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MarketScreener Homepage  >  Equities  >  Nyse  >  Voya Financial, Inc.    VOYA

VOYA FINANCIAL, INC.

(VOYA)
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VOYA FINANCIAL : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

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02/21/2020 | 04:32pm EDT
For the purposes of the discussion in this Annual Report on Form 10-K, the term
Voya Financial, Inc. refers to Voya Financial, Inc. and the terms "Company,"
"we," "our," and "us" refer to Voya Financial, Inc. and its subsidiaries.

The following discussion and analysis presents a review of our results of operations for the years ended December 31, 2019, 2018 and 2017 and financial condition as of December 31, 2019 and 2018. This item should be read in its entirety and in conjunction with the Consolidated Financial Statements and related notes contained in Part II, Item 8. of this Annual Report on Form 10-K.


In addition to historical data, this discussion contains forward-looking
statements about our business, operations and financial performance based on
current expectations that involve risks, uncertainties and assumptions. Actual
results may differ materially from those discussed in the forward-looking
statements as a result of various factors. See the "Note Concerning
Forward-Looking Statements."

Overview

We provide our principal products and services through three segments: Retirement, Investment Management and Employee Benefits. Corporate includes activities not directly related to our segments and certain run-off activities that are not meaningful to our business strategy.


In general, our primary sources of revenue include fee income from managing
investment portfolios for clients as well as asset management and administrative
fees from certain insurance and investment products; investment income on our
general account and other funds; and from insurance premiums. Our fee income
derives from asset- and participant-based advisory and recordkeeping fees on our
retirement products, from management and administrative fees we earn from
managing client assets, from the distribution, servicing and management of
mutual funds, as well as from other fees such as surrender charges from policy
withdrawals. We generate investment income on the assets in our general account,
primarily fixed income assets, that back our liabilities and surplus. We earn
premiums on insurance policies, including stop-loss, group life, voluntary and
disability products as well as individual life insurance and retirement
contracts. Our expenses principally consist of general business expenses,
commissions and other costs of selling and servicing our products, interest
credited on general account liabilities as well as insurance claims and benefits
including changes in the reserves we are required to hold for anticipated future
insurance benefits.

Because our fee income is generally tied to account values, our profitability is
determined in part by the amount of assets we have under management,
administration or advisement, which in turn depends on sales volumes to new and
existing clients, net deposits from retirement plan participants, and changes in
the market value of account assets. Our profitability also depends on the
difference between the investment income we earn on our general account assets,
or our portfolio yield, and crediting rates on client accounts. Underwriting
income, principally dependent on our ability to price our insurance products at
a level that enables us to earn a margin over the costs associated with
providing benefits and administering those products, and to effectively manage
actuarial and policyholder behavior factors, is another component of our
profitability.

Profitability also depends on our ability to effectively deploy capital and
utilize our tax assets. Furthermore, profitability depends on our ability to
manage expenses to acquire new business, such as commissions and distribution
expenses, as well as other operating costs.

The following represents segment percentage contributions to total Adjusted
operating revenues and Adjusted operating earnings before income taxes for the
year ended December 31, 2019:
                                                          Year Ended December 31, 2019
                                                                             Adjusted
                                                                            Operating
                                                            Adjusted         Earnings
                                                           Operating          before
percent of total                                            Revenues       Income Taxes
Retirement                                                      49.2 %          99.5  %
Investment Management                                           12.3 %          30.5  %
Employee Benefits                                               36.8 %          33.7  %
Corporate                                                        1.8 %         (63.7 )%




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Business Held for Sale and Discontinued Operations

The Individual Life Transaction


On December 18, 2019, we entered into a Master Transaction Agreement (the
"Resolution MTA") with Resolution Life U.S. Holdings Inc., a Delaware
corporation ("Resolution Life US"), pursuant to which Resolution Life US will
acquire Security Life of Denver Company ("SLD"), Security Life of Denver
International Limited ("SLDI") and Roaring River II, Inc. ("RRII") including
several subsidiaries of SLD. The transaction is expected to close by September
30, 2020 and is subject to conditions specified in the Resolution MTA, including
the receipt of required regulatory approvals.

We have determined that the legal entities to be sold and the Individual Life
and Annuities businesses within these entities meet the criteria to be
classified as held for sale and that the sale represents a strategic shift that
will have a major effect on our operations. Accordingly, the results of
operations of the businesses to be sold have been presented as discontinued
operations, and the assets and liabilities of the related businesses have been
classified as held for sale and segregated for all periods presented in this
Annual Report on Form 10-K.

During the fourth quarter of 2019, we recorded an estimated loss on sale, net of
tax, of $1,108 million to write down the carrying value of the businesses held
for sale to estimated fair value, which is based on the estimated sales price of
the transaction, less cost to sell and other adjustments in accordance with the
Resolution MTA. Additionally, the estimated loss on sale is based on assumptions
that are subject to change due to fluctuations in market conditions and other
variables that may occur prior to the closing date. For additional information
on the Transaction and the related estimated loss on sale, see Trends and
Uncertainties in Part II, Item 7 of this Annual Report on Form 10-K.

Concurrently with the sale, SLD will enter into reinsurance agreements with
Reliastar Life Insurance Company ("RLI"), ReliaStar Life Insurance Company of
New York ("RLNY"), and Voya Retirement Insurance and Annuity Company ("VRIAC"),
each of which is a direct or indirect wholly owned subsidiary of the Company.
Pursuant to these agreements, RLI and VRIAC will reinsure to SLD a 100% quota
share, and RLNY will reinsure to SLD a 75% quota share, of their respective
individual life insurance and annuities businesses. RLI, RLNY, and VRIAC will
remain subsidiaries of the Company. We currently expect that these reinsurance
transactions will be carried out on a coinsurance basis, with SLD's reinsurance
obligations collateralized by assets in trust. Based on values as of December
31, 2019, U.S. GAAP reserves to be ceded under the Individual Life Transaction
(defined below) are expected to be approximately $11.0 billion and are subject
to change until closing. The reinsurance agreements along with the sale of the
legal entities noted above (referred to as the "Individual Life Transaction")
will result in the disposition of substantially all of the Company's life
insurance and legacy non-retirement annuity businesses and related assets. The
revenues and net results of the Individual Life and Annuities businesses that
will be disposed of via reinsurance are reported in businesses exited or to be
exited through reinsurance or divestment which is an adjustment to our U.S. GAAP
revenues and earnings measures to calculate Adjusted operating revenues and
Adjusted operating earnings before income taxes, respectively.

At close, we will recognize a further adjustment to Total shareholders' equity,
excluding Accumulated other comprehensive income, associated with the portion of
the transaction that involves a sale through reinsurance. We currently estimate
that we would realize a partially offsetting book value gain, net of DAC and
tax, on the assets expected to be transferred upon execution of the
arrangements, such that the total reduction in Total shareholders' equity,
excluding Accumulated other comprehensive income, due to the Individual Life
Transaction would be in the range of $250 million to $750 million. These impacts
are subject to changes due to many factors including interest rate movements,
asset selections and changes to the structure of the reinsurance transactions.

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The following table presents the major components of income and expenses of
discontinued operations, net of tax related to the Individual Life Transaction
for the periods indicated:
                                                            Year Ended December 31,
                                                     2019             2018            2017
Revenues:
Net investment income                           $       665$       649$       672
Fee income                                              750               743             754
Premiums                                                 27                27              24
Total net realized capital gains (losses)                45               (44 )           (18 )
Other revenue                                           (21 )               4              (8 )
Total revenues                                        1,466             1,379           1,424
Benefits and expenses:
Interest credited and other benefits to
contract owners/policyholders                         1,065             1,050             978
Operating expenses                                       83                96             102
Net amortization of Deferred policy acquisition
costs and Value of business acquired                    153               135             176
Interest expense                                         10                 9               8
Total benefits and expenses                           1,311             1,290           1,264
Income (loss) from discontinued operations
before income taxes                                     155                89             160
Income tax expense (benefit)                             31                17              53
Loss on sale, net of tax                             (1,108 )               -               -
Income (loss) from discontinued operations, net
of tax                                          $      (984 )$        72$       107



The 2018 Transaction

On June 1, 2018, we consummated a series of transactions (collectively, the
"2018 Transaction") pursuant to a Master Transaction Agreement dated December
20, 2017 ("2018 MTA") with VA Capital Company LLC ("VA Capital") and Athene
Holding Ltd ("Athene"). As part of the 2018 Transaction, Venerable Holdings,
Inc. ("Venerable"), a wholly owned subsidiary of VA Capital, acquired two of our
subsidiaries, Voya Insurance and Annuity Company ("VIAC") and Directed Services,
LLC ("DSL"), and VIAC and other Voya subsidiaries reinsured to Athene
substantially all of their fixed and fixed indexed annuities business. The 2018
Transaction resulted in the disposition of substantially all of our Closed Block
Variable Annuity ("CBVA") and Annuities businesses.

During 2019, we settled the outstanding purchase price true-up amounts with VA
Capital. We do not anticipate further material charges in connection with the
2018 Transaction. Income (loss) from discontinued operations, net of tax for the
year ended December 31, 2019 includes a charge of $82 million related to the
purchase price true-up settlement in connection with the 2018 Transaction.

Upon execution of the Individual Life Transaction including the reinsurance
arrangements disclosed above, we will continue to hold an insignificant number
of Individual Life, Annuities and CBVA policies. These policies are referred to
in this Annual Report on Form 10-K as "Residual Runoff Business".

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The following table summarizes the components of Income (loss) from discontinued operations, net of tax related to the 2018 Transaction for the years ended December 31, 2019, 2018 and 2017:

                                                           Year Ended December 31,
                                                     2019          2018 (1)          2017
Revenues:
Net investment income                           $         -      $       510$    1,266
Fee income                                                -              295            801
Premiums                                                  -              (50 )          190
Total net realized capital gains (losses)                 -             (345 )       (1,234 )
Other revenue                                             -               10             19
Total revenues                                            -              420          1,042
Benefits and expenses:
Interest credited and other benefits to
contract owners/policyholders                             -              442            978
Operating expenses                                        -              (14 )          250
Net amortization of Deferred policy acquisition
costs and Value of business acquired                      -               49            127
Interest expense                                          -               10             22
Total benefits and expenses                               -              487          1,377
Income (loss) from discontinued operations
before income taxes                                       -              (67 )         (335 )
Income tax expense (benefit)                              -              (19 )         (178 )
Loss on sale, net of tax                                (82 )            505         (2,423 )
Income (loss) from discontinued operations, net
of tax                                          $       (82 )    $       

457 $ (2,580 )

(1) Reflects Income (loss) from discontinued operations, net of tax for the five months ended May 31, 2018 (the 2018 Transaction closed on June 1, 2018).

Trends and Uncertainties


Throughout this Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A"), we discuss a number of trends and uncertainties
that we believe may materially affect our future liquidity, financial condition
or results of operations. Where these trends or uncertainties are specific to a
particular aspect of our business, we often include such a discussion under the
relevant caption of this MD&A, as part of our broader analysis of that area of
our business. In addition, the following factors represent some of the key
general trends and uncertainties that have influenced the development of our
business and our historical financial performance and that we believe will
continue to influence our continuing business operations and financial
performance in the future.

Market Conditions


While extraordinary monetary accommodation has suppressed volatility in rate,
credit and domestic equity markets for an extended period, global capital
markets are now past peak accommodation as the U.S.Federal Reserve continues
its gradual pace of policy normalization. As global monetary policy becomes less
accommodative, an increase in market volatility could affect our business,
including through effects on the rate and spread component of yields we earn on
invested assets, changes in required reserves and capital, and fluctuations in
the value of our assets under management ("AUM"), administration or advisement
("AUA"). These effects could be exacerbated by uncertainty about future fiscal
policy, changes in tax policy, the scope of potential deregulation, levels of
global trade, and geopolitical risk. In the short- to medium-term, the potential
for increased volatility, coupled with prevailing interest rates below
historical averages, can pressure sales and reduce demand as consumers hesitate
to make financial decisions. In addition, this environment could make it
difficult to manufacture products that are consistently both attractive to
customers and profitable. Financial performance can be adversely affected by
market volatility as fees driven by AUM fluctuate, hedging costs increase and
revenue declines due to reduced sales and increased outflows. As a company with
strong retirement, investment management and insurance capabilities, however, we
believe the market conditions noted above may, over the long term, enhance the
attractiveness of our broad portfolio of products and services. We will need to
continue to monitor the behavior of our customers and other factors, including
mortality rates, morbidity rates, and lapse rates, which adjust in response to
changes in market conditions in order to ensure that our products and services
remain attractive as well as profitable. For additional information on our
sensitivity to interest rates and equity market prices, see Quantitative and
Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual
Report on Form 10-K.

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Interest Rate Environment
We believe the interest rate environment will continue to influence our business
and financial performance in the future for several reasons, including the
following:

• Our continuing business general account investment portfolio, which was

approximately $53 billion as of December 31, 2019, consists predominantly of

fixed income investments and had an annualized earned yield of approximately

5.3% in the fourth quarter of 2019. In the near term and absent further

material change in yields available on fixed income investments, we expect

the yield we earn on new investments will be lower than the yields we earn

on maturing investments, which were generally purchased in environments

where interest rates were higher than current levels. We currently

anticipate that proceeds that are reinvested in fixed income investments

during 2020 will earn an average yield below the prevailing portfolio yield.

If interest rates were to rise, we expect the yield on our new money

investments would also rise and gradually converge toward the yield of those

maturing assets. In addition, while less material to financial results than

new money investment rates, movements in prevailing interest rates also

influence the prices of fixed income investments that we sell on the

secondary market rather than holding until maturity or repayment, with

rising interest rates generally leading to lower prices in the secondary

     market, and falling interest rates generally leading to higher prices.


• Certain of our products pay guaranteed minimum rates. For example, fixed

accounts and a portion of the stable value accounts included within defined

     contribution retirement plans and universal life ("UL") policies. We are
     required to pay these guaranteed minimum rates even if earnings on our
     investment portfolio decline, with the resulting investment margin
     compression negatively impacting earnings. In addition, we expect more
     policyholders to hold policies (lower lapses) with comparatively high

guaranteed rates longer in a low interest rate environment. Conversely, a

rise in average yield on our investment portfolio would positively impact

earnings if the average interest rate we pay on our products does not rise

correspondingly. Similarly, we expect policyholders would be less likely to

hold policies (higher lapses) with existing guarantees as interest rates

     rise.



For additional information on the impact of the continued low interest rate
environment, see Risk Factors - The level of interest rates may adversely affect
our profitability, particularly in the event of a continuation of the current
low interest rate environment or a period of rapidly increasing interest rates
in Part I, Item 1A. of this Annual Report on Form 10-K. Also, for additional
information on our sensitivity to interest rates, see Quantitative and
Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual
Report on Form 10-K.

Discontinued Operations

Income (loss) from discontinued operations, net of tax, for the year ended
December 18, 2019 includes the estimated loss on sale for the Individual Life
Transaction of $1,108 million. The estimated loss on sale represents the excess
of the estimated carrying value of the businesses held for sale over the
estimated purchase price, which approximates fair value, less cost to sell. The
purchase price in the transaction is approximately $1.25 billion, with an
adjustment based on the adjusted capital and surplus of SLD, SLDI and RRII at
closing including the assumption of surplus notes.

The estimated purchase price and estimated carrying value of the legal entities
to be sold as of the future date of closing, and therefore the estimated loss on
sale related to the Individual Life Transaction, are subject to adjustment in
future quarters until closing, and may be influenced by, but not limited to, the
following factors:

• The performance of the businesses held for sale, including the impact of

       mortality, reinsurance rates and financing costs;


•      Changes in the terms of the Transaction, including as the result of

subsequent negotiations or as necessary to obtain regulatory approval; and


•      Other changes in the terms of the Transaction due to unanticipated
       developments.



The Company is required to remeasure the estimated fair value and loss on sale
at the end of each quarter until the closing of the Individual Life Transaction.
Changes in the estimated loss on sale that occur prior to closing of the
Individual Life Transaction will be reported as an adjustment to Income (loss)
from discontinued operations, net of tax, in future quarters prior to closing.


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Seasonality and Other Matters


Our business results can vary from quarter to quarter as a result of seasonal
factors. For all of our segments, the first quarter of each year typically has
elevated operating expenses, reflecting higher payroll taxes, equity
compensation grants, and certain other expenses that tend to be concentrated in
the first quarters. Additionally, alternative investment income tends to be
lower in the first quarters. Other seasonal factors that affect our business
include:

Retirement

• The first quarters tend to have the highest level of recurring deposits in

Corporate Markets, due to the increase in participant contributions from

the receipt of annual bonus award payments or annual lump sum matches and

profit sharing contributions made by many employers. Corporate Market

       withdrawals also tend to increase in the first quarters as departing
       sponsors change providers at the start of a new year.



•      In the third quarters, education tax-exempt markets typically have the

lowest recurring deposits, due to the timing of vacation schedules in the

       academic calendar.


• The fourth quarters tend to have the highest level of single/transfer

deposits due to new Corporate Market plan sales as sponsors transfer from

other providers when contracts expire at the fiscal or calendar year-end.

Recurring deposits in the Corporate Market may be lower in the fourth

quarters as higher paid participants scale back or halt their

contributions upon reaching the annual maximums allowed for the year.

       Finally, Corporate Market withdrawals tend to increase in the fourth
       quarters, as in the first quarters, due to departing sponsors.


Investment Management

• In the fourth quarters, performance fees are typically higher due to

certain performance fees being associated with calendar-year performance

against established benchmarks and hurdle rates.

Employee Benefits

•      The first quarters tend to have the highest Group Life loss ratio. Sales
       for Group Life and Stop Loss also tend to be the highest in the first

quarters, as most of our contracts have January start dates in alignment

       with the start of our clients' fiscal years.



•      The third quarters tend to have the second highest Group Life and Stop
       Loss sales, as a large number of our contracts have July start dates in
       alignment with the start of our clients' fiscal years.



In addition to these seasonal factors, our results are impacted by the annual
review of assumptions related to future policy benefits and deferred policy
acquisition costs ("DAC"), value of business acquired ("VOBA") (collectively,
"DAC/VOBA") and other intangibles, which we generally complete in the third
quarter of each year, and annual remeasurement related to our employee benefit
plans, which we generally complete in the fourth quarter of each year. See
Critical Accounting Judgments and Estimates in Part II, Item 7. of this Annual
Report on Form 10-K for further information.

Stranded Costs
As a result of the 2018 Transaction and the Individual Life Transaction, the
historical revenues and certain expenses of the sold businesses have been
classified as discontinued operations. Historical revenues and certain expenses
of the businesses that will be divested via reinsurance at closing of the
Individual Life Transaction (including an insignificant amount of Individual
Life and closed block non retirement annuities that are not part of the
transaction) are reported within continuing operations, but are excluded from
adjusted operating earnings as businesses exited or to be exited through
reinsurance or divestment. Expenses classified within discontinued operations
and businesses exited or to be exited through reinsurance include only direct
operating expenses incurred by these businesses and then only to the extent that
the nature of such expenses was such that we would cease to incur such expenses
upon the close of the 2018 Transaction and the Individual Life
Transaction. Certain other direct costs of these businesses, including those
which relate to activities for which we have or will provide transitional
services and for which we have or will be reimbursed under transition services
agreements ("TSAs") are reported within continuing operations along with the
associated revenues from the TSAs. Additionally, indirect costs, such as those
related to corporate and shared service functions that were previously allocated
to the businesses sold or divested via reinsurance, are reported within
continuing operations. These costs ("Stranded Costs") and the associated
revenues from the TSAs are reported within continuing operations in Corporate,
since we do not believe they are representative of the future run-rate of
revenues and expenses of our continuing operations. The Stranded Costs related
to the 2018

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Transaction were removed in the fourth quarter of 2019 and we plan to address
the Stranded Costs related to the Individual Life Transaction through a cost
reduction strategy. Refer to Restructuring in Part II, Item 7 of this Annual
Report on Form 10-K for more information on this program.

Carried Interest


Net investment income and net realized gains (losses), within our Investment
Management segment, includes, for the current and previous periods,
performance-based capital allocations related to sponsored private equity funds
("carried interest") that are subject to later reversal based on subsequent fund
performance, to the extent that cumulative rates of investment return fall below
specified investment hurdle rates. Any such reversal could be fully or partially
recovered in subsequent periods if cumulative fund performance later exceeds
applicable hurdles. For the year ended December 31, 2019, our carried interest
total net results were immaterial. For the year ended December 31, 2018, our
carried interest total net results were a gain of $13 million. For the year
ended December 31, 2017, our carried interest total net results were a gain of
$35 million, including the recovery of $25 million in previously reversed
accrued carried interest related to a private equity fund which experienced an
increase in fund performance during 2017. For additional information on carried
interest, see Risk Factors - Revenues, earnings and income from our Investment
Management business operations could be adversely affected if the terms of our
asset management agreements are significantly altered or the agreements are
terminated, or if certain performance hurdles are not realized in Part I, Item
1A. of this Annual Report on Form 10-K.

Restructuring

Organizational Restructuring


As a result of the closing of the 2018 Transaction, we have undertaken
restructuring efforts to execute the transition and reduce stranded expenses
associated with our CBVA and fixed and fixed indexed annuities businesses, as
well as our corporate and shared services functions ("Organizational
Restructuring").

In August 2018, we announced that we were targeting a cost savings of $110
million to $130 million by the middle of 2019 to address the stranded costs of
the 2018 Transaction. Additionally, in October 2018, we announced our decision
to cease new sales following the strategic review of our Individual Life
business, which was expected to result in cost savings of $20 million. The
initiatives associated with these restructuring efforts concluded during 2019.

In November 2018, we announced that we are targeting an additional $100 million
of cost savings by the end of 2020 in addition to the cost savings referenced
above. These savings initiatives will improve operational efficiency, strengthen
technology capabilities and centralize certain sales, operations and investment
management activities. The restructuring charges in connection with these
initiatives are not reflected in our run-rate cost savings estimates.

The Organizational Restructuring initiatives described above have resulted in
recognition of severance and organizational transition costs and are reflected
in Operating expenses in the Consolidated Statements of Operations, but excluded
from Adjusted operating earnings before income taxes. For the years ended
December 31, 2019 and 2018, we incurred Organizational Restructuring expenses of
$201 million and $49 million associated with continuing operations.

In addition to the restructuring costs incurred above, the anticipated reduction
in employees from the execution of the initiatives described above triggered an
immaterial curtailment loss and related re-measurement gain of our qualified
defined benefit pension plan as of January 31, 2019, which was recorded during
the first quarter of 2019.

Including the expense of $201 million for the year ended December 31, 2019, the
aggregate amount of additional Organizational Restructuring expenses expected is
in the range of $250 million to $300 million. We anticipate that these costs,
which will include severance, organizational transition costs incurred to
reorganize operations and other costs such as contract terminations and asset
write-offs, will occur at least through the end of 2020.

Restructuring expenses that were directly related to the preparation for and
execution of the 2018 Transaction are included in Income (loss) from
discontinued operations, net of tax, in the Consolidated Statements of
Operations. For the year ended December 31, 2019, we did not incur any
Organizational Restructuring expenses associated with discontinued operations as
a result of the 2018 Transaction. For the year ended December 31, 2018, we
incurred Organizational Restructuring expenses as a result of the 2018
Transaction of $6 million of severance and organizational transition costs,
which are reflected in discontinued operations.


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Pursuant to the Individual Life Transaction, we will divest or dissolve five
regulated insurance entities, including its life companies domiciled in Colorado
and Indiana, and captive entities domiciled in Arizona and Missouri. We will
also divest Voya America Equities LLC, a regulated broker-dealer, and transfer
or cease usage of a substantial number of administrative systems. As such, we
will undertake further restructuring efforts to reduce stranded expenses
associated with our Individual Life business as well as our corporate and shared
services functions. Through the closing of the Individual Life Transaction, we
anticipate incurring additional restructuring expenses directly related to the
disposition. These collective costs, which include severance, transition and
other costs, cannot currently be estimated but could be material.

2016 Restructuring


In 2016, we began implementing a series of initiatives designed to make us a
simpler, more agile company able to deliver an enhanced customer experience
("2016 Restructuring"). These initiatives include an increasing emphasis on less
capital-intensive products and the achievement of operational synergies.
Substantially all of the initiatives associated with the 2016 Restructuring
program concluded at the end of 2018.

For the years ended December 31, 2019, 2018 and 2017, the total of all
initiatives in the 2016 Restructuring program resulted in restructuring expenses
of $8 million, $30 million and $82 million, respectively, which are reflected in
Operating expenses in the Consolidated Statements of Operations, but are
excluded from Adjusted operating earnings before income taxes. These expenses
are classified as a component of Other adjustments to Income (loss) from
continuing operations before income taxes and consequently are not included in
the adjusted operating results of our segments.

Results of Operations

Operating Measures


In this MD&A, we discuss Adjusted operating earnings before income taxes and
Adjusted operating revenues, each of which is a measure used by management to
evaluate segment performance. We provide more information on each measure below.

Adjusted Operating Earnings before Income Taxes


Adjusted operating earnings before income taxes. We believe that Adjusted
operating earnings before income taxes provides a meaningful measure of our
business and segment performance and enhances the understanding of our financial
results by focusing on the operating performance and trends of the underlying
business segments and excluding items that tend to be highly variable from
period to period based on capital market conditions or other factors. We use the
same accounting policies and procedures to measure segment Adjusted operating
earnings before income taxes as we do for the directly comparable U.S. GAAP
measure, which is Income (loss) from continuing operations before income taxes.
Adjusted operating earnings before income taxes does not replace Income (loss)
from continuing operations before income taxes as a measure of our consolidated
results of operations. Therefore, we believe that it is useful to evaluate both
Income (loss) from continuing operations before income taxes and Adjusted
operating earnings before income taxes when reviewing our financial and
operating performance. Each segment's Adjusted operating earnings before income
taxes is calculated by adjusting Income (loss) from continuing operations before
income taxes for the following items:

• Net investment gains (losses), net of related amortization of DAC, VOBA,

sales inducements and unearned revenue, which are significantly influenced

by economic and market conditions, including interest rates and credit

spreads, and are not indicative of normal operations. Net investment gains

(losses) include gains (losses) on the sale of securities, impairments,

changes in the fair value of investments using the fair value option

("FVO") unrelated to the implied loan-backed security income recognition

for certain mortgage-backed obligations and changes in the fair value of

derivative instruments, excluding realized gains (losses) associated with

swap settlements and accrued interest;

• Net guaranteed benefit hedging gains (losses), which are significantly

       influenced by economic and market conditions and are not indicative of
       normal operations, include changes in the fair value of derivatives
       related to guaranteed benefits, net of related reserve increases
       (decreases) and net of related amortization of DAC, VOBA and sales

inducements, less the estimated cost of these benefits. The estimated

cost, which is reflected in adjusted operating earnings, reflects the

expected cost of these benefits if markets perform in line with our

long-term expectations and includes the cost of hedging. Other derivative

and reserve changes related to guaranteed benefits are excluded from

adjusted operating earnings, including the impacts related to changes in

       our nonperformance spread;



•      Income (loss) related to businesses exited or to be exited through

reinsurance or divestment, which includes gains and (losses) associated

with transactions to exit blocks of business within continuing operations

       (including net investment



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gains (losses) on securities sold and expenses directly related to these
transactions) and residual run-off activity (including an insignificant number
of Individual Life, Annuities and CBVA policies that were not part of the
Individual Life and 2018 Transactions). Excluding this activity, which also
includes amortization of intangible assets related to businesses exited or to be
exited, better reveals trends in our core business and more closely aligns
Adjusted operating earnings before income taxes with how we manage our segments;

•      Income (loss) attributable to noncontrolling interest represents the
       interest of shareholders, other than those of Voya Financial, Inc., in
       consolidated entities. Income (loss) attributable to noncontrolling

interest represents such shareholders' interests in the gains and losses

of those entities, or the attribution of results from consolidated

variable interest entities ("VIEs") or voting interest entities ("VOEs")

       to which we are not economically entitled;



•      Dividend payments made to preferred shareholders are included as
       reductions to reflect the Adjusted operating earnings

that is available to common shareholders;

• Income (loss) related to early extinguishment of debt; which includes

losses incurred as a part of transactions where we repurchase outstanding

principal amounts of debt; these losses are excluded from Adjusted

operating earnings before income taxes since the outcome of decisions to

restructure debt are infrequent and not indicative of normal operations;

• Impairment of goodwill, value of management contract rights and value of

customer relationships acquired, which includes losses as a result of

impairment analysis; these represent losses related to infrequent events

       and do not reflect normal, cash-settled expenses;



•      Immediate recognition of net actuarial gains (losses) related to our

pension and other postretirement benefit obligations and gains (losses)

from plan amendments and curtailments, which includes actuarial gains and

losses as a result of differences between actual and expected experience

on pension plan assets or projected benefit obligation during a given

period. We immediately recognize actuarial gains and losses related to

pension and other postretirement benefit obligations gains and losses from

plan adjustments and curtailments. These amounts do not reflect normal,

cash-settled expenses and are not indicative of current Operating expense

       fundamentals; and



•      Other items not indicative of normal operations or performance of our
       segments or related to events such as capital or organizational
       restructurings undertaken to achieve long-term economic benefits,

including certain costs related to debt and equity offerings, acquisition

/ merger integration expenses, severance and other third-party expenses

associated with such activities. These items vary widely in timing, scope

and frequency between periods as well as between companies to which we are

       compared. Accordingly, we adjust for these items as our management
       believes that these items distort the ability to make a meaningful
       evaluation of the current and future performance of our segments.



The most directly comparable U.S. GAAP measure to Adjusted operating earnings
before income taxes is Income (loss) from continuing operations before income
taxes. For a reconciliation of Income (loss) from continuing operations before
income taxes to Adjusted operating earnings before income taxes, see Results of
Operations-Company Consolidated below.

Adjusted Operating Revenues

Adjusted operating revenues is a measure of our segment revenues. Each segment's Adjusted operating revenues are calculated by adjusting Total revenues to exclude the following items:

• Net investment gains (losses) and related charges and adjustments, which

are significantly influenced by economic and market conditions, including

interest rates and credit spreads, and are not indicative of normal

operations. Net investment gains (losses) include gains (losses) on the

sale of securities, impairments, changes in the fair value of investments

using the FVO unrelated to the implied loan-backed security income

recognition for certain mortgage-backed obligations and changes in the

fair value of derivative instruments, excluding realized gains (losses)

       associated with swap settlements and accrued interest. These are net of
       related amortization of unearned revenue;


• Gain (loss) on change in fair value of derivatives related to guaranteed

       benefits, which is significantly influenced by economic and market
       conditions and not indicative of normal operations, includes changes in
       the fair value of derivatives related to guaranteed benefits, less the

estimated cost of these benefits. The estimated cost, which is reflected

in adjusted operating revenues, reflects the expected cost of these

benefits if markets perform in line with our long-term expectations and

includes the cost of hedging. Other derivative and reserve changes related

to guaranteed benefits are excluded from Adjusted operating revenues,

including the impacts related to changes in our nonperformance spread;



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• Revenues related to businesses exited or to be exited through reinsurance

       or divestment, which includes revenues associated with transactions to
       exit blocks of business within continuing operation (including net
       investment gains (losses) on securities sold related to these

transactions) and residual run-off activity (including an insignificant

number of Individual Life, Annuities and CBVA policies that were not part

of the Individual Life and 2018 Transactions). Excluding this activity

       better reveals trends in our core business and more closely aligns
       Adjusted operating revenues with how we manage our segments;


• Revenues attributable to noncontrolling interest represents the interest

of shareholders, other than of Voya Financial, Inc., in the revenues of

consolidated entities. Revenues attributable to noncontrolling interest

represents such shareholders' interests in the revenues of those entities,

or the attribution of results from consolidated VIEs or VOEs to which we

       are not economically entitled; and


• Other adjustments to Total revenues primarily reflect fee income earned by

our broker-dealers for sales of non-proprietary products, which are

reflected net of commission expense in our segments' operating revenues,

       other items where the income is passed on to third parties and the
       elimination of intercompany investment expenses included in Adjusted
       operating revenues.



The most directly comparable U.S. GAAP measure to Adjusted operating revenues is
Total revenues. For a reconciliation of Total revenues to Adjusted operating
revenues, see Results of Operations-Company Consolidated below.

AUM and AUA


A substantial portion of our fees, other charges and margins are based on AUM.
AUM represents on-balance sheet assets supporting customer account
values/liabilities and surplus as well as off-balance sheet institutional/mutual
funds. Customer account values reflect the amount of policyholder equity that
has accumulated within retirement, annuity and universal-life type products. AUM
includes general account assets managed by our Investment Management segment in
which we bear the investment risk, separate account assets in which the contract
owner bears the investment risk and institutional/mutual funds, which are
excluded from our balance sheets. AUM-based revenues increase or decrease with a
rise or fall in the amount of AUM, whether caused by changes in capital markets
or by net flows.

AUM is principally affected by net deposits (i.e., new deposits, less surrenders
and other outflows) and investment performance (i.e., interest credited to
contract owner accounts for assets that earn a fixed return or market
performance for assets that earn a variable return). Separate account AUM and
institutional/mutual fund AUM include assets managed by our Investment
Management segment, as well as assets managed by third-party investment
managers. Our Investment Management segment reflects the revenues earned for
managing affiliated assets for our other segments as well as assets managed for
third parties.

AUA represents accumulated assets on contracts pursuant to which we either
provide administrative or advisement services or product guarantees for assets
managed by third parties. These contracts are not insurance contracts and the
assets are excluded from the Consolidated Financial Statements. Fees earned on
AUA are generally based on the number of participants, asset levels and/or the
level of services or product guarantees that are provided.

Our consolidated AUM/AUA includes eliminations of AUM/AUA managed by our Investment Management segment that is also reflected in other segments' AUM/AUA and adjustments for AUM not reflected in any segments.

Sales Statistics


In our discussion of our segment results under Results of Operations-Segment by
Segment, we sometimes refer to sales activity for various products. The term
"sales" is used differently for different products, as described more fully
below. These sales statistics do not correspond to revenues under U.S. GAAP and
are used by us as operating statistics underlying our financial performance.

Net flows are deposits less redemptions (including benefits and other product charges).

Sales for Employee Benefits products are based on a calculation of annual premiums, which represent regular premiums on new policies, plus a portion of new single premiums.


Total gross premiums and deposits are defined as premium revenue and deposits
for policies written and assumed. This measure provides information as to growth
and persistency trends related to premium and deposits.

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Other Measures

Total annualized in-force premiums are defined as a full year of premium at the
rate in effect at the end of the period. This measure provides information as to
the growth and persistency trends in premium revenue.

Interest adjusted loss ratios are defined as the ratio of benefits expense to
premium revenue exclusive of the discount component in the change in benefit
reserve. This measure reports the loss ratio related to mortality on life
products and morbidity on health products.

Results of Operations - Company Consolidated


The following table presents the consolidated financial information for the
periods indicated:
                                                       Year Ended December 31,
($ in millions)                                 2019             2018             2017
Revenues:
Net investment income                      $      2,792$      2,669$      2,641
Fee income                                        1,969            1,982            1,889
Premiums                                          2,273            2,132            2,097
Net realized capital gains (losses)                (166 )           (355 )           (209 )
Other revenue                                       465              443    

379

Income (loss) related to consolidated
investment entities                                 143              292              432
Total revenues                                    7,476            7,163            7,229
Benefits and expenses:
Interest credited and other benefits to
contract owners/policyholders                     3,750            3,526    

3,658

Operating expenses                                2,746            2,606    

2,562

Net amortization of Deferred policy
acquisition costs and Value of business
acquired (1)                                        199              233    

353

Interest expense                                    176              221    

184

Operating expenses related to consolidated
investment entities                                  45               49               87
Total benefits and expenses                       6,916            6,635    

6,844

Income (loss) from continuing operations
before income taxes                                 560              528    

385

Income tax expense (benefit)                       (205 )             37    

687

Income (loss) from continuing operations            765              491             (302 )
Income (loss) from discontinued
operations, net of tax                           (1,066 )            529           (2,473 )
Net Income (loss)                                  (301 )          1,020           (2,775 )
Less: Net income (loss) attributable to
noncontrolling interest                              50              145    

217

Less: Preferred stock dividends                      28                -                -
Net income (loss) available to our common
shareholders                               $       (379 )$        875

$ (2,992 )

(1) Refer to DAC/VOBA and Other Intangibles Unlocking in Part II, Item 7. of this Annual Report on Form 10-K for further detail.

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The following table presents information about our Operating expenses for the
periods indicated:
                                                       Year Ended December 31,
($ in millions)                                 2019             2018             2017
Operating expenses:
Commissions                                $        673$        643$        656
General and administrative expenses:
Net actuarial (gains)/losses related to
pension and other postretirement benefit
obligations                                          (3 )             47               16
Restructuring expenses                              209               79               82
Strategic Investment Program (1)                      -                -               80
Other general and administrative expenses         1,977            1,943    

1,862

Total general and administrative expenses         2,183            2,069    

2,040

Total operating expenses, before DAC/VOBA
deferrals                                         2,856            2,712            2,696
DAC/VOBA deferrals                                 (110 )           (106 )           (134 )
Total operating expenses                   $      2,746$      2,606$      2,562

(1) Beginning in 2018, remaining costs of our Strategic Investment Program related to IT simplification, digital and analytics are insignificant and have been allocated to our reportable segments within Other general and administrative expenses.

The following table presents AUM and AUA as of the dates indicated:

                                   As of December 31,
($ in millions)             2019          2018          2017
AUM and AUA:
Retirement (2)           $ 440,043$ 361,575$ 432,341
Investment Management      272,730       250,468       274,304
Employee Benefits            1,797         1,788         1,829

Eliminations/Other (111,783 ) (102,527 ) (105,492 ) Total AUM and AUA(1) (2) $ 602,787$ 511,304$ 602,982


AUM                      $ 322,538$ 281,380$ 307,980
AUA (2)                    280,249       229,924       295,002

Total AUM and AUA(1) (2) $ 602,787$ 511,304$ 602,982



(1) Includes AUM and AUA related to the Individual Life and 2018 Transactions,
for which a substantial portion of the assets continue to be managed by our
Investment Management segment.
(2) Retirement includes Assets Under Advisement, which are presented in AUA. For
further detail, refer to the Retirement segment results section below. Prior
period information have been revised to conform to current period presentation.


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The following table presents a reconciliation of Income (loss) from continuing
operations to Adjusted operating earnings before income taxes and the relative
contributions of each segment to Adjusted operating earnings before income taxes
for the periods indicated:
                                                          Year Ended December 31,
($ in millions)                                   2019               2018            2017
Income (loss) from continuing operations
before income taxes                          $        560$        528$       385
Less Adjustments:
Net investment gains (losses) and related
charges and adjustments                                25               (124 )          (112 )
Net guaranteed benefit hedging gains
(losses) and related charges and adjustments          (14 )               62              46
Income (loss) related to businesses exited
or to be exited through reinsurance or
divestment                                             98                (40 )            59
Income (loss) attributable to noncontrolling
interests                                              50                145             217
Income (loss) related to early
extinguishment of debt                                (12 )              (40 )            (4 )
Immediate recognition of net actuarial gains
(losses) related to pension and other
postretirement benefit obligations and gains
(losses) from plan amendments and
curtailments                                            3                (47 )           (16 )
Dividend payments made to preferred
shareholders                                           28                  -               -
Other adjustments                                    (209 )              (79 )           (97 )

Total adjustments to income (loss) from continuing operations before income taxes $ (31 )$ (123 )$ 93


Adjusted operating earnings before income
taxes by segment:
Retirement                                   $        588$        701$       456
Investment Management                                 180                205             248
Employee Benefits                                     199                160             127
Corporate                                            (376 )             (415 )          (539 )
Total adjusted operating earnings before
income taxes                                 $        591$        651$       292




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The following table presents a reconciliation of Total revenues to Adjusted operating revenues and the relative contributions of each segment to Adjusted operating revenues for the periods indicated:

                                                       Year Ended December 31,
($ in millions)                                 2019             2018             2017
Total revenues                             $      7,476$      7,163$      7,229
Adjustments:
Net realized investment gains (losses) and
related charges and adjustments                      18             (148 )           (132 )
Gain (loss) on change in fair value of
derivatives related to guaranteed benefits          (13 )             63               46
Revenues related to businesses exited or
to be exited through reinsurance or
divestment                                        1,531            1,446    

1,618

Revenues attributable to noncontrolling
interests                                           109              214    

321

Other adjustments                                   321              238    

193

Total adjustments to revenues              $      1,966$      1,813

$ 2,046


Adjusted operating revenues by segment:
Retirement                                 $      2,712$      2,727$      2,538
Investment Management                               675              683              731
Employee Benefits                                 2,026            1,849            1,767
Corporate                                            97               91              147

Total adjusted operating revenues $ 5,510$ 5,350

$ 5,183

The following tables describe the components of the reconciliation between Adjusted operating earnings before income taxes and Income (loss) from continuing operations before income taxes related to Net investment gains (losses) and related charges and adjustments and Net guaranteed benefits hedging gains (losses) and related charges and adjustments.


The following table presents the adjustment to Income (loss) from continuing
operations before income taxes related to Total investment gains (losses) and
the related Net amortization of DAC/VOBA and other intangibles for the periods
indicated:
                                                         Year Ended December 31,
($ in millions)                                  2019               2018             2017
Other-than-temporary impairments           $         (60 )     $        (32 )$        (20 )
CMO-B fair value adjustments(1)                       62               (107 )            (69 )
Gains (losses) on the sale of securities              36                (14 )              -
Other, including changes in the fair value
of derivatives                                       (34 )               11              (10 )
Total investment gains (losses) including
businesses to be exited through
reinsurance or divestment                              4               (142 )            (99 )
Net amortization of DAC/VOBA and other
intangibles on above                                  10                 31               16
Net investment gains (losses) including
businesses to be exited through
reinsurance or divestment                  $          14       $       (111 )$        (83 )
Less: Net investment gains (losses)
related to the businesses to be exited
through reinsurance or divestment, net of
DAC/VOBA and other intangibles                        11                (13 )            (29 )
Net investment gains (losses) excluding
businesses to be exited through
reinsurance or divestment                  $          25       $       (124 

) $ (112 )

(1) For a description of our CMO-B portfolio, refer to Investments - CMO-B Portfolio in Part II, Item 7. of this Annual Report on Form 10-K.

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The following table presents the adjustment to Income (loss) from continuing operations before income taxes related to Guaranteed benefit hedging gains (losses) net of DAC/VOBA and other intangibles amortization for the periods indicated:

                                                         Year Ended December 31,
($ in millions)                                  2019               2018    

2017

Gain (loss), excluding nonperformance risk $ (15 ) $ 75 $ 63 Gain (loss) due to nonperformance risk(1)

              1                 (13 )            (17 )
Net gain (loss) prior to related
amortization of DAC/VOBA and sales
inducements                                          (14 )                62               46
Net amortization of DAC/VOBA and sales
inducements                                            -                   -                -
Net guaranteed benefit hedging gains
(losses) and related charges and
adjustments                                $         (14 )     $          

62 $ 46

(1) Refer to Critical Accounting Judgments and Estimates in Part II, Item 7. of this Annual Report on Form 10-K for further detail.

The following tables present businesses exited or to be exited through reinsurance or divestment adjustments to Income (loss) from continuing operations and Total revenues for the periods indicated:

                                                         Year Ended December 31,
($ in millions)                                   2019            2018      

2017

Income (loss) related to businesses exited
through reinsurance or divestment            $         25     $       (71 )   $         18
Income (loss) related to businesses to be
exited through reinsurance or divestment               73              31               41
Total income (loss) related to business
exited or to be exited through reinsurance
or divestment                                $         98     $       (40 )   $         59



                                                        Year Ended December 31,
($ in millions)                                   2019            2018            2017
Revenues related to businesses exited
through reinsurance or divestment            $        124$       (43 )$        92
Revenues related to businesses to be exited
through reinsurance or divestment                   1,407           1,489   

1,526

Total revenues related to business exited or
to be exited through reinsurance or
divestment                                   $      1,531$     1,446$     1,618

The following table presents summary information related to the Income (loss) from discontinued operations, net of tax for the periods indicated:

                                                          Year Ended 

December 31,

                                                    2019            2018    

2017

Income (loss) from discontinued operations, net
of tax (1)
Individual Life Transaction                     $      (984 )$       72$      107
2018 Transaction                                        (82 )          457         (2,580 )
Total                                           $    (1,066 )$      529$   (2,473 )

(1) Refer to Overview in Part II, Item 7. of this Annual Report on Form 10-K for further detail.


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The following table presents significant items included in Income (loss) from
discontinued operations, net of tax related to the Individual Life Transaction
for the periods indicated:
                                                            Year Ended December 31,
($ in millions)                                      2019              2018            2017
Loss on sale, net of tax excluding costs to
sell                                            $     (1,072 )     $         -     $        -
Transaction costs                                        (36 )               -              -
Net results of discontinued operations (1)                93                55             54
Income tax benefit (expense)                              31                17             53
Income (loss) from discontinued operations, net
of tax (2)                                      $       (984 )     $        

72 $ 107



(1) Includes $31 million, $102 million and $59 million of DAC,VOBA and other
intangibles unlocking for the years ended December 31, 2019, 2018 and 2017,
respectively.
(2) Refer to Overview in Part II, Item 7. of this Annual Report on Form 10-K for
further detail.

The following table presents significant items included in Income (loss) from
discontinued operations, net of tax related to the 2018 Transaction for the
periods indicated:
                                                        Year Ended December 31,
($ in millions)                                  2019              2018             2017
Loss on sale, net of tax excluding costs
to sell                                    $         (82 )    $        507$     (2,392 )
Transaction costs                                      -                (2 )            (31 )
Net results of discontinued operations,
excluding notable items                                -               339  

1,072

Income tax benefit (expense)                           -                19              178
Notable items in CBVA results:
Net gains (losses) related to incurred
guaranteed benefits and CBVA hedge
program, excluding nonperformance risk                 -              (409 )         (1,136 )
Gain (loss) due to nonperformance risk                 -                 4             (284 )
DAC/VOBA and other intangibles unlocking               -                (1 )             13
Income (loss) from discontinued
operations, net of tax (1)                 $         (82 )    $        457

$ (2,580 )

(1) Refer to Overview in Part II, Item 7. of this Annual Report on Form 10-K for further detail.


Terminology Definitions

Net realized capital gains (losses), net realized investment gains (losses) and
related charges and adjustments and Net guaranteed benefit hedging losses and
related charges and adjustments include changes in the fair value of
derivatives. Increases in the fair value of derivative assets or decreases in
the fair value of derivative liabilities result in "gains." Decreases in the
fair value of derivative assets or increases in the fair value of derivative
liabilities result in "losses."

In addition, we have certain products that contain guarantees that are embedded
derivatives related to guaranteed benefits and index-crediting features, while
other products contain such guarantees that are considered derivatives
(collectively "guaranteed benefit derivatives").

Consolidated - Year Ended December 31, 2019 Compared to Year Ended December 31, 2018


Net Income (Loss)

Net investment income increased $123 million from $2,669 million to $2,792 million primarily due to:

• the impact of the current interest rate environment on fair value adjustments;

• higher prepayment fee income; and

• growth in general account assets in our Retirement segment.

The increase was partially offset by:

• lower alternative investment income primarily driven by lower yields in

       the current period compared to the prior period.




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Fee income decreased $13 million from $1,982 million to $1,969 million primarily due to:

• lower management and administrative fees earned in our Investment

Management segment due to lower average general account AUM driven by the

impact of the 2018 Transaction; and

• margin rate compression and change in business mix in our Retirement segment.

The decrease was partially offset by:

•      an increase in full service fees in our Retirement segment driven by
       equity market improvements and business growth.


Premiums increased $141 million from $2,132 million to $2,273 million primarily due to:

• higher premiums driven by growth of the stop loss, voluntary blocks and

group life business in our Employee Benefits segment.

The increase was partially offset by:

• a decline in premiums associated with our business to be reinsured due to

discontinued sales and lower considerations of life contingent contracts

which corresponds to a decrease in Interest credited and other benefits to

contract owners/policyholder.

Net realized capital losses decreased $189 million from $355 million to $166 million primarily due to:

• higher Net investment gains and related charges and adjustments primarily

       due to interest rate and equity market movements, discussed below; and

• gains from market value changes associated with business reinsured, which

       are fully offset by a corresponding amount in Interest credited and other
       benefits to contract owners/policyholders.


The gains were partially offset by:

• unfavorable change in the fair value of guaranteed benefit derivatives

excluding nonperformance risk as a result of interest rate movements

partially offset by gain due to nonperformance risk; and

• gain on sale of real estate and other non-recurring items in the prior period.

Other revenue increased $22 million from $443 million to $465 million primarily due to:

• higher performance fees in our Investment Management segment; and

• higher revenue resulting from transition services agreements.

The increase was partially offset by:

• lower broker-dealer revenues in our Retirement segment.

Interest credited and other benefits to contract owners/policyholders increased $224 million from $3,526 million to $3,750 million primarily due to:

•      market value impacts and changes in the reinsurance deposit asset
       associated with business reinsured, which are fully offset by a
       corresponding amount in Net realized capital gains (losses); and

• growth on stop loss, voluntary blocks and group life business partially

offset by lower loss ratios in our Employee Benefits segment.

The increase was partially offset by:

• a decline in interest credited and other benefits to contract

owners/policyholders associated with our business to be reinsured due to

       lower considerations of life contingent contracts which corresponds to a
       decrease in Premiums; and

• Reserve release associated with our business to be reinsured.




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Operating expenses increased $140 million from $2,606 million to $2,746 million primarily due to:

• an increase in growth-based expenses in our Retirement, Investment

Management and Employee Benefit segments;

• higher restructuring charges in the current period; and

• higher litigation reserves in our Retirement segment.

The increase was partially offset by:

• litigation recovery related to a divested business in the current period;



• lower Stranded Costs; and


• net actuarial gain related to our pension and other postretirement benefit

obligations, discussed below.

Net amortization of DAC/VOBA decreased $34 million from $233 million to $199 million primarily due to:

• favorable amortization on our business to be reinsured driven by favorable

       unlocking in the current period;


•      unfavorable unlocking and amortization in the prior period driven by an
       update to the assumptions related to the GMIR initiatives in our
       Retirement segment. See DAC/VOBA and Other Intangibles Unlocking in Part

II, Item 7. of this Annual Report on Form 10-K for further information;

and

• net favorable amortization on our business reinsured.

The decrease was partially offset by:

• a higher net unfavorable impact of annual assumption updates. See Results

of Operations - Segment by Segment in Part II, Item 7. of this Annual

Report on Form 10-K; and

• favorable amortization in the prior period due to net investment losses.

Interest expense decreased $45 million from $221 million to $176 million primarily due to:

•      debt extinguishment in connection with repurchased debt in the prior
       period that did not reoccur at the same level in the current period and

preferred stock issuances in the fourth quarter of 2018 and second quarter

       of 2019. See Liquidity and Capital Resources in Part II, Item 7. of this
       Annual Report on Form 10-K for further information.


Income (loss) from continuing operations before income taxes increased $32 million from $528 million to $560 million primarily due to:

• higher Net investment gains and related charges and adjustments, discussed

       below;


•      Income on business exited or to be exited through reinsurance or
       divestment, discussed below;


•      Immediate recognition of net actuarial gain related to pension plan
       adjustments and curtailments, discussed below; and

• lower losses related to early extinguishment of debt, discussed below.

The decrease was partially offset by:

• unfavorable changes in Other adjustments due to higher restructuring

charges in the current period;

• lower Income attributable to noncontrolling interest;


•      unfavorable changes in Net guaranteed benefit hedging gains (loss) and
       related charges and adjustments primarily due to changes in interest
       rates, discussed below; and

• lower Adjusted operating earnings before income taxes, discussed below.

Income tax expense changed $242 million from an expense of $37 million to a benefit of $205 million primarily due to:

• a release of a portion of the valuation allowance; and

• a change in tax credits.

The change was partially offset by:

• a change in noncontrolling interest;

• a change in the dividends received deduction ("DRD"); and

• an increase in income before income taxes.




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Income (loss) from discontinued operations, net of tax changed $1,595 million from income of $529 million to loss of $1,066 million primarily due to:

• Individual Life Transaction loss on sale, net of tax excluding costs to

sell made in the current period;

• a favorable Adjustment to the 2018 Transaction loss on sale, net of tax

excluding costs to sell in the prior period;

• a decrease in Net results from discontinued operations primarily due to

favorable results in the prior period related to the 2018 Transaction

partially offset by a favorable change in the Individual Life Transaction

Net results from discontinued operations in the current period; and

• Transaction costs related to the Individual Life Transaction.

The change was partially offset by:

• Net losses related to incurred guaranteed benefits and CBVA hedge program,

       excluding nonperformance risk in businesses held for sale related to the
       2018 Transaction in the prior period.


Adjusted Operating Earnings before Income Taxes

Adjusted operating earnings before income taxes decreased $60 million from $651 million to $591 million primarily due to:

• higher expenses primarily resulting from business growth and non-recurring

       items in our Retirement, Investment Management and Employee Benefits
       segments;


•      higher benefits incurred in stop loss, voluntary blocks and group life

business partially offset by lower loss ratios in our Employee Benefits

       segment;


•      lower average general account AUM driven by the impact of the 2018
       Transaction;


•      unfavorable DAC/VOBA unlocking due to annual assumption updates in our
       Retirement segment;

• lower alternative investment income; and

• lower Net investment income in our Corporate segment due to run-off

business and other non-recurring activity in the prior period.

The decrease was partially offset by:

• higher premiums driven by growth of the stop loss, voluntary blocks and

group life business in our Employee Benefits segment;

• lower Stranded costs; and

• higher performance fees in our Investment Management segment.

Adjustments from Income (Loss) from Continuing Operations before Income Taxes to Adjusted Operating Earnings before Income Taxes

Net investment gains (losses) and related charges and adjustments increased $149 million from a loss of $124 million to a gain of $25 million primarily due to:

• favorable changes in CMO-B fair value adjustments as a result of equity

market and interest rate movements; and

• gains on the sale of securities in the current period.

The increase was partially offset by:

• unfavorable changes in the fair value of derivatives;

• higher impairments in the current period;



•favorable change in Net investment gains associated with our business to be
reinsured; and
•lower favorable amortization of DAC/VOBA and sales inducements.


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Net guaranteed benefit hedging gains (losses) and related charges and adjustments decreased $76 million from a gain of $62 million to a loss of $14 million primarily due to:

• unfavorable changes in fair value of guaranteed benefit derivatives

excluding nonperformance risk as a result of changes in interest rates.

The decrease was partially offset by:

• favorable changes due to nonperformance risk in the current period.




Loss related to businesses exited through reinsurance or divestment increased
$138 million from a loss of $40 million to a gain of $98 million primarily due
to:

• a litigation recovery related to a divested business in the current period;


•      net favorable amortization associated with business reinsured and to be
       reinsured in the current period; and

• reserve release associated with the social security master death file.

The increase was partially offset by:

• a decline in premiums due to lower considerations on life contingent

contracts and discontinued sales.

Loss related to early extinguishment of debt decreased $28 million from $40 million to $12 million primarily due to:

• higher losses in connection with repurchased and restructured debt in the

prior period. See Liquidity and Capital Resources in Part II, Item 7. of

this Annual Report on Form 10-K for further information.




Immediate recognition of net actuarial gains (losses) related to pension and
other postretirement benefit obligations and gains (losses) from plan
adjustments and curtailments changed $50 million. See Critical Accounting
Judgments and Estimates - Employee Benefits Plans in Part II, Item 7. of this
Annual Report on Form 10-K for further information.

Other adjustments increased $130 million from a loss of $79 million to a loss of $209 million primarily due to:

• higher costs recorded in the current period related to restructuring. See

Overview - Restructuring in Part II, Item 7. of this Annual Report on Form

10-K for further information.

Consolidated - Year Ended December 31, 2018 Compared to Year Ended December 31, 2017


Net Income (Loss)

Net investment income increased $28 million from $2,641 million to $2,669 million primarily due to:

• higher alternative investment income.

The increase was partially offset by:

• a recovery of previously reversed carried interest in the prior period in

our Investment Management segment; and

• lower investment income in our runoff blocks of business.

Fee income increased $93 million from $1,889 million to $1,982 million primarily due to:

• an increase in separate account and institutional/mutual fund AUM in our

Retirement segment driven by market improvements and the cumulative impact

of positive net flows resulting in higher full service fees;

• an increase in recordkeeping fees in our Retirement segment; and


•      higher management and administrative fees earned in our Investment
       Management segment.


The increase was partially offset by:

• a shift in the business mix in our Retirement segment.




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Premiums increased $35 million from $2,097 million to $2,132 million primarily due to:

• higher premiums driven by growth of the voluntary and group life business

       partially offset by a decline in stop loss premiums in our Employee
       Benefits segment.


The increase was partially offset by:

• a decline in premiums associated with our business to be reinsured due to

lower considerations on life contingent contracts and discontinued sales.

Net realized capital losses increased $146 million from $209 million to $355 million primarily due to:

• unfavorable market value changes associated with business reinsured; and

• higher Net realized investment losses as a result of greater losses in

CMO-B fair value adjustments, losses on the sale of securities, and higher

impairments partially offset by gains due to changes in the fair value of

       derivatives.



The losses were partially offset by:

• higher gains in the fair value of net guaranteed benefit derivatives,

excluding nonperformance risk due to changes in interest rates.

Other revenue increased $64 million from $379 million to $443 million primarily due to:

• higher broker-dealer revenues in our Retirement segment;

• revenue resulting from a transition services agreement;

• favorable market value adjustments on separate accounts in our Retirement

       segment; and



The increase was partially offset by:

• lower performance fees in our Investment Management segment.

Interest credited and other benefits to contract owners/policyholders decreased $132 million from $3,658 million to $3,526 million as a result of the following:

•      market value impacts and changes in the reinsurance deposit asset
       associated with business reinsured; and


•      improvement as a result of a certain block of funding agreements in
       run-off during 2017.


The decrease was partially offset by:

• higher loss ratio on group life and voluntary benefits partially offset by

lower benefits incurred on stop loss in our Employee Benefits segment.

Operating expenses increased $44 million from $2,562 million to $2,606 million primarily due to:

• higher litigation reserves related to a divested business;


•      higher net actuarial losses related to our pension and other
       postretirement benefit obligations;

• higher recordkeeping expenses in our Retirement segment; and

• higher broker-dealer expenses.

The increase was partially offset by:

• a decline in expenses associated with our Strategic Investment Program;

• lower expenses related to net compensation adjustments;

• a decrease in compliance-related expenses in the current period; and

• lower restructuring charges in the current period.




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Net amortization of DAC/VOBA decreased $120 million from $353 million to $233 million primarily due to:

• favorable impact of annual assumption updates in our Retirement segment,

excluding GMIR;

• lower unfavorable unlocking in the current period driven by an update to

the assumptions related the GMIR initiatives in our Retirement segment;

and

• lower amortization as a result of the GMIR initiatives referenced above.

The decrease was partially offset by:

• net unfavorable amortization on our business reinsured.

Interest expense increased $37 million from $184 million to $221 million primarily due to:

• debt extinguishment in connection with repurchased debt.

Income (loss) from continuing operations before income taxes increased $143 million from $385 million to $528 million primarily due to:

• higher Adjusted operating earnings before income taxes, discussed below; and

• favorable changes in Other adjustments due to lower restructuring charges

in the current period.

The increase was partially offset by:

• higher Loss related to business exited through reinsurance or divestment,

discussed below;

• lower Income attributable to noncontrolling interest;

• higher expenses related to early extinguishment of debt;

• higher Immediate recognition of net actuarial losses related to pension

       and other postretirement benefit obligations and losses from plan
       adjustments and curtailments, discussed below; and


•      higher Net investment losses and related charges and adjustments,
       discussed below.


Income tax expense decreased $650 million from $687 million to $37 million primarily due to:

• a decrease in the federal income tax rate from 35% to 21%;

• a large Tax Reform-related expense associated with revaluing deferred tax

assets in 2017 that did not recur in 2018; and


• a change in the DRD.


The decrease was partially offset by:

• a change in noncontrolling interest;

• an increase in income before income taxes; and

• a change in non-deductible expenses.

Income (loss) from discontinued operations, net of tax changed $3,002 million from loss of $2,473 million to income of $529 million primarily due to:

• a favorable Adjustment to the loss on sale associated with the CBVA and

Annuities business, net of tax excluding costs to sell in the current

period; and

• a decrease in Net losses related to incurred guaranteed benefits and CBVA

       hedge program, excluding nonperformance risk in businesses held for sale.


The increase was partially offset by:

• a decrease in Net results of discontinued operations, excluding notable

items, primarily due to the unfavorable impact of equity market movements

       compared to the prior period.




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Adjusted Operating Earnings before Income Taxes

Adjusted operating earnings before income taxes increased $359 million from $292 million to $651 million primarily due to:

•      favorable net DAC/VOBA unlocking due to annual assumption updates as
       described above and lower unfavorable impact of GMIR initiatives in our
       Retirement segment;

• excluding the impact of a nonrecurring positive reserve refinement in the

prior period as noted below, favorable net impact of premium and benefits

incurred in the stop loss and voluntary blocks partially offset by net

unfavorable result in the group life block in our Employee Benefits

segment;

• higher net investment income primarily due to higher alternative

investment income;

• a decline in expenses associated with our Strategic Investment Program;

• an increase in separate account and institutional/mutual fund AUM driven

by equity market improvements resulting in higher full service fees in our

       Retirement segment;


•      higher Corporate earnings primarily due to lower net compensation
       adjustments, Stranded costs and compliance related expenses; and


•      an increase in average AUM driven by market improvements and the

cumulative impact of positive net flows resulting in higher management and

administrative fees earned in our Investment Management segment.

The increase was partially offset by:

• positive reserve refinement in the prior period that did not reoccur in

       our Employee Benefits segment; and


•      a recovery of accrued carried interest in the prior period in our
       Investment Management segment.


Adjustments from Income (Loss) from Continuing Operations before Income Taxes to Adjusted Operating Earnings before Income Taxes

Net investment gains (losses) and related charges and adjustments increased $12 million from a loss of $112 million to a loss of $124 million primarily due to:

• greater losses on CMO-B fair value adjustments;

• losses on the sale of securities in the current period; and

• higher impairments in the current period.

The change was partially offset by:


•gains due to changes in the fair value of derivatives in the current period;
•unfavorable change in Net investment gains associated with our business to be
reinsured; and
•      favorable changes in DAC/VOBA and other intangibles unlocking related to

net investment gains and losses.

Net guaranteed benefit hedging gains (losses) and related charges and adjustments increased $16 million from a gain of $46 million to a gain of $62 million primarily due to:

• higher gains in the fair value of net guaranteed benefit derivatives,

excluding nonperformance risk due to changes in interest rates.




Income (Loss) related to businesses exited or to be exited through reinsurance
or divestment changed by $99 million from a gain of $59 million to a loss of $40
million primarily due to:

• higher litigation reserves related to a divested business;

• net unfavorable amortization; and

• a decline in premiums due to lower considerations on life contingent

contracts and discontinued sales.

Loss related to early extinguishment of debt of increased $36 million from $4 million to $40 million primarily due to:

• Losses in connection with repurchased debt.




Immediate recognition of net actuarial gains (losses) related to pension and
other postretirement benefit obligations and gains (losses) from plan
adjustments and curtailments changed $31 million from a loss of $16 million to a
loss of $47 million. See Critical

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Accounting Judgments and Estimates - Employee Benefits Plans in Part II, Item 7. of this Annual Report on Form 10-K for further information.

Other adjustments decreased $18 million from a loss of $97 million to a loss of $79 million primarily due to:

• lower costs recorded in the current period related to restructuring. See

Overview - Restructuring in Part II, Item 7. of this Annual Report on Form

10-K for further information; and

• rebranding costs incurred in the prior period.

Results of Operations - Segment by Segment

Retirement

The following table presents Adjusted operating earnings before income taxes of our Retirement segment for the periods indicated:

                                                         Year Ended December 31,
($ in millions)                                  2019               2018    

2017

Adjusted operating revenues:
Net investment income and net realized
gains (losses)                             $       1,750$      1,758$      1,703
Fee income(1)                                        852                844              744
Premiums                                               5                  7                6
Other revenue                                        105                118               85
Total adjusted operating revenues                  2,712              2,727            2,538
Operating benefits and expenses:
Interest credited and other benefits to
contract owners/policyholders                        946                956              958
Operating expenses                                 1,046                959              850
Net amortization of DAC/VOBA                         132                111              274
Total operating benefits and expenses              2,124              2,026            2,082
Adjusted operating earnings before income
taxes (2)                                  $         588       $        701

$ 456



(1) Year ended December 31, 2017 excludes investment-only products, which were
transfered from Corporate during the year ended December 31, 2018.
(2) Refer to DAC/VOBA and Other Intangibles Unlocking in Part II, Item 7. of
this Annual Report on Form 10-K for further description.

The following table presents DAC/VOBA and other intangibles unlocking, including
unlocking related to the GMIR initiative, and annual review of the assumptions,
included in Adjusted operating earnings before income taxes for the periods
indicated:
                                              Year Ended December 31,
($ in millions)                             2019         2018       2017

DAC/VOBA and other intangibles unlocking $ (30 )$ (1 )$ (137 )




The net impact of annual review of the assumptions, completed in the third
quarter 2019, 2018 and 2017, resulted in unlocking of $(25) million, $48 million
and $(47) million, respectively. The net unfavorable unlocking in 2019 reflects
impacts related to our reduction in the long-term interest rate of 50 basis
points and lower net margins. The net favorable unlocking in 2018 reflects
changes in equity market assumptions partially offset by $51 million unfavorable
adjustment related to the GMIR initiatives. The net unfavorable unlocking in
2017 reflects $220 million related to the GMIR initiative. Excluding the
GMIR-related unlocking, the favorable DAC/VOBA unlocking from the annual review
of assumptions was primarily driven by favorable liability and expense
assumption changes.

Starting first quarter of 2019, Assets Under Advisement are presented in AUA,
which includes recordkeeping, stable value investment-only wrap, brokerage and
investment advisory assets. Prior period information have been revised to
conform to current period presentation.


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The following tables present AUM and AUA for our Retirement segment as of the
dates indicated:
                                                   As of December 31,
($ in millions)                              2019         2018         2017
Corporate markets                         $  73,497$  58,705$  60,495
Tax exempt markets                           70,109       60,514       62,070
Total full service plans                    143,606      119,219      122,565
Stable value(1) and pension risk transfer    10,298       10,815       11,982
Retail wealth management                     10,843        9,099        3,644
Total AUM                                   164,747      139,133      138,191
AUA                                         275,296      222,442      294,150
Total AUM and AUA                         $ 440,043$ 361,575$ 432,341


(1) Where Voya is the Investment Manager.  Stable Value assets move from AUM to
AUA when Voya no longer serves as Investment Manager but continues to provide a
book value guarantee.

                                         As of December 31,
($ in millions)                    2019         2018         2017
General Account                 $  32,932$  33,006$  32,571
Separate Account                   77,748       65,417       71,233
Mutual Fund/Institutional Funds    54,067       40,710       34,387
AUA                               275,296      222,442      294,150
Total AUM and AUA               $ 440,043$ 361,575$ 432,341



The following table presents a rollforward of AUM for our Retirement segment for
the periods indicated:
                                                       Year Ended December 31,
($ in millions)                                   2019          2018          2017
Balance as of beginning of period              $ 139,133$ 138,191$ 121,408
Transfers / Adjustments(1)                             -         6,212             -
  Deposits                                        20,563        19,474        18,014

Surrenders, benefits and product charges (19,666 ) (19,439 )

(16,509 )

   Net flows                                         897            35      

1,505

Interest credited and investment performance 24,717 (5,305 )

  15,278
Balance as of end of period                    $ 164,747$ 139,133$ 138,191

(1) Reflects investment-only products which were transferred from Corporate effective January 1, 2018 and an adjustment in the three months ended June 30, 2018 to include certain Stable Value assets previously reported as AUA.

Retirement - Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

Adjusted operating earnings before income taxes decreased $113 million from $701 million to $588 million primarily due to:

• higher expenses primarily resulting from business growth and non-recurring

       items, including the write-off previously deferred expenses related to
       policy acquisition cost;

• unfavorable DAC/VOBA unlocking due to annual assumption updates; and

• lower investment spread income.





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The decrease was partially offset by:

• higher fee revenue resulting from business growth and equity market

       improvements.



Retirement - Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Adjusted operating earnings before income taxes increased $245 million from $456 million to $701 million primarily due to:

• favorable changes in DAC/VOBA unlocking primarily due to annual assumption

updates;

• an increase in separate account and institutional/mutual fund AUM driven

       by equity market improvements and the cumulative impact of positive net
       flows resulting in higher full service fees;

• growth in general account assets resulting from the cumulative impact of

       participants' transfers from variable investment options into fixed
       investment options;

• an increase in alternative investment income primarily driven by market

performance; and

• the impact of expense management efforts partially offset by higher

expenses due to the growth in business.

The increase was partially offset by:

• unfavorable DAC/VOBA unlocking due to the GMIR initiative which reduces

       our interest rate exposure on new deposits, transfers and in certain plans
       existing fixed account assets;


•      lower investment yields, including the impact of the continued low
       interest rate environment;

• lower prepayment fee income; and

• the shift in the business mix from participants' transfers from variable

investment options into fixed investment options.

Investment Management

The following table presents Adjusted operating earnings before income taxes of our Investment Management segment for the periods indicated:

                                                            Year Ended December 31,
($ in millions)                                              2019           2018     2017
Adjusted operating revenues:
Net investment income and net realized gains (losses) $     13$  29$  57
Fee income                                                 611               635      632
Other revenue                                               51                19       42
Total adjusted operating revenues                          675               683      731
Operating benefits and expenses:
Operating expenses                                         495               478      483
Total operating benefits and expenses                      495               478      483
Adjusted operating earnings before income taxes       $    180

$ 205$ 248

Our Investment Management operating segment revenues include the following intersegment revenues, primarily consisting of asset-based management and administration fees.

                                                  Year Ended December 31,
($ in millions)                                    2019           2018     

2017

Investment Management intersegment revenues $    104$ 101$ 103






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The following table presents AUM and AUA for our Investment Management segment
as of the dates indicated:
                                        As of December 31,
($ in millions)                   2019         2018         2017
Assets under Management
External clients:
Investment Management sourced  $  99,589$  85,573$  85,804
Affiliate sourced(1)              38,785       34,372       56,476
Variable annuities(2)             28,448       27,231            -
Total external clients           166,822      147,176      142,280
General account                   56,651       56,288       82,006
Total AUM                        223,473      203,464      224,286

Assets under Administration(3) 49,257 47,004 50,018 Total AUM and AUA

              $ 272,730$ 250,468$ 274,304


(1) Affiliate sourced AUM includes assets sourced by other segments and also
reported as AUM or AUA by such other segments.
(2) Reflects AUM associated with the businesses divested as part of the 2018
Transaction.
(3) AUA includes assets sourced by other segments and also reported as AUA or
AUM by such other segments.

The following table presents net flows for our Investment Management segment for
the periods indicated:
                                   Year Ended December 31,
($ in millions)                 2019         2018        2017

Net Flows: Investment Management sourced $ 3,948$ 2,991$ 5,017 Affiliate sourced

              (1,348 )     (2,124 )      (978 )

Variable annuities (1) (2,626 ) (2,519 ) (4,505 ) Sub-advisor replacements (2) 2,806

           76         857
Total                         $ 2,780$ (1,576 )$   391


(1) Reflects net flows associated with the businesses divested as part of the
2018 Transaction.
(2) Reflects net flows mainly associated with outside managed funds.

Investment Management - Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

Adjusted operating earnings before income taxes decreased $25 million from $205 million to $180 million primarily due to:

• lower average general account AUM driven by the impact of the 2018

Transaction;

• lower investment capital returns; and


•      higher operating expenses due primarily to higher volume expenses
       associated with business growth.


The decrease was partially offset by:

• higher Other revenue primarily due to higher performance and production

fees earned in the current period.

Investment Management - Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Adjusted operating earnings before income taxes decreased $43 million from $248 million to $205 million primarily due to:

• higher alternative investment income primarily driven by the recovery of

accrued carried interest previously reversed in the prior period related

       to a sponsored private equity fund that experienced market value
       improvements in the current period; and


•      an increase in average AUM driven by market improvements and the

cumulative impact of positive net flows resulting in higher management and

       administrative fees earned.




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The decrease was partially offset by:

• higher operating expenses including higher compensation related expenses

primarily associated with higher operating earnings; and

• lower Other revenue related to performance fees earned in the current period.




Employee Benefits

The following table presents Adjusted operating earnings before income taxes of the Employee Benefits segment for the periods indicated:

                                                          Year Ended December 31,
($ in millions)                                  2019               2018               2017
Adjusted operating revenues:
Net investment income and net realized
gains (losses)                             $         114       $         114     $          109
Fee income                                            64                  69                 63
Premiums                                           1,856               1,672              1,600
Other revenue                                         (8 )                (6 )               (5 )
Total adjusted operating revenues                  2,026               1,849              1,767
Operating benefits and expenses:
Interest credited and other benefits to
contract owners/policyholders                      1,406               1,317             (1,293 )
Operating expenses                                   405                 355               (336 )
Net amortization of DAC/VOBA                          16                  17                (11 )
Total operating benefits and expenses              1,827               1,689             (1,640 )
Adjusted operating earnings before income
taxes (1)                                  $         199       $         

160 $ 127

(1) Refer to DAC/VOBA and Other Intangibles Unlocking in Part II, Item 7. of this Annual Report on Form 10-K for further description.

In the third quarter 2019 and 2017, the net impact of the annual review of the assumptions were not material. In the third quarter 2018, the net favorable impact of the annual review of the assumptions was $1 million, of which $7 million favorable impact in Fee income was offset by $6 million unfavorable impact in Net amortization of DAC/VOBA.



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The following table presents sales, gross premiums and in-force for our Employee Benefits segment for the periods indicated:

                                        Year Ended December 31,
($ in millions)                      2019        2018        2017
Sales by Product Line:
Group life and Disability          $   133$    99$    85
Stop loss                              282         255         286
Total group products                   415         354         371
Voluntary products                     114          94          70
Total sales by product line        $   529$   448$   441

Total gross premiums and deposits $ 2,079$ 1,872$ 1,806


Group life and Disability              710         659         623
Stop loss                            1,038         969         969
Voluntary                              390         311         257

Total annualized in-force premiums $ 2,138$ 1,939$ 1,849


Loss Ratios:
Group life (interest adjusted)        75.6 %      79.5 %      76.0 %
Stop loss                             78.4 %      79.1 %      82.7 %
Total Loss Ratio                      70.2 %      72.5 %      74.0 %


Employee Benefits - Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

Adjusted operating earnings before income taxes increased $39 million from $160 million to $199 million primarily due to:

•higher premiums driven by growth of the stop loss, voluntary and group life blocks.

The increase was partially offset by:


•higher benefits incurred due to growth in business partially offset by lower
loss ratios; and
•higher distribution expenses and commissions to support business growth.

Employee Benefits - Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Adjusted operating earnings before income taxes increased $33 million from $127 million to $160 million primarily due to:

• higher premiums driven by growth of the stop loss and voluntary business;

• favorable group life and voluntary experience;

• a favorable reserve refinement related to expired claims on the stop loss

       block; excluding the effect of this refinement, the loss ratio for stop
       loss is 83.7% for the current period; and

• the current and prior periods both benefited from favorable voluntary

       reserve refinements.



The increase was partially offset by:

•      higher benefits incurred due to a higher loss ratio on stop loss and
       growth of the business; and

• higher volume related expenses associated with growth of the stop loss and

       voluntary business.




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Corporate

The following table presents Adjusted operating earnings before income taxes of Corporate for the periods indicated:

                                                        Year Ended December 

31,

($ in millions)                                  2019              2018     

2017

Adjusted operating revenues:
Net investment income and net realized
gains (losses)                             $          54      $         56     $         68
Fee income(1)                                          -                 -               67
Premiums                                               3                 3                3
Other revenue                                         40                32                9
Total adjusted operating revenues                     97                91              147
Operating benefits and expenses:
Interest credited and other benefits to
contract owners/policyholders                         42                32               16
Operating expenses (2)                               225               290              484
Net amortization of DAC/VOBA                           -                 -                -
Interest Expense (3)                                 206               184              186
Total operating benefits and expenses                473               506              686
Adjusted operating earnings before income
taxes                                      $        (376 )    $       (415 

) $ (539 )



(1) Year ended December 31, 2017 includes investment-only products, which were
transferred to our Retirement segment during the year ended December 31, 2018.
(2) Includes expenses from corporate activities, and expenses not allocated to
our segments. Years ended December 31, 2019 and 2018 primarily include stranded
costs related to the 2018 and Individual Life Transactions and amortization of
intangibles. Year ended December 31, 2017 also includes expenses related to our
Strategic Investment Program and investment-only products.
(3)Includes dividend payments made to preferred shareholders.


Corporate - Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

Adjusted operating earnings before income taxes increased $39 million from a loss of $415 million to a loss of $376 million primarily due to:

• lower Stranded costs; and

• lower net compensation adjustments.

This increase was partially offset by:

•      Preferred stock dividends in the current year partially offset by lower
       interest expense as we converted debt to equity instruments during the
       fourth quarter of 2018 and second quarter of 2019; and


•      income due to run-off business and other non-recurring activity in the
       prior period.


Corporate - Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Adjusted operating earnings before income taxes increased $124 million from a loss of $539 million to a loss of $415 million primarily related to:

• decline in expenses associated with our Strategic Investment Program as

the expense is allocated to our segments beginning in the first quarter of

2018;

• lower net compensation adjustments;

• a decrease in compliance-related expenses in the current period; and


• lower Stranded costs.



Alternative Investment Income

Investment income on certain alternative investments can be volatile due to changes in market conditions. The following table presents the amount of investment income (loss) on certain alternative investments that is included in segment Adjusted operating


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earnings before income taxes and the average level of assets in each segment,
prior to intercompany eliminations, which excludes alternative investments and
income that are a component of Assets held for sale, Income (loss) related to
businesses exited or to be exited through reinsurance or divestment and Income
(loss) from discontinued operations, net of tax, respectively, and alternative
investments and income in Corporate. These alternative investments are carried
at fair value, which is estimated based on the net asset value ("NAV") of these
funds.

While investment income on these assets can be volatile, based on current plans, we expect to earn 9.0% on these assets over the long-term.

The following table presents the investment income for the years ended December 31, 2019, 2018 and 2017, respectively, and the average assets of alternative investments as of the dates indicated:

                                         Year Ended December 31,
($ in millions)                           2019             2018     2017

Retirement:

Alternative investment income    $      84$  99$  62
Average alternative investments        758                  595      517
Investment Management:
Alternative investment income(1)        13                   28       57
Average alternative investments        223                  232      229
Employee Benefits:
Alternative investment income           10                   10        6
Average alternative investments         86                   57       49


(1) No amounts for carried interest were reversed or recovered in 2019. Includes
the recoveries of $1 million and $25 million in 2018 and 2017, respectively, of
previously reversed accrued carried interest related to a private equity fund
which experienced an increase in fund performance.

DAC/VOBA and Other Intangibles Unlocking


Changes in Adjusted operating earnings before income taxes and Net income (loss)
are influenced by increases and decreases in amortization of DAC, VOBA, deferred
sales inducements ("DSI"), and unearned revenue ("URR"), collectively, "DAC/VOBA
and other intangibles". Unlocking, described below, related to DAC, VOBA, DSI
and URR, are referred to as "DAC/VOBA and other intangibles unlocking."

We amortize DAC/VOBA and other intangibles related to universal life-type
contracts and fixed and variable deferred annuity contracts over the estimated
lives of the contracts in relation to the emergence of estimated gross profits.
Assumptions as to mortality, persistency, interest crediting rates, returns
associated with separate account performance, impact of hedge performance,
expenses to administer the business and certain economic variables, such as
inflation, are based on our experience and our overall short-term and long-term
future expectations for returns available in the capital markets. At each
valuation date, estimated gross profits are updated with actual gross profits
and the assumptions underlying future estimated gross profits are evaluated for
continued reasonableness. Adjustments to estimated gross profits require that
amortization rates be revised retroactively to the date of the contract
issuance, which is referred to as unlocking. As a result of this process, the
cumulative balances of DAC/VOBA and other intangibles are adjusted with an
offsetting benefit or charge to income to reflect changes in the period of the
revision. An unlocking event that results in a benefit to income ("favorable
unlocking") generally occurs as a result of actual experience or future
expectations being favorable compared to previous estimates. Changes in DAC/VOBA
and other intangibles due to contract changes or contract terminations higher
than estimated are also included in "unlocking." At each valuation date, we
evaluate these assumptions and, if actual experience or other evidence suggests
that earlier assumptions should be revised, we adjust the reserve balance, with
a related charge or credit to Policyholder benefits. These reserve adjustments
are included in unlocking associated with all our segments. An unlocking event
that results in a charge to income ("unfavorable unlocking") generally occurs as
a result of actual experience or future expectations being unfavorable compared
to previous estimates. As a result of unlocking, the amortization schedules for
future periods are also adjusted.

We also review the estimated gross profits for each of our blocks of business to
determine recoverability of DAC, VOBA and DSI balances each period. If these
assets are deemed to be unrecoverable, a write-down is recorded that is referred
to as loss recognition. Refer to Critical Accounting Judgments and Estimates in
Part II, Item 7. of this Annual Report on Form 10-K for more information.


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The following table presents DAC/VOBA and other intangibles unlocking, including
unlocking related to the guaranteed minimum interest rate ("GMIR initiative")
and annual review of the assumptions, included in Adjusted operating earnings
before income taxes for the periods indicated:
                                                    Year Ended December 31,
($ in millions)                                   2019         2018       2017
Retirement (1)                                 $    (30 )$  (1 )$ (137 )
Employee Benefits                                     -          (1 )      

(2 ) Total DAC/VOBA and other intangibles unlocking $ (30 )$ (2 )$ (139 )

(1) Includes unfavorable unlocking of $51 million and $220 million for the years ended December 31, 2018 and 2017, respectively, associated with the GMIR initiative discussed below.

The following table presents the impact on segment Adjusted operating earnings before income taxes of the annual assumption updates for the periods indicated:

                       Year Ended December 31,
($ in millions)      2019          2018      2017
Retirement        $    (25 )$    48$ (47 )
Employee Benefits        -             1        -
Total             $    (25 )$    49$ (47 )



During the third quarter of 2019, 2018, and 2017, we completed our annual review
of the assumptions, including projection model inputs, in each of our segments
(except for the Investment Management segment for which assumption reviews are
not relevant). As a result of this review, we made a number of changes to our
assumptions resulting in a net unfavorable impact of $25 million to Adjusted
operating earnings before income taxes in the current period, compared to an
favorable impact of $49 million in the third quarter of 2018 and an unfavorable
impact of $47 million in the third quarter of 2017. The unlocking in third
quarter 2019 was driven principally by a reduction in the long-term interest
rate of 50 basis points. The unlocking in the third quarter 2018 was driven
principally by the unfavorable adjustment of the GMIR initiative partially
offset by favorable changes in equity market assumptions in our Retirement
business. The unlocking in the third quarter 2017 was driven principally by GMIR
initiative and favorable liability and expense assumption changes. For
information about the impacts of the annual review of assumptions on DAC/VOBA
and other intangibles and Adjusted operating earnings before income taxes
related to our segments, see Results of Operations - Segment by Segment in Part
II, Item 7. of this Annual Report on Form 10-K.

In 2017, we began soliciting customer consents to execute a change to reduce the
GMIR initiative applicable to future deposits and transfers into fixed
investment options for certain retirement plan contracts with above-market
GMIRs. This change reduces our interest rate exposure on new deposits, transfers
and in certain plans existing fixed account assets and resulted in unfavorable
unlocking during 2017 and 2018. The unfavorable unlocking for 2018 and 2017 was
$51 million and $220 million, respectively and was recorded in Net amortization
of DAC/VOBA. Of these amounts, $8 million and $92 million were reflected in the
annual assumption updates described above for 2018 and 2017, respectively.

Liquidity and Capital Resources


Liquidity refers to our ability to access sufficient sources of cash to meet the
requirements of our operating, investing and financing activities. Capital
refers to our long-term financial resources available to support business
operations and future growth. Our ability to generate and maintain sufficient
liquidity and capital depends on the profitability of the businesses, timing of
cash flows on investments and products, general economic conditions and access
to the capital markets and the other sources of liquidity and capital described
herein.

Consolidated Sources and Uses of Liquidity and Capital


Our principal available sources of liquidity are product charges, investment
income, proceeds from the maturity and sale of investments, proceeds from debt
issuance and borrowing facilities, equity securities issuance, repurchase
agreements, contract deposits and securities lending. Primary uses of these
funds are payments of policyholder benefits, commissions and operating expenses,
interest credits, share repurchases, investment purchases and contract
maturities, withdrawals and surrenders.


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Parent Company Sources and Uses of Liquidity


Voya Financial, Inc. is largely dependent on cash flows from its operating
subsidiaries to meet its obligations. The principal sources of funds available
to Voya Financial, Inc. include dividends and returns of capital from its
operating subsidiaries, as well as cash and short-term investments, and proceeds
from debt issuances, borrowing facilities and equity securities issuances. These
sources of funds include the $750 million revolving credit sublimit of our
Second Amended and Restated Credit Agreement and reciprocal borrowing facilities
maintained with Voya Financial, Inc's subsidiaries as well as alternate sources
of liquidity described below.

Voya Financial, Inc.'s primary sources and uses of cash for the periods indicated are presented in the following table:

                                                         Year Ended December 31,
($ in millions)                                   2019             2018     

2017

Beginning cash and cash equivalents balance $ 209$ 244

    $        257
Sources:
Proceeds from loans from subsidiaries, net
of repayments                                          65                -              408
Dividends and returns of capital from
subsidiaries                                        1,064            1,207  

1,093

Repayment of loans to subsidiaries, net of
new issuances                                           -              111               87
Proceeds from 2024 Notes offering                       -                -              399
Proceeds from 2048 Notes offering                       -              350                -
Proceeds from issuance of preferred stock,
net                                                   293              319                -
Amounts received from subsidiaries under tax
sharing agreements, net                                 -               63                -
Refund of income taxes, net                           128                -              154
Proceeds from sale of equity securities, net          121                -                -
Sale of short-term investments                          -              212                -
Other, net                                             15                1                -
Total sources                                       1,686            2,263            2,141
Uses:
Repurchase of Senior Notes                             97              266              490
Premium paid and other fees related to debt
extinguishment                                          9               20                4
Payment of interest expense                           136              152              138
Capital provided to subsidiaries                        3               55              467
Repayments of loans from subsidiaries, net
of new issuances                                        -              414                -
New issuances of loans to subsidiaries, net
of repayments                                          85                -                -
Amounts paid to subsidiaries under tax
sharing arrangements, net                             123                -              104
Payment of income taxes, net                            -                1                -
Debt issuance costs                                     -                6                3
Common stock acquired - Share repurchase            1,136            1,025              923
Share-based compensation                               22               14                8
Dividends paid on preferred stock                      28                -                -
Dividends paid on common stock                         44                6                8
Maturity of 2018 Notes                                  -              337                -
Acquisition of equity securities, net                   -                2                9
Total uses                                          1,683            2,298  

2,154

Net increase (decrease) in cash and cash
equivalents                                             3              (35 )            (13 )

Ending cash and cash equivalents balance $ 212$ 209

   $        244




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Share Repurchase Program and Dividends to Shareholders


On March 13, 2014, our Board of Directors authorized a share repurchase program,
pursuant to which we may, from time to time, purchase shares of our common
shares through various means, including, without limitation, open market
transactions, privately negotiated transactions, forward, derivative, or
accelerated repurchase, or automatic repurchase transactions, including 10b5-1
plans, or tender offers.

Since 2014, our Board of Directors has periodically renewed our authority to
repurchase our shares. On May 2, 2019, the Board of Directors provided share
repurchase authorization, increasing the aggregate of our common stock
authorized for repurchase by $500 million. On October 31, 2019, the Board of
Directors provided its most recent share repurchase authorization, increasing
the aggregate of our common stock authorized for repurchase by $800 million. The
additional share repurchase authorization expires on December 31, 2020 (unless
extended) and does not obligate us to purchase any shares. The authorization for
the share repurchase program may be terminated, increased or decreased by the
Board of Directors at any time. As of December 31, 2019 , we were authorized to
repurchase shares up to an aggregate purchase price of $690 million.

The following table presents repurchases of our common stock through share repurchase agreements with third-party financial institutions for the year ended December 31, 2019 and December 31, 2017. We did not enter into any share repurchase agreements in 2018.

                                                    2019
                                                Initial                         Additional
                                                 Shares                           Shares        Total Shares
 Execution Date              Payment           Delivered      Closing Date      Delivered       Repurchased
January 3, 2019       $               250      5,059,449      April 4, 2019        290,765        5,350,214
April 9, 2019         $               236      3,593,453       June 4, 2019        879,199        4,472,652
June 19, 2019         $               200      2,963,512     August 6, 2019        695,566        3,659,078
December 19, 2019     $               200      2,591,093          (1)              (1)              (1)
(1)This arrangement is scheduled to terminate no later than the end of first quarter of 2020, at which time
we will settle any outstanding positive or negative share balances based on the daily volume-weighted average
price of our common stock.

                                                    2017
                                                Initial                         Additional
                                                 Shares                           Shares        Total Shares
 Execution Date              Payment           Delivered      Closing Date      Delivered       Repurchased
March 9, 2017         $               150              -     April 12, 2017      3,986,647        3,986,647
December 26, 2017     $               500      7,821,666     March 26, 2018      1,947,413        9,769,079

The following table presents repurchases of our common stock through open market repurchases for the year ended December 31, 2019, 2018 and 2017. ($ in millions)

                     Year Ended December 31,
                              2019               2018            2017
Shares of common stock   4,926,775             20,843,047      7,437,994
Payment                $       250$      1,025$       273



The following table summarizes our payment of common dividends and repurchases
of common shares:
($ in millions)                              Year Ended December 31,
                                           2019          2018       2017

Dividends paid on common shares $ 44$ 6$ 8 Repurchases of common shares (at cost) 1,096 1,125 1,023 Total

                                  $   1,140$ 1,131$ 1,031



Liquidity

We manage liquidity through access to substantial investment portfolios as well
as a variety of other sources of liquidity including committed credit
facilities, securities lending and repurchase agreements. Our asset-liability
management ("ALM") process takes

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into account the expected maturity of investments and expected benefit payments
as well as the specific nature and risk profile of the liabilities. As part of
our liquidity management process, we model different scenarios to determine
whether existing assets are adequate to meet projected cash flows.

Capitalization


The primary components of our capital structure consist of debt and equity
securities. Our capital position is supported by cash flows within our operating
subsidiaries, the availability of borrowed funds under liquidity facilities, and
any additional capital we raise to invest in the growth of the business and for
general corporate purposes. We manage our capital position based on a variety of
factors including, but not limited to, our financial strength, the credit rating
of Voya Financial, Inc. and of its insurance company subsidiaries and general
macroeconomic conditions.

As of December 31, 2019, we had $1 million of short-term debt borrowings outstanding consisting entirely of the current portion of long-term debt. The following table summarizes our borrowing activities for the year ended December 31, 2019:

                           Beginning                           Maturities 

and

($ in millions)             Balance          Issuance            Repayment            Other Changes         Ending Balance
Long-Term Debt:
Debt securities          $      3,132     $           -     $          (96 )       $            3         $          3,039
Windsor property loan               5                 -                  -                     (1 )                      4
Subtotal                        3,137                 -                (96 )                    2                    3,043
Less: Current portion of
long-term debt                      1                 -                  -                      -                        1
Total long-term debt     $      3,136     $           -     $          (96 )       $            2         $          3,042



As of December 31, 2018, we had $1 million of short-term debt borrowings
outstanding consisting entirely of the current portion of long-term debt. The
following table summarizes our borrowing activities for the year ended
December 31, 2018:
                           Beginning                        Maturities and
($ in millions)             Balance         Issuance          Repayment          Other Changes        Ending Balance
Long-Term Debt:
Debt securities          $      3,455$       350$        (672 )      $          (1 )      $          3,132
Windsor property loan               5               -                 -                    -                       5
Subtotal                        3,460             350              (672 )                 (1 )                 3,137
Less: Current portion of
long-term debt                    337               -              (337 )                  1                       1
Total long-term debt     $      3,123$       350$        (335 )      $          (2 )      $          3,136


As of December 31, 2019, we were in compliance with our debt covenants.

Preferred Stock


On June 11, 2019, we issued 300,000 shares of 5.35% Fixed-Rate Reset
Non-Cumulative Preferred Stock, Series B ("the Series B preferred stock"), with
a $0.01 par value per share and a liquidation preference of $1,000 per share,
represented by 12,000,000 Depository Shares each representing a 1/40th interest
in a share of the Series B preferred stock, for aggregate net proceeds of $293
million.

On September 12, 2018, we issued 325,000 shares of 6.125% Fixed-Rate Reset
Non-Cumulative Preferred Stock, Series A ("the Series A preferred stock"), with
a $0.01 par value per share and a liquidation preference of $1,000 per share,
for aggregate net proceeds of $319 million.
Our ability to declare or pay dividends on, or purchase, redeem or otherwise
acquire, shares of our common stock will be substantially restricted in the
event that we do not declare and pay (or set aside) dividends on the Series A
and Series B preferred stock for the last preceding dividend period.

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During the year ended December 31, 2019, we declared and paid dividends of $20
million and $8 million on the Series A and Series B preferred stock,
respectively. During the year ended December 31, 2018, there were no
declarations or payments of dividends on preferred stock. As of December 31,
2019, there were no preferred stock dividends in arrears. See the Shareholders'
Equity Note in Part II, Item 8. of this Annual Report on Form 10-K for further
information.

Senior Notes

As of December 31, 2019 and 2018, Voya Financial, Inc. had four and five series
of senior notes (collectively, the "Senior Notes"), respectively, with aggregate
outstanding principal amount of $1.6 billion and $1.7 billion, respectively. The
Senior Notes are guaranteed by Voya Holdings. We are permitted to redeem all or
any portion of the Senior Notes at any time at a redemption price equal to the
principal amount redeemed, or, if greater, a "make-whole redemption price,"
plus, in each case accrued and unpaid interest.

On July 12, 2019, we completed the redemption of our remaining $97 million
aggregate principal amount of 5.5% Senior Notes due 2022 (the "2022 Notes"). In
connection with this transaction, we incurred a loss on debt extinguishment of
$9 million for the year ended December 31, 2019, which was recorded in Interest
Expense in the Consolidated Statements of Operations.

Junior Subordinated Notes


As of December 31, 2019 and 2018, Voya Financial, Inc. had two series of junior
subordinated notes (collectively, the "Junior Subordinated Notes") with
aggregate outstanding principal amount of $1.1 billion, respectively. The Junior
Subordinated Notes are guaranteed on an unsecured, junior subordinated basis by
Voya Holdings.

Aetna Notes

As of December 31, 2019 and 2018, Voya Holdings was the obligor under three
series of debentures (collectively, the "Aetna Notes") with aggregate
outstanding principal amount of $358 million, respectively, which were issued by
a predecessor of Voya Holdings and assumed in connection with our acquisition of
Aetna's life insurance and related businesses. In addition, Equitable of Iowa
Capital Trust II, a limited purpose trust subsidiary, has outstanding $13
million principal amount of 8.42% Series B Capital Securities due April 1, 2027
(the "Equitable Notes"). ING Group, our previous corporate parent, guarantees
the Aetna Notes. The Equitable Notes are also guaranteed by Voya Financial, Inc.

Concurrent with the completion of our Initial Public Offering ("IPO"), we
entered into a shareholder agreement with ING Group that governs certain aspects
of our continuing relationship. Pursuant to that agreement, we are obligated to
reduce the aggregate outstanding principal amount of Aetna Notes to no more than
zero as of December 31, 2019, or otherwise to make provision for ING Group's
guarantee of any outstanding Aetna Notes in excess of such amounts.

Our obligation to ING Group with respect to the Aetna Notes can be met, at our option, through redemptions, repurchases or by posting collateral with a third-party collateral agent, for the benefit of ING Group.


If we fail to meet these obligations to ING Group, we have agreed to pay a
prescribed quarterly fee (1.25% per quarter for 2020) to ING Group based on the
outstanding principal amount of Aetna Notes for which provision has not been
made, in excess of the limits set forth above.

As of December 31, 2019 and 2018, the amounts of collateral required to avoid the payment of a fee to ING Group were $358 million and $258 million, respectively.



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Put Option Agreement for Senior Debt Issuance


On March 17, 2015, we entered into an off-balance sheet ten-year put option
agreement with a Delaware trust that we formed, in connection with the
completion of the sale by the trust of $500 million aggregate amount of
pre-capitalized trust securities redeemable February 15, 2025 ("P-Caps") in a
Rule 144A private placement. The trust invested the proceeds from the sale of
the P-Caps in a portfolio of principal and interest strips of U.S.Treasury
securities. The put option agreement provides Voya Financial, Inc. the right to
sell to the trust at any time up to $500 million principal amount of its 3.976%
Senior Notes due 2025 ("3.976% Senior Notes") and receive in exchange a
corresponding principal amount of the U.S.Treasury securities held by the
trust. The 3.976% Senior Notes will not be issued unless and until the put
option is exercised. In return, we pay a semi-annual put premium to the trust at
a rate of 1.875% per annum applied to the unexercised portion of the put option,
and reimburse the trust for its expenses. The put premium and expense
reimbursements are recorded in Operating expenses in the Consolidated Statements
of Operations. If and when issued, the 3.976% Senior Notes will be guaranteed by
Voya Holdings. Our obligations under the put option agreement and the expense
reimbursement agreement with the trust are also guaranteed by Voya Holdings.

The put option described above will be exercised automatically in full if we
fail to make certain payments to the trust, including any failure to pay the put
option premium or expense reimbursements when due, if such failure is not cured
within 30 days, and upon certain bankruptcy event involving us or Voya Holdings.
We are also required to exercise the put option in full: (i) if we reasonably
believe that our consolidated shareholders' equity, calculated in accordance
with U.S. GAAP but excluding Accumulated other comprehensive income (loss) and
Noncontrolling interest, has fallen below $3.0 billion, subject to adjustment in
certain cases; (ii) upon the occurrence of an event of default under the 3.976%
Senior Notes; and (iii) upon certain events relating to the trust's status as an
"investment company" under the Investment Company Act of 1940.

We have a one-time right to unwind a prior voluntary exercise of the put option
by exchanging all of the 3.976% Senior Notes then held by the trust for U.S.Treasury securities. If the put option has been fully exercised, the 3.976%
Senior Notes issued may be redeemed by us prior to their maturity at par or, if
greater, at a make-whole redemption price, in each case plus accrued and unpaid
interest to the date of redemption. The P-Caps are to be redeemed by the trust
on February 15, 2025 or upon any early redemption of the 3.976% Senior Notes.

Senior Unsecured Credit Facility


Prior to November 1, 2019, we had a $1.0 billion senior unsecured credit
facility which was set to expire on May 6, 2021. The facility provided $1.0
billion of committed capacity for issuing letters of credit and also included a
revolving credit borrowing sublimit of $750 million. As of September 30, 2019,
there were no amounts outstanding as revolving credit borrowings and no amounts
of LOCs outstanding under the senior unsecured credit facility. Under the terms
of the facility, Voya Financial, Inc. was required to maintain a minimum net
worth of $6.6 billion, which may increase upon any future equity issuances by
us.

Effective November 1, 2019, we revised the terms of our senior unsecured credit
facility by entering into a Third Amended and Restated Revolving Credit
Agreement ("Third Amended and Restated Credit Agreement") with a syndicate of
banks, all of which previously participated in the facility. The Third Amended
and Restated Credit Agreement modifies the senior unsecured credit facility by
extending the term of the agreement to November 1, 2024 and reducing the total
amount of LOCs that may be issued from $1.0 billion to $500 million. The
revolving credit sublimit was removed and the full $500 million may be utilized
for direct borrowings.  The terms require us to maintain a minimum net worth of
$6.15 billion. The minimum net worth amount may increase upon any future equity
issuances by us.

Other Credit Facilities

We use credit facilities to provide collateral required primarily under our
affiliated reinsurance transactions with captive insurance subsidiaries. We also
issue guarantees and enter into financing arrangements in connection with these
credit facilities. These arrangements are designed to facilitate the financing
of statutory reserve requirements.


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The following table summarizes our credit facilities as of December 31, 2019:
($ in millions)
Obligor /                                      Secured/     Committed/
Applicant             Business Supported      Unsecured    Uncommitted    Expiration     Capacity       Utilization       Unused Commitment
Voya Financial,
Inc.               Other                      Unsecured     Committed     11/01/2024   $      500     $           -     $               500
Voya Financial,
Inc.               Other                       Secured     Uncommitted     Various             10                 1                       -
Voya Financial,
Inc. / SLDI        Other(4)                   Unsecured    Uncommitted    12/31/2020          300                58                       -
Voya Financial,
Inc. / SLDI        Retirement(1)              Unsecured     Committed     03/20/2022          250               242                       8
Voya Financial,
Inc. / SLDI        Individual Life(3)         Unsecured     Committed     12/31/2025          475               475                       -
Voya Financial,
Inc. / SLDI        Individual Life(3)         Unsecured     Committed     07/01/2037        1,725             1,606                     119
Voya Financial,
Inc. / Roaring
River LLC          Individual Life(3)         Unsecured     Committed     10/01/2025          425               392                      33
Voya Financial,
Inc. / Roaring
River IV, LLC      Individual Life(3)         Unsecured     Committed     12/31/2028          565               357                     208
Voya Financial,
Inc.               Individual Life(4)         Unsecured     Committed     12/09/2024          300               250                      50
Voya Financial,    Individual
Inc.               Life/Retirement/Other(4)   Unsecured     Committed     02/11/2022          300               300                       -
SLDI               Hannover Re(2)             Unsecured     Committed     10/29/2023           61                51                      10
Voya Financial,
Inc.               Hannover Re(2)(4)          Unsecured    Uncommitted    04/27/2021          125               125                       -
Total                                                                                  $    5,036$       3,857     $               928


N/A- Not Applicable
(1) On January 10, 2020, the facility was cancelled.
(2) Individual Life Reinsurance business acquired by Hannover Re in 2009 via
indemnity reinsurance, see "Reinsurance" below for further information.
(3) These facilities will be terminated as a result of the sale of SLD and SLDI
to Resolution. Fees associated with these facilities for the years ended
December 31, 2019, 2018 and 2017 were $22 million, $23 million and $24 million,
respectively.
(4) In December 2019 and January 2020, these facilities were amended to include
terms which require us to maintain a minimum net worth of $6.15 billion. The
minimum net worth may increase upon any future equity issuances by us.

Total fees associated with credit facilities for the years ended December 31, 2019, 2018 and 2017 were $34 million, $34 million and $50 million, respectively.

Voya Financial, Inc. Credit Support of Subsidiaries


In addition to our Senior Unsecured Credit Facility, Voya Financial, Inc.
maintains credit facilities with third-party banks to support the reinsurance
obligations of our captive reinsurance subsidiaries in which Voya Financial is
either a primary obligor or provides a financial guarantee. As of December 31,
2019, such facilities provided for up to $4.4 billion of capacity, of which $3.6
billion was utilized.

We also provide credit support to our Roaring River IV, LLC ("Roaring River IV")
captive reinsurance subsidiary through a surplus maintenance agreement with a
third-party bank in connection with a financing arrangement involving $565
million of statutory reserves which matures December 31, 2028. The reimbursement
agreement requires Voya Financial, Inc. to cause capital to be maintained in
Roaring River IV Holding LLC, the intermediate holding company of Roaring River
IV, and in Roaring River IV. These amounts will vary over time based on a
percentage of Roaring River IV in force life insurance. Upon closing the
transaction, we expect to unwind this financing arrangement, and this guarantee
will therefore terminate .

In addition, we provide guarantees to certain of our subsidiaries to support various business requirements:

•      Under the Buyer Facility Agreement put into place by Hannover Re, Voya
       Financial, Inc. and SLDI have contingent reimbursement obligations and
       Voya Financial, Inc. has guarantee obligations, up to the full $2.9

billion principal amount of the note and one $600 million letter of credit

issued pursuant to the agreement, if SLD or SLDI were to direct the sale

or liquidation of the note other than as permitted by the Buyer Facility

Agreement, or fail to return reinsurance collateral (including the note)

upon termination of the Buyer Facility Agreement or as otherwise required

       by the Buyer Facility Agreement. In addition, Voya Financial, Inc. has
       agreed to indemnify Hannover Re for any losses it incurs in the event



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that SLD or SLDI were to exercise offset rights unrelated to the Hannover Re
block. We expect to restructure this guarantee arrangement in connection with
the Individual Life Transaction.

Voya Financial, Inc. has also entered into a corporate guarantee agreement

with a third-party ceding insurer where it guarantees the reinsurance

obligations of our subsidiary, SLD, assumed under a reinsurance agreement

with the third-party cedent for the amount of the statutory reserves

assumed by SLD. The current amount of reserves outstanding as of

December 31, 2019 is $13 million. We expect to restructure this guarantee

       arrangement in connection with the Individual Life Transaction.


Voya Financial, Inc. guarantees the obligations of Voya Holdings under the

$13 million principal amount Equitable Notes maturing in 2027, and

provides a back-to-back guarantee to ING Group in respect of its guarantee

       of $358 million combined principal amount of Aetna Notes. For more
       information see "Capitalization- Aetna Notes" above.


Voya Financial, Inc. and Voya Holdings provide a guarantee to certain Voya

insurance subsidiaries of VIAC's payment obligations to those subsidiaries

under certain VIAC surplus notes held by those subsidiaries. The agreement

provides for Voya and Voya Holdings to reimburse the applicable subsidiary

       to the extent that any interest on, principal of, or any redemption
       payment with respect to such surplus note is unpaid by VIAC on its
       scheduled date.



We did not recognize any asset or liability as of December 31, 2019 and 2018 in
relation to intercompany indemnifications, guarantees or support agreements. As
of December 31, 2019 and 2018, no circumstances existed in which we were
required to currently perform under these arrangements.

Securities Lending


We engage in securities lending whereby certain securities from our portfolio
are loaned to other institutions for short periods of time. We have the right to
approve any institution with whom the lending agent transacts on our behalf.
Initial collateral, primarily cash, is required at a rate of 102% of the market
value of the loaned securities. The lending agent retains the collateral and
invests it in short-term liquid assets on our behalf. The market value of the
loaned securities is monitored on a daily basis with additional collateral
obtained or refunded as the market value of the loaned securities fluctuates.
The lending agent indemnifies us against losses resulting from the failure of a
counterparty to return securities pledged where collateral is insufficient to
cover the loss. As of December 31, 2019 and 2018, the fair value of loaned
securities was $1,159 million and $1,237 million, respectively, and is included
in Securities pledged on the Consolidated Balance Sheets. As of December 31,
2019 and 2018, collateral retained by the lending agent and invested in liquid
assets on our behalf was $1,055 million and $1,190 million, respectively, and is
recorded in Short-term investments under securities loan agreements, including
collateral delivered on the Consolidated Balance Sheets. As of December 31, 2019
and 2018, liabilities to return collateral of $1,055 million and $1,190 million,
respectively, are included in Payables under securities loan and repurchase
agreements, including collateral held on the Consolidated Balance Sheets.

Repurchase Agreements


We engage in dollar repurchase agreements with mortgage-backed securities
("dollar rolls") and repurchase agreements with other collateral types to
increase our return on investments and improve liquidity. Such arrangements meet
the requirements to be accounted for as financing arrangements. We enter into
dollar roll transactions by selling existing mortgage-backed securities ("MBS")
and concurrently entering into an agreement to repurchase similar securities
within a short time frame at a lower price. Under repurchase agreements, we
borrow cash from a counterparty at an agreed upon interest rate for an agreed
upon time frame and pledge collateral in the form of securities. At the end of
the agreement, the counterparty returns the collateral to us, and we, in turn,
repay the loan amount along with the additional agreed upon interest. We require
that, at all times during the term of the dollar roll and repurchase agreements,
cash or other collateral types obtained is sufficient to allow us to fund
substantially all of the cost of purchasing replacement assets. Cash received is
generally invested in short-term investments, with the offsetting obligation to
repay the loan included within Payables under securities loan and repurchase
agreements, including collateral held on the Consolidated Balance Sheets. As per
the terms of the agreements, the market value of the loaned securities is
monitored with additional collateral obtained or refunded as the market value of
the loaned securities fluctuates due to changes in interest rates, spreads and
other risk factors.

The carrying value of the securities pledged in dollar rolls and repurchase
agreement transactions is included in Securities pledged on the Consolidated
Balance Sheets. As of December 31, 2019, the carrying value of securities
pledged and obligation to repay loans related to repurchase agreement
transactions was $66 million, respectively. As of December 31, 2018, the
carrying value of securities pledged and obligation to repay loans related to
repurchase agreement transactions was $45 million, respectively. As of December
31, 2019 and 2018, we did not have any securities pledged in dollar rolls.


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We also enter into reverse repurchase agreements. These transactions involve a
purchase of securities and an agreement to sell substantially the same
securities as those purchased. We require that, at all times during the term of
the reverse repurchase agreements, cash or other collateral types provided is
sufficient to allow the counterparty to fund substantially all of the cost of
purchasing the replacement assets. As of December 31, 2019 and 2018, we did not
have any securities pledged under reverse repurchase agreements.

The primary risk associated with short-term collateralized borrowings is that
the counterparty will be unable to perform under the terms of the contract. Our
exposure is limited to the excess of the net replacement cost of the securities
over the value of the short-term investments. We believe the counterparties to
the dollar rolls, repurchase and reverse repurchase agreements are financially
responsible and that the counterparty risk is minimal.

FHLB


We are currently a member of the FHLB of Boston and the FHLB of Des Moines. We
are required to maintain a collateral deposit to back any funding agreements
issued by the FHLB. We have the ability to obtain funding from the FHLBs based
on a percentage of the value of our assets and subject to the availability of
eligible collateral. The limits across all programs are up to an amount that
corresponds to the lending value of assets that can be pledged to the FHLB
Boston which is limited to total statutory surplus of VRIAC and lending value of
assets that can be pledged to the FHLB Des Moines which is limited to 30% of the
total assets of the general and separate accounts of RLI. Furthermore,
collateral is pledged based on the outstanding balances of FHLB funding
agreements. The amount varies based on the type, rating and maturity of the
collateral posted to the FHLB. Generally, mortgage securities, commercial real
estate and U.S. treasury securities are pledged to the FHLBs. Market value
fluctuations resulting from changes in interest rates, spreads and other risk
factors for each type of assets are monitored and additional collateral is
either pledged or released as needed. Additionally, SLD is currently a member of
FHLB of Topeka. Our capacity under this facility will transfer to Resolution
Life with the sale of SLD under the Individual Life Transaction.

Our maximum borrowing capacity for our continuing operations under the FHLB of
Boston and the FHLB of Des Moines was $7.8 billion as of December 31, 2019, and
does not have an expiration date as long as we maintain a satisfactory level of
creditworthiness based on the FHLBs' credit assessment. As of December 31, 2019
and 2018, we had $877 million and $657 million in non-putable FHLB funding
agreements, respectively, which are included in Contract owner account balances
on the Consolidated Balance Sheets. As of December 31, 2019 and 2018, we had
assets with a market value of approximately $1,211 million and $771 million,
respectively, which collateralized the FHLB funding agreements.

Borrowings from Subsidiaries


We maintain revolving reciprocal loan agreements with a number of our life and
non-life insurance subsidiaries that are used to fund short-term cash
requirements that arise in the ordinary course of business. Under these
agreements, either party may borrow up to the maximum allowable under the
agreement for a term not more than 270 days. For life insurance subsidiaries,
the amounts that either party may borrow from the other under the agreement vary
and are between 2% and 5% of the insurance subsidiary's statutory net admitted
assets (excluding separate accounts) as of the previous year end depending on
the state of domicile. As of December 31, 2019, the aggregate amount that may be
borrowed or lent under agreements with life insurance subsidiaries was $1.9
billion. For non-life insurance subsidiaries, the maximum allowable under the
agreement is based on the assets of the subsidiaries and their particular cash
requirements. As of December 31, 2019, Voya Financial, Inc. had $69 million in
outstanding borrowings from subsidiaries and had loaned $164 million to its
subsidiaries.

Collateral - Derivative Contracts


Under the terms of our over-the-counter ("OTC") Derivative ISDA agreements, we
may receive from, or deliver to, counterparties, collateral to assure that the
terms of the International Swaps and Derivatives Association, Inc. ("ISDA")
agreements will be met with regard to the Credit Support Annex ("CSA"). The
terms of the CSA call for us to pay interest on any cash received equal to the
Federal Funds rate. To the extent cash collateral is received and delivered, it
is included in Payables under securities loan and repurchase agreements,
including collateral held and Short-term investments under securities loan
agreements, including collateral delivered, respectively, on the Consolidated
Balance Sheets and is reinvested in short-term investments. Collateral held is
used in accordance with the CSA to satisfy any obligations. Investment grade
bonds owned by us are the source of noncash collateral posted, which is reported
in Securities pledged on the Consolidated Balance Sheets. As of December 31,
2019, we held $9 million and $82 million of net cash collateral related to OTC
derivative contracts and cleared derivative contracts, respectively. As of
December 31, 2018, we held $27 million and $16 million of net cash collateral
related to OTC derivative contracts and cleared derivative contracts,
respectively. In addition, as of December 31, 2019, we delivered $183 million of
securities and held no securities as collateral. As of December 31, 2018, we
delivered $180 million of securities and held no securities as collateral.


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Ratings


Our access to funding and our related cost of borrowing, collateral requirements
for derivative instruments and the attractiveness of certain of our products to
customers are affected by our credit ratings and insurance financial strength
ratings, which are periodically reviewed by the rating agencies. Financial
strength ratings and credit ratings are important factors affecting public
confidence in an insurer and its competitive position in marketing products.
Credit ratings are also important to our ability to raise capital through the
issuance of debt and for the cost of such financing.

A downgrade in our credit ratings or the credit or financial strength ratings of
our rated subsidiaries could have a material adverse effect on our results of
operations and financial condition. See Risk Factors- A downgrade or a potential
downgrade in our financial strength or credit ratings could result in a loss of
business and adversely affect our results of operations and financial condition
in Part I, Item 1A. of this Annual Report on Form 10-K.

With respect to our credit facility and derivative agreements, based on the
amount of credit outstanding as of December 31, 2019, a one-notch or two-notch
downgrade in Voya Financial, Inc.'s credit ratings by S&P or Moody's would not
have resulted in an additional increase in our collateral requirements.

With respect to certain SLD reinsurance agreements, based on the amount of
reinsurance outstanding as of December 31, 2019 and December 31, 2018, a
two-notch downgrade of our insurance subsidiaries would have resulted in an
estimated increase in our collateral requirements by approximately $13 million
and $14 million, respectively. The nature of the collateral that we may be
required to post is principally in the form of cash, highly rated securities or
LOC.

Financial strength ratings represent the opinions of rating agencies regarding
the financial ability of an insurance company to meet its obligations under an
insurance policy. Credit ratings represent the opinions of rating agencies
regarding an entity's ability to repay its indebtedness. These ratings are not a
recommendation to buy or hold any of our securities and they may be revised or
revoked at any time at the sole discretion of the rating organization.

The financial strength and credit ratings of Voya Financial, Inc. and its principal subsidiaries as of the date of this Annual Report on Form 10-K are summarized in the following table.

                                                        Rating Agency
                                                                   Moody's
                                                                  Investors
                                                                   Service,     Standard &
                                    A.M. Best     Fitch, Inc.        Inc.         Poor's
                                     ("A.M.                      ("Moody's")
                                   Best") (1)    ("Fitch") (2)       (3)        ("S&P") (4)
Long-term Issuer Credit
Rating/Outlook:
Voya Financial, Inc.                withdrawn     BBB+/stable    Baa2/stable    BBB+/stable

Financial Strength
Rating/Outlook:
Voya Retirement Insurance and         (5)          A/stable       A2/stable      A+/stable
Annuity Company
Security Life of Denver               (5)          A/stable        A3/Under      A+/stable
Insurance Company                                                   Review

ReliaStar Life Insurance Company A/stable A/stable A2/stable

A+/stable

ReliaStar Life Insurance Company A/stable A/stable A2/stable

A+/stable

of New York



(1) A.M. Best's financial strength ratings for insurance companies range from
"A++ (superior)" to "s (suspended)." Long-term credit ratings range from "aaa
(exceptional)" to "s (suspended)."
(2) Fitch's financial strength ratings for insurance companies range from "AAA
(exceptionally strong)" to "C (distressed)." Long-term credit ratings range from
"AAA (highest credit quality)," which denotes exceptionally strong capacity for
timely payment of financial commitments, to "D (default)."
(3) Moody's financial strength ratings for insurance companies range from "Aaa
(exceptional)" to "C (lowest)." Numeric modifiers are used to refer to the
ranking within the group- with 1 being the highest and 3 being the lowest. These
modifiers are used to indicate relative strength within a category. Long-term
credit ratings range from "Aaa (highest)" to "C (default)."
(4) S&P's financial strength ratings for insurance companies range from "AAA
(extremely strong)" to "D (default)." Long-term credit ratings range from "AAA
(extremely strong)" to "D (default)."
(5) Effective April 11, 2019, A.M. Best withdrew, at the Company's request, its
financial strength ratings with respect to Voya Retirement Insurance Annuity
Company and Security Life of Denver Insurance Company.

Rating agencies use an "outlook" statement for both industry sectors and
individual companies. For an industry sector, a stable outlook generally implies
that over the next 12 to 18 months the rating agency expects ratings to remain
unchanged among companies in the sector. For a particular company, an outlook
generally indicates a medium- or long-term trend in credit fundamentals, which
if continued, may lead to a rating change.


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Ratings actions and outlook changes by A.M. Best, Fitch, Moody's and S&P from
December 31, 2018 through December 31, 2019 and subsequently through the date of
this Annual Report on Form 10-K are as follows:

• On March 11, 2019, Fitch affirmed the ratings of the holding company, Voya

Financial, Inc. and revised its outlook on the ratings to Stable from

Negative. At the same time, Fitch affirmed the financial strength ratings

of Voya's life insurance subsidiaries and maintained its Stable outlook on

       these ratings.


• On April 11, 2019, A.M. Best affirmed the financial strength rating of A

of the life insurance entities of Voya Financial, Inc. Additionally, A.M.

Best affirmed the long-term issuer credit rating of "bbb+" of Voya

Financial, Inc. The outlook of these was assigned as Stable. Concurrently,

A.M. Best withdrew the ratings of Voya, Voya Retirement Insurance Annuity

       Company and Security Life of Denver Insurance Company at our request to no
       longer participate in A.M. Best's rating process with respect to those
       entities.


• On June 11, 2019, S&P upgraded the long-term issuer credit rating of Voya

Financial, Inc. from BBB, Positive to BBB+, Stable and the financial

strength rating of the insurance entities of Voya Financial, Inc. from A,

Positive to A+, Stable.

• On December 18, 2019, Moody's downgraded the financial strength rating of

Security Life of Denver Insurance Company from A2, Stable to A3 and placed

the rating on review for downgrade. The ratings of Voya Financial, Inc.

and those of its other affiliates are not included in this rating action.




Reinsurance

We reinsure our business through a diversified group of well capitalized, highly
rated reinsurers. However, we remain liable to the extent our reinsurers do not
meet their obligations under the reinsurance agreements.We monitor trends in
arbitration and any litigation outcomes with our reinsurers. Collectability of
reinsurance balances are evaluated by monitoring ratings and evaluating the
financial strength of our reinsurers. Large reinsurance recoverable balances
with offshore or other non-accredited reinsurers are secured through various
forms of collateral, including secured trusts, funds withheld accounts and
irrevocable LOCs.

The S&P financial strength rating of our reinsurers with our largest reinsurance
recoverable balances are AA- rated or better. These reinsurers are (i) Lincoln
National Life Insurance Company and Lincoln Life & Annuity Company of New York
and subsidiaries of Lincoln National Corporation ("Lincoln"). Only those
reinsurance recoverable balances where recovery is deemed probable are
recognized as assets on our Consolidated Balance Sheets.

In 1998, in order to divest of a block of the individual life business, we
entered into an indemnity reinsurance agreement with a subsidiary of Lincoln,
which established a trust to secure its obligations to us under the reinsurance
transaction. Of the Premium receivable and reinsurance recoverable on the
Consolidated Balance Sheets, $1.3 billion and $1.4 billion as of December 31,
2019 and 2018, respectively, is related to the reinsurance recoverable from the
subsidiary of Lincoln under this reinsurance agreement.

Pursuant to the terms of the 2018 MTA disclosed in the Overview section of the
Management's Discussion and Analysis in Item 7. of Part II of the Annual Report
on Form 10-K and prior to the closing of the Transaction, the Company entered
into the following reinsurance transactions:

• VIAC recaptured from the Company the CBVA business previously assumed by

       Roaring River II, Inc., a subsidiary of the Company.


•      Our company, through one of our subsidiaries ceded, under modified
       coinsurance agreements, as amended, fixed and fixed indexed annuity
       reserves of $451 million to Athene Life Re, Ltd. ("ALRe"). Under the terms

of the agreements, ALRe contractually assumed the policyholder liabilities

and obligations related to the policies, although we remain obligated to

the policyholders. Upon the consummation of the agreements, we recognized

no gain or loss in the Consolidated Statements of Operations.

• Our company, through one of our subsidiaries, assumed, under coinsurance

and modified coinsurance agreements, certain individual life and deferred

annuity policies from VIAC. Upon the consummation of the agreements, we

recognized no gain or loss in the Consolidated Statements of Operations.

       As of December 31, 2019 and 2018, assumed reserves related to these
       agreements were $782 million and $837 million, respectively.



As a result of the Individual Life Transaction described in the Overview section
of the Management's Discussion and Analysis in Part II, Item 7. of the Annual
Report on Form 10-K, the following reinsurance transactions have been reported
as held for sale in our Consolidated Financial Statements:


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On December 31, 2004, we reinsured the individual life reinsurance business (and
sold certain systems and operating assets used in the individual life
reinsurance business) to Scottish Re on a 100% coinsurance basis (the "2004
Transaction") through our wholly owned subsidiaries, SLD and SLDI. As part of
the 2004 Transaction, the ceding commission (net of taxes), along with other
reserve assets, was placed in trust for our benefit to secure Scottish Re's
obligations as reinsurers of the acquired business.

On November 19, 2008, an existing reinsurance agreement between Scottish Re
(U.S.), Inc. ("SRUS") and Ballantyne Re, an Irish public limited company
("Ballantyne Re"), concerning a portion of the business that was originally
ceded to Scottish Re as part of the 2004 Transaction, was novated with the
result that SLD was substituted for SRUS as the ceding company to Ballantyne Re
and made the sole beneficiary of the trust established by to support the reserve
requirements of the ceded business. On April 12, 2019, SLD entered into a
Lock-Up Support Agreement (the "Lock-Up Agreement") with Ballantyne Re, certain
other companies, and holders of certain notes issued by Ballantyne Re in
connection with the restructuring of Ballantyne Re. Under the terms of the
Lock-Up Agreement, SLD agreed, subject to certain conditions, to enter into a
novation and related agreements (the "Novation"). The Novation occurred on June
12, 2019 with the result that Swiss Re Life & Health America Inc. ("Swiss Re")
was substituted for Ballantyne Re as the reinsurer effective April 1, 2019. As
part of the Novation, Swiss Re established a trust account with assets
supporting its reinsurance obligation to SLD. The Novation did not change SLD's
reinsurance coverage related to the reinsured business. As of December 31, 2019,
trust assets with a market value of $559 million supported reserves of $528
million.

Effective January 1, 2009, we entered into the Master Purchase Agreement ("MPA")
with Scottish Re and Hannover Re such that Hannover Re acquired the individual
life reinsurance business from Scottish Re. Of the Assets held for sale on the
Consolidated Balance Sheets, $2.1 billion and $2.4 billion as of December 31,
2019 and 2018, respectively, is related to the reinsurance recoverable from
Hannover Re under this reinsurance agreement. As of December 31, 2018, the
premium deficiency reserve established in 2017 related to the business assumed
was $0.3 billion and had no impact on the Consolidated Statements of Operations
as the business is 100% reinsured.

For additional information regarding our reinsurance recoverable balances, see
Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A.
of this Annual Report on Form 10-K.

Pension and Postretirement Plans


When contributing to our qualified retirement plans we will take into
consideration the minimum and maximum amounts required by ERISA, the attained
funding target percentage of the plan, the variable-rate premiums that may be
required by the Pension Benefit Guaranty Corporation ("PBGC") and any funding
relief that might be enacted by Congress. Contributions to our nonqualified
plans and other postretirement and post-employment plans are funded from general
assets of the respective sponsoring subsidiary company as benefits are paid.

For additional information on our pension and postretirement plan arrangements, see the Employee Benefit Arrangements Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.

Restrictions on Dividends and Returns of Capital from Subsidiaries


Our business is conducted through operating subsidiaries. U.S. insurance laws
and regulations regulate the payment of dividends and other distributions by our
U.S. insurance subsidiaries to their respective parents. These restrictions are
based in part on the prior year's statutory income and surplus. In general,
dividends up to specified levels are considered ordinary and may be paid without
prior approval. Dividends in larger amounts, or "extraordinary" dividends, are
subject to approval by the insurance commissioner of the state of domicile of
the insurance subsidiary proposing to pay the dividend. In addition, under the
insurance laws of our principal insurance subsidiaries domiciled in Connecticut
and Minnesota (these insurance subsidiaries, together with our insurance
subsidiary domiciled in Colorado, are referred to collectively, as our
"Principal Insurance Subsidiaries"), no dividend or other distribution exceeding
an amount equal to an insurance company's earned surplus may be paid without the
domiciliary insurance regulator's prior approval. Our Principal Insurance
Subsidiary domiciled in Connecticut has ordinary dividend capacity for 2020.
However, as a result of the extraordinary dividends it paid in 2015, 2016 and
2017, together with statutory losses incurred in connection with the recapture
and cession to one of our Arizona captives of certain term life business in the
fourth quarter of 2016, our Principal Insurance Subsidiary domiciled in
Minnesota currently has negative earned surplus. In addition, primarily as a
result of statutory losses incurred in connection with the retrocession of our
Principal Insurance Subsidiary domiciled in Minnesota of certain life insurance
business in the fourth quarter of 2018, our Principal Insurance Subsidiary
domiciled in Colorado has a net loss from operations for the twelve-month period
ending the preceding December 31. Therefore, neither our Minnesota nor Colorado
Principal Insurance Subsidiaries have the capacity at this time to make ordinary
dividend payments. Any extraordinary dividend payment would be subject to
domiciliary insurance regulatory approval, which can be granted or withheld at
the discretion of the regulator.


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For a summary of applicable laws and regulations governing dividends, see the
Insurance Subsidiaries Dividend Restrictions section of the Insurance
Subsidiaries Note in our Consolidated Financial Statements in Part II, Item 8.
of this Annual Report on Form 10-K.

The following table summarizes dividends permitted to be paid by our Principal
Insurance Subsidiaries to Voya Financial, Inc. or Voya Holdings without the need
for insurance regulatory approval and dividends and extraordinary distributions
paid by each of our Principal Insurance Subsidiaries to its parent for the
periods indicated:
                                      Dividends Permitted
                                       without Approval            Dividends Paid           Extraordinary Distributions Paid
                                                               Year Ended December 31,           Year Ended December 31,
($ in millions)                        2020         2019          2019           2018               2019                2018
Subsidiary Name (State of
domicile):
Voya Retirement Insurance and
Annuity Company (CT)                $     295$   396$       396$  126     $             -            $      -
Security Life of Denver Insurance
Company (CO)                                -           -               -          52                   -                   -
ReliaStar Life Insurance Company
(MN)                                        -           -               -           -                 360                   -


Other Subsidiaries - Dividends, Returns of Capital, and Capital Contributions


We may receive dividends from or contribute capital to our wholly owned non-life
insurance subsidiaries such as broker-dealers, investment management entities
and intermediate holding companies. For the years ended December 31, 2019 and
2018, dividends net of capital contributions received by Voya Financial, Inc.
and Voya Holdings from non-life subsidiaries were $78 million and $114 million,
respectively.

On March 27, 2019, RRII paid a dividend of $152 million to SLDI, which in turn
paid a dividend of $170 million to Voya Financial. On December 31, 2019, RRII
paid a dividend of $2 million to SLDI, which in turn paid a dividend of $58
million to Voya Financial.

Statutory Capital and Risk-Based Capital of Principal Insurance Subsidiaries


Each of our wholly owned Principal Insurance Subsidiaries is subjected to
minimum risk based capital ("RBC") requirements established by the insurance
departments of their applicable state of domicile. The formulas for determining
the amount of RBC specify various weighting factors that are applied to
financial balances or various levels of activity based on the perceived degree
of risk. Regulatory compliance is determined by a ratio of total adjusted
capital ("TAC"), as defined by the NAIC, to RBC requirements, as defined by the
NAIC. Each of our U.S. insurance subsidiaries exceeded the minimum RBC
requirements that would require regulatory or corrective action for all periods
presented herein. Our estimated RBC ratio on a combined basis for our Principal
Insurance Subsidiaries, with adjustments for certain intercompany transactions,
was approximately 490% as of December 31, 2019. As a result of Tax Reform, the
NAIC updated the factors affecting RBC requirements, including ours, to reflect
the lowering of the top corporate tax rate from 35% to 21%. Adjusting these
factors in light of Tax Reform resulted in an increase in the amount of capital
we are required to maintain to satisfy our RBC requirements. During the fourth
quarter of 2018, we also established a new RBC target of 400%.

Our wholly owned insurance subsidiaries are required to prepare statutory
financial statements in accordance with statutory accounting practices
prescribed or permitted by the insurance department of the state of domicile of
the respective insurance subsidiary. Statutory accounting practices primarily
differ from U.S. GAAP by charging policy acquisition costs to expense as
incurred, establishing future policy benefit liabilities using different
actuarial assumptions as well as valuing investments and certain assets and
accounting for deferred taxes on a different basis. Certain assets that are not
admitted under statutory accounting principles are charged directly to surplus.
Depending on the regulations of the insurance department of the state of
domicile, the entire amount or a portion of an asset balance can be non-admitted
depending on specific rules regarding admissibility. The most significant
non-admitted assets are typically a portion of deferred tax assets in excess of
prescribed thresholds.

For a summary of statutory capital and surplus of our Principal Insurance Subsidiaries, see the Insurance Subsidiaries Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.

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We monitor the ratio of our insurance subsidiaries' TAC to Company Action Level
Risk-Based Capital ("CAL"). A ratio in excess of 125% indicates that the
insurance subsidiary is not required to take any corrective actions to increase
capital levels at the direction of the applicable state of domicile.

The following table summarizes the ratio of TAC to CAL on a combined basis primarily for our Principal Insurance Subsidiaries, with adjustments for certain intercompany transactions, as of the dates indicated below: ($ in millions)

                     ($ in millions)
     As of December 31, 2019             As of December 31, 2018
     CAL          TAC      Ratio         CAL          TAC      Ratio
$      1,046$ 5,126     490 %   $      1,072$ 5,129     478 %


For additional information regarding RBC, see Business-Regulation-Insurance Regulation in Part I, Item 1. of this Annual Report on Form 10-K.


As of December 31, 2019, SLD had the following surplus notes outstanding to its
affiliate SLDI Georgia Holdings, Inc. "(Georgia Holdings").
Issuance Date   Maturity     2019     2018
 12/21/1994     4/15/2021   $  40$  60
 12/19/2000     4/15/2021      26       39
  4/15/2017     4/15/2042      61       61
  4/15/2018     4/15/2043      62       62
  4/15/2019     4/15/2044      63        -


Upon the closing of the Resolution MTA, Voya Financial, Inc., through one of its affiliates, will retain surplus notes issued by SLD in the amount of $123 million under modified terms.

Captive Reinsurance Subsidiaries


Uncertainties associated with our continued use of affiliated captive
reinsurance subsidiaries are primarily related to potential regulatory changes.
For example, effective January 1, 2016, the NAIC heightened the standards
applicable to captives related to XXX and AXXX business issued and ceded after
December 31, 2014. The NAIC left for future action application of the standards
to captives that assume variable annuity business.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations


As of December 31, 2019, the following table presents our on- and off- balance
sheet contractual obligations due in various periods. The payments reflected in
this table are based on our estimates and assumptions about these obligations.
Because these estimates and assumptions are necessarily subjective, the actual
cash outflows in future periods will vary, possibly materially, from those
presented in the table.

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                                              Less than                                       More than
($ in millions)                 Total          1 Year         1-3 Years       3-5 Years        5 Years
Contractual Obligations:
Purchase obligations(1)      $    1,016$       972$        44     $         -     $         -
Reserves for insurance
obligations(2)(3)                62,689           4,031           6,581           6,962          45,115
Retirement and other
plans(4)                          1,668             149             299             317             903
Short-term and long-term
debt obligations(5)               6,652             166             309             473           5,704
Operating leases(6)                 187              33              64              49              41
Finance leases(7)                    65              21              42               2               -
Securities lending,
repurchase agreements and
collateral held(8)                1,519           1,453               -               -              66
Total(9)                     $   73,796$     6,825$     7,339$     7,803$    51,829

Contractual Obligations of
businesses held for sale:
Purchase obligations(1)      $      305$       294$        11     $         -     $         -
Reserves for insurance
obligations                      33,353             224             924           1,102          31,103
Securities lending and
repurchase agreements(8)            241             241               -               -               -
Total(9)                     $   33,899$       759$       935$     1,102$    31,103


(1) Purchase obligations consist primarily of outstanding commitments under
alternative investments that may occur any time within the terms of the
partnership and private loans. The exact timing, however, of funding these
commitments related to partnerships and private loans cannot be estimated.
Therefore, the amount of the commitments related to partnerships and private
loans is included in the category "Less than 1 Year."
(2) Reserves for insurance obligations consist of amounts required to meet our
future obligations for future policy benefits and contract owner account
balances. Amounts presented in the table represent estimated cash payments under
such contracts, including significant assumptions related to the receipt of
future premiums, mortality, morbidity, lapse, renewal, retirement, disability
and annuitization comparable with actual experience. These assumptions also
include market growth and interest crediting consistent with assumptions used in
amortizing DAC. Estimated cash payments are undiscounted for the time value of
money. Accordingly, the sum of cash flows presented of $62.7 billion
significantly exceeds the sum of Future policy benefits and Contract owner
account balances of $50.9 billion recorded on our Consolidated Balance Sheets as
of December 31, 2019. Estimated cash payments are also presented gross of
reinsurance. Due to the significance of the assumptions used, the amounts
presented could materially differ from actual results.
(3) Contractual obligations related to certain closed blocks, with reserves in
the amount of $1.5 billion, have been excluded from the table because the blocks
were divested through reinsurance contracts and collateral is provided by third
parties that is accessible by us. Although we are not relieved of legal
liability to the contract holder for these closed blocks, third-party collateral
of $1.7 billion has been provided for the payment of the related insurance
obligations. The sufficiency of collateral held for any individual block may
vary.
(4) Includes estimated benefit payments under our qualified and non-qualified
pension plans, estimated benefit payments under our other postretirement benefit
plans, and estimated payments of deferred compensation based on participant
elections and an average retirement age.
(5) The estimated payments due by period for long-term debt reflects the
contractual maturities of principal, as well as estimated future interest
payments. The payment of principal and estimated future interest for short-term
debt are reflected in estimated payments due in less than one year. See the
Financing Agreements Note in our Consolidated Financial Statements in Part II,
Item 8. of this Annual Report on Form 10-K for additional information concerning
the short-term and long-term debt obligations.
(6) Operating leases consist primarily of outstanding commitments for office
space, equipment and automobiles.
(7) Finance lease obligation is associated with a service contract.
(8) Securities loan, repurchase agreements, and collateral held represent the
liability to return collateral received from counterparties under securities
lending agreements, OTC derivative and cleared derivative contracts as well as
the obligations related to borrowings under repurchase agreements. Securities
lending agreements include provisions which permit us to call back securities
with minimal notice and accordingly, the payable is classified as having a term
of less than 1 year. Additionally, Securities lending agreements and collateral
held include off-balance sheet non-cash collateral of $146 million and $0
million, respectively.
(9) Unrecognized tax benefits are excluded from the table due to immateriality.
In addition, in 2015 we entered into a put option agreement with a Delaware
trust that gives Voya Financial, Inc. the right, at any time over a 10-year
period, to issue up to $500 million of senior notes to the trust in return for
principal and interest strips of U.S.Treasury securities that are held by the
trust. See Liquidity-Put Option Agreement for Senior Debt Issuance for more
information on this agreement.

Critical Accounting Judgments and Estimates

General


The preparation of financial statements in conformity with U.S. GAAP requires us
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Critical estimates and assumptions are evaluated on
an on-going basis based on historical developments, market conditions, industry
trends and other information that is reasonable under the circumstances. There
can be no assurance that actual results will conform to estimates and
assumptions and

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that reported results of operations will not be materially affected by the need
to make future accounting adjustments to reflect changes in these estimates and
assumptions from time to time.

We have identified the following accounting judgments and estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability:

• Estimated loss on businesses held for sale;

• Reserves for future policy benefits;


•      DAC, VOBA and other intangibles (collectively, "DAC/VOBA and other
       intangibles");

• Valuation of investments and derivatives;


• Impairments;


• Income taxes;


• Contingencies; and

• Employee benefit plans.




In developing these accounting estimates, we make subjective and complex
judgments that are inherently uncertain and subject to material changes as facts
and circumstances develop. Although variability is inherent in these estimates,
we believe the amounts provided are appropriate based on the facts available
upon preparation of the Consolidated Financial Statements.

The above critical accounting estimates are described in the Business, Basis of
Presentation and Significant Accounting Policies Note and the Business Held for
Sale and Discontinued Operations Note in our Consolidated Financial Statements
in Part II, Item 8. of this Annual Report on Form 10-K.

Estimated loss on businesses held for sale


On December 18, 2019, we entered into the Resolution MTA with Resolution Life US
pursuant to which Resolution Life US will acquire all of the shares of the
capital stock of SLD and SLDI, including the capital stock of several
subsidiaries of SLD and SLDI. This transaction will result in the sale of a
significant portion of of our Individual Life business as well as the fixed and
variable Annuities business associated with the subsidiaries sold. We have
determined that the businesses to be disposed via sale meet the criteria to be
classified as held for sale and the sale represents a strategic shift that will
have a major effect on our operations. Accordingly, the results of operations of
the businesses to be sold have been presented as discontinued operations in the
accompanying Consolidated Statements of Operations and Consolidated Statements
of Cash Flows, and the assets and liabilities of the businesses have been
classified as held for sale and segregated for all periods presented in the
Consolidated Balance Sheets. A business classified as held for sale is recorded
at the lower of its carrying value or estimated fair value less cost to sell. If
the carrying value exceeds its estimated fair value less cost to sell, a loss is
recognized. Transactions between the businesses held for sale and businesses in
continuing operations that are expected to continue to exist after the disposal
are not eliminated to appropriately reflect the continuing operations and the
assets, liabilities and results of the businesses held for sale. In connection
with the this transaction, we recorded an estimated loss on sale, net of tax,
of $1,108 million in the fourth quarter of 2019. The estimated loss on sale, net
of tax is based on assumptions that are subject to change due to fluctuations in
market conditions and other variables that may occur prior to the closing date,
which is expected to take place by September 30, 2020. For additional
information on the Individual Life Transaction and the related estimated loss on
sale, net of tax, see Trends and Uncertainties in Part II, Item 7. of this
Annual Report on Form 10-K and the Business Held for Sale and Discontinued
Operations Note to our accompanying Consolidated Financial Statements.

Reserves for Future Policy Benefits


The determination of future policy benefit reserves is dependent on actuarial
assumptions. The principal assumptions used to establish liabilities for future
policy benefits are based on our experience and periodically reviewed against
industry standards. These assumptions include mortality, morbidity, policy
lapse, contract renewal, payment of subsequent premiums or deposits by the
contract owner, retirement, investment returns, inflation, benefit utilization
and expenses. The assumptions used require considerable judgments. Changes in,
or deviations from, the assumptions used can significantly affect our reserve
levels and related results of operations.

• Mortality is the incidence of death among policyholders triggering the

payment of underlying insurance coverage by the insurer. In addition,

mortality also refers to the ceasing of payments on life-contingent

annuities due to the death of the annuitant. We utilize a combination of

actual and industry experience when setting our mortality assumptions.


•      A lapse rate is the percentage of in-force policies surrendered by the
       policyholder or canceled by us due to non-payment of premiums.



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See the Reserves for Future Policy Benefits and Contract Owner Account Balances
Note and the Guaranteed Benefit Features Note in our Consolidated Financial
Statements in Part II, Item 8. of this Annual Report on Form 10-K for further
information on our reserves for future policy benefits, contract owner account
balances and product guarantees.

Insurance and Other Reserves


Reserves for traditional life insurance contracts (term insurance, participating
and non-participating whole life insurance and traditional group life insurance)
and accident and health insurance represent the present value of future benefits
to be paid to or on behalf of contract owners and related expenses, less the
present value of future net premiums. Assumptions as to interest rates,
mortality, expenses and persistency are based on our estimates of anticipated
experience at the period the policy is sold or acquired, including a provision
for adverse deviation. Interest rates used to calculate the present value of
these reserves ranged from 2.3% to 7.7%.

Reserves for payout contracts with life contingencies are equal to the present
value of expected future payments. Assumptions as to interest rates, mortality
and expenses are based on our estimates of anticipated experience at the period
the policy is sold or acquired, including a provision for adverse deviation.
Such assumptions generally vary by annuity plan type, year of issue and policy
duration. Interest rates used to calculate the present value of future benefits
ranged from 2.7% to 8.3%.

Although assumptions are "locked-in" upon the issuance of traditional life
insurance contracts, certain accident and health insurance contracts and payout
contracts with life contingencies, significant changes in experience or
assumptions may require us to provide for expected future losses on a product by
establishing premium deficiency reserves. Premium deficiency reserves are
determined based on best estimate assumptions that exist at the time the premium
deficiency reserve is established and do not include a provision for adverse
deviation. See "Deferred Policy Acquisition Costs, Value of Business Acquired
and Other Intangibles" below for premium deficiency reserves established during
2019 and 2018.

Product Guarantees and Index-crediting Features


The assumptions used to establish the liabilities for our product guarantees
require considerable judgment and are established as management's best estimate
of future outcomes. We periodically review these assumptions and, if necessary,
update them based on additional information that becomes available. Changes in,
or deviations from, the assumptions used can significantly affect our reserve
levels and related results of operations.

IUL, Stabilizer and MCG: We also issue certain products that contain embedded
derivatives that are measured at estimated fair value separately from the host
contracts. These products include IUL, and stabilizer ("Stabilizer") contracts.
The managed custody guarantee product ("MCG") is a stand-alone derivative and is
measured in its entirety at estimated fair value.

The estimated fair value of the embedded derivative in the IUL contracts is
based on the present value of the excess of interest payments to the contract
owners over the growth in the minimum guaranteed account value. The excess
interest payments are determined as the excess of projected index driven
benefits over the projected guaranteed benefits. The projection horizon is over
the current indexed term of the related contracts, which takes into account best
estimate actuarial assumptions, such as partial withdrawals, full surrenders,
deaths and maturities.

The estimated fair value of the Stabilizer embedded derivative and MCG
stand-alone derivative is determined based on the present value of projected
future claims, minus the present value of future guaranteed premiums. At
inception of the contract, we project a guaranteed premium to be equal to the
present value of the projected future claims. The income associated with the
contracts is projected using actuarial and capital market assumptions, including
benefits and related contract charges, over the anticipated life of the related
contracts. The cash flow estimates are projected under multiple capital market
scenarios using observable risk-free rates and other best estimate assumptions.

The liabilities for the IUL and Stabilizer embedded derivatives and the MCG
stand-alone derivative include a risk margin to capture uncertainties related to
policyholder behavior assumptions. The margin represents additional compensation
a market participant would require to assume these risks.


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The discount rate used to determine the fair value of the liabilities for our
IUL and Stabilizer embedded derivatives and the MCG stand-alone derivative
includes an adjustment to reflect the risk that these obligations will not be
fulfilled ("nonperformance risk"). Our nonperformance risk adjustment is based
on a blend of observable, similarly rated peer holding company credit spreads,
adjusted to reflect the credit quality of our individual insurance subsidiary
that issued the guarantee, as well as an adjustment to reflect the non-default
spreads and the priority and recovery rates of policyholder claims.

Universal and Variable Universal Life: Reserves for UL and variable universal
life ("VUL") secondary guarantees and paid-up guarantees are calculated by
estimating the expected value of death benefits payable and recognizing those
benefits ratably over the accumulation period based on total expected
assessments. The reserve for such products recognizes the portion of contract
assessments received in early years used to compensate us for benefits provided
in later years. Assumptions used, such as the interest rate, lapse rate and
mortality, are consistent with assumptions used in estimating gross profits for
purposes of amortizing DAC.

See Quantitative and Qualitative Disclosures About Market Risk in Part II, Item
7A. of this Annual Report on Form 10-K for additional information regarding
specific hedging strategies we utilize to mitigate risk for the product
guarantees, as well as sensitivities of the embedded derivative and stand-alone
derivative liabilities to changes in certain capital markets assumptions.

Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles


DAC represents policy acquisition costs that have been capitalized and are
subject to amortization and interest.VOBA represents the outstanding value of
in-force business acquired and is subject to amortization and interest. DSI
represents benefits paid to contract owners for a specified period that are
incremental to the amounts we credit on similar contracts without sales
inducements and are higher than the contract's expected ongoing crediting rates
for periods after the inducement. URR relates to UL and VUL products and
represents policy charges for benefits or services to be provided in future
periods.

Collectively, we refer to DAC, VOBA, DSI and URR as "DAC/VOBA and other
intangibles". See the Deferred Policy Acquisition Costs and Value of Business
Acquired Note in our Consolidated Financial Statements in Part II, Item 8. of
this Annual Report on Form 10-K for additional information on DAC/VOBA and other
intangibles.

Amortization Methodologies

We amortize DAC and VOBA related to certain traditional life insurance contracts
and certain accident and health insurance contracts over the premium payment
period in proportion to the present value of expected gross premiums.
Assumptions as to mortality, morbidity, persistency and interest rates, which
include provisions for adverse deviation, are consistent with the assumptions
used to calculate reserves for future policy benefits.

These assumptions are "locked-in" at issue and not revised unless the DAC or
VOBA balance is deemed to be unrecoverable from future expected profits.
Recoverability testing is performed for current issue year products to determine
if gross premiums are sufficient to cover DAC or VOBA, estimated benefits and
related expenses. In subsequent periods, the recoverability of DAC and VOBA is
determined by assessing whether future gross premiums are sufficient to amortize
DAC or VOBA, as well as provide for expected future benefits and related
expenses. If a premium deficiency is deemed to be present, charges will be
applied against the DAC and VOBA balances before an additional reserve is
established. Absent such a premium deficiency, variability in amortization after
policy issuance or acquisition relates only to variability in premium volumes.

We amortize DAC and VOBA related to universal life-type contracts and fixed and
variable deferred annuity contracts over the estimated lives of the contracts in
relation to the emergence of estimated gross profits. Assumptions as to
mortality, persistency, interest crediting rates, fee income, returns associated
with separate account performance, impact of hedge performance, expenses to
administer the business and certain economic variables, such as inflation, are
based on our experience and overall capital markets. At each valuation date,
estimated gross profits are updated with actual gross profits, and the
assumptions underlying future estimated gross profits are evaluated for
continued reasonableness. Adjustments to estimated gross profits require that
amortization rates be revised retroactively to the date of the contract issuance
("unlocking"). If the update of assumptions causes estimated gross profits to
increase, DAC and VOBA amortization will decrease, resulting in a current period
increase to earnings. The opposite result occurs when the assumption update
causes estimated gross profits to decrease. We amortize the DSI and URR over the
estimated lives of the related contracts using the same methodology and
assumptions used to amortize DAC.

For universal life-type contracts and fixed and variable deferred annuity
contracts, recoverability testing is performed for current issue year products
to determine if gross profits are sufficient to cover DAC/VOBA and other
intangibles, estimated benefits and related expenses. In subsequent periods, we
perform testing to assess the recoverability of DAC/VOBA and other intangibles
on

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an annual basis, or more frequently if circumstances indicate a potential loss recognition issue exists. If DAC/VOBA or other intangibles are not deemed recoverable from future gross profits, charges will be applied against the DAC/VOBA or other intangible balances before an additional reserve is established.


During the year ended December 31, 2017, as a result of the 2018 Transaction and
the sale of substantially all of the Annuities and CBVA businesses discussed
above, we have evaluated and redefined our contract groupings for loss
recognition testing in those businesses. This has resulted in the establishment
of premium deficiency reserves for the Annuities and CBVA business that was not
included in the 2018 Transaction of $43 million, as of December 31, 2017. Of
that amount, $18 million is recorded as an increase in Policyholder benefits in
the Consolidated Statement of Operations, with a corresponding increase to
Future policy benefits on the Consolidated Balance Sheet, and $25 million is
reported within Income (loss) from discontinued operations, net of tax in the
Consolidated Statement of Operations, with a corresponding amount in Liabilities
held for sale on the Consolidated Balance Sheet.

Assumptions and Periodic Review


Changes in assumptions can have a significant impact on DAC/VOBA and other
intangibles balances, amortization rates, reserve levels, and results of
operations. Assumptions are management's best estimates of future outcome. We
periodically review these assumptions against actual experience and, based on
additional information that becomes available, update our assumptions. Deviation
of emerging experience from our assumptions could have a significant effect on
our DAC/VOBA and other intangibles, reserves, and the related results of
operations.

• One significant assumption is the assumed return associated with the

variable account performance, which has historically had a greater impact

       on variable annuity than VUL products. To reflect the volatility in the
       equity markets, this assumption involves a combination of near-term
       expectations and long-term assumptions regarding market performance. The

overall return on the variable account is dependent on multiple factors,

including the relative mix of the underlying sub-accounts among bond funds

and equity funds, as well as equity sector weightings. We use a reversion

       to the mean approach, which assumes that the market returns over the
       entire mean reversion period are consistent with a long-term level of
       equity market appreciation. We monitor market events and only change the
       assumption when sustained deviations are expected. This methodology
       incorporates a 9% long-term equity return assumption, a 14% cap and a
       five-year look-forward period.

• Another significant assumption used in the estimation of gross profits for

       certain products is mortality. We utilize a combination of actual and
       industry experience when setting our mortality assumptions, which are

consistent with the assumptions used to calculate reserves for future

policy benefits.

• Assumptions related to interest rate spreads and credit losses also impact

       estimated gross profits for applicable products with credited rates. These
       assumptions are based on the current investment portfolio yields and
       credit quality, estimated future crediting rates, capital markets, and
       estimates of future interest rates and defaults.

• Other significant assumptions include estimated policyholder behavior

assumptions, such as surrender, lapse, and annuitization rates. We use a

combination of actual and industry experience when setting and updating

our policyholder behavior assumptions, and such assumptions require

considerable judgment. Estimated gross revenues and gross profits for our

       variable annuity contracts are particularly sensitive to these
       assumptions.


We include the impact of the change in value of the embedded derivative associated with the IUL contracts in gross profits for purposes of determining DAC amortization.


During the third quarter of 2019, 2018 and 2017, we conducted our annual review
of assumptions, including projection model inputs, and made a number of changes
to our assumptions which impacted the results of our segments reflected in
Income (loss). The following are the impacts of assumption changes during 2019,
2018 and 2017.

During the third quarter of 2019, we updated our assumptions to reflect, among
other changes, a reduction in the long-term interest rate of 50 basis points and
updates to our Individual Life business assumptions including higher than
expected persistency at older ages, lower net margins and refinements to our
policyholder behavior assumptions. The impact of assumption changes on our
results from continuing operations was a loss of $70 million in the third
quarter of 2019, of which a loss of $25 million was included in Adjusted
operating earnings before income taxes and reflects net unfavorable DAC/VOBA and
other intangibles unlocking.

During the third quarter of 2018, we updated our assumptions to reflect, among
other changes, increases in reinsurance rate assumptions in our Individual Life
business and the unfavorable adjustment of the GMIR initiative partially offset
by favorable changes in equity market assumptions in our Retirement business.
The impact of assumption changes on our results from continuing operations was a
loss of $51 million in the third quarter of 2018 of which a gain of $49 million
was included in Adjusted operating earnings before income taxes and reflects net
favorable DAC/VOBA and other intangibles unlocking.

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During the third quarter of 2017, the impact of assumption changes on our
results from continuing operations resulted in a loss of $130 million, of which
a loss of $47 million was included in Adjusted operating earnings before income
taxes and reflects net unfavorable DAC/VOBA and other intangibles unlocking.

For the third quarter of 2019, 2018 and 2017, the impact of assumption changes
related to our disposed businesses reported in discontinued operations were
losses of $31 million, $102 million and $59 million, respectively and reflected
unfavorable DAC/VOBA and other intangibles unlocking.

Sensitivity


We perform sensitivity analyses to assess the impact that certain assumptions
have on DAC/VOBA and other intangibles, as well as certain reserves. The
following table presents the estimated instantaneous net impact to income from
continuing and discontinued operations of various assumption changes on our
DAC/VOBA and other intangible balances and the impact on related reserves for
future policy benefits and reinsurance. The effects are not representative of
the aggregate impacts that could result if a combination of such changes to
equity markets, interest rates and other assumptions occurred.
($ in millions)                                                      As of 

December 31, 2019

                                            Continuing Operations (1)        Discontinued Operations         Total
Decrease in long-term equity rate of
return assumption by 100 basis points      $                 (37 )         $                -            $        (37 )
A change to the long-term interest rate
assumption of -50 basis points                               (43 )                        (22 )                   (65 )
A change to the long-term interest rate
assumption of +50 basis points                                30                           20                      50
An assumed increase in future mortality by
1%                                                           (10 )                        (12 )                   (22 )


1) Includes DAC/VOBA and other intangibles of the Individual Life business that will be exited via reinsurance pursuant to the Resolution MTA.


We generally assume that the rate of return on fixed income investments backing
CBVA contracts moves in a manner correlated with changes to our assumed
long-term rate of return. Furthermore, assumptions regarding shifts in market
factors may be overly simplistic and not indicative of actual market behavior in
stress scenarios.

Lower assumed equity rates of return, lower assumed interest rates, increased
assumed future mortality and decreased equity market values generally decrease
DAC/VOBA and other intangibles and increase future policy benefits, thus
decreasing income before income taxes. Higher assumed interest rates generally
increase DAC/VOBA and other intangibles and decrease future policy benefits,
thus increasing income before income taxes.

Valuation of Investments and Derivatives


Our investment portfolio consists of public and private fixed maturity
securities, commercial mortgage and other loans, equity securities, short-term
investments, other invested assets and derivative financial instruments. We
enter into interest rate, equity market, credit default and currency contracts,
including swaps, futures, forwards, caps, floors and options, to reduce and
manage various risks associated with changes in value, yield, price, cash flow
or exchange rates of assets or liabilities held or intended to be held, or to
assume or reduce credit exposure associated with a referenced asset, index or
pool. We also utilize options and futures on equity indices to reduce and manage
risks associated with our universal-life type and annuity products.

See the Investments (excluding Consolidated Investment Entities) Note and the
Derivative Financial Instruments Note in our Consolidated Financial Statements
in Part II, Item 8. of this Annual Report on Form 10-K for further information.

Investments


We measure the fair value of our financial assets and liabilities based on
assumptions used by market participants in pricing the asset or liability, which
may include inherent risk, restrictions on the sale or use of an asset, or
nonperformance risk, including our own credit risk. The estimate of fair value
is the price that would be received to sell an asset or transfer a liability
("exit price") in an orderly transaction between market participants in the
principal market, or the most advantageous market in the absence of a principal
market, for that asset or liability. We use a number of valuation sources to
determine the fair values of our financial assets and liabilities, including
quoted market prices, third-party commercial pricing services, third-party
brokers, industry-standard,

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vendor-provided software that models the value based on market observable inputs, and other internal modeling techniques based on projected cash flows.


We categorize our financial instruments into a three-level hierarchy 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.

When available, the estimated fair value of securities is based on quoted prices
in active markets that are readily and regularly obtainable. When quoted prices
in active markets are not available, the determination of estimated fair value
is based on market standard valuation methodologies, including discounted cash
flows, matrix pricing or other similar techniques. Inputs to these methodologies
include, but are not limited to, market observable inputs such as benchmark
yields, credit quality, issuer spreads, bids, offers and cash flow
characteristics of the security. For privately placed bonds, we also consider
such factors as the net worth of the borrower, value of the collateral, the
capital structure of the borrower, the presence of guarantees, and the
borrower's ability to compete in its relevant market. Valuations are reviewed
and validated monthly by an internal valuation committee using price variance
reports, comparisons to internal pricing models, back testing of recent trades,
and monitoring of trading volumes, as appropriate.

The valuation of financial assets and liabilities involves considerable
judgment, is subject to considerable variability, is established using
management's best estimate, and is revised as additional information becomes
available. As such, changes in, or deviations from, the assumptions used in such
valuations can significantly affect our results of operations. Financial markets
are subject to significant movements in valuation and liquidity, which can
impact our ability to liquidate and the selling price that can be realized for
our securities.

Derivatives

Derivatives are carried at fair value, which is determined by using observable
key financial data, such as yield curves, exchange rates, S&P 500 prices, LIBOR
and Overnight Index Swap Rates ("OIS") or through values established by
third-party sources, such as brokers. Valuations for our futures contracts are
based on unadjusted quoted prices from an active exchange. Counterparty credit
risk is considered and incorporated in our valuation process through
counterparty credit rating requirements and monitoring of overall exposure. Our
own credit risk is also considered and incorporated in our valuation process.

We have certain CDS and options that are priced by third party vendors or by
using models that primarily use market observable inputs, but contain inputs
that are not observable to market participants.

We also have investments in certain fixed maturities and have issued certain
universal life-type and annuity products that contain embedded derivatives for
which fair value is at least partially determined by levels of or changes in
domestic and/or foreign interest rates (short-term or long-term), exchange
rates, prepayment rates, equity markets, or credit ratings/spreads. The fair
values of these embedded derivatives are determined using prices or valuation
techniques that require inputs that are both unobservable and significant to the
overall fair value measurement. For additional information regarding the
valuation of and significant assumptions associated with embedded derivatives
and stand-alone derivatives associated with certain universal life-type and
annuity contracts, see "Reserves for Future Policy Benefits" above.

In addition, we have entered into coinsurance with funds withheld reinsurance
arrangements that contain embedded derivatives. The fair value of the embedded
derivatives is based on the change in the fair value of the underlying assets
held in the trust using the valuation methods and assumptions described for our
investments held.

The valuation of derivatives involves considerable judgment, is subject to
considerable variability, is established using management's best estimate and is
revised as additional information becomes available. As such, changes in, or
deviations from, these assumptions used in such valuations can have a
significant effect on the results of operations.

For additional information regarding the fair value of our investments and
derivatives, see the Fair Value Measurements (excluding Consolidated Investment
Entities) Note in our Consolidated Financial Statements in Part II, Item 8. of
this Annual Report on Form 10-K.


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Impairments


We evaluate our available-for-sale investments quarterly to determine whether
there has been an other-than-temporary decline in fair value below the amortized
cost basis. This evaluation process entails considerable judgment and
estimation. Factors considered in this analysis include, but are not limited to,
the length of time and the extent to which the fair value has been less than
amortized cost, the issuer's financial condition and near-term prospects, future
economic conditions and market forecasts, interest rate changes and changes in
ratings of the security. An extended and severe unrealized loss position on a
fixed maturity may not have any impact on: (a) the ability of the issuer to
service all scheduled interest and principal payments and (b) the evaluation of
recoverability of all contractual cash flows or the ability to recover an amount
at least equal to its amortized cost based on the present value of the expected
future cash flows to be collected. In contrast, for certain equity securities,
we give greater weight and consideration to a decline in market value and the
likelihood such market value decline will recover.

When assessing our intent to sell a security, or if it is more likely than not
we will be required to sell a security before recovery of its amortized cost
basis, we evaluate facts and circumstances such as, but not limited to,
decisions to rebalance the investment portfolio and sales of investments to meet
cash flow or capital needs.

We use the following methodology and significant inputs to determine the amount of the OTTI credit loss:

• When determining collectability and the period over which the value is

expected to recover for U.S. and foreign corporate securities, foreign

government securities and state and political subdivision securities, we

apply the same considerations utilized in our overall impairment

evaluation process, which incorporates information regarding the specific

security, the industry and geographic area in which the issuer operates

and overall macroeconomic conditions. Projected future cash flows are

estimated using assumptions derived from our best estimates of likely

scenario-based outcomes, after giving consideration to a variety of

variables that includes, but is not limited to: general payment terms of

the security; the likelihood that the issuer can service the scheduled

interest and principal payments; the quality and amount of any credit

enhancements; the security's position within the capital structure of the

issuer; possible corporate restructurings or asset sales by the issuer;

       and changes to the rating of the security or the issuer by rating
       agencies.

• Additional considerations are made when assessing the unique features that

apply to certain structured securities, such as subprime, Alt-A,

non-agency RMBS, CMBS and ABS. These additional factors for structured

securities include, but are not limited to: the quality of underlying

collateral; expected prepayment speeds; loan-to-value ratio; debt service

coverage ratios; current and forecasted loss severity; consideration of

the payment terms of the underlying assets backing a particular security;

and the payment priority within the tranche structure of the security.

• When determining the amount of the credit loss for U.S. and foreign

corporate securities, foreign government securities and state and

political subdivision securities, we consider the estimated fair value as

the recovery value when available information does not indicate that

another value is more appropriate. When information is identified that

indicates a recovery value other than estimated fair value, we consider in

the determination of recovery value the same considerations utilized in

its overall impairment evaluation process, which incorporates available

information and our best estimate of scenario-based outcomes regarding the

specific security and issuer; possible corporate restructurings or asset

sales by the issuer; the quality and amount of any credit enhancements;

the security's position within the capital structure of the issuer;

fundamentals of the industry and geographic area in which the security

issuer operates; and the overall macroeconomic conditions.

• We perform a discounted cash flow analysis comparing the current amortized

cost of a security to the present value of future cash flows expected to

be received, including estimated defaults and prepayments. The discount

       rate is generally the effective interest rate of the fixed maturity prior
       to impairment.



Mortgage loans on real estate are all commercial mortgage loans. If a mortgage
loan is determined to be impaired (i.e., when it is probable that we will be
unable to collect all amounts due according to the contractual terms of the loan
agreement), the carrying value of the mortgage loan is reduced to the lower of
either the present value of expected cash flows from the loan, discounted at the
loan's original purchase yield, or the fair value of the collateral. For those
mortgages that are determined to require foreclosure, the carrying value is
reduced to the fair value of the underlying collateral, net of estimated costs
to obtain and sell at the point of foreclosure.

Impairment analysis of the investment portfolio involves considerable judgment,
is subject to considerable variability, is established using management's best
estimate and is revised as additional information becomes available. As such,
changes in, or deviations from, the assumptions used in such analysis can have a
significant effect on the results of operations.

For additional information regarding the evaluation process for impairments, see
the Investments (excluding Consolidated Investment Entities) Note in our
Consolidated Financial Statements in Part II, Item 8. of this Annual Report on
Form 10-K.

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Income Taxes

Valuation Allowances

We use certain assumptions and estimates in determining the income taxes payable
or refundable for the current year, the deferred income tax liabilities and
assets for items recognized differently in our Consolidated Financial Statements
from amounts shown on our income tax returns and the federal income tax expense.
Determining these amounts requires analysis and interpretation of current tax
laws and regulations, including the loss limitation rules associated with change
in control. We exercise considerable judgment in evaluating the amount and
timing of recognition of the resulting income tax liabilities and assets. These
judgments and estimates are reevaluated on a periodic basis and as regulatory
and business factors change.

Deferred tax assets represent the tax benefit of future deductible temporary
differences, net operating loss carryforwards and tax credit carryforwards. We
evaluate and test the recoverability of deferred tax assets. Deferred tax assets
are reduced by a valuation allowance if, based on the weight of evidence, it is
more likely than not that some portion, or all, of the deferred tax assets will
not be realized. Considerable judgment and the use of estimates are required in
determining whether a valuation allowance is necessary and, if so, the amount of
such valuation allowance. In evaluating the need for a valuation allowance, we
consider many factors, including:

• The nature, frequency and severity of book income or losses in recent years;

• The nature and character of the deferred tax assets and liabilities;

• The nature and character of income by life and non-life subgroups;


•      The recent cumulative book income (loss) position after adjustment for
       permanent differences;

• Taxable income in prior carryback years;


•      Projected future taxable income, exclusive of reversing temporary
       differences and carryforwards;

• Projected future reversals of existing temporary differences;

• The length of time carryforwards can be utilized;

• Prudent and feasible tax planning strategies we would employ to avoid a

tax benefit from expiring unused; and

• Tax rules that would impact the utilization of the deferred tax assets.




We have assessed whether it is more likely than not that the deferred tax assets
will be realized in the future. In making this assessment, we considered the
available sources of income and positive and negative evidence regarding our
ability to generate sufficient taxable income to realize our deferred tax
assets, which include net operating loss carryforwards ("NOLs"), capital loss
carryforwards and tax credit carryforwards.

After considering the impact of the above factors on the valuation allowance,
including the impact of the Individual Life Transaction, we determined that it
is more likely than not that $250 million of additional deferred tax asset will
be realized. As a result, we recorded a valuation allowance release of $250
million.

The valuation allowance was approximately $388 million and $638 million as of
December 31, 2019 and 2018, respectively. The decrease is primarily related to
the tax valuation allowance release of $250 million. Pursuant to U.S. GAAP, we
do not specifically identify the valuation allowance with individual categories.
However, we estimate that balances of approximately $198 million as of
December 31, 2019 and $445 million as of December 31, 2018 were related to
federal net operating and capital losses. The remaining balances were
attributable to various items, including state taxes and other deferred tax
assets.

In December 2014, we entered into an Issue Resolution Agreement ("IA") with the
IRS relating to the Internal Revenue Code Section 382 calculation of the annual
limitation on the use of certain of the Company's federal tax attributes that
will apply as a consequence of the Section 382 event experienced by the Company
in March 2014. We do not expect the annual limitation to impact our ability to
utilize the losses or credits. As of December 31, 2019, we had approximately
$9.6 billion of federal net operating loss carryforwards and $17 million of
capital loss carryforwards.

For further information on our income taxes see the Income Taxes Note to our
Consolidated Financial Statements in Part II, Item 8 of this Annual Report on
Form 10-K.

Tax Contingencies

In establishing unrecognized tax benefits, we determine whether a tax position
is more likely than not to be sustained under examination by the appropriate
taxing authority. We also consider positions which have been reviewed and agreed
to as part of an

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examination by the appropriate taxing authority. Tax positions that do not meet
the more likely than not standard are not recognized. Tax positions that meet
this standard are recognized in our Consolidated Financial Statements. We
measure the tax position as the largest amount of benefit that is greater than
50% likely of being realized upon ultimate resolution with the taxing authority
that has full knowledge of all relevant information.

Changes in Law

Certain changes or future events, such as changes in tax legislation, geographic mix of earnings, completion of tax audits, planning opportunities and expectations about future outcomes could have an impact on our estimates of deferred taxes, valuation allowances, tax provisions and effective tax rates.

Contingencies

For information regarding our contingencies, see the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.

Employee Benefits Plans


We sponsor defined benefit pension and other postretirement benefit plans
covering eligible employees, sales representatives and other individuals. The
net periodic benefit cost and projected benefit obligations are calculated based
on assumptions, such as discount rate, expected rate of return on plan assets,
rate of future compensation increases and health care cost trend rates. These
assumptions require considerable judgment, are subject to considerable
variability and are established using our best estimate. Actual results could
vary significantly from assumptions based on changes, such as economic and
market conditions, demographics of participants in the plans and amendments to
benefits provided under the plans. Differences between the expected return and
the actual return on plan assets and other actuarial changes, which could be
significant, are immediately recognized in the Consolidated Statements of
Operations, generally in the fourth quarter.

The table below summarizes the components of the net actuarial (gains) losses related to pension obligations recognized within Operating expenses in our Consolidated Statements of Operations for the periods indicated: (Gain)/Loss Recognized ($ in millions) 2019 2018 2017 Discount Rate

                              $ 292$ (160 )$ 196
Asset Returns                               (263 )      207      (142 )
Mortality Table Assumptions                  (22 )       (6 )     (14 )
Demographic Data and other                   (11 )        9       (25 )

Total Net Actuarial (Gain)/Loss Recognized $ (4 )$ 50$ 14




For the year ended December 31, 2019, we decreased our pension plans discount
rate by 1.1% resulting in an increase in our benefit obligations and a
corresponding actuarial loss of $292 million. This decrease in the discount rate
was driven by decrease in the 30-year Treasury and corporate AA yields. For the
year ended December 31, 2018, we increased our pension plans discount rate by
0.61%, resulting in a decrease in our benefit obligations and a corresponding
actuarial gain of $160 million. This increase in the discount rate was driven by
an increase in the 30-year Treasury and corporate AA yields. For the year ended
December 31, 2017, we decreased our pension plans discount rate by 0.70%,
resulting in an increase in our benefit obligations and a corresponding
actuarial loss of $196 million. This decrease in discount rate was driven by a
decrease in corporate AA yields and 30-year Treasury yields.

Our expected long-term rate of return on our Voya Retirement Plan (the
"Retirement Plan") assets was 6.75% and 7.5% for 2019 and 2018, respectively.
Our expected return on plan assets is calculated using 30-year forward looking
assumptions based on the long-term target asset allocation. In 2019, the actual
return on our Retirement Plan assets was approximately 24.4%, resulting in an
actuarial gain of $263 million. In 2018, the actual return on our Retirement
Plan assets was approximately (4.1)%, resulting in an actuarial loss of $207
million. In 2017, the actual return on our Retirement Plan assets was
approximately 17.4%, resulting in an actuarial gain of $142 million.

In October 2019, the Society of Actuaries ("SOA") published and we adopted the
Pri. A-2012 Private Retirement Plans Mortality Tables report that provides new
base mortality assumptions; and new mortality improvement projection scales
(MP-2019) that project a lower rate of mortality improvement than what was used
in 2018. These mortality assumption changes lowered our total benefit liability
by approximately 1% in 2019 and contributed $(22) million to the net actuarial
gain for the year ended December

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31, 2019. Changes in mortality assumptions in 2018 and 2017 contributed $(6) million and $(14) million, respectively, to the net actuarial loss in those periods.


The Retirement Plan is a tax qualified defined benefit plan, the benefits of
which are guaranteed (within certain specified legal limits) by the Pension
Benefit Guaranty Corporation ("PBGC"). Beginning January 1, 2012, the Retirement
Plan adopted a cash balance pension formula instead of a final average pay
("FAP") formula, allowing all eligible employees to participate in the
Retirement Plan. Participants earn an annual credit equal to 4% of eligible
compensation. Interest is credited monthly based on a 30-year U.S.Treasury
securities bond rate published by the IRS in the preceding August of each year.
The accrued vested cash pension balance benefit is portable; participants can
take it if they leave us.

Sensitivity

The discount rate and expected rate of return assumptions relating to our
defined benefit pension plans have historically had the most significant effect
on our net periodic benefit costs and the projected and accumulated projected
benefit obligations associated with these plans.

The discount rates are based on current market information provided by plan
actuaries. The discount rate modeling process involves selecting a portfolio of
high quality, non-callable bonds that will match the cash flows of the defined
benefit pension plans. The weighted average discount rate in 2019 for the net
periodic benefit cost was 4.37% for defined benefit pension plans. The discount
rate as of December 31, 2019 for the benefit obligation of our pension plans was
3.36%.

As of December 31, 2019, the sensitivities of the effect of a change in the
discount rate are as presented below. This represents the estimate of actuarial
gains (losses) that would be recognized immediately through Operating expenses
in our Consolidated Statements of Operations:
                                               Increase (Decrease) in
                                                Net Periodic Benefit
($ in millions)                                  Cost-Pension Plans
Increase in discount rate by 100 basis points $               (266 )
Decrease in discount rate by 100 basis points                  330



                                                  Increase (Decrease) in
($ in millions)                                 Pension Benefit Obligation
Increase in discount rate by 100 basis points $                   (266 )
Decrease in discount rate by 100 basis points                      330



The expected rate of return considers the asset allocation, historical returns
on the types of assets held and current economic environment. Based on these
factors, we expect that the assets will earn an average percentage per year over
the long term. This estimation is based on an active return on a compound basis,
with a reduction for administrative expenses and manager fees paid to
non-affiliated companies from the assets. For estimation purposes, we assume the
long-term asset mix will be consistent with the current mix. Changes in the
asset mix could impact the amount of recorded pension income or expense, the
funded status of the Retirement Plan and the need for future cash contributions.

The expected rate of return for 2019 was 6.75%, net of expenses, for the
Retirement Plan. The expected rate of return assumption is only applicable to
the Retirement Plan as assets are not held by any of the other pension and other
postretirement plans.

As of December 31, 2019, the effect of a change in the actual rate of return on
the net periodic benefit cost is presented in the table below. This represents
the estimate of actuarial gains (losses) that would be recognized immediately
through Operating expenses in our Consolidated Statements of Operations:
                                                        Increase (Decrease) in Net Periodic
($ in millions)                                             Benefit Cost-Pension Plans
Increase in actual rate of return by 100 basis points   $                         (17 )
Decrease in actual rate of return by 100 basis points                              17




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The expected rate of return for 2020 is 6.25%, net of expenses, for the
Retirement Plan, reflecting a change in asset allocation from equity securities
to fixed maturities. The estimated impact of this change as well as the
actuarial gain experienced on plan assets in 2019 is expected to decrease our
net periodic benefit cost by approximately $10 million.

For more information related to our employee benefit plans, see the Employee
Benefit Arrangements Note in our Consolidated Financial Statements in Part II,
Item 8. of this Annual Report on Form 10-K.

Impact of New Accounting Pronouncements


For information regarding the impact of new accounting pronouncements, see the
Business, Basis of Presentation and Significant Accounting Policies Note in our
Consolidated Financial Statements in Part II, Item 8. of this Annual Report on
Form 10-K.

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                                  INVESTMENTS
                  (excluding Consolidated Investment Entities)

Investments for our general account are managed by our wholly owned asset manager, Voya Investment Management LLC, pursuant to investment advisory agreements with affiliates. In addition, our internal treasury group manages our holding company liquidity investments, primarily money market funds.

Investment Strategy


Our investment strategy seeks to achieve sustainable risk-adjusted returns by
focusing on principal preservation, disciplined matching of asset
characteristics with liability requirements and the diversification of risks.
Investment activities are undertaken according to investment policy statements
that contain internally established guidelines and risk tolerances and are
required to comply with applicable laws and insurance regulations. Risk
tolerances are established for credit risk, credit spread risk, market risk,
liquidity risk and concentration risk across issuers, sectors and asset types
that seek to mitigate the impact of cash flow variability arising from these
risks.

Segmented portfolios are established for groups of products with similar
liability characteristics. Our investment portfolio consists largely of high
quality fixed maturities and short-term investments, investments in commercial
mortgage loans, alternative investments and other instruments, including a small
amount of equity holdings. Fixed maturities include publicly issued corporate
bonds, government bonds, privately placed notes and bonds, bonds issued by
states and municipalities, ABS, traditional MBS and various CMO tranches managed
in combination with financial derivatives as part of a proprietary strategy
known as CMO-B.

We use derivatives for hedging purposes to reduce our exposure to the cash flow
variability of assets and liabilities, interest rate risk, credit risk and
market risk. In addition, we use credit derivatives to replicate exposure to
individual securities or pools of securities as a means of achieving credit
exposure similar to bonds of the underlying issuer(s) more efficiently.

See the Investments (excluding Consolidated Investment Entities) Note in our
Consolidated Financial Statements in Part II, Item 8. of this Annual Report on
Form 10-K.

Portfolio Composition

The following table presents the investment portfolio as of the dates indicated:
                                       December 31, 2019               December 31, 2018
                                    Carrying                        Carrying
($ in millions)                      Value         % of Total        Value         % of Total
Fixed maturities,
available-for-sale, excluding
securities pledged               $     39,663           74.0 %   $     36,897           73.0 %
Fixed maturities, at fair value
using the fair value option             2,707            5.0 %          2,233            4.4 %
Equity securities,
available-for-sale                        196            0.4 %            247            0.5 %
Short-term investments(1)                  68            0.1 %            126            0.2 %
Mortgage loans on real estate           6,878           12.8 %          7,281           14.4 %
Policy loans                              776            1.4 %            814            1.6 %
Limited
partnerships/corporations               1,290            2.4 %            982            1.9 %
Derivatives                               316            0.6 %            194            0.4 %
Other investments                         385            0.7 %            379            0.7 %
Securities pledged                      1,408            2.6 %          1,462            2.9 %
Total investments                $     53,687          100.0 %   $     50,615          100.0 %

(1) Short-term investments include investments with remaining maturities of one year or less, but greater than three months, at the time of purchase.

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Fixed Maturities

The following tables present total fixed maturities, including securities pledged, by market sector, as of the dates indicated:

                                                        December 31, 2019
($ in millions)                   Amortized Cost      % of Total      Fair Value      % of Total
Fixed maturities:
U.S. Treasuries                  $         1,074            2.7 %   $      1,382            3.2 %
U.S. Government agencies and
authorities                                   74            0.2 %             95            0.2 %
State, municipalities and
political subdivisions                     1,220            3.1 %          1,323            3.0 %
U.S. corporate public securities          12,980           32.5 %         14,938           34.0 %
U.S. corporate private
securities                                 5,568           14.0 %          6,035           13.8 %
Foreign corporate public
securities and foreign
governments(1)                             3,887            9.8 %          4,341           10.0 %
Foreign corporate private
securities(1)                              4,545           11.4 %          4,831           11.0 %
Residential mortgage-backed
securities                                 4,999           12.6 %          5,204           11.9 %
Commercial mortgage-backed
securities                                 3,402            8.5 %          3,574            8.2 %
Other asset-backed securities              2,058            5.2 %          2,055            4.7 %
Total fixed maturities,
including securities pledged     $        39,807          100.0 %   $     43,778          100.0 %

(1) Primarily U.S. dollar denominated.

                                                        December 31, 2018
($ in millions)                   Amortized Cost      % of Total      Fair Value      % of Total
Fixed maturities:
U.S. Treasuries                  $         1,228            3.1 %   $      1,423            3.5 %
U.S. Government agencies and
authorities                                   62            0.1 %             74            0.2 %
State, municipalities and
political subdivisions                     1,241            3.1 %          1,250            3.1 %
U.S. corporate public securities          14,455           36.2 %         14,876           36.6 %
U.S. corporate private
securities                                 5,499           13.8 %          5,491           13.5 %
Foreign corporate public
securities and foreign
governments(1)                             4,139           10.4 %          4,135           10.2 %
Foreign corporate private
securities(1)                              4,705           11.8 %          4,640           11.4 %
Residential mortgage-backed
securities                                 4,143           10.4 %          4,282           10.6 %
Commercial mortgage-backed
securities                                 2,777            6.9 %          2,763            6.8 %
Other asset-backed securities              1,688            4.2 %          1,658            4.1 %
Total fixed maturities,
including securities pledged     $        39,937          100.0 %   $     40,592          100.0 %

(1) Primarily U.S. dollar denominated.

As of December 31, 2019, the average duration of our fixed maturities portfolio, including securities pledged, is between 7.5 and 8.0 years.

Fixed Maturities Credit Quality - Ratings


The Securities Valuation Office ("SVO") of the NAIC evaluates the fixed maturity
security investments of insurers for regulatory reporting and capital assessment
purposes and assigns securities to one of six credit quality categories called
"NAIC designations." An internally developed rating is used as permitted by the
NAIC if no rating is available. These designations are generally similar to the
credit quality designations of the NAIC acceptable rating organizations ("ARO")
for marketable fixed maturity securities, called rating agency designations
except for certain structured securities as described below. NAIC designations
of "1," highest quality and "2," high quality, include fixed maturity securities
generally considered investment grade by such rating organizations.

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NAIC designations 3 through 6 include fixed maturity securities generally considered below investment grade by such rating organizations.


The NAIC designations for structured securities, including subprime and Alt-A
RMBS, are based upon a comparison of the bond's amortized cost to the NAIC's
loss expectation for each security. Securities where modeling results in no
expected loss in each scenario are considered to have the highest designation of
NAIC 1. A large percentage of our RMBS securities carry the NAIC 1 designation
while the ARO rating indicates below investment grade. This is primarily due to
the credit and intent impairments recorded by us that reduced the amortized cost
on these securities to a level resulting in no expected loss in any scenario,
which corresponds to the NAIC 1 designation. The methodology reduces regulatory
reliance on rating agencies and allows for greater regulatory input into the
assumptions used to estimate expected losses from such structured securities. In
the tables below, we present the rating of structured securities based on
ratings from the NAIC methodologies described above (which may not correspond to
rating agency designations). NAIC designations (e.g., NAIC 1-6) are based on the
NAIC methodologies.

As a result of time lags between the funding of investments, the finalization of
legal documents and the completion of the SVO filing process, the fixed maturity
portfolio generally includes securities, that have not yet been rated by the SVO
as of each balance sheet date, such as private placements. Pending receipt of
SVO ratings, the categorization of these securities by NAIC designation is based
on the expected ratings indicated by internal analysis.

Information about certain of our fixed maturity securities holdings by the NAIC
designation is set forth in the following tables. Corresponding rating agency
designation does not directly translate into NAIC designation, but represents
our best estimate of comparable ratings from rating agencies, including Moody's,
S&P and Fitch. If no rating is available from a rating agency, then an
internally developed rating is used. As of December 31, 2019 and 2018, the
weighted average NAIC quality rating of our fixed maturities portfolio was 1.5.


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The following tables present credit quality of fixed maturities, including securities pledged, using NAIC designations as of dates indicated: ($ in millions)

                                         December 31, 2019
NAIC Quality                                                                                       Total Fair
Designation            1             2            3            4            5            6           Value

U.S. Treasuries $ 1,382 $ - $ - $ - $

    -     $      -     $   1,382
U.S. Government
agencies and
authorities              95             -            -            -            -            -            95
State,
municipalities and
political
subdivisions          1,200           121            -            -            -            2         1,323
U.S. corporate
public securities     6,783         7,327          682          124           22            -        14,938
U.S. corporate
private securities    2,095         3,620          157          148           15            -         6,035
Foreign corporate
public securities
and foreign
governments(1)        1,758         2,389          148           46            -            -         4,341
Foreign corporate
private
securities(1)           505         4,050          232           44            -            -         4,831
Residential
mortgage-backed
securities            5,030           111           18            1           19           25         5,204

Commercial

mortgage-backed

securities            3,166           322           66           12            8            -         3,574
Other asset-backed
securities            1,765           209           21            3           57            -         2,055
Total fixed
maturities         $ 23,779     $  18,149     $  1,324     $    378     $    121     $     27     $  43,778
% of Fair Value        54.2 %        41.5 %        3.0 %        0.9 %       

0.3 % 0.1 % 100.0 %

(1) Primarily U.S. dollar denominated.

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($ in millions)                                         December 31, 2018
NAIC Quality                                                                                       Total Fair
Designation            1             2            3            4            5            6           Value

U.S. Treasuries $ 1,423 $ - $ - $ - $

    -     $      -     $   1,423
U.S. Government
agencies and
authorities              74             -            -            -            -            -            74
State,
municipalities and
political
subdivisions          1,148           100            -            -            -            2         1,250
U.S. corporate
public securities     6,660         7,293          752          158           13            -        14,876
U.S. corporate
private securities    2,161         3,034          128          149           16            3         5,491
Foreign corporate
public securities
and foreign
governments(1)        1,808         2,069          219           37            1            1         4,135
Foreign corporate
private
securities(1)           587         3,671          275           65           42            -         4,640
Residential
mortgage-backed
securities            4,177            25           34            2            7           37         4,282

Commercial

mortgage-backed

securities            2,668            75           20            -            -            -         2,763
Other asset-backed
securities            1,423           144           30            7           31           23         1,658
Total fixed
maturities         $ 22,129     $  16,411     $  1,458     $    418     $    110     $     66     $  40,592
% of Fair Value        54.5 %        40.4 %        3.6 %        1.0 %       

0.3 % 0.2 % 100.0 %

(1) Primarily U.S. dollar denominated.


The fixed maturities in our portfolio are generally rated by external rating
agencies and, if not externally rated, are rated by us on a basis similar to
that used by the rating agencies. As of December 31, 2019 and 2018, the weighted
average quality rating of our fixed maturities portfolio was A. Ratings are
derived from three ARO ratings and are applied as follows, based on the number
of agency ratings received:

• when three ratings are received then the middle rating is applied; • when two ratings are received then the lower rating is applied; • when a single rating is received, the ARO rating is applied; and • when ratings are unavailable then an internal rating is applied.

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The following tables present credit quality of fixed maturities, including
securities pledged, using ARO ratings as of the dates indicated:
($ in millions)                                             December 31, 2019
                                                                                                   Total Fair
ARO Quality Ratings            AAA           AA            A           BBB        BB and Below       Value
U.S. Treasuries            $   1,382     $      -     $       -     $      -     $          -     $   1,382
U.S. Government agencies
and authorities                   89            6             -            -                -            95
State, municipalities and
political subdivisions            83          757           360          121                2         1,323
U.S. corporate public
securities                       152          924         5,715        7,373              774        14,938
U.S. corporate private
securities                       148          184         1,882        3,494              327         6,035
Foreign corporate public
securities and foreign
governments(1)                    13          377         1,353        2,378              220         4,341
Foreign corporate private
securities(1)                      -            -           591        4,022              218         4,831

Residential

mortgage-backed securities     3,768          175           110          383              768         5,204
Commercial mortgage-backed
securities                     1,397          365           872          777              163         3,574
Other asset-backed
securities                       393          411           920          215              116         2,055
Total fixed maturities     $   7,425     $  3,199     $  11,803     $ 18,763     $      2,588     $  43,778
% of Fair Value                 17.0 %        7.3 %        27.0 %       42.8 %            5.9 %       100.0 %

(1) Primarily U.S. dollar denominated.

($ in millions)                                             December 31, 2018
                                                                                                   Total Fair
ARO Quality Ratings            AAA           AA            A           BBB        BB and Below       Value
U.S. Treasuries            $   1,423     $      -     $       -     $      -     $          -     $   1,423
U.S. Government agencies
and authorities                   69            5             -            -                -            74
State, municipalities and
political subdivisions            89          697           362          100                2         1,250
U.S. corporate public
securities                       171          829         5,643        7,321              912        14,876
U.S. corporate private
securities                       156          211         1,933        2,901              290         5,491
Foreign corporate public
securities and foreign
governments(1)                    26          430         1,378        2,042              259         4,135
Foreign corporate private
securities(1)                      -            -           610        3,791              239         4,640

Residential

mortgage-backed securities     3,064           73            57          158              930         4,282
Commercial mortgage-backed
securities                     1,358          335           523          404              143         2,763
Other asset-backed
securities                       629          185           554          166              124         1,658
Total fixed maturities     $   6,985     $  2,765     $  11,060     $ 16,883     $      2,899     $  40,592
% of Fair Value                 17.2 %        6.8 %        27.3 %       41.6 %            7.1 %       100.0 %

(1) Primarily U.S. dollar denominated.


Fixed maturities rated BB and below may have speculative characteristics and
changes in economic conditions or other circumstances that are more likely to
lead to a weakened capacity of the issuer to make principal and interest
payments than is the case with higher rated fixed maturities.

Unrealized Capital Losses


Gross unrealized capital losses on fixed maturities, including securities
pledged, decreased $756 million from $847 million to $91 million for the year
ended December 31, 2019. The decrease in gross unrealized capital losses was
primarily due to declining interest rates and tightening credit spreads. Gross
unrealized losses on fixed maturities, including securities pledged, increased

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$645 million from $202 million to $847 million for the year ended December 31, 2018. The increase in gross unrealized capital losses was primarily due to rising interest rates and widening credit spreads.


As of December 31, 2019, we held one fixed maturity security with unrealized
capital losses in excess of $10 million. The unrealized capital losses on this
fixed maturity security equaled $13 million, or 14.2% of the total unrealized
losses. As of December 31, 2018, we held three fixed maturities with unrealized
capital losses in excess of $10 million. The unrealized capital losses on these
fixed maturities equaled $44 million, or 5.2% of the total unrealized losses.

As of December 31, 2019, we held $3.2 billion of energy sector fixed maturity
securities, constituting 7.2% of the total fixed maturities portfolio, with
gross unrealized capital losses of $27 million, including one energy sector
fixed maturity security with unrealized capital losses in excess of $10 million.
The unrealized capital losses on this fixed maturity security equaled $13
million. As of December 31, 2019, our fixed maturity exposure to the energy
sector is comprised of 91.1% investment grade securities.

As of December 31, 2018, we held $3.2 billion of energy sector fixed maturity
securities, constituting 7.9% of the total fixed maturities portfolio, with
gross unrealized capital losses of $117 million including one energy sector
fixed maturity security with unrealized capital losses in excess of $10 million.
The unrealized capital losses on this fixed maturity security equaled $21
million. As of December 31, 2018, our fixed maturity exposure to the energy
sector is comprised of 86.9% investment grade securities.

The following table presents the U.S. and foreign corporate securities within
our energy holdings by sector as of the dates indicated:
($ in
millions)                       December 31, 2019                                     December 31, 2018
Sector Type      Amortized Cost       Fair Value     % Fair Value      Amortized Cost       Fair Value     % Fair Value
Midstream      $          1,132     $      1,284           40.6 %    $          1,228     $      1,264           39.5 %
Integrated
Energy                      485              566           17.9 %                 679              689           21.5 %
Independent
Energy                      696              755           23.9 %                 716              715           22.3 %
Oil Field
Services                    302              309            9.8 %                 356              321           10.0 %
Refining                    204              246            7.8 %                 201              213            6.7 %
Total          $          2,819     $      3,160          100.0 %    $          3,180     $      3,202          100.0 %



See the Investments (excluding Consolidated Investment Entities) Note in our
Consolidated Financial Statements in Part II, Item 8. of this Annual Report on
Form 10-K for further information on unrealized capital losses.

CMO-B Portfolio


As part of our broadly diversified investment portfolio, we have a core holding
in a proprietary mortgage derivatives strategy known as CMO-B, which invests in
a variety of CMO securities in combination with interest rate derivatives in
targeting a specific type of exposure to the U.S. residential mortgage market.
Because of their relative complexity and generally small natural buyer base, we
believe certain types of CMO securities are consistently priced below their
intrinsic value, thereby providing a source of potential return for investors in
this strategy.

The CMO securities that are part of our CMO-B portfolio are either notional or
principal securities, backed by the interest and principal components,
respectively, of mortgages secured by single-family residential real estate.
There are many variations of these two types of securities including interest
only and principal only securities, as well as inverse-floating rate (principal)
securities and inverse interest only securities, all of which are part of our
CMO-B portfolio. This strategy has been in place for nearly two decades and thus
far has been a significant source of investment income while exhibiting
relatively low volatility and correlation compared to the other asset types in
the investment portfolio, although we cannot predict whether favorable returns
will continue in future periods.

To protect against the potential for credit loss associated with financially
troubled borrowers, investments in our CMO-B portfolio are primarily in CMO
securities backed by one of the government sponsored entities: the Federal
National Mortgage Association ("Fannie Mae"), the Federal Home Loan Mortgage
Corporation ("Freddie Mac") or Government National Mortgage Association ("Ginnie
Mae").

Because the timing of the receipt of the underlying cash flow is highly
dependent on the level and direction of interest rates, our CMO-B portfolio also
has exposure to both interest rate and convexity risk. The exposure to interest
rate risk-the potential for changes in value that results from changes in the
general level of interest rates-is managed to a defined target duration using
interest

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rate swaps and interest rate futures. The exposure to convexity risk-the
potential for changes in value that result from changes in duration caused by
changes in interest rates-is dynamically hedged using interest rate swaps and at
times, interest rate swaptions.

Prepayment risk represents the potential for adverse changes in portfolio value
resulting from changes in residential mortgage prepayment speed (actual and
projected), which in turn depends on a number of factors, including conditions
in both credit markets and housing markets. Changes in the prepayment behavior
of homeowners represent both a risk and potential source of return for our CMO-B
portfolio. As a result, we seek to invest in securities that are broadly
diversified by collateral type to take advantage of the uncorrelated prepayment
experiences of homeowners with unique characteristics that influence their
ability or desire to prepay their mortgage. We choose collateral types and
individual securities based on an in-depth quantitative analysis of prepayment
incentives across available borrower types.

The following table presents fixed maturities balances held in the CMO-B portfolio by NAIC quality rating as of the dates indicated: ($ in millions)

                       December 31, 2019                                     December 31, 2018
NAIC Quality
Designation      Amortized Cost       Fair Value     % Fair Value      Amortized Cost       Fair Value     % Fair Value
1              $          3,131     $      3,273           95.4 %    $          2,723     $      2,835           97.1 %
2                           104              105            3.1 %                  15               15            0.5 %
3                            12               12            0.3 %                  15               25            0.9 %
4                             -                -              - %                   -                -              - %
5                             8               18            0.5 %                   3                6            0.2 %
6                            19               25            0.7 %                  23               37            1.3 %
Total          $          3,274     $      3,433          100.0 %    $          2,779     $      2,918          100.0 %


For CMO securities where we elected the FVO, amortized cost represents the market values. For details on the NAIC designation methodology, please see "Fixed Maturities Credit Quality-Ratings" above.

The following table presents the notional amounts and fair values of interest rate derivatives used in our CMO-B portfolio as of the dates indicated:

                                    December 31, 2019                             December 31, 2018
                                         Asset         Liability                       Asset         Liability
                         Notional         Fair           Fair          Notional         Fair           Fair
($ in millions)          Amount          Value          Value          Amount          Value          Value
Derivatives
non-qualifying for
hedge accounting:
Interest Rate
Contracts              $   13,772     $       58     $       131     $   14,969     $       32     $        79


We utilize interest rate futures and interest rate swaps as a part of the CMO-B portfolio to hedge interest rate risk.


The following table presents our CMO-B fixed maturity securities balances and
tranche type as of the dates indicated:
($ in millions)                      December 31, 2019                                     December 31, 2018
Tranche Type          Amortized Cost       Fair Value     % Fair Value      Amortized Cost       Fair Value     % Fair Value
Inverse Floater     $            273     $        350           10.2 %    $            300     $        360           12.3 %
Interest Only
(IO)                             179              183            5.3 %                 164              177            6.1 %
Inverse IO                     1,615            1,681           49.1 %               1,315            1,365           46.8 %
Principal Only
(PO)                             230              235            6.8 %                 246              248            8.5 %
Floater                           11               12            0.3 %                  13               14            0.5 %
Agency Credit
Risk Transfer                    957              962           28.0 %                 739              751           25.7 %
Other                              9               10            0.3 %                   2                3            0.1 %
Total               $          3,274     $      3,433          100.0 %    $          2,779     $      2,918          100.0 %




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For the year ended December 31, 2019, the market value of our CMO-B portfolio
increased primarily due to new purchase activity exceeding paydowns and
maturities. Valuation of the securities within our CMO-B portfolio have
benefited from a benign prepayment environment for seasoned collateral resulting
in continued positive relative performance for the strategy. Yields within the
CMO-B portfolio continue to decline, however, as higher yielding historical
CMO-B assets paydown or mature and are replaced with lower yielding new assets.

The following table presents returns for our CMO-B portfolio for the periods
indicated:
                                                          Year Ended December 31,
($ in millions)                                   2019               2018            2017
Net investment income                        $        452       $        413     $       408
Net realized capital gains (losses)(1)               (203 )             (339 )          (289 )
Income (loss) from continuing operations
before income taxes                          $        249       $         

74 $ 119

(1) Net realized capital gains (losses) also include derivatives interest settlements, mark to market adjustments and realized gains (losses) on standalone derivatives contracts that are in the CMO-B portfolio.


In defining the Adjusted operating earnings before income taxes for our CMO-B
portfolio (including CMO-B portfolio income (loss) related to businesses to be
exited through reinsurance or divestment) certain recharacterizations are
recognized. The net coupon settlement on interest rate swaps hedging CMO-B
securities that is included in Net realized capital gains (losses) is reflected.
In addition, the premium amortization and change in fair value for securities
designated under the FVO are included in Net realized capital gains (losses),
whereas the coupon for these securities is included in Net investment income. In
order to present the economics of these fair value securities in a similar
manner to those of an available for sale security, the premium amortization is
reclassified from Net realized capital gains (losses).

After adjusting for the two items referenced immediately above, the following
table presents a reconciliation of Income (loss) from continuing operations
before income taxes from our CMO-B portfolio to Adjusted operating earnings
before income taxes from our CMO-B portfolio (including CMO-B portfolio income
(loss) related to businesses to be exited through reinsurance or divestment) for
the periods indicated:
                                                         Year Ended December 31,
($ in millions)                                  2019               2018              2017
Income (loss) from continuing operations
before income taxes                        $         249       $          74     $        119
Realized gains/(losses) including OTTI                 3                  15                1
Fair value adjustments                               (62 )               107               69
Total adjustments to income (loss) from
continuing operations                                (59 )               122               70
Total(1)                                   $         190       $         196     $        189

(1) Includes CMO-B portfolio income related to adjusted operating earnings and businesses to be exited through reinsurance or divestment.

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Structured Securities

Residential Mortgage-backed Securities


The following tables present our residential mortgage-backed securities as of
the dates indicated:
                                                               December 31, 2019
                                         Gross Unrealized       Gross Unrealized
($ in millions)    Amortized Cost         Capital Gains          Capital Losses       Embedded Derivatives        Fair Value
Prime Agency     $          2,783     $                137     $              3     $                   10     $        2,927
Prime Non-Agency            2,062                       47                   10                          2              2,101
Alt-A                         133                       14                    -                          8                155
Sub-Prime(1)                   52                        6                    1                          -                 57
Total RMBS       $          5,030     $                204     $             14     $                   20     $        5,240

(1) Includes subprime other asset backed securities.

                                                               December 31, 2018
                                         Gross Unrealized       Gross Unrealized
($ in millions)    Amortized Cost         Capital Gains          Capital Losses       Embedded Derivatives        Fair Value
Prime Agency     $          2,647     $                110     $             31     $                    8     $        2,734
Prime Non-Agency            1,333                       45                   16                          2              1,364
Alt-A                         141                       15                    -                          7                163
Sub-Prime(1)                   68                        7                    1                          -                 74
Total RMBS       $          4,189     $                177     $             48     $                   17     $        4,335

(1) Includes subprime other asset backed securities.







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Commercial Mortgage-backed Securities


The following tables present our commercial mortgage-backed securities as of the
dates indicated:
                                                                                                      December 31, 2019
($ in                    AAA                               AA                                 A                                BBB                          BB and Below                         Total

millions) Amortized Cost Fair Value Amortized Cost Fair Value

     Amortized Cost     Fair Value     Amortized Cost     Fair Value    Amortized Cost     Fair Value     Amortized Cost     Fair Value
2013 and
prior     $            286   $        316   $             42   $         43   $             70   $         71   $            124   $        131   $          3      $          4   $            525   $        565
2014                   307            336                 44             45                 59             61                 28             29             25                25                463            496
2015                   234            248                160            165                115            119                127            132             25                25                661            689
2016                    59             61                 17             18                 30             32                 50             53              8                 8                164            172
2017                   131            138                 41             41                129            134                 66             68             66                68                433            449
2018                   121            137                 24             25                231            240                 95             98              2                 2                473            502
2019                   143            160                 28             28                213            215                268            267             31                31                683            701
Total
CMBS      $          1,281   $      1,396   $            356   $        365   $            847   $        872   $            758   $        778   $        160      $        163   $          3,402   $      3,574

                                                                                                      December 31, 2018
($ in                    AAA                               AA                                 A                                BBB                          BB and Below                         Total

millions) Amortized Cost Fair Value Amortized Cost Fair Value

     Amortized Cost     Fair Value     Amortized Cost     Fair Value    Amortized Cost     Fair Value     Amortized Cost     Fair Value
2013 and
prior     $            370   $        380   $             63   $         63   $             78   $         78   $             76   $         81   $          9      $          9   $            596   $        611
2014                   342            345                 33             32                 40             40                 27             27             37                37                479            481
2015                   302            297                148            147                 61             61                116            116             27                27                654            648
2016                    91             86                 15             15                 33             32                 43             43              7                 7                189            183
2017                   203            193                 55             54                 85             83                 42             41             33                33                418            404
2018                    57             56                 24             24                231            229                 98             97             31                30                441            436
2019                     -              -                  -              -                  -              -                  -              -              -                 -                  -              -
Total
CMBS      $          1,365   $      1,357   $            338   $        335   $            528   $        523   $            402   $        405   $        144      $        143   $          2,777   $      2,763



As of December 31, 2019, 88.6% and 9.0% of CMBS investments were designated as
NAIC-1 and NAIC-2, respectively. As of December 31, 2018, 96.6% and 2.7% of CMBS
investments were designated as NAIC-1 and NAIC-2, respectively.




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Other Asset-backed Securities


The following tables present our other asset-backed securities as of the dates
indicated:
                                                                                                           December 31, 2019
($ in                         AAA                               AA                                A                                BBB                          BB and Below                          Total

millions) Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value

     Amortized Cost     Fair Value     Amortized Cost     Fair Value
Collateralized
Obligation     $            317   $        315   $         298     $        298   $            699   $        689   $             31   $         30   $        86        $         76   $          1,431   $      1,408
Auto-Loans                    3              4              10               10                  8              8                  -              -             -                   -                 21             22
Student Loans                17             17              94               96                 93             95                  2              1             -                   -                206            209
Credit Card
loans                         1              1               -                -                  -              -                  -              -             -                   -                  1              1
Other Loans                  55             58               6                7                123            126                179            183             5                   5                368            379
Total Other
ABS(1)         $            393   $        395   $         408     $        411   $            923   $        918   $            212   $        214   $

91 $ 81 $ 2,027 $ 2,019 (1) Excludes subprime other asset backed securities.

                                                                                                           December 31, 2018
($ in                         AAA                               AA                                A                                BBB                          BB and Below                          Total

millions) Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value

     Amortized Cost     Fair Value     Amortized Cost     Fair Value
Collateralized
Obligation     $            558   $        550   $          93     $         91   $            370   $        354   $             26   $         24   $        77        $         70   $          1,124   $      1,089
Auto-Loans                    3              3              10               10                  8              8                  -              -             -                   -                 21             21
Student Loans                 9              9              80               81                 95             94                  -              -             -                   -                184            184
Credit Card
loans                         2              2               -                -                  -              -                  -              -             -                   -                  2              2
Other Loans                  66             65               2                2                 94             95                144            142             5                   5                311            309
Total Other
ABS(1)         $            638   $        629   $         185     $        184   $            567   $        551   $            170   $        166   $        82        $         75   $          1,642   $      1,605

(1) Excludes subprime other asset backed securities.

As of December 31, 2019, 85.9% and 10.2% of Other ABS investments were designated as NAIC-1 and NAIC-2, respectively. As of December 31, 2018, 85.8% and 8.7% of Other ABS investments were designated as NAIC-1 and NAIC-2, respectively.




Mortgage Loans on Real Estate

We rate commercial mortgages to quantify the level of risk. We place those loans
with higher risk on a watch list and closely monitor these loans for collateral
deficiency or other credit events that may lead to a potential loss of principal
and/or interest. If we determine the value of any mortgage loan to be OTTI
(i.e., when it is probable that we will be unable to collect on amounts due
according to the contractual terms of the loan agreement), the carrying value of
the mortgage loan is reduced to either the present value of expected cash flows
from the loan, discounted at the loan's effective interest rate, or fair value
of the collateral. For those mortgages that are determined to require
foreclosure, the carrying value is reduced to the fair value of the underlying
collateral, net of estimated costs to obtain and sell at the point of
foreclosure. The carrying value of the impaired loans is reduced by establishing
an other-than-temporary write-down recorded in Net realized capital gains
(losses) in the Consolidated Statements of Operations.

Loan-to-value ("LTV") and debt service coverage ("DSC") ratios are measures
commonly used to assess the risk and quality of commercial mortgage loans. The
LTV ratio, calculated at time of origination, is expressed as a percentage of
the amount of the loan relative to the value of the underlying property. An LTV
ratio in excess of 100% indicates the unpaid loan amount exceeds the value of
the underlying collateral. The DSC ratio, based upon the most recently received
financial statements, is expressed as a percentage of the amount of a property's
Net income (loss) to its debt service payments. A DSC ratio of less than 1.0
indicates that property's operations do not generate sufficient income to cover
debt payments. These ratios are utilized as part of the review process described
above.


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As of December 31, 2019 and 2018, our mortgage loans on real estate portfolio
had a weighted average DSC of 2.3 times and 2.2 times, and a weighted average
LTV ratio of 61.5% and 61.6%, respectively. See the Investments (excluding
Consolidated Investment Entities) Note in our Consolidated Financial Statements
in Part II, Item 8. of this Annual Report on Form 10-K for further information
on mortgage loans on real estate.



Other-Than-Temporary Impairments


We evaluate available-for-sale fixed maturities and equity securities for
impairment on a regular basis. The assessment of whether impairments have
occurred is based on a case-by-case evaluation of the underlying reasons for the
decline in estimated fair value. See the Business, Basis of Presentation and
Significant Accounting Policies Note in our Consolidated Financial Statements in
Part II, Item 8. of this Annual Report on Form 10-K for the policy used to
evaluate whether the investments are other-than-temporarily impaired.

For the year ended December 31, 2019, we recorded $28 million of credit related
OTTI. See the Investments (excluding Consolidated Investment Entities) Note in
our Consolidated Financial Statements of Part II, Item 8. in this Annual Report
on Form 10-K for further information on OTTI.

Derivatives


We use derivatives for a variety of hedging purposes. We also have embedded
derivatives within fixed maturities instruments and certain product features.
See the Business, Basis of Presentation and Significant Accounting Policies Note
and the Derivatives Note in our Consolidated Financial Statements in Part II,
Item 8. of this Annual Report on Form 10-K for further information.

European Exposures


We quantify and allocate our exposure to the region by attempting to identify
aspects of the region or country risk to which we are exposed. Among the factors
we consider are the nationality of the issuer, the nationality of the issuer's
ultimate parent, the corporate and economic relationship between the issuer and
its parent, as well as the political, legal and economic environment in which
each functions. By undertaking this assessment, we believe that we develop a
more accurate assessment of the actual geographic risk, with a more integrated
understanding of contributing factors to the full risk profile of the issuer.

In the normal course of our ongoing risk and portfolio management process, we
closely monitor compliance with a credit limit hierarchy designed to minimize
overly concentrated risk exposures by geography, sector and issuer. This
framework takes into account various factors such as internal and external
ratings, capital efficiency and liquidity and is overseen by a combination of
Investment and Corporate Risk Management, as well as insurance portfolio
managers focused specifically on managing the investment risk embedded in our
portfolio.

While financial conditions in Europe have broadly improved, the possibility of
capital market volatility spreading through a highly integrated and
interdependent banking system remains. Despite signs of continuous improvement
in the region, we continue to closely monitor our exposure to the region.



As of December 31, 2019 , our total European exposure had an amortized cost and
fair value of $4,000 million and $4,368 million, respectively. European exposure
with a primary focus on Greece, Ireland, Italy, Portugal and Spain (which we
refer to as "peripheral Europe") amounts to $483 million, which includes
non-financial institutions exposure in Ireland of $175 million, in Italy of $135
million and in Spain of $111 million. We also had financial institutions
exposure in Ireland of $21 million, in Italy of $10 million and in Spain of $31
million. We did not have any exposure to Greece.

Among the remaining $3,885 million of total non-peripheral European exposure, we
had a portfolio of credit-related assets similarly diversified by country and
sector across developed and developing Europe. As of December 31, 2019, our
non-peripheral sovereign exposure was $160 million, which consisted of fixed
maturities and derivative assets. We also had $633 million in net exposure to
non-peripheral financial institutions, with a concentration in Switzerland of
$125 million and the United Kingdom of $334 million. The balance of $3,092
million was invested across non-peripheral, non-financial institutions.

Some of the major country level exposures were in the United Kingdom of $1,956
million, in The Netherlands of $372 million, in Belgium of $222 million, in
France of $313 million, in Germany of $197 million, in Switzerland of $305
million, and in Russia of $81 million. We believe the primary risk results from
market value fluctuations resulting from spread volatility and the secondary
risk is default risk, dependent upon the strength of continued recovery of
economic conditions in Europe.


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Consolidated Investment Entities


We provide investment management services to, and have transactions with,
various collateralized loan obligations ("CLO entities"), private equity funds,
hedge funds, registered investment companies, insurance entities,
securitizations and other investment entities in the normal course of business.
In certain instances, we serve as the investment manager, making day-to-day
investment decisions concerning the assets of these entities. These entities are
considered to be either variable interest entities ("VIEs") or voting interest
entities ("VOEs"), and we evaluate our involvement with each entity to determine
whether consolidation is required.

Certain investment entities are consolidated under consolidation guidance. We
consolidate certain entities under the VIE guidance when it is determined that
we are the primary beneficiary. We consolidate certain entities under the VOE
guidance when we act as the controlling general partner and the limited partners
have no substantive rights to impact ongoing governance and operating activities
of the entity, or when we otherwise have control through voting rights. See
Consolidation and Noncontrolling Interests in the Business, Basis of
Presentation and Significant Accounting Policies Note to our Consolidated
Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.

We have no right to the benefits from, nor do we bear the risks associated with
these investments beyond our direct debt or equity investments in and management
fees generated from these entities. Such direct investments amounted to
approximately $279 million and $290 million on a continuing basis as of
December 31, 2019 and 2018, respectively. If we were to liquidate, the assets
held by consolidated investment entities would not be available to our general
creditors as a result of the liquidation.

Fair Value Measurement


Upon consolidation of CLO entities, we elected to apply the FVO for financial
assets and financial liabilities held by these entities and have continued to
measure these assets (primarily corporate loans) and liabilities (debt
obligations issued by CLO entities) at fair value in subsequent periods. We have
elected the FVO to more closely align the accounting with the economics of the
transactions and allow us to more effectively reflect changes in the fair value
of CLO assets with a commensurate change in the fair value of CLO liabilities.

Investments held by consolidated private equity funds and hedge funds are
reported in our Consolidated Financial Statements. Changes in the fair value of
consolidated investment entities are recorded as a separate line item within
Income (loss) related to consolidated investment entities in our Consolidated
Financial Statements.

The methodology for measuring the fair value and fair value hierarchy
classification of financial assets and liabilities of consolidated investment
entities is consistent with the methodology and fair value hierarchy rules that
we apply to our investment portfolio. See Fair Value Measurement in the
Business, Basis of Presentation and Significant Accounting Policies Note to our
Consolidated Financial Statements in Part II, Item 8. of this Annual Report on
Form 10-K.

Nonconsolidated VIEs

We also hold variable interest in certain CLO entities that we do not
consolidate because we have determined that we are not the primary beneficiary.
With these CLO entities, we serve as the investment manager and receive
investment management fees and contingent performance fees. Generally, we do not
hold any interest in the nonconsolidated CLO entities, but if we do, such
ownership has been deemed to be insignificant. We have not provided and are not
obligated to provide any financial or other support to these entities.

We manage or hold investments in certain private equity funds and hedge funds.
With these entities, we serve as the investment manager and are entitled to
receive investment management fees and contingent performance fees that are
generally expected to be insignificant. Although we have the power to direct the
activities that significantly impact the economic performance of the funds, we
do not hold a significant variable interest in any of these funds and, as such,
do not have the obligation to absorb losses or the right to receive benefits
from the entity that could potentially be significant to the entity.
Accordingly, we are not considered the primary beneficiary and did not
consolidate any of these investment funds.

In addition, we do not consolidate funds in which our involvement takes the form
of a limited partner interest and is restricted to a role of a passive investor,
as a limited partner's interest does not provide us with any substantive
kick-out or participating rights, which would overcome the presumption of
control by the general partner. See the Consolidated Investment Entities Note in
our Consolidated Financial Statements in Part II, Item 8. of this Annual Report
on Form 10-K for more information.


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Securitizations


We invest in various tranches of securitization entities, including RMBS, CMBS
and ABS. Through our investments, we are not obligated to provide any financial
or other support to these entities. Each of the RMBS, CMBS and ABS entities are
thinly capitalized by design and considered VIEs. Our involvement with these
entities is limited to that of a passive investor. We have no unilateral right
to appoint or remove the servicer, special servicer or investment manager, which
are generally viewed to have the power to direct the activities that most
significantly impact the securitization entities' economic performance, in any
of these entities, nor do we function in any of these roles. We, through our
investments or other arrangements, do not have the obligation to absorb losses
or the right to receive benefits from the entity that could potentially be
significant to the entity. Therefore, we are not the primary beneficiary and do
not consolidate any of the RMBS, CMBS and ABS entities in which we hold
investments. These investments are accounted for as investments
available-for-sale as described in the Fair Value Measurements (excluding
Consolidated Investment Entities) Note in our Consolidated Financial Statements
in Part II, Item 8. of this Annual Report on Form 10-K and unrealized capital
gains (losses) on these securities are recorded directly in AOCI, except for
certain RMBS which are accounted for under the FVO whose change in fair value is
reflected in Other net realized gains (losses) in the Consolidated Statements of
Operations. Our maximum exposure to loss on these structured investments is
limited to the amount of our investment. Refer to the Investments (excluding
Consolidated Investment Entities) Note in our Consolidated Financial Statements
in Part II, Item 8. of this Annual Report on Form 10-K for details regarding the
carrying amounts and classifications of these assets.


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05/26VOYA FINANCIAL : Presented at Deutsche Bank Global Financial Services Conference
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05/21VOYA FINANCIAL, INC. : Submission of Matters to a Vote of Security Holders (form..
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05/20VOYA FINANCIAL : launches new Leave Management solution to help employers simpli..
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05/15VOYA FINANCIAL : to Present at Wells Fargo Virtual Financial Services Forum
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05/13VOYA FINANCIAL : to Present at UBS Virtual Insurance Conference
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05/08VOYA FINANCIAL : Joins 100Kin10 Network to Help Train and Retain 100,000 Science..
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05/07VOYA FINANCIAL : Pomona Investment Fund Marks 5-year Anniversary
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05/06VOYA FINANCIAL : Management's Discussion and Analysis of Financial Condition and..
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05/05VOYA : 1Q Earnings Snapshot
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05/05VOYA FINANCIAL, INC. : Results of Operations and Financial Condition, Financial ..
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