid and the final date by which the Company must receive the payment. The notice will be sent to the owners last known address and to any assignee of record. The Policy does not lapse, and the insurance coverage continues, until the expiration of this grace period. If the grace period ends and the no lapse period guarantee is no longer in effect, all coverage under the Policy will terminate without value. The Company will reinstate the Policy for five years after the lapse if:
| the owner submits a written reinstatement application to the Companys office; |
| the insured meets the Companys insurability requirements; |
| if the no lapse period has expired, pay an amount sufficient to provide a net premium equal to any uncollected monthly deductions due up to the time of termination, plus two monthly deductions due in advance at the time of reinstatement, plus an amount sufficient to increase the cash value above the surrender charges in effect at the time of reinstatement; |
| if the no lapse period has not expired, the required premium will be the lesser of the premium described directly above, or the total minimum monthly guarantee premium from Policy issue through the month of lapse, plus two months of minimum monthly guarantee premiums, minus premiums previously paid net of any withdrawals, outstanding loans, accrued loan interest and surrender charge assessed upon a decrease in specified amount that has been deducted from the cash value. |
The Company will not reinstate any indebtedness. The cash value of the loan reserve on the reinstatement date will be zero. The net surrender value on the reinstatement date will equal the cash value at the time
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the Policy lapsed, plus any net premiums paid at reinstatement, minus one monthly deduction and any surrender charge. The reinstatement date will be the Monthiversary on or following the day the Company approves the reinstatement application.
The Company may decline a request for reinstatement.
F. | Allocations of Initial Premium Among the Fixed Account and the Subaccounts |
The Separate Account. An owner may allocate premiums to the subaccounts of the WRL Series Life Account (the separate account). The separate account currently consists of several subaccounts, the assets of which are used to purchase shares of a designated corresponding investment portfolio of a fund. Each fund is registered under the Investment Company Act of 1940, as amended, as an open-ended management investment company. Additional subaccounts may be added from time to time to invest in other portfolios of a fund or any other investment company.
When an owner allocates an amount to a subaccount (either by premium allocation, transfer of cash value or repayment of a Policy loan), the Policy is credited with units in that subaccount. The number of units is determined by dividing the amount allocated, transferred or repaid to the subaccount by the subaccounts unit value for the valuation date when the allocation or transfer request or repayment is received at the Companys administrative office. A subaccounts unit value is determined for each valuation period by multiplying the value of a unit for a subaccount for the prior valuation period by the net investment factor for the subaccount for the current valuation period. The unit value for each subaccount was arbitrarily set at $10 at the time the subaccount commenced operations. The net investment factor is an index used to measure the investment performance of a subaccount from one valuation period to the next.
The Fixed Account. Owners also may allocate premiums to the fixed account, which guarantees principal and a minimum fixed rate of interest. Money allocated or transferred to the fixed account will earn interest at a current interest rate in effect at that time. The interest rate will equal at least 2%.
Allocations of Premiums Among the Separate Account and the Fixed Account. Premiums are allocated to the subaccounts and the fixed account in accordance with the following procedures.
In the application for the Policy, the owner will specify the percentage of each net premium to be allocated to each subaccount of the separate account and/or the fixed account. The percentage of each net premium that may be allocated to any subaccount or the fixed account must be a whole number, and the sum of the allocation percentages must be 100%.
If the owner selects dollar cost averaging, then the owner must have at least $5,000 in each subaccount from which the Company will make transfers and the owner must transfer a total of at least $100 monthly. If the owner selects asset rebalancing, the cash value of the Policy (or initial premium if a new Policy) must be at least $5,000. Unless otherwise required by state law, the Company may restrict allocations to the fixed account if the fixed account value, net of the loan reserve, following the allocation would exceed $250,000. This restriction does not apply to any transfer to the fixed account in the exercise of conversion rights.
Allocation percentages may be changed at any time by the owner submitting a written notice to the Companys mailing address or telephone instructions to the Companys administrative office. The change will be effective at the end of the valuation date on which the Company receives the change request. Upon instructions from the owner, the registered agent of record for the Policy may also change
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allocation instructions for the owner. The minimum amount that can be allocated to a particular subaccount is 1% of each net premium payment.
G. | Loan Repayments and Interest Payments |
Repaying Loan Amount. The owner may repay all or part of the loan amount at any time while the Policy is in force. The loan amount is equal to the sum of all outstanding Policy loans including both principal plus any accrued interest. Loan repayments must be sent to the Companys mailing address and will be credited as of the date received. If the death benefit becomes payable while a Policy loan is outstanding, the loan amount will be deducted in calculating the death benefit.
Allocation for Repayment of Policy Loans. At each Policy anniversary, the Company will compare the outstanding loan amount to the amount in the loan reserve. The Company will also make this comparison any time the owner repays all or part of the loan, or makes a request to borrow an additional amount. At such time, if the outstanding loan amount exceeds the amount in the loan reserve, the Company will withdraw the difference from the subaccounts and the fixed account and transfer it to the loan reserve, in the same manner as when a loan is made. If the amount in the loan reserve exceeds the outstanding loan amount, the Company will withdraw the difference from the loan reserve and transfer it to the subaccounts and the fixed account in the same manner as current premiums are allocated. No charge will be imposed for these transfers, and these transfers are not treated as transfers in calculating the transfer charge. The Company reserves the right to require a transfer to the fixed account if the loans were originally transferred from the fixed account.
Interest on Loan Reserve. The amount in the loan reserve will be credited with interest at a fixed annual effective rate of 2%. See Policy Loans below. Any interest earned that is in excess of the outstanding loan amount will be transferred on the Policy anniversary to the subaccounts and the fixed account in accordance with the instructions for premium allocations then in effect.
H. | Refund of Excess Premiums for Modified Endowment Contracts |
At the time a Policy is issued, the Company will notify the owner as to whether the Policy is classified as a modified endowment contract (MEC) based on the initial premium received. If the Policy is not a MEC at issue, the owner will be notified of the maximum amount of additional premiums the owner can pay without causing the Policy to be classified as a MEC. At the time a premium is credited which would cause the Policy to become a MEC, the Company will immediately notify the owner and the agent. At that time, the owner will need to notify the Company if he or she wants the Policy to continue as a MEC. Unless the owner notifies the Company that he or she does want the Policy to continue as a MEC, the Company will refund the dollar amount of the excess premium that caused the Policy to become a MEC.
A. | Transfers Among the Subaccounts and the Fixed Account |
The owner may transfer cash value between and among the subaccounts of the separate account and, subject to certain special rules, to and from the fixed account. An owners request for a transfer must be in a form satisfactory to the Company.
In any Policy year, the owner currently may make an unlimited number of non-substantive transfers among the subaccounts. The Company deducts a transfer charge of $25 from the amount transferred for the 13th and each additional transfer in a Policy year. The Company guarantees that it will not increase this charge. For purposes of the transfer charge, all transfer requests made in one day are considered one
8
transfer, regardless of the number of subaccounts affected by the transfer, and transfers resulting from loans, the exercise of conversion rights, reallocation of cash value immediately after the reallocation date, transfers via the Internet, transfers among the ProFunds and/or Access Trust subaccounts, dollar cost averaging and asset rebalancing transfers are not treated as transfers for the purpose of the charge. Any unused free transfers do not carry over to the next year.
There is no minimum amount that must be transferred. There is no minimum amount that must remain in a subaccount following a transfer. However, unless otherwise required by state law, transfers to the fixed account may be restricted if the fixed account value, net of the loan reserve, following the transfer would exceed $250,000. Transfers from the fixed account may be limited to one per Policy year (unless the owner has selected dollar cost averaging). The maximum amount that may be transferred from the fixed account to the subaccounts in any Policy year is limited to the greater of: 25% of the amount in the fixed account on the date of the transfer; or the amount transferred from the fixed account in the immediately prior Policy year. The Company reserves the right to require that the transfer request be made in writing and received no later than 30 days after a Policy anniversary.
The Policy, as applied for and issued, will automatically receive telephone transfer privileges unless the owner provides other instructions. The telephone transfer privileges allow the owner to give authority to the registered representative or agent of record for the Policy to make telephone transfers and to change the allocation of future payments among the subaccounts and the fixed account on the owners behalf according to the owners instructions. The Company will require the owner to provide certain information for identification purposes when making a transfer request by telephone, and may require written confirmation of the request.
Costs and Market Timing/Frequent Transfers. Professional market timing organizations and some Policy owners try to profit from various strategies called market timing; for example, switching money into investment option portfolios when they expect prices to rise and taking money out when they expect prices to fall, or switching from one investment option portfolio to another and then back again after a short period of time. As money is shifted in and out, the underlying mutual fund incurs expenses for buying and selling securities. These costs are borne by all Policy owners, including the long-term Policy owners who do not generate the costs. Frequent transfers may also impede the ability of the portfolio manager of the underlying fund to sustain the stated investment objective of the portfolio.
The transfer privilege under the Policy is not intended to serve as a vehicle for short-term or frequent transfers. The Policy does not permit market timing/frequent transfers except among subaccounts in the ProFunds and Access One Trust. As described above, frequent transfers among investment option portfolios disrupt portfolio management in the underlying mutual fund and tend to drive fund expenses higher. The Company reserves the right to limit or revoke your transfer privileges and/or may not accept future premium payments from you if you engage in frequent transfer activity. The Company considers eight or more transfers in any three-month period to be frequent transfer activity, although it reserves the right to impose restrictions if there are fewer frequent transfers. Currently, we do not foresee any circumstances under which we would waive these restrictions on frequent transfer activity. The Company also reserves the right to implement, administer, and charge an owner for any fee or restriction, including redemption fees, imposed by an underlying fund portfolio.
B. | Dollar Cost Averaging |
The dollar cost averaging program permits an owner to transfer systematically, on a monthly basis, a set dollar amount from the fixed account or the portfolios investing in the money market and the bond subaccounts to a subaccount chosen by the owner. Transfers will be made monthly as of the end of the valuation date after the first Monthiversary after the reallocation date. An owner may elect to participate
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in the dollar cost averaging program at any time by sending the Company a completed dollar cost averaging request form. The Company will make the first transfer in the month after receipt of this form at the Companys mailing address, provided that the form is received by the 25th day of the month. To participate in the dollar cost averaging program, an owner must have at least $5,000 in each account from which the Company will make transfers and total monthly transfers must be at least $100. Also, each month, an owner may not transfer more than one-tenth of the amount that was in the fixed account at the beginning of dollar cost averaging. There is no charge for using the dollar cost averaging program. The Company reserves the right to modify, suspend, or discontinue offering the dollar cost averaging program at any time and for any reason. Dollar cost averaging is not available while an owner is participating in the asset rebalancing program or in any asset allocation services provided by a third party.
C. | Asset Rebalancing |
An owner may instruct the Company to rebalance automatically (on a quarterly, semi-annual or annual basis) the Policys cash value to maintain the percentage allocation specified in the owners currently effective premium allocation schedule. An owner may elect to participate in the asset rebalancing program at any time by sending a completed allocation request form to the Companys mailing address. The initial rebalancing will occur on the next quarterly, semi-annual or annual anniversary after receipt of this form. The Company will credit the amounts transferred at the unit value next determined on the dates the transfers are made. If a day on which rebalancing would ordinarily occur falls on a day on which the NYSE is closed, rebalancing will occur on the next day the NYSE is open.
To participate in the asset rebalancing program, the Policy must have a cash value of at least $5,000 or make a $5,000 initial premium payment. Cash value in the fixed account is not available for this program. The allocation percentages must be in whole numbers. Subsequent changes to the allocation percentages may be made quarterly by written instruction to the Companys mailing address or by telephone instruction to the Companys administrative office. Once elected, asset rebalancing remains in effect until the owner instructs the Company to discontinue asset rebalancing. There is no charge for using the asset rebalancing program. The Company reserves the right to discontinue offering the asset rebalancing program at any time and for any reason. If an owner terminates participation in the program, the Company restricts the owners right to re-enter the program to once each Policy year. Asset rebalancing is not available while an owner is participating in the dollar cost averaging program or in any asset allocation services provided by a third party. Asset rebalancing will cease if the owner makes any transfer to or from any subaccount other than under a scheduled rebalancing.
D. | Third Party Asset Allocation Services |
The Company does not offer advice about how to allocate an owners cash value under any circumstance, but an owner may engage a third party investment advisor to manage his or her account. The Company is not a party to the agreement an owner has with any such third party investment advisor, and any fee charged by an owners investment advisor is in addition to the fees and expenses that apply under the Policy.
The Company may provide administrative or other support services to independent third parties that have been authorized by owners to conduct transfers on their behalf or to recommend how subaccount values should be allocated. There is currently no charge for these administrative and support services. The Company reserves the right to discontinue providing administrative and support services at any time and for any reason.
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E. | Transfer Errors |
In accordance with industry practice, the Company will establish procedures to address and to correct errors in amounts transferred among the subaccounts and the fixed account, except for de minimus amounts. The Company will correct non de minimus errors it makes and will assume any risk associated with the error. Owners will not be penalized in any way for errors made by the Company. The Company will take any gain resulting from the error.
A. | Free-Look Right |
The Policy provides for an initial free-look right during which an owner may cancel the Policy by returning it to the Companys mailing address, to one of the Companys branch offices or to the agent who sold the Policy. The free-look period expires 10 days after the owner receives the Policy. The free-look period may be longer in some states. Upon returning the Policy to the Company or to an authorized agent for forwarding to the Companys mailing address, the Policy will be deemed void from the beginning. Within seven days after the Companys mailing address receives the cancellation request and the Policy, the Company will pay a refund. In most states, the refund will be:
| any charges and taxes deducted from premiums; plus |
| any monthly deductions or other charges deducted from amounts allocated to the subaccounts and the fixed account; plus |
| the cash value in the subaccounts and the fixed account on the date the Company (or its agent) receives the returned Policy at the Companys administrative office. |
Some states may require the Company to refund all of the premiums paid for the Policy.
B. | Surrenders |
Requests for Net Surrender Value. If the insured is alive and the Policy is in force, the owner may surrender the Policy at any time for its net surrender value. The net surrender value on any valuation date is equal to the cash value, minus any surrender charge, and minus any outstanding loan amount and accrued loan interest. The net surrender value will be determined by the Company on the valuation date the Company receives all required documents, including a satisfactory written request containing the owners original signature at its mailing address. The signature of the owners spouse may be required. The Company will cancel the Policy as of the date the written request is received at the Companys mailing address and the Company will ordinarily pay the net surrender value in a lump sum within seven days following receipt of the written request and all other required documents. The Policy cannot be reinstated after it is surrendered.
Surrender of Policy Surrender Charge. If the Policy is surrendered during the first 10 Policy years, or during the 10-year period following an increase in specified amount (including specified amount increases generated by the Inflation Fighter Rider Level Premium), the Company will deduct a surrender charge from the cash value and pay the remaining cash value (less any outstanding Policy loan amounts and accrued loan interest) to the owner.
The surrender charge is a charge for each $1,000 of specified amount of the Policy without consideration of any supplemental riders. The surrender charge that will apply on a full surrender of the Policy is the total of the surrender charge calculated for the initial specified amount and the surrender charges
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calculated for each increase in specified amount (including specified amount increases generated by the Inflation Fighter Rider Level Premium).
The initial specified amount has a 10-year surrender charge period starting on the Policy date and surrender charges that are based upon the insureds issue age, gender, and rate class on the Policy date. Each increase in specified amount (including specified amount increases generated by the Inflation Fighter Rider Level Premium) has its own 10-year surrender charge period and surrender charges that are based upon the insureds issue age, gender, and rate class at the time of the increase.
The surrender charge for each layer of specified amount is calculated as:
| the surrender charge per thousand of specified amount in the layer (varies by issue age, gender, and underwriting class on the Policy date or date of specified amount increase); multiplied by |
| the number of thousands of specified amount in the layer; multiplied by |
| the surrender charge factor. |
The surrender charge per thousand is calculated separately for the initial specified amount and for each increase in specified amount, using rates found in the prospectus. The surrender charge factor is also calculated separately for the initial specified amount and for each increase in specified amount in force (including specified amount increases generated by the Inflation Fighter Rider Level Premium). The surrender charge factor is always determined from the Policy date or date of specified amount increase to the surrender date, regardless of whether there were any prior lapses or reinstatements.
Extraordinary Expenses. When the Company incurs extraordinary expenses, such as overnight mail expenses or wire service fees, for expediting delivery of the surrender payment, the Company will deduct that charge from the payment. The Company charges $20 for an overnight delivery ($30 for Saturday delivery) and $25 for wire service.
C. | Cash Withdrawals |
When Withdrawals are Permitted. After the first Policy year, the owner may withdraw a portion of the cash value, subject to the following conditions:
| The owner must make a cash withdrawal request in writing, and the request must contain the owners original signature. The signature of the owners spouse may be required. The owner may also fax a withdrawal request to the Company if it is less than $500,000. |
| Only one cash withdrawal is allowed during a Policy year. |
| The Company may limit the withdrawal amount to at least $500 and the remaining net surrender value following a withdrawal may not be less than $500. During the first ten Policy years, the amount of the withdrawal may be limited to no less than $500 and to no more than 10% of the net surrender value. After the tenth Policy year, the amount of a withdrawal may be limited to no less than $500 and to no more than the net surrender value, less $500. |
| A cash withdrawal will not be permitted if it will reduce the specified amount below the minimum specified amount set forth in the Policy. |
| The owner may specify the subaccount(s) and the fixed account from which the withdrawal will be taken. If the owner does not specify an account, the Company will deduct the Policys value in the subaccounts and the fixed account in accordance with the owners current premium allocation instructions. |
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| The Company generally will pay a cash withdrawal request within seven days following the valuation date on which the withdrawal request is received. |
| The Company will deduct a processing fee equal to $25 or 2% of the amount withdrawn, whichever is less, and will pay the owner the balance. The Company guarantees that this charge will not increase. |
| The Company does not deduct a surrender charge when a cash withdrawal is taken. |
| A cash withdrawal will terminate the Inflation Fighter Rider. |
| The Company will not allow a cash withdrawal that will disqualify a Policy as life insurance under the Internal Revenue Code. |
| A cash withdrawal may have tax consequences. |
Effect of Withdrawal on Death Benefit. A cash withdrawal will reduce the cash value by the amount of the cash withdrawal and will reduce the death benefit by at least the amount of the cash withdrawal. If death benefit Option A is in effect or Option C is in effect and the insured is attained age 71 or greater, a cash withdrawal will reduce the specified amount by an amount equal to the amount of the cash withdrawal.
Extraordinary Expenses. When the Company incurs extraordinary expenses, such as overnight mail expenses or wire service fees, for expediting delivery of the partial withdrawal payment, the Company will deduct that charge from the payment. The Company charges $20 for an overnight delivery ($30 for Saturday delivery) and $25 for wire service.
D. | Lapses |
If the no lapse period guarantee is not in effect and if a sufficient premium has not been received by the 61st day after the date of the grace period notice, the Policy will lapse without value and no amount will be payable to the owner unless the Policy is reinstated within five years after the lapse and prior to the maturity date.
E. | Premium Expense Charge, Monthly Deduction, and Mortality and Expense Risk Charge |
Premium Expense Charge. The Company deducts a premium expense charge from premiums before allocating such premiums to the subaccounts and fixed account selected by the owner. This charge is equal to:
For All Except Residents of Puerto Rico
| 6% of all premium payments during the first ten Policy years on Policies with a specified amount in force of less than $250,000 (band 1), and 2.50% of premiums thereafter; and |
| 3.0% of all premium payments during the first ten Policy years on Policies with a specified amount in force from $250,000 - $499,999 (band 2), and 2.50% of premiums thereafter. |
There is no premium expense charge for Policies with a specified amount of $500,000 or higher (band 3).
For Residents of Puerto Rico
| 10% of premiums during the first 10 Policy years on Policies with a specified amount in force of less than $250,000;(band 1); |
| 7.0% on Policies with a specified amount from $250,000- $499,999 (band 2); and 4.0% with a specified amount of $500,000 or more. |
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We guarantee this charge will not exceed 12.0%, 9.0%, and 6.0%, respectively for each category.
| The current charge for Policies after the first 10 Policy years is equal to 6.5% with a specified amount up to $499,999 (bands 1 and 2); and 4.0% with a specified amount of $500,000 or more. |
We guarantee this charge will not exceed 8.5% and 6.0%, respectively for each category.
Monthly Deduction. A monthly deduction will be deducted pro rata from the Policys cash value in each subaccount and the fixed account on the Policy date and on each Monthiversary prior to the insureds attained age 111 or 100 (depending on when the Policy was applied for). The owner may elect to choose the subaccounts from which the Company will deduct the monthly deduction (that is, make self-directed monthly deductions). If self-directed monthly deductions are not elected, the Company will deduct the monthly charge on a pro-rata basis from all accounts (i.e., deductions will be withdrawn from each subaccount and the fixed account in proportion to the value each bears to the total cash value on the Monthiversary). The monthly deduction is a charge compensating the Company for the services and benefits provided, costs and expenses incurred, and risks assumed by the Company in connection with the Policy.
The monthly deduction is equal to:
| the monthly Policy charge; plus |
| the monthly cost of insurance charge for the Policy; plus |
| the monthly per unit charge for the Policy; plus |
| the portion of the monthly deduction for any benefits provided by riders attached to the Policy. |
Monthly Policy Charge.
For Policies Applied for On or After September 22, 2008:
The monthly Policy charge currently equals $10.00 each Policy month through age 110 and 0 beginning at age 111. The Company guarantees that this charge will never be more than $10.00 per month during the first Policy year and $12.00 per month thereafter through age 110.
For Policies Applied for Before September 22, 2008 and Issued Before January 1, 2009:
The monthly Policy charge currently equals $8.00 each Policy month for the first 10 Policy years and $4.00 each Policy month for Policy year 11 through age 99 and 0 beginning at age 100. The Company guarantees that this charge will never be more than $8.00 for the first Policy year and never more than $12.00 thereafter through age 99.
Cost of Insurance Charge.
The cost of insurance charge is calculated monthly. The cost of insurance charge varies each month and is determined as follows:
1. | reduce the death benefit on the Monthiversary by the cash value on the Monthiversary after it has been allocated among the layers of specified amount in force in the following order: first, initial specified amount, then, each increase in specified amount starting with the oldest increase, then the next oldest, successively, until all cash value has been allocated (the resulting amounts are the net amount at risk for each layer of specified amount); |
2. | Then, multiply each layer of net amount at risk provided under 1. by the appropriate monthly cost of insurance rate for that layer; and add the results together. |
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Cost of Insurance Rates. The monthly cost of insurance rate depends, in part, on the specified amount band. Generally, the higher the specified amount band, the lower the cost of insurance rates. The specified amount band is determined by referring to the specified amount in force for the Base Policy (riders are not included in determining the Policys specified amount band). The specified amount bands available are:
1) | Band 1: $50,000 - $249,999 |
2) | Band 2: $250,000 - $499,999 |
3) | Band 3: $500,000 and over |
If the specified amount is increased, different monthly cost of insurance rates may apply to that layer of specified amount, based on the insureds attained age and underwriting class at the time of the increase, gender, and the length of time since the increase. Increases in specified amount may move the Policy into a higher specified amount band which may result in a decrease in the rates for the cost of insurance and monthly per unit charges.
Decreases in specified amount may cause the Policy to drop into a lower band of specified amount and may result in an increase in cost of insurance rates. Decreases in specified amount are applied on a last-in, first-out basis to the specified amount in force, and will first reduce the specified amount provided by the most recent increase in specified amount in force, then reduce the next most recent increases, successively, and then reduce the initial specified amount.
Cost of insurance rates also vary depending on the insureds issue age on the Policy date, issue age at the time of any increase in specified amount, specified amount band, gender, rate class, and the length of time from the Policy date or from the date of any increase in specified amount. These rates will never be greater than the guaranteed amounts stated in the Policy which are based on the 2001 Commissioners Standard Ordinary (C.S.O.) Mortality Tables (for Policies applied for on or after September 22, 2008) or the Commissioners 1980 Standard Ordinary Tobacco and Non-Tobacco Mortality Tables (for Policies applied for before September 22, 2008, and issued before January 1, 2009) and the insureds attained age, gender, and rate class.
Cost of insurance rates for Policies that are issued on a simplified or expedited basis may cause healthy individuals to pay higher cost of insurance rates than they would pay under a substantially similar Policy offered using different underwriting criteria.
Monthly Per Unit Charge. The Company deducts a monthly per unit charge for up to 10 Policy years on and after the Policy date, and on any increase in specified amount (including increases generated by the Inflation Fighter Rider Level Premium). Currently, the Company deducts this charge each month during the first 10 years from the Policy date, and 10 years following the date of any increase in specified amount or the addition of any rider. The monthly per unit charge that is set on the Policy date is based on the issue age of the insured. A separate monthly per unit charge is assessed for up to 10 years following each increase in specified amount and the rate of that charge is based on the insureds age at the time of any increase in specified amount. This charge equals:
| the monthly per unit charge for the specified amount on the Policy date; plus |
| the monthly per unit charge for each increase in specified amount caused by either a rider or a requested increase; minus |
| the monthly per unit charge for any specified amount that has been decreased. |
Optional Insurance Riders. The monthly deduction will include charges for any optional insurance benefits added to the Policy by rider.
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Mortality and Expense Risk Charge. Each valuation date, the Company deducts a daily charge from the cash value in each subaccount in an amount equal to the Policys cash value in each subaccount multiplied by the daily pro rata portion of the annual mortality and expense risk charge rate of up to 0.90% (equal to 0.90% of the average daily net assets in each subaccount). For the first 10 Policy years, the current annual rate for the mortality and risk charge is equal to 0.75% of the average daily net assets of each subaccount. The Company intends to reduce this charge to 0.60% for Policy years 11 15, 0.30% for Policy years 16 20, and 0.00% for Policy years 21+, but the Company does not guarantee that it will do so. The Company guarantees that this charge will be no more than 0.90% for all Policy years.
F. | Death Benefits |
Death Benefit Proceeds. As long as the Policy is in force, the Company will pay the death benefit upon receipt, at the Companys administrative office of satisfactory proof of the insureds death, plus written direction (from each eligible recipient of death benefit proceeds) regarding how to pay the death benefit payment, and any other documents, forms and information we need. The Company may require return of the Policy.
The death benefit proceeds equal:
| the death benefit (described below); minus |
| any past due monthly deductions if the insured dies during the grace period (if applicable); minus |
| any outstanding Policy loan and accrued loan interest; plus |
| any additional insurance in force provided by rider. |
The Company will pay the death benefit proceeds to the primary beneficiary(ies), if living, or to a contingent beneficiary. If each beneficiary dies before the insured and there is no contingent beneficiary, the Company will pay the death benefit proceeds to the owner or the owners estate.
The Company will pay the death benefit proceeds in a lump sum or under a settlement option. The election may be made by the owner during his or her lifetime, or, if no election is in effect at his or her death, by the beneficiary. An option in effect at death may not be changed to another form of benefit after death. If no election is made, the Company will pay the death benefit proceeds in a lump sum.
If all or part of the death benefit proceeds will be paid to the beneficiary in one sum, the Company will pay interest on this sum as required by applicable state law from the date the Company receives due proof of the insureds death to the date the Company makes payment. Generally payment will be made within seven days after the valuation date on which the Company has received at the Companys administrative office all materials necessary to constitute due proof of death and written direction (from each eligible recipient of death benefit proceeds) regarding how to pay the death benefit payment, and any other documents, forms and information we need.
If a settlement option is elected, the death benefit will be applied to the option within seven days after the valuation date by which the Company received due proof of death and written direction (from each eligible recipient of death benefit proceeds) regarding how to pay the death benefit payment, and any other documents, forms and information we need and payments will begin under that option when provided by the option.
Death Benefit. The death benefit is determined at the end of the valuation period in which the insured dies. One of the three death benefit options offered under the Policy must be selected on the application.
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If the owner does not select a death benefit option on the application, Option A will be selected and the Company will ask the owner to confirm the selection of Option A in writing or choose another option.
For purposes of qualifying the Policy as a life insurance policy, there are two tax tests available in Code Section 7702, the guideline premium test, or the cash value accumulation test. The insured must choose either the guideline premium test or the cash value accumulation test on the application. This choice may not be changed. If a choice is not made on the application, the default test will be the guideline premium test.
The three death benefits are:
Under the Guideline Premium Test
Death Benefit Option A equals the greatest of: |
the current specified amount; or a specified percentage called the limitation percentage, as shown on the Policys schedule page, multiplied by the cash value on the insureds date of death; or the amount required for the Policy to qualify as a life insurance policy under Section 7702 of the Internal Revenue Code. | |
Under the Cash Value Accumulation Test
Death Benefit Option A equals the greatest of: |
the current specified amount; or a specified percentage called the limitation percentage, as shown on the Policys schedule page, multiplied by the difference of the cash value on the date of the primary insureds death and any applicable net single premium for riders that are qualified additional benefits as shown on the owners Policy schedule page; or the amount required for the Policy to qualify as a life insurance policy under Section 7702 of the Internal Revenue Code. | |
Under the Guideline Premium Test
Death Benefit Option B equals the greatest of: | the current specified amount; plus the cash value on the insureds date of death; or the limitation percentage, as shown on the Policys schedule page, multiplied by the cash value on the primary insureds date of death; or the amount required for the Policy to qualify as a life insurance policy under Section 7702 of the Internal Revenue Code. | |
Under the Cash Value Accumulation Test
Death Benefit Option B equals the greatest of: | the current specified amount; plus the cash value on the primary insureds date of death; or a specified percentage called the limitation percentage, as shown on the Policys schedule page, multiplied by |
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the difference of the cash value on the date of the primary insureds death and any applicable net single premium for riders that are qualified additional benefits as shown on the owners Policys schedule page; or the amount required for the Policy to qualify as a life insurance policy under Section 7702 of the Internal Revenue Code. |
Option C equals the greater of: | death benefit option A; or the current specified amount, multiplied by an age-based factor equal to the lesser of: 1.0 or 0.04 times (95 minus insureds attained age at death) (the factor will never be less than zero); plus the cash value on the insureds date of death; or the amount required for the Policy to qualify as a life insurance policy under Section 7702 of the Internal Revenue Code. | |
The Company guarantees that, regardless of the death benefit option selected, so long as the Policy does not lapse, the death benefit will never be less than the specified amount on the insureds date of death.
Change in Death Benefit Option. After the third Policy year, the owner may change the death benefit option once each Policy year if the specified amount was not changed that year and the insured is less than attained age 95. The Company will notify the owner of the new specified amount. The request to change the death benefit option must be in writing. The effective date of the change will be the Monthiversary on or following the date when the Company receives the request at its administrative office. The owner may not make a change that would decrease the specified amount below the minimum specified amount under band 1 listed on the Policy schedule page.
Death Benefit After Age 111 (for Policies applied for on or after September 22, 2008) or Age 100 (for Policies applied for before September 22, 2008 and issued before January 1, 2009). If the Policy is still in force on the Policy anniversary on or following the insureds 111th or 100th birthday (depending on when the Policy was applied for), the Policy will continue and the death benefit payable will continue to be calculated in accordance with the death benefit option and the life insurance compliance test then in effect.
Effect of Inflation Fighter Rider Level Premium on the Death Benefit. If Option A is chosen on the application, the owner may add the Inflation Fighter Rider Level Premium to the Policy. If the Inflation Fighter Rider Level Premium has been added, the Policys specified amount will automatically increase each year on the Policy anniversary until the 20th Policy anniversary. If the death benefit option is changed to either Option B or Option C, the Inflation Fighter Rider Level Premium will terminate and future scheduled increases in specified amount will automatically cease.
Change in Specified Amount. The owner may increase the specified amount once each Policy year and prior to the insureds 86th birthday if the death benefit option has not been changed that year. After the Policy has been in force for three years, the owner may decrease the specified amount once each Policy year if the death benefit option has not been changed that year. An increase in specified amount will be treated as an additional layer of coverage with its own cost of insurance rates, monthly per unit charge, surrender charges, and surrender charge period. This also applies to increases generated by the Inflation Fighter Rider Level Premium. If a change in specified amount causes the specified amount band to
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change, the Company will apply the new cost of insurance rates and monthly per unit charge to the amounts in the new band as of the effective date of the change. A new minimum monthly guarantee premium is effective on the date of the change (except in the event of an increase in specified amount generated by the Inflation Fighter Rider Level Premium).
| Decrease in Specified Amount. The request to decrease the specified amount must be in writing, and the specified amount cannot be increased in the same Policy year. The specified amount cannot be decreased lower than the minimum specified amount under band 1 as shown on the Policy schedule page, nor can it be decreased if the specified amount would disqualify the Policy as life insurance under the Code. Until the later of the end of the surrender charge period or the Policy anniversary on or following the insureds 65th birthday, the Company may limit the amount of the decrease to no more than 20% of the then current specified amount. A decrease in specified amount will take effect on the Monthiversary on or after the Company receives the written request. |
| Increase in Specified Amount. A request to increase specified amount must be applied for on a supplemental application and must include evidence of insurability satisfactory to the Company. An increase requires approval by the Company, and will take effect on the Monthiversary on or after such approval. The Company may require the increase to be at least $10,000. The specified amount may not be decreased in the same Policy year that the specified amount is increased. |
Supplemental Death Benefits. Supplemental death benefits and other benefits may be added to the Policy by purchasing one or more riders as described in the current prospectus for the Policy.
G. | Policy Loans |
Policy Loans. After the first Policy year and so long as the Policy is in force, the owner may obtain a Policy loan from the Company at any time by submitting a written, faxed, or telephone request to the Companys administrative office The signature of the owners spouse may be required. The Company may permit loans prior to the first anniversary for Policies issued pursuant to 1035 Exchanges. The minimum loan amount may be $500 and the maximum loan amount is 90% of the Policys net surrender value less any loan interest that will accrue before the next Policy anniversary. Policy loans will be processed as of the valuation date the request is received and loan proceeds generally will be sent to the owner within seven days thereafter.
The Policy, as applied for and issued, will automatically permit the owner to request a loan by telephone, unless the owner provides other instructions. The Company will require the owner to provide certain information for identification purposes when making a loan request by telephone, and may require written confirmation of the request. The Company may reject the request, or require a signature guarantee if the loan amount exceeds $500,000 or if the address of record has been changed within the past 10 days. The Company will also accept fax instructions or requests from the owner regarding loans.
Collateral for Policy Loans. When a Policy loan is made, an amount equal to the requested loan is transferred from the cash value in the subaccounts or fixed account to the loan reserve. This withdrawal is made based on the owners current premium allocation instructions, unless the owner specifies a different allocation when requesting the loan.
Interest on Policy Loans. The Company currently charges interest on any outstanding Policy loan at a current effective annual interest rate of 2.75% (3% maximum guaranteed) on each Policy anniversary. The Company may declare various loan interest rates, and may apply different rates to different parts of the loan. Loan interest that is unpaid when due will be added to the loan amount on each Policy anniversary and will bear interest at the same rate. An amount equal to the unpaid amount of interest is
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transferred to the loan reserve from each subaccount and the fixed account based on the owners current premium allocation instructions, unless the owner directs otherwise. After the 10th Policy year, the owner may borrow at preferred loan rates an amount equal to the cash value minus total premiums paid (less any cash withdrawals) and minus any outstanding loan amount including accrued loan interest. The current preferred loan interest rate charged is 2% effective annually and is guaranteed not to exceed 2.25%. After the insureds attained age 111 or 100 (depending on when the Policy was applied for), all loans, new and existing, are considered preferred loans. The Company will credit the amount in the loan reserve with interest at an effective annual rate of 2%.
Effect on Death Benefit. If the death benefit becomes payable while a Policy loan is outstanding, the loan amount, including accrued loan interest, will be deducted in calculating the death benefit. If at any time the sum of outstanding loans, including accrued loan interest, causes the net surrender value of the Policy to reach zero, the Company will send the owner, and any assignee of record, notice of the default and the owner will have a 61-day grace period to submit a sufficient payment to avoid lapse.
H. | Policy Changes After Age 111 (For Policies Applied for On or After September 22, 2008) or Age 100 (For Policies Applied for Before September 22, 2008 and Issued Before January 1, 2009). |
If the Policy is still in force on the Policy anniversary on or following the insureds 111th or 100th birthday, as applicable, the Policy will continue, with the following changes:
| the Company will no longer accept any further premium payments; |
| the Company will no longer deduct the monthly deductions; |
| the Company will continue to deduct the mortality and expense risk charge; |
| interest will continue to accrue on any Policy loans, as before; |
| the Company will continue to accept Policy loan repayments and loan interest payments; and |
| the Company will continue to permit Policy loans and withdrawals to be made. |
I. | Payments by the Company |
Payments of cash withdrawals, surrenders, settlement options, or death benefits proceeds ordinarily will be made within seven days of the valuation date on which the Company receives the request and all required documentation at the Companys administrative office. The Company may postpone the payment of any such transactions for any of the following reasons:
| the NYSE is closed for trading other than for customary holiday or weekend closings, or trading on the NYSE is otherwise restricted, as determined by the SEC; |
| the SEC permits, by an order, the postponement for the protection of owners; or |
| the SEC determines that an emergency exists that the disposal of, or the determination of the value of, securities held in the separate account not reasonably practicable; or |
| the payment is attributable to a check that has not cleared; or |
| when mandated under applicable law. |
The Company may defer, for up to six months after the date the Company receives the request, the payment of any proceeds from the fixed account for a transfer, cash withdrawal, death benefit proceeds, or surrender request.
J. | Conversion Rights |
20
The owner has the right to transfer all of the subaccount value to the fixed account. If this transfer is made during the first 24 Policy months, there is no transfer charge and the transfer is not counted for purposes of determining whether a transfer charge applies. The owner must make this request in writing to the Companys mailing address.
In the event of a material change in the investment policy of any portfolio, all subaccount values may be transferred to the fixed account without a transfer charge. The request to transfer must be received within 60 days after the effective date of the change of investment policy or the date the owner is notified, whichever is later.
K. | Redemption Errors |
In accordance with industry practice, the Company will establish procedures to address and to correct errors in amounts redeemed from the subaccounts and the fixed account, except for de minimus amounts. The Company will assume the risk of any non de minimus errors caused by the Company.
L. | Misstatement of Age or Gender |
If the insureds age or gender has been misstated in the application or any other supplemental application, then the death benefit under the Policy will be adjusted based on what the cost of insurance charge and monthly per unit charge for the most recent monthly deduction would have purchased based on the insureds correct age and gender.
M. | Incontestability |
Except for fraud, the Policy limits the Companys right to contest the Policy, for reasons of material misstatements contained in the application (or any supplemental application), after it has been in force during the insureds lifetime for two years from the Policy date or, if reinstated, for two years from the reinstatement date. A new two-year contestability period will apply to each increase in specified amount that requires evidence of insurability (excluding automatic increases generated by the Inflation Fighter Rider Level Premium), beginning on the effective date of each increase, and will apply only to statements made in the application for the increase.
N. | Limited Death Benefit |
The Policy limits the death benefit if the insured dies by suicide, while sane or insane, within two years after the Policy date or the effective date of a reinstatement. The Companys liability is limited to an amount equal to the premiums paid, less any outstanding loan amount, and less any cash withdrawals.
If the insured commits suicide, while sane or insane, within two years from the effective date of any increase in specified amount that requires evidence of insurability, the Companys liability with respect to such increase will be its cost of insurance charges and any monthly per unit charges.
21
Exhibit 26 (r)
POWERS OF ATTORNEY
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Blake S. Bostwick, a Director and President of Transamerica Life Insurance Company, an Iowa corporation, do hereby appoint Art Woods and Brian Stallworth, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, as amended, in connection with the registration of the variable contracts listed below, and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder without the others.
Separate Account Name | SEC 1940 File Number |
Product Name | SEC 1933 File Number | |||
WRL Series Life Account | 811-4420 | Transamerica Freedom Elite Builder II | 333-199047 | |||
WRL Series Life Account | 811-4420 | WRL Financial Freedom Builder | 333-199057 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Builder | 333-199055 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Equity Protector | 333-199058 | |||
WRL Series Life Account | 811-4420 | Transamerica Associate Freedom Elite Builder | 333-199059 | |||
WRL Series Life Account | 811-4420 | Transamerica Xcelerator Exec | 333-199054 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite | 333-199063 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Wealth Protector | 333-199056 | |||
WRL Series Life Account | 811-4420 | WRL Xcelerator & Xcelerator Focus | 333-199062 | |||
WRL Series Life Account | 811-4420 | WRL ForLife | 333-199061 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Advisor | 333-199060 | |||
WRL Series Life Account | 811-4420 | WRL Freedom SP Plus | 333-199067 | |||
WRL Series Life Account | 811-4420 | The Equity Protector | 333-199068 | |||
WRL Series Life Account G | 811-21929 | Transamerica Freedom Asset Advisor | 333-199064 | |||
WRL Series Life Account G | 811-21929 | WRL Benefactor | 333-199066 | |||
WRL Series Life Account G | 811-21929 | WRL Evolution | 333-199065 | |||
Separate Account VL E | 811-04733 | Pacers Choice Variable Life | 333-146343 | |||
WRL Series Life Corporate Account | 811-08833 | Advantage IV | 333-57681 |
IN WITNESS WHEREOF, I have hereunto set my hand this 9th of September, 2020.
/s/ Blake S. Bostwick |
Blake S. Bostwick |
Director and President |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Fred J. Gingerich, Controller, Senior Vice President and Assistant Treasurer of Transamerica Life Insurance Company, an Iowa corporation, do hereby appoint Art Woods and Brian Stallworth, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, and proxies, exemptive orders or other documents filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, as amended, in connection with the registration of the variable contracts listed below, and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder without the others.
Separate Account Name | SEC 1940 File Number |
Product Name | SEC 1933 File Number | |||
WRL Series Life Account | 811-4420 | Transamerica Freedom Elite Builder II | 333-199047 | |||
WRL Series Life Account | 811-4420 | WRL Financial Freedom Builder | 333-199057 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Builder | 333-199055 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Equity Protector | 333-199058 | |||
WRL Series Life Account | 811-4420 | Transamerica Associate Freedom Elite Builder | 333-199059 | |||
WRL Series Life Account | 811-4420 | Transamerica Xcelerator Exec | 333-199054 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite | 333-199063 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Wealth Protector | 333-199056 | |||
WRL Series Life Account | 811-4420 | WRL Xcelerator & Xcelerator Focus | 333-199062 | |||
WRL Series Life Account | 811-4420 | WRL ForLife | 333-199061 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Advisor | 333-199060 | |||
WRL Series Life Account | 811-4420 | WRL Freedom SP Plus | 333-199067 | |||
WRL Series Life Account | 811-4420 | The Equity Protector | 333-199068 | |||
WRL Series Life Account G | 811-21929 | Transamerica Freedom Asset Advisor | 333-199064 | |||
WRL Series Life Account G | 811-21929 | WRL Benefactor | 333-199066 | |||
WRL Series Life Account G | 811-21929 | WRL Evolution | 333-199065 | |||
Separate Account VL E | 811-04733 | Pacers Choice Variable Life | 333-146343 | |||
WRL Series Life Corporate Account | 811-08833 | Advantage IV | 333-57681 |
IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of September, 2020.
/s/ Fred J. Gingerich |
Fred J. Gingerich |
Controller and Vice President |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Mark W. Mullin, a Director and Chairman of the Board of Transamerica Life Insurance Company, an Iowa corporation, do hereby appoint Art Woods and Brian Stallworth, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, as amended, in connection with the registration of the variable contracts listed below, and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder without the others.
Separate Account Name | SEC 1940 File Number |
Product Name | SEC 1933 File Number | |||
WRL Series Life Account | 811-4420 | Transamerica Freedom Elite Builder II | 333-199047 | |||
WRL Series Life Account | 811-4420 | WRL Financial Freedom Builder | 333-199057 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Builder | 333-199055 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Equity Protector | 333-199058 | |||
WRL Series Life Account | 811-4420 | Transamerica Associate Freedom Elite Builder | 333-199059 | |||
WRL Series Life Account | 811-4420 | Transamerica Xcelerator Exec | 333-199054 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite | 333-199063 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Wealth Protector | 333-199056 | |||
WRL Series Life Account | 811-4420 | WRL Xcelerator & Xcelerator Focus | 333-199062 | |||
WRL Series Life Account | 811-4420 | WRL ForLife | 333-199061 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Advisor | 333-199060 | |||
WRL Series Life Account | 811-4420 | WRL Freedom SP Plus | 333-199067 | |||
WRL Series Life Account | 811-4420 | The Equity Protector | 333-199068 | |||
WRL Series Life Account G | 811-21929 | Transamerica Freedom Asset Advisor | 333-199064 | |||
WRL Series Life Account G | 811-21929 | WRL Benefactor | 333-199066 | |||
WRL Series Life Account G | 811-21929 | WRL Evolution | 333-199065 | |||
Separate Account VL E | 811-04733 | Pacers Choice Variable Life | 333-146343 | |||
WRL Series Life Corporate Account | 811-08833 | Advantage IV | 333-57681 |
IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of September, 2020.
/s/ Mark W. Mullin |
Mark W. Mullin |
Director and Chairman of the Board |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, David Schulz, a Director, Chief Tax Officer and Senior Vice President of Transamerica Life Insurance Company, an Iowa corporation, do hereby appoint Art Woods and Brian Stallworth, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, as amended, in connection with the registration of the variable contracts listed below, and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder without the others.
Separate Account Name | SEC 1940 File Number |
Product Name | SEC 1933 File Number | |||
WRL Series Life Account | 811-4420 | Transamerica Freedom Elite Builder II | 333-199047 | |||
WRL Series Life Account | 811-4420 | WRL Financial Freedom Builder | 333-199057 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Builder | 333-199055 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Equity Protector | 333-199058 | |||
WRL Series Life Account | 811-4420 | Transamerica Associate Freedom Elite Builder | 333-199059 | |||
WRL Series Life Account | 811-4420 | Transamerica Xcelerator Exec | 333-199054 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite | 333-199063 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Wealth Protector | 333-199056 | |||
WRL Series Life Account | 811-4420 | WRL Xcelerator & Xcelerator Focus | 333-199062 | |||
WRL Series Life Account | 811-4420 | WRL ForLife | 333-199061 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Advisor | 333-199060 | |||
WRL Series Life Account | 811-4420 | WRL Freedom SP Plus | 333-199067 | |||
WRL Series Life Account | 811-4420 | The Equity Protector | 333-199068 | |||
WRL Series Life Account G | 811-21929 | Transamerica Freedom Asset Advisor | 333-199064 | |||
WRL Series Life Account G | 811-21929 | WRL Benefactor | 333-199066 | |||
WRL Series Life Account G | 811-21929 | WRL Evolution | 333-199065 | |||
Separate Account VL E | 811-04733 | Pacers Choice Variable Life | 333-146343 | |||
WRL Series Life Corporate Account | 811-08833 | Advantage IV | 333-57681 |
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of September, 2020.
/s/ David Schulz |
David Schulz |
Director, Chief Tax Officer and Senior Vice President |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, C. Michiel van Katwijk, a Director, Chief Financial Officer, Executive Vice President and Treasurer of Transamerica Life Insurance Company, an Iowa corporation, do hereby appoint Art Woods and Brian Stallworth, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, as amended, in connection with the registration of the variable contracts listed below, and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder without the others.
Separate Account Name | SEC 1940 File Number |
Product Name | SEC 1933 File Number | |||
WRL Series Life Account | 811-4420 | Transamerica Freedom Elite Builder II | 333-199047 | |||
WRL Series Life Account | 811-4420 | WRL Financial Freedom Builder | 333-199057 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Builder | 333-199055 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Equity Protector | 333-199058 | |||
WRL Series Life Account | 811-4420 | Transamerica Associate Freedom Elite Builder | 333-199059 | |||
WRL Series Life Account | 811-4420 | Transamerica Xcelerator Exec | 333-199054 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite | 333-199063 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Wealth Protector | 333-199056 | |||
WRL Series Life Account | 811-4420 | WRL Xcelerator & Xcelerator Focus | 333-199062 | |||
WRL Series Life Account | 811-4420 | WRL ForLife | 333-199061 | |||
WRL Series Life Account | 811-4420 | WRL Freedom Elite Advisor | 333-199060 | |||
WRL Series Life Account | 811-4420 | WRL Freedom SP Plus | 333-199067 | |||
WRL Series Life Account | 811-4420 | The Equity Protector | 333-199068 | |||
WRL Series Life Account G | 811-21929 | Transamerica Freedom Asset Advisor | 333-199064 | |||
WRL Series Life Account G | 811-21929 | WRL Benefactor | 333-199066 | |||
WRL Series Life Account G | 811-21929 | WRL Evolution | 333-199065 | |||
Separate Account VL E | 811-04733 | Pacers Choice Variable Life | 333-146343 | |||
WRL Series Life Corporate Account |
811-08833 | Advantage IV | 333-57681 |
IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of September, 2020.
/s/ C. Michiel van Katwijk |
C. Michiel van Katwijk |
Director, Chief Financial Officer, Executive Vice President and Treasurer |
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