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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
——————————————————————
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20202021

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________

Commission File Number: 033-23376

VOYA RETIREMENT INSURANCE & ANNUITY CO
(Exact name of registrant as specified in its charter)
Connecticut71-0294708
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
One Orange Way
WindsorConnecticut06095-4774
(Address of principal executive offices)(Zip Code)
(860) 580-4646
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ☐ Yes      ý No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act    ☐ Yes      ý No

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ý Yes      o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerAccelerated filer    
Non-accelerated filerxSmaller reporting company     
Emerging growth company     
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).        ☐ Yes      ý No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates: None

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. o Yes o No

As of March 10, 2021,8, 2022, 55,000 shares of Common Stock, $50 par value were outstanding, all of which were directly owned by Voya Holdings Inc.
NOTE:  WHEREAS VOYA RETIREMENT INSURANCE AND ANNUITY COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(a) AND (b) OF FORM 10-K, THIS FORM IS BEING FILED WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTION
I(2).
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Form 10-K for the period ended December 31, 20202021
 
TABLE OF CONTENTS
PAGE
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Item 9.
Item 9A.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
*Item omitted pursuant to General Instruction I(2) of Form 10-K, except as to Part III, Item 10 with respect to compliance with Sections 406 and 407 of the Sarbanes-Oxley Act of 2002.
**Item prepared in accordance with General Instruction I(2) of Form 10-K.
***Item omitted as registrant is neither an accelerated filer nor a well-known seasoned issuer.

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As used in this Annual Report on Form 10-K, "VRIAC" refers to Voya Retirement Insurance and Annuity Company and the "Company," "we," "our" and "us" refer to VRIAC and its wholly owned subsidiaries.

NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including "Risk Factors," "Management's Narrative Analysis of the Results of Operations and Financial Condition" and "Business" contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements relating to future developments in our business or expectations for our future financial performance and any statement not involving a historical fact. Forward-looking statements use words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. Actual results, performance or events may differ materially from those projected in any forward-looking statement due to, among other things, (i) general economic conditions, particularly economic conditions in our core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) the effects of natural or man-made disasters, including pandemic events and specifically the current COVID-19 pandemic event (v) mortality and morbidity levels, (vi) persistency and lapse levels, (vii) interest rates, (viii) currency exchange rates, (ix) general competitive factors, (x) changes in laws and regulations; (xi) changes in the policies of governments and/or regulatory authorities; and (xii) our parent company, Voya Financial, Inc.'s ability to successfully manage the separation of the fixed and variable annuities business that it sold to VA Capital LLC on June 1, 2018 and the Individual Life Transaction that closed on January 4, 2021, including the transition services on the expected timeline and economic terms, and (xiv) other factors described in the section "Item 1A. Risk Factors."

The risks included here are not exhaustive. Current reports on Form 8-K and other documents filed with the Securities and Exchange Commission ("SEC") include additional factors that could affect our businesses and financial performance. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.
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PART I

Item 1.        Business
(Dollar amounts in millions, unless otherwise stated)

Organization of Business

Voya Retirement Insurance and Annuity Company ("VRIAC") is a stock life insurance company domiciled in the State of Connecticut. VRIAC and its wholly owned subsidiaries (collectively, "the Company") provide financial products and services in the United States. VRIAC is authorized to conduct its insurance business in all states and in the District of Columbia, Guam, Puerto Rico and the Virgin Islands.

Prior to May 2013, Voya Financial, Inc., together with its subsidiaries, including the Company was an indirect, wholly owned subsidiary of ING Groep N.V. ("ING Group" or "ING"), a global financial services holding company based in The Netherlands. In May 2013, Voya Financial, Inc. completed its initial public offering of common stock, including the issuance and sale of common stock by Voya Financial, Inc. and the sale of shares of common stock owned indirectly by ING Group. ING Group completely divested its ownership of Voya Financial, Inc. common stock between 2013 and 2015.

VRIAC is a direct, wholly owned subsidiary of Voya Holdings Inc. ("Parent"), which is a direct, wholly owned subsidiary of Voya Financial, Inc. ("Voya Financial").

On January 4, 2021, VRIAC’s ultimate parent, Voya Financial Inc. ("Voya Financial"), consummated a series of transactions pursuant to a Master Transaction Agreement (the “Resolution MTA”) entered into on December 18, 2019 with Resolution Life U.S. Holdings Inc., a Delaware corporation (“Resolution Life US”), pursuant to which Resolution Life US acquired all of the shares of the capital stock of Security Life of Denver Company ("SLD") and Security Life of Denver International Limited ("SLDI"), including the capital stock of several subsidiaries of SLD and SLDI.

Concurrently with the sale, SLD entered into reinsurance agreements with Reliastar Life Insurance Company ("RLI"), ReliaStar Life Insurance Company of New York (“RLNY”), and VRIAC, each of which is a direct or indirect wholly owned subsidiary of Voya Financial. Pursuant to these agreements, RLI and VRIAC reinsured to SLD a 100% quota share, and RLNY reinsured to SLD a 75% quota share, of their respective individual life insurance and annuities businesses. RLI, RLNY, and VRIAC remain subsidiaries of Voya Financial. These reinsurance transactions were substantially carried out on a coinsurance or modified coinsurance basis, with SLD’s reinsurance obligations collateralized by invested assets placed in a comfort trust. The reinsurance agreements along with the sale of the legal entities noted above (referred to as the "Individual Life Transaction") resulted in the disposition of substantially all of Voya Financial's life insurance and legacy non-retirement annuity businesses and related assets. Pursuant to the Individual Life Transaction, VRIAC's reserves related to legacy non-retirement annuity business as well as pension risk transfer products were ceded to SLD and related assets were transferred.

Effective as of March 1, 2021, VRIAC acquired 49.9% of the issued and outstanding common stock of Voya Special Investments, Inc. from Voya Financial. The investment has been accounted for as an equity method investment and recognized within Other investments in Consolidated Balance Sheets. Also, effective as of March 1, 2021, the Company acquired $80 million of Security Life of Denver Company ("SLD") issued surplus notes and $73 million of Resolution (Life U.S. Intermediate Holdings Ltd.) issued preferred shares from affiliated entities, which were received in connection with the Individual Life Transaction.

On June 9, 2021, Voya Financial completed the sale of the independent financial planning channel of Voya Financial Advisors ("VFA") to Cetera Financial Group, Inc. (“Cetera”), one of the nation’s largest networks of independently managed broker-dealers. VFA is one of the channels through which VRIAC distributes its products. In connection with this transaction, VFA transferred more than 800 independent financial professionals serving retail customers with approximately $38 billion in assets under advisement to Cetera, while retaining approximately 500 field and phone-based financial professionals who support our business

Effective December 31, 2019, VRIAC’s sole shareholder, Voya Holdings, Inc., transferred ownership of Voya Institutional Plan Services, LLC (“VIPS”) and Voya Retirement Advisors, LLC (“VRA”) to VRIAC. VIPS and VRA provide retirement recordkeeping and investment advisory services, respectively, and the transfer was made to more closely align recordkeeping and related activities of VRIAC’s retirement business. It also had the effect of reducing VRIAC's tax liability. In addition to these non-insurance subsidiaries, VRIAC also has the wholly-owned owned non-insurance subsidiary, Voya Financial Partners, LLC ("VFP").
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On June 1, 2018, VRIAC's ultimate parent, Voya Financial, consummated a series of transactions (collectively, the "2018 Transaction'') pursuant to a Master Transaction Agreement dated December 20, 2017 (the "2018 MTA") with VA Capital Company LLC ("VA Capital") and Athene Holding Ltd ("Athene"). As part of the 2018 Transaction, VA Capital's wholly owned subsidiary Venerable Holdings Inc. ("Venerable") acquired certain of Voya Financial's assets, including all of the shares of capital stock of Voya Insurance and Annuity Company ("VIAC"), the Company's Iowa-domiciled insurance affiliate, as well as the membership interests of DSL, the Company's former broker-dealer subsidiary. Following the closing of the 2018 Transaction, VRIAC acquired a 9.99% equity interest in VA Capital.

Description of Business

We offer qualified and nonqualifiednon-qualified annuity contracts that include a variety of funding and payout options for employer-sponsored retirement plans as well as some individual plans qualified under Internal Revenue Code Sections 401, 403, 408, 457
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and 501, as well as nonqualifiednon-qualified deferred compensation plans and related services. Our products are offered primarily to small and mid-sized corporations, public and private school systems, higher education institutions, hospitals and healthcare facilities, not-for-profit organizations, state and local governments, small to mid-sized corporations and individuals. We also provide stable value investment options, including separate account guaranteed investment contracts (e.g., GICs) and synthetic GICs, to institutional clients. Pension risk transfer group annuity solutions were previously offered to institutional plan sponsors who needed to transfer their defined benefit plan obligations to us. We discontinued sales of these solutions in late 2016 to better align business activities to our priorities. This business will bewas transferred as part of the Individual Life Transaction described further under "Organization of Business". Our products are generally distributed through independentthird-party brokers and advisors, third-party administrators, pension consultants, and representatives associated with Voya Financial's owned broker-dealer and investment advisor, Voya Financial Advisors, Inc. ("VFA"). On February 8, 2021, VFA entered into an agreement with Cetera Financial Group, Inc. (“Cetera”), one of the nation’s largest networks of independently managed broker-dealers, pursuant to which Cetera will acquire the independent financial planning channel of VFA (the “Financial Planning Channel Sale”). In connection with this transaction, VFA expects to transfer approximately 900 independent financial professionals serving retail customers with approximately $40 billion in assets to Cetera, while retaining approximately 600 field and phone-based financial professionals who support our business. The transaction is expected to close in the second or third quarter of 2021. The closing is subject to certain conditions, including the receipt of required regulatory approvals.VFA.

We have one operating segment, which offers the products described below.

Products and Services

Our products include deferred and immediate (i.e., payout) annuity contracts. Our products also include programs offered to qualified plans and nonqualifiednon-qualified deferred compensation plans that package administrative and record-keeping services, participant education, and a broad suite of financial wellness offerings including retirement and financial planning guidance and advisory products, tools and services along with a variety of investment options, including proprietary and non-proprietary mutual funds and variable and fixed investment solutions that include proprietary and non-proprietary options. In addition, we offer wrapper agreements entered into with retirement plans, which contain certain benefit responsive guarantees (i.e., guarantees of principal and previously accrued interest for benefits paid under the terms of the plan) with respect to portfolios of plan-owned assets not invested with us. Stable value products are also provided to institutional plan sponsors where we may or may not be providing other employer sponsored products and services.

Annuity contracts offered by us contain variable and fixed investment options. Variable options generally provide for assumption by the customer of investment risks. Assets supporting variable annuity options are held in separate accounts that invest in mutual funds distributed by VRIAC and managed and/or distributed by its affiliates, or unaffiliated entities. Variable separate account investment income and realized capital gains and losses are not reflected in the Consolidated Statements of Operations.

Fixed options are either "fully-guaranteed" or "experience-rated." Fully-guaranteed fixed options provide guarantees on investment returns and maturity values. Experience-rated fixed options require the contract owner to assume certain investment risks, including realized capital gains and losses on the sale of invested assets and other risks subject to, among other things, principal and interest guarantees.

Fixed Indexed Annuities ("FIA") credit interest based on allocations selected by a customer in one or more of the strategies we offer and upon policy parameters that we set. The FIA strategies include a fixed interest option as well as options based on performance of various external financial market indices. Each FIA also offers a minimum value available to the client based on non-forfeiture regulations. The crediting mechanism for FIA exposes us to changes in equity indices such as the Standard & Poor's 500 Index ("S&P 500"), the Dow Jones Euro Stoxx 50, the Standard & Poor's 400 Index ("S&P 400") Midcap and the Russell 2000 indices. For accounting purposes, the index return component of a FIA is considered an embedded derivative.

Our variable annuities may offer one or more of the following guaranteed minimum death benefits:

Guaranteed Minimum Death Benefits ("GMDBs"):

Standard - Guarantees that, upon death of the individual specified in the policy, the death benefit will be no less than the premiums paid by the customer, adjusted for withdrawals.
Ratchet - Guarantees that, upon death of the individual specified in the policy, the death benefit will be no less than the greater of (1) Standard or (2) the maximum policy anniversary (or quarterly) value of the variable annuity, adjusted for withdrawals.
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Rollup - Guarantees that, upon death of the individual specified in the policy, the death benefit will be no less than the aggregate premiums paid by the contract owner, with interest at the contractual rate per annum, adjusted for withdrawals. The rollup may be subject to a maximum cap on the total benefit.
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Combo - Guarantees that, upon death of the individual specified in the policy, the death benefit will be no less than the greater of (1) Ratchet or (2) Rollup.

Variable annuities with a death benefit equal to the product's account value, or the greater of the product's account value and the Standard Death Benefit are currently being offered. All other versions have been discontinued.

Variable annuity contracts containing GMDBs expose us to equity risk. A decrease in the equity markets may cause a decrease in the account values, thereby increasing the possibility that we may be required to pay amounts to customers due to guaranteed death benefits. An increase in the value of the equity markets may increase account values for these contracts, thereby decreasing our risk associated with the GMDBs. Contracts with non-standard GMDB features are reinsured to third party reinsurers to mitigate the risk produced by such guaranteed minimum death benefits. Furthermore, contracts with standard GMDB features are out of the money so the risk associated with these contracts is unlikely to materialize in the near future.

Other Minimum Guarantees

Other variable annuity contracts contain minimum interest rate guarantees and allow the contract holder to select either the market value of the account or the book value of the account at termination. The book value of the account is equal to deposits plus interest, less any withdrawals. Under the terms of the contract, the book value settlement is paid out over time. These guarantees are offered in our Stabilizer and managed custody guarantee products ("MCG").

Fees and Margins

Insurance and expense charges, investment management fees and other fees earned by us vary by product and depend on, among other factors, the funding option selected by the customer under the product. For annuity products where assets are allocated to variable funding options through a separate account, we may charge the separate account asset-based insurance and expense fees.

In addition, where the customer selects a variable funding option, we may receive compensation from the fund's adviser, administrator, or other affiliated entity, for the performance of certain administrative, recordkeeping or other services. This compensation, which may be deducted from fund assets, may include a share of the management fee, service fees, 12b-1 distribution fees or other revenues based on a percentage of average net assets held in the fund by us. For funds managed by an affiliate, additional compensation may be received in the form of intercompany payments from the fund's investment advisor or the investment advisor's parent in order to allocate revenue and profits across the organization.

For fixed funding options, we earn a margin that is based on the difference between income earned on the investments supporting the liability and interest credited to customers.

In connection with programs offered to qualified plans and nonqualifiednon-qualified deferred compensation plans that package administrative and recordkeeping services along with a menu of investment options, we may receive 12b-1 and service plan fees, as well as compensation from the affiliated or nonaffiliatednon-affiliated fund's advisor, administrator, or other affiliated entity for the performance of certain shareholder services.

We may also receive other fees or charges depending on the nature of the products.

Strategy, Method of Distribution and Principal Markets

Our products are offered primarily to small and mid-sized corporations, public and private school systems, higher education institutions, hospitals and healthcare facilities, not-for-profit organizations, state and local governments, small to mid-sized corporations and individuals. Our products are generally distributed through independent brokers and advisors, third-party administrators, consultants, and representatives associated with Voya Financial's owned broker-dealer and investment advisor, VFA.

We are not dependent upon any single customer and no single customer accounted for more than 10% of consolidated revenue in 2020.2021. In addition, the loss of business from any one, or a few, independent brokers or agents would not have a material adverse effect on us.

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Assets Under Management and Administration

A substantial portion of our fees, other charges and margins, are based on assets under management ("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 and annuity products. AUM includes general account assets 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). Assets under administration ("AUA") represent accumulated assets on contracts pursuant to which we either provide administrative services or product guarantees for assets managed by third parties. 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. The AUM, AUA and deposits, were as follows as of and for the periods indicated:
December 31,December 31,
2020201920212020
Deposits:Deposits:Deposits:
Variable annuitiesVariable annuities$8,452 $8,944 Variable annuities$9,439 $8,452 
Fixed annuitiesFixed annuities2,071 2,119 Fixed annuities2,153 2,071 
Total annuitiesTotal annuities10,523 11,063 Total annuities11,592 10,523 
Other productsOther products1,854 901 Other products802 1,854 
Total depositsTotal deposits$12,377 $11,964 Total deposits$12,394 $12,377 
Assets under management:Assets under management:Assets under management:
Variable annuitiesVariable annuities$77,322 $70,505 Variable annuities$86,758 $77,322 
Fixed annuitiesFixed annuities31,145 29,140 Fixed annuities28,910 31,145 
Total annuitiesTotal annuities108,467 99,645 Total annuities115,668 108,467 
Other productsOther products12,252 10,863 Other products12,329 12,252 
Total assets under managementTotal assets under management$120,719 $110,508 Total assets under management$127,997 $120,719 
Assets under administrationAssets under administration344,903 273,200 Assets under administration388,611 344,903 
Total assets under management and administrationTotal assets under management and administration$465,622 $383,708 Total assets under management and administration$516,608 $465,622 

AUM are generally available for contract owner withdrawal and are generally subject to market value adjustments and/or deferred surrender charges. To encourage customer retention and recover acquisition expenses, contracts typically impose a surrender charge on contract owner balances withdrawn within a period of time after the contract's inception. The period of time and level of the charge vary by product. In addition, an approach incorporated into certain recent variable annuity contracts with fixed funding options allows contract owners to receive an incremental interest rate if withdrawals from the fixed account are spread over a period of five years. Further, more favorable credited rates may be offered after policies have been in force for a period of time. Existing tax penalties on annuity and certain custodial account distributions prior to age 59 1/2 provide further disincentive to customers for premature surrenders of account balances, but generally do not impede transfers of those balances to products of competitors.

Competition

Within the retirement business, competition from traditional insurance carriers, 403(b) and 457 plan providers, as well as banks, mutual fund companies and other investment managers, offers consumers many choices. Principal competitive factors are reputation for investment performance, product features, service, cost and the perceived financial strength of the investment manager. Competition may affect, among other matters, both business growth and the pricing of our products and services.

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Reinsurance Arrangements

We utilize indemnity reinsurance agreements to reduce our exposure to losses from our annuity insurance business. Reinsurance permits recovery of a portion of losses from reinsurers, although it does not discharge our primary liability as the direct insurer of the risks. Reinsurance treaties are structured as monthly or yearly renewable term, coinsurance, or modified coinsurance. All agreements that we currently have relate to specifically-identified blocks of business or contracts; therefore the agreements do not cover new contracts written, if any.

See Management's Narrative Analysis of the Results of Operations and Financial Condition-Liquidity and Capital Resources-Reinsurance Agreements in Part II, Item 7. of this Annual Report on Form 10-K for further discussion of our reinsurance arrangements.

Investment Overview and 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 in all cases 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.

Investments are managed by Voya Investment Management LLC, our affiliate, pursuant to an investment advisory agreement. Portfolios are established for groups of products with similar liability characteristics within us. Our investment portfolio consists largely of high quality fixed maturity securities and short-term investments, investments in commercial mortgage loans, limited partnerships and other instruments, including a small amount of equity holdings. Fixed maturity securities include publicly issued corporate bonds, government bonds, privately placed notes and bonds, mortgage-backed securities and asset-backed securities. We use derivatives for hedging purposes and to replicate exposure to other assets as a more efficient means of assuming credit exposure similar to bonds of the underlying issuer(s).

Employees and Other Shared Services

VRIAC had 1,6671,637 employees as of December 31, 2020,2021, primarily focused on managing new business processing, product distribution, marketing, customer service and product management for us and certain of our affiliates, as well as providing product development, actuarial and finance services to us and certain of our affiliates. We also utilize services provided by Voya Services Company and other affiliates. These services include risk management, human resources, investment management, information technology, legal and compliance services, as well as other new business processing, actuarial and finance related services. The affiliated companies are reimbursed for our use of various services and facilities under a variety of intercompany agreements.

REGULATION

Our operations and businesses are subject to a significant number of Federal and state laws, regulations, administrative determinations.

Following is a description of certain legal and regulatory frameworks to which we are or may be subject.

Insurance Regulation

Our operations are subject to comprehensive regulation and supervision under U.S. state and federal laws. Each U.S. state, the District of Columbia and U.S. territories and possessions have insurance laws that apply to companies licensed to carry on an insurance business in the jurisdiction. We are subject to the insurance laws of the State of Connecticut, where we are domiciled and other jurisdictions in which we transact business. The primary regulators of our insurance operations are the insurance departments of Connecticut and New York.

State insurance regulators have broad administrative powers with respect to all aspects of the insurance business including: licensing to transact business, licensing agents, admittance of assets to statutory surplus, regulating premium rates for certain insurance products, approving policy forms, regulating unfair trade and claims practices, establishing reserve requirements and solvency standards, establishing credit for reinsurance requirements, fixing maximum interest rates on life insurance policy
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loans and minimum accumulation or surrender values and other matters. State insurance laws and regulations include numerous provisions governing the marketplace conduct of insurers, including provisions governing the form and content of disclosures to consumers, product illustrations, advertising, product replacement, suitability, sales and underwriting practices, complaint handling and claims handling. State regulators enforce these provisions through periodic market conduct examinations. State insurance laws and regulations regulating affiliate transactions, the payment of dividends and change of control transactions are discussed in greater detail below.

State insurance laws and regulations require us to file financial statements with state insurance regulators everywhere we are licensed and our operations and accounts are subject to examination by those regulators at any time. We prepare statutory financial statements in accordance with accounting practices and procedures developed by regulators to monitor and regulate the solvency of insurance companies and their ability to pay current and future policyholder obligations. The National Association of Insurance Commissioners (the "NAIC") has approved these uniform statutory accounting principles ("SAP") which have in turn been adopted, in some cases with minor modifications, by all state insurance regulators.

We are subject to periodic financial examinations and other inquiries and investigations by our state insurance regulators and other state law enforcement agencies and attorneys general.

Insurance Holding Company Regulation

Because we are part of an affiliated group of companies, we are subject to the insurance holding company law of the State of Connecticut, our state of domicile. State insurance holding company law generally requires each insurance company directly or indirectly owned by the holding company to register with the insurance regulator in the insurance company’s state of domicile and to furnish annually financial and other information about the operations of companies within the holding company system. Generally, all transactions affecting the insurers in the holding company system must be fair and reasonable and, if material, require prior notice and approval or non-disapproval by the state’s insurance regulator.

Change of Control. State insurance holding company regulations, including those of Connecticut, generally provide that no person, corporation or other entity may acquire control of an insurance company, or a controlling interest in any parent company of an insurance company, without the prior approval of such insurance company’s domiciliary state insurance regulator. Under Connecticut law, any person acquiring, directly or indirectly, 10% or more of the voting securities of an insurance company is presumed to have acquired "control" of the company. This statutory presumption of control may be rebutted by a showing that control does not exist in fact. Our Connecticut insurance regulators, however, may find that "control" exists in circumstances in which a person owns or controls less than 10% of voting securities.

To obtain approval of any change in control, any proposed acquirer must file with the Connecticut Insurance Department an application disclosing, among other information, its background, financial condition, the financial condition of its affiliates, the source and amount of funds by which it will affect the acquisition, the criteria used in determining the nature and amount of consideration to be paid for the acquisition, proposed changes in the management and operations of the insurance company and other related matters.

Any purchaser of shares of common stock representing 10% or more of the voting power of our capital stock or that of Voya Financial, Inc. will be presumed to have acquired control of our Company unless, following application by that purchaser with the Connecticut Insurance Department, the Insurance Commissioner determines otherwise.

NAIC Regulations. The current insurance holding company model act and regulations (the "NAIC Regulations"), a version of which has been adopted by our domicile states, include a requirement that an insurance holding company system's ultimate controlling person submit annually to its lead state insurance regulator an "enterprise risk report" that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole. The NAIC Regulations also include a provision requiring a controlling person to submit prior notice to its domiciliary insurance regulator of a divestiture of controlConnecticut adopted its version of the NAIC Regulations.

The NAIC's "Solvency Modernization Initiative" focuses on: (1) capital requirements; (2) corporate governance and risk management; (3) group supervision; (4) statutory accounting and financial reporting; and (5) reinsurance. This initiative has resulted in the adoption by the NAIC, and our insurance subsidiaries' domicile states, of the Risk Management and Own Risk and Solvency Assessment Model Act ("ORSA"). ORSA requires that insurers maintain a risk management framework and conduct an internal own risk and solvency assessment of the insurer's material risks in normal and stressed environments. The assessment must be documented in a confidential annual summary report, a copy of which must be made available to regulators
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as required or upon request. In accordance with statutory requirements, Voya Financial, Inc. regularly prepares and submits ORSA summary reports on behalf of the consolidated enterprise to the Connecticut Insurance Department, the legal insurance regulator of Voya Financial, Inc.'s consolidated enterprise. This initiative also resulted in the adoption by the NAIC and several of our insurance subsidiary domiciliary regulators of the Corporate Governance Annual Filing Model Act, which requires insurers, including Voya, to make an annual confidential filing regarding their corporate governance policies.

Dividend Payment Restrictions. The insurance law of an insurance company's state of domicile imposes certain restrictions on a domiciliary insurance company's ability to pay dividends to its parentThese restrictions are based in part on the prior year’s statutory income and surplusIn general, dividends up to specified levels are considered ordinary and may be paid without prior approvalDividends 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 Connecticut insurance law, 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.

Financial Regulation

Policy and Contract Reserve Sufficiency Analysis. Under the laws and regulations of Connecticut, we are required to conduct annual analyses of the sufficiency of our statutory reservesOther jurisdictions in which we are licensed may have certain reserve requirements that differ from our state of domicileIn each case, a qualified actuary must submit an opinion that states that the aggregate statutory reserves, when considered in light of the assets held with respect to such reserves, are sufficient to meet the insurer's contractual obligations and related expensesIf such an opinion cannot be rendered, the affected insurer must set up additional statutory reserves by moving funds from available statutory surplusWe submit these opinions annually to applicable insurance regulatory authorities.

Surplus and Capital Requirements. Insurance regulators have the discretionary authority, in connection with the ongoing licensing of insurance companies, to limit or prohibit the ability of an insurer to issue new policies if, in the regulators' judgment, the insurer is not maintaining a minimum amount of surplus or is in hazardous financial condition. Insurance regulators may also limit the ability of an insurer to issue new life insurance policies and annuity contracts above an amount based upon the face amount and premiums of policies of a similar type issued in the prior year. We do not currently believe that the current or anticipated levels of our statutory surplus present a material risk that any such regulator would limit the amount of new policies that we may issue.

Risk-Based Capital. The NAIC has adopted risk-based capital ("RBC") requirements for life, health and property and casualty insurance companiesThe requirements provide a method for analyzing the minimum amount of adjusted capital (statutory capital and surplus plus other adjustments) appropriate for an insurance company to support its overall business operations, taking into account the risk characteristics of the company's assets, liabilities and certain off-balance sheet itemsState insurance regulators use the RBC requirements as an early warning tool to identify possibly inadequately capitalized insurers. An insurance company found to have insufficient statutory capital based on its RBC ratio may be subject to varying levels of additional regulatory oversight depending on the level of capital inadequacyAs of December 31, 2020,2021, our Total Adjusted Capital exceeded statutory minimum RBC levels that would require any regulatory or corrective action.

Effective December 31, 2021, The NAIC is currently working with the American Academy of Actuaries as they consider possible updatesadopted changes to the asset factors that are used to calculate the RBC requirements for certain investment portfolio assets. The NAIC review may leadchanges led to an expansion in the number of NAIC asset class categories for factor-based RBC requirements and the adoption of new factors, which could increaseincreased capital requirements on some securities and decreasedecreased capital requirements on others. We cannot predict what, if any, changes may result from this review or their potentialThe impact on our RBC ratios. We will continueratio is expected to monitor developments inbe manageable. In connection with this area.change, we have lowered our target RBC ratio to 375%.

IRIS Tests. The NAIC has developed a set of financial relationships or tests known as the Insurance Regulatory Information System ("IRIS") to assist state regulators in monitoring the financial condition of U.S. insurance companies and identifying companies requiring special attention or action. For IRIS ratio purposes, we submit data to the NAIC on an annual basis. The NAIC analyzes this data using prescribed financial data ratios. A ratio falling outside the prescribed "usual range" is not considered a failing result. Rather, unusual values are viewed as part of the regulatory early monitoring system. In many cases, it is not unusual for financially sound companies to have one or more ratios that fall outside the usual range.

Regulators typically investigate or monitor an insurance company if its IRIS ratios fall outside the prescribed usual range for four or more of the ratios, but each state has the right to inquire about any ratios falling outside the usual rangeThe inquiries made by state insurance regulators into an insurance company's IRIS ratios can take various forms.

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We do not anticipate regulatory action as a result of the 20202021 IRIS ratio results. In all instances in prior years, regulators have been satisfied upon follow-up that no regulatory action was required.

Insurance Guaranty Associations. Each state has insurance guaranty association laws that require insurance companies doing business in the state to participate in various types of guaranty associations or other similar arrangements. The laws are designed to protect policyholders from losses under insurance policies issued by insurance companies that become impaired or insolvent. Typically, these associations levy assessments, up to prescribed limits, on member insurers on the basis of the member insurer’s proportionate share of the business in the relevant jurisdiction in the lines of business in which the impaired or insolvent insurer is engaged. Some jurisdictions permit member insurers to recover assessments that they paid through full or partial premium tax offsets, usually over a period of years.

We accrue the cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations and the amount of premiums written in each state. We have estimated this undiscounted liability to be minimal as of December 31, 20202021 and 2019.2020. We have also recorded an asset of $8 million and $9 million as of December 31, 2021 and 2020, and 2019,respectively, for future credits to premium taxes. We estimate our liabilities for future assessments under state insurance guaranty association laws. We believe the reserves established are adequate for future assessments relating to insurance companies that are currently subject to insolvency proceedings.

Cybersecurity Regulatory Activity

The NAIC, numerous state and federal regulatory bodies and self-regulatory organizations like FINRA are focused on cybersecurity standards both for the financial services industry and for all companies that collect personal information, and have proposed and enacted legislation and regulations, and issued guidance regarding cybersecurity standards and protocols. For example,These laws and regulations constantly evolve and remain subject to significant change. In addition, the application and interpretation of these laws and regulations are often uncertain.

In response to the growing threat of cyber-attacks in the insurance industry, certain jurisdictions have begun to consider new cybersecurity measures, including the adoption of cybersecurity regulations. On October 24, 2017, the NAIC adopted its Insurance Data Security Model Law (the “Model Law”), intended to serve as model legislation for states to enact in order to govern cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state insurance laws. These laws are designed to ensure that licensees of the Department of Insurance in these states have strong and aggressive cybersecurity programs to protect the personal data of their customers. Alabama, Connecticut, Delaware, Indiana, Iowa, Louisiana, Maine, Michigan, Mississippi, New Hampshire, North Dakota, Ohio, South Carolina and Virginia have adopted versions of the Model Law, each with a different effective date, and other states may adopt versions of the Model Law in the future. In February 2017, the New York Department of Financial Services ("NYDFS") issued final Cybersecurity Requirements for Financial Services Companies that requireis not based on the Model Law, that requires banks, insurance companies, and other financial services institutions regulated by the NYDFS, including us, to establish and maintain a comprehensive cybersecurity program "designed to protect consumers and ensure the safety and soundness of New York State's financial services industry." In 2018industry". NYDFS’s Cybersecurity Requirements specifically provide for: (i) controls relating to the governance framework for a cybersecurity program; (ii) risk-based minimum standards for technology systems for data protection; (iii) minimum standards for cyber breach responses, including notice to the NYDFS of material events; and 2019, multiple other states have adopted versions(iv) identification and documentation of material deficiencies, remediation plans and annual certification of regulatory compliance with the NAIC Insurance Data Security Model Law. These laws, with effective dates ranging from January 1, 2019 to January 20, 2021, ensure that licensees of the Departments of Insurance in these states have strong and aggressive cybersecurity programs to protect the personal data of their customers. NYDFS.

During 2021,2022, we expect cybersecurity risk management, prioritization and reporting to continue to be an area of significant focus by governments, regulatory bodies and self-regulatory organizations at all levels.

Securities Regulation Affecting Insurance Operations

We sell group variable annuities that are registered with and regulated by the SEC as securities under the Securities Act of 1933, as amended (the "Securities Act"). These products are issued through separate accounts that are registered as investment companies under the Investment Company Act, and are regulated by state law. Each separate account is generally divided into sub-accounts, each of which invests in an underlying mutual fund which is itself a registered investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act"). Our mutual funds, and in certain states, our variable annuity products, are subject to filing and other requirements under state securities laws. Federal and state securities laws and regulations are primarily intended to protect investors and generally grant broad rulemaking and enforcement powers to regulatory agencies.

In June 2019, the SEC approved a new rule, Regulation Best Interest (“Regulation BI”) and related forms and interpretations. Among other things, Regulation BI applies a heightened “best interest” standard to broker-dealers and their associated persons,
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including our retail broker-dealer, Voya Financial Advisors, when they make securities investment recommendations to retail customers. Compliance with Regulation BI was required beginning June 30, 2020. We do not believe ongoing compliance with Regulation BI will have a material impact on us.

Federal Initiatives Affecting Insurance Operations

The U.S. federal government generally does not directly regulate the insurance business. Federal legislation and administrative policies in several areas can significantly affect insurance companies. These areas include federal pension regulation, financial services regulation, federal tax laws relating to life insurance companies and their products and the USA PATRIOT Act of 2001 (the "Patriot Act") requiring, among other things, the establishment of anti-money laundering monitoring programs.

Regulation of Retirement Products and Services

Our retirement products and services are subject to federal and state tax, securities, fiduciary (including the Employment Retirement Income Security Act ("ERISA")), insurance and other laws and regulations. The SEC, FINRA, state securities commissions, state banking and insurance departments and the Department of Labor ("DOL") and the Treasury Department are the principal regulators that regulate these products and services.

Federal and state securities laws and regulations are primarily intended to protect investors in the securities markets and generally grant regulatory agencies broad enforcement and rulemaking powers, including the power to limit or restrict the conduct of business in the event of non-compliance with such laws and regulations. Federal and state securities regulatory authorities and FINRA from time to time make inquiries and conduct examinations regarding compliance by us, our subsidiaries and affiliates with securities and other laws and regulations.

Department of Labor Rule Regarding Fiduciaries

In DecemberJune 2020, the Department of Labor (“DOL”) adopted a revised interpretation to the five part test to determine investment advice fiduciary status under Title I of ERISA. TheIn December 2020, the DOL also adopted a prohibited transaction exemption that, subject to meeting certain requirements, will allow investment advice fiduciaries to receive compensation that might not otherwise be considered an ERISA prohibited transaction. The DOL has deferred enforcement of the new fiduciary interpretation until the prohibited transaction exemption becomes effective on February 16, 2021. We do not believe compliance with the fiduciary interpretation or the prohibited transaction exemption will have a material impact on us. We
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anticipate other state and federal regulators may follow with their own rules applicable to investment recommendations relating to other separate or overlapping investment products and accounts, such as insurance products and retirement accounts. If these additional rules are more onerous than Regulation BI and DOL rules, or do not coordinate with Regulation BI and DOL rules, the impact on us could be more substantial.

Federal Initiatives Affecting Insurance Operations

The U.S. federal government generally does not directly regulate the insurance business. Federal legislation and administrative policies in several areas can significantly affect insurance companies. These areas include federal pension regulation, financial services regulation, federal tax laws relating to life insurance companies and their products and the USA PATRIOT Act of 2001 (the "Patriot Act") requiring, among other things, the establishment of anti-money laundering monitoring programs.

Regulation of Retirement Products and Services

Our retirement products and services are subject to federal and state tax, securities, fiduciary (including the Employment Retirement Income Security Act ("ERISA")), insurance and other laws and regulations. The SEC, FINRA, state securities commissions, state banking and insurance departments and the Department of Labor ("DOL") and the Treasury Department are the principal regulators that regulate these products and services.

Federal and state securities laws and regulations are primarily intended to protect investors in the securities markets and generally grant regulatory agencies broad enforcement and rulemaking powers, including the power to limit or restrict the conduct of business in the event of non-compliance with such laws and regulations. Federal and state securities regulatory authorities and FINRA from time to time make inquiries and conduct examinations regarding compliance by us, our subsidiaries and affiliates with securities and other laws and regulations.

Employee Retirement Income Security Act Considerations

ERISA is a comprehensive federal statute that applies to U.S. employee benefit plans sponsored by private employers and labor unions. Plans subject to ERISA include pension and profit sharing plans and welfare plans, including health, life and disability plans. Among other things, ERISA imposes reporting and disclosure obligations, prescribes standards of conduct that apply to plan fiduciaries and prohibits transactions known as "prohibited transactions," such as conflict-of-interest transactions, self-dealing and certain transactions between a benefit plan and a party in interest. ERISA also provides for a scheme of civil and criminal penalties and enforcement. Our insurance, investment management and retirement businesses provide services to employee benefit plans subject to ERISA, including limited services under specific contracts where we may act as an ERISA fiduciary. We are also subject to ERISA’s prohibited transaction rules for transactions with ERISA plans, which may affect our ability to, or the terms upon which we may, enter into transactions with those plans, even in businesses unrelated to those giving rise to party in interest status. The applicable provisions of ERISA and the Internal Revenue Code are subject to enforcement by the DOL, the U.S. Internal Revenue Service ("IRS") and the U.S. Pension Benefit Guaranty Corporation ("PBGC").

The CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which became law on March 27, 2020, provides a range of economic stimulus and relief for individuals and businesses. Among other provisions, the CARES Act created a new category of distribution from most retirement plans and IRAs, a "coronavirus related distribution", or CRD. Retirement plan participants (subject to sponsor approval) and IRA owners who certify that they have been negatively impacted by COVID-19 may each, through the end of 2020, withdraw up to an aggregate of $100,000 penalty-free, and pay resulting income taxes over a 3-year period or re-contribute the withdrawn amount into a qualified plan or IRA during the same period. We do not believe the CARES Act will have a material effect on our financial condition or results of operations.

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Other Laws and Regulations

USA Patriot Act

The Patriot Act contains anti-money laundering and financial transparency laws applicable to broker-dealers and other financial services companies, including insurance companies. The Patriot Act seeks to promote cooperation among financial institutions, regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering. Anti-money laundering laws outside of the United States contain provisions that may be different, conflicting or more rigorous. Internal practices, procedures and controls are required to meet the increased obligations of financial institutions to identify their customers, watch for and report suspicious transactions, respond to requests for information by regulatory authorities and law enforcement agencies and share information with other financial institutions.

We are also required to follow certain economic and trade sanctions programs administered by the Office of Foreign Asset Control that prohibit or restrict transactions with suspected countries, their governments and, in certain circumstances, their nationals. We are also subject to regulations governing bribery and other anti-corruption measures.

Privacy Laws and Regulation

U.S. federalWe are subject to laws, regulations and state laws and regulations, as well as international laws such as the General Data Protection Regulation ("GDPR") of the European Union,directives that require all companies generally, and financial institutions including insurance companies, in particular,and other businesses to protect the security and confidentiality of personal information, including health-related and customer information, and to notify consumers abouttheir customers and other individuals of their policies and practices relating to theirthe collection, use, and disclosure of consumerhealth-related and customer information. In addition, we must comply with international privacy laws, regulations, and directives concerning the cross border transfer or use of employee and customer personal information. These laws, regulations and directives also:
provide additional protections regarding the use and disclosure of certain information and the protection of thesuch as national identifier numbers (e.g., social security and confidentiality of that information. The collection, use, disclosure and security of protected health information is also governed by federal and state laws. Federal and state laws also numbers);
require notice to affected individuals, law enforcement, regulators and others if there is a breach of the security of certain personal information, including social security numbers, and require holders of certain personal information to protect the security of the data. Federal regulations information;
require financial institutions to implement effective programs to detect, prevent, and mitigate identity theft. Federal and state laws and regulations theft;
regulate the ability of financial institutions to make telemarketing calls and to send unsolicitede-mail, text, messages, e-mail or fax messages to consumers and customers. Federal lawscustomers;
require oversight of third parties that have access to, and regulations also regulatehandle, personal information; and
prescribe the permissible uses of certain typespersonal information, including customer information and consumer report information.

Some countries have also instituted laws requiring in-country data processing and/or in-country storage of the personal data of its citizens. Compliance with such laws could result in higher technology, administrative and other costs for us and could affect how products and services are offered or require us to structure our businesses, operations and systems in less efficient ways.

Certain of our activities are subject to the privacy regulations of the Gramm-Leach-Bliley Act of 1999 (the “GLBA”), along with its implementing regulations, which restricts certain collection, processing, storage, use and disclosure of personal information, including consumer report information. Federalrequires notice to individuals of privacy practices, provides individuals with certain rights to prevent the use and state governmentsdisclosure of certain nonpublic or otherwise legally protected information and regulatory bodies may consider additional or more detailed regulation regarding these subjects. Numerous state regulatory bodies are focused on privacyimposes requirements for all companies that collectthe safeguarding and proper destruction of personal information through the issuance of data security standards or guidelines.

We are subject to numerous state laws governing the protection of personal and confidential information of our clients or employees, including the NYDFS Cybersecurity Regulation which mandates detailed cybersecurity standards for all institutions, including insurance entities, authorized by the NYDFS to operate in New York. We are subject to certain other states cybersecurity standards, including in states that have proposed and enacted legislation and regulations regarding privacy standards and protocols.adopted the NAIC Insurance Data Security Model Law. For example,more information, see “—Cybersecurity Regulatory Activity.”

We are also subject to California enactedlaw, including the California Consumer Privacy Act of 2018 (“CCPA”), which took effect onbecame effective January 1,20201, 2020. The CCPA established a privacy framework for covered businesses which collect and process the personal information of California consumers. It includes a broad definition of personal information, affords California residents certain individual rights of access and deletion regarding their personal data, and limits the “sale” of such information, which is also broadly construed to include making personal information available to third parties for valuable consideration. The CCPA established potentially severe statutory damages for businesses that fail to implement reasonable security measures to protect against breaches of personal information, and includes a broad private right of action available to affected consumers. The CCPA excludes data subject to the GLBA; however, this is not an entity-wide exception. The breach of California consumers’ personal data, to the extent it involves data not covered by GLBA, represents a significant risk of liability.

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Moreover, the legal landscape relating to data privacy and data protection is quickly evolving, which may increase operational and compliance costs associated with new or amended laws and regulations. For instance, since the CCPA was enacted in 2018, the California Attorney General has issued several draft implementing regulations, including following the CCPA coming into force in 2020. In November 2020, the California Privacy Rights Act of 2020, which will go into effect on January 1, 2023. Consumer privacy legislation similar(the “CRPA”) was approved by California voters to amend the CCPA and to establish a new data protection authority, the California Privacy Protection Agency, authorized to promulgate new data protection regulations. Adapting our business and practices to the California Consumer Privacy Act has been introducedCCPA, as amended by the CPRA, and any forthcoming regulations, may be burdensome and could involve substantial additional or diverted resources.

More broadly, the General Data Protection Regulation (“GDPR”) which regulates data protection for all individuals within the European Union (“EU”), including foreign companies processing data of EU residents, became effective on May 25, 2018 and applies to all of our subsidiaries operating in other states. Broad data privacy legislationthe EU. The U.K. has also been introducedimplemented the GDPR (the “U.K. GDPR”). The GDPR and the U.K. GDPR set out a number of requirements that must be complied with when handling the personal data of such EU and U.K. based data subjects respectively including: the obligation to appoint data protection officers in certain circumstances; new rights for individuals to be “forgotten” and rights to data portability; the principal of accountability and the obligation to make public notification of significant data breaches. The GDPR and the U.K. GDPR include restrictions on transfers outside the U.K. and the European Economic Area (including Switzerland) and the requirement to include specific data protection provisions in agreements with data processors. The GDPR and the U.K. GDPR enhance individuals’ rights, introduces complex and far-reaching company obligations and increases penalties significantly in case of violation. The interpretation and application of data protection laws in the U.S. Senate. Should, Europe and elsewhere are developing and are often uncertain and in flux. The introduction of the U.K. GDPR and the GDPR, and any such Stateresultant changes in U.K. or Federal legislation be enacted, weEU member states’ national laws and other covered businessesregulations, may increase our compliance obligations and costs and may necessitate the review and implementation of policies and processes relating to our collection and use of data. It is possible that these laws or cybersecurity regulations may be requiredinterpreted and applied in a manner that is inconsistent with our data protection or security practices.

On October 21, 2019, the NAIC formed a Privacy Protections Working Group to incur significant expensereview state insurance privacy protections regarding the collection, use and disclosure of information gathered in connection with insurance transactions. During its meeting on July 30, 2020, the Privacy Protections Working Group indicated that it would begin a gap analysis of existing privacy protections in order to meet its requirements.identify differences in coverage between different privacy regimes, focusing on consumer issues, industry obligations, and regulatory enforcement. The Privacy Protections Working Group continues to work on this gap analysis, which could result in recommended changes to certain NAIC model laws and regulations related to privacy.

Additionally, we are subject to the terms of our privacy policies and privacy-related obligations to third parties. Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to consumers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of sensitive information, which could include personally identifiable information or other user data, may result in governmental or regulatory investigations, enforcement actions, regulatory fines, compliance orders, litigation or public statements against us by consumer advocacy groups or others, and could cause consumers to lose trust in us, all of which could be costly and have an adverse effect on our business. In addition, new and changed rules and regulations regarding privacy, data protection (in particular those that impact the use of machine intelligence) and cross-border transfers of consumer information could cause us to delay planned uses and disclosures of data to comply with applicable privacy and data protection requirements. For example, our use of certain vendors outside of the United States to perform services on our platform could subject us to additional data protection regimes and increased risk of noncompliance. Moreover, if third parties that we work with violate applicable laws or our policies, such violations also may put personal information at risk, which may result in increased regulatory scrutiny.

Environmental Considerations

Our ownership and operation of real property and properties within our commercial mortgage loan portfolio is subject to federal, state and local environmental laws and regulations. Risks of hidden environmental liabilities and the costs of any required clean-up are inherent in owning and operating real property. Under the laws of certain states, contamination of a property may give rise to a lien on the property to secure recovery of the costs of clean-up, which could adversely affect the valuation of, and increase the liabilities associated with, the commercial mortgage loans we hold. In several states, this lien has priority over the lien of an existing mortgage against such property. In addition, we may be liable, in certain circumstances, as an "owner" or "operator," for costs of cleaning-up releases or threatened releases of hazardous substances at a property mortgaged to us under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and the laws of certain states. Application of various other federal and state environmental laws could also result in the imposition of liability on us for costs associated with environmental hazards.

We routinely conduct environmental assessments prior to closing any new commercial mortgage loans or to taking title to real estate. Although unexpected environmental liabilities can always arise, we seek to minimize this risk by undertaking these environmental assessments and complying with our internal environmental policies and procedures.

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Item 1A.        Risk Factors
        (Dollar amounts in millions, unless otherwise stated)

We face a variety of risks that are substantial and inherent in our business, including market, liquidity, credit, operational, legal, regulatory and reputational risks. The following is a summary of the more important factors that could affect our business, sales, revenues, AUM, reputation, results of operation, liquidity, profitability or financial condition.

Conditions in the global capital markets and the economy.
The COVID-19 pandemic.
Adverse capital and credit market conditions and the cost of credit and capital.
The level of interest rates and in particular the continuation of the low interest rate environment or a period of rapidly increasing interest rates.
The expected replacement of LIBOR and related reforms.
A downgrade or a potential downgrade in our financial strength or credit ratings.
Our ability to increase or maintain our market share in highly competitive markets.
The adequacy of our risk management policies and procedures, including hedging programs.
The inability of counterparties to meet their financial obligations.
Requirements to post collateral or make payments related to changes in market value of specified assets.
The diminishment in value of our invested assets and the investment returns credited to customers.
The relative illiquidity of some of our investments as well as significant market valuation fluctuations of certain asset classes.
The complexity of our products and services and the reliance on intermediaries to properly perform services and not misrepresent our products or services.
Inherent uncertainty in various methodologies, estimations and assumptions that we use to value our investments.
Risks associated with our participation in a securities lending program and a repurchase program.
Differences between actual policy experience and pricing, reserving or actuarial assumptions.
Unfavorable developments in interest rates, credit spreads and policyholder behavior related to our stable value products, and the ability of our hedge program and risk mitigation features to offset potential consequences.
Potential acceleration of the amortization of DAC, DSI and/or VOBA.
Credit risk associated with reinsurance, as well as its general availability, affordability or adequacy.
A decrease in our RBC ratio (as a result of a reduction in statutory surplus and/or increase in RBC requirements) could result in increased scrutiny by insurance regulators and rating agencies.
A concentration of our institutional funding with a Federal Home Loan Bank.
Any failure to protect the privacy and confidentiality of customer information.
Interruption or other operational failures in telecommunication, information technology and other operational systems, including as a result of human error.
A failure to maintain the security, integrity, confidentiality or privacy of our telecommunication, information technology and other operational systems, or the sensitive data residing on such systems.
Changes in accounting standards.
Potential limitations on our ability to use certain beneficial deferred tax assets.
Potential requirements to reduce the carrying value of our deferred income tax asset or establish an additional valuation allowance against the deferred income tax asset.
Adverse publicity or increased governmental and regulatory actions with respect to us, other well-known companies or the financial services industry in general.
Litigation or potential litigation.
A loss of, or significant change in, key product distribution relationships.
The occurrence of natural or man-made disasters.
Potential difficulties arising from outsourcing relationships.
The application of regulations governing our businesses and those of our affiliates, as well as changes in such regulation.
The application of regulations governing our insurance businesses in particular, as well as changes in regulation, enforcement actions and regulatory investigations.
The regulation of our products, and failure to meet any of the complex product requirements.
Changes in tax laws and interpretations of existing tax law.
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Risks Related to Our Business

Conditions in the global capital markets and the economy generally have affected and may continue to affect our business and results of operations.

Our business and results of operations are materially affected by conditions in the global capital markets and the economy generally and are vulnerable to general economic disruption, decreases in asset prices, increases in market volatility and reductions in the availability of credit. In 2020, the economic dislocation created by the COVID-19 pandemic created many of these conditions at least temporarily, and some such conditions, in particular high unemployment and historically low interest rates, have persisted into 2021. See Risk Factor "The COVID-19 pandemic has had, and is likely to continue to have, adverse effects on our financial condition and results of operations".

Although we carry out business almost exclusively in the United States, we are affected by both domestic and international macroeconomic developments. Volatility and disruptions in financial markets, including global capital markets, can have an adverse effect on our investment portfolio, and our liabilities are sensitive to changing market factors. Factors including, but not limited to, geopolitics and political uncertainty, interest rates, credit spreads, equity prices, derivative prices and availability, real estate markets, exchange rates, the volatility and strength of the capital markets, and deflation and inflation, all affect our financial condition. Disruptions in one market or asset class can also spread to other markets or asset classes. Upheavals in the financial markets can also affect our financial condition (including our liquidity and capital levels) as a result of impacts, including diverging impacts, on the value of our assets and our liabilities.

Even in the absence of a market downturn, our retirement products, as well as our investment returns and our access to and cost of financing, are sensitive to equity, fixed income, real estate and other market fluctuations and general economic and political conditions. These fluctuations and conditions could materially and adversely affect our results of operations, financial condition and liquidity.

To the extent that any of the foregoing risks were to emerge in a manner that adversely affected general economic conditions, financial markets, or the markets for our products and services, our financial condition, liquidity, and results of operations could be materially adversely affected.

The COVID-19 pandemic has had, and is likely to continue to have, adverse effects on our financial condition and results of operations.

Many businesses around the world, including ours, have been significantly affected by the global outbreak of COVID-19 disease. Since March 2020, when the disease first became widespread, global financial markets have experienced periods of extreme volatility. These market events, which include a significant drop in equity prices in the early spring followed by a recovery in the second and third quarters, declines in U.S.TreasuryU.S. Treasury yields and distress in certain credit market sectors such as energy, real estate, transportation and retail, have adversely affected our 2020 financial results and are likely to continue to have adverse effects on our business. These future adverse effects, which could be material, may include:

Increased impairments or credit rating downgrades within our general account portfolio, which could consume our excess capital and reduce our dividend capacity. Although we currently believe that we have adequate liquidity for the foreseeable future, if our asset portfolio were to experience a material amount of impairments or ratings downgrades, Voya Financial might require us to maintain additional statutory capital and would need to consider additional steps to preserve liquidity at our holding company;
Declines in fee revenues from lower AUM/AUA and plan participant counts, as a result of increased unemployment and furloughs, lower asset prices, suspensions or reductions in participant plan deposits or employer matching contributions, and an increase in plan loans and withdrawals;
Decreased spread-based revenues due to lower interest rates;
Material harm to the financial condition of our reinsurers, which would increase the probability of default on reinsurance recoveries; and
Reduced sales levels due to decreased RFP activity or delayed decision making by our clients or prospective clients.

We have also faced, and are likely to continue to face, disruption of our normal business operations, including the ability to interact with existing or potential clients. While manymost states have lifted their most severe restrictions requiring mandatory business shutdowns and stay-at-home orders, the resurgence and persistence of new infections and variants in many U.S. states has slowed the reopening of the U.S. economy. Although our business has been deemed an essential service in most or all jurisdictions in which we operate, the vast majority of our employees have been working from home since March 2020. While our work from
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our work from home arrangements have not created any significant problems, if such problems were to arise in the future, such that significant portions of our workforce are unable to work remotely in an effective manner, the impact of COVID-19 on our business could be exacerbated. Further, while the ability to impose federal vaccine mandates has been curtailed by the U.S. Supreme Court, we continue to be subject to various state and local mandates that would require at least a portion of our U.S. employees to be vaccinated, which could potentially impact our workforce.

In addition, our business process and IT operations depend to a significant extent on outsourcing providers and a joint venture based in India, which has experienced periodic lockdowns in several cities. Although our joint venture operations did not experience any notable disruptions from a transition to work-from-home, several of our outsourcing providers have experienced difficulty in moving their employee bases to a work-from-home arrangement. While these difficulties have not yet materially interfered with our business operations, there is a risk of future disruptions, particularly if India experiences further disruptions to economic activity due to COVID-19.

The transition to work-from-home also increases vulnerabilities to cybersecurity threats and other fraudulent activities. Although we are remaining vigilant on this issue and have not experienced any significant incidents, we are expending a substantial amount of resources to defend against potential attacks, which may occur while in this state of heightened risk.

The extent to which COVID-19 will continue to negatively affect our business operations, potentially in a material manner, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic, macroeconomic conditions, the continued effectiveness of our business continuity plan (including work-from-home arrangements and staffing in operational facilities), the direct and indirect impact of the pandemic on our employees, clients, counterparties and service providers, as well as other market participants, and actions taken by governmental authorities and other third parties in response to the pandemic.

Adverse capital and credit market conditions may impact our ability to access liquidity and capital, as well as the cost of credit and capital.

Adverse capital market conditions may affect the availability and cost of borrowed funds, thereby impacting our ability to support or grow our businesses. We need liquidity to pay our operating expenses, interest on our debt and dividends to our parent, to maintain our securities lending activities and to replace certain maturing liabilities. Without sufficient liquidity, we will be forced to curtail our operations and our business will suffer. Our principal sources of liquidity are fees, annuity deposits and cash flow from investments and assets. 

The level of interest rates may adversely affect our profitability, particularly in the event of a continuation of the low interest rate environment or a period of rapidly increasing interest rates.

During a period of decreasing interest rates or a prolonged period of low interest rates, our investment earnings may decrease because the interest earnings on our recently purchased fixed income investments will likely have declined in tandem with market interest rates. In addition, a prolonged low interest rate period may result in higher costs for certain derivative instruments that may be used to hedge certain of our product risks. RMBS and callable fixed income securities in our investment portfolios will be more likely to be prepaid or redeemed as borrowers seek to borrow at lower interest rates. Consequently, we may be required to reinvest the proceeds in securities bearing lower interest rates. Accordingly, during periods of declining interest rates, our profitability may suffer as the result of a decrease in the spread between interest rates credited to policyholders and contract owners and returns on our investment portfolios. An extended period of declining or prolonged low interest rates or a prolonged period of low interest rates may also coincide with a change to our long-term view of the interest rates. Such a change in our view would cause us to further change the long-term interest rate assumptions in our calculation of insurance assets and liabilities under U.S. GAAP. Any future revision would result in increased reserves, accelerated amortization of DAC and other unfavorable consequences, which would be incremental to those consequences recorded in connection with the most recent revision. In addition, certain statutory capital and reserve requirements are based on formulas or models that consider interest rates, and an extended period of low interest rates may increase the statutory capital we are required to hold and the amount of assets we must maintain to support statutory reserves. We believe a continuation of the low interest rate environment would negatively affect our financial performance.

Conversely, an increase in market interest rates could also have a material adverse effect on the value of our investment portfolio by, for example, decreasing the estimated fair values of the fixed income securities within our investment portfolio. A decrease in the estimated fair value of our investment portfolio would result in a reduction in GAAP equity and an increase in our leverage ratios. An increase in market interest rates could also create increased collateral posting requirements associated with our interest rate hedge programs and Federal Home Loan Bank ("FHLB") funding agreements, which could materially and
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adversely affect liquidity. In addition, an increase in market interest rates could require us to pay higher interest rates on debt securities we may issue in the financial markets from time to time to finance our operations, which would increase our interest expense and reduce our results of operations.
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Lastly, certain statutory reserve requirements are based on formulas or models that consider forward interest rates and an increase in forward interest rates may increase the statutory reserves we are required to hold thereby reducing statutory capital.

Changes in prevailing interest rates may negatively affect our business including the level of net interest margin we earn. In a period of changing interest rates, interest expense may increase and interest credited to policyholders may change at different rates than the interest earned on assets. Accordingly, changes in interest rates could decrease net interest margin. Changes in interest rates may negatively affect the value of our assets and our ability to realize gains or avoid losses from the sale of those assets, all of which also ultimately affect earnings. In addition, our insurance and annuity products and certain of our retirement and investment products are sensitive to inflation rate fluctuations. A sustained increase in the inflation rate in our principal markets may also negatively affect our business, financial condition and results of operation. For example, a sustained increase in the inflation rate may result in an increase in nominal market interest rates. A failure to accurately anticipate higher inflation and factor it into our product pricing assumptions may result in mispricing of our products, which could materially and adversely impact our results of operations.

The expected replacement of the London Interbank Offered Rate ("LIBOR") and replacement or reform of other interest rates could adversely affect our results of operations and financial condition.

Central banks throughout the world, including the Federal Reserve, have commissioned working groups of market participants and official sector representatives with the goal of finding suitable replacements for LIBOR and replacements or reforms of other interest rate benchmarks, such as EURIBOR and EONIA (the "IBORs"). It is expected that a transition away from the widespread use of such rates to alternative rates based on observable market transactions and other potential interest rate benchmark reforms will occur over the next several years. For example, the Financial Conduct Authority ("FCA"), which regulates LIBOR, has announced that it has commitments from panel banks to continue to contribute to LIBOR through the end of 2021, but that it will not use its powers to compel contributions beyond such date. Accordingly, there is considerable uncertainty regarding the publication of LIBOR beyond 2021.

On April 3, 2018, the Federal Reserve Bank of New York commenced publication of three reference rates based on overnight U.S. Treasury repurchase agreement transactions, including the Secured Overnight Financing Rate, which has been recommended as an alternative to U.S. dollar LIBOR by the Alternative Reference Rates Committee. Further, the Bank of England is publishing a reformed Sterling Overnight Index Average, consisting of a broader set of overnight Sterling money market transactions, which has been selected by the Working Group on Sterling Risk-Free Reference Rates as the alternative rate to Sterling LIBOR. Central bank-sponsored committees in other jurisdictions, including Europe, Japan and Switzerland, have, or are expected to, select alternative reference rates denominated in other currencies.

The market transition away from IBORs to alternative reference rates is complex and could have a range of adverse impacts including potentially systemic disruptions to the financial markets generally, as well as adverse impacts to our results of operations and financial condition. In particular, any such transition or reform could:

Adversely impact the pricing, liquidity, value of, return on, and trading for a broad array of financial products, including any IBOR-linked securities, loans and derivatives that are included in our financial assets and liabilities;

Result in disputes, litigation or other actions with counterparties regarding the interpretation and enforceability of provisions in IBOR-based products such as fallback language or other related provisions, including in the case of fallbacks to the alternative reference rates, any economic, legal, operational or other impact resulting from the fundamental differences between the IBORs and the various alternative reference rates; and

Require the transition and/or development of appropriate systems and analytics to effectively transition our risk management processes from IBOR-based products to those based on one or more alternative reference rates in a timely manner, including by quantifying a value and risk for various alternative reference rates, which may prove challenging given the limited history of the proposed alternative reference rates.

Further, to the extent that any of our contracts contain pre-cessation fallback triggers tied to such an event, any or all of the risks noted above could be accelerated in the event that an IBOR-regulating authority such as the UK FCA announces that LIBOR (or any other IBOR) is no longer "representative" prior to the planned cessation in 2021.
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Depending on several factors including those set forth above, our results of operation and financial condition could be adversely affected by the market transition or reform of certain benchmarks. Other factors include the pace of the transition to replacement of reformed rates, the specific terms and parameters for and market acceptance of any alternative reference rate,
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prices of and the liquidity of trading markets for products based on alternative reference rates, and our ability to transition and develop appropriate systems and analytics for one or more alternative reference rates.

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.

We are currently subject to periodic review by independent credit rating agencies S&P, Moody's, Fitch and A.M. Best,Fitch, each of which currently maintain an investment grade rating with respect to us. Our ability to obtain secured or unsecured debt financing and our cost of secured or unsecured debt financing is dependent, in part, on our credit ratings. Maintaining our credit ratings depends in part on strong financial results and in part on other factors, including the outlook of the rating agencies on our sector and the market generally. A credit rating downgrade could negatively impact our ability to obtain secured or unsecured financing and increase borrowing costs.

Financial strength ratings, which various rating organizations publish as a measure of an insurance company's ability to meet contractholder and policyholder obligations, are important to maintain public confidence in our products, the ability to market our products and our competitive position. A downgrade in our financial strength ratings, or the announced potential for a downgrade, could have a significant adverse effect on our financial condition and results of operations in many ways, including: (i) reducing new sales of insurance and annuity products and investment products; (ii) adversely affecting our relationships with our advisors and third-party distributors of our products; (iii) materially increasing the number or amount of policy surrenders and withdrawals by contractholders and policyholders; (iv) requiring us to reduce prices for many products and services to remain competitive; and (v) adversely affecting our ability to obtain reinsurance or obtain reasonable pricing on reinsurance.

In addition, rating agencies may implement changes to their capital models that may favorably or unfavorably affect our ratings.

We cannot assure you that these ratings will remain in effect for any given period of time or that a rating will not be lowered, suspended or withdrawn. Ratings are not a recommendation to buy, sell or hold any security, and each agency's rating should be evaluated independently of any other agency's rating. Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, could increase our corporate borrowing costs and limit our access to the capital markets, which could adversely impact our financial results.

Because we operate in highly competitive markets, we may not be able to increase or maintain our market share, which may have an adverse effect on our results of operations and financial condition.

In each of our businesses we face intense competition, including from domestic and foreign insurance companies, broker-dealers, financial advisors, asset managers and diversified financial institutions, banks, technology companies and start-up financial services providers, both for the ultimate customers for our products and for distribution through independent distribution channels. We compete based on a number of factors including brand recognition, reputation, quality of service, quality of investment advice, investment performance of our products, product features, scope of distribution, price, perceived financial strength and credit ratings, scale and level of customer service. A decline in our competitive position as to one or more of these factors could adversely affect our profitability. Many of our competitors are large and well-established and some have greater market share or breadth of distribution, offer a broader range of products, services or features, assume a greater level of risk, have greater financial resources, or have higher claims-paying or credit ratings than we do. Furthermore, the preferences of the end consumers for our products and services may shift, including as a result of technological innovations affecting the marketplaces in which we operate. To the extent our competitors are more successful than we are at adopting new technology and adapting to the changing preferences of the marketplace, our competitiveness may decline.

In recent years, there has been substantial consolidation among companies in the financial services industry resulting in increased competition from large, well-capitalized financial services firms. Many of our competitors also have been able to increase their distribution systems through mergers, acquisitions, partnerships or other contractual arrangements. Furthermore, larger competitors may have lower operating costs and have an ability to absorb greater risk, while maintaining financial strength ratings, allowing them to price products more competitively. These competitive pressures could result in increased pressure on the pricing of certain of our products and services, and could harm our ability to maintain or increase profitability. In addition, if our financial strength and credit ratings are lower than our competitors, we may experience increased surrenders and/or a significant decline in sales. Due to the competitive nature of the financial services industry, there can be no assurance
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that we will continue to effectively compete within the industry or that competition will not have a material adverse impact on our business, results of operations and financial condition.
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Our risk management policies and procedures, including hedging programs, may prove inadequate for the risks we face, which could negatively affect our business and financial condition or result in losses.

We have developed risk management policies and procedures, including hedging programs that utilize derivative financial instruments, and expect to continue to do so in the future. Nonetheless, our policies and procedures to identify, monitor and manage risks may not be fully effective, particularly during turbulent economic conditions. Many of our methods of managing risk and exposures are based upon observed historical market behavior or statistics based on historical models. As a result, these methods may not predict future exposures accurately, which could be significantly greater than historical measures indicate. Other risk management methods depend on the evaluation of information regarding markets, customers, catastrophe occurrence or other matters that is publicly available or otherwise accessible to us. This information may not always be accurate, complete, up-to-date or properly evaluated. Management of operational, legal and regulatory risks requires, among other things, policies and procedures to record and verify large numbers of transactions and events. These policies and procedures may not be fully effective.

We employ various strategies, including hedging and reinsurance, with the objective of mitigating risks inherent in our business and operations. These risks include current or future changes in the fair value of our assets and liabilities, current or future changes in cash flows, the effect of interest rates, equity markets and credit spread changes, the occurrence of credit defaults, currency fluctuations and changes in mortality and longevity. We seek to control these risks by, among other things, entering into reinsurance contracts and derivative instruments, such as swaps, options, futures and forward contracts. See "Reinsurance subjects us to the credit risk of reinsurers and may not be available, affordable or adequate to protect us against losses" for a description of risks associated with our use of reinsurance. Developing an effective strategy for dealing with these risks is complex, and no strategy can completely protect us from such risks. Our hedging strategies also rely on assumptions and projections regarding our assets, liabilities, general market factors and the creditworthiness of our counterparties that may prove to be incorrect or prove to be inadequate. Our hedging strategies and the derivatives that we use, or may use in the future, may not adequately mitigate or offset the hedged risk and our hedging transactions may result in losses.

The inability of counterparties to meet their financial obligations could have an adverse effect on our results of operations.

Third parties that owe us money, securities or other assets may not pay or perform under their obligations. These parties include the issuers or guarantors of securities we hold, customers, reinsurers, trading counterparties, securities lending and repurchase counterparties, counterparties under swaps, credit default and other derivative contracts, clearing agents, exchanges, clearing houses and other financial intermediaries. Defaults by one or more of these parties on their obligations to us due to bankruptcy, lack of liquidity, downturns in the economy or real estate values, operational failure or other factors, or even rumors about potential defaults by one or more of these parties, could have a material adverse effect on our results of operations, financial condition and liquidity. Actual or anticipated changes or downgrades in counterparty credit ratings, including any announcement that such ratings are under review for a downgrade, could increase our corporate borrowing costs and limit our access to the capital markets, which could adversely impact our financial results.

We routinely execute a high volume of transactions such as unsecured debt instruments, derivative transactions and equity investments with counterparties and customers in the financial services industry, resulting in large periodic settlement amounts which may result in our having significant credit exposure to one or more of such counterparties or customers. Many of these transactions comprise derivative instruments with a number of counterparties in order to hedge various risks, including equity and interest rate market risk features within many of our insurance and annuity products. Our obligations under our products are not changed by our hedging activities and we are liable for our obligations even if our derivative counterparties do not pay us. As a result, we face concentration risk with respect to liabilities or amounts we expect to collect from specific counterparties and customers. A default by, or even concerns about the creditworthiness of, one or more of these counterparties or customers could have an adverse effect on our results of operations or liquidity. There is no assurance that losses on, or impairments to the carrying value of, these assets due to counterparty credit risk would not materially and adversely affect our business, results of operations or financial condition.

We are also subject to the risk that our rights against third parties may not be enforceable in all circumstances. The deterioration or perceived deterioration in the credit quality of third parties whose securities or obligations we hold could result in losses and/or adversely affect our ability to rehypothecate or otherwise use those securities or obligations for liquidity purposes. While in many cases we are permitted to require additional collateral from counterparties that experience financial difficulty, disputes may arise as to the amount of collateral we are entitled to receive and the value of pledged assets. Our credit risk may also be
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exacerbated when the collateral we hold cannot be realized or is liquidated at prices not sufficient to recover the full amount of the loan or derivative exposure that is due to us, which is most likely to occur during periods of illiquidity and depressed asset valuations. The termination of contracts and the foreclosure on collateral may subject us to claims for the improper exercise of
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rights under the contracts. Bankruptcies, downgrades and disputes with counterparties as to the valuation of collateral tend to increase in times of market stress and illiquidity.

Requirements to post collateral or make payments related to changes in market value of specified assets may adversely affect liquidity.

The amount of collateral we may be required to post under short-term financing agreements and derivative transactions may increase under certain circumstances. Pursuant to the terms of some transactions, we could be required to make payment to our counterparties related to any change in the market value of the specified collateral assets. Such requirements could have an adverse effect on liquidity. Furthermore, with respect to any such payments, we may have unsecured risk to the counterparty as these amounts may not be required to be segregated from the counterparty's other funds, may not be held in a third-party custodial account and may not be required to be paid to us by the counterparty until the termination of the transaction.

Our investment portfolio is subject to several risks that may diminish the value of our invested assets and the investment returns credited to customers, which could reduce our sales, revenues, AUM, results of operations and financial condition.

Fixed income securities represent a significant portion of our investment portfolio. We are subject to the risk that the issuers, or guarantors, of fixed income securities we own may default on principal and interest payments they owe us. We are also subject to the risk that the underlying collateral within asset-backed securities, including mortgage-backed securities, may default on principal and interest payments causing an adverse change in cash flows. The occurrence of a major economic downturn, acts of corporate malfeasance, widening mortgage or credit spreads, or other events that adversely affect the issuers, guarantors or underlying collateral of these securities could cause the estimated fair value of our fixed income securities portfolio and our earnings to decline and the default rate of the fixed income securities in our investment portfolio to increase. A ratings downgrade affecting issuers or guarantors of securities in our investment portfolio, or similar trends that could worsen the credit quality of such issuers, or guarantors could also have a similar effect. Similarly, a ratings downgrade affecting a security we hold could indicate the credit quality of that security has deteriorated and could increase the capital we must hold to support that security to maintain our RBC ratio. See risk factor "A decrease in our RBC ratio (as a result of a reduction in statutory surplus and/or increase in RBC requirements) could result in increased scrutiny by insurance regulators and rating agencies and have a material adverse effect on our business, results of operations and financial condition." We are also subject to the risk that cash flows resulting from the payments on pools of mortgages or other obligations that serve as collateral underlying the mortgage-or asset-backed securities we own may differ from our expectations in timing or size. Cash flow variability arising from an unexpected acceleration in mortgage prepayment behavior can be significant, and could cause a decline in the estimated fair value of certain "interest-only" securities within our mortgage-backed securities portfolio. Any event reducing the estimated fair value of these securities, other than on a temporary basis, could have a material adverse effect on our business, results of operations and financial condition.

From time to time we invest our capital to seed a particular investment strategy or investment portfolio. We may also co-invest in funds or take an equity ownership interest in certain structured finance/investment vehicles that are managed by our affiliates. Any decrease in the value of such investments could negatively affect our revenues and income.

Some of our investments are relatively illiquid and in some cases are in asset classes that have been experiencing significant market valuation fluctuations.

We hold certain assets that may lack liquidity, such as privately placed fixed income securities, commercial mortgage loans, policy loans and limited partnership interests. Reported values of our relatively illiquid types of investments do not necessarily reflect the current market prices of the asset. If we require significant amounts of cash on short notice in excess of normal cash requirements or are required to post or return collateral in connection with our investment portfolio, derivatives transactions or securities lending activities, we may have difficulty selling these investments in a timely manner, be forced to sell them for less than we otherwise would have been able to realize, or both.

We invest a portion of our invested assets in investment funds, many of which make private equity investments. The amount and timing of income from such investment funds tends to be uneven as a result of the performance of the underlying investments, including private equity investments. The timing of distributions from the funds, which depends on particular events relating to the underlying investments, as well as the funds' schedules for making distributions and their needs for cash,
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can be difficult to predict. As a result, the amount of income that we record from these investments can vary substantially from quarter to quarter. Recent equity and credit market volatility may reduce investment income for these types of investments.


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Our products and services are complex and are frequently sold through intermediaries, and a failure to properly perform services or the misrepresentation of our products or services could have an adverse effect on our revenues, income and financial condition.

Many of our products and services are complex and are frequently sold through intermediaries. In particular, we are reliant on intermediaries to describe and explain our products to potential customers. The intentional or unintentional misrepresentation of our products and services in advertising materials or other external communications, or inappropriate activities by our personnel or an intermediary, could adversely affect our reputation and business prospects, as well as lead to potential regulatory actions or litigation.

The valuation of many of our financial instruments includes methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may materially and adversely affect our results of operations and financial condition.

The following financial instruments are carried at fair value in our financial statements: fixed income securities, equity securities, derivatives, embedded derivatives and separate account assets. We have categorized these instruments into a three-level hierarchy, based on the priority of the inputs to the respective 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), while quoted prices in markets that are not active or valuation techniques requiring inputs that are observable for substantially the full term of the asset or liability are Level 2.

During periods of market disruption, including periods of rapidly changing credit spreads or illiquidity, it may be difficult to value certain of our securities, such as certain mortgage-backed securities, if trading becomes less frequent and/or market data becomes less observable. There may be certain asset classes that, although currently in active markets with significant observable data, could become illiquid in a difficult financial environment. As such, valuations may include inputs and assumptions that are less observable or require greater estimation, thereby resulting in values that may differ materially from the value at which the investments may be ultimately sold. Further, rapidly changing and unprecedented credit and equity market conditions could materially impact the valuation of securities as reported within the financial statements, and the period-to-period changes in value could vary significantly. Decreases in value could have a material adverse effect on our results of operations and financial condition.

The determination of the amount of allowances and impairments taken on our investments is subjective and could materially and adversely impact our results of operations or financial condition.

The determination of the amount of allowances and impairments varies by investment type and is based upon our quarterly evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are subjective and require a high degree of judgment, and are revised as conditions change and new information becomes available. There can be no assurance that management has accurately assessed the level of impairments taken and allowances reflected in our financial statements. Furthermore, additional impairments may need to be taken or allowances provided for in the future if investments perform worse than our expectations. Historical trends may not be indicative of future impairments or allowances.

Fixed maturity securities classified as available-for-sale are reported at their estimated fair value. Unrealized gains or losses on available-for-sale securities are recognized as a component of other comprehensive income (loss) and are therefore excluded from net income (loss). The accumulated change in estimated fair value of these available-for-sale securities is recognized in net income (loss) when the gain or loss is realized upon the sale of the security or in the event that the decline in estimated fair value is determined to be other-than-temporary and an impairment charge to earnings is taken. Such realized losses or impairments may have a material adverse effect on our net income (loss) in a particular interim or annual period.

Our participation in a securities lending program and a repurchase program subjects us to potential liquidity and other risks.

The repurchase of securities or our inability to enter into new repurchase agreements would reduce the amount of such cash collateral available to us. Market conditions on or after the repurchase date may limit our ability to enter into new agreements at a time when we need access to additional cash collateral for investment or liquidity purposes.

For both securities lending and repurchase transactions, in some cases, the maturity of the securities held as invested collateral (i.e., securities that we have purchased with cash collateral received) may exceed the term of the related securities on loan and
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the estimated fair value may fall below the amount of cash received as collateral and invested. If we are required to return significant amounts of cash collateral on short notice and we are forced to sell securities to meet the return obligation, we may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than we otherwise would have been able to realize under normal market conditions, or both. In addition,
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under adverse capital market and economic conditions, liquidity may broadly deteriorate, which would further restrict our ability to sell securities. If we decrease the amount of our securities lending and repurchase activities over time, the amount of net investment income generated by these activities will also likely decline. See "Item 7. Management's Narrative Analysis of the Results of Operations and Financial Condition-Liquidity and Capital Resources-Securities Pledged."

Differences between actual claims experience and reserving assumptions may adversely affect our results of operations or financial condition.

We establish and hold reserves to pay future policy benefits and claims. Our reserves do not represent an exact calculation of liability, but rather are actuarial or statistical estimates based on data and models that include many assumptions and projections, which are inherently uncertain and involve the exercise of significant judgment, including assumptions as to the levels and/or timing of receipt or payment of premiums, benefits, claims, expenses, interest credits, investment results (including equity market returns), retirement, mortality, morbidity and persistency. We periodically review the adequacy of reserves and the underlying assumptions. We cannot, however, determine with precision the amounts that we will pay for, or the timing of payment of, actual benefits, claims and expenses or whether the assets supporting our policy liabilities, together with future premiums, will grow to the level assumed prior to payment of benefits or claims. If actual experience differs significantly from assumptions or estimates, reserves may not be adequate. If we conclude that our reserves, together with future premiums, are insufficient to cover future policy benefits and claims, we would be required to increase our reserves and incur income statement charges for the period in which we make the determination, which could materially and adversely affect our results of operations and financial condition.

Unfavorable developments in interest rates, credit spreads and policyholder behavior can result in adverse financial consequences related to our stable value products, and our hedge program and risk mitigation features may not successfully offset these consequences.

We offer stable value products primarily as a fixed rate, liquid asset allocation option for employees of our plan sponsor customers within the defined contribution funding plans offered by our Retirement business. Although a majority of these products do not provide for a guaranteed minimum credited rate, a portion of this book of business provides a guaranteed annual credited rate on the invested assets in addition to enabling participants the right to withdraw and transfer funds at book value.

The sensitivity of our statutory reserves and surplus established for the stable value products to changes in interest rates, credit spreads and policyholder behavior will vary depending on the magnitude of these changes, as well as on the book value of assets, the market value of assets, credit losses, the guaranteed credited rates available to customers and other product features. Realization or re-measurement of these risks may result in an increase in the reserves for stable value products, and could materially and adversely affect our financial position or results of operations. In particular, in extended low interest rate environments, we bear exposure to the risk that reserves must be added to fund book value withdrawals and transfers when guaranteed annual credited rates exceed the earned rate on invested assets. In a rising interest rate environment, we are exposed to the risk of financial disintermediation through a potential increase in the level of book value withdrawals.

Although we maintain a hedge program and other risk mitigating features to offset these risks, such program and features may not operate as intended or may not be fully effective, and we may remain exposed to such risks.

We may be required to accelerate the amortization of DAC, deferred sales inducements (“DSI”) and/or VOBA, any of which could adversely affect our results of operations or financial condition.
Capitalized costs associated with DAC, DSI and VOBA are amortized in proportion to actual and estimated gross profits or gross premiums depending on the type of contract. On an ongoing basis, we test the DAC, DSI and VOBA recorded on our balance sheets to determine if these amounts are recoverable under current assumptions. In addition, we regularly review the estimates and assumptions underlying DAC, DSI and VOBA. The projection of estimated gross profits or gross premiums requires the use of certain assumptions, principally related to separate account fund returns in excess of amounts credited to policyholders, policyholder behavior such as surrender, lapse and annuitization rates, interest margin, expense margin, mortality, future impairments and hedging costs. Estimating future gross profits or gross premiums is a complex process requiring considerable judgment and the forecasting of events well into the future. If these assumptions prove to be inaccurate,
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if an estimation technique used to estimate future gross profits or gross premiums is changed, or if significant or sustained equity market declines occur and/or persist, we could be required to accelerate the amortization of DAC, DSI and VOBA, which would result in a charge to earnings. Such adjustments could have a material adverse effect on our results of operations and financial condition.
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Reinsurance subjects us to the credit risk of reinsurers and may not be available, affordable or adequate to protect us against losses.

We cede life insurance policies and annuity contracts or certain risks related to life insurance policies and annuity contracts to other insurance companies using various forms of reinsurance including coinsurance, modified coinsurance, funds withheld, monthly renewable term and yearly renewable term. However, we remain liable to the underlying policyholders, even if the reinsurer defaults on its obligations with respect to the ceded business. If a reinsurer fails to meet its obligations under the reinsurance contract, we will be forced to bear the entire unresolved liability for claims on the reinsured policies. In addition, a reinsurer insolvency or loss of accredited reinsurer status may cause us to lose our reserve credits on the ceded business, in which case we would be required to establish additional statutory reserves.

In connection with the Individual Life Transaction, we entered into a large reinsurance agreement with SLD, our former insurance affiliate, with respect to the portion of the Individual Life and other legacy businesses that have been written by us. While SLD's reinsurance obligations to us are collateralized through assets held in trust, in the event of any default by SLD of its reinsurance obligations to us, or any loss of credit for such reinsurance, there can be no assurance that such assets will be sufficient to support the reserves that we would be required to establish or pay claims.

If a reinsurer does not have accredited reinsurer status or if a currently accredited reinsurer loses that status, in any state where we are licensed to do business, we are not entitled to take credit for reinsurance in that state if the reinsurer does not post sufficient qualifying collateral (either qualifying assets in a qualifying trust or qualifying LOCs). In this event, we would be required to establish additional statutory reserves. Similarly, the credit for reinsurance taken by us under reinsurance agreements with affiliated and unaffiliated non-accredited reinsurers is, under certain conditions, dependent upon the non-accredited reinsurer's ability to obtain and provide sufficient qualifying assets in a qualifying trust or qualifying LOCs issued by qualifying lending banks. If these steps are unsuccessful, or if unaffiliated non-accredited reinsurers that have reinsured business with us are unsuccessful in obtaining sources of qualifying reinsurance collateral, we might not be able to obtain full statutory reserve credit.

Loss of reserve credit would require us to establish additional statutory reserves and would result in a decrease in the level of our capital, which could have a material adverse effect on our profitability, results of operations and financial condition.

Our reinsurance recoverable balances are periodically assessed for uncollectability. The collectability of reinsurance recoverables is subject to uncertainty arising from a number of factors, including whether the insured losses meet the qualifying conditions of the reinsurance contract, whether reinsurers or their affiliates have the financial capacity and willingness to make payments under the terms of the reinsurance contract, and the degree to which our reinsurance balances are secured by sufficient qualifying assets in qualifying trusts or qualifying LOCs issued by qualifying lender banks. Although a substantial portion of our reinsurance exposure is secured by assets held in trusts or LOCs, the inability to collect a material recovery from a reinsurer could have a material adverse effect on our profitability, results of operations and financial condition.

The premium rates and other fees that we charge are based, in part, on the assumption that reinsurance will be available at a certain cost. Some of our reinsurance contracts contain provisions that limit the reinsurer's ability to increase rates on in-force business; however, some do not. If a reinsurer raises the rates that it charges on a block of in-force business, in some instances, we will not be able to pass the increased costs onto our customers and our profitability will be negatively impacted. Additionally, such a rate increase could result in our recapturing of the business, which may result in a need to maintain additional reserves, reduce reinsurance receivables and expose us to greater risks. In recent years, we have faced a number of rate increase actions on in-force business, which have in some instances adversely affected our financial results, and there can be no assurance that the outcome of future rate increase actions would not have a material effect on our results of operations or financial condition. In addition, if reinsurers raise the rates that they charge on new business, we may be forced to raise the premiums that we charge, which could have a negative impact on our competitive position.
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A decrease in our RBC ratio (as a result of a reduction in statutory surplus and/or increase in RBC requirements) could result in increased scrutiny by insurance regulators and rating agencies and have a material adverse effect on our business, results of operations and financial condition.

The NAIC has established regulations that provide minimum capitalization requirements based on RBC formulas for insurance companies. The RBC formula for life insurance companies establishes capital requirements relating to asset, insurance, interest rate and business risks, including equity, interest rate and expense recovery risks associated with variable annuities and group annuities that contain guaranteed minimum death and living benefits. We are subject to RBC standards and/or other minimum
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statutory capital and surplus requirements imposed under the laws of the state of Connecticut, our state of domicile. (For additional discussion of how the NAIC calculates RBC ratios, see “Item 1. Business-Regulation-InsuranceBusiness - Financial Regulation -Financial Regulation-Risk -Based Capital.”- Risk-Based Capital”).

In any particular year, statutory surplus amounts and RBC ratios may increase or decrease depending on a variety of factors, including the amount of statutory income or losses (which are sensitive to equity market and credit market conditions), the amount of additional capital we must hold to support business growth, changes in equity market levels, the value and credit ratings of certain fixed-income and equity securities in our investment portfolio, the value of certain derivative instruments that do not receive hedge accounting and changes in interest rates, as well as changes to the RBC formulas and the interpretation of the NAIC's instructions with respect to RBC calculation methodologies. As a result of Tax Reform, theThe NAIC updated the factors affecting RBC requirements which causedincorporated an expanded bond designations proposal, including new factors. This resulted in an increase in the amount of capital we required to maintainneeded to satisfy our RBC requirements. Many of these factors are outside of our control. Our financial strength and credit ratings are significantly influenced by statutory surplus amounts and RBC ratios. In addition, rating agencies may implement changes to their own internal models, which differ from the RBC capital model that have the effect of increasing or decreasing the amount of statutory capital we should hold relative to the rating agencies' expectations. To the extent that our RBC ratios are deemed to be insufficient, we may seek to take actions either to increase our capitalization or to reduce our capitalization requirements. If we were unable to accomplish such actions, the rating agencies may view this as a reason for a ratings downgrade.

Our failure to meet RBC requirements or minimum capital and surplus requirements could subject us to further examination or corrective action imposed by insurance regulators, including limitations on our ability to write additional business, supervision by regulators or seizure or liquidation. Any corrective action imposed could have a material adverse effect on our business, results of operations and financial condition. A decline in RBC ratios, whether or not it results in a failure to meet applicable RBC requirements, may still limit our ability to make dividends or distributions to our Parent, could result in a loss of customers or new business, and could be a factor in causing ratings agencies to downgrade our financial strength ratings, each of which could have a material adverse effect on our business, results of operations and financial condition.

A significant portion of our institutional funding originates from a Federal Home Loan Bank, which subjects us to liquidity risks associated with sourcing a large concentration of our funding from one counterparty.

A significant portion of our institutional funding originates from the Federal Home Loan Bank of Boston ("FHLB of Boston"). We have issued non-putable funding agreements in exchange for eligible collateral in the form of cash, mortgage-backed securities and U.S. Treasury securities.

Should the FHLB choose to change its definition of eligible collateral, or if the market value of the pledged collateral decreases in value due to changes in interest rates or credit ratings, we may be required to post additional amounts of collateral in the form of cash or other eligible collateral. Additionally, we may be required to find other sources to replace this funding if we lose access to FHLB funding. This could occur if our creditworthiness falls below either of the FHLB's requirements or if legislative or other political actions cause changes to the FHLBs' mandate or to the eligibility of life insurance companies to be members of the FHLB system.

Any failure to protect the privacy and confidentiality of customer information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operation.

Our businesses and relationships with customers are dependent upon our ability to maintain the privacy, security and confidentiality of our and our customers' personal information, trade secrets, and other confidential information (including customer transactional data and personal information about our customers, the employees and customers of our customers, and our own employees and agents). We are also subject to numerous federal and state laws as well as international laws such as GDPR regarding the privacy and security of personal information, which laws vary significantly from jurisdiction to jurisdiction. As data privacy laws continue to proliferate, we may face difficulties in complying with an increasing number of
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legal obligations with respect to data privacy and security, or with balancing competing requirements that may be inconsistent across jurisdictions.

Many of our employees and contractors and the representatives of our broker-dealer subsidiaries and affiliates have access to and routinely process personal information in computerized, paper and other forms. We rely on various internal policies, procedures and controls to protect the privacy, security and confidentiality of personal and confidential information that is accessible to, or in the possession of, us, or our employees, contractors and representatives. It is possible that an employee, contractor or representative could, intentionally or unintentionally, disclose or misappropriate personal information or other confidential information. If we fail in the future to maintain adequate internal controls, including any failure to implement newly-required additional controls, or if our employees, contractors or representatives fail to comply with our policies and
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procedures, misappropriation or intentional or unintentional inappropriate disclosure or misuse of personal information or confidential customer information could occur. Such internal control inadequacies or non-compliance could materially damage our reputation, result in regulatory action or lead to civil or criminal penalties, which, in turn, could have a material adverse effect on our business, reputation, results of operations and financial condition. For additional risks related to our potential failure to protect confidential information, see risk factors “-Interruption or other operational failures in telecommunication, information technology, and other operational systems, including as a result of human error, could harm our business,” and "-A failure to maintain the security, integrity, confidentiality or privacy of our telecommunication, information technology or other operational systems, or the sensitive data residing on such systems, could harm our business.”

Interruption or other operational failures in telecommunication, information technology and other operational systems, including as a result of human error, could harm our business.

We are highly dependent on automated and information technology systems to record and process both our internal transactions and transactions involving our customers, as well as to calculate reserves, value invested assets and complete certain other components of our U.S. GAAP and statutory financial statements. Despite the implementation of security and back-up measures, our information technology systems may remain vulnerable to disruptions. We may also be subject to disruptions of any of these systems arising from events that are wholly or partially beyond our control (for example, natural disasters, acts of terrorism, epidemics, computer viruses and electrical/telecommunications outages). All of these risks are also applicable where we rely on joint ventures, affiliates and third party service providers to provide services to us and our customers, including those joint ventures, affiliates and third party service providers to whom we outsource certain of our functions. The failure of any one of these systems for any reason, or errors made by our employees or agents, could in each case cause significant interruptions to our operations, which could harm our reputation, adversely affect our internal control over financial reporting, or have a material adverse effect on our business, results of operations and financial condition.

A failure to maintain the security, integrity, confidentiality or privacy of our telecommunication, information technology and other operational systems, or the sensitive data residing on such systems, could harm our business.

We are highly dependent on automated telecommunications, information technology and other operational systems to record and process our internal transactions and transactions involving our customers. Despite the implementation of security and back-up measures, our information technology systems may be vulnerable to physical or electronic intrusions, viruses or other attacks, programming errors, and similar disruptions. Businesses in the United States and in other countries have increasingly become the targets of "cyberattacks," "ransomware," "phishing," "hacking" or similar illegal or unauthorized intrusions into computer systems and networks. Such events are often highly publicized, can result in significant disruptions to information technology systems and the theft of significant amounts of information, as well as funds from online financial accounts, and can cause extensive damage to the reputation of the targeted business, in addition to leading to significant expenses associated with investigation, remediation and customer protection measures. Like others in our industry, we are subject to cybersecurity incidents in the ordinary course of our business. Although we seek to limit our vulnerability to such events through technological and other means, it is not possible to anticipate or prevent all potential forms of cyberattack or to guarantee our ability to fully defend against all such attacks. In addition, due to the sensitive nature of much of the financial and other personal information we maintain, we may be at particular risk for targeting.

We retain personal and confidential information and financial accounts in our information technology systems, and we rely on industry standard commercial technologies to maintain the security of those systems. Anyone who is able to circumvent our security measures and penetrate our information technology systems could disrupt system operations, access, view, misappropriate, alter, or delete information in the systems, including personal information and proprietary business information and misappropriate funds from online financial accounts. Information security risks also exist with respect to the use of portable electronic devices, such as laptops, which are particularly vulnerable to loss and theft. Certain state, federal and international laws require that individuals be notified if a security breach compromises the security or confidentiality of their personal
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information. Any attack or other breach of the security of our information technology systems that compromises personal information, or that otherwise results in unauthorized disclosure or use of personal information could damage our reputation in the marketplace, deter purchases of our products, subject us to heightened regulatory scrutiny, sanctions, significant civil and criminal liability or other adverse legal consequences and require us to incur significant technical, legal and other expenses. Numerous state regulatory bodies are focused on privacy requirements for all companies that collect personal information and have proposed and enacted legislation and regulations regarding privacy standards and protocols. Broad data privacy legislation has also been introduced in the U.S. Senate. Should any such state or federal legislation be enacted, we and other covered businesses may be required to incur significant expense in order to meet its requirements.

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Our joint ventures, affiliates and third party service providers, including third parties to whom we outsource certain of our functions are also subject to the risks outlined above, any one of which could result in our incurring substantial costs and other negative consequences, including a material adverse effect on our business, results of operations and financial condition. For additional information about specific cybersecurity regulations that we are subject to, see Part I. Item 1. "Business-Regulation-Insurance Regulation-Cybersecurity Regulatory Activity".

Changes in accounting standards could adversely impact our reported results of operations and our reported financial condition.

Our financial statements are subject to the application of U.S. GAAP, which is periodically revised or expanded. Accordingly, from time to time we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the Financial Accounting Standards Board ("FASB"). It is possible that future accounting standards we are required to adopt could change the current accounting treatment that we apply to our consolidated financial statements and that such changes could have a material adverse effect on our results of operations and financial condition.

For additional information regarding new accounting standards, see Part II, Item 8. Note 1. "Business, Basis of Presentation and Significant Accounting Policies".

Our ability to use certain beneficial deferred tax assets may become subject to limitations.

Section 382 and Section 383 of the U.S. Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), operate as anti-abuse rules, the general purpose of which is to prevent trafficking in tax losses and credits, but which can apply without regard to whether a "loss trafficking" transaction occurs or is intended. These rules are triggered by the occurrence of an ownership change—generally defined as when the ownership of a company, or its parent, changes by more than 50% (measured by value) on a cumulative basis in any three year period ("Section 382 event"). If triggered, the amount of the taxable income for any post-change year which may be offset by a pre-change loss is subject to an annual limitation. Generally speaking, this limitation is derived by multiplying the fair market value of the Company immediately before the date of the Section 382 event by the applicable federal long-term tax-exempt rate. If the company were to experience a Section 382 event, this could impact our ability to obtain tax benefits from existing deferred tax assets, as well as future losses and deductions.

We may be required to reduce the carrying value of our deferred income tax asset or establish a valuation allowance against the deferred income tax asset if: (i) there are significant changes to federal tax policy; (ii) our business does not generate sufficient taxable income; (iii) there is a significant decline in the fair market value of our investment portfolio; or (iv) our tax planning strategies are not feasible. Reductions in the carrying value of our deferred income tax asset or establishment of a valuation allowance could have a material adverse effect on our results of operations and financial condition.

We periodically evaluate and test our ability to realize our 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. In assessing the more likely than not criteria, we consider future taxable income as well as prudent tax planning strategies.

Future changes in facts, circumstances, tax law, including a reduction in federal corporate tax rates may result in a reduction in the carrying value of our deferred income tax asset and RBC ratios, or an increase in the valuation allowance. A reduction in the carrying value of our deferred income tax asset or RBC ratios, or an increase in the valuation allowance could have a material adverse effect on the Company's results of operations and financial condition.

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Our business may be negatively affected by adverse publicity or increased governmental and regulatory actions with respect to us, other well-known companies or the financial services industry in general.

Governmental scrutiny with respect to matters relating to compensation, compliance with regulatory and tax requirements and other business practices in the financial services industry has increased dramatically in the past several years and has resulted in more aggressive and intense regulatory supervision and the application and enforcement of more stringent standards. Press coverage and other public statements that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, could result in some type of inquiry or investigation by regulators, legislators and/or law enforcement officials or in lawsuits. Responding to these inquiries, investigations and lawsuits, regardless of the ultimate outcome of the proceeding, is time-consuming and expensive and can divert the time and effort of our senior management from its business. Future legislation or regulation or governmental views on compensation may result in us altering compensation practices in ways that could adversely affect our ability to attract and retain talented employees. Adverse publicity, governmental scrutiny, pending or future
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investigations by regulators or law enforcement agencies and/or legal proceedings involving us or our affiliates could also have a negative impact on our reputation and on the morale and performance of employees, and on business retention and new sales, which could adversely affect our businesses and results of operations.

Litigation may adversely affect our profitability and financial condition.

We are, and may be in the future, subject to legal actions in the ordinary course of our business operations. Some of these legal proceedings may be brought on behalf of a class. Plaintiffs may seek large or indeterminate amounts of damage, including compensatory, liquidated, treble and/or punitive damages. Our reserves for litigation may prove to be inadequate and insurance coverage may not be available or may be declined for certain matters. It is possible that our results of operations or cash flows in a particular interim or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation depending, in part, upon the results of operations or cash flows for such period. Given the large or indeterminate amounts sometimes sought, and the inherent unpredictability of litigation, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation matters could have a material adverse effect on our financial condition.

A loss of, or significant change in, key product distribution relationships could materially affect sales.

We distribute certain products under agreements with affiliated distributors and other members of the financial services industry that are not affiliated with us. We compete with other financial institutions to attract and retain commercial relationships in each of these channels, and our success in competing for sales through these distribution intermediaries depends upon factors such as the amount of sales commissions and fees we pay, the breadth of our product offerings, the strength of our brand, our perceived stability and financial strength ratings, and the marketing and services we provide to, and the strength of the relationships we maintain with, individual distributors. An interruption or significant change in certain key relationships could materially affect our ability to market our products and could have a material adverse effect on our business, results of operations and financial condition. Distributors may elect to alter, reduce or terminate their distribution relationships with us, including for such reasons as changes in our distribution strategy, adverse developments in our business, adverse rating agency actions or concerns about market-related risks. Alternatively, we may terminate one or more distribution agreements due to, for example, a loss of confidence in, or a change in control of, one of the distributors, which could reduce sales.

We are also at risk that key distribution partners may merge or change their business models in ways that affect how our products are sold, either in response to changing business priorities or as a result of shifts in regulatory supervision or potential changes in state and federal laws and regulations regarding standards of conduct applicable to distributors when providing investment advice to retail and other customers.

The occurrence of natural or man-made disasters may adversely affect our results of operations and financial condition.

We are exposed to various risks arising from natural disasters, including hurricanes, climate change, floods, earthquakes, tornadoes and pandemic disease, as well as man-made disasters and core infrastructure failures, including acts of terrorism, military actions, power grid and telephone/internet infrastructure failures, which may adversely affect AUM, results of operations and financial condition by causing, among other things:

losses in our investment portfolio due to significant volatility in global financial markets or the failure of counterparties to perform;
changes in the rate of mortality, claims, withdrawals, lapses and surrenders of existing policies and contracts, as well as sales of new policies and contracts; and
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disruption of our normal business operations due to catastrophic property damage, loss of life, or disruption of public and private infrastructure, including communications and financial services.

A number of these risks materialized in connection with the COVID-19 epidemic, which created material economic disruption worldwide and also had significant effects on our business operations, including the operations of Voya’s overseas joint venture and third-party outsourcing providers.

In the event of any future disaster or disruption, there can be no assurance that our business continuation and crisis management plan or insurance coverages would be effective in mitigating any negative effects on operations or profitability in the event of a disaster, nor can we provide assurance that the business continuation and crisis management plans of the independent distributors and outside vendors on whom we rely for certain services and products would be effective in mitigating any negative effects on the provision of such services and products in the event of a disaster.

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Claims resulting from a catastrophic event could also materially harm the financial condition of our reinsurers, which would increase the probability of default on reinsurance recoveries. Our ability to write new business could also be adversely affected.

In addition, the jurisdictions in which we are admitted to transact business require life insurers doing business within the jurisdiction to participate in guaranty associations, which raise funds to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. It is possible that a catastrophic event could require extraordinary assessments on us, which may have a material adverse effect on our business, results of operations and financial condition.

If we experience difficulties arising from outsourcing relationships, our ability to conduct business may be compromised, which may have an adverse effect on our business and results of operations.

As we continue to focus on reducing the expense necessary to support our operations, we have increasingly used outsourcing strategies for a significant portion of our information technology and business functions. If our joint ventures, affiliates or third-party service providers experience disruptions or do not perform as anticipated, or we experience problems with a transition, we may experience system failures, disruptions or other operational difficulties, an inability to meet obligations, including, but not limited to, obligations to policyholders, customers, business partners and distribution partners, increased costs and a loss of business and such events may have a material adverse effect on our business and results of operations. Our reliance on outsourcing providers may also exacerbate our exposure to certain risks associated with catastrophic events or material disruptions in economic activity, such as that which occurred in connection with the COVID-19 epidemic. This exposure could be particularly severe to the extent such events occur in regions, such as India, in which our outsourcing providers tend to be concentrated. See “-Interruption or other operational failures in telecommunication, information technology and other operational systems, including as a result of human error, could harm our business,” and "-A failure to maintain the security, integrity, confidentiality or privacy of our telecommunication, information technology or other operational systems, or the sensitive data residing on such systems, could harm our business."

Risks Related to Regulation

Our businesses and those of our affiliates are heavily regulated and changes in regulation or the application of regulation may reduce our profitability.

We are subject to detailed insurance, securities and other financial services laws and government regulation. In addition to the insurance, securities and other regulations and laws specific to the industries in which we operate, regulatory agencies have broad administrative power over many aspects of our business, which may include ethical issues, money laundering, privacy, recordkeeping and marketing and sales practices. Also, bank regulators and other supervisory authorities in the United States and elsewhere continue to scrutinize payment processing and other transactions under regulations governing such matters as money-laundering, prohibited transactions with countries subject to sanctions, and bribery or other anti-corruption measures.

Compliance with applicable laws and regulations is time consuming and personnel-intensive, and changes in laws and regulations may materially increase the cost of compliance and other expenses of doing business. There are a number of risks that may arise where applicable regulations may be unclear, subject to multiple interpretations or under development or where regulations may conflict with one another, where regulators revise their previous guidance or courts overturn previous rulings, which could result in our failure to meet applicable standards. Regulators and other authorities have the power to bring administrative or judicial proceedings against us, which could result, among other things, in suspension or revocation of our licenses, cease and desist orders, fines, civil penalties, criminal penalties or other disciplinary action which could materially harm our results of operations and financial condition. If we fail to address, or appear to fail to address, appropriately any of these matters, our reputation could be harmed and we could be subject to additional legal risk, which could increase the size and
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number of claims and damages asserted against us or subject us to enforcement actions, fines and penalties. See "Item 1. Business - Regulation" for further discussion on the impact of regulations on our businesses.

Past or future misconduct by our employees, agents, intermediaries, representatives of our broker-dealer affiliates or employees of our vendors could result in violations of law by us, regulatory sanctions and/or serious reputational or financial harm, and the precautions we take to prevent and detect this activity may not be effective in all cases. Although we employ controls and procedures designed to monitor associates' business decisions and to prevent us from taking excessive or inappropriate risks, associates may take such risks regardless of such controls and procedures. Our Parent's compensation policies and practices are reviewed as part of our overall risk management program, but it is possible that such compensation policies and practices could inadvertently incentivize excessive or inappropriate risk taking. If our associates take excessive or inappropriate risks, those risks could harm our reputation and have a material adverse effect on our results of operations and financial condition.

 
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Our businesses are heavily regulated, and changes in regulation in the United States, enforcement actions and regulatory investigations may reduce profitability.

Our operations are subject to comprehensive regulation and supervision throughout the United States. State insurance laws regulate most aspects of our insurance business and we are regulated by the insurance department of our state of domicile, Connecticut. The primary purpose of state regulation is to protect policyholders, and not necessarily to protect creditors or investors. See "Item 1. Business - Regulation-Insurance Regulation."

State insurance regulators, the NAIC and other regulatory bodies regularly reexamine existing laws and regulations applicable to insurance companies and their products and their affiliated transactions. Changes in these laws and regulations, or in interpretations thereof, are often made for the benefit of the consumer at the expense of the insurer and could materially and adversely affect our business, results of operations or financial condition. We currently use captive reinsurance companies to reinsure certain of our remaining annuities and to fund statutory stable value reserves in excess of the economic reserve level. Our continued use of affiliated captive reinsurance companies are subject to potential regulatory changes.

Any regulatory action that limits our ability to achieve desired benefits from the use of or materially increases our cost of using captive reinsurance companies, either retroactively or prospectively could have a material adverse effect on our financial condition or results of operations.

In addition to the foregoing risks, the financial services industry is the focus of increased regulatory scrutiny as various state and federal governmental agencies and self-regulatory organizations conduct inquiries and investigations into the products and practices of the financial services industries. It is possible that future regulatory inquiries or investigations involving the insurance industry generally, or the Company specifically, could materially and adversely affect our business, results of operations or financial condition. For a description of certain regulatory inquiries affecting the Company, see the Litigation and Regulatory Matters section of the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II. Item 8. in this Annual Report on Form 10-K.

In some cases, this regulatory scrutiny has led to legislation and regulation, or proposed legislation and regulation that could significantly affect the financial services industry, or has resulted in regulatory penalties, settlements and litigation. New laws, regulations and other regulatory actions aimed at the business practices under scrutiny could materially and adversely affect our business, results of operations or financial condition. The adoption of new laws and regulations, enforcement actions, or litigation, whether or not involving us, could influence the manner in which we distribute our products, result in negative coverage of the industry by the media, cause significant harm to our reputation and materially and adversely affect our business, results of operations or financial condition.

Our products are subject to extensive regulation and failure to meet any of the complex product requirements may reduce profitability.

Our retirement and investment, and remaining annuity products are subject to a complex and extensive array of state and federal tax, securities, insurance and employee benefit plan laws and regulations, which are administered and enforced by a number of different governmental and self-regulatory authorities, including state insurance regulators, state securities administrators, state banking authorities, the SEC, FINRA, the DOL and the IRS.

For example, U.S. federal income tax law imposes requirements relating to insurance and annuity product design, administration and investments that are conditions for beneficial tax treatment of such products under the Internal Revenue Code. Additionally, state and federal securities and insurance laws impose requirements relating to insurance and annuity
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product design, offering and distribution and administration. Failure to administer product features in accordance with contract provisions or applicable law, or to meet any of these complex tax, securities, or insurance requirements could subject us to administrative penalties imposed by a particular governmental or self-regulatory authority, unanticipated costs associated with remedying such failure or other claims, harm to our reputation, interruption of our operations or adversely impact profitability.

Changes in tax law, as well as changes in interpretation and enforcement of existing tax laws could increase our future tax costs, reducing our profitability.

Changes or clarifications in tax law could cause further reductions to the statutory deferred tax assets and RBC ratios of our insurance subsidiaries. A reduction in the statutory deferred tax assets or RBC ratios may impact the ability of the affected insurance subsidiaries to make distributions to us and consequently could negatively impact our ability to pay dividends to our stockholders and to service our debt.
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Current U.S. federal income tax law permits tax-deferred accumulation of income earned under life insurance and annuity products, and permits exclusion from taxation of death benefits paid under life insurance contracts. Changes in tax laws that restrict these tax benefits could make some of our products less attractive to customers. Reductions in individual income tax rates or estate tax rates could also make some of our products less advantageous to customers. Changes in federal tax laws that reduce the amount an individual can contribute on a pre-tax basis to an employer-provided, tax-deferred product (either directly by reducing current limits or indirectly by changing the tax treatment of such contributions from exclusions to deductions) or changes that would limit an individual’s aggregate amount of tax-deferred savings could make our retirement products less attractive to customers.

Item 1B.    Unresolved Staff Comments

Omitted as registrant is neither an accelerated filer nor a well-known seasoned issuer.

Item 2.    Properties

The Company's home office is located at One Orange Way, Windsor, Connecticut, 06095-4774. All Company office space other than the home office is leased or subleased by the Company or its other affiliates. The Company pays substantially all expenses associated with its owned or leased and subleased office properties. Affiliates within Voya Financial's operations provide the Company with various management, finance, investment management and other administrative services, primarily from facilities located at 5780 Powers Ferry Road, N.W., Atlanta, Georgia 30327-4390. The affiliated companies are reimbursed for the Company's use of these services and facilities under a variety of intercompany agreements.

Item 3.        Legal Proceedings

See the Litigation and Regulatory Matters section of the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. in this Annual Report on Form 10-K for a description of our material legal proceedings.

Item 4.        Mine Safety Disclosures

Not applicable.
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PART II

Item 5.        Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
        (Dollar amounts in millions, unless otherwise stated)    
 
There is no public trading market for the common stock of VRIAC. All of our outstanding common stock is owned by our parent, Voya Holdings Inc. ("Parent"), a direct, wholly owned subsidiary of Voya Financial.

Connecticut insurance law imposes restrictions on a Connecticut insurance company's ability to pay dividends to its parent. 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 Connecticut Insurance Commissioner.

Under Connecticut insurance law, an extraordinary dividend or distribution is defined as a dividend or distribution that, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (1) ten percent (10%) of our earned statutory surplus at the prior year end or (2) our prior year statutory net gain from operations. Connecticut law also prohibits a Connecticut insurer from declaring or paying a dividend except out of its earned surplus unless prior insurance regulatory approval is obtained.

During the year ended December 31, 2020,2021, VRIAC declared and paid ordinary dividends to its Parent in the aggregate amount of $294$78 million, as well as an extraordinary dividend in the aggregate amount of $474 million. During the year ended December 31, 2020 and December 31, 2019, VRIAC paid an ordinary dividend in the amount of $294 million and $396 million to its Parent.

On March 27, 2020, VFP paid a $20 million dividend to VRIAC, its parent; on June 18, 2020, VFP paid a $15 million dividend to VRIAC; on September 25, 2020, VFP paid a $20 million dividend to VRIAC; and on December 22, 2020, VFP paid a $20 million dividend to VRIAC. During the year ended December 31, 2019, VFP paid dividends of $80 million to VRIAC.

On December 31, 2020, VRA paid a $20 million dividend to VRIAC, its parent.Parent, respectively.

During the year ended December 31, 2021, VRIAC received a $318 million capital contribution from its Parent, comprised of cash and non-cash assets. During the year ended December 31, 2020, weVRIAC did not receive capital contributions from ourits Parent. During the yearsyear ended December 31, 2019, weVRIAC received capital contributions of $57 million from ourits Parent.

Item 6.    Selected Financial DataReserved

Omitted pursuant to General Instruction I(2)(a) of Form 10-K.

Item 7.    Management's Narrative Analysis of the Results of Operations and Financial Condition
(Dollar amounts in millions, unless otherwise stated)

For the purposes of the discussion in this Annual Report on Form 10-K, the term "VRIAC" refers to Voya Retirement Insurance and Annuity Company and the terms "Company," "we," "our," "us" refer to Voya Retirement Insurance and Annuity Company and its subsidiaries. We are a direct, wholly owned subsidiary of Voya Holdings Inc. ("Parent"), which is a direct, wholly owned subsidiary of Voya Financial, Inc.

The following discussion and analysis presents a review of our results of operations for the years ended December 31, 2020, 20192021 and 20182020, and financial condition as of December 31, 20202021 and 2019.2020. 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. For discussion and analysis of our results of operations for the years ended December 31, 2020 and 2019, refer to our 2020 Annual Report on Form 10-K filed with the SEC on March 16, 2021.

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 "Note Concerning Forward-Looking Statements."

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Overview

VRIAC is a stock life insurance company domiciled in the State of Connecticut. VRIAC and its wholly owned subsidiaries (collectively, the "Company") provide financial products and services in the United States. VRIAC is authorized to conduct its insurance business in all states and in the District of Columbia, Guam, Puerto Rico and the Virgin Islands.

Effective December 31, 2019, VRIAC’s sole shareholder, Voya Holdings, Inc., transferred ownership of Voya Institutional Plan Services, LLC (“VIPS”) and Voya Retirement Advisors, LLC (“VRA”) to VRIAC for no cash consideration. VIPS and VRA provide retirement recordkeeping and investment advisory services, respectively, and the transfer was made to more
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closely align recordkeeping and related activities of VRIAC’s retirement business. It also had the effect of reducing VRIAC's tax liability In addition to these non-insurance subsidiaries, VRIAC ownsalso has the wholly-owned owned non-insurance subsidiary, Voya Financial Partners, LLC ("VFP").

On January 4, 2021, VRIAC's ultimate parent, Voya Financial Inc. ("Voya Financial"), consummated a series of transactions pursuant to a Master Transaction Agreement (the “Resolution MTA”) entered into on December 18, 2019 with Resolution Life U.S. Holdings Inc., a Delaware corporation (“Resolution Life US”), pursuant to which Resolution Life US acquired all of the shares of the capital stock of Security Life of Denver Company ("SLD") and Security Life of Denver International Limited ("SLDI"), including the capital stock of several subsidiaries of SLD and SLDI.

Concurrently with the sale, SLD entered into reinsurance agreements with ReliaStar Life Insurance Company ("RLI"), ReliaStar Life Insurance Company of New York (“RLNY”), and VRIAC, each of which is a direct or indirect wholly owned subsidiary of Voya Financial. Pursuant to these agreements, RLI and VRIAC reinsured to SLD a 100% quota share, and RLNY will reinsurereinsures to SLD a 75% quota share, of their respective in-scope individual life insurance and annuities businesses. RLI, RLNY, and VRIAC remain subsidiaries of Voya Financial. These reinsurance transactions were substantially carried out on a coinsurance or modified coinsurance basis, with SLD’s reinsurance obligations collateralized by invested assets placed in a comfort trust. The reinsurance agreements along with the sale of the legal entities noted above (referred to as the "Individual Life Transaction") resulted in the disposition of substantially all of Voya Financial's life insurance and legacy non-retirement annuity businesses and related assets. Pursuant to the Individual Life Transaction, VRIAC's reserves related to legacy non-retirement annuity business as well as pension risk transfer products were ceded to SLD and related assets transferred. Based on values as of December 31, 2020, U.S. GAAP reserves to be ceded for VRIAC are expected to be approximately $3.6 billion.

Furthermore, upon closing of the Individual Life Transaction on January 4, 2021, we expect to havehad $63 million of pre-tax deferred intangibles inassociated with the range of $50 million to $150 million net of tax, subject to changes due to many factors including interest rate movements, other investment valuation items, asset selections and changes to the structure of the reinsurance transactions, including an ultimate reinsurance structure that is not entirely on a coinsurance basis with a comfort trust.divested businesses. The deferred intangibles will consist of (1) existing DAC and VOBA balances for the portiondeferred cost of the transaction that involves a sale through reinsurance and (2) deferred Cost or reinsurance ("COR") to be established upon closingas a result of the reinsurance transactions mentioned above.Individual Life transaction. The aggregate deferred intangibles will beare amortized as a charge to earnings over the life of the underlying policies.

Additionally, tofor the extentportion of the reinsurance transactions referred to above reinsurethat involve policies that do not meet risk transfer, a deposit asset will bewas established in the amount of net consideration transferred to SLD, which is expected to be in the range of $1.0 billion to $1.5 billion net of tax.on a pre-tax basis. This compares to liabilities related to contractContract owner account balances that currently exist for the related underlying policies. The annual net impact

Effective as of March 1, 2021, Voya Retirement Insurance and Annuity Company acquired 49.9% of the interest income accretion onissued and outstanding common stock of Voya Special Investments, Inc. from Voya Financial, Inc. The investment has been accounted for as an equity method investment and recognized within Other investments in Consolidated Balance Sheets. Also, effective as of March 1, 2021, the deposit assetCompany acquired $80 million of SLD issued surplus notes and interest credited to$73 million of Resolution (Life U.S. Intermediate Holdings Ltd.) issued preferred shares from affiliated entities, which were received in connection with the contract owner account balances is expected to be in the range of approximately $20 million to $60 million, net of tax.Individual Life Transaction.

On June 1, 2018,9, 2021, Voya Financial consummated a series of transactions (collectively,completed the "2018 Transaction") pursuant to a Master Transaction Agreement dated December 20, 2017 (the "MTA") with VA Capital Company LLC ("VA Capital") and Athene Holding Ltd. ("Athene"). As partsale of the 2018 Transaction, VA Capital's wholly owned subsidiary Venerable Holdings, Inc. ("Venerable") acquired certainindependent financial planning channel of Voya Financial's assets, including all of the shares of the capital stock of Voya Insurance and Annuity Company ("VIAC"), the Company's Iowa-domiciled insurance affiliate, as well as the membership interests of DSL, the Company's broker-dealer subsidiary. Following the closing of the 2018 Transaction, VRIAC acquired a 9.99% equity interest in VA Capital.

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Our Business
Our products include qualified and nonqualified annuity contracts that include a variety of funding and payout options for individuals and employer-sponsored retirement plans qualified under Internal Revenue Code Sections 401, 403, 408, 457 and 501, as well as nonqualified deferred compensation plans and related services. Our products are offered primarily to public and private school systems, higher education institutions, hospitals and healthcare facilities, not-for-profit organizations, state and local governments, small to mid-sized corporations and individuals. We also provide stable value investment options, including separate account guaranteed investment contracts (e.g. GICs) and synthetic GICs, to institutional clients. Our products are generally distributed through independent agents and brokers, third party administrators, banks, consultants, and representatives associated with Voya Financial's owned broker-dealer and investment advisor, Voya Financial Advisors Inc. ("VFA").

On February 8, 2021, VFA entered into an agreement with to Cetera Financial Group, Inc. (“Cetera”Inc, ("Cetera"), one of the nation’s largest networks of independently managed broker-dealers, pursuant tobroker-dealers. VFA is one of the channels through which Cetera will acquire the independent financial planning channel of VFA (the “Financial Planning Channel Sale”).VRIAC distributes its products. In connection with this transaction, VFA expects to transfer approximately 900transferred more than 800 independent financial professionals serving retail customers with approximately $40$38 billion in assets under advisement to Cetera, while retaining approximately 600500 field and phone-based financial professionals who support our business. The transaction is expected to close in the second or third quarter of 2021. The closing is subject to certain conditions, including the receipt of required regulatory approvals.

We derive our revenue mainly from (a) investment income earned on investments (b) Fee income generated from separate account assets supporting variable options under variable annuity contract investments, as designated by contract owners, (c) Premiums, (d) realized capital gains (losses) on investments and changes in fair value of embedded derivatives on product guarantees, and (e) Other revenue which includes certain other fees. Our Benefits and expenses primarily consist of (a) Interest credited and other benefits to contract owners/policyholders, (b) Operating expenses, which include expenses related to the selling and servicing of the various products offered by us and other general business expenses and (c) amortization of DAC and VOBA. In addition, we collect broker-dealer commission revenues through VFP, which are, in turn, paid to broker-dealers and expensed.

We have one operating segment.

Critical Accounting Judgments and Estimates

General

The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("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 statementsConsolidated 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 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. The inputs into our estimates and assumptions consider the economic implications of COVID-19 on our critical and significant accounting estimates. Those estimates are inherently subject to change and actual results could differ from those estimates, and the differences may be material to the accompanying Consolidated Financial Statements.
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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:

Reserves for future policy benefits;
Deferred policy acquisition costs ("DAC") and value of business acquired ("VOBA");
Valuation of investments and derivatives;
Impairments;
Income taxes; and
Contingencies.

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.
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The above critical accounting estimates are described in 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.

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.

See 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 payout contracts with life contingencies are equal to the present value of expected future payments. Assumptions, as towhich are "locked-in" at inception of the contracts, include interest rates, mortality and expenses, and 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 2.3%3.4% to 5.3%. Due to the locked-in assumptions, sensitivity associated with these contracts do not result in significant impacts to our results of operations.

Although assumptions are "locked-in"locked-in upon the issuance of 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.

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.

Stabilizer and MCG: We also issue certain productsstabilizer ("Stabilizer") contracts that contain embedded derivatives that are measured at estimated fair value separately from the host contracts. These products include Stabilizer contracts. The managed custody guarantee product ("MCG") is a stand-alone derivative and is measured in its entirety at estimated fair value.
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The estimated fair value of the Stabilizer embedded derivative and MCG contractsstand-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 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 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 the Company, as well as an adjustment to reflect the non-default spreads and the priority and recovery rates of policyholder claims.

Assumptions and Periodic Review

We review overall policyholder experience at least annually (including lapse, annuitization, withdrawal and mortality) and update these assumptions when deemed necessary, based on additional information that becomes available. If policyholder experience is significantly different from that assumed, such could have a significant effect on our reserve levels and related results of operations.

See the Quantitative and Qualitative Disclosures About Market Risk Section in Part II, Item 7A. of this Annual Report on Form 10-K for additional information regarding the specific hedging strategies and reinsurance 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 and Value of Business Acquired

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.

See the Deferred Policy Acquisition CostsBusiness, Basis of Presentation and Value of Business AcquiredSignificant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for additional information on DAC and VOBA.

Assumptions and Periodic Review

Assumptions deemed critical to the DAC and VOBA estimates include the long-term equity rate of return, long-term interest rate, and future mortality. Changes in assumptions can have a significant impact on DAC and VOBA balances, amortization rates, reserve levels, and results of operations. Assumptions are management's best estimateestimates 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 and VOBA, reserves, and the related results of operations.

One significant assumption is the assumed return associated with the variable account performance. 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%an 8% long-term equity return assumption, a 14% cap and a five-year look-forward period.
Assumptions related to interest rate spreads and credit losses also impact estimated gross profits for all 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 profits for our variable annuity contracts are particularly sensitive to these assumptions.

During the third quarter of 2020, 20192021 and 2018,2020, we conducted our annual review of assumptions, including projection model inputs, which resulted in net favorable/(unfavorable)/favorable unlocking of DAC and VOBA of $20 million and $(138) million, $(13) million and $42 million, respectively. Unlocking in the third quarter of 2020 was primarily driven by changes in long term interest and equity rates. Unlocking in the third quarter 2019 reflects impacts related to a reduction in the long-term interest rate and lower net margins partially offset by changes to earned rates. Unlocking in the third quarter 2018 reflects changes in equity market assumptions partially offset by an unfavorable adjustment related to the GMIR initiative (described below).

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In 2017, we began soliciting customer consents to execute a change to reduceUnlocking in the guaranteed minimum interest rate ("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 will favorably impact the DAC/VOBA amortization rate and operating earnings over time.

Therethird quarter of 2021 was no unlocking of DAC and VOBA related to GMIR initiative for the year ended December 31, 2020 and 2019. For the year ended December 31, 2018, unfavorable unlocking of DAC and VOBA related toprimarily driven by changes in GMIR provisions was $51 million, of which $8 million was includedasset return assumptions. Unlocking in the resultsthird quarter of the annual review of assumptions referenced above.2020 was primarily driven by changes in long term interest and equity rates.

Sensitivity

We perform sensitivity analyses to assess the impact that certain assumptions have on DAC and VOBA, as well as certain reserves. The following table presents the estimated instantaneous net impact on income before income taxes of various assumption changes on our DAC and VOBA 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. (Assumptions regarding shifts in market factors may be overly simplistic and not indicative of actual market behavior in stress scenarios.)
($ in millions)As of December 31, 20202021
Decrease in long-term equity rate of return assumption by 100 basis points$(30)(27)
A change to the long-term interest rate assumption of -50 basis points(26)(24)
A change to the long-term interest rate assumption of +50 basis points2115 
A one-time, 10% decrease in equity market values(6)(7)

Lower assumed equity rates of return, lower assumed interest rates and decreases in equity market values generally decrease DAC and VOBA and increase future policy benefits, thus decreasing income before income taxes. Higher assumed interest rates generally increase DAC and VOBA and decrease future policy benefits, thus increasing income before income taxes.

Valuation of Investments and Derivatives

Our investment portfolio includes certain investments recorded at fair value and 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 annuity products.

See the Investments 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 paid to 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, 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.
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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
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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, London Interbank Offered Rates ("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 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 annuity contracts, see "Reserves for Future Policy Benefits" above.

In addition, we have entered into coinsurance with funds withheld reinsurance arrangements, accounted for under the deposit method, 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 our results of operations.

For additional information regarding the fair value of our investments and derivatives, see the Fair Value Measurements Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. For additional information regarding the sensitivities of interest rate risk and equity market price risk and impact on investments and derivatives, see the Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K.

Impairments

Fixed maturities, available-for-sale, and mortgage loans on real estate can be subject to credit impairment, which can have a significant effect on the results of operations. Refer to 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 an understanding of our methodology and significant inputs considered within the allowance for credit losses and impairments. For additional information regarding the evaluation process for credit impairments, refer to the Investments 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

The results of our operations are included in the consolidated tax return of Voya Financial. Generally, our Consolidated Financial Statements recognize the current and deferred income tax consequences that result from our activities during the current and preceding periods pursuant to the provisions of ASC Topic 740, "Income Taxes" as if we were a separate taxpayer rather than a member of Voya Financial's consolidated income tax return group, with the exception of any net operating loss carryforwards and capital loss carryforwards, which are recorded pursuant to the tax sharing agreement.

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Under our tax sharing agreement, Voya Financial will pay us for the tax benefits of ordinary and capital losses only in the event that the consolidated tax group actually uses the tax benefit of losses generated.

Valuation Allowances

We use certain assumptions and estimates in determining the income taxes payable or refundable to/from Voya Financial 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 are reevaluated on a periodic basis and as regulatory and business factors change.

For additional understanding over the Company's valuation allowance, refer to the Business, Basis of Presentation and
Significant Accounting Policies Note in Part II, Item 8. of this Annual report on Form 10-K.

Tax Contingencies

In establishing unrecognizedWe recognize the tax benefits, we determine whether abenefit from an uncertain tax position only if it is more likely than not to be sustained under examination by the appropriateapplicable taxing authority. We also consider positions that have been reviewed and agreed to as part of an examination by the appropriateapplicable taxing authority. Tax positionsFor items 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. Wemore-likely-than-not recognition threshold, we measure the tax position as the largest amount of benefit that is greatermore than 50% likely of beingto be realized upon ultimate resolution with the taxingapplicable tax authority that has full knowledge of all relevant information. Tax positions that do not meet the more-likely-than-not standard are not recognized.

Changes in Law

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

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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Results of Operations
Year Ended December 31,Year ended December 31,
($ in millions)($ in millions)202020192018($ in millions)20212020Change
Revenues:Revenues:Revenues:
Net investment incomeNet investment income$1,858 $1,689 $1,623 Net investment income$1,949 $1,858 $91 
Fee incomeFee income905 877 875 Fee income1,088 905 183 
PremiumsPremiums32 31 41 Premiums(2,425)32 (2,457)
Broker-dealer commission revenueBroker-dealer commission revenue69 Broker-dealer commission revenue— 
Total net realized capital gains (losses)(310)(144)(242)
Total net gains (losses)Total net gains (losses)166 (310)476 
Other revenueOther revenue(1)14 19 Other revenue38 (1)39 
Total revenuesTotal revenues2,486 2,469 2,385 Total revenues818 2,486 (1,668)
Benefits and expenses:Benefits and expenses:Benefits and expenses:
Interest credited and other benefits to contract owners/policyholdersInterest credited and other benefits to contract owners/policyholders1,049 1,013 828 Interest credited and other benefits to contract owners/policyholders(1,483)1,049 (2,532)
Operating expensesOperating expenses1,090 1,056 894 Operating expenses1,213 1,090 123 
Broker-dealer commission expenseBroker-dealer commission expense69 Broker-dealer commission expense— 
Net amortization of Deferred policy acquisition costs and Value of business acquiredNet amortization of Deferred policy acquisition costs and Value of business acquired192 65 86 Net amortization of Deferred policy acquisition costs and Value of business acquired97 192 (95)
Interest expenseInterest expenseInterest expense— (1)
Total benefits and expensesTotal benefits and expenses2,334 2,137 1,879 Total benefits and expenses(171)2,334 (2,505)
Income (loss) before income taxesIncome (loss) before income taxes152 332 506 Income (loss) before income taxes989 152 837 
Income tax expense (benefit)Income tax expense (benefit)(14)32 61 Income tax expense (benefit)163 (14)177 
Net income (loss)Net income (loss)$166 $300 $445 Net income (loss)$826 $166 $660 

Year Ended December 31, 20202021 compared to Year Ended December 31, 2019

Net income decreased by $134 million from $300 million to $166 million primarily due to:

higher Net realized losses;
higher Net amortization of DAC and VOBA;
higher Interest credited and other benefits to contract owners/policyholders; and
higher Operating expenses.

The decrease was partially offset by:

higher Net investment income; and
lower Income tax expense.2020

Revenues

Net investmentFee income increased by $169$183 million from $1,689$905 million to $1,858$1,088 million primarily due to:

growthan increase in the generalseparate account and institutional/mutual fund assets under management driven by positive net flows; andequity market performance.

Premiums decreasedby$2,457 million from$32 millionto an unfavorable$2,425 millionprimarily due to:

higher alternative investment incomethe ceding of the Pension Risk Transfer (PRT) and annuity business to Resolution as part of the Life Transaction.

Net gains (losses) changed by $476 million from a loss of $310 million to a gain of $166 million primarily driven by higher yieldsdue to:

favorable changes in fixed maturities, including securities pledged due to reinsurance agreements resulting from the Resolution transaction, normal portfolio activity, and intent impairments;
favorable changes in the fair value of embedded derivatives on product guarantees as a result of interest rate movements and the impact of non-performance risk in the current period compared to the prior period.period;
favorable changes in commercial mortgage loans driven by the sale of loans from reinsurance portfolios to Resolution upon the close of the transaction and improvement in the commercial real estate markets; and
favorable changes in other investments related to the sale of the Company's stake in VA Capital.

The increase was partially offset by:

lower prepayment fee income.

Net realized capital losses increased by $166 million from $144 million to $310 million primarily due to:

unfavorable changes in fixed maturities, using the fair value option due to interest rate movements and spread changes; and
unfavorable changes in derivatives - VIM (including embedded derivatives) due to interest rate changes.


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Other revenue unfavorable changes in available for sale securitiesincreased by $39 million from $(1) million to $38 million primarily due to market changes; andto:
losses associated with the increase in the allowance for credit losses associated with commercial mortgage loans subsequent to the adoption of ASU 2016-13 at the beginning of the current year.

The increase was partially offset by:

favorable changes inTSA service fees with Resolution resulting from the fair values of derivatives due to interest rate movements.Life Transaction.

Benefits and Expenses

Interest credited and other benefits to contract owners/policyholders increaseddecreased by $36$2,532 million from $1,013$1,049 million to $1,049$(1,483) million primarily due to:

unfavorable reserve increases duethe ceding of the Pension Risk Transfer (PRT) and annuity business to loss recognition driven byResolution as part of the impact of annual assumption updates.

The increase was partially offset by:

favorable changes in the fair value of embedded derivatives on reinsurance and embedded derivative products.Life Transaction.

Operating expenses increased by $34$123 million from $1,056$1,090 million to $1,090$1,213 million primarily due to:

fees associated with the recapture of a reinsurance agreement an increase in growth-based expenses and higher bonuses due to stronger performance in the current period.

Net amortization of DAC and VOBA increaseddecreased by $127$95 million from $65$192 million to $192$97 million primarily due to:

favorable DAC/VOBA unlocking in the current period compared to unfavorable unlocking in the prior period due to annual assumption updates in the current period.updates.

Income TaxesThe decrease was partially offset by:

higher amortization as a result of gains realized from asset liquidation attributable to the Individual Life Transaction; and
DAC/VOBA balance within the Annuities business being written down to zero in Q1 2021 as the block did not pass LRT.

Income tax expense/expense (benefit) changed by $46$177 million from a benefit of $(14) million to an expense of $32 million to a benefit of $14$163 million due to:

a decreasean increase in income before income taxes; and
an increase in tax attributes.taxes.

Financial Condition

Investments

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, Other asset-backed securities ("ABS"), and traditional Mortgage-backed securities ("MBS").

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 Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. for more information on investments.

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Portfolio Composition

The following table presents the investment portfolio as of the dates indicated:
December 31, 2021December 31, 2020
($ in millions)($ in millions)December 31, 2020December 31, 2019($ in millions)Carrying
Value
% of
Total
Carrying
Value
% of
Total
Fixed maturities, available-for-sale, excluding securities pledgedFixed maturities, available-for-sale, excluding securities pledged$24,360 75.6 %$28,043 77.9 %
Fixed maturities, at fair value optionFixed maturities, at fair value option1,253 3.9 %1,730 4.8 %
Carrying
Value
% of
Total
Carrying
Value
% of
Total
Fixed maturities, available-for-sale, excluding securities pledged$28,043 77.9 %$25,153 75.3 %
Fixed maturities, at fair value using the fair value option1,730 4.8 %1,479 4.4 %
Equity securities, available-for-sale116 0.3 %80 0.2 %
Equity securities, at fair valueEquity securities, at fair value141 0.4 %116 0.3 %
Short-term investments(1)
Short-term investments(1)
17 — %— — %
Short-term investments(1)
— — %17 — %
Mortgage loans on real estateMortgage loans on real estate4,627 12.9 %4,664 14.0 %Mortgage loans on real estate4,222 13.1 %4,627 12.9 %
Policy loansPolicy loans187 0.5 %205 0.6 %Policy loans171 0.5 %187 0.5 %
Limited partnerships/corporationsLimited partnerships/corporations815 2.3 %738 2.2 %Limited partnerships/corporations980 3.0 %815 2.3 %
DerivativesDerivatives145 0.4 %224 0.7 %Derivatives149 0.5 %145 0.4 %
Securities pledgedSecurities pledged220 0.7 %828 2.5 %Securities pledged799 2.5 %220 0.7 %
Other investmentsOther investments43 0.2 %43 0.1 %Other investments143 0.5 %43 0.2 %
Total investmentsTotal investments$35,943 100.0 %$33,414 100.0 %Total investments$32,218 100.0 %$35,943 100.0 %
(1) Short-term investments include investments with remaining maturities of one year or less, but greater than 3 months, at the time of purchase.

Fixed Maturities

The following tables present total fixed maturities, including securities pledged, by market sector as of the dates indicated:
December 31, 2021
($ in millions)Amortized
Cost
% of
Total
Fair
Value
% of
Total
Fixed maturities:
U.S. Treasuries$554 2.3 %$691 2.6 %
U.S. Government agencies and authorities20 0.1 %20 0.1 %
State, municipalities, and political subdivisions716 2.9 %803 3.0 %
U.S. corporate public securities7,314 30.1 %8,269 31.4 %
U.S. corporate private securities3,620 14.9 %3,939 14.9 %
Foreign corporate public securities and foreign governments(1)
2,352 9.7 %2,591 9.8 %
Foreign corporate private securities(1)
2,563 10.5 %2,703 10.2 %
Residential mortgage-backed securities3,081 12.7 %3,164 12.0 %
Commercial mortgage-backed securities2,766 11.4 %2,881 10.9 %
Other asset-backed securities1,341 5.4 %1,351 5.1 %
Total fixed maturities, including securities pledged$24,327 100.0 %$26,412 100.0 %
(1) Primarily U.S. dollar denominated.
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Fixed Maturities

The following tables present total fixed maturities, including securities pledged, by market sector as of the dates indicated:
($ in millions)December 31, 2020
Amortized
Cost
% of
Total
Fair
Value
% of
Total
Fixed maturities:
U.S. Treasuries$535 2.0 %$721 2.4 %
U.S. Government agencies and authorities18 0.1 %19 0.1 %
State, municipalities, and political subdivisions698 2.6 %814 2.7 %
U.S. corporate public securities7,632 28.7 %9,156 30.6 %
U.S. corporate private securities3,870 14.6 %4,379 14.6 %
Foreign corporate public securities and foreign governments(1)
2,539 9.6 %2,951 9.8 %
Foreign corporate private securities(1)
2,991 11.3 %3,303 11.0 %
Residential mortgage-backed securities4,071 15.3 %4,237 14.1 %
Commercial mortgage-backed securities2,712 10.2 %2,893 9.6 %
Other asset-backed securities1,500 5.6 %1,520 5.1 %
Total fixed maturities, including securities pledged$26,566 100.0 %$29,993 100.0 %
(1) Primarily U.S. dollar denominated.
December 31, 2020
($ in millions)($ in millions)December 31, 2019($ in millions)Amortized
Cost
% of
Total
Fair
Value
% of
Total
Amortized
Cost
% of
Total
Fair
Value
% of
Total
Fixed maturities:Fixed maturities:Fixed maturities:
U.S. TreasuriesU.S. Treasuries$565 2.2 %$691 2.5 %U.S. Treasuries$535 2.0 %$721 2.4 %
U.S. Government agencies and authoritiesU.S. Government agencies and authorities19 0.1 %19 0.1 %U.S. Government agencies and authorities18 0.1 %19 0.1 %
State, municipalities, and political subdivisionsState, municipalities, and political subdivisions747 3.0 %815 3.0 %State, municipalities, and political subdivisions698 2.6 %814 2.7 %
U.S. corporate public securitiesU.S. corporate public securities7,103 28.0 %8,031 29.2 %U.S. corporate public securities7,632 28.7 %9,156 30.6 %
U.S. corporate private securitiesU.S. corporate private securities3,776 15.0 %4,066 14.8 %U.S. corporate private securities3,870 14.6 %4,379 14.6 %
Foreign corporate public securities and foreign governments(1)
Foreign corporate public securities and foreign governments(1)
2,417 9.5 %2,679 9.8 %
Foreign corporate public securities and foreign governments(1)
2,539 9.6 %2,951 9.8 %
Foreign corporate private securities(1)
Foreign corporate private securities(1)
3,171 12.5 %3,375 12.3 %
Foreign corporate private securities(1)
2,991 11.3 %3,303 11.0 %
Residential mortgage-backed securitiesResidential mortgage-backed securities3,685 14.5 %3,810 13.9 %Residential mortgage-backed securities4,071 15.3 %4,237 14.1 %
Commercial mortgage-backed securitiesCommercial mortgage-backed securities2,381 9.4 %2,500 9.0 %Commercial mortgage-backed securities2,712 10.2 %2,893 9.6 %
Other asset-backed securitiesOther asset-backed securities1,472 5.8 %1,474 5.4 %Other asset-backed securities1,500 5.6 %1,520 5.1 %
Total fixed maturities, including securities pledgedTotal fixed maturities, including securities pledged$25,336 100.0 %$27,460 100.0 %Total fixed maturities, including securities pledged$26,566 100.0 %$29,993 100.0 %
(1) Primarily U.S. dollar denominated.

As of December 31, 2020,2021, the average duration of our fixed maturities portfolio, including securities pledged, is between 6.5 and 7.0 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. NAIC designations 3 through 6 include fixed maturity securities generally considered below investment grade by such rating organizations.
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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 all scenarios, 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 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 Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings Services ("S&P") and Fitch Ratings, Inc. ("Fitch"). If no rating is available from a rating agency, then an internally developed rating is used. As of December 31, 20202021 and 20192020 the weighted average NAIC quality rating of our fixed maturities portfolio was 1.6 and 1.5.

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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, 20202021 and 2019,2020, 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.

The following tables present credit quality of fixed maturities, including securities pledged, using NAIC designations as of the dates indicated:

($ in millions)December 31, 2021
NAIC Quality Designation123456Total Fair Value
U.S. Treasuries$691 $— $— $— $— $— $691 
U.S. Government agencies and authorities20 — — — — — 20 
State, municipalities and political subdivisions737 65 — — — 803 
U.S. corporate public securities2,697 5,285 239 41 — 8,269 
U.S. corporate private securities1,315 2,300 243 79 — 3,939 
Foreign corporate public securities and foreign governments(1)
789 1,689 106 — — 2,591 
Foreign corporate private securities(1)
223 2,202 146 67 — 65 2,703 
Residential mortgage-backed securities3,116 22 — 10 15 3,164 
Commercial mortgage-backed securities2,488 332 54 — — 2,881 
Other asset-backed securities1,112 221 — 1,351 
Total fixed maturities$13,188 $12,116 $793 $208 $27 $80 $26,412 
% of Fair Value49.9 %45.9 %3.0 %0.8 %0.1 %0.3 %100.0 %
(1) Primarily U.S. dollar denominated.
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($ in millions)December 31, 2020
NAIC Quality Designation123456Total Fair Value
U.S. Treasuries$721 $— $— $— $— $— $721 
U.S. Government agencies and authorities19 — — — — — 19 
State, municipalities and political subdivisions750 63 — — — 814 
U.S. corporate public securities3,198 5,468 450 35 — 9,156 
U.S. corporate private securities1,528 2,472 285 85 — 4,379 
Foreign corporate public securities and foreign governments(1)
1,108 1,704 128 11 — — 2,951 
Foreign corporate private securities(1)
276 2,763 94 170 — — 3,303 
Residential mortgage-backed securities3,947 188 68 — 13 21 4,237 
Commercial mortgage-backed securities2,648 203 38 — — 2,893 
Other asset-backed securities1,353 147 — 1,520 
Total fixed maturities$15,548 $13,008 $1,069 $312 $35 $21 $29,993 
% of Fair Value51.8 %43.4 %3.6 %1.0 %0.1 %0.1 %100.0 %
(1) Primarily U.S. dollar denominated.

The following tables present credit quality of fixed maturities, including securities pledged, using NAIC designationsARO ratings as of the dates indicated:
($ in millions)December 31, 2020
NAIC Quality Designation123456Total Fair Value
U.S. Treasuries$721 $— $— $— $— $— $721 
U.S. Government agencies and authorities19 — — — — — 19 
State, municipalities and political subdivisions750 63 — — — 814 
U.S. corporate public securities3,198 5,468 450 35 — 9,156 
U.S. corporate private securities1,528 2,472 285 85 — 4,379 
Foreign corporate public securities and foreign governments(1)
1,108 1,704 128 11 — — 2,951 
Foreign corporate private securities(1)
276 2,763 94 170 — — 3,303 
Residential mortgage-backed securities3,947 188 68 — 13 21 4,237 
Commercial mortgage-backed securities2,648 203 38 — — 2,893 
Other asset-backed securities1,353 147 — 1,520 
Total fixed maturities$15,548 $13,008 $1,069 $312 $35 $21 $29,993 
% of Fair Value51.8 %43.4 %3.6 %1.0 %0.1 %0.1 %100.0 %
(1) Primarily U.S. dollar denominated.
($ in millions)December 31, 2019
NAIC Quality Designation123456Total Fair Value
U.S. Treasuries$691 $— $— $— $— $— $691 
U.S. Government agencies and authorities19 — — — — — 19 
State, municipalities and political subdivisions755 59 — — — 815 
U.S. corporate public securities3,330 4,175 445 69 12 — 8,031 
U.S. corporate private securities1,383 2,471 107 95 10 — 4,066 
Foreign corporate public securities and foreign governments(1)
1,089 1,482 92 16 — — 2,679 
Foreign corporate private securities(1)
336 2,858 148 33 — — 3,375 
Residential mortgage-backed securities3,677 96 — 12 22 3,810 
Commercial mortgage-backed securities2,242 196 47 — 2,500 
Other asset-backed securities1,318 135 11 — 1,474 
Total fixed maturities$14,840 $11,472 $853 $223 $49 $23 $27,460 
% of Fair Value54.0 %41.8 %3.1 %0.8 %0.2 %0.1 %100.0 %
(1) Primarily U.S. dollar denominated.


($ in millions)December 31, 2021
ARO Quality RatingsAAAAAABBBBB and BelowTotal Fair Value
U.S. Treasuries$691 $— $— $— $— $691 
U.S. Government agencies and authorities18 — — — 20 
State, municipalities and political subdivisions47 465 225 65 803 
U.S. corporate public securities46 483 2,429 5,047 264 8,269 
U.S. corporate private securities32 68 1,147 2,447 245 3,939 
Foreign corporate public securities and foreign governments(1)
176 716 1,562 129 2,591 
Foreign corporate private securities(1)
— 29 198 2,266 210 2,703 
Residential mortgage-backed securities2,089 214 159 222 480 3,164 
Commercial mortgage-backed securities1,167 289 580 753 92 2,881 
Other asset-backed securities150 303 647 217 34 1,351 
Total fixed maturities$4,248 $2,027 $6,103 $12,579 $1,455 $26,412 
% of Fair Value16.1 %7.7 %23.1 %47.6 %5.5 %100.0 %
(1) Primarily U.S. dollar denominated.
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The following tables present credit quality of fixed maturities, including securities pledged, using ARO ratings as of the dates indicated:
($ in millions)December 31, 2020
ARO Quality RatingsAAAAAABBBBB and BelowTotal Fair Value
U.S. Treasuries$721 $— $— $— $— $721 
U.S. Government agencies and authorities19 — — — — 19 
State, municipalities and political subdivisions56 489 201 67 814 
U.S. corporate public securities80 469 3,044 5,118 445 9,156 
U.S. corporate private securities65 105 1,384 2,478 347 4,379 
Foreign corporate public securities and foreign governments(1)
283 914 1,586 160 2,951 
Foreign corporate private securities(1)
— 30 276 2,760 237 3,303 
Residential mortgage-backed securities3,006 266 115 215 635 4,237 
Commercial mortgage-backed securities1,128 333 589 724 119 2,893 
Other asset-backed securities297 361 680 146 36 1,520 
Total fixed maturities$5,380 $2,336 $7,203 $13,094 $1,980 $29,993 
% of Fair Value17.9 %7.8 %24.0 %43.7 %6.6 %100.0 %
(1) Primarily U.S. dollar denominated.
($ in millions)December 31, 2020
ARO Quality RatingsAAAAAABBBBB and BelowTotal Fair Value
U.S. Treasuries$721 $— $— $— $— $721 
U.S. Government agencies and authorities19 — — — — 19 
State, municipalities and political subdivisions56 489 201 67 814 
U.S. corporate public securities80 469 3,044 5,118 445 9,156 
U.S. corporate private securities65 105 1,384 2,478 347 4,379 
Foreign corporate public securities and foreign governments(1)
283 914 1,586 160 2,951 
Foreign corporate private securities(1)
— 30 276 2,760 237 3,303 
Residential mortgage-backed securities3,006 266 115 215 635 4,237 
Commercial mortgage-backed securities1,128 333 589 724 119 2,893 
Other asset-backed securities297 361 680 146 36 1,520 
Total fixed maturities$5,380 $2,336 $7,203 $13,094 $1,980 $29,993 
% of Fair Value17.9 %7.8 %24.0 %43.7 %6.6 %100.0 %
(1) Primarily U.S. dollar denominated.
($ in millions)December 31, 2019
ARO Quality RatingsAAAAAABBBBB and BelowTotal Fair Value
U.S. Treasuries$691 $— $— $— $— $691 
U.S. Government agencies and authorities19 — — — — 19 
State, municipalities and political subdivisions55 502 198 59 815 
U.S. corporate public securities72 440 2,837 4,185 497 8,031 
U.S. corporate private securities89 120 1,280 2,371 206 4,066 
Foreign corporate public securities and foreign governments(1)
269 858 1,420 124 2,679 
Foreign corporate private securities(1)
— — 429 2,820 126 3,375 
Residential mortgage-backed securities2,799 136 75 281 519 3,810 
Commercial mortgage-backed securities1,012 240 601 539 108 2,500 
Other asset-backed securities292 312 692 140 38 1,474 
Total fixed maturities$5,037 $2,019 $6,970 $11,815 $1,619 $27,460 
% of Fair Value18.3 %7.4 %25.4 %43.0 %5.9 %100.0 %
(1) Primarily U.S. dollar denominated.
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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 capitallosses on fixed maturities, including securities pledged, increased $4 million from $107 million to $111 million for the year ended December 31, 2021. The modest increase in unrealized losses was driven by moderately higher interest rates in the front end of the yield curve. Gross unrealized losses on fixed maturities, including securities pledged, increased $44 million from $63 million to $107 million for the year ended December 31, 2020. A modest steepening of the yield curve, that included higher interest rates in the long-end, increased unrealized losses on a small portion of the portfolio. Tighter spreads on the quarter and historically low interest rates continue to limit the overall amount of unrealized losses. 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, decreased $497 million from $560 million to $63 million for the year ended December 31, 2019. The increase in gross unrealized capital losses was primarily due to rising interest rates and widening credit spreads.

As of December 31, 2020,2021, we held threeno fixed maturity securities with unrealized capital loss in excess of $10 million. As of December 31, 2020, , thewe held three fixed maturity securities with unrealized capital loss in excess of $10 million. The unrealized capital losses on these fixed maturitiesmaturity securities equaled $34 million, or 31.5% of the total unrealized losses.

As of December 31, 2019,2021, we held zerohad $1.6 billion of energy sector fixed maturity securities, constituting 6.0% of the total fixed maturities portfolio, with gross unrealized capital losses of $14 million, including no energy sector fixed maturity securities with unrealized capital lossesloss in excess of $10 million. The unrealized capital losses on thisAs of December 31, 2021, our fixed maturity equaled $15 million, or 2.7%exposure to the energy sector was comprised of the total unrealized losses.87.0% investment grade securities.

As of December 31, 2020, we hadheld $1.8 billion of energy sector fixed maturity securities, constituting 6.0% of the total fixed maturities portfolio, with gross unrealized capital losses of $22 million, including one energy sector fixed maturity security with unrealized capital loss in excess of $10 million. The unrealized capital loss on this fixed maturity security equaled $12 million. As of December 31, 2020, our fixed maturity exposure to the energy sector was comprised of 83.3% investment grade securities.

As of December 31, 2019, we held $1.8 billion of energy sector fixed maturity securities, constituting 6.7% of the total fixed maturities portfolio, with gross unrealized capital losses of $18 million, including zero energy sector fixed maturity security with unrealized capital loss in excess of $10 million. The unrealized capital loss on this fixed maturity security equaled $19 million. As of December 31, 2019, our fixed maturity exposure to the energy sector was comprised of 90.5% investment grade securities. See the Investments Note to our Condensed Consolidated Financial Statements in Part I,II, Item 1.8. of this annualAnnual Report on Form 10-K for further information on unrealized capital losses.

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Residential Mortgage-Backed Securities

The following table presents our residential mortgage-backed securities as of December 31, 20202021 and 2019:2020:
December 31, 2020December 31, 2021
($ in millions)($ in millions)Amortized CostGross Unrealized Capital GainsGross Unrealized Capital LossesEmbedded DerivativesFair Value($ in millions)Amortized CostGross Unrealized Capital GainsGross Unrealized Capital LossesEmbedded DerivativesFair Value
Prime AgencyPrime Agency$2,286 $110 $$$2,400 Prime Agency$1,501 $60 $$$1,559 
Prime Non-AgencyPrime Non-Agency1,732 55 12 1,776 Prime Non-Agency1,543 31 14 1,561 
Alt-AAlt-A39 47 Alt-A27 34 
Sub-Prime(1)
Sub-Prime(1)
28 — — 32 
Sub-Prime(1)
25 — — 28 
Total RMBSTotal RMBS$4,085 $174 $15 $11 $4,255 Total RMBS$3,096 $99 $20 $$3,182 
(1) Includes subprime other asset backed securities.

(1) Includes subprime other asset backed securities.

(1) Includes subprime other asset backed securities.

December 31, 2019December 31, 2020
($ in millions)($ in millions)Amortized CostGross Unrealized Capital GainsGross Unrealized Capital LossesEmbedded DerivativesFair Value($ in millions)Amortized CostGross Unrealized Capital GainsGross Unrealized Capital LossesEmbedded DerivativesFair Value
Prime AgencyPrime Agency$2,099 $84 $$$2,187 Prime Agency$2,286 $110 $$$2,400 
Prime Non-AgencyPrime Non-Agency1,525 33 1,551 Prime Non-Agency1,732 55 12 1,776 
Alt-AAlt-A46 — 58 Alt-A39 47 
Sub-Prime(1)
Sub-Prime(1)
30 — — 33 
Sub-Prime(1)
28 — — 32 
Total RMBSTotal RMBS$3,700 $128 $10 $11 $3,829 Total RMBS$4,085 $174 $15 $11 $4,255 
(1) Includes subprime other asset backed securities.

(1) Includes subprime other asset backed securities.

(1) Includes subprime other asset backed securities.

Commercial Mortgage-backed Securities

The following table presents our commercial mortgage-backed securities as of December 31, 2021 and 2020:

December 31, 2021
($ in millions)AAAAAABBBBB and BelowTotal
Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
2014 and prior$453 $503 $30 $31 $95 $98 $48 $49 $49 $47 $675 $728 
2015132 146 77 80 34 35 54 54 15 15 312 330 
201623 25 16 17 22 23 24 24 — — 85 89 
201753 58 18 18 46 47 35 36 22 23 174 182 
201872 80 19 19 74 75 47 48 214 224 
2019146 163 31 31 112 114 198 199 493 512 
202064 66 22 22 45 46 118 119 — — 249 253 
2021126 126.0 71 71 142 142 225 224 — — 564 563 
Total CMBS$1,069 $1,167 $284 $289 $570 $580 $749 $753 $94 $92 $2,766 $2,881 
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Commercial Mortgage-backed Securities
December 31, 2020
($ in millions)AAAAAABBBBB and BelowTotal
Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
2014 and prior$448 $525 $93 $95 $109 $113 $80 $81 $41 $41 $771 $855 
2015162 187 89 96 41 42 72 74 21 21 385 420 
201630 33 17 18 29 32 25 25 — — 101 108 
201756 63 31 31 61 61 49 50 35 35 232 240 
201874 86 26 26 141 144 101 100 13 14 355 370 
2019138 162 39 39 133 130 269 274 587 613 
202070.0 72.0 27 28 66 67 118 120 — — 281 287 
Total CMBS$978 $1,128 $322 $333 $580 $589 $714 $724 $118 $119 $2,712 $2,893 

The following table presents our commercial mortgage-backed securities asAs of December 31, 20202021, 86.4% and 2019:
December 31, 2020
($ in millions)AAAAAABBBBB and BelowTotal
Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
2013 and prior$190 $223 $57 $58 $78 $81 $73 $73 $14 $14 $412 $449 
2014258 302 36 37 31 32 27 27 359 406 
2015162 187 89 96 41 42 72 74 21 21 385 420 
201630 33 17 18 29 32 25 25 — — 101 108 
201756 63 31 31 61 61 49 50 35 35 232 240 
201874 86 26 26 141 144 101 100 13 14 355 370 
2019138 162 39 39 133 130 269 274 587 613 
202070 72 27 28 66 67 118 120 — — 281 287 
Total CMBS$978 $1,128 $322 $333 $580 $589 $714 $724 $118 $119 $2,712 $2,893 
December 31, 2019
($ in millions)AAAAAABBBBB and BelowTotal
Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
2013 and prior$193 $212 $35 $36 $50 $51 $94 $99 $$$374 $401 
2014251 274 29 29 38 39 15 15 21 22 354 379 
2015188 199 77 80 50 51 84 88 19 19 418 437 
201627 29 11 11 23 24 37 39 104 109 
201772 75 34 34 98 102 44 45 32 34 280 290 
201885 95 21 22 172 178 78 80 — — 356 375 
2019114 128 27 28 156 157 174 173 24 23 495 509 
Total CMBS$930 $1,012 $234 $240 $587 $602 $526 $539 $104 $107 $2,381 $2,500 

11.5% of CMBS investments were designated as NAIC-1 and NAIC-2, respectively. As of December 31, 2020, 91.5% and 7.0% of CMBS investments were designated as NAIC-1 and NAIC-2, respectively. As

Other Asset-backed Securities

The following table presents our other asset-backed securities as of December 31, 2019, 89.7%2021 and 7.9% of CMBS investments were designated as NAIC-1 and NAIC-2, respectively.2020:
December 31, 2021
($ in millions)AAAAAABBBBB and BelowTotal
Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
Collateralized Obligation$100 $101 $233 $233 $568 $568 $71 $70 $19 $17 $991 $989 
Auto-Loans— — — — — — 
Student Loans12 12 66 68 — — 86 88 
Credit Card loans— — — — — — — — 
Other Loans35 37 63 64 141 145 — — 240 247 
Total Other ABS(1)
$147 $150 $301 $303 $644 $646 $214 $217 $19 $17 $1,325 $1,333 
(1) Excludes subprime other asset backed securities
December 31, 2020
($ in millions)AAAAAABBBBB and BelowTotal
Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
Collateralized Obligation$224 $223 $258 $259 $556 $554 $$$22 $19 $1,068 $1,063 
Auto-Loans10 10 — — — — 18 18 
Student Loans30 31 80 84 32 33 — — 143 150 
Other Loans37 41 81 85 129 136 — — 256 271 
Total Other ABS(1)$292 $296 $357 $362 $676 $679 $138 $146 $22 $19 $1,485 $1,502 
(1) Excludes subprime other asset backed securities

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Other Asset-backed Securities

The following table presents our other asset-backed securities as of December 31, 2020 and 2019:
December 31, 2020
($ in millions)AAAAAABBBBB and BelowTotal
Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
Collateralized Obligation$224 $223 $258 $259 $556 $554 $$$22 $19 $1,068 $1,063 
Auto-Loans10 10 — — — — 18 18 
Student Loans30 31 80 84 32 33 — — 143 150 
Other Loans37 41 81 85 129 136 — — 256 271 
Total Other ABS(1)
$292 $296 $357 $362 $676 $679 $138 $146 $22 $19 $1,485 $1,502 
(1) Excludes subprime other asset backed securities
December 31, 2019
($ in millions)AAAAAABBBBB and BelowTotal
Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
Collateralized Obligation$235 $234 $237 $238 $542 $534 $12 $11 $21 $18 $1,047 $1,035 
Auto-Loans10 10 — — — — 16 16 
Student Loans14 14 59 60 71 72 — — 146 148 
Other Loans40 42 78 80 124 127 248 256 
Total Other ABS(1)$290 $291 $309 $312 $696 $691 $138 $140 $24 $21 $1,457 $1,455 
(1) Excludes subprime other asset backed securities

As of December 31, 2020, 88.9%2021, 82.2% and 9.8%16.4% of Other ABS investments were designated as NAIC-1 and NAIC-2, respectively. As of December 31, 2019, 89.3%2020, 88.9% and 9.3%9.8% of Other ABS investments were designated as NAIC-1 and NAIC-2, respectively.

Mortgage Loans on Real Estate

As of December 31, 2020, there was one commercial mortgage loans with a pre and post carrying value of $5 and $3 respectively, for which repayment is expected to be provided substantially through the operation or sale of collateral as the borrower is experiencing financial difficulty. The collateral is Office/Retail space and Hotel. The expected credit loss was based on the fair value of the underlying collateral and there was a subsequent write off against the allowance of $2.

As of December 31, 20202021 and 2019,2020, our mortgage loans on real estate portfolio had a weighted average DSC of 2.0 and 2.2, times, respectively, and a weighted average LTV ratio of 46.0%46.6% and 62.3%46.0%, respectively. While still heavily impacted by COVID-19, the Commercial Mortgage Loan portfolio allowance increased by $28 during the quarter. We continue to observe distress in the hotel sector. See the Investments Note and 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 further information on mortgage loans on real estate.
Impairments

We evaluate available-for-sale fixed maturities 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 impaired.
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See the Investments Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information on impairment.

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, 2020,2021, the Company's total European exposure had an amortized cost and fair value of $2,780$2,447 million and $3,130$2,602 million, respectively. European exposure with a primary focus on Greece, Ireland, Italy, Portugal and Spain (which we refer to as "peripheral Europe") amounts to $300$196 million, which includes non-financial institutions exposure in Ireland of $82$37 million, in Italy of $110$91 million, and in Spain of $78$52 million. We also had financial institutions exposure in Italy of $6$5 million and in Spain of $24$11 million. We did not have any exposure to Greece or Portugal.

Among the remaining $2,830$2,406 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, 2020,2021, our non-peripheral sovereign exposure was $100$67 million, which consisted of fixed maturities. We also had $500$430 million in net exposure to non-peripheral financial institutions with a concentration in France of $105$111 million, The Netherlands of $57$38 million, Switzerland of $79$76 million and the United Kingdom of $231$170 million. The balance of $2,230$1,914 million was invested across non-peripheral, non-financial institutions.

Some of the major country level exposures were in the United Kingdom of $1,470$1,242 million, in The Netherlands of $251$199 million, in Belgium of $165$119 million, in France of $278$252 million, in Germany of $152$175 million, in Switzerland of $191$172 million, and in Russia of $57$48 million. We believe the primary risk results from market value fluctuations resulting from spread volatility and the secondary risk is default risk, dependent uponrisk. The recent military conflict between Russia and Ukraine could also impact the strengthvaluation of continued recovery of economic conditionsour investments in Europe.that region.
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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.

Liquidity Management

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, repurchase agreements, contract deposits, securities lending and capital contributions. Primary uses of these funds are payments of commissions and operating expenses, interest credits, investment purchases and contract maturities, withdrawals and surrenders and payment of dividends.

Our liquidity position is managed by maintaining adequate levels of liquid assets, such as cash, cash equivalents and short-term investments. As part of the liquidity management process, different scenarios are modeled to determine whether existing assets are adequate to meet projected cash flows. Key variables in the modeling process include interest rates, equity market movements, quantity and type of interest and equity market hedges, anticipated contract owner behavior, market value of the general account assets, variable separate account performance and implications of rating agency actions.

The fixed account liabilities are supported by a general account portfolio, principally composed of fixed rate investments with matching duration characteristics that can generate predictable, steady rates of return. The portfolio management strategy for the fixed account considers the assets available-for-sale. This strategy enables us to respond to changes in market interest rates, prepayment risk, relative values of asset sectors and individual securities and loans, credit quality outlook and other relevant factors. The objective of portfolio management is to maximize returns, taking into account interest rate and credit risk, as well as other risks. Our asset/liability management discipline includes strategies to minimize exposure to loss as interest rates and economic and market conditions change. In executing this strategy, we use derivative instruments to manage these risks. Our derivative counterparties are of high credit quality.

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.

The following discussion presents a review of our sources and uses of liquidity and capital. This discussion should be read in its entirety and in conjunction with the Off-Balance Sheet Arrangements and Aggregate Contractual Obligations table contained in Management's Narrative Analysis of the Results of Operations and Financial Condition in Part II, Item 7., of this Annual Report on Form 10-K.

Liquidity Management

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, repurchase agreements, contract deposits, securities lending and capital contributions. Primary uses of these funds are payments of commissions and operating expenses, interest credits, investment purchases and contract maturities, withdrawals and surrenders and payment of dividends.

Our liquidity position is managed by maintaining adequate levels of liquid assets, such as cash, cash equivalents and short-term investments. As part of the liquidity management process, different scenarios are modeled to determine whether existing assets are adequate to meet projected cash flows. Key variables in the modeling process include interest rates, equity market movements, quantity and type of interest and equity market hedges, anticipated contract owner behavior, market value of the general account assets, variable separate account performance and implications of rating agency actions.

The fixed account liabilities are supported by a general account portfolio, principally composed of fixed rate investments with matching duration characteristics that can generate predictable, steady rates of return. The portfolio management strategy for the fixed account considers the assets available-for-sale. This strategy enables us to respond to changes in market interest rates, prepayment risk, relative values of asset sectors and individual securities and loans, credit quality outlook and other relevant factors. The objective of portfolio management is to maximize returns, taking into account interest rate and credit risk, as well as other risks. Our asset/liability management discipline includes strategies to minimize exposure to loss as interest rates and economic and market conditions change. In executing this strategy, we use derivative instruments to manage these risks. Our derivative counterparties are of high credit quality.

Liquidity and Capital Resources

Additional sources of liquidity include borrowing facilities to meet short-term cash requirements that arise in the ordinary course of business. We maintain the following agreements:

A reciprocal loan agreement with Voya Financial, Inc., an affiliate, whereby either party can borrow from the other up to 3.0% of VRIAC's statutory admitted assets as of the prior December 31. As of December 31, 2021, VRIAC had an outstanding receivable of $130 million and VIPS had a $19 million outstanding payable. As of December 31, 2020, VRIACwe had an outstanding receivable of $653 million and VIPS had a $7 million outstanding payable. As of December 31, 2019, we had an outstanding receivable of $69 million and no outstanding payable from/to Voya Financial, Inc. under the reciprocal loan agreement. We and Voya Financial, Inc. continue to maintain the reciprocal loan agreement and future borrowings by either party will be subject to the reciprocal loan terms summarized above. Effective January 2014, interest on any borrowing by either the Company or Voya Financial, Inc. is charged at a rate based on the prevailing market rate for similar third-party borrowings or securities.

We hold approximately 57.5%49.1% of our assets in marketable securities. These assets include cash, U.S. Treasuries, Agencies, Corporate Bonds, ABS, CMBS and collateralized mortgage obligations ("CMO") and Equity securities. In the event of a temporary liquidity need, cash may be raised by entering into repurchase agreements, dollar rolls and/or security lending agreements by temporarily lending securities and receiving cash collateral. Under our Liquidity Plan, up to 12.0% of our general account statutory admitted assets may be allocated to repurchase, securities lending and dollar roll programs. At the time a temporary cash need arises, the actual percentage of admitted assets available for repurchase transactions will depend upon outstanding allocations to the three programs. As of December 31, 2021, VRIAC had securities lending collateral assets of $676 million, which represents approximately 0.5% of its general
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account statutory admitted assets. As of December 31, 2020, VRIAC had securities lending collateral assets of $74 million, which represents approximately 0.1% of its general account statutory admitted assets. As of December 31, 2019, VRIAC had securities lending collateral assets of $650 million, which represents approximately 2.0% of its general account statutory admitted assets.

Management believes that our sources of liquidity are adequate to meet our short-term cash obligations.

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Capital Contributions and Dividends

During the year ended December 31, 2020,2021, VRIAC declared and paid ordinary dividends to its Parent in the aggregate amount of $294$78 million, as well as an extraordinary dividend in the aggregate amount of $474 million. During the year ended December 31, 2020 and December 31, 2019, VRIAC paid an ordinary dividend in the amount of $294 million and $396 million to its Parent.Parent, respectively.

On March 27,During the year ended December 31, 2021, VRIAC received a $318 million capital contributions from its Parent, comprised of cash and non-cash assets. During the year ended December 31, 2020, VFP paid a $20 million dividend to VRIAC did not receive capital contributions from its parent. On June 18, 2020, VFP paid a $15 million dividend to VRIAC; on September 25, 2020, VFP paid a $20 million dividend to VRIAC; on December 22, 2020, VFP paid a $20 million dividend to VRIAC.Parent. During the year ended December 31, 2019, VFP paid dividends of $80 million to VRIAC.

On December 31, 2020, VRA paid a $20 million dividend to VRIAC its parent.

During the years ended December 31, 2020, we did not receive capital contributions from our Parent. During the years December 31, 2019, we received capital contributions of $57 million from ourits Parent.

Collateral

Under the terms of our Over-The-Counter ("OTC") Derivative International Swaps and Derivatives Association, Inc. ("ISDA") agreements, we may receive from, or deliver to, counterparties collateral to assure that terms of the 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 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, 2021, we held $8 million and $2 million of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. As of December 31, 2020, we held $5 million and $43 million of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. AsIn addition, as of December 31, 2019,2021, we held $7 million and $55delivered $60 million of net cash collateral related to OTC derivative contractssecurities and cleared derivative contracts, respectively. In addition,held $2 million securities as collateral. As of December 31, 2020, we delivered $77 million of securities and held no securities as collateral. As of December 31, 2019, we delivered $113 million of securities and held no securities as collateral.

Ratings

Our access to funding and our related cost of borrowing, collateral requirements for derivatives 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 Parent or rated affiliates 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.

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.

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Our financial strength and credit ratings as of the date of this Annual Report on Form 10-K are summarized in the following table.
CompanyA.M. BestFitchMoody'sS&P
Voya Retirement Insurance and Annuity Company
Financial Strength Rating(4)A
(3 of 9)
A2
(3 of 9)
A+
(3 of 9)
Rating AgencyFinancial Strength Rating Scale
Fitch(1)
"AAA" to "C"
Moody's(2)
"Aaa" to "C"
S&P(3)
"AAA" to "R"
(1) 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)."
(2) 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)."
(3) 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)."
(4) Effective April 11, 2019, A.M. Best withdrew, at the Company’s request, its financial strength ratings.

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-medium or long-term trend in credit fundamentals, which if continued, may lead to a rating change.

Ratings actions and outlook changes by Fitch, Moody's, and S&P, from December 31, 2019 through December 31, 2020 and subsequently through the date of this Annual Report on Form 10-K are as follows.

On April 1, 2020, In June 2021, Moody’s changed its outlook for the US life insurance sector to negative from stable.

In December 2019, Fitch revised its outlook on the life insurance sector to negative from stable.  Subsequently, in March of 2020, Fitch revised its rating outlook for the U.S. life insurance sector from negative to stable. In December 2021, Fitch revised its outlook for the U.S. life insurance sector from negative from stable. to neutral.

Other Minimum Guarantees

Other variable annuity contracts contain minimum interest rate guarantees and allow the contract holder to select either the market value of the account or the book value of the account at termination. The book value of the account is equal to deposits plus interest, less any withdrawals. Under the terms of the contract, the book value settlement is paid out over time. These guarantees are offered in our stabilizer and managed custody guarantee products.

Reinsurance

We utilize indemnity reinsurance agreements to reduce our exposure to large losses from GMDBs in our annuity insurance business. Reinsurance permits recovery of a portion of losses from reinsurers, although it does not discharge our primary liability as direct insurer of the risks. We evaluate the financial strength of potential reinsurers and continually monitor the financial strength and credit ratings of our reinsurers. Only those reinsurance recoverable balances deemed probable of recovery are reflected as assets on our Consolidated Balance Sheets and are stated net of allowances for uncollectible reinsurance.

While we have a significant concentration of reinsurance with Lincoln National Corporation ("Lincoln") associated with the disposition of our individual life insurance business to a subsidiary of Lincoln, a trust was established by the Lincoln subsidiary effective March 1, 2007, to secure the Lincoln subsidiary's obligations to us under the reinsurance agreement.

We had entered into the followingDuring 2020, we recaptured a reinsurance agreement with an affiliate that was accounted for under the deposit method. As of December 31, 2019,2021 and 2020 we had no deposit assets of $36 million and depositor liabilities of $76 million, related to this agreement. Deposit assets and liabilities are included in Other assets and Other liabilities, respectively, on the Consolidated Balance Sheets.

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Effective, December 31, 2012, we entered into an automatic reinsurance agreement with our affiliate, Security Life of Denver International Limited ("SLDI"), to manage the reserve and capital requirements in connection with a portion of our deferred annuities business. Under the terms of the agreement, we reinsure to SLDI, on an indemnity reinsurance basis, a quota share of our liabilities on certain contracts. The quota share percentage with respect to the contracts that are delivered or issued for delivery in the State of New York is 90% and the quota share percentage with respect to the contracts that are delivered or issued for delivery outside of the State of New York is 100%. On March 26, 2020, this agreement was recaptured and resulted in a loss of $20 million that was recorded in the first quarter of 2020.


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Derivatives

Our use of derivatives is limited mainly to economic hedging to reduce our exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk, exchange rate risk and market risk. It is our policy not to offset amounts recognized for derivative instruments and amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement.

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 annuity products. Derivative contracts are reported as Derivatives assets or liabilities on the Consolidated Balance Sheets at fair value. Changes in the fair value of derivatives are recorded in Other net realized capital gains (losses) in the Consolidated Statements of Operations.

We also have investments in certain fixed maturities and have issued certain 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. Embedded derivatives within fixed maturities are included with the host contract on the Consolidated Balance Sheets and changes in fair value of the embedded derivatives are recorded in Other net realized capital gains (losses) in the Consolidated Statements of Operations. Embedded derivatives within certain annuity products are included in Future policy benefits and contract owner account balances on the Consolidated Balance Sheets and changes in the fair value of the embedded derivatives are recorded in Other net realized capital gains (losses) in the Consolidated Statements of Operations.

In addition, we have entered into a reinsurance agreement, accounted for under the deposit method, that contains an embedded derivative, the fair value of which is based on the change in the fair value of the underlying assets held in trust. The embedded derivatives within the reinsurance agreements are reported in Other liabilities on the Consolidated Balance Sheets, and changes in the fair value of the embedded derivative are recorded in Interest credited and other benefit to contract owners/policyholders in the Consolidated Statements of Operations.





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Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

As of December 31, 2020,2021, 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.
($ in millions)($ in millions)Payments Due by Period($ in millions)Payments Due by Period
Contractual ObligationsContractual ObligationsTotalLess than 1 Year1-3 Years3-5 YearsMore than
5 Years
Contractual ObligationsTotalLess than 1 Year1-3 Years3-5 YearsMore than
5 Years
Purchase obligations(1)
Purchase obligations(1)
$615 $582 $33 $— $— 
Purchase obligations(1)
$663 $650 $13 $— $— 
Reserves for insurance obligations(2)(3)
Reserves for insurance obligations(2)(3)
37,974 2,117 4,321 4,550 26,986 
Reserves for insurance obligations(2)(3)
37,434 2,205 4,492 4,708 26,029 
Retirement and other plans(4)
Retirement and other plans(4)
87 17 17 44 
Retirement and other plans(4)
91 18 18 46 
Long-term debt obligation(5)
Long-term debt obligation(5)
Long-term debt obligation(5)
— 
Securities lending and collateral held(6)
Securities lending and collateral held(6)
278 278 — — — 
Securities lending and collateral held(6)
898 898 — — — 
TotalTotal$38,958 $2,987 $4,372 $4,568 $27,031 Total$39,089 $3,763 $4,524 $4,727 $26,075 
(1) Purchase obligations consist primarily of outstanding commitments under limited partnerships 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 total 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. All estimated cash payments are undiscounted for the time value of money.
(3) Contractual obligations related to certain closed blocks that were divested through reinsurance to third parties with Reservesreserves in the amount of $1.2$1.1 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 the Company.table. Although we are not relieved of our legal liability to the contract holder for these closed blocks, third-party collateral of $1.5$1.3 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 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 from long-term debt reflects the contractual maturities of principal, as well as estimated future interest payments. See the Financing Agreements Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
(6) Securities loaned and collateral held represent the liability to return collateral received from counterparties under securities lending agreements, OTC derivative and cleared derivative contracts. 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 include non-cash collateral of $70$87 million.

Securities Pledged

We engageSee the Business, Basis of Presentation and Significant Accounting Policies Note and the Investments Note in Part II, Item 8. of this Annual report on 10-K for further information on our 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 behalf of us. 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, 2020 and 2019, the fair value of loaned securities was $143 million and $715 million, respectively, and is included in Securities pledged on the Consolidated Balance Sheets.program.

If cash is received as collateral, the lending agent retains the cash collateral and invests it in short-term liquid assets on behalf of us. As of December 31, 2020 and 2019, cash collateral retained by the lending agent and invested in short-term liquid assets on our behalf was $74 million and $650 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, 2020 and 2019, liabilities to return collateral of $74 million and $650 million, respectively, are included in Payables under securities loan agreements, including collateral held, on the Consolidated Balance Sheets.
We accept non-cash collateral in the form of securities. The securities retained as collateral by the lending agent may not be sold or re-pledged, except in the event of default, and are not reflected in our Consolidated Balance Sheets. This collateral generally consists of U.S. Treasury, U.S. Government agency securities and MBS pools. As of December 31, 2020 and 2019, the fair value of securities retained as collateral by the lending agent on our behalf was $70 million and $91 million, respectively.

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FHLB

On January 18, 2018, we became a member of the Federal Home Loan Bank of Boston (“FHLB of Boston”). We are required to pledge collateral to back funding agreements issued to the FHLB. We have the ability to obtain funding from the FHLB based on a percentage of the value of our assets and subject to the availability of eligible collateral. The limit for the program is up to an amount that corresponds to the lending value of assets that can be pledged to the FHLB of Boston which is limited to total statutory surplus of VRIAC. 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.
    
As of December 31, 2020,2021, we had $795$925 million in non-putable FHLB funding agreements, which are included in Future policy benefits and contract owner account balances on the Consolidated Balance Sheets. As of December 31, 2020,2021, we had assets with a market value of approximately $997 million,$1.1 billion, which collateralized the FHLB funding agreements. As of December 31, 2020,2021, our available collateral lending value was approximately $1.9$1.6 billion for VRIAC.

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Statutory Capital and Risk-Based Capital

The Connecticut Insurance Department (the "Department") recognizes only statutory accounting practices prescribed or permitted by the State of Connecticut for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under the Connecticut Insurance Law. The NAIC Accounting Practices and Procedures Manual has been adopted as a component of prescribed or permitted practices by the State of Connecticut.

We are subject to minimum risk-based capital ("RBC") requirements established by the Department. 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.

We are required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the Department. 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 Department, the entire amount or a portion of an insurance company's asset balance can be non-admitted based on the specific rules regarding admissibility. The most significant non-admitted assets are typically a portion of deferred tax assets in excess of prescribed thresholds.

The Department recognizes as capital and surplus those amounts determined in conformity with statutory accounting practices prescribed by the Department. Statutory capital and surplus of VRIAC was $2.2 billion and $2.0 billion as offor the years ended December 31, 2021 and 2020, and 2019.respectively.

Contingencies

For information regarding contingencies related to legal proceedings, regulatory matters and other contingencies involving us, see the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. in this Annual Report on Form 10-K.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk
(Dollar amounts in millions, unless otherwise stated)

Market risk is the risk that our consolidated financial position and results of operations will be affected by fluctuations in the value of financial instruments. We have significant holdings in financial instruments and are naturally exposed to a variety of market risks. The main market risks we are exposed to include interest rate risk, equity market price risk and credit risk. We do not have material market risk exposure to "trading" activities in our Consolidated Financial Statements.

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Risk Management

As a financial services company offering retirement products and services, taking measured risks is part of our business. As part of our effort to ensure measured risk taking, we have integrated risk management in our daily business activities and strategic planning.

We place a high priority on risk management and risk control. We have comprehensive risk management and control procedures in place, which are integrated with our affiliates. We have established an integrated risk management function together with our affiliates with responsibility for the formulation of our risk appetite, strategies, policies and limits. The risk management function is also responsible for monitoring our overall market risk exposures and provides review, oversight and support functions on risk-related issues.

Our risk appetite is aligned with how our business is managed and anticipates future regulatory developments. In particular, our risk appetite is aligned with regulatory capital requirements as well as metrics that are aligned with various ratings agency models.

Our risk governance and control systems enable us to identify, control, monitor and aggregate risks and provide assurance that risks are being measured, monitored and reported adequately and effectively. To promote measured risk taking, we have integrated risk management with our business activities and strategic planning.

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We have implemented several limit structures to manage risk. Examples include, but are not limited to, the following:

At-risk limits on sensitivities of earnings and regulatory capital;
Duration and convexity mismatch limits;
Liquidity limits;
Credit risk limits;
Mortality concentration limits;
Catastrophe and mortality exposure retention limits for our insurance risk; and
Investment and derivative guidelines.

We are also subject to cash flow stress testing pursuant to regulatory requirements. This analysis measures the effect of changes in interest rate assumptions on asset and liability cash flows. The analysis includes the effects of:

the timing and amount of redemptions and prepayments in our asset portfolio;
our derivative portfolio;
death benefits and other claims payable under the terms of our insurance products;
lapses and surrenders in our insurance products;
minimum interest guarantees in our insurance products; and
book value guarantees in our insurance products.

We evaluate any shortfalls that our cash flow testing reveals and if needed increase statutory reserves or adjust portfolio management strategies.

Derivatives are financial instruments for which values are derived from interest rates, foreign currency exchange rates, financial indices, or other prices of securities or commodities. Derivatives include swaps, futures, options and forward contracts. Under U.S. insurance statutes, we may use derivatives to hedge market values or cash flows of assets or liabilities; to replicate cash market instruments; and for certain limited income generating activities. We are generally prohibited from using derivatives for speculative purposes. References below to hedging and hedge programs refer to our process of reducing exposure to various risks. This does not mean that the process necessarily results in hedge accounting treatment for the respective derivative instruments. To qualifySee 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 information regarding the Company's hedge accounting treatment, a derivative must be highly effective in mitigating the designated risk of the hedged item and meet other specific requirements. Effectiveness of the hedge is assessed at inception and throughout the life of the hedging relationship. Even if a derivative qualifies for hedge accounting treatment, there may be an element of ineffectiveness of the hedge. The ineffective portion of a hedging relationship subject to hedge accounting is recognized in Net realized capital gains (losses) in the Consolidated Statements of Operations.policies.

In connection with the Individual Life Transaction executed on January 4, 2021, we entered into a large reinsurance agreement with SLD, our former insurance affiliate, with respect to the portion of the legacy non-retirement annuity business as well as pension risk transfer products that have been written by us. While SLD's reinsurance obligations to us are collateralized through
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assets held in trust, in the event of any default by SLD of its reinsurance obligations to us, or any loss of credit for such reinsurance, there can be no assurance that such assets will be sufficient to support the reserves that we would be required to establish or pay claims

Market Risk Related to Interest Rates

We define interest rate risk as the risk of an economic loss due to adverse changes in interest rates. This risk arises from our holdings in interest sensitive assets and liabilities, primarily as a result of investing life insurance premiums, fixed annuity and guaranteed investment contract deposits received in interest-sensitive assets and carrying these funds as interest-sensitive liabilities. In a rising interest rate environment, we are exposed to the risk of financial disintermediation through a potential increase in the level of book value surrenders on certain stable value contracts. Conversely, a steady increase in interest rates would tend to improve financial results due to reduced hedging costs, lower costs of guaranteed benefits and improvement to fixed margins.

We use product design, pricing and asset/liability management ("ALM") strategies to reduce the adverse effects of interest rate movement. Product design and pricing strategies can include the use of surrender charges, withdrawal restrictions and the ability to reset credited interest rates. ALM strategies can include the use of derivatives and duration and convexity mismatch limits. See Risk Factors -Risks- Risks Related to Our Business-GeneralBusiness - 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.

Derivatives strategies include See the following:

Minimum Interest Rate GuaranteesDerivative Financial Instruments. For certain liability contracts, we provide the contract holder a guaranteed minimum interest rate. These contracts include certain fixed annuities. We purchase interest rate swaps and interest rate options to reduce risk associated with these liability guarantees.
Book Value Guarantees in Stable Value Contracts. For certain stable value contracts, the contract holder and participants may surrender the contract for the account value even if the market value of the asset portfolio is in an unrealized loss position. We purchase derivatives including interest rate swaps and interest rate options to reduce the risk associated with this type of guarantee.
Other Market Value and Cash Flow Hedges. We also use derivatives in general to hedge present or future changes in cash flows or market value changes Note in our assets and liabilities. We use derivatives such as interest rate swaps to specifically hedge interest rate risks associated with certain asset classesConsolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information regarding derivative strategies on our portfolio.material derivative types.

We assess interest rate exposures for financial assets, liabilities and derivatives using hypothetical test scenarios that assume either increasing or decreasing 100 basis point parallel shifts in the yield curve. The following table summarize the net estimated potential change in fair value from hypothetical 100 basis point upward and downward shifts in interest rates as of December 31, 2020.2021. In calculating these amounts, we exclude gains and losses on separate account fixed income securities related to products for which the investment risk is borne primarily by the separate account contract holder rather than by us. While the test scenarios are for illustrative purposes only and do not reflect our expectations regarding future interest rates or
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the performance of fixed-income markets, they are a near-term, reasonably possible hypothetical change that illustrates the potential impact of such events. These tests do not measure the change in value that could result from non-parallel shifts in the yield curve. As a result, the actual change in fair value from a 100 basis point change in interest rates could be different from that indicated by these calculations.
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As of December 31, 2020As of December 31, 2021
Hypothetical Change in
Fair Value(2)
Hypothetical Change in
Fair Value(2)
($ in millions)($ in millions)Notional
Fair Value(1)
+ 100 Basis Points Yield Curve Shift- 100 Basis Points Yield Curve Shift($ in millions)Notional
Fair Value(1)
+ 100 Basis Points Yield Curve Shift- 100 Basis Points Yield Curve Shift
Financial assets with interest rate risk:Financial assets with interest rate risk:Financial assets with interest rate risk:
Fixed maturities, including securities pledgedFixed maturities, including securities pledged$— $29,993 $(1,987)$1,694 Fixed maturities, including securities pledged$— $26,412 $(1,790)$1,910 
Mortgage loans on real estateMortgage loans on real estate— 5,013 (241)171 Mortgage loans on real estate— 4,495 (190)200 
Derivatives:Derivatives:Derivatives:
Interest rate contractsInterest rate contracts14,173 (34)97 (95)Interest rate contracts10,532 34 (39)
Financial liabilities with interest rate risk:Financial liabilities with interest rate risk:Financial liabilities with interest rate risk:
Investment contract liabilities:Investment contract liabilities:Investment contract liabilities:
Funding agreements without fixed maturities and deferred annuities(3)
Funding agreements without fixed maturities and deferred annuities(3)
— 36,741 (5,797)7,304 
Funding agreements without fixed maturities and deferred annuities(3)
— 35,256 (2,689)3,074 
Funding agreements with fixed maturitiesFunding agreements with fixed maturities— 796 (28)15 Funding agreements with fixed maturities— 925 (33)31 
Supplementary contracts, immediate annuities and otherSupplementary contracts, immediate annuities and other— 345 (61)75 Supplementary contracts, immediate annuities and other— 267 (5)
Embedded derivatives on reinsurance— — — — 
Guaranteed benefit derivatives(3):
Guaranteed benefit derivatives(3):
Guaranteed benefit derivatives(3):
Stabilizer and MCGsStabilizer and MCGs— 53 (52)79 Stabilizer and MCGs— 20 (20)58 
(1)    Separate account assets and liabilities which are interest sensitive are not included herein as any interest rate risk is borne by the holder of the separate account.
(2)    (Decreases) in assets or (decreases) in liabilities are presented in parentheses. Increases in assets or increases in liabilities are presented without parentheses.
(3)    Certain amounts included in the Funding agreements without fixed maturities and deferred annuities line are also reflected within the Guaranteed benefit derivatives lines of the table above. Sensitivities related to fixed indexed annuities have been deemed immaterial and as such have been excluded from this table.
Market Risk Related to Equity Market Prices

Our variable products and general account equity securities are significantly influenced by global equity markets. Increases or decreases in equity markets impact certain assets and liabilities related to our variable products and our earnings derived from those products. Our variable products include variable annuity contracts.

We assess equity risk exposures for financial assets, liabilities and derivatives using hypothetical test scenarios that assume either an increase or decrease of 10% in all equity market benchmark levels. The following table presents the net estimated potential change in fair value from an instantaneous increase and decrease in all equity market benchmark levels of 10% as of December 31, 2020.2021. In calculating these amounts, we exclude gains and losses on separate account equity securities related to products for which the investment risk is borne primarily by the separate account contract holder rather than by us. While the test scenarios are for illustrative purposes only and do not reflect our expectations regarding the future performance of equity markets, they are near-term, reasonably possible hypothetical changes that illustrate the potential impact of such events. These scenarios consider only the direct effect on fair value of declines in equity benchmark market levels and not changes in asset-based fees recognized as revenue, changes in our estimates of total gross profits used as a basis for amortizing DAC and VOBA and other costs, or changes in any other assumptions such as market volatility or mortality, utilization or persistency rates in variable contracts.
As of December 31, 2020
Hypothetical Change in
Fair Value(1)
($ in millions)Fair Value+ 10%
Equity Shock
-10%
Equity Shock
Financial assets with equity market risk:
Equity securities, available-for-sale$116 $12 $(12)
Limited partnerships/corporations815 49 (49)
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As of December 31, 2021
Hypothetical Change in
Fair Value(1)
($ in millions)Fair Value+ 10%
Equity Shock
-10%
Equity Shock
Financial assets with equity market risk:
Equity securities, at fair value$141 $14 $(14)
Limited partnerships/corporations980 59 (59)
(1) (Decreases) in assets are presented in parentheses and increase in assets are presented without parentheses.
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Market Risk Related to Credit Risk

Credit risk is primarily embedded in the general account portfolio. The carrying value of our fixed maturity, including securities pledged, and equity portfolio totaled $30.1$26.6 billion and $27.5$30.1 billion as of December 31, 20202021 and 2019,2020, respectively. Our credit risk materializes primarily as impairment losses and/or credit related trading losses. We are exposed to occasional cyclical economic downturns, during which impairment losses may be significantly higher than the long-term historical average. This is offset by years where we expect the actual impairment losses to be substantially lower than the long-term average.

Credit risk in the portfolio can also materialize as increased capital requirements caused by rating down-grades. The effect of rating migration on our capital requirements is also dependent on the economic cycle and increased asset impairment levels may go hand in hand with increased asset related capital requirements.

We manage the risk of default and rating migration by applying disciplined credit evaluation and underwriting standards and prudently limiting allocations to lower quality, higher risk investments. In addition, we diversify our exposure by issuer and country, using rating based issuer and country limits, as well as by industry segment, using specific investment constraints. Limit compliance is monitored on a daily, monthly, or quarterly basis. Limit violations are reported to senior management and we are actively involved in decisions around curing such limit violations.

We also have credit risk related to the ability of our derivatives and reinsurance counterparties to honor their obligations to pay the contract amounts under various agreements. In order to minimize the risk of credit loss on such contracts, we diversify our exposures among several counterparties and limit the amount of exposure to each based on credit rating. For most counterparties, we have collateral agreements in place that would substantially limit our credit losses in case of a counterparty default. We also generally limit our selection of counterparties that we do new transactions with to those with an "A-" credit rating or above. When exceptions are made to that principle, we ensure that we obtain collateral to mitigate our risk of loss. For derivatives counterparty risk exposures (which includes reverse repurchase and securities lending transactions), we measure and monitor our risks on a market value basis daily.

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Item 8.        Financial Statements and Supplementary Data
Page
Consolidated Financial Statements as of December 31, 20202021 and 20192020 and for the Years Ended December 31,
2021, 2020 2019 and 2018:2019:
Consolidated Financial Statement Schedules as of December 31, 20202021 and 20192020 and for the Years Ended December 31, 2021, 2020 2019 and 2018:2019:

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Report of Independent Registered Public Accounting Firm


To the Shareholder and the Board of Directors of
Voya Retirement Insurance and Annuity Company

Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Voya Retirement Insurance and Annuity Company (the Company) as of December 31, 20202021 and 2019,2020, the related consolidated statements of operations, comprehensive income, changes in shareholder'sshareholder’s equity and cash flows for each of the three years in the period ended December 31, 2020,2021, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the "consolidated“consolidated financial statements"statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 20202021 and 2019,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020,2021, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit mattermatters communicated below is a matterare matters arising from the current period audit of the financial statements that waswere communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit mattermatters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit mattermatters below, providing a separate opinionopinions on the critical audit mattermatters or on the accounts or disclosures to which it relates.they relate.














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 Deferred policy acquisition costs and Value of business acquired
Description of the MatterAs disclosed in Note 1 and Note 5 to the consolidated financial statements, the Company’s deferred policy acquisition costs and value of business acquired (“DAC/VOBA”) totaled $162$409 million at December 31, 2020,2021, net of unrealized gains and losses, which represented deferred acquisition costs and value of business acquired related to fixed and variable deferred annuity contracts. The carrying amount of the DAC related to fixed and variable deferred annuity contracts is the total of costs deferred, less amortization net of interest. The carrying amount of the VOBA related to fixed and variable deferred annuity contracts is the outstanding value of in-force business acquired, based on the present value of estimated net cash flows embedded in the insurance contracts at the time of the acquisition, less amortization net of interest. DAC and VOBA related to fixed and variable deferred annuity contracts are amortized over the estimated lives of the contracts in relation to the emergence of estimated gross profits.

As described in Note 1 to the consolidated financial statements, there is a significant amount of uncertainty inherent in calculating estimated gross profits as the calculation includes significant management judgment in developing certain assumptions such as persistency, interest crediting rates, fee income, returns associated with separate account performance, expenses to administer the business, and certain economic variables. Management’s assumptions are adjusted, known as unlocking, over time for emerging experience and expected changes in trends. The unlocking results in DAC/VOBA amortization being recalculated, using the new assumptions for estimated gross profits, that results either in additional or less cumulative amortization expense.

Auditing management’s estimate of DAC/VOBA related to fixed and variable deferred annuity contracts was complex due to the highly judgmental nature of assumptions included in the projection of estimated gross profits used in the valuation of DAC/VOBA.
How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of the controls over the DAC/VOBA estimation process, including, among others, controls related to management’s evaluation of the need to update assumptions based on the comparison of actual Company experience to previous assumptions and updating investment margins for current and expected future market conditions.

We utilized actuarial specialists to assist with our audit procedures, which included, among others, reviewing the methodology applied by management by comparing to the methodology used in prior periods as well as industry practice. To assess the assumptions used in measuring estimated gross profits, we compared the significant assumptions noted above with historical experience, observable market data and management’s estimates of prospective changes in these assumptions. We also independently recalculated estimated gross profits for a sample of policies for comparison with the actuarial result developed by management.

/s/ Ernst & Young LLP
We have served as the Company's auditor since 2001.60

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San Antonio, TexasAccounting for Reinsurance Transaction on January 4, 2021
March 16, 2021Description of the MatterAs discussed in Note 7 to the consolidated financial statements, on January 4, 2021, the Company entered into a reinsurance agreement with Resolution Life U.S. Holdings, Inc (Resolution Life US). As a result of the reinsurance transaction, the Company reinsured $3.5 billion of policyholder liabilities under indemnity coinsurance and modified coinsurance arrangements and recorded a reinsurance recoverable of $2.5 billion. The Company ceded $2.4 billion in premiums and $2.5 billion in policyholder benefits. The Company transferred invested assets with a fair market value of $3.7 billion as consideration for the reinsurance arrangements. The Company also recognized non-cash assets of $73 million and $1.5 billion relating to a cost of reinsurance asset and deposit asset, respectively.

Auditing the reinsurance transaction on January 4, 2021 was complex due to multiple elements of the transaction including the assessment of risk transfer, determination of the cost of reinsurance asset, accounting for transfers of assets and liabilities and recording of the reinsurance recoverable and deposit asset amounts.
How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design, and tested the operating effectiveness of the controls over the reinsurance agreement process including, among others, controls related to whether the agreement passes risk transfer, the determination of the cost of reinsurance, and the accounting for transfers of assets and liabilities and recording of the reinsurance recoverable and deposit asset amounts.

Our audit procedures included, among others, assessing the terms of the reinsurance agreement with certain subsidiaries of Resolution Life US, evaluating management’s risk transfer conclusion, testing the calculation of the cost of reinsurance and the recognized investments gains and benefit expense amounts, and testing the reinsurance recoverable and deposit asset recorded.

/s/ Ernst and Young LLP
We have served as the Company's auditor since 2001
San Antonio, Texas
March 11, 2022




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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Consolidated Balance Sheets
December 31, 20202021 and 20192020
(In millions, except share and per share data)
As of December 31,As of December 31,
2020201920212020
AssetsAssetsAssets
Investments:Investments:Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost of $24,667 as of 2020 and $23,107 as of 2019; allowance for credit losses of $14 as of 2020)$28,043 $25,153 
Fixed maturities, available-for-sale, at fair value (amortized cost of $23,074 as of 2021 and $24,667 as of 2020; allowance for credit losses of $48 as of 2021 and $14 as of 2020)Fixed maturities, available-for-sale, at fair value (amortized cost of $23,074 as of 2021 and $24,667 as of 2020; allowance for credit losses of $48 as of 2021 and $14 as of 2020)$24,360 $28,043 
Fixed maturities, at fair value using the fair value optionFixed maturities, at fair value using the fair value option1,730 1,479 Fixed maturities, at fair value using the fair value option1,253 1,730 
Equity securities, at fair value (cost of $116 as of 2020 and $73 as of 2019)116 80 
Equity securities, at fair value (cost of $141 as of 2021 and $116 as of 2020)Equity securities, at fair value (cost of $141 as of 2021 and $116 as of 2020)141 116 
Short-term investmentsShort-term investments17 Short-term investments— 17 
Mortgage loans on real estateMortgage loans on real estate4,694 4,664 Mortgage loans on real estate4,233 4,694 
Less: Allowance for credit lossesLess: Allowance for credit losses67 Less: Allowance for credit losses11 67 
Mortgage loans on real estate, netMortgage loans on real estate, net4,627 4,664 Mortgage loans on real estate, net4,222 4,627 
Policy loansPolicy loans187 205 Policy loans171 187 
Limited partnerships/corporationsLimited partnerships/corporations815 738 Limited partnerships/corporations980 815 
DerivativesDerivatives145 224 Derivatives149 145 
Securities pledged (amortized cost of $169 as of 2020 and $749 as of 2019)220 828 
Securities pledged (amortized cost of $725 as of 2021 and $169 as of 2020)Securities pledged (amortized cost of $725 as of 2021 and $169 as of 2020)799 220 
Other investmentsOther investments43 43 Other investments143 43 
Total investmentsTotal investments35,943 33,414 Total investments32,218 35,943 
Cash and cash equivalentsCash and cash equivalents360 512 Cash and cash equivalents436 360 
Short-term investments under securities loan agreements, including collateral deliveredShort-term investments under securities loan agreements, including collateral delivered249 917 Short-term investments under securities loan agreements, including collateral delivered808 249 
Accrued investment incomeAccrued investment income304 293 Accrued investment income285 304 
Premiums receivable and reinsurance recoverablePremiums receivable and reinsurance recoverable1,219 1,304 Premiums receivable and reinsurance recoverable3,598 1,219 
Less: Allowance for credit losses
Premiums receivable and reinsurance recoverable, net1,219 1,304 
Deferred policy acquisition costs, Value of business acquired and Sales inducements to contract ownersDeferred policy acquisition costs, Value of business acquired and Sales inducements to contract owners173 608 Deferred policy acquisition costs, Value of business acquired and Sales inducements to contract owners422 173 
Short-term loan to affiliateShort-term loan to affiliate653 69 Short-term loan to affiliate130 653 
Current income tax recoverableCurrent income tax recoverableCurrent income tax recoverable— 
Due from affiliatesDue from affiliates118 67 Due from affiliates70 118 
Property and equipmentProperty and equipment63 60 Property and equipment72 63 
Other assetsOther assets242 255 Other assets1,635 242 
Assets held in separate accountsAssets held in separate accounts87,319 78,713 Assets held in separate accounts96,964 87,319 
Total assetsTotal assets$126,648 $116,221 Total assets$136,638 $126,648 

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Consolidated Balance Sheets
December 31, 20202021 and 20192020
(In millions, except share and per share data)
As of December 31,As of December 31,
2020201920212020
Liabilities and Shareholder's EquityLiabilities and Shareholder's EquityLiabilities and Shareholder's Equity
Future policy benefits and contract owner account balancesFuture policy benefits and contract owner account balances$33,127 $31,142 Future policy benefits and contract owner account balances$32,926 $33,127 
Payable for securities purchasedPayable for securities purchased26 Payable for securities purchased— 26 
Payables under securities loan agreements, including collateral heldPayables under securities loan agreements, including collateral held208 865 Payables under securities loan agreements, including collateral held811 208 
Due to affiliatesDue to affiliates125 95 Due to affiliates110 125 
DerivativesDerivatives216 285 Derivatives144 216 
Current income taxesCurrent income taxes42 — 
Deferred income taxesDeferred income taxes439 304 Deferred income taxes227 439 
Other liabilitiesOther liabilities291 369 Other liabilities384 291 
Liabilities related to separate accountsLiabilities related to separate accounts87,319 78,713 Liabilities related to separate accounts96,964 87,319 
Total liabilitiesTotal liabilities121,751 111,778 Total liabilities131,608 121,751 
Commitments and Contingencies (Note 12)Commitments and Contingencies (Note 12)00Commitments and Contingencies (Note 12)00
Shareholder's equity:Shareholder's equity:Shareholder's equity:
Common stock (100,000 shares authorized, 55,000 issued and outstanding as of 2020 and 2019 , respectively; $50 par value per share)
Common stock (100,000 shares authorized, 55,000 issued and outstanding as of 2021 and 2020, respectively; $50 par value per share)Common stock (100,000 shares authorized, 55,000 issued and outstanding as of 2021 and 2020, respectively; $50 par value per share)
Additional paid-in capitalAdditional paid-in capital2,873 2,873 Additional paid-in capital3,191 2,873 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)1,882 1,292 Accumulated other comprehensive income (loss)1,423 1,882 
Retained earningsRetained earnings139 275 Retained earnings413 139 
Total shareholder's equityTotal shareholder's equity4,897 4,443 Total shareholder's equity5,030 4,897 
Total liabilities and shareholder's equityTotal liabilities and shareholder's equity$126,648 $116,221 Total liabilities and shareholder's equity$136,638 $126,648 


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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Consolidated Statements of Operations
For the Years Ended December 31, 2021, 2020 and 2019
(In millions)
Year Ended December 31,
202120202019
Revenues:
Net investment income$1,949 $1,858 $1,689 
Fee income1,088 905 877 
Premiums(2,425)32 31 
Broker-dealer commission revenue
Net gains (losses):
Total impairments(2)(37)(41)
Less: Portion of impairments recognized in Other comprehensive income (loss)— — 
Net impairments recognized in earnings(2)(37)(43)
Other net gains (losses)168 (273)(101)
Total net gains (losses)166 (310)(144)
Other revenue38 (1)14 
Total revenues818 2,486 2,469 
Benefits and expenses:
Interest credited and other benefits to contract owners/policyholders(1,483)1,049 1,013 
Operating expenses1,213 1,090 1,056 
Broker-dealer commission expense
Net amortization of Deferred policy acquisition costs and Value of business acquired97 192 65 
Interest expense— 
Total benefits and expenses(171)2,334 2,137 
Income (loss) before income taxes989 152 332 
Income tax expense (benefit)163 (14)32 
Net income (loss)$826 $166 $300 

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Consolidated Statements of OperationsComprehensive Income
For the Years Ended December 31, 2021, 2020 2019 and 20182019
(In millions)
Year Ended December 31,
202020192018
Revenues:
Net investment income$1,858 $1,689 $1,623 
Fee income905 877 875 
Premiums32 31 41 
Broker-dealer commission revenue69 
Net realized capital gains (losses):
Total impairments(37)(41)(18)
Less: Portion of impairments recognized in Other comprehensive income (loss)
Net impairments recognized in earnings(37)(43)(20)
Other net realized capital gains (losses)(273)(101)(222)
Total net realized capital gains (losses)(310)(144)(242)
Other revenue(1)14 19 
Total revenues2,486 2,469 2,385 
Benefits and expenses:
Interest credited and other benefits to contract owners/policyholders1,049 1,013 828 
Operating expenses1,090 1,056 894 
Broker-dealer commission expense69 
Net amortization of Deferred policy acquisition costs and Value of business acquired192 65 86 
Interest expense
Total benefits and expenses2,334 2,137 1,879 
Income (loss) before income taxes152 332 506 
Income tax expense (benefit)(14)32 61 
Net income (loss)$166 $300 $445 
Year Ended December 31,
202120202019
Net income (loss)$826 $166 $300 
Other comprehensive income (loss), before tax:
Unrealized gains (losses) on securities(580)748 1,324 
Pension and other postretirement benefits liability(1)(1)(1)
Other comprehensive income (loss), before tax(581)747 1,323 
Income tax expense (benefit) related to items of other comprehensive income (loss)(122)157 276 
Other comprehensive income (loss), after tax(459)590 1,047 
Comprehensive income (loss)$367 $756 $1,347 

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Consolidated Statements of Comprehensive IncomeChanges in Shareholder's Equity
For the Years Ended December 31, 2021, 2020 2019 and 20182019
(In millions)
Year Ended December 31,
202020192018
Net income (loss)$166 $300 $445 
Other comprehensive income (loss), before tax:
Unrealized gains/losses on securities748 1,323 (897)
Impairments
Pension and other postretirement benefits liability(1)(1)(1)
Other comprehensive income (loss), before tax747 1,323 (890)
Income tax expense (benefit) related to items of other comprehensive income (loss)157 276 (192)
Other comprehensive income (loss), after tax590 1,047 (698)
Comprehensive income (loss)$756 $1,347 $(253)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Deficit)Total Shareholder's Equity
Balance at January 1, 2019$$2,816 $108 $508 $3,435 
Adjustment for adoption of ASU 2018-02— — 137 (137)— 
Comprehensive income (loss):
Net income (loss)— — — 300 300 
Other comprehensive income (loss), after tax— — 1,047 — 1,047 
Total comprehensive income (loss)1,347 
Dividends paid and distributions of capital— — — (396)(396)
Contribution of capital— 57 — — 57 
Balance as of December 31, 20192,873 1,292 275 4,443 
Adjustment for adoption of ASU 2016-13— — — (8)(8)
Comprehensive income (loss):
Net income (loss)— — — 166 166 
Other comprehensive income (loss), after tax— — 590 — 590 
Total comprehensive income (loss)756 
Dividends paid and distributions of capital— — — (294)(294)
Balance as of December 31, 20202,873 1,882 139 4,897 
Net income (loss)— — — 826 826 
Other comprehensive income (loss), after tax— — (459)— (459)
Total comprehensive income (loss)367 
Dividends paid and distributions of capital— — — (552)(552)
Contribution of capital— 318 — — 318 
Balance as of December 31, 2021$$3,191 $1,423 $413 $5,030 

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Consolidated Statements of Changes in Shareholder's EquityCash Flows
For the Years Ended December 31, 2021, 2020 2019 and 20182019
(In millions)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Deficit)Total Shareholder's Equity
Balance at January 1, 2018$$2,763 $806 $189 $3,761 
Comprehensive income (loss):
Net income (loss)— 445 445 
Other comprehensive income (loss), after tax(698)(698)
Total comprehensive income (loss)(253)
Dividends paid and distributions of capital(126)(126)
Contribution of capital55 55 
Employee related benefits(2)(2)
Balance as of December 31, 20182,816 108 508 3,435 
Adjustment for adoption of ASU 2018-02— — 137 (137)— 
Comprehensive income (loss):
Net income (loss)300 300 
Other comprehensive income (loss), after tax1,047 1,047 
Total comprehensive income (loss)1,347 
Dividends paid and distributions of capital(396)(396)
Contribution of capital57 57 
Balance as of December 31, 20192,873 1,292 275 4,443 
Adjustment for adoption of ASU 2016-01(8)(8)
Net income (loss)166 166 
Other comprehensive income (loss), after tax590 590 
Total comprehensive income (loss)756 
Dividends paid and distributions of capital(294)(294)
Balance as of December 31, 2020$$2,873 $1,882 $139 $4,897 

Year Ended December 31,
202120202019
Cash Flows from Operating Activities:
Net income (loss)$826 $166 $300 
Adjustments to reconcile Net income (loss) to Net cash provided by operating activities:
Capitalization of deferred policy acquisition costs, value of business acquired and sales inducements(60)(59)(49)
Net amortization of deferred policy acquisition costs, value of business acquired and sales inducements99 194 65 
Net accretion/amortization of discount/premium(21)(7)
Future policy benefits, claims reserves and interest credited705 757 568 
Deferred income tax (benefit) expense208 (20)23 
Net (gains) losses(166)310 144 
Depreciation and amortization10 21 
(Gains) losses on limited partnerships/corporations(147)(23)(35)
Change in:
Accrued investment income19 (11)
Premiums receivable and reinsurance recoverable(83)85 105 
Other receivables and asset accruals(5)21 55 
Due to/from affiliates33 (21)
Other payables and accruals61 (84)158 
Other, net(13)(12)(8)
Net cash provided by operating activities1,464 1,306 1,363 
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2020, 2019 and 2018
(In millions)

Year Ended December 31,
202020192018
Cash Flows from Operating Activities:
Net income (loss)$166 $300 $445 
Adjustments to reconcile Net income (loss) to Net cash provided by operating activities:
Capitalization of deferred policy acquisition costs, value of business acquired and sales inducements(59)(49)(64)
Net amortization of deferred policy acquisition costs, value of business acquired and sales inducements194 65 87 
Net accretion/amortization of discount/premium(7)(3)
Future policy benefits, claims reserves and interest credited757 568 547 
Deferred income tax (benefit) expense(20)23 58 
Net realized capital losses310 144 242 
Depreciation and amortization10 21 14 
(Gains) losses on limited partnerships/corporations(23)(35)
Change in:
Accrued investment income(11)
Premiums receivable and reinsurance recoverable85 105 87 
Other receivables and asset accruals21 55 (8)
Due to/from affiliates(21)24 
Other payables and accruals(84)158 (176)
Other, net(12)(8)(33)
Net cash provided by operating activities1,306 1,363 1,223 
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Year Ended December 31,Year Ended December 31,
202020192018202120202019
Cash Flows from Investing Activities:Cash Flows from Investing Activities:Cash Flows from Investing Activities:
Proceeds from the sale, maturity, disposal or redemption of:Proceeds from the sale, maturity, disposal or redemption of:Proceeds from the sale, maturity, disposal or redemption of:
Fixed maturitiesFixed maturities3,487 3,956 3,983 Fixed maturities$4,832 $3,487 $3,956 
Equity securities, available-for-sale145 
Fixed maturities, tradingFixed maturities, trading33 — — 
Equity securitiesEquity securities158 145 
Mortgage loans on real estateMortgage loans on real estate403 803 598 Mortgage loans on real estate606 403 803 
Limited partnerships/corporationsLimited partnerships/corporations104 70 99 Limited partnerships/corporations318 104 70 
Acquisition of:Acquisition of:Acquisition of:
Fixed maturitiesFixed maturities(4,988)(4,582)(5,475)Fixed maturities(5,743)(4,988)(4,582)
Equity securities, available-for-sale(178)(12)(3)
Fixed maturities, tradingFixed maturities, trading(33)— — 
Equity securitiesEquity securities(178)(178)(12)
Mortgage loans on real estateMortgage loans on real estate(433)(555)(606)Mortgage loans on real estate(690)(433)(555)
Limited partnerships/corporationsLimited partnerships/corporations(158)(190)(254)Limited partnerships/corporations(238)(158)(190)
Derivatives, netDerivatives, net46 23 23 Derivatives, net(54)46 23 
Policy loans, netPolicy loans, net18 Policy loans, net16 18 
Short-term investments, netShort-term investments, net(15)50 (26)Short-term investments, net15 (15)50 
Short-term loan to affiliate, netShort-term loan to affiliate, net(584)(69)80 Short-term loan to affiliate, net523 (584)(69)
Collateral received (delivered), netCollateral received (delivered), net11 (86)(46)Collateral received (delivered), net44 11 (86)
Receipts on deposit asset contractsReceipts on deposit asset contracts70 — — 
Other, netOther, net(5)(3)(45)Other, net(110)(5)(3)
Net cash used in investing activitiesNet cash used in investing activities(2,147)(587)(1,665)Net cash used in investing activities(431)(2,147)(587)
Cash Flows from Financing Activities:Cash Flows from Financing Activities:Cash Flows from Financing Activities:
Deposits received for investment contractsDeposits received for investment contracts$5,197 $3,395 $3,744 Deposits received for investment contracts$4,281 $5,197 $3,395 
Maturities and withdrawals from investment contractsMaturities and withdrawals from investment contracts(4,220)(3,686)(3,108)Maturities and withdrawals from investment contracts(4,718)(4,220)(3,686)
Settlements on deposit contracts(1)(5)(20)
Short-term loans from affiliates, net(68)
Settlements on deposit liability contractsSettlements on deposit liability contracts— (1)(5)
Proceeds from loans with affiliates, netProceeds from loans with affiliates, net12 — 
Dividends paid and return of capital distribution(294)(396)(126)
Dividends paid and distributions of capitalDividends paid and distributions of capital(552)(294)(396)
Capital contribution from parentCapital contribution from parent57 55 Capital contribution from parent20 — 57 
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities689 (635)477 Net cash (used in) provided by financing activities(957)689 (635)
Net increase (decrease) in cash and cash equivalentsNet increase (decrease) in cash and cash equivalents(152)141 35 Net increase (decrease) in cash and cash equivalents76 (152)141 
Cash and cash equivalents, beginning of periodCash and cash equivalents, beginning of period512 371 336 Cash and cash equivalents, beginning of period360 512 371 
Cash and cash equivalents, end of periodCash and cash equivalents, end of period$360 $512 $371 Cash and cash equivalents, end of period$436 $360 $512 
Supplemental cash flow information:Supplemental cash flow information:Supplemental cash flow information:
Income taxes paid (received), netIncome taxes paid (received), net$$(13)$60 Income taxes paid (received), net$(92)$$(13)
Noncash capital contribution from parentNoncash capital contribution from parent298 — — 

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)

1.    Business, Basis of Presentation and Significant Accounting Policies

Business

Voya Retirement Insurance and Annuity Company ("VRIAC") is a stock life insurance company domiciled in the State of Connecticut. VRIAC and its wholly owned subsidiaries (collectively, the "Company") provide financial products and services in the United States.  VRIAC is authorized to conduct its insurance business in all states and in the District of Columbia and in Guam, Puerto Rico and the Virgin Islands.

VRIAC is a direct, wholly owned subsidiary of Voya Holdings Inc. ("Parent"), which is a direct, wholly owned subsidiary of Voya Financial, Inc.

PriorThe Company derives its revenue mainly from (a) Investment income earned on investments, (b) Fee income generated from separate account assets supporting variable options under variable annuity contract investments, as designated by contract owners, (c) Premiums, (d) Net gains (losses) on investments and changes in fair value of embedded derivatives on product guarantees, and (e) Other revenue which includes certain other fees. The Company's benefits and expenses primarily consist of (a) Interest credited and other benefits to May 2013, Voya Financial, Inc. ("Voya Financial"), together with its subsidiaries, includingcontract owners/policyholders, (b) Operating expenses, which include expenses related to the selling and servicing of the various products offered by us and other general business expenses, and (c) Amortization of DAC and VOBA. In addition, the Company was an indirect, wholly owned subsidiary of ING Groep N.V. ("ING Group" or "ING"), a global financial services holding company based in The Netherlands. In May 2013, Voya Financial, Inc. completed its initial public offering of common stock, including the issuance and sale of common stock by Voya Financial, Inc. and the sale of shares of common stock owned indirectly by ING Group. Between October 2013 and March 2015, ING Group completed the sale of its remaining shares of common stock of Voya Financial, Inc. in a series of registered public offerings.

On January 4, 2021, VRIAC's ultimate parent, Voya Financial Inc. ("Voya Financial"), completed a series of transactions pursuant to a Master Transaction Agreement (the “Resolution MTA”) entered into on December 18, 2019 with Resolution Life U.S. Holdings Inc., a Delaware corporation (“Resolution Life US”), pursuant to which Resolution Life US acquired all of the shares of the capital stock of Security Life of Denver Company ("SLD") and Security Life of Denver International Limited ("SLDI"), including the capital stock of several subsidiaries of SLD and SLDI.

Concurrently with the sale, SLD entered into reinsurance agreements with ReliaStar Life Insurance Company ("RLI"), ReliaStar Life Insurance Company of New York (“RLNY”), and VRIAC, each of which is a direct or indirect wholly owned subsidiary of Voya Financial. Pursuant to these agreements, RLI and VRIAC reinsured to SLD a 100% quota share, and RLNY will reinsure to SLD a 75% quota share, of their respective in-scope individual life insurance and annuities businesses. RLI, RLNY, and VRIAC will remain subsidiaries of Voya Financial. The reinsurance agreements along with the sale of the legal entities noted above (referred to as the "Individual Life Transaction") resulted in the disposition of substantially all of Voya Financial's life insurance and legacy non-retirement annuity businesses and related assets. Pursuant to the Individual Life Transaction, VRIAC's reserves related to legacy non-retirement annuity business as well as pension risk transfer products were ceded to SLD and related assets transferred.

Effective December 31, 2019, VRIAC’s sole shareholder, Voya Holdings, Inc., transferred ownership of Voya Institutional Plan Services, LLC (“VIPS”) and Voya Retirement Advisors, LLC (“VRA”) to VRIAC for no cash consideration. VIPS and VRA provide retirement recordkeeping and investment advisory services, respectively, and the transfer was made to more closely align recordkeeping and related activities of VRIAC’s retirement business. It also had the effect of reducing VRIAC's tax liability. In addition to these non-insurance subsidiaries, VRIAC owns the wholly-owned owned non-insurance subsidiary,collects broker-dealer commission revenues through Voya Financial Partners, LLC ("VFP").

On June 1, 2018, VRIAC's ultimate parent, Voya Financial, consummated a series of transactions (collectively, the "2018 Transaction'') pursuant, which are, in turn, paid to a Master Transaction Agreement dated December 20, 2017 (the "2018 MTA") with VA Capital Company LLC ("VA Capital")broker-dealers and Athene Holding Ltd. ("Athene"). As part of the 2018 Transaction, VA Capital's wholly owned subsidiary Venerable Holdings Inc. ("Venerable") acquired certain of Voya Financial's assets, including all of the shares of capital stock of Voya Insurance and Annuity Company ("VIAC"), the Company's Iowa-domiciled insurance affiliate, as well as the membership interests of DSL, the Company's former broker-dealer subsidiary. Following the closing of the 2018 Transaction, VRIAC acquired a 9.99% equity interest in VA Capital.expensed.

The Company offers qualified and nonqualifiednon-qualified annuity contracts that include a variety of funding and payout options for individuals and employer-sponsored retirement plans qualified under Internal Revenue Code Sections 401, 403, 408, 457 and 501, as well as nonqualifiednon-qualified deferred compensation plans and related services. The Company's products are offered primarily to
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
public and private school systems, higher education institutions, hospitals and healthcare facilities, not-for-profit organizations, state and local governments, small to mid-sized corporations and individuals. The Company also provides stable value investment options, including separate account guaranteed investment contracts (e.g., GICs) and synthetic GICs, to institutional clients. Pension risk transfer group annuity solutions were previously offered to institutional plan sponsors who needed to transfer their defined benefit plan obligations to the Company. The Company discontinued sales of these solutions in late 2016 to better align business activities to the Company's priorities. This business will bewas transferred as part of the Individual Life Transaction described above.below. The Company's products are generally distributed through independent brokers and advisors, third-party administrators consultants, and representatives associated with Voya Financial's broker-dealer and investment advisor, Voya Financial Advisors, Inc. ("VFA").

On February 8, 2021, VFA entered into an agreement with Cetera Financial Group, Inc. (“Cetera”), one of the nation’s largest networks of independently managed broker-dealers, pursuant to which Cetera will acquire the independent financial planning channel of VFA (the “Financial Planning Channel Sale”). In connection with this transaction, VFA expects to transfer approximately 900 independent financial professionals serving retail customers with approximately $40 billion in assets to Cetera, while retaining approximately 600 field and phone-based financial professionals who support our business. The transaction is expected to close in the second or third quarter of 2021. The closing is subject to certain conditions, including the receipt of required regulatory approvals.consultants.

Products offered by the Company include deferred and immediate (i.e., payout) annuity contracts. The Company's products also include programs offered to qualified plans and nonqualifiednon-qualified deferred compensation plans that package administrative and record-keeping services, participant education, and retirement readiness planning tools along with a variety of investment options, including proprietary and non-proprietary mutual funds and variable and fixed investment options. In addition, the Company offers wrapper agreements entered into with retirement plans, which contain certain benefit responsive guarantees (i.e., guarantees of principal and previously accrued interest for benefits paid under the terms of the plan) with respect to portfolios of plan-owned assets not invested with the Company. Stable value products are also provided to institutional plan sponsors where the Company may or may not be providing other employer sponsored products and services.

The Company has 1 operating segment.

Effective December 31, 2019, VRIAC’s sole shareholder, Voya Holdings, Inc., transferred ownership of Voya Institutional Plan Services, LLC (“VIPS”) and Voya Retirement Advisors, LLC (“VRA”) to VRIAC for no cash consideration. VIPS and VRA provide retirement recordkeeping and investment advisory services, respectively, and the transfer was made to more closely align recordkeeping and related activities of VRIAC’s retirement business. It also had the effect of reducing VRIAC's tax liability. In addition to these non-insurance subsidiaries, VRIAC owns the wholly-owned non-insurance subsidiary, VFP.

On January 4, 2021, VRIAC's ultimate parent, Voya Financial, Inc. ("Voya Financial"), completed a series of transactions pursuant to a Master Transaction Agreement (the “Resolution MTA”) entered into on December 18, 2019 with Resolution Life U.S. Holdings Inc., a Delaware corporation (“Resolution Life US”), pursuant to which Resolution Life US acquired all of the
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
shares of the capital stock of Security Life of Denver Company ("SLD") and Security Life of Denver International Limited ("SLDI"), including the capital stock of several subsidiaries of SLD and SLDI. Refer to the Reinsurance Note for additional information on the reinsurance transactions associated with the Resolution MTA.

Effective as of March 1, 2021, VRIAC acquired 49.9% of the issued and outstanding common stock of Voya Special Investments, Inc. from Voya Financial. The investment has been accounted for as an equity method investment and recognized within Other investments in Consolidated Balance Sheets. Also, effective as of March 1, 2021, the Company acquired $80 of SLD issued surplus notes and $73 of Resolution (Life U.S. Intermediate Holdings Ltd.) issued preferred shares from affiliated entities, which were received in connection with the Individual Life Transaction.

On June 9, 2021, Voya Financial completed the sale of the independent financial planning channel of Voya Financial Advisors, Inc. ("VFA") to Cetera Financial Group, Inc. (“Cetera”), one of the nation’s largest networks of independently managed broker-dealers. VFA is one of the channels through which VRIAC distributes its products. In connection with this transaction, VFA transferred more than 800 independent financial professionals serving retail customers with approximately $38 billion in assets under advisement to Cetera, while retaining approximately 500 field and phone-based financial professionals who support our business.

Basis of Presentation

The accompanying Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").

The Consolidated Financial Statements include the accounts of VRIAC and its wholly owned subsidiaries, VFP, VIPS, VRA and DSL (prior to June 1, 2018).VRA. Intercompany transactions and balances have been eliminated.

Significant Accounting Policies

Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management 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 Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Those estimates are inherently subject to change and actual results could differ from those estimates.estimates, and the differences may be material to the Consolidated Financial Statements.

The Company has identified the following accounts and policies as the most significant in that they involve a higher degree of judgment, are subject to a significant degree of variability and/or contain significant accounting estimates:

Reserves for future policy benefits;
Deferred policy acquisition costs ("DAC") and value of business acquired ("VOBA");
Valuation of investments and derivatives;
Impairments;
Income taxes; and
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Contingencies.

Fair Value Measurement

The Company measures the fair value of its 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 the Company's 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. The Company uses a number of valuation sources to determine the fair values of its financial assets and liabilities, including quoted market prices, third-party commercial pricing services, third-party brokers, industry-standard, vendor-provided software that models the value based on market observable inputs, and other internal modeling techniques based on projected cash flows.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Investments

The accounting policies for the Company's principal investments are as follows:

Fixed Maturities and Equity Securities: The Company measures its equity securities at fair value and recognizes any changes in fair value in net income.

The Company's fixed maturities are currentlygenerally designated as available-for-sale, except thoseavailable-for-sale. In addition, the Company has fixed maturities accounted for using the fair value option ("FVO")., and in the second quarter of 2021, the Company established a trading portfolio of fixed maturity debt securities. Available-for-sale securities are reported at fair value and unrealized capital gains (losses) on these securities are recorded directly in AOCI and presented net of related changes in DAC, VOBA and Deferred income taxes. Trading securities are valued at fair value, with the changes in fair value recorded in Other net gains (losses) and interest income recorded in Net investment income in the Consolidated Statements of Operations. In addition, certain fixed maturities have embedded derivatives, which are reported with the host contract on the Consolidated Balance Sheets.

In connection with funds withheld reinsurance treaties, the Company has elected the FVO for certain of its fixed maturities to better match the measurement of those assets and related embedded derivative liabilities in the Consolidated Statements of Operations. Certain collateralized mortgage obligations ("CMOs"), primarily interest-only and principal-only strips, are accounted for as hybrid instruments and valued at fair value with changes in the fair value recorded in Other net realized capital gains (losses) in the Consolidated Statements of Operations.. Changes in fair value associated with derivatives purchased to hedge CMOs are also recorded in Other net realized capital gains (losses) in the Consolidated Statements of Operations..

Purchases and sales of fixed maturities and equity securities, excluding private placements, are recorded on the trade date. Purchases and sales of private placements and mortgage loans are recorded on the closing date. Investment gains and losses on sales of securities are generally determined on a first-in-first-out ("FIFO") basis.

Interest income on fixed maturities is recorded when earned using an effective yield method, giving effect to amortization of premiums and accretion of discounts. Dividends on equity securities are recorded when declared. Such dividends and interest income are recorded in Net investment income in the Consolidated Statements of Operations.

Included within fixed maturities are loan-backed securities, including residential mortgage-backed securities ("RMBS"), commercial mortgage-backed securities ("CMBS") and asset-backed securities ("ABS"). Amortization of the premium or discount from the purchase of these securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for single-class and multi-class mortgage-backed securities ("MBS") and ABS are estimated by management using inputs obtained from third-party specialists, including broker-dealers, and based on management's knowledge of the current market. For prepayment-sensitive securities such as interest-only and principal-only strips, inverse floaters and credit-sensitive MBS and ABS securities, which represent beneficial interests in securitized financial assets that are not of high credit quality or that have been credit impaired, the effective yield is recalculated on a prospective basis. For all other MBS and ABS, the effective yield is recalculated on a retrospective basis.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Short-term Investments: Short-term investments include investments with remaining maturities of one year or less, but greater than three months, at the time of purchase. These investments are stated at fair value.

Mortgage Loans on Real Estate: The Company's mortgage loans on real estate are all commercial mortgage loans, which are reported at amortized cost, net of allowance for credit losses. Amortized cost is the principal balance outstanding, net of
deferred loan fees and costs. Accrued interest receivable is reported in Accrued investment income on the Consolidated Balance Sheets.

Mortgage loans are evaluated by the Company's investment professionals, including an appraisal of loan-specific credit quality, property characteristics and market trends. Loan performance is continuously monitored on a loan-specific basis throughout the year. The Company's review includes submitted appraisals, operating statements, rent revenues and annual inspection reports, among other items. This review evaluates whether the properties are performing at a consistent and acceptable level to secure the debt.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Management estimates the credit loss allowance balance using a factor-based method of probability of default and loss given
default which incorporates relevant available information, from internal and external sources, relating to past events, current
conditions, and reasonable and supportable forecasts. Included in the factor-based method are the consideration of debt type,
capital market factors, and market vacancy rates, and loan-specific risk characteristics such as debt service coverage ratios
(“DSC”), loan-to-value (“LTV”), collateral size, seniority of the loan, segmentation, and property types.

The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net
amount expected to be collected on the loans. The change in the allowance for credit losses is recorded in Other net realized
capital gains (losses) in the Consolidated Statements of Operations.. Loans are written off against the allowance when
management believes the uncollectability of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of
amounts previously written-off and expected to be written-off.

Mortgages are rated for the purpose of quantifying the level of risk. Those loans with higher risk are placed on a watch list and are closely monitored for collateral deficiency or other credit events that may lead to a potential loss of principal or interest. The Company defines delinquent mortgage loans consistent with industry practice as 60 days past due.

Commercial mortgage loans are placed on non-accrual status when 90 days in arrears if the Company has concerns regarding the collectability of future payments, or if a loan has matured without being paid off or extended. Factors considered may include conversations with the borrower, loss of major tenant, bankruptcy of borrower or major tenant, decreased property cash flow, number of days past due, or various other circumstances. Based on an assessment as to the collectability of the principal, a determination is made either to apply against the book value or apply according to the contractual terms of the loan. Funds recovered in excess of book value would then be applied to recover expenses, impairments, and then interest. Accrual of interest resumes after factors resulting in doubts about collectability have improved.

For those mortgages that are determined to require foreclosure, expected credit losses are based on the fair value of the
underlying collateral, net of estimated costs to obtain and sell at the point of foreclosure. Property obtained from foreclosed
mortgage loans is recorded in Other investments on the Consolidated Balance Sheets.

Policy Loans: Policy loans are carried at an amount equal to the unpaid balance. Interest income on such loans is recorded as earned in Net investment income using the contractually agreed upon interest rate. Generally, interest is capitalized on the policy's anniversary date. Valuation allowances are not established for policy loans, as these loans are collateralized by the cash surrender value of the associated insurance contracts. Any unpaid principal or interest on the loan is deducted from the account value or the death benefit prior to settlement of the policy.

Limited Partnerships/Corporations: The Company uses the equity method of accounting for investments in limited partnership interests, which consist primarily of private equity and hedge funds. Generally, the Company records its share of earnings using a lag methodology, relying on the most recent financial information available, generally not to exceed three months. The Company's earnings from limited partnership interests accounted for under the equity method are recorded in Net investment income.

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TableOther Investments: Other investments are comprised primarily of Contentsthe Company's investment in outstanding common stock of an affiliate, Voya Special Investments, Inc., which is accounted for as an equity method investment. Other investments also include Federal Home Loan Bank ("FHLB") stock and property obtained from foreclosed mortgage loans, as well as other miscellaneous investments. The Company is a member of the FHLB system and is required to own a certain amount of FHLB stock based on the level of borrowings and other factors. FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for impairment based on ultimate recovery of par value.
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Securities Pledged: The Company engages in securities lending whereby certain securities from its portfolio are loaned to other institutions, through a lending agent, for short periods of time. The Company has the right to approve any institution with whom the lending agent transacts on its behalf. Initial collateral, primarily cash, is required at a minimum 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 behalf of the Company. 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 the Company against losses resulting from the failure of a counterparty to return securities pledged where collateral is insufficient to cover the loss.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Impairments

The Company evaluates its available-for-sale general account investments quarterly to determine whether a decline in fair value below the amortized cost basis has resulted from credit loss or other factors. This evaluation process entails considerable judgment and estimation. Factors considered in this analysis include, but are not limited to, 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. A severe unrealized loss position on a fixed maturity may not have any impact on: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.

When assessing the Company's intent to sell a security, or if it is more likely than not it will be required to sell a security before recovery of its amortized cost basis, management evaluates 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.

When the Company has determined it has the intent to sell, or if it is more likely than not that the Company will be required to sell a security before recovery of its amortized cost basis, and the fair value has declined below amortized cost ("intent impairment"), management evaluates facts and circumstances such as, but not limited to, the individual security is written down from amortized cost to fair value, and a corresponding charge is recorded in Net realized capital gains (losses) as impairments in the Consolidated Statements of Operations as Impairments.Operations.

For available-for-sale securities that do not meet the intent impairment criteria but the Company has determined that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss allowance is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in Other comprehensive income (loss).

The Company uses the following methodology and significant inputs in determining whether a credit loss exists:

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, the Company applies the same considerations utilized in its 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 the Company's 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 ratios; 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.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government securities and state and political subdivision securities, the Company considers 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, the Company considers in the determination of recovery value the same considerations utilized in its overall impairment evaluation process, which incorporates available information and the Company's 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.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The Company performs 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.

Changes in the allowance for credit losses are recorded in Net realized capital gains (losses) as Impairments in the Consolidated
Statements of Operations.impairments. Losses are charged against the allowance when the Company believes the uncollectability of an
available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available-for-sale securities is excluded from the estimate of credit losses. The Company evaluates the collectability of accrued interest receivable as part of its quarterly impairment evaluation of available-for-sale investments. Losses are recorded in Net investment income when the Company believes the uncollectability of the accrued interest receivable is confirmed.

Derivatives

The Company's use of derivatives is limited mainly to economic hedging to reduce the Company's exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk, exchange rate risk and market risk. It is the Company's policy not to offset amounts recognized for derivative instruments and amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement, which provides the Company with the legal right of offset. However, in accordance with the Chicago
Mercantile Exchange ("CME") rules related to the variation margin payments, the Company is required to adjust the derivative
balances with the variation margin payments related to its cleared derivatives executed through CME.

The Company enters 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. The Company also utilizes options and futures on equity indices to reduce and manage risks associated with its annuity products. Derivative contracts are reported as Derivatives assets or liabilities on the Consolidated Balance Sheets at fair value. Changes in the fair value of derivatives are recorded in Other net realized capital gains (losses) in the Consolidated Statements of Operations.

To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge as either (a) a hedge of the exposure to changes in the estimated fair value of a recognized asset or liability or an identified portion thereof that is attributable to a particular risk ("fair value hedge") or (b) a hedge of a forecasted transaction or of the variability of cash flows that is attributable to interest rate risk to be received or paid related to a recognized asset or liability ("cash flow hedge"). In this documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument's effectiveness and the method that will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and periodically throughout the life of the designated hedging relationship.

Fair Value Hedge:  For derivative instruments that are designated and qualify as a fair value hedge, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in the same line item in the Consolidated Statements of Operations as impacted by the hedged item.

Cash Flow Hedge: For derivative instruments that are designated and qualify as a cash flow hedge, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is reported as a component of AOCI. Those amounts are subsequently reclassified to earnings when the hedged item affects earnings, and are reported in the same line item in the Consolidated Statements of Operations as impacted by the hedged item.

Even if a derivative qualifies for hedge accounting treatment, there may be an element of ineffectiveness of the hedge. The ineffective portion of a hedging relationship subject to hedge accounting is recognized in Net gains (losses) in the Consolidated Statements of Operations.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
of AOCI. Those amounts are subsequently reclassified to earnings when the hedged item affects earnings, and are reported in the same line item in the Consolidated Statements of Operations as impacted by the hedged item.

Even if a derivative qualifies for hedge accounting treatment, there may be an element of ineffectiveness of the hedge. The ineffective portion of a hedging relationship subject to hedge accounting is recognized in Net realized capital gains (losses) in the Consolidated Statements of Operations.

When hedge accounting is discontinued because it is determined that the derivative is no longer expected to be highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the Consolidated Balance Sheets at its estimated fair value, with subsequent changes in estimated fair value recognized currently in Other net realized capital gains (losses). The carrying value of the hedged asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in Other comprehensive income (loss) related to discontinued cash flow hedges are released into the Consolidated Statements of Operations when the Company's earnings are affected by the variability in cash flows of the hedged item.

When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date, or within two months of that date, the derivative continues to be carried on the Consolidated Balance Sheets at its estimated fair value, with changes in estimated fair value recognized currently in Other net realized capital gains (losses). Derivative gains and losses recorded in Other comprehensive income (loss) pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable are recognized immediately in Other net realized capital gains (losses).

The Company also has investments in certain fixed maturities and has issued certain 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. Embedded derivatives within fixed maturities are included with the host contract on the Consolidated Balance Sheets, and changes in the fair value of the embedded derivatives are recorded in Other net realized capital gains (losses) in the Consolidated Statements of Operations.. Embedded derivatives within certain annuity products are included in Future policy benefits and contract owner account balances on the Consolidated Balance Sheets, and changes in the fair value of the embedded derivatives are recorded in Other net realized capital gains (losses) in the Consolidated Statements of Operations..

In addition, the Company has entered intopreviously had coinsurance with funds withheld reinsurance arrangements that were recaptured in March 2020, accounted for under the deposit method, that containcontained embedded derivatives, the fair value of which iswas based on the change in the fair value of the underlying assets held in trust. The embedded derivatives within the reinsurance agreements are reported in Other liabilities on the Consolidated Balance Sheets, and changesChanges in the fair value of the embedded derivatives are recorded in Interest credited and other benefits to contract owners/policyholders in the Consolidated Statements of Operations.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, amounts due from banks and other highly liquid investments, such as money market instruments and debt instruments with maturities of three months or less at the time of purchase. Cash and cash equivalents are stated at fair value.

Deferred Policy Acquisition Costs and Value of Business Acquired

DAC represents policy acquisition costs that have been capitalized and are subject to amortization and interest. Capitalized costs are incremental, direct costs of contract acquisition and certain other costs related directly to successful acquisition activities. Such costs consist principally of commissions, underwriting, sales and contract issuance and processing expenses directly related to the successful acquisition of new and renewal business. Indirect or unsuccessful acquisition costs, maintenance, product development and overhead expenses are charged to expense as incurred. VOBA represents the outstanding value of in-force business acquired and is subject to amortization and interest. The value is based on the present value of estimated net cash flows embedded in the insurance contracts at the time of the acquisition and increased for subsequent deferrable expenses on purchased policies. DAC and VOBA are adjusted for the impact of unrealized capital gains (losses) on investments, as if such gains (losses) have been realized, with corresponding adjustments included in AOCI.

Amortization Methodologies
The Company amortizes DAC and VOBA related to deferred annuity contracts over the estimated lives of the contracts in relation to the emergence of estimated gross profits. 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").

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
subsequent deferrable expenses on purchased policies. DAC and VOBA are adjusted for the impact of unrealized capital gains (losses) on investments, as if such gains (losses) have been realized, with corresponding adjustments included in AOCI.

Amortization Methodologies
The Company amortizes DAC and VOBA related to 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 the Company's 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").

Recoverability testing is performed for current issue year products to determine if gross profits are sufficient to cover DAC and VOBA, estimated benefits and related expenses. In subsequent years, the Company performs testing to assess the recoverability of DAC and VOBA on an annual basis, or more frequently if circumstances indicate a potential loss recognition issue exists. If DAC or VOBA are not deemed recoverable from future gross profits, charges will be applied against DAC or VOBA balances before an additional reserve is established.

Internal Replacements
Contract owners may periodically exchange one contract for another, or make modifications to an existing contract. These transactions are identified as internal replacements. Internal replacements that are determined to result in substantially unchanged contracts are accounted for as continuations of the replaced contracts. Any costs associated with the issuance of the new contracts are considered maintenance costs and expensed as incurred. Unamortized DAC and VOBA related to the replaced contracts continue to be deferred and amortized in connection with the new contracts. Internal replacements that are determined to result in contracts that are substantially changed are accounted for as extinguishments of the replaced contracts, and any unamortized DAC and VOBA related to the replaced contracts are written off to Net amortization of Deferred policy acquisition costs and Value of business acquired in the Consolidated Statements of Operations.

Assumptions
Changes in assumptions canmay have a significant impact on DAC and VOBA balances, amortization rates, reserve levels, and results of operations. Assumptions are management's best estimate of future outcome.

Several assumptions are considered significant in the estimation of gross profits associated with the Company's variabledeferred annuity products. One significant assumption is the assumed return associated with the variable account performance. 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. The Company uses 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. The Company monitors market events and only changes the assumption when sustained deviations are expected. This methodology incorporates a 9%an 8% long-term equity return assumption, a 14% cap and a five-year look-forward period.

Other significant assumptions used in the estimation of gross profits for products with creditedinclude general account investment returns, crediting rates, include interest rate spreadsexpense and credit losses. Estimated gross profits of variable annuity contracts are sensitive to estimatedfees as well as policyholder behavior assumptions such as surrender, lapsepremiums, surrenders and annuitization rates.lapses.

Contract Costs Associated with Certain Financial Services Contracts

Contract cost assets represent costs incurred to obtain or fulfill a non-insurance contract that are expected to be recovered and, thus, have been capitalized and are subject to amortization. Capitalized contract costs include incremental costs of obtaining a contract and fulfillment costs that relate directly to a contract and generate or enhance resources of the Company that are used to satisfy performance obligations. Capitalized contract costs are amortized on a straight-line basis over the estimated lives of the contracts, which typically range from 5 to 15 years.

Capitalized contract costs are included in Other assets on the Consolidated Balance Sheets, and costs expensed as incurred are included in Operating expenses in the Consolidated Statements of Operations.

As of December 31, 2021 and 2020, contract cost assets were $104 and $105, respectively. For the years ended December 31, 2021, 2020 and 2019, amortization expenses of $23, $23 and $23, respectively, were recorded in Operating expenses in the Consolidated Statements of Operations. There was no impairment loss in relation to the contract costs capitalized.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Capitalized contract costs are included in Other assets on the Consolidated Balance Sheets, and costs expensed as incurred are included in Operating expenses in the Consolidated Statements of Operations.

As of December 31, 2020 and 2019, contract cost assets were $105 and $109, respectively. Capitalized contract costs are amortized on a straight-line basis over the estimated lives of the contracts, which typically range from 5 to 15 years. For the years ended December 31, 2020 and 2019, amortization expenses of $19 and $23, respectively, were recorded in Operating expenses in the Consolidated Statements of Operations. There was 0 impairment loss in relation to the contract costs capitalized.

Future Policy Benefits and Contract Owner Account Balances

Future Policy Benefits
The Company establishes and carries actuarially-determined reserves that are calculated to meet its future obligations, including estimates of unpaid claims and claims that the Company believes have been incurred but have not yet been reported as of the balance sheet date. The principal assumptions used to establish liabilities for future policy benefits are based on Company 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. Changes in, or deviations from, the assumptions used can significantly affect the Company's reserve levels and related results of operations.

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 the Company's 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 2.3%3.4% to 5.3%.

Although assumptions are "locked-in" upon the issuance of payout contracts with life contingencies, significant changes in experience or assumptions may require the Company 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.

Contract Owner Account Balances
Contract owner account balances relate to investment-type contracts, as follows:

Account balances for funding agreements with fixed maturities are calculated using the amount deposited with the Company, less withdrawals, plus interest accrued to the ending valuation date. Interest on these contracts is accrued by a predetermined index, plus a spread or a fixed rate, established at the issue date of the contract.
Account balances for fixed annuities and payout contracts without life contingencies are equal to cumulative deposits, less charges and withdrawals, plus credited interest thereon. Credited interest rates vary by product and ranged up to 4.3% for the year 2021, 4.3% for the year 2020 and 5.3% for the years 2019 and 2018.year 2019. Account balances for group immediate annuities without life contingent payouts are equal to the discounted value of the payment at the implied break-even rate.
For fixed-indexed annuity ("FIA"), the aggregate initial liability is equal to the deposit received, plus a bonus, if applicable, and is split into a host component and an embedded derivative component. Thereafter, the host liability accumulates at a set interest rate, and the embedded derivative liability is recognized at fair value.

Product Guarantees and Additional Reserves
The Company calculates additional reserve liabilities for certain variable annuity guaranteed benefits and variable funding products. The Company periodically evaluates its estimates and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. Changes in, or deviations from, the assumptions used can significantly affect the Company's reserve levels and related results of operations.

GMDB:    Reserves for annuity guaranteed minimum death benefits ("GMDB") are determined by estimating the value of expected benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. Expected experience is based on a range of scenarios. Assumptions used, such as the long-term equity market return, lapse rate and mortality, are consistent with assumptions used in estimating gross profits for the
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
purpose of amortizing DAC. The assumptions of investment performance and volatility are consistent with the historical experience of the appropriate underlying equity index, such as the Standard & Poor's ("S&P") 500 Index. Reserves for GMDB are recorded in Future policy benefits and contract owner account balances on the Consolidated Balance Sheets. Changes in reserves for GMDB are reported in Interest credited and other benefits to contract owners/policyholders in the Consolidated Statements of Operations.

FIA: The Company issued FIA contracts that contain embedded derivatives that are measured at estimated fair value separately from the host contracts. Such embedded derivatives are recorded in Future policy benefits and contract owner account balances onbalances.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Balance Sheets. Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Changes in estimated fair value, that are not related to attributed fees or premiums collected or payments made, are reported in Other net realized capital gains (losses) in the Consolidated Statements of Operations.

The estimated fair value of the embedded derivative in the FIA contracts is based on the present value of the excess of interest payments to the contract owners over the growth in the minimum guaranteed contract 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 anticipated life of the related contracts, which takes into account best estimate actuarial assumptions, such as partial withdrawals, full surrenders, deaths, annuitizations and maturities.

Stabilizer and MCG: Guaranteed credited rates give rise to an embedded derivative in the Stabilizerstabilizer ("Stabilizer") products and a stand-alone derivative for managed custody guarantee products ("MCG"). These derivatives are measured at estimated fair value and recorded in Future policy benefits and contract owner account balances on the Consolidated Balance Sheets.balances. Changes in estimated fair value, that are not related to attributed fees collected or payments made, are reported in Other net realized capital gains (losses) in the Consolidated Statements of Operations..

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, the Company projects 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 FIA and Stabilizer embedded derivatives and the MCG stand-alone derivative (collectively, "guaranteed benefit derivatives") 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.

The discount rate used to determine the fair value of the liabilities for FIA 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").

Separate Accounts

Separate account assets and liabilities generally represent funds maintained to meet specific investment objectives of contract owners or participants who bear the investment risk, subject, in limited cases, to minimum guaranteed rates. Investment income and investment gains and losses generally accrue directly to such contract owners. The assets of each account are legally segregated and are not subject to claims that arise out of any other business of the Company or its affiliates.

Separate account assets supporting variable options under variable annuity contracts are invested, as designated by the contract owner or participant under a contract, in shares of mutual funds that are managed by the Company, or its affiliates, or in other selected mutual funds not managed by the Company, or its affiliates.

The Company reports separately, as assets and liabilities, investments held in the separate accounts and liabilities of separate accounts if:

Such separate accounts are legally recognized;
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Assets supporting the contract liabilities are legally insulated from the Company's general account liabilities;
Investments are directed by the contract owner or participant; and
All investment performance, net of contract fees and assessments, is passed through to the contract owner.

The Company reports separate account assets that meet the above criteria at fair value on the Consolidated Balance Sheets based on the fair value of the underlying investments. The underlying investments include mutual funds, short term investments, cash and fixed maturities. Separate account liabilities equal separate account assets. Investment income and net realized and unrealized capital gains (losses) of the separate accounts, however, are not reflected in the Consolidated Statements of Operations, and the Consolidated Statements of Cash Flows do not reflect investment activity of the separate accounts.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Repurchase Agreements

The Company engages in dollar repurchase agreements with MBS ("dollar rolls") and repurchase agreements with other collateral types to increase its return on investments and improve liquidity. Such arrangements meet the requirements to be accounted for as financing arrangements.

The Company enters into dollar roll transactions by selling existing MBS and concurrently entering into an agreement to repurchase similar securities within a short time frame at a lower price. Under repurchase agreements, the Company borrows cash from a counterparty at an agreed upon interest rate for an agreed upon time frame and pledges collateral in the form of securities. At the end of the agreement, the counterparty returns the collateral to the Company, and the Company, in turn, repays the loan amount along with the additional agreed upon interest.

The Company's policy requires that at all times during the term of the dollar roll and repurchase agreements that cash or other collateral types obtained is sufficient to allow the Company 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 agreements, including collateral held on the Consolidated Balance Sheets. The carrying value of the securities pledged in dollar rolls and repurchase agreement transactions is included in Securities pledged on the Consolidated Balance Sheets.

Recognition of Revenue

Insurance Revenue and Related Benefits
Premiums related to payouts contracts with life contingencies are recognized in Premiums in the Consolidated Statements of Operations when due from the contract owner. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded in Interest credited and other benefits to contract owners/policyholders in the Consolidated Statements of Operations when incurred.

Amounts received as payment for investment-type, fixed annuities, payout contracts without life contingencies and FIA contracts are reported as deposits to contract owner account balances. Revenues from these contracts consist primarily of fees assessed against the contract owner account balance for mortality and policy administration charges and are reported in Fee income. Surrender charges are reported in Other revenue. In addition, the Company earns investment income from the investment of contract deposits in the Company's general account portfolio, which is reported in Net investment income in the Consolidated Statements of Operations. Fees assessed that represent compensation to the Company for services to be provided in future periods and certain other fees are deferred and amortized into revenue over the expected life of the related contracts in proportion to estimated gross profits in a manner consistent with DAC for these contracts. Benefits and expenses for these products include claims in excess of related account balances, expenses of contract administration and interest credited to contract owner account balances.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Financial Services Revenue
Revenue for various financial services is measured based on consideration specified in a contract with a customer and is recognized when the Company has satisfied a performance obligation. For advisory, recordkeeping and administration services of $514, $423 and $405 for the years ended December 31, 2021, 2020 and 2019, respectively, the Company recognizes revenue as services are provided, generally over time. For distribution and shareholder servicing revenue of $180, $158 and $82 for the years ended December 31, 2021, 2020 and 2019, respectively, the Company recognizes revenue as related consideration is received and provides distribution services at a point in time and shareholder services over time. Contract terms are typically less than one year, and consideration is variable.

For a description of principal activities from which the Company generates revenue, see the Business section above for further information.

For the years ended December 31, 2021, 2020 and 2019, such revenue represents approximately 21.2%, 23.4% and 19.7% respectively, of total revenue.revenues. In calculating the percentage for the year ended December 31, 2021, the Company excluded the
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
day one impact of ceded premiums from the Reinsurance transaction entered into pursuant to the close of the Resolution MTA For the years ended December 31, 2021, 2020 and 2019, a portion of the revenue recognized in the current period from distribution services is related to performance obligations satisfied in previous periods. Revenue for various financial services is recorded in Fee income or Other revenue in the Consolidated Statements of Operations. Receivables of $88$107 and $97$88 are included in Other assets on the Consolidated Balance Sheets as of December 31, 20202021 and 2019,2020, respectively.

Income Taxes

The Company uses certain assumptions and estimates in determining (a) the income taxes payable or refundable to/from Voya Financial, Inc. for the current year, (b) the provision for income taxes and (c) the deferred income tax assets and liabilities.

The provision for income taxes is based on income and expense reported in the financial statements after adjustments for permanent differences between our financial statements and consolidated federal income tax return. Permanent differences include the dividends received deduction. As a result of permanent differences, the effective tax rate reflected in the financial statements may be different than the actual rate in the income tax return.

Temporary differences between our financial statements and income tax return create deferred tax assets and liabilities. Deferred tax assets represent the tax benefit of future deductible temporary differences, net operating loss carryforwards and tax credit carryforwards. The Company's deferred tax assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The Company evaluates and tests the recoverability of its 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, the Company considers many factors, including the nature and character of the deferred tax assets and liabilities, the amount and character of book income or losses in recent years, projected future taxable income and future reversals of temporary differences, tax planning strategies we would employ to avoid a tax benefit from expiring unused, and the length of time carryforwards can be utilized.

We recognizeThe Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained under examination by the applicable taxing authority. The Company also considers positions that have been reviewed and agreed to as part of an examination by the applicable taxing authority. For items that meet the more-likely-than-not recognition threshold, the Company measures the tax position as the largest amount of benefit that is more than 50% likely to be realized upon ultimate resolution with the applicable tax authority that has full knowledge of all relevant information.

Reinsurance

The Company utilizes reinsurance agreements in most aspects of its insurance business to reduce its exposure to large losses. Such reinsurance permits recovery of a portion of losses from reinsurers, although it does not discharge the primary liability of the Company as direct insurer of the risks reinsured.

For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk. The Company reviews contractual features, particularly those that may limit the amount of
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. The assumptions used to account for long-duration reinsurance agreements are consistent with those used for the underlying contracts. Ceded Future policy benefits and contract owner account balances are reported gross on the Consolidated Balance Sheets.

Long-duration: For reinsurance of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid and benefits received related to the underlying contracts is included in the expected net cost of reinsurance, which is recorded as a component of the reinsurance asset or liability. Any difference between actual and expected net cost of reinsurance is recognized in the current period and included as a component of profits used to amortize DAC.

If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in Other liabilities, and deposits made are included in Other assets on the Consolidated Balance Sheets.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as Other revenues or Operating expenses in the Consolidated Statements of Operations, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through Other revenues or Other expenses, as appropriate.

Accounting for reinsurance requires use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance. The Company also evaluates the financial strength of potential reinsurers and continually monitors the financial condition of reinsurers.

Reinsurance recoverable balances are reported net of the allowance for credit losses in the Company’s Consolidated Balance Sheets. Management estimates the credit loss allowance balance using a factor-based method of probability of default and loss given default which incorporates relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Included in the factor-based method are the consideration of capital market factors, counterparty financial information and ratings, and reinsurance agreement-specific risk characteristics such as collateral type, collateral size, and covenant strength.

The allowance for credit losses is a valuation account that is deducted from the reinsurance recoverable balance to present the
net amount expected to be collected on the reinsurance recoverable. The change in the allowance for credit losses is recorded in
Policyholder benefits in the Consolidated Statements of Operations.

Current reinsurance recoverable balances deemed probable of recovery and payable balances under reinsurance agreements are included in Premiums receivable and reinsurance recoverable and Other liabilities, respectively. Such assets and liabilities relating to reinsurance agreements with the same reinsurer are recorded net on the Consolidated Balance Sheets if a right of offset exists within the reinsurance agreement. Premiums, Fee income and Interest credited and other benefits to contract owners/policyholders are reported net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in Other revenue.

The Company utilizes reinsurance agreements, accounted for under the deposit method, to manage reserve and capital requirements in connection with a portion of its deferred annuities business. The agreements contain embedded derivatives for which carrying value is estimated based on the changerevenue in the fair valueConsolidated Statements of the assets supporting the funds withheld under the agreements.Operations.

The Company currently has a significant concentration of ceded reinsurance with a subsidiary of Lincoln National Corporation ("Lincoln") arising from the disposition of its individual life insurance business.

Employee Benefits Plans

The Company, in conjunction with Voya Services Company, sponsors non-qualified defined benefit pension plans covering eligible employees, sales representatives and other individuals.

A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive upon retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
respect of non-qualified defined benefit pension plans is the present value of the projected pension benefit obligation ("PBO") at the balance sheet date, together with adjustments for unrecognized past service costs. This liability is included in Other liabilities on the Consolidated Balance Sheets. The PBO is defined as the actuarially calculated present value of vested and non-vested pension benefits accrued based on future salary levels. The Company recognizes the funded status of the PBO for pension plans on the Consolidated Balance Sheets.

Net periodic benefit cost for the non-qualified defined benefit pension plans is determined using management estimates and actuarial assumptions to derive service cost and interest cost for a particular year and is included in Operating expenses in the Consolidated Statements of Operations. The obligations and expenses associated with these plans require use of assumptions, such as discount rate and rate of future compensation increases and healthcare cost trend rates, as well as assumptions regarding participant demographics, such as age of retirements,retirement, withdrawal rates and mortality. Management determines these assumptions based on a variety of factors, such as currently available market and industry data and expected benefit payout streams. 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. These differences may have a significant effect
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
on the Company's Consolidated Financial Statements and liquidity. Actuarial gains (losses) are immediately recognized in Operating expenses in the Consolidated Statements of Operations.

Contingencies

A loss contingency is an existing condition, situation or set of circumstances involving uncertainty as to possible loss that will ultimately be resolved when one or more future events occur or fail to occur. Examples of loss contingencies include pending or threatened adverse litigation, threat of expropriation of assets and actual or possible claims and assessments. Amounts related to loss contingencies are accrued and recorded in Other liabilities on the Consolidated Balance Sheets if it is probable that a loss has been incurred and the amount can be reasonably estimated, based on the Company's best estimate of the ultimate outcome.

Adoption of New Pronouncements

The following table provides a description of the Company's adoption of new ASUsAccounting Standard Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB") and the impact of the adoption on the Company's financial statements.statements:
StandardDescription of RequirementsEffective dateDate and methodMethod of adoptionAdoptionEffect on the financial statementsFinancial Statements or other significant mattersOther Significant Matters
ASU 2018-14,2019-12,
Changes toSimplifying the
Disclosure
Requirements
Accounting for Defined
Benefit Plans
Income Taxes
This standard, issued in August
2018, eliminates
December 2019, simplifies the accounting for income taxes by eliminating certain
disclosure
exceptions to the general principles and simplifying several aspects of ASC 740, Income taxes, including requirements related to the following:
The intraperiod tax allocation exception to the incremental approach,
The tax basis step-up in goodwill obtained in a transaction that are
no longer considered cost
beneficial
is not a business combination,
Hybrid tax regimes,
Ownership changes in investments - changes from a subsidiary to an equity method investment,
Separate financial statements of entities not subject to tax,
Interim-period accounting for enacted changes in tax law, and requires new
disclosures that are considered
relevant.
The year-to-date loss limitation in interim-period tax accounting.
December 31, 2020
using the
January 1, 2021 on a prospective basis, except for those provisions that required retrospective or modified retrospective
method.
Adoption of the ASU had no effectdid not have an impact on the
Company's financial condition, results of
operations, or cash flows. The adoption results in various disclosure changes that have been included in Note 11, Benefit Plans.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
StandardDescription of RequirementsEffective dateDate and methodMethod of adoptionAdoptionEffect on the financial statementsFinancial Statements or other significant mattersOther Significant Matters
ASU 2018-15,
Implementation
Costs Incurred
in a Cloud
Computing
Arrangement
that is a Service
Contract
This standard, issued in August 2018, requires a customer in a hosting arrangement that is a service contract to follow the guidance for internal-use
software projects to determine which implementation costs to capitalize as an asset. Capitalized implementation costs are
required to be expensed over the term
2016-13, Measurement of the hosting arrangement. In addition, a customer is required to apply the impairment and abandonment guidance for
long-lived assets to the capitalized implementation costs. Balances related to capitalized implementation costs must be
presented in the same financial statement line items as other hosting arrangement balances, and additional disclosures are required.
January 1, 2020 using the prospective method.Adoption of the ASU did not have a
material impact on the Company's financial
condition, results of operations, or cash
flows.
ASU 2018-13,
Changes to the
Disclosure
Requirements
for Fair Value
Measurement
This standard, issued in August 2018, simplifies certain disclosure requirements for fair value measurement.January 1, 2020
using the transition
method prescribed
for each applicable
provision.
Adoption of this ASU had no effect on the
Company's financial condition, results of
operations, or cash flows. The adoption
resulted in various disclosure changes that
have been included in Note 4, Fair Value
Measurements.
ASU 2016-13,
Measurement of
Credit Losses on
Financial
Instruments
This standard, issued in June 2016:
Introduces a new current expected credit loss ("CECL") model to measure impairment on certain types of financial instruments,
Requires an entity to estimate lifetime expected credit losses, under the new CECL model, based on relevant information about historical events, current conditions, and reasonable and
supportable forecasts,
Modifies the impairment model for available-for-sale debt securities, and
Provides a simplified accounting model
for purchased financial assets with credit deterioration since their origination.
In addition, the FASB issued various amendments during 2018, 2019, and 2020 to clarify the provisions of ASU 2016-13.
January 1, 2020,
using the modified
retrospective method
for financial assets
measured at
amortized cost and
the prospective
method for
available-for-sale
debt securities.
The Company recorded a $8 decrease, net
of tax, to Unappropriated retained earnings
as of January 1, 2020 for the cumulative
effect of adopting ASU 2016-13. The
transition adjustment includes recognition
of an allowance for credit losses of $12
related to mortgage loans, net of the effect
of DAC/VOBA and other intangibles of
$2
$2 and deferred income taxes of $2.


The provisions that required prospective
adoption had no effect on the Company's
financial condition, results of operations,
or cash flows.


In addition, disclosures have been updated
to reflect accounting policy changes made
as a result of the implementation of ASU
2016-13. (See the Significant Accounting
Policies section.)


Comparative information has not been
adjusted and continues to be reported under
previously applicable U.S. GAAP.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
StandardDescription of RequirementsEffective date and method of adoptionEffect on the financial statements or other significant matters
ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive IncomeThis standard, issued in February 2018, permits a reclassification from accumulated other comprehensive income ("AOCI") to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 ("Tax Reform"). Stranded tax effects arise because U.S. GAAP requires that the impact of a change in tax laws or rates on deferred tax liabilities and assets be reported in net income, even if related to items recognized within accumulated other comprehensive income. The amount of the reclassification would be based on the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate, applied to deferred tax liabilities and assets reported within accumulated other comprehensive income.January 1, 2019 with the change reported in the period of adoption.The impact to the January 1, 2019 Consolidated Balance Sheet was an increase to AOCI of $137, with a corresponding decrease to Retained earnings. The ASU did not have a material impact on the Company's results of operations, cash flows, or disclosures.
ASU 2017-12, Targeted Improvements to Accounting for Hedging ActivitiesThis standard, issued in August 2017, enables entities to better portray risk management activities in their financial statements, as follows:
• Expands an entity's ability to hedge nonfinancial and financial risk components and reduces complexity in accounting for fair value hedges of interest rate risk,
• Eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item, and
• Eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness, and modifies required disclosures.

In October 2018, the FASB issued an amendment which expands the list of U.S. benchmark interest rates permitted in the application of hedge accounting.
January 1, 2019,
using the modified
retrospective
method, with the
exception of the
presentation and
disclosure
requirements which
were adopted
prospectively.
The adoption had no effect on the Company's financial condition, results of operations, or cash flows. As a result of the adoption, the Company has updated its Derivatives accounting policy with respect to fair value and cash flow hedges. Other required disclosure changes have been included in Note 3, Derivative Financial Instruments.














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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
StandardDescription of RequirementsEffective date and method of adoptionEffect on the financial statements or other significant matters
ASU 2016-02, LeasesThis standard, issued in February 2016, requires lessees to recognize a right-of-use asset and a lease liability for all leases with terms of more than 12 months. The lease liability will be measured as the present value of the lease payments, and the asset will be based on the liability. For income statement purposes, expense recognition will depend on the lessee's classification of the lease as either finance, with a front-loaded amortization expense pattern similar to current capital leases, or operating, with a straight-line expense pattern similar to current operating leases. Lessor accounting will be similar to the current model, and lessors will be required to classify leases as operating, direct financing, or sales-type.

ASU 2016-02 also replaces the sale-leaseback guidance to align with the new revenue recognition standard, addresses statement of operation and statement of cash flow classification, and requires additional disclosures for all leases. In addition, the FASB issued various amendments during 2018 to clarify and simplify the provisions and implementation guidance of ASU 2016-02.
January 1, 2019 using the modified retrospective method.The adoption did not have a material impact on the Company's financial condition, results of operations, or cash flows.
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial LiabilitiesThis standard, issued in January 2016, addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments, including requiring:
• Equity investments (except those consolidated or accounted for under the equity method) to be measured at fair value with changes in fair value recognized in net income.
• Elimination of the disclosure of methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost.
January 1, 2018 using the modified retrospective method, except for certain provisions that were required to be applied using the prospective method.The impact to the January 1, 2018 Consolidated Balance Sheet was a $12 increase, net of tax, to Retained earnings (deficit) with a corresponding decrease of $12, net of tax, to AOCI to recognize the unrealized gain associated with Equity securities. The provisions that required prospective adoption had no effect on the Company's financial condition, results of operations, or cash flows. Under previous guidance, prior to January 1, 2018, Equity securities were classified as available for sale with changes in fair value recognized in Other comprehensive income.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
StandardDescription of RequirementsEffective date and method of adoptionEffect on the financial statements or other significant matters
ASU 2014-09, Revenue from Contracts with CustomersThis standard, issued in May 2014, requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when, or as, the entity satisfies a performance obligation under the contract. ASU 2014-09 also updated the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In addition, the FASB issued various amendments during 2016 to clarify the provisions and implementation guidance of ASU 2014-09. Revenue recognition for insurance contracts and financial instruments is explicitly scoped out of the guidance.January 1, 2018 using the modified retrospective method.The adoption had no impact on revenue recognition. However, the adoption resulted in a $95 increase in Other assets to capitalize costs to obtain and fulfill certain financial services contracts. This adjustment was offset by a related $19 increase in deferred tax liabilities, resulting in a net $76 increase to Retained earnings (deficit) on the Consolidated Balance Sheet as of January 1, 2018. In addition, disclosures have been updated to reflect accounting policy changes made as a result of the implementation of ASU 2014-09. (See the Significant Accounting Policies section.)

Comparative information has not been adjusted and continues to be reported under previous revenue recognition guidance. As of December 31, 2018, the adoption of ASU 2014-09 resulted in a $105 increase in Other assets, reduced by a related $22 decrease in Deferred income taxes, resulting in a net $83 increase to Retained earnings (deficit) on the Consolidated Balance Sheet. For the year ended December 31, 2018 , the adoption resulted in a $3 increase in Operating expenses on the Consolidated Statement of Operations and had no impact on Net cash provided by operating activities.


Future Adoption of Accounting Pronouncements

The following table provides a description of future adoptions of new accounting standards that may have an impact on the Company's financial statements when adopted:
StandardDescription of RequirementsEffective dateDate and transition provisionsTransition ProvisionsEffect on the financial statementsFinancial Statements or other significant mattersOther Significant Matters
ASU 2020-04,
Reference Rate
Reform
This standard, issued in March 2020, provides
temporary optional expedients and exceptions
for applying U.S. GAAP principles to contracts,
hedging relationships, and other transactions
affected by reference rate reform if certain
criteria are met.

In January, 2021, the FASB issued ASU
2021-01 which clarified the scope of relief
related to ASU 2020-04.
The amendments are
effective as of March 12,
2020, the issuance date of
the ASU. An entity may
elect to apply the
amendments prospectively
through December 31,
2022.
The Company expects that
it willmay elect to apply some of
the expedients and
exceptions provided in ASU
2020-04; however, the
Company is still evaluating
its options under this guidance as the guidance, and therefore,
the impact
reference rate reform adoption process continues. To date, adoption of the adoption
of
ASU 2020-04has not had an impact on the
Company’s financial
condition and results of
operations has not yet been
determined.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
StandardDescription of RequirementsEffective date and transition provisionsEffect on the financial statements or other significant matters
ASU 2019-12,
Simplifying the
Accounting for
Income Taxes
This standard, issued in December 2019,
simplifies the accounting for income taxes by
eliminating certain exceptions to the general
principles and simplifying several aspects of
ASC 740, Income taxes, including requirements
related to the following:
• The intraperiod tax allocation exception to
the incremental approach,
• The tax basis step-up in goodwill obtained in
a transaction that is not a business combination,
• Hybrid tax regimes,
• Ownership changes in investments - changes
from a subsidiary to an equity method investment,
• Separate financial statements of entities not
subject to tax,
• Interim-period accounting for enacted
changes in tax law, and
• The year-to-date loss limitation in interimperiod tax accounting.
January 1, 2021 with early
adoption permitted. Early
adoption in an interim
period must reflect any
adjustments as of the
beginning of the annual
period. Initial adoption of
ASU 2019-12 is required
to be reported on a
prospective basis, except
for certain provisions that
are required to be applied
retrospectively or
modified retrospectively.
operations. The Company intendswill continue to
adopt ASU 2019-12
evaluate the impacts of reference rate reform on contract modifications and hedging relationships as of
January 1, 2021 on a
prospective basis, except for
those provisions that are
required to be applied on a
retrospective or modified
retrospective basis. The
Company does not expect
ASU 2019-12 to have a
material impact on the
Company's financial
condition, results of
operations, or cash flows.
transition progresses.
ASU 2018-12,
Targeted
Improvements to the Accounting for Long- Duration
Contracts
This standard, issued in August 2018, changes
the measurement and disclosures of insurance
liabilities and deferred acquisition costs ("DAC")
DAC for long-duration contracts issued by insurers.
In November, 2020, the
FASB released ASU
2020-11, which deferred
the effective date of the
amendments in ASU
2018-12 for SEC filers to
fiscal years ending after
December 15, 2022,
including interim periods
within those fiscal years.
Initial adoption for the
liability for future policy
benefits and DAC is
required to be reported
using either a full
retrospective or modified
retrospective approach.
For market risk benefits,
full retrospective
application is required.
TheEvaluation of the implications of these
requirements including
transition options,
and
related potential financial
statement impacts are
currently being evaluated.
is continuing. The Company does not plan to early adopt the ASU and expects to apply a modified retrospective transition method for the liability of future policy benefits and DAC. While it is not possible to
estimate the expected
impact of adoption at this
time, the Company believes
there is a reasonable
possibility that
implementation of ASU
2018-12 may result in a
significant impact on
Shareholder’s equity and
future earnings patterns.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)

2.    Investments

Fixed Maturities

Available-for-sale and FVO fixed maturities were as follows as of December 31, 2020:
Amortized
Cost
Gross
Unrealized
Capital
Gains
Gross
Unrealized
Capital
Losses
Embedded Derivatives(2)
Fair
Value
Allowance for credit losses
Fixed maturities:
U.S. Treasuries$535 $186 $$$721 $
U.S. Government agencies and authorities18 19 
State, municipalities and political subdivisions698 116 814 
U.S. corporate public securities7,632 1,531 9,156 
U.S. corporate private securities3,870 536 27 4,379 
Foreign corporate public securities and foreign governments(1)
2,539 413 2,951 
Foreign corporate private securities(1)
2,991 348 25 — 3,303 11 
Residential mortgage-backed securities4,071 171 15 11 4,237 
Commercial mortgage-backed securities2,712 207 26 2,893 
Other asset-backed securities1,500 28 1,520 
Total fixed maturities, including securities pledged26,566 3,537 107 11 29,993 14 
Less: Securities pledged169 52 220 
Total fixed maturities$26,397 $3,485 $106 $11 $29,773 $14 
(1) Primarily U.S. dollar denominated.
(2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Consolidated Statements of Operations.


















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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
2.    Investments

Fixed Maturities

Available-for-sale and fair value option ("FVO") fixed maturities were as follows as of December 31, 2021:
Amortized
Cost
Gross
Unrealized
Capital
Gains
Gross
Unrealized
Capital
Losses
Embedded Derivatives(2)
Fair
Value
Allowance for credit losses
Fixed maturities:
U.S. Treasuries$554 $137 $— $— $691 $— 
U.S. Government agencies and authorities20 — — — 20 — 
State, municipalities and political subdivisions716 88 — 803 — 
U.S. corporate public securities7,314 994 39 — 8,269 — 
U.S. corporate private securities3,620 334 15 — 3,939 — 
Foreign corporate public securities and foreign governments(1)
2,352 253 14 — 2,591 — 
Foreign corporate private securities(1)
2,563 188 — 2,703 47 
Residential mortgage-backed securities3,081 97 20 3,164 
Commercial mortgage-backed securities2,766 130 15 — 2,881 — 
Other asset-backed securities1,341 16 — 1,351 — 
Total fixed maturities, including securities pledged24,327 2,237 111 26,412 48 
Less: Securities pledged725 74 — — 799 — 
Total fixed maturities$23,602 $2,163 $111 $$25,613 $48 
(1) Primarily U.S. dollar denominated.
(2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net gains (losses) in the Consolidated Statements of Operations.



















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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Available-for-sale and FVO fixed maturities were as follows as of December 31, 2019:2020:
Amortized
Cost
Gross
Unrealized
Capital
Gains
Gross
Unrealized
Capital
Losses
Embedded Derivatives(2)
Fair
Value
OTTI(3)(4)
Amortized
Cost
Gross
Unrealized
Capital
Gains
Gross
Unrealized
Capital
Losses
Embedded Derivatives(2)
Fair
Value
Allowance for credit losses
Fixed maturities:Fixed maturities:Fixed maturities:
U.S. TreasuriesU.S. Treasuries$565 $129 $$$691 $U.S. Treasuries$535 $186 $— $— $721 $— 
U.S. Government agencies and authoritiesU.S. Government agencies and authorities19 19 U.S. Government agencies and authorities18 — — 19 — 
State, municipalities and political subdivisionsState, municipalities and political subdivisions747 68 815 State, municipalities and political subdivisions698 116 — — 814 — 
U.S. corporate public securitiesU.S. corporate public securities7,103 941 13 8,031 U.S. corporate public securities7,632 1,531 — 9,156 — 
U.S. corporate private securitiesU.S. corporate private securities3,776 306 16 4,066 U.S. corporate private securities3,870 536 27 — 4,379 — 
Foreign corporate public securities and foreign governments(1)
Foreign corporate public securities and foreign governments(1)
2,417 265 2,679 
Foreign corporate public securities and foreign governments(1)
2,539 413 — 2,951 — 
Foreign corporate private securities(1)
Foreign corporate private securities(1)
3,171 205 3,375 
Foreign corporate private securities(1)
2,991 348 25 — 3,303 11 
Residential mortgage-backed securitiesResidential mortgage-backed securities3,685 125 11 11 3,810 Residential mortgage-backed securities4,071 171 15 11 4,237 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities2,381 122 2,500 Commercial mortgage-backed securities2,712 207 26 — 2,893 — 
Other asset-backed securitiesOther asset-backed securities1,472 15 13 1,474 Other asset-backed securities1,500 28 — 1,520 
Total fixed maturities, including securities pledgedTotal fixed maturities, including securities pledged25,336 2,176 63 11 27,460 Total fixed maturities, including securities pledged26,566 3,537 107 11 29,993 14 
Less: Securities pledgedLess: Securities pledged749 85 828 Less: Securities pledged169 52 — 220 — 
Total fixed maturitiesTotal fixed maturities$24,587 $2,091 $57 $11 $26,632 $Total fixed maturities$26,397 $3,485 $106 $11 $29,773 $14 
(1) Primarily U.S. dollar denominated.
(2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Consolidated Statements of Operations.
(3) Represents OTTI reported as a component of Other comprehensive income (loss).
(4) Amount excludes $194 of net unrealized gains on impaired available-for-sale securities.

The amortized cost and fair value of fixed maturities, including securities pledged, as of December 31, 2020,2021, are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called or prepaid. Mortgage-backed securities ("MBS") and Other asset-backed securities ("ABS") are shown separately because they are not due at a single maturity date.
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Due to mature:Due to mature:Due to mature:
One year or lessOne year or less$788 $797 One year or less$334 $339 
After one year through five yearsAfter one year through five years3,421 3,686 After one year through five years3,324 3,476 
After five years through ten yearsAfter five years through ten years5,244 5,980 After five years through ten years4,058 4,429 
After ten yearsAfter ten years8,830 10,880 After ten years9,423 10,772 
Mortgage-backed securitiesMortgage-backed securities6,783 7,130 Mortgage-backed securities5,847 6,045 
Other asset-backed securitiesOther asset-backed securities1,500 1,520 Other asset-backed securities1,341 1,351 
Fixed maturities, including securities pledgedFixed maturities, including securities pledged$26,566 $29,993 Fixed maturities, including securities pledged$24,327 $26,412 

The investment portfolio is monitored to maintain a diversified portfolio on an ongoing basis. Credit risk is mitigated by monitoring concentrations by issuer, sector and geographic stratification and limiting exposure to any one issuer. As of December 31, 2020 and 2019, the Company did not have any investments in a single issuer, other than obligations of the U.S.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
As of December 31, 2021 and 2020, the Company did not have any investments in a single issuer, other than obligations of the U.S. Government and government agencies, with a carrying value in excess of 10% of the Company's ConsolidatedTotal Shareholder's equity.Equity.

The following tables present the composition of the U.S. and foreign corporate securities within the fixed maturity portfolio by industry category as of the dates indicated:
Amortized
Cost
Gross Unrealized Capital GainsGross Unrealized Capital LossesFair Value
December 31, 2021December 31, 2021
CommunicationsCommunications$883 $154 $$1,035 
FinancialFinancial2,713 275 13 2,975 
Industrial and other companiesIndustrial and other companies7,004 713 26 7,691 
EnergyEnergy1,385 216 14 1,587 
UtilitiesUtilities2,658 310 10 2,958 
TransportationTransportation854 71 924 
TotalTotal$15,497 $1,739 $66 $17,170 
Amortized
Cost
Gross Unrealized Capital GainsGross Unrealized Capital LossesFair Value
December 31, 2020December 31, 2020December 31, 2020
CommunicationsCommunications$950 $231 $$1,180 Communications$950 $231 $$1,180 
FinancialFinancial2,921 472 3,391 Financial2,921 472 3,391 
Industrial and other companiesIndustrial and other companies7,284 1,155 13 8,426 Industrial and other companies7,284 1,155 13 8,426 
EnergyEnergy1,571 259 22 1,808 Energy1,571 259 22 1,808 
UtilitiesUtilities3,025 530 3,554 Utilities3,025 530 3,554 
TransportationTransportation929 128 20 1,037 Transportation929 128 20 1,037 
TotalTotal$16,680 $2,775 $59 $19,396 Total$16,680 $2,775 $59 $19,396 
December 31, 2019
Communications$1,002 $156 $$1,158 
Financial2,650 302 2,952 
Industrial and other companies7,053 667 11 7,709 
Energy1,675 185 18 1,842 
Utilities2,913 294 3,206 
Transportation856 78 932 
Total$16,149 $1,682 $32 $17,799 

The Company has elected the FVO for certain of its fixed maturities to better match the measurement of assets and liabilities in the Condensed Consolidated Statements of Operations. Certain collateralized mortgage obligations ("CMOs"), primarily interest-only and principal-only strips, are accounted for as hybrid instruments and reported at fair value with changes in the fair value recorded in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.

The Company invests in various categories of CMOs, including CMOs that are not agency-backed, that are subject to different degrees of risk from changes in interest rates and defaults. The principal risks inherent in holding CMOs are prepayment and extension risks related to significant decreases and increases in interest rates resulting in the prepayment of principal from the underlying mortgages, either earlier or later than originally anticipated. As of December 31, 2021 and 2020, approximately 45.1% and 2019, approximately 48.2% and 48.4%, respectively, of the Company's CMO holdings, were invested in the above mentioned types of CMOs such as interest-only or principal-only strips, that are subject to more prepayment and extension risk than traditional CMOs.

Public corporate fixed maturity securities are distinguished from private corporate fixed maturity securities based upon the manner in which they are transacted. Public corporate fixed maturity securities are issued initially through market intermediaries on a registered basis or pursuant to Rule 144A under the Securities Act of 1933 (the "Securities Act") and are traded on the secondary market through brokers acting as principal. Private corporate fixed maturity securities are originally issued by borrowers directly to investors pursuant to Section 4(a)(2) of the Securities Act, and are traded in the secondary market directly with counterparties, either without the participation of a broker or in agency transactions.

Repurchase AgreementAgreements

As of December 31, 2020 and 2019, the Company did not have any securities pledged in dollar rolls, repurchase agreement transactions or reverse repurchase agreements.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
As of December 31, 2021 and 2020, the Company did not have any securities pledged in dollar rolls, repurchase agreement transactions or reverse repurchase agreements.



Securities PledgedLending

The Company engages in securities lending whereby the initial collateral is required at a minimum rate of 102% of the market value of the loaned securities.  The lending agent retains the collateral and invests it in high quality liquid assets on behalf of the Company. 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 the Company 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, 20202021 and 2019,2020, the fair value of loaned securities was $143$739 and $715,$143, respectively, and is included in Securities pledged on the Consolidated Balance Sheets.

If cash is received as collateral, the lending agent retains the cash collateral and invests it in short-term liquid assets on behalf of the Company. As of December 31, 20202021 and 2019,2020, cash collateral retained by the lending agent and invested in short-term liquid assets on the Company's behalf was $74$677 and $650,$74, respectively, and is recorded in Short-term investments under securities loan agreements, including collateral delivered on the Consolidated Balance Sheets. As of December 31, 20202021 and 2019,2020, liabilities to return collateral of $74$677 and $650,$74, respectively, are included in Payables under securities loan agreements, including collateral held, on the Consolidated Balance Sheets.

The Company accepts non-cash collateral in the form of securities. The securities retained as collateral by the lending agent may not be sold or re-pledged, except in the event of default, and are not reflected on the Company’s Consolidated Balance Sheets. This collateral generally consists of U.S. Treasury, U.S. Government agency securities and MBS pools. As of December 31, 20202021 and 2019,2020, the fair value of securities retained as collateral by the lending agent on the Company’s behalf was $70$87 and $91,$70, respectively.

The following table presents borrowings under securities pledgedlending transactions by asset class pledged foras of the dates indicated:
December 31, 2020(1)(2)
December 31, 2019(1)(2)
U.S. Treasuries$70 $109 
U.S. corporate public securities54 447 
Foreign corporate public securities and foreign governments20 185 
Equity Securities
Payables under securities loan agreements$144 $741 
(1) As of December 31, 2020 and December 31, 2019, borrowings under securities lending transactions include cash collateral of $74 and $650, respectively.
(2) As of December 31, 2020 and December 31, 2019, borrowings under securities lending transactions include non-cash collateral of $70 and $91, respectively.
December 31, 2021December 31, 2020
U.S. Treasuries$42 $70 
U.S. corporate public securities479 54 
Foreign corporate public securities and foreign governments243 20 
Payables under securities loan agreements$764 $144 

The Company's securities lending activities are conducted on an overnight basis, and all securities loaned can be recalled at any time. The Company does not offset assets and liabilities associated with its securities lending program.

Variable Interest Entities ("VIEs")

The Company holds certain VIEs for investment purposes. VIEs may be in the form of private placement securities, structured securities, securitization transactions or limited partnerships. The Company has reviewed each of its holdings and determined that consolidation of these investments in the Company's financial statements is not required, as the Company is not the primary beneficiary, because the Company does not have both the power to direct the activities that most significantly impact the entity's economic performance and the obligation or right to potentially significant losses or benefits, for any of its investments in VIEs. The Company did not provide any non-contractual financial support and its carrying value represents the Company's exposure to loss. The carrying value and ownership interest of these investments are included in Limited partnerships/corporations on the Consolidated Balance Sheets. Income and losses recognized on these investments are reported in Net investment income onin the Consolidated Statements of Operations.


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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Securitizations

The Company invests in various tranches of securitization entities, including Residential mortgage-backed securities ("RMBS"), Commercial mortgage-backed securities ("CMBS") and ABS. Through its investments, the Company is 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. The Company's involvement with these entities is limited to that of a passive investor. The Company has 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 does the Company function in any of these roles. The Company, through its investments or other arrangements, does 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, the Company is not the primary beneficiary and willdoes not consolidate any of the RMBS, CMBS and ABS entities in which it holds investments. These investments are accounted for as investments available-for-sale as described in the Fair Value Measurements Note to these Consolidated Financial Statements and unrealized capital gains (losses) on these securities are recorded directly in AOCI, except for certain RMBS that are accounted for under the FVO, for which changes in fair value are reflected in Other net realized gains (losses) in the Consolidated Statements of Operations. The Company’s maximum exposure to loss on these structured investments is limited to the amount of its investment.

Allowance for credit losses

The following table presents a rollforward of the allowance for credit losses on available-for-sale fixed maturity securities for the period presented:
Year Ended December 31, 2020
Residential mortgage-backed securitiesCommercial mortgage-backed securitiesForeign corporate private securitiesOther asset-backed securitiesTotal
Balance as of January 1$$$$$
   Credit losses on securities for which credit losses were not previously recorded11 14 
   Initial allowance for credit losses recognized on financial assets accounted for as PCD (Purchased Credit Deteriorated)
   Reductions for securities sold during the period
   Reductions for intent to sell or more likely than not will be required to sell securities prior to recovery of amortized cost
   Increase (decrease) on securities with allowance recorded in previous period
   Write-offs
   Recoveries of amounts previously written off
Balance as of December 31$$$11 $$14 










Year Ended December 31, 2021
Residential mortgage-backed securitiesCommercial mortgage-backed securitiesForeign corporate private securitiesOther asset-backed securitiesTotal
Balance as of January 1, 2021$$— $11 $$14 
Credit losses on securities for which credit losses were not previously recorded— 35 — 36 
Initial allowance for credit losses recognized on financial assets accounted for as PCD— — — — — 
Reductions for securities sold during the period— — — — — 
Reductions for intent to sell or more likely than not will be required to sell securities prior to recovery of amortized cost— — — — — 
Increase (decrease) on securities with allowance recorded in previous period(1)— (2)(2)
Write-offs— — — — — 
Recoveries of amounts previously written off— — — — — 
Balance as of December 31, 2021$$— $47 $— $48 
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Year Ended December 31, 2020
Residential mortgage-backed securitiesCommercial mortgage-backed securitiesForeign corporate private securitiesOther asset-backed securitiesTotal
Balance as of January 1, 2020$— $— $— $— $— 
Credit losses on securities for which credit losses were not previously recorded— 11 14 
Initial allowance for credit losses recognized on financial assets accounted for as PCD— — — — — 
Reductions for securities sold during the period— — — — — 
Reductions for intent to sell or more likely than not will be required to sell securities prior to recovery of amortized cost— — — — — 
Increase (decrease) on securities with allowance recorded in previous period— — — — — 
Write-offs— — — — — 
Recoveries of amounts previously written off— — — — — 
Balance as of December 31, 2020$$— $11 $$14 

Unrealized Capital Losses

Unrealized capital losses (including noncredit impairments), along with the fair value ofThe following table presents available-for-sale fixed maturity securities,maturities, including securities pledged, for which an allowance for credit losses has not been recorded by market sector and duration were as follows as of December 31, 2020:
Twelve Months or Less
Below Amortized Cost
More Than Twelve
Months Below
Amortized Cost
Total
Fair
Value
Unrealized
Capital 
Losses
Number of securitiesFair
Value
Unrealized
Capital 
Losses
Number of securitiesFair
Value
Unrealized
Capital 
Losses
Number of securities
U.S. Treasuries$$$$$$
U.S. Government, agencies and authorities
State, municipalities and political subdivisions
U.S. corporate public securities199 182 22 221 186 
U.S. corporate private securities316 10 29 71 17 387 27 36 
Foreign corporate public securities and foreign governments32 22 38 24 
Foreign corporate private securities176 25 20 179 25 21 
Residential mortgage-backed613 11 134 119 54 732 15 188 
Commercial mortgage-backed579 25 105 33 612 26 112 
Other asset-backed206 59  265 88 471 147 
Total$2,134 $78 555 $519 $29 163 $2,653 $107 718 
2021:

The Company concluded that an allowance for credit losses was unnecessary for these securities because the unrealized losses are not credit related.















Twelve Months or Less
Below Amortized Cost
More Than Twelve
Months Below
Amortized Cost
Total
Fair
Value
Unrealized
Capital 
Losses
Number of securitiesFair
Value
Unrealized
Capital 
Losses
Number of securitiesFair
Value
Unrealized
Capital 
Losses
Number of securities
U.S. Treasuries$$— $$— $14 $— 
State, municipalities and political subdivisions33 21 — — — 33 21 
U.S. corporate public securities1,237 32 290 110 138 1,347 39 428 
U.S. corporate private securities325 35 94 13 419 15 43 
Foreign corporate public securities and foreign governments425 13 90 21 17 446 14 107 
Foreign corporate private securities54 10 — 64 
Residential mortgage-backed400 11 181 241 96 641 20 277 
Commercial mortgage-backed780 178 155 27 935 15 205 
Other asset-backed577 183  70 48 647 231 
Total$3,838 $72 989 $708 $39 337 $4,546 $111 1,326 
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Unrealized capitalThe Company concluded that an allowance for credit losses (including noncredit impairments), along withwas unnecessary for these securities because the fair value ofunrealized losses are not credit related.

The following table presents available-for-sale fixed maturity securities,maturities, including securities pledged, for which an allowance for credit losses has not been recorded by market sector and duration were as follows as of December 31, 2019:2020:
Twelve Months or Less
Below Amortized Cost
More Than Twelve
Months Below
Amortized Cost
TotalTwelve Months or Less
Below Amortized Cost
More Than Twelve
Months Below
Amortized Cost
Total
Fair
Value
Unrealized
Capital Losses
Fair
Value
Unrealized
Capital Losses
Fair
Value
Unrealized
Capital Losses
Fair
Value
Unrealized
Capital 
Losses
Number of SecuritiesFair
Value
Unrealized
Capital 
Losses
Number of SecuritiesFair
Value
Unrealized
Capital 
Losses
Number of Securities
U.S. TreasuriesU.S. Treasuries$68 $$12 $*$80 $U.S. Treasuries$$— $— $— — $$— 
U.S. Government, agencies and authorities18 *18 *
State, municipalities and political subdivisionsState, municipalities and political subdivisions21 *21 *State, municipalities and political subdivisions— — — — — 
U.S. corporate public securitiesU.S. corporate public securities97 131 10 228 13 U.S. corporate public securities199 182 22 221 186 
U.S. corporate private securitiesU.S. corporate private securities75 *134 16 209 16 U.S. corporate private securities316 10 29 71 17 387 27 36 
Foreign corporate public securities and foreign governmentsForeign corporate public securities and foreign governments*53 59 Foreign corporate public securities and foreign governments32 22 — 38 24 
Foreign corporate private securitiesForeign corporate private securities21 *56 77 Foreign corporate private securities176 25 20 — 179 25 21 
Residential mortgage-backedResidential mortgage-backed535 139 674 11 Residential mortgage-backed613 11 134 119 54 732 15 188 
Commercial mortgage-backedCommercial mortgage-backed331 18 *349 Commercial mortgage-backed579 25 105 33 612 26 112 
Other asset-backedOther asset-backed217 500 11 717 13 Other asset-backed206 59 265 88 471 147 
TotalTotal$1,389 $17 $1,043 $46 $2,432 $63 Total$2,134 $78 555 $519 $29 163 $2,653 $107 718 
Total number of securities in an unrealized loss position289 278 567 
*Less than $1.

Based on the Company's quarterly evaluation of its securities in a unrealized loss position, described below, the Company concluded that these securities were not impaired as of December 31, 2020.2021. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases. See the Business, Basis of Presentation and Significant Accounting Policies Note to these Consolidated Financial Statements for the policy used to evaluate whether the investments are impaired.

Gross unrealized capital losses on fixed maturities, including securities pledged, increased $44$4 from $63$107 to $107$111 for the year ended December 31, 2020.2021. The increasechange in gross unrealized capital losses was primarily due to higher interest rates in the longerfront end of the yield curve. As of December 31, 2020, $52021, $4 of the total $107$111 of gross unrealized losses were from 34 available-for-sale fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for 12 months or greater.

Evaluating Securities for Impairments

The Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, including fixed maturity securities in accordance with its impairment policy in order to evaluate whether such investments are impaired.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The following table identifies the Company's impairments included in the Consolidated Statements of Operations, excluding impairments included in Other comprehensive income (loss) by type for the periods indicated:
Year Ended December 31,Year Ended December 31,
202020192018202120202019
ImpairmentNo. of SecuritiesImpairmentNo. of SecuritiesImpairmentNo. of SecuritiesImpairmentNo. of SecuritiesImpairmentNo. of SecuritiesImpairmentNo. of Securities
State municipalities, and political subdivisionsState municipalities, and political subdivisions$$*$State municipalities, and political subdivisions$— — $— *$— *
U.S. corporate public securitiesU.S. corporate public securities12 43 11 25 U.S. corporate public securities— — 12 43 11 25 
U.S. corporate private securitiesU.S. corporate private securities16 U.S. corporate private securities— — — *16 
Foreign corporate public securities and foreign governments(1)
Foreign corporate public securities and foreign governments(1)
22 15 
Foreign corporate public securities and foreign governments(1)
— — 22 15 
Foreign corporate private securities(1)
Foreign corporate private securities(1)
18 11 
Foreign corporate private securities(1)
00— *18 11 
Residential mortgage-backedResidential mortgage-backed44 71 58 Residential mortgage-backed13 44 71 
Commercial mortgage-backedCommercial mortgage-backed20 106 *18 *Commercial mortgage-backed— *20 106 — *18 
Other asset-backedOther asset-backed61 73 *Other asset-backed— — 61 73 
TotalTotal$37 291 $40 235 $20 66 Total$14 $37 291 $40 235 
Credit Impairments$$20 $14 
Intent Impairments$37 $20 $
(1) Primarily U.S. dollar denominated.
(1) Primarily U.S. dollar denominated.
(1) Primarily U.S. dollar denominated.
*Less than $1.

The Company may sell securities during the period in which fair value has declined below amortized cost for fixed maturities. In certain situations, new factors, including changes in the business environment, can change the Company's previous intent to continue holding a security. Accordingly, these factors may lead the Company to record additional intent related capital losses.

For the year ended December 31, 2020 intent impairments in the amount of $26 were recorded on assets designated to be included in the reinsurance agreement associated with the Individual Life Transaction.

Troubled Debt Restructuring

The Company invests in high quality, well performing portfolios of commercial mortgage loans and private placements. Under certain circumstances, modifications are granted to these contracts. Each modification is evaluated as to whether a troubled debt restructuring has occurred. A modification is a troubled debt restructuring when the borrower is in financial difficulty and the creditor makes concessions. Generally, the types of concessions may include reducing the face amount or maturity amount of the debt as originally stated, reducing the contractual interest rate, extending the maturity date at an interest rate lower than current market interest rates and/or reducing accrued interest. The Company considers the amount, timing and extent of the concession granted in determining any impairment or changes in the specific valuationcredit allowance recorded in connection with the troubled debt restructuring. A valuationcredit allowance may have been recorded prior to the quarter when the loan is modified in a troubled debt restructuring. Accordingly, the carrying value (net of the specific valuation allowance) before and after modification through a troubled debt restructuring may not change significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. For the year ended December 31, 2021, the Company did not have any new commercial mortgage loan troubled debt restructurings or new private placement troubled debt restructurings. As of December 31, 2020, the Company had 8 new commercial mortgage loan troubled debt restructurings with a pre-modification carrying value and post-modification carrying value of $45. For the year ended December 31, 2020, the Company had 0no new private placement troubled debt restructuring. As ofrestructurings.

For the years ended December 31, 2019,2021 and 2020, the Company had 1 commercial mortgage loandid not have any private placements modified in a troubled debt restructuring and had 1 private placementwith a subsequent payment default or commercial mortgage loans modified in a troubled debt restructuring.restructuring with a subsequent payment default.

9692

Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
As of December 31, 2020 and 2019, the Company did 0t have any private placements modified in a troubled debt restructuring with a subsequent payment default. As of December 31, 2020, the Company had 0 commercial mortgage loans modified in a troubled debt restructuring with a subsequent payment default. As of December 31, 2019, the Company had 1 commercial mortgage loan modified in a troubled debt restructuring with a subsequent payment default.

Mortgage Loans on Real Estate

The Company diversifies its commercial mortgage loan portfolio by geographic region and property type to reduce concentration risk. The Company manages risk when originating commercial mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate. Subsequently, the Company continuously evaluates mortgage loans based on relevant current information including a review of loan-specific credit quality,performance, property characteristics and market trends. Loan performance is monitored on a loan specific basis through the review of submitted appraisals, operating statements, rent revenues and annual inspection reports, among other items. This review ensures properties are performing at a consistent and acceptable level to secure the debt. The components to evaluate debt service coverage are received and reviewed at least annually to determine the level of risk.
Loan-to-value ("LTV") and debt service coverage ("DSC") ratios are measures commonly used to assess the risk and quality of 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. A LTV ratio in excess of 100% indicates the unpaid loan amount exceeds 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 to its debt service payments. A DSC ratio of less than 1.0 indicates that a property’s operations do not generate sufficient income to cover debt payments. These ratios are utilized as part of the review process described above.

The following tables present commercial mortgage loans by year of origination and LTV ratio as of the dates indicated. The information is updated as of December 31, 2021 and 2020, respectively.
















As of December 31, 2021
Loan-to-Value Ratios
Year of Origination0% - 50%>50% - 60%>60% - 70%>70% - 80%>80% and aboveTotal
2021$215 $273 $182 $— $— $670 
2020114 202 69 — — 385 
2019150 145 61 — — 356 
2018127 43 — — 173 
2017543 202 — — 748 
2016290 227 — — 518 
2015 and prior1,161 207 15 — — 1,383 
Total$2,600 $1,299 $334 $— $— $4,233 
As of December 31, 2020
Loan-to-Value Ratios
Year of Origination0% - 50%>50% - 60%>60% - 70%>70% - 80%>80% and aboveTotal
2020$164 $206 $39 $— $— $409 
2019209 165 107 — — 481 
2018124 91 73 — — 288 
2017499 356 — — 861 
2016399 275 — — 675 
2015 and prior1,574 391 15 — — 1,980 
Total$2,969 $1,484 $241 $— $— $4,694 

97

Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The following tables present commercial mortgage loans by year of origination and LTV ratio as of the dates indicated.
As of December 31, 2020
Loan-to-Value Ratios
Year of Origination0% - 50%>50% - 60%>60% - 70%>70% - 80%>80% and aboveTotal
2020$164 $206 $39 $$$409 
2019209 165 107 481 
2018124 91 73 288 
2017499 356 861 
2016399 275 675 
2015407 68 475 
2014 and prior1,167 323 15 1,505 
Total$2,969 $1,484 $241 $$$4,694 
As of December 31, 2019
Loan-to-Value Ratios
Year of Origination0% - 50%>50% - 60%>60% - 70%>70% - 80%>80% and aboveTotal
201985 96 145 170 26 522 
201888 110 133 14 349 
2017101 244 566 13 10 934 
201646 150 470 31 697 
201510 343 168 529 
2014 and prior134 252 1,093 154 1,633 
Total$380 $1,173 $2,552 $509 $50 $4,664 













9893

Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The following tables present commercial mortgage loans by year of origination and DSC ratio as of the dates indicated. The information is updated as of December 31, 2021 and 2020, respectively.
As of December 31, 2020
Debt Service Coverage Ratios
Year of Origination>1.5x>1.25x - 1.5x>1.0x - 1.25x<1.0xCommercial mortgage loans secured by land or construction loansTotal
2020$298 $93 $18 $$$409 
2019319 77 36 49 481 
2018102 79 60 47 288 
2017494 204 103 60 861 
2016591 53 31 675 
2015445 23 475 
2014 and prior1,231 155 72 47 1,505 
Total$3,480 $684 $320 $210 $$4,694 
As of December 31, 2019
Debt Service Coverage Ratios
Year of Origination>1.5x>1.25x - 1.5x>1.0x - 1.25x<1.0xCommercial mortgage loans secured by land or construction loansTotal
2019353 127 42 522 
2018236 60 50 349 
2017481 238 133 82 934 
2016615 59 23 697 
2015492 32 529 
2014 and prior1,358 128 88 59 1,633 
Total$3,535 $587 $346 $196 $$4,664 

As of December 31, 2021
Debt Service Coverage Ratios
Year of Origination>1.5x>1.25x - 1.5x>1.0x - 1.25x<1.0xCommercial mortgage loans secured by land or construction loansTotal
2021$556 $23 $34 $57 $— $670 
2020342 15 23 — 385 
2019206 43 84 23 — 356 
201896 49 25 — 173 
2017355 139 93 161 — 748 
2016440 17 44 17 — 518 
2015 and prior1,065 137 122 59 — 1,383 
Total$3,060 $377 $449 $347 $— $4,233 
As of December 31, 2020
Debt Service Coverage Ratios
Year of Origination>1.5x>1.25x - 1.5x>1.0x - 1.25x<1.0xCommercial mortgage loans secured by land or construction loansTotal
2020$298 $93 $18 $— $— $409 
2019319 77 36 49 — 481 
2018102 79 60 47 — 288 
2017494 204 103 60 — 861 
2016591 53 31 — — 675 
2015 and prior1,676 178 72 54 — 1,980 
Total$3,480 $684 $320 $210 $— $4,694 







9994

Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The following tables present the commercial mortgage loans by year of origination and U.S. region as of the dates indicated. The information is updated as of December 31, 2021 and 2020, respectively.
As of December 31, 2020
U.S. Region
Year of OriginationPacificSouth AtlanticMiddle AtlanticWest South CentralMountainEast North CentralNew EnglandWest North CentralEast South CentralTotal
2020$84 $159 $35 $37 $32 $29 $$12 $20 $409 
201963 122 11 137 54 39 17 11 27 481 
201849 98 57 34 26 11 013 288 
201799 98 352 136 74 60 37 861 
2016156 127 180 32 72 72 21 675 
2015109 133 100 30 42 48 475 
2014 and prior417 290 226 111 156 132 40 104 29 1,505 
Total$977 $1,027 $961 $517 $456 $391 $81 $202 $82 $4,694 
As of December 31, 2019
U.S. Region
Year of OriginationPacificSouth AtlanticMiddle AtlanticWest South CentralMountainEast North CentralNew EnglandWest North CentralEast South CentralTotal
201963 127 26 155 53 43 18 11 26 522 
201850 132 60 43 26 11 12 15 349 
2017103 99 396 151 77 60 43 934 
2016158 132 187 32 75 77 21 697 
2015125 160 103 34 43 50 10 529 
2014 and prior445 316 247 122 168 142 42 121 30 1,633 
Total$944 $966 $1,019 $537 $442 $383 $84 $212 $77 $4,664 

As of December 31, 2021
U.S. Region
Year of OriginationPacificSouth AtlanticMiddle AtlanticWest South CentralMountainEast North CentralNew EnglandWest North CentralEast South CentralTotal
2021$79 $58 $120 $132 $96 $118 $$36 $22 $670 
202070 159 25 33 34 30 12 21 385 
201948 106 10 103 34 12 15 11 17 356 
201832 60 53 — — 173 
201787 82 311 129 44 55 36 — 748 
201674 120 162 28 44 63 14 518 
2015 and prior364 317 252 64 135 102 45 85 19 1,383 
Total$754 $902 $933 $497 $393 $389 $81 $199 $85 $4,233 
As of December 31, 2020
U.S. Region
Year of OriginationPacificSouth AtlanticMiddle AtlanticWest South CentralMountainEast North CentralNew EnglandWest North CentralEast South CentralTotal
2020$84 $159 $35 $37 $32 $29 $$12 $20 $409 
201963 122 11 137 54 39 17 11 27 481 
201849 98 57 34 26 11 — 13 — 288 
201799 98 352 136 74 60 37 — 861 
2016156 127 180 32 72 72 21 675 
2015 and prior526 423 326 141 198 180 49 108 29 1,980 
Total$977 $1,027 $961 $517 $456 $391 $81 $202 $82 $4,694 




















10095

Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The following tables present the commercial mortgage loans by year of origination and property type as of the dates indicated. The information is updated as of December 31, 2021 and 2020, respectively.
As of December 31, 2020
Property Type
Year of OriginationRetailIndustrialApartmentsOfficeHotel/MotelOtherMixed UseTotal
2020$51 $73 $141 $144 $$$$409 
201932 73 283 71 22 481 
201849 78 124 17 17 288 
2017102 415 204 136 861 
2016129 244 138 144 675 
2015121 180 65 51 17 41 475 
2014 and prior671 125 273 210 62 125 39 1,505 
Total$1,155 $1,188 $1,228 $773 $117 $190 $43 $4,694 
As of December 31, 2019
Property Type
Year of OriginationRetailIndustrialApartmentsOfficeHotel/MotelOtherMixed UseTotal
201933 90 299 81 19 522 
201852 91 152 32 18 349 
2017104 461 218 147 934 
2016131 254 147 146 697 
2015148 185 69 62 23 42 529 
2014 and prior730 135 300 229 69 130 40 1,633 
Total$1,198 $1,216 $1,185 $697 $127 $197 $44 $4,664 

As of December 31, 2021
Property Type
Year of OriginationRetailIndustrialApartmentsOfficeHotel/MotelOtherMixed UseTotal
2021$24 $159 $368 $104 $— $$$670 
202051 72 124 138 — — — 385 
201930 66 173 67 20 — — 356 
201835 72 31 15 17 — 173 
201790 355 184 116 — — 748 
2016103 212 68 127 — 518 
2015 and prior528 196 267 153 63 139 37 1,383 
Total$861 $1,132 $1,215 $720 $89 $168 $48 $4,233 
As of December 31, 2020
Property Type
Year of OriginationRetailIndustrialApartmentsOfficeHotel/MotelOtherMixed UseTotal
2020$51 $73 $141 $144 $— $— $— $409 
201932 73 283 71 22 — — 481 
201849 78 124 17 17 — 288 
2017102 415 204 136 — — 861 
2016129 244 138 144 675 
2015 and prior792 305 338 261 79 166 39 1,980 
Total$1,155 $1,188 $1,228 $773 $117 $190 $43 $4,694 

The following table summarizes the activity in the allowance for losses for commercial mortgage loans for the periods indicated:
2020December 31, 2021December 31, 2020
Allowance for credit losses, balance at January 1Allowance for credit losses, balance at January 1$12 (1)Allowance for credit losses, balance at January 1$67 $12 (1)
Credit losses on mortgage loans for which credit losses were not previously recordedCredit losses on mortgage loans for which credit losses were not previously recordedCredit losses on mortgage loans for which credit losses were not previously recorded
Change in allowance due to transfer of loans from Voya Reinsurance
portfolios to Resolution
Change in allowance due to transfer of loans from Voya Reinsurance
portfolios to Resolution
(7)— 
Increase (decrease) on mortgage loans with allowance recorded in previous periodIncrease (decrease) on mortgage loans with allowance recorded in previous period52 Increase (decrease) on mortgage loans with allowance recorded in previous period(50)52 
Provision for expected credit lossesProvision for expected credit losses69 Provision for expected credit losses11 69 
Write-offsWrite-offs(2)Write-offs— (2)
Recoveries of amounts previously written-offRecoveries of amounts previously written-offRecoveries of amounts previously written-off— — 
Allowance for credit losses, balance at December 31Allowance for credit losses, balance at December 31$67 Allowance for credit losses, balance at December 31$11 $67 
(1) On January 1, 2020, as a result of implementing ASU 2016-13 Measurement of Credit Losses of Financial Instruments, the Company recorded a transition adjustment on a continuing basis for Allowance for credit losses on mortgage loans on real estate of $12.

While still heavily impacted by COVID-19, the Commercial Mortgage Loan portfolio allowance increased by $28 during the fourth quarter as certain sectors of the economy resumed operations, albeit at lower than pre-pandemic levels. We continue to observe distress in the hotel sector.

10196

Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
To provide temporary financial assistance to our commercial mortgage loans borrowers adversely affected by COVID-19 related stress, the Company has provided payment forbearance to approximately 7% of the outstanding principal amount of our commercial mortgage loans. Deferred payment amounts are expected to be repaid across the 12 months following the end of the agreed upon forbearance period. No modifications to any commercial mortgage loans have been made as of the issuance date of this filing.

The following table presents past due commercial mortgage loans as of the dates indicated:
December 31, 2020December 31, 2019December 31, 2021December 31, 2020
Delinquency:Delinquency:Delinquency:
CurrentCurrent$4,691 $4,664 Current$4,233 $4,691 
30-59 days past due30-59 days past due30-59 days past due— — 
60-89 days past due60-89 days past due60-89 days past due— — 
Greater than 90 days past dueGreater than 90 days past dueGreater than 90 days past due— 
TotalTotal$4,694 $4,664 Total$4,233 $4,694 

Commercial mortgage loans are placed on non-accrual status when 90 days in arrears if the Company has concerns regarding the collectability of future payments, or if a loan has matured without being paid off or extended. As of December 31, 2021, the Company had no commercial mortgage loan in non-accrual status. As of December 31, 2020, the Company had 1 commercial mortgage loans in non-accrual status. As of December 31, 2019, the Company had 0 commercial mortgage loansloan in non-accrual status. There was 0no interest income recognized on loans in non-accrual status for the years ended December 31, 20202021 and December 31, 2019.

As of December 31, 2020 and December 31, 2019, the Company had 0 commercial mortgage loans that were over 90 days or more past due but are not on non-accrual status. The Company had 0 commercial mortgage loans on non-accrual status for which there is no related allowance for credit losses as of December 31, 2020.

Net Investment Income

The following table summarizes Net investment income for the periods indicated:
Year Ended December 31,Year Ended December 31,
202020192018202120202019
Fixed maturitiesFixed maturities$1,603 $1,432 $1,363 Fixed maturities$1,453 $1,603 $1,432 
Equity securitiesEquity securitiesEquity securities12 
Mortgage loans on real estateMortgage loans on real estate200 224 220 Mortgage loans on real estate179 200 224 
Policy loansPolicy loans12 Policy loans12 
Short-term investments and cash equivalentsShort-term investments and cash equivalentsShort-term investments and cash equivalents
Other107 91 95 
Limited partnerships and otherLimited partnerships and other364 107 91 
Gross investment incomeGross investment income1,933 1,763 1,695 Gross investment income2,019 1,933 1,763 
Less: investment expensesLess: investment expenses75 74 72 Less: investment expenses70 75 74 
Net investment incomeNet investment income$1,858 $1,689 $1,623 Net investment income$1,949 $1,858 $1,689 

As of December 31, 2020 and 2019,2021, the Company had no investments in fixed maturities that did not produce net investment income. For the year ended December 31, 2020, the Company had $1 and $0, respectively, of investments in fixed maturities that did not produce net investment income. Fixed maturities are moved to a non-accrual status when the investment defaults.

Interest income on fixed maturities is recorded when earned using an effective yield method, giving effect to amortization of premiums and accretion of discounts. Such interest income is recorded in Net investment income in the Consolidated Statements of Operations.

Net Gains (Losses)

Net gains (losses) comprise the difference between the amortized cost of investments and proceeds from sale and redemption, as well as losses incurred due to the credit-related and intent-related impairment of investments. Net gains and losses are also primarily generated from changes in fair value of embedded derivatives within products and fixed maturities, changes in fair value of fixed maturities recorded at FVO and changes in fair value including accruals on derivative instruments, except for effective cash flow hedges. Net gains (losses) also include changes in fair value of trading debt securities and changes in fair value of equity securities. The cost of the investments on disposal is generally determined based on first-in-first-out ("FIFO") methodology.

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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Net Realized Capital Gains (Losses)

Net realized capital gains (losses) comprise the difference between the amortized cost of investments and proceeds from sale and redemption, as well as losses incurred due to the credit-related and intent-related impairment of investments. Realized investment gains and losses are also primarily generated from changes in fair value of embedded derivatives within products and fixed maturities, changes in fair value of fixed maturities recorded at FVO and changes in fair value including accruals on derivative instruments, except for effective cash flow hedges. Net realized capital gains (losses) also include changes in fair value of equity securities. The cost of the investments on disposal is generally determined based on first-in-first-out ("FIFO") methodology.

Net realized capital gains (losses) were as follows for the periods indicated:
Year Ended December 31,Year Ended December 31,
202020192018202120202019
Fixed maturities, available-for-sale, including securities pledgedFixed maturities, available-for-sale, including securities pledged$(23)$11 $(69)Fixed maturities, available-for-sale, including securities pledged$515 $(23)$11 
Fixed maturities, at fair value optionFixed maturities, at fair value option(257)(47)(227)Fixed maturities, at fair value option(562)(257)(47)
Equity securities(16)(4)
Equity securities, at fair valueEquity securities, at fair value(16)
DerivativesDerivatives49 (82)(36)Derivatives(18)49 (82)
Embedded derivatives - fixed maturitiesEmbedded derivatives - fixed maturities(4)Embedded derivatives - fixed maturities(4)— 
Guaranteed benefit derivativesGuaranteed benefit derivatives(27)(11)94 Guaranteed benefit derivatives35 (27)(11)
Mortgage Loans(56)
Mortgage loansMortgage loans99 (56)— 
Other investmentsOther investments(1)Other investments95 (1)
Net realized capital gains (losses)$(310)$(144)$(242)
Net gains (losses)Net gains (losses)$166 $(310)$(144)

On June 1, 2021, the Company fully disposed of a 9.99% equity interest in VA Capital which was originally acquired as part of a Master Transaction Agreement dated December 20, 2017, related to the sale of substantially all of our Closed Block Variable Annuity (CBVA) and Annuity business. The disposition resulted in a net realized gain of $95 reported as Other net gains (losses) in the Consolidated Statements of Operations.

Proceeds from the sale of fixed maturities, available-for-sale, and equity securities and the related gross realized gains and losses, before tax were as follows for the periods indicated:
Year Ended December 31,Year Ended December 31,
202020192018202120202019
Proceeds on salesProceeds on sales$1,512 $2,418 $2,498 Proceeds on sales$5,275 $1,512 $2,418 
Gross gainsGross gains85 30 14 Gross gains538 85 30 
Gross lossesGross losses59 25 50 Gross losses59 25 
10398

Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
3.    Derivative Financial Instruments

The Company primarily enters into the following types of derivatives:

Interest rate swaps: Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and/or liabilities. Interest rate swaps are also used to hedge the interest rate risk associated with the value of assets it owns or in an anticipation of acquiring them. Using interest rate swaps, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest payments, calculated by reference to an agreed upon notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made to/from the counterparty at each due date. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships.

Foreign exchange swaps: The Company uses foreign exchange or currency swaps to reduce the risk of change in the value, yield or cash flows associated with certain foreign denominated invested assets. Foreign exchange swaps represent contracts that require the exchange of foreign currency cash flows against U.S. dollar cash flows at regular periods, typically quarterly or semi-annually. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships.

Futures: The Company uses interest rate futures contracts to hedge its exposure to market risks due to changes in interest rates. The Company enters into exchange traded futures with regulated futures commissions that are members of the exchange. The Company also posts initial and variation margins, with the exchange, on a daily basis. The Company utilizes exchange-traded futures in non-qualifying hedging relationships. The Company may also use futures contracts as a hedge against an increase in certain equity indices.
.
Managed custody guarantees ("MCGs"): The Company issues certain credited rate guarantees on variable fixed income portfolios that represent stand-alone derivatives. The market value is partially determined by, among other things, levels of or changes in interest rates, prepayment rates and credit ratings/spreads.

Embedded derivatives: The Company also invests in certain fixed maturity instruments and has issued certain products that contain embedded derivatives for which market value is at least partially determined by, among other things, levels of or changes in domestic and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates, equity rates, or credit ratings/spreads. In addition, the Company has entered into coinsurance with funds withheld arrangements, which contain embedded derivatives.

The Company's use of derivatives is limited mainly to economic hedging to reduce the Company's exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk, exchange rate risk and equity market risk. It is the Company's policy not to offset amounts recognized for derivative instruments and amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement, which provides the Company with the legal right of offset. However, in accordance with the Chicago Mercantile Exchange ("CME") rules related to the variation margin payments, the Company is required to adjust the derivative balances with the variation margin payments related to its cleared derivatives executed through CME.

10499

Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The notional amounts and fair values of derivatives were as follows as of the dates indicated:
December 31, 2020December 31, 2019December 31, 2021December 31, 2020
Notional
Amount
Asset
Fair Value
Liability
Fair Value
Notional
Amount
Asset
Fair Value
Liability
Fair Value
Notional
Amount
Asset
Fair Value
Liability
Fair Value
Notional
Amount
Asset
Fair Value
Liability
Fair Value
Derivatives: Qualifying for hedge accounting(1)
Derivatives: Qualifying for hedge accounting(1)
Derivatives: Qualifying for hedge accounting(1)
Cash flow hedges:Cash flow hedges:Cash flow hedges:
Interest rate contractsInterest rate contracts$18 $$$23 $$Interest rate contracts$18 $— $— $18 $— $— 
Foreign exchange contractsForeign exchange contracts628 36 652 10 18 Foreign exchange contracts567 14 15 628 36 
Derivatives: Non-qualifying for hedge accounting(1)
Derivatives: Non-qualifying for hedge accounting(1)
Derivatives: Non-qualifying for hedge accounting(1)
Interest rate contractsInterest rate contracts14,155 137 171 18,640 210 261 Interest rate contracts10,514 135 129 14,155 137 171 
Foreign exchange contractsForeign exchange contracts83 54 Foreign exchange contracts34 — — 83 — 
Equity contractsEquity contracts55 63 Equity contracts— — — 55 
Credit contractsCredit contracts188 182 Credit contracts110 — — 188 — 
Embedded derivatives and Managed custody guarantees:Embedded derivatives and Managed custody guarantees:      Embedded derivatives and Managed custody guarantees:      
Within fixed maturity investmentsWithin fixed maturity investmentsN/A11 N/A11 Within fixed maturity investmentsN/A— N/A11 — 
Within productsWithin productsN/A59 N/A33 Within productsN/A— 28 N/A— 59 
Within reinsurance agreementsN/AN/A23 
Managed custody guaranteesManaged custody guaranteesN/AN/AManaged custody guaranteesN/A— N/A— 
TotalTotal$156 $279 $235 $341 Total$156 $173 $156 $279 
(1) Open derivative contracts are reported as Derivatives assets or liabilities on the Consolidated Balance Sheets at fair value.
N/A - Not Applicable

Based on the notional amounts, a substantial portion of the Company’s derivative positions was not designated or did not qualify for hedge accounting as part of a hedging relationship as of December 31, 20202021 and 2019.2020. The Company utilizes derivative contracts mainly to hedge exposure to variability in cash flows, interest rate risk, credit risk, foreign exchange risk and equity market risk. The majority of derivatives used by the Company are designated as product hedges, which hedge the exposure arising from insurance liabilities or guarantees embedded in the contracts the Company offers through various product lines. These derivatives do not qualify for hedge accounting as they do not meet the criteria of being "highly effective" as outlined in ASC Topic 815, but do provide an economic hedge, which is in line with the Company’s risk management objectives. The Company also uses derivatives contracts to hedge its exposure to various risks associated with the investment portfolio. The Company does not seek hedge accounting treatment for certain of these derivatives as they generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules outlined in ASC Topic 815. The Company also uses credit default swaps coupled with other investments in order to produce the investment characteristics of otherwise permissible investments that do not qualify as effective accounting hedges under ASC Topic 815.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Although the Company has not elected to net its derivative exposures, the notional amounts and fair values of Over-The-Counter ("OTC") and cleared derivatives excluding exchange traded contracts are presented in the tables below as of the dates indicated:
December 31, 2020December 31, 2021
Notional AmountAsset Fair ValueLiability Fair ValueNotional AmountAsset Fair ValueLiability Fair Value
Credit contractsCredit contracts$188 $$Credit contracts$110 $— $— 
Equity contractsEquity contracts55 Equity contracts— — — 
Foreign exchange contractsForeign exchange contracts711 39 Foreign exchange contracts601 14 15 
Interest rate contractsInterest rate contracts12,567 137 171 Interest rate contracts9,576 135 129 
145 216 149 144 
Counterparty netting(1)
Counterparty netting(1)
(141)(141)
Counterparty netting(1)
(140)(140)
Cash collateral netting(1)
Cash collateral netting(1)
(1)(43)
Cash collateral netting(1)
(7)(2)
Securities collateral netting(1)
Securities collateral netting(1)
(28)
Securities collateral netting(1)
(2)(1)
Net receivables/payablesNet receivables/payables$$Net receivables/payables$— $
(1)Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements.
December 31, 2019
Notional AmountAsset Fair ValueLiability Fair Value
Credit contracts$182 $$
Equity contracts63 
Foreign exchange contracts706 10 19 
Interest rate contracts17,621 210 261 
224 285 
Counterparty netting(1)
(217)(217)
Cash collateral netting(1)
(6)(58)
Securities collateral netting(1)
(5)
Net receivables/payables$$

December 31, 2020
Notional AmountAsset Fair ValueLiability Fair Value
Credit contracts$188 $— $
Equity contracts55 
Foreign exchange contracts711 39 
Interest rate contracts12,567 137 171 
145 216 
Counterparty netting(1)
(141)(141)
Cash collateral netting(1)
(1)(43)
Securities collateral netting(1)
— (28)
Net receivables/payables$$
(1)Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements.

Collateral

Under the terms of the OTC Derivative International Swaps and Derivatives Association, Inc. ("ISDA") agreements, the Company may receive from, or deliver to, counterparties, collateral to assure that terms of the ISDA agreements will be met with regard to the Credit Support Annex ("CSA"). The terms of the CSA call for the Company 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 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 the Company are the source of noncash collateral posted, which is reported in Securities pledged on the Consolidated Balance Sheets.

As of December 31, 2021, the Company held $8 and pledged $2 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. As of December 31, 2020, the Company held $5 and delivered $43 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. AsIn addition, as of December 31, 2019,2021, the Company delivered $60 of securities and held $7 and $55 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. In addition,$2 securities as collateral. As of December 31, 2020, the Company delivered $77 of securities and held 0 securities as collateral. As of December 31, 2019, the Company delivered $113 of securities and held 0no securities as collateral.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The location and effect of derivatives qualifying for hedge accounting on the Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income are as follows for the periodperiods indicated:

Year Ended December 31Year Ended December 31
20202019202120202019
Interest Rate ContractsForeign Exchange ContractsInterest Rate ContractsForeign Exchange ContractsInterest Rate ContractsForeign Exchange ContractsInterest Rate ContractsForeign Exchange ContractsInterest Rate ContractsForeign Exchange Contracts
Derivatives: Qualifying for hedge accountingDerivatives: Qualifying for hedge accountingDerivatives: Qualifying for hedge accounting
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into IncomeLocation of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into IncomeNet Investment IncomeNet Investment Income and Other Net Realized Capital Gains/(Losses)Net Investment IncomeNet Investment Income and Other Net Realized Capital Gains/(Losses)Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into IncomeNet investment incomeNet investment income and Other net gains/(losses)Net investment incomeNet investment income and Other net gains/(losses)Net investment incomeNet investment income and Other net gains/(losses)
Amount of Gain or (Loss) Recognized in Other Comprehensive IncomeAmount of Gain or (Loss) Recognized in Other Comprehensive Income$$(23)$$Amount of Gain or (Loss) Recognized in Other Comprehensive Income$(1)$33 $$(23)$$— 
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive IncomeAmount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income10 Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income— — — 10 

Interest Rate ContractsForeign Exchange Contracts
The location and amount of gain (loss) recognized in the Consolidated Statements of Operations for derivatives qualifying for
hedge accounting are as follows for the periodperiods indicated:
Year Ended December 31,Year Ended December 31,
20202019202120202019
Net Investment IncomeOther net realized capital gains/(losses)Net Investment IncomeOther net realized capital gains/(losses)Net investment incomeOther net gains/(losses)Net investment incomeOther net gains/(losses)Net investment incomeOther net gains/(losses)
Total amounts of line items presented in the statement of operations in which the effects of cash flow hedges are recordedTotal amounts of line items presented in the statement of operations in which the effects of cash flow hedges are recorded$1,858 $(273)$1,689 $(101)Total amounts of line items presented in the statement of operations in which the effects of cash flow hedges are recorded$1,949 $168 $1,858 $(273)1,689 (101)
Derivatives: Qualifying for hedge accountingDerivatives: Qualifying for hedge accountingDerivatives: Qualifying for hedge accounting
Cash flow hedges:Cash flow hedges:Cash flow hedges:
Foreign exchange contracts:Foreign exchange contracts:Foreign exchange contracts:
Gain (loss) reclassified from accumulated other comprehensive income into incomeGain (loss) reclassified from accumulated other comprehensive income into income10 (3)10 Gain (loss) reclassified from accumulated other comprehensive income into income(5)10 (3)10 — 

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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The location and effect of derivatives not designated as hedging instruments on the Consolidated Statements of Operations are as follows for the periods indicated:
Location of Gain or (Loss) Recognized in Income on DerivativeYear Ended December 31,Location of Gain or (Loss) Recognized in Income on DerivativeYear Ended December 31,
202020192018202120202019
Derivatives: Non-qualifying for hedge accountingDerivatives: Non-qualifying for hedge accountingDerivatives: Non-qualifying for hedge accounting
Interest rate contractsInterest rate contractsOther net realized capital gains (losses)$51 $(85)$(44)Interest rate contractsOther net gains (losses)$(16)$51 $(85)
Foreign exchange contractsForeign exchange contractsOther net realized capital gains (losses)(2)Foreign exchange contractsOther net gains (losses)(2)
Equity contractsEquity contractsOther net realized capital gains (losses)Equity contractsOther net gains (losses)— — 
Credit contractsCredit contractsOther net realized capital gains (losses)(1)Credit contractsOther net gains (losses)
Embedded derivatives and Managed custody guarantees:Embedded derivatives and Managed custody guarantees:Embedded derivatives and Managed custody guarantees:
Within fixed maturity investmentsWithin fixed maturity investmentsOther net realized capital gains (losses)(4)Within fixed maturity investmentsOther net gains (losses)(4)— 
Within productsWithin productsOther net realized capital gains (losses)(23)(11)94 Within productsOther net gains (losses)31 (23)(11)
Within reinsurance agreementsWithin reinsurance agreementsPolicyholder benefits23 (102)58 Within reinsurance agreementsPolicyholder benefits— 23 (102)
Managed custody guaranteesManaged custody guaranteesOther net realized capital gains (losses)(4)Managed custody guaranteesOther net gains (losses)(4)— 
TotalTotal$48 $(193)$104 Total$18 $48 $(193)

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
4.    Fair Value Measurements

The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2020:2021:
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:Assets:Assets:
Fixed maturities, including securities pledged:Fixed maturities, including securities pledged:Fixed maturities, including securities pledged:
U.S. TreasuriesU.S. Treasuries$548 $173 $$721 U.S. Treasuries$510 $181 $— $691 
U.S. Government agencies and authoritiesU.S. Government agencies and authorities19 19 U.S. Government agencies and authorities— 20 — 20 
State, municipalities and political subdivisionsState, municipalities and political subdivisions814 814 State, municipalities and political subdivisions— 803 — 803 
U.S. corporate public securitiesU.S. corporate public securities9,099 57 9,156 U.S. corporate public securities— 8,264 8,269 
U.S. corporate private securitiesU.S. corporate private securities3,093 1,286 4,379 U.S. corporate private securities— 2,560 1,379 3,939 
Foreign corporate public securities and foreign governments(1)
Foreign corporate public securities and foreign governments(1)
2,951 2,951 
Foreign corporate public securities and foreign governments(1)
— 2,591 — 2,591 
Foreign corporate private securities (1)
Foreign corporate private securities (1)
3,008 295 3,303 
Foreign corporate private securities (1)
— 2,431 272 2,703 
Residential mortgage-backed securitiesResidential mortgage-backed securities4,204 33 4,237 Residential mortgage-backed securities— 3,130 34 3,164 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities2,893 2,893 Commercial mortgage-backed securities— 2,881 — 2,881 
Other asset-backed securitiesOther asset-backed securities1,483 37 1,520 Other asset-backed securities— 1,318 33 1,351 
Total fixed maturities, including securities pledgedTotal fixed maturities, including securities pledged548 27,737 1,708 29,993 Total fixed maturities, including securities pledged510 24,179 1,723 26,412 
Equity securitiesEquity securities17 99 116 Equity securities27 — 114 141 
Derivatives:Derivatives:Derivatives:
Interest rate contractsInterest rate contracts130 137 Interest rate contracts— 135 — 135 
Foreign exchange contractsForeign exchange contractsForeign exchange contracts— 14 — 14 
Equity contractsEquity contractsEquity contracts— — — — 
Credit contractsCredit contracts— — — — 
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreementsCash and cash equivalents, short-term investments and short-term investments under securities loan agreements610 16 626 Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements1,244 — — 1,244 
Assets held in separate accountsAssets held in separate accounts81,096 6,001 222 87,319 Assets held in separate accounts91,474 5,174 316 96,964 
Total assetsTotal assets$82,278 $33,892 $2,029 $118,199 Total assets$93,255 $29,502 $2,153 $124,910 
Percentage of Level to totalPercentage of Level to total69 %29 %%100 %Percentage of Level to total74 %24 %%100 %
Liabilities:Liabilities:Liabilities:
Derivatives:Derivatives:Derivatives:
Guaranteed benefit derivatives:Guaranteed benefit derivatives:Guaranteed benefit derivatives:
FIAFIA$$$10 $10 FIA$— $— $$
Stabilizer and MCGsStabilizer and MCGs53 53 Stabilizer and MCGs— — 20 20 
Other derivatives:Other derivatives:Other derivatives:
Interest rate contractsInterest rate contracts171 171 Interest rate contracts— 129 — 129 
Foreign exchange contractsForeign exchange contracts39 39 Foreign exchange contracts— 15 — 15 
Equity contractsEquity contractsEquity contracts— — — — 
Credit contractsCredit contractsCredit contracts— — — — 
Embedded derivative on reinsurance
Total liabilitiesTotal liabilities$$216 $63 $279 Total liabilities$— $144 $29 $173 
(1) Primarily U.S. dollar denominated.



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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as
of December 31, 2019:2020:
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:Assets:Assets:
Fixed maturities, including securities pledged:Fixed maturities, including securities pledged:Fixed maturities, including securities pledged:
U.S. TreasuriesU.S. Treasuries$536 $155 $$691 U.S. Treasuries$548 $173 $— $721 
U.S. Government agencies and authoritiesU.S. Government agencies and authorities19 19 U.S. Government agencies and authorities— 19 — 19 
State, municipalities and political subdivisionsState, municipalities and political subdivisions815 815 State, municipalities and political subdivisions— 814 — 814 
U.S. corporate public securitiesU.S. corporate public securities7,984 47 8,031 U.S. corporate public securities— 9,099 57 9,156 
U.S. corporate private securitiesU.S. corporate private securities3,064 1,002 4,066 U.S. corporate private securities— 3,093 1,286 4,379 
Foreign corporate public securities and foreign governments(1)
Foreign corporate public securities and foreign governments(1)
2,679 2,679 
Foreign corporate public securities and foreign governments(1)
— 2,951 — 2,951 
Foreign corporate private securities (1)
Foreign corporate private securities (1)
3,185 190 3,375 
Foreign corporate private securities (1)
— 3,008 295 3,303 
Residential mortgage-backed securitiesResidential mortgage-backed securities3,794 16 3,810 Residential mortgage-backed securities— 4,204 33 4,237 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities2,500 2,500 Commercial mortgage-backed securities— 2,893 — 2,893 
Other asset-backed securitiesOther asset-backed securities1,426 48 1,474 Other asset-backed securities— 1,483 37 1,520 
Total fixed maturities, including securities pledgedTotal fixed maturities, including securities pledged536 25,621 1,303 27,460 Total fixed maturities, including securities pledged548 27,737 1,708 29,993 
Equity securities, available-for-sale17 63 80 
Equity securitiesEquity securities17 — 99 116 
Derivatives:Derivatives:Derivatives:
Interest rate contractsInterest rate contracts209 210 Interest rate contracts130 — 137 
Foreign exchange contractsForeign exchange contracts10 10 Foreign exchange contracts— — 
Equity contractsEquity contractsEquity contracts— — 
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreementsCash and cash equivalents, short-term investments and short-term investments under securities loan agreements1,429 1,429 Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements610 16 — 626 
Assets held in separate accountsAssets held in separate accounts72,448 6,150 115 78,713 Assets held in separate accounts81,096 6,001 222 87,319 
Total assetsTotal assets$74,431 $31,994 $1,481 $107,906 Total assets$82,278 $33,892 $2,029 $118,199 
Percentage of Level to totalPercentage of Level to total69 %30 %%100 %Percentage of Level to total69 %29 %%100 %
Liabilities:Liabilities:Liabilities:
Derivatives:Derivatives:Derivatives:
Guaranteed benefit derivatives:Guaranteed benefit derivatives:Guaranteed benefit derivatives:
FIAFIA$$$11 $11 FIA$— $— $10 $10 
Stabilizer and MCGsStabilizer and MCGs22 22 Stabilizer and MCGs— — 53 53 
Other derivatives:Other derivatives:Other derivatives:
Interest rate contractsInterest rate contracts261 261 Interest rate contracts— 171 — 171 
Foreign exchange contractsForeign exchange contracts19 19 Foreign exchange contracts— 39 — 39 
Equity contractsEquity contractsEquity contracts— — 
Credit contractsCredit contractsCredit contracts— — 
Embedded derivative on reinsurance23 23 
Total liabilitiesTotal liabilities$$308 $33 $341 Total liabilities$— $216 $63 $279 
(1) Primarily U.S. dollar denominated.

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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Valuation of Financial Assets and Liabilities at Fair Value

Certain assets and liabilities are measured at estimated fair value on the Company's Consolidated Balance Sheets. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The exit price and the transaction (or entry) price will be the same at initial recognition in many circumstances. However, in certain cases, the transaction price may not represent fair value. The fair value of a liability is based on the amount that would be paid to transfer a liability to a third-party with an equal credit standing. Fair value is required to be a market-based measurement that is determined based on a hypothetical transaction at the measurement date, from a market participant's perspective. The Company considers three broad valuation approaches when a quoted price is unavailable: (i) the market approach, (ii) the income approach and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given the instrument being measured and the availability of sufficient inputs. The Company prioritizes the inputs to fair valuation approaches and allows for the use of unobservable inputs to the extent that observable inputs are not available.

The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of exit price and the fair value hierarchy as prescribed in ASC Topic 820. Valuations are obtained from third-party commercial pricing services, brokers and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from third-party commercial pricing services are non-binding. The Company reviews the assumptions and inputs used by third-party commercial pricing services for each reporting period in order to determine an appropriate fair value hierarchy level. The documentation and analysis obtained from third-party commercial pricing services are reviewed by the Company, including in-depth validation procedures confirming the observability of inputs. The valuations are reviewed and validated monthly through the internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades or monitoring of trading volumes.

The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy are presented below.

For fixed maturities classified as Level 2 assets, fair values are determined using a matrix-based market approach, based on prices obtained from third-party commercial pricing services and the Company’s matrix and analytics-based pricing models, which in each case incorporate a variety of market observable information as valuation inputs. The market observable inputs used for these fair value measurements, by fixed maturity asset class, are as follows:

U.S. Treasuries: Fair value is determined using third-party commercial pricing services, with the primary inputs being stripped interest and principal U.S. Treasury yield curves that represent a U.S. Treasury zero-coupon curve.

U.S. government agencies and authorities, State, municipalities and political subdivisions: Fair value is determined using third-party commercial pricing services, with the primary inputs being U.S. Treasury yield curves, trades of comparable securities, credit spreads off benchmark yields and issuer ratings.

U.S. corporate public securities, Foreign corporate public securities and foreign governments: Fair value is determined using third-party commercial pricing services, with the primary inputs being benchmark yields, trades of comparable securities, issuer ratings, bids and credit spreads off benchmark yields.

U.S. corporate private securities and Foreign corporate private securities: Fair values are determined using a matrix and analytics-based pricing model. The model incorporates the current level of risk-free interest rates, current corporate credit spreads, credit quality of the issuer and cash flow characteristics of the security. The model also considers a liquidity spread, the value of any collateral, the capital structure of the issuer, the presence of guarantees, and prices and quotes for comparably rated publicly traded securities.

RMBS, CMBS and ABS: Fair value is determined using third-party commercial pricing services, with the primary inputs being credit spreads off benchmark yields, prepayment speed assumptions, current and forecasted loss severity, debt service coverage ratios, collateral type, payment priority within tranche and the vintage of the loans underlying the security.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
RMBS, CMBS and ABS: Fair value is determined using third-party commercial pricing services, with the primary inputs being credit spreads off benchmark yields, prepayment speed assumptions, current and forecasted loss severity, debt service coverage ratios, collateral type, payment priority within tranche and the vintage of the loans underlying the security.

Generally, the Company does not obtain more than one vendor price from pricing services per instrument. The Company uses a hierarchy process in which prices are obtained from a primary vendor and, if that vendor is unable to provide the price, the next vendor in the hierarchy is contacted until a price is obtained or it is determined that a price cannot be obtained from a commercial pricing service. When a price cannot be obtained from a commercial pricing service, independent broker quotes are solicited. Securities priced using independent broker quotes are classified as Level 3.

Fair values of privately placed bonds are determined primarily using a matrix-based pricing model and are generally classified as Level 2 assets. The model considers the current level of risk-free interest rates, current corporate spreads, the credit quality of the issuer and cash flow characteristics of the security. Also considered are factors such as the net worth of the borrower, the value of collateral, the capital structure of the borrower, the presence of guarantees and the Company's evaluation of the borrower's ability to compete in its relevant market. Using this data, the model generates estimated market values which the Company considers reflective of the fair value of each privately placed bond.

Equity securities: Level 2 and Level 3 equity securities, typically private equities or equity securities not traded on an exchange, are valued by other sources such as analytics or brokers.

Derivatives: Derivatives are carried at fair value, which is determined using the Company's derivative accounting system in conjunction with observable key financial data from third party sources, such as yield curves, exchange rates, S&P 500 Index prices, London Interbank Offered Rates ("LIBOR") and Overnight Index Swap ("OIS") rates. The Company uses OIS for valuations of collateralized interest rate derivatives, which are obtained from third-party sources. For those derivatives that are unable to be valued by the accounting system, the Company typically utilizes values established by third-party brokers. Counterparty credit risk is considered and incorporated in the Company's valuation process through counterparty credit rating requirements and monitoring of overall exposure. It is the Company's policy to transact only with investment grade counterparties with a credit rating of A- or better. The Company's nonperformance risk is also considered and incorporated in the Company's valuation process. The Company also has certain credit default swaps 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, which have been classified as Level 3. The remaining derivative instruments are valued based on market observable inputs and are classified as Level 2.

Guaranteed benefit derivatives: The index-crediting feature in the Company's FIA contract is an embedded derivative that is required to be accounted for separately from the host contract. The fair value of the obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by market implied assumptions. These derivatives are classified as Level 3 liabilities in the fair value hierarchy.

The Company records reserves for Stabilizer and MCG contracts containing guaranteed credited rates. The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is required to be reported at fair value. The estimated fair value is determined based on the present value of projected future claims, minus the present value of future guaranteed premiums. At inception of the contract, the Company projects a guaranteed premium to be equal to the present value of the projected future claims. The income associated with the contracts is projected using relevant actuarial and capital market assumptions, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by using stochastic techniques under a variety of risk neutral scenarios and other market implied assumptions. These derivatives are classified as Level 3 liabilities.

The discount rate used to determine the fair value of the embedded derivatives and stand-alone derivative includes an adjustment for nonperformance risk. The nonperformance risk adjustment incorporates a blend of observable, similarly rated peer holding company credit spreads, adjusted to reflect the credit quality of the Company, as well as an adjustment to reflect the non-default spreads and the priority and recovery rates of policyholder claims.



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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Embedded derivatives on reinsurance: The carrying value of embedded derivatives is estimated based upon the change in the fair value of the assets supporting the funds withheld payable under reinsurance agreements. The fair value of the embedded derivatives is based on market observable inputs and is classified as Level 2.

Level 3 Financial Instruments

The fair values of certain assets and liabilities are determined using prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (i.e., Level 3 as defined by ASC Topic 820), including but not limited to liquidity spreads for investments within markets deemed not currently active. These valuations, whether derived internally or obtained from a third-party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability. In addition, the Company has determined, for certain financial instruments, an active market is such a significant input to determine fair value that the presence of an inactive market may lead to classification in Level 3. In light of the methodologies employed to obtain the fair values of financial assets and liabilities classified as Level 3, additional information is presented below.


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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The following table summarizes the change in fair value of the Company's Level 3 assets and liabilities and transfers in and out of Level 3 for the period indicated:
Year Ended December 31, 2020Year Ended December 31, 2021
Fair Value
as of
January 1
Total
Realized/Unrealized
Gains (Losses) Included in:
PurchasesIssuancesSalesSettlementsTransfers into Level 3Transfers out of Level 3Fair Value as of December 31
Change in Unrealized Gains (Losses) Included in Earnings(3)
Change in Unrealized Gains (Losses) Included in OCI(3)
Fair Value
as of
January 1
Total
Realized/Unrealized
Gains (Losses) Included in:
PurchasesIssuancesSalesSettlementsTransfers into Level 3Transfers out of Level 3Fair Value as of December 31
Change in Unrealized Gains (Losses) Included in Earnings(3)
Change in Unrealized Gains (Losses) Included in OCI(3)
Net IncomeOCINet IncomeOCI
Fixed maturities, including securities pledged:Fixed maturities, including securities pledged:Fixed maturities, including securities pledged:
U.S. Corporate public securitiesU.S. Corporate public securities$47 $$$$$(10)$(11)$27 $$57 $$U.S. Corporate public securities$57 $— $— $$— $— $(3)$— $(54)$$— $— 
U.S. Corporate private securitiesU.S. Corporate private securities1,002 33 255 (9)(89)294 (200)1,286 33 U.S. Corporate private securities1,286 13 (46)201 — (103)(161)283 (94)1,379 — (33)
Foreign corporate public securities and foreign governments(1)
Foreign corporate private securities(1)
Foreign corporate private securities(1)
190 (9)(21)190 (11)(4)(44)295 (21)
Foreign corporate private securities(1)
295 (31)22 38 — (22)(30)— — 272 19 
Residential mortgage-backed securitiesResidential mortgage-backed securities16 (7)32 (8)33 (7)Residential mortgage-backed securities33 (12)— 21 — (7)— (2)34 (12)— 
Commercial mortgage-backed securities
Other asset-backed securitiesOther asset-backed securities48 (15)37 Other asset-backed securities37 — (2)14 — — (34)18 — 33 — (1)
Total fixed maturities, including securities pledgedTotal fixed maturities, including securities pledged1,303 (16)16 481 (30)(119)325 (252)1,708 (5)16 Total fixed maturities, including securities pledged1,708 (30)(26)279 — (132)(228)302 (150)1,723 (9)(15)
Equity securities63 35 (1)99 
Fixed maturities, trading, at fair valueFixed maturities, trading, at fair value— — — 33 — (33)— — — — — — 
Equity securities, at fair valueEquity securities, at fair value99 — 75 — (30)(37)— — 114 — — 
Derivatives:Derivatives:Derivatives:
Guaranteed benefit derivatives:Guaranteed benefit derivatives:Guaranteed benefit derivatives:
Stabilizer and MCGs(2)
Stabilizer and MCGs(2)
(22)(29)(2)(53)
Stabilizer and MCGs(2)
(53)33 — — (1)— — — (20)— — 
FIA(2)
FIA(2)
(11)(2)(10)
FIA(2)
(10)— — (2)— — — (9)— — 
Assets held in separate accounts(4)
Assets held in separate accounts(4)
115 161 (2)(55)222 
Assets held in separate accounts(4)
222 — 225 — (13)— — (119)316 — — 
(1) Primarily U.S. dollar denominated.
(1) Primarily U.S. dollar denominated.
(1) Primarily U.S. dollar denominated.
(2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Consolidated Statements of Operations.
(2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net gains (losses) in the Consolidated Statements of Operations.
(2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net gains (losses) in the Consolidated Statements of Operations.
(3) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net realized capital gains (losses) in the Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Condensed Consolidated Statements of Comprehensive Income
(3) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net gains (losses) in the Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Condensed Consolidated Statements of Comprehensive Income
(3) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net gains (losses) in the Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Condensed Consolidated Statements of Comprehensive Income
(4) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.
(4) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.
(4) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.




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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The following table summarizes the change in fair value of the Company's Level 3 assets and liabilities and transfers in and out of Level 3 for the period indicated:
Year Ended December 31, 2019Year Ended December 31, 2020
Fair Value
as of
January 1
Total
Realized/Unrealized
Gains (Losses) Included in:
PurchasesIssuancesSalesSettlements
Transfers into Level 3(3)
Transfers out of Level 3(3)
Fair Value as of December 31
Change in Unrealized Gains (Losses) Included in Earnings(4)
Fair Value
as of
January 1
Total
Realized/Unrealized
Gains (Losses) Included in:
PurchasesIssuancesSalesSettlementsTransfers into Level 3Transfers out of Level 3Fair Value as of December 31
Change in Unrealized Gains (Losses) Included in Earnings(3)
Change in Unrealized Gains (Losses) Included in OCI(3)
Net IncomeOCINet IncomeOCI
Fixed maturities, including securities pledged:Fixed maturities, including securities pledged:Fixed maturities, including securities pledged:
U.S. Corporate public securitiesU.S. Corporate public securities$28 $$$$$$(7)$23 $$47 $U.S. Corporate public securities$47 $— $$— $— $(10)$(11)$27 $— $57 $— $
U.S. Corporate private securitiesU.S. Corporate private securities771 (1)62 246 (14)(61)(9)1,002 (1)U.S. Corporate private securities1,002 — 33 255 — (9)(89)294 (200)1,286 — 33 
Foreign corporate private securities(1)
Foreign corporate private securities(1)
124 (17)31 108 (56)190 
Foreign corporate private securities(1)
190 (9)(21)190 — (11)(4)(44)295 (21)
Residential mortgage-backed securitiesResidential mortgage-backed securities10 (3)16 (4)Residential mortgage-backed securities16 (7)— 32 — — — — (8)33 (7)— 
Commercial mortgage-backed securities12   (12)
Other asset-backed securitiesOther asset-backed securities94 (2)(44)48 Other asset-backed securities48 — — — — (15)— — 37 — — 
Total fixed maturities, including securities pledgedTotal fixed maturities, including securities pledged1,039 (21)96 363 (70)(70)31 (65)1,303 (4)Total fixed maturities, including securities pledged1,303 (16)16 481 — (30)(119)325 (252)1,708 (5)16 
Equity securities, available-for-sale50 (16)29 63 (16)
Equity securities, at fair valueEquity securities, at fair value63 — 35 — — (1)— — 99 — 
Derivatives:Derivatives:Derivatives:
Guaranteed benefit derivatives:Guaranteed benefit derivatives:Guaranteed benefit derivatives:
Stabilizer and MCGs(2)
Stabilizer and MCGs(2)
(4)(16)(2)(22)
Stabilizer and MCGs(2)
(22)(29)— — (2)— — — — (53)— — 
FIA(2)
FIA(2)
(11)— (5)(11)
FIA(2)
(11)— — (2)— — — (10)— — 
Assets held in separate accounts(5)(4)
Assets held in separate accounts(5)(4)
61 79 (2)(30)115 
Assets held in separate accounts(5)(4)
115 — — 161 — (2)— (55)222 — — 
(1) Primarily U.S. dollar denominated.
(1) Primarily U.S. dollar denominated.
(1) Primarily U.S. dollar denominated.
(2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Consolidated Statements of Operations.
(3) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
(4) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net realized capital gains (losses) in the Consolidated Statements of Operations.
(5) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.
(2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net gains (losses) in the Consolidated Statements of Operations.
(2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net gains (losses) in the Consolidated Statements of Operations.
(3) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net gains (losses) in the Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Consolidated Statements of Comprehensive Income.
(3) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net gains (losses) in the Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Consolidated Statements of Comprehensive Income.
(4) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.
(4) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
For the years ended December 31, 20202021 and 2019,2020, the transfers in and out of Level 3 for fixed maturities and separate accounts were due to the variation in inputs relied upon for valuation each quarter. Securities that are primarily valued using independent broker quotes when prices are not available from one of the commercial pricing services are reflected as transfers into Level 3. When securities are valued using more widely available information, the securities are transferred out of Level 3 and into Level 1 or 2, as appropriate.

Significant Unobservable Inputs

The Company's Level 3 fair value measurements of its fixed maturities, equity securities and equity and credit derivative contracts are primarily based on broker quotes for which the quantitative detail of the unobservable inputs is neither provided nor reasonably corroborated, thus negating the ability to perform a sensitivity analysis. The Company performs a review of broker quotes by performing a monthly price variance comparison and back tests broker quotes to recent trade prices.

Other Financial Instruments

The following disclosures are made in accordance with the requirements of ASC Topic 825 which requires disclosure of fair value information about financial instruments, whether or not recognized at fair value on the Consolidated Balance Sheets.

ASC Topic 825 excludes certain financial instruments, including insurance contracts and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.



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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The carrying values and estimated fair values of the Company's financial instruments as of the dates indicated:
December 31, 2020December 31, 2019December 31, 2021December 31, 2020
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Assets:Assets:Assets:
Fixed maturities, including securities pledgedFixed maturities, including securities pledged$29,993 $29,993 $27,460 $27,460 Fixed maturities, including securities pledged$26,412 $26,412 $29,993 $29,993 
Equity securitiesEquity securities116 116 80 80 Equity securities141 141 116 116 
Mortgage loans on real estateMortgage loans on real estate4,694 5,013 4,664 4,912 Mortgage loans on real estate4,233 4,495 4,694 5,013 
Policy loansPolicy loans187 187 205 205 Policy loans171 171 187 187 
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreementsCash and cash equivalents, short-term investments and short-term investments under securities loan agreements626 626 1,429 1,429 Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements1,244 1,244 626 626 
Deposit assets(2)
Deposit assets(2)
1,407 1,425 — — 
DerivativesDerivatives145 145 224 224 Derivatives149 149 145 145 
Short-term loan to affiliateShort-term loan to affiliate653 653 69 69 Short-term loan to affiliate130 130 653 653 
Other investmentsOther investments43 43 43 43 Other investments143 143 43 43 
Assets held in separate accountsAssets held in separate accounts87,319 87,319 78,713 78,713 Assets held in separate accounts96,964 96,964 87,319 87,319 
Liabilities:Liabilities:Liabilities:
Investment contract liabilities:Investment contract liabilities:Investment contract liabilities:
Funding agreements without fixed maturities and deferred annuities(1)
Funding agreements without fixed maturities and deferred annuities(1)
28,169 36,741 26,337 32,697 
Funding agreements without fixed maturities and deferred annuities(1)
28,128 35,256 28,169 36,741 
Funding agreements with fixed maturitiesFunding agreements with fixed maturities795 796 877 876 Funding agreements with fixed maturities925 925 795 796 
Supplementary contracts, immediate annuities and otherSupplementary contracts, immediate annuities and other288 345 312 384 Supplementary contracts, immediate annuities and other257 267 288 345 
Deposit liabilities76 152 
Derivatives:Derivatives:Derivatives:
Guaranteed benefit derivatives:Guaranteed benefit derivatives:Guaranteed benefit derivatives:
FIAFIA10 10 11 11 FIA10 10 
Stabilizer and MCGsStabilizer and MCGs53 53 22 22 Stabilizer and MCGs20 20 53 53 
Other derivativesOther derivatives216 216 285 285 Other derivatives144 144 216 216 
Short-term debt(2)
Long-term debt(2)
Embedded derivatives on reinsurance002323
Short-term debt(3)
Short-term debt(3)
19 19 
Long-term debt(3)
Long-term debt(3)
(1) Certain amounts included in Funding agreements without fixed maturities and deferred annuities are also reflected within the Guaranteed benefit derivatives section of the table above.
(2) Included in Other LiabilitiesAssets on the Consolidated Balance Sheets.

(3)












Included in Other Liabilities on the Consolidated Balance Sheets.
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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)

The following table presents the classification of financial instruments which are not carried at fair value on the Consolidated Balance Sheets:
Financial InstrumentClassification
Mortgage loans on real estateLevel 3
Policy loansLevel 2
Deposit assetsLevel 3
Other investmentsLevel 2
Funding agreements without fixed maturities and deferred annuitiesLevel 3
Funding agreements with fixed maturitiesLevel 2
Supplementary contracts, immediate annuities and otherLevel 3
Deposit liabilitiesLevel 3
Short-term debt and Long-term debtLevel 2

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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)

5.    Deferred Policy Acquisition Costs and Value of Business Acquired

The following table presents a rollforward of DAC and VOBA for the periods indicated:
DACVOBATotalDACVOBATotal
Balance at January 1, 2018$385 $367 $752 
Deferrals of commissions and expenses55 61 
Amortization:
Amortization, excluding unlocking(75)(72)(147)
Unlocking (1)
(26)13 (13)
Interest accrued35 39 (2)74 
Net amortization included in the Consolidated Statements of Operations(66)(20)(86)
Change in unrealized capital gains/losses on available-for-sale securities162 198 360 
Balance as of December 31, 2018536 551 1,087 
Balance at January 1, 2019Balance at January 1, 2019$536 $551 $1,087 
Deferrals of commissions and expensesDeferrals of commissions and expenses43 49 Deferrals of commissions and expenses43 49 
Amortization:Amortization:Amortization:
Amortization, excluding unlockingAmortization, excluding unlocking(72)(66)(138)Amortization, excluding unlocking(72)(66)(138)
Unlocking (1)
Unlocking (1)
(2)
Unlocking (1)
(2)— 
Interest accruedInterest accrued35 38 (2)73 Interest accrued35 38 (2)73 
Net amortization included in the Consolidated Statements of OperationsNet amortization included in the Consolidated Statements of Operations(35)(30)(65)Net amortization included in the Consolidated Statements of Operations(35)(30)(65)
Change in unrealized capital gains/losses on available-for-sale securitiesChange in unrealized capital gains/losses on available-for-sale securities(256)(222)(478)Change in unrealized capital gains/losses on available-for-sale securities(256)(222)(478)
Balance as of December 31, 2019Balance as of December 31, 2019288 305 593 Balance as of December 31, 2019288 305 593 
Impact of ASU 2016-13Impact of ASU 2016-132Impact of ASU 2016-13— 2
Deferrals of commissions and expensesDeferrals of commissions and expenses56 59 Deferrals of commissions and expenses56 59 
Amortization:Amortization:Amortization:
Amortization, excluding unlockingAmortization, excluding unlocking(84)(76)(160)Amortization, excluding unlocking(84)(76)(160)
Unlocking (1)
Unlocking (1)
(5)(94)(99)
Unlocking (1)
(5)(94)(99)
Interest accruedInterest accrued35 32 (2)67 Interest accrued35 32 (2)67 
Net amortization included in the Consolidated Statements of OperationsNet amortization included in the Consolidated Statements of Operations(54)(138)(192)Net amortization included in the Consolidated Statements of Operations(54)(138)(192)
Change in unrealized capital gains/losses on available-for-sale securitiesChange in unrealized capital gains/losses on available-for-sale securities(170)(130)(300)Change in unrealized capital gains/losses on available-for-sale securities(170)(130)(300)
Balance as of December 31, 2020Balance as of December 31, 2020$122 $40 $162 Balance as of December 31, 2020122 40 162 
Deferrals of commissions and expensesDeferrals of commissions and expenses55 59 
Amortization:Amortization:
Amortization, excluding unlockingAmortization, excluding unlocking(94)(86)(180)
Unlocking (1)
Unlocking (1)
17 23 
Interest accruedInterest accrued35 25 (2)60 
Net amortization included in the Consolidated Statements of OperationsNet amortization included in the Consolidated Statements of Operations(53)(44)(97)
Change in unrealized capital gains/losses on available-for-sale securitiesChange in unrealized capital gains/losses on available-for-sale securities146 139 285 
Balance as of December 31, 2021Balance as of December 31, 2021$270 $139 $409 
(1) DAC/VOBA unlocking includes the impact of annual review of assumptions which typically occurs in the third quarter; and retrospective and prospective unlocking. Additionally, the 2018 amounts include unfavorable unlocking of DAC and VOBA of $25 and $26, respectively, associated with an update to assumptions related to customer consents of changes to guaranteed minimum interest rate provisions.
(2)     Interest accrued at the following rates for VOBA: 5.5% to 7.0% during 2021, 2020 2019 and 2018.2019.

The estimated amount of VOBA amortization expense, net of interest, during the next five years is presented in the following table. Actual amortization incurred during these years may vary as assumptions are modified to incorporate actual results and/or changes in best estimates of future results.
YearYearAmountYearAmount
2021$25 
2022202223 2022$27 
2023202321 202322 
2024202417 202417 
2025202514 202515 
2026202612 


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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)

6.    Guaranteed Benefit Features

The Company calculates an additional liability for certain GMDBs and other minimum guarantees in order to recognize the expected value of these benefits in excess of the projected account balance over the accumulation period based on total expected assessments.

The Company regularly evaluates estimates used to adjust the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised.

As of December 31, 20202021 and 2019,2020, the account value for the separate account contracts with guaranteed minimum benefits was $46.9$44.2 billion and $40.0$46.9 billion, respectively. The additional liability recognized related to minimum guarantees as of December 31, 2021 and 2020 was $25 and 2019 was $57, and $26, respectively.

The aggregate fair value of fixed income securities and equity securities, including mutual funds, supporting separate accounts with additional insurance benefits and minimum investment return guarantees as of December 31, 2021 and 2020 and 2019 was $9.2$9.0 billion and $8.2$9.2 billion, respectively.

7.    Reinsurance

As of December 31, 2020,2021, the Company has reinsurance treaties with 43 unaffiliated reinsurers covering a significant portion of the mortality risks and guaranteed death benefits under its variable contracts. The Company previously had an agreement with 1 of its affiliates, Security Life of Denver International ("SLDI"), which was accounted for under the deposit method of accounting. This agreement was recaptured in Q1 2020. Refer to the Related Party Transactions Note for further detail.

Premiums receivable and reinsurance recoverable was comprised of the following as of the dates indicated:
December 31,
20212020
Premiums receivable$(3)$— 
Reinsurance recoverable, net of allowance for credit losses3,601 1,219 
Total$3,598 $1,219 

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Table of Contents
Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Information regarding the effect of reinsurance on the Consolidated Statement of Operations is as follows for the periods indicated:
Year ended December 31,
202120202019
Premiums:
Direct premiums$34 $32 $31 
Reinsurance assumed— — — 
Reinsurance ceded(2,459)— — 
Net premiums$(2,425)$32 $31 
Interest credited and other benefits to contract owners / policyholders:
Direct interest credited and other benefits to contract owners / policyholders$1,138 $1,088 $1,051 
Reinsurance assumed
Reinsurance ceded(2,629)(46)(44)
Net interest credited and other benefits to contract owners / policyholders$(1,483)$1,049 $1,013 

Concurrently with the sale of SLD by Resolution Life US disclosed in the Business, Basis of Presentation and Significant Accounting Policies Note to these Consolidated Financial Statements, SLD entered into reinsurance agreements with ReliaStar Life Insurance Company ("RLI"), ReliaStar Life Insurance Company of New York (“RLNY”), and VRIAC, each of which is a direct or indirect wholly owned subsidiary of Voya Financial. Pursuant to these agreements, RLI and VRIAC reinsured to SLD a 100% quota share, and RLNY reinsured to SLD a 75% quota share, of their respective individual life insurance and annuities businesses. The reinsurance agreements along with the sale of the legal entities noted above (referred to as the "Individual Life Transaction") resulted in the disposition of substantially all of Voya Financial's life insurance and legacy non-retirement annuity businesses and related assets. Pursuant to the Individual Life Transaction, VRIAC's reserves related to legacy non-retirement annuity business as well as pension risk transfer products were ceded to SLD and related assets transferred. The reinsurance obligation with counterparty SLD are secured by collateralized assets held in a trust. RLI, RLNY, and VRIAC continue to be subsidiaries of Voya Financial. The reinsurance transaction does not extinguish the Company’s primary liability to its policyholders. As a result of the reinsurance transactions on January 4, 2021, the Company reinsured $3.5 billion of policyholder liabilities under indemnity coinsurance and modified coinsurance arrangements. As of January 4, 2021, reinsurance recoverable associated with these transactions was $2.5 billion. The Company ceded $2.4 billion in premiums and $2.5 billion in policyholder benefits. The Company transferred assets with a fair market value of $3.7 billion as consideration for the reinsurance arrangements. As a result of the transfer of invested assets the Company recognized $0.5 billion in pre-tax realized gains. The Company also recognized a non-cash liability of $73 relating to the pretax net cost of reinsurance liability and $1.5 billion deposit asset, respectively, on January 4, 2021 as a result of entering into the reinsurance agreements. The aggregate deferred intangibles will be amortized as a charge to earnings over the life of the underlying policies. The deposit relates to liabilities related to Contract owner account balances that currently exist for the related underlying policies.

On October 1, 1998, the Company disposed of its individual life insurance business under an indemnity reinsurance arrangement with a subsidiary of Lincoln for $1.0 billion in cash. Under the agreement, the Lincoln subsidiary contractually assumed from the Company certain policyholder liabilities and obligations, although the Company remains obligated to contract owners. The Lincoln subsidiary established a trust to secure its obligations to the Company under the reinsurance agreement. As of December 31, 20202021 and 2019,2020, the Company had $1.2$1.1 billion and $1.3$1.2 billion, respectively, related to Reinsurance recoverable from the subsidiary of Lincoln.

Premiums receivable and reinsurance recoverable was comprised of the following as of the dates indicated:
December 31,
20202019
Reinsurance recoverable, net of allowance for credit losses$1,219 $1,304 
Total$1,219 $1,304 

For the years ended December 31, 2020 and 2019, premiums, net of reinsurance were $32 and $31, respectively.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
8.    Capital Contributions, Dividends and Statutory Information

Connecticut insurance law imposes restrictions on a Connecticut insurance company's ability to pay dividends to its parent. 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 Connecticut Insurance Commissioner.

Under Connecticut insurance law, an extraordinary dividend or distribution is defined as a dividend or distribution that, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (1) ten percent (10%) of VRIAC's earned statutory surplus at the prior year end or (2) VRIAC's prior year statutory net gain from operations. Connecticut law also prohibits a Connecticut insurer from declaring or paying a dividend except out of its earned surplus unless prior insurance regulatory approval is obtained.

During the year ended December 31, 2020,2021, VRIAC declared and paid ordinary dividends to its Parent in the aggregate amount of $294.$78, as well as an extraordinary dividend in the aggregate amount of $474. During the year ended December 31, 2020 and December 31, 2019 , VRIAC paid an ordinary dividend in the amount of $294 and $396 to its Parent.Parent, respectively.

On March 27,During the year ended December 31, 2021, VRIAC received $318 capital contributions from its Parent, comprised of cash and non-cash assets. During the year ended December 31, 2020, VFP paid a $20 dividend to VRIAC did not receive capital contributions from its parent; on June 18, 2020, VFP paid a $15 dividend to VRIAC; on September 25, 2020, VFP paid a $20 dividend to VRIAC; and on December 22, 2020, VFP paid a $20 dividend to VRIAC.Parent. During the year ended December 31, 2019, VFP paid dividends of $80 to VRIAC.

On December 31, 2020, VRA paid a $20 dividend to VRIAC its parent.

During the years ended December 31, 2020, the Company did not receive capital contributions from our Parent. During the years ended December 31, 2019, the Company received capital contributions of $57 from ourits Parent.

The Company is subject to minimum risk-based capital ("RBC") requirements established by the Department. 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 National Association of Insurance Commissioners ("NAIC"), to RBC requirements, as defined by the NAIC. The Company exceeded the minimum RBC requirements that would require any regulatory or corrective action for all periods presented herein.

The Company is required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the Department. 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 Department, the entire amount or a portion of an insurance company's asset balance can be non-admitted depending on specific rules regarding admissibility. The most significant non-admitted assets of the Company are typically a portion of deferred tax assets in excess of prescribed thresholds.

Statutory net income was $794, $299 $325 and $377,$325 for the years ended December 31, 2021, 2020 2019 and 2018,2019, respectively. Statutory capital and surplus was $2.2 billion and $2.0 billion as offor the years ended December 31, 2021 and 2020, and 2019.respectively.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)

9.    Accumulated Other Comprehensive Income (Loss)

Shareholder's equity included the following components of AOCI as of the dates indicated.
December 31,December 31,
202020192018202120202019
Fixed maturities, net of impairmentFixed maturities, net of impairment$3,430 $2,113 $127 Fixed maturities, net of impairment$2,126 $3,430 $2,113 
Derivatives(1)Derivatives(1)73 117 140 Derivatives(1)77 73 117 
DAC/VOBA and Sales inducements adjustments on available-for-sale securitiesDAC/VOBA and Sales inducements adjustments on available-for-sale securities(855)(551)(73)DAC/VOBA and Sales inducements adjustments on available-for-sale securities(567)(855)(551)
Premium deficiency reserve adjustmentPremium deficiency reserve adjustment(434)(211)(51)Premium deficiency reserve adjustment— (434)(211)
OtherOtherOther— — 
Unrealized capital gains (losses), before taxUnrealized capital gains (losses), before tax2,216 1,468 143 Unrealized capital gains (losses), before tax1,636 2,216 1,468 
Deferred income tax asset (liability)Deferred income tax asset (liability)(337)(180)(39)Deferred income tax asset (liability)(215)(337)(180)
Unrealized capital gains (losses), after taxUnrealized capital gains (losses), after tax1,879 1,288 104 Unrealized capital gains (losses), after tax1,421 1,879 1,288 
Pension and other postretirement benefits liability, net of taxPension and other postretirement benefits liability, net of taxPension and other postretirement benefits liability, net of tax
AOCIAOCI$1,882 $1,292 $108 AOCI$1,423 $1,882 $1,292 
(1) Gains and losses reported in AOCI from hedge transactions that resulted in the acquisition of an identified asset are reclassified into earnings in the same period or periods during which the asset acquired affects earnings. As of December 31, 2020,2021, the portion of the AOCI that is expected to be reclassified into earnings within the next twelve months is $22.$20.



























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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)


Changes in AOCI, including the reclassification adjustments recognized in the Consolidated Statements of Operations were as follows for the periods indicated:
Year Ended December 31, 2020Year Ended December 31, 2021
Before-Tax AmountIncome TaxAfter-Tax AmountBefore-Tax AmountIncome TaxAfter-Tax Amount
Available-for-sale securities:Available-for-sale securities:Available-for-sale securities:
Fixed maturitiesFixed maturities$1,309 $(275)$1,034 Fixed maturities$(756)$160 $(596)
OtherOtherOther(1)— (1)
Impairments0
Adjustments for amounts recognized in Net realized capital gains (losses) in the Consolidated Statements of Operations(2)
Adjustments for amounts recognized in Net gains (losses) in the Consolidated Statements of OperationsAdjustments for amounts recognized in Net gains (losses) in the Consolidated Statements of Operations(549)115 (434)
DAC/VOBA and Sales inducementsDAC/VOBA and Sales inducements(302)(1)63 (239)DAC/VOBA and Sales inducements288 (1)(61)227 
Premium deficiency reserve adjustmentPremium deficiency reserve adjustment(224)47 (177)Premium deficiency reserve adjustment434 (91)343 
Change in unrealized gains/losses on available-for-sale securities793 (167)626 
Change in unrealized gains (losses) on available-for-sale securitiesChange in unrealized gains (losses) on available-for-sale securities(584)123 (461)
Derivatives:Derivatives:Derivatives:
DerivativesDerivatives(22)(2)(17)Derivatives25 (2)(5)20 
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Consolidated Statements of OperationsAdjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Consolidated Statements of Operations(23)(18)Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Consolidated Statements of Operations(21)(17)
Change in unrealized gains/losses on derivatives(45)10 (35)
Change in unrealized gains (losses) on derivativesChange in unrealized gains (losses) on derivatives(1)
Pension and other postretirement benefits liability:Pension and other postretirement benefits liability:Pension and other postretirement benefits liability:
Amortization of prior service cost recognized in Operating expenses in the Consolidated Statements of OperationsAmortization of prior service cost recognized in Operating expenses in the Consolidated Statements of Operations(1)(3)(1)Amortization of prior service cost recognized in Operating expenses in the Consolidated Statements of Operations(1)(3)— (1)
Change in pension and other postretirement benefits liabilityChange in pension and other postretirement benefits liability(1)(1)Change in pension and other postretirement benefits liability(1)— (1)
Change in Other comprehensive income (loss)$747 $(157)$590 
Change in Accumulated other comprehensive income (loss)Change in Accumulated other comprehensive income (loss)$(581)$122 $(459)
(1) See the Deferred Policy Acquisition Costs and Value of Business Acquired Note to these Consolidated Financial Statements for additional information.
(2) See the Derivative Financial Instruments Note to these Consolidated Financial Statements for additional information.
(3) See the Benefit Plans Note to these Consolidated Financial Statements for amounts reported in Net Periodic (Benefit) Costs.



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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Year Ended December 31, 2019Year Ended December 31, 2020
Before-Tax AmountIncome TaxAfter-Tax AmountBefore-Tax AmountIncome TaxAfter-Tax Amount
Available-for-sale securities:Available-for-sale securities:Available-for-sale securities:
Fixed maturitiesFixed maturities$1,995 $(419)$1,576 Fixed maturities$1,309 $(275)$1,034 
OtherOtherOther— 
Impairments
Adjustments for amounts recognized in Net realized capital gains (losses) in the Consolidated Statements of Operations(11)(9)
Adjustments for amounts recognized in Net gains (losses) in the Consolidated Statements of OperationsAdjustments for amounts recognized in Net gains (losses) in the Consolidated Statements of Operations(2)
DAC/VOBA and Sales inducementsDAC/VOBA and Sales inducements(479)(1)100 (379)DAC/VOBA and Sales inducements(302)(1)63 (239)
Premium deficiency reserve adjustmentPremium deficiency reserve adjustment(160)33 (127)Premium deficiency reserve adjustment(224)47 (177)
Change in unrealized gains/(losses) on available-for-sale securities1,346 (284)1,062 
Change in unrealized gains (losses) on available-for-sale securitiesChange in unrealized gains (losses) on available-for-sale securities793 (167)626 
Derivatives:Derivatives:Derivatives:
DerivativesDerivatives(2)Derivatives(22)(2)(17)
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Consolidated Statements of OperationsAdjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Consolidated Statements of Operations(23)(18)Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Consolidated Statements of Operations(23)(18)
Change in unrealized gains/(losses) on derivatives(22)(17)
Change in unrealized gains (losses) on derivativesChange in unrealized gains (losses) on derivatives(45)10 (35)
Pension and other postretirement benefits liability:Pension and other postretirement benefits liability:Pension and other postretirement benefits liability:
Amortization of prior service cost recognized in Operating expenses in the Consolidated Statements of OperationsAmortization of prior service cost recognized in Operating expenses in the Consolidated Statements of Operations(1)(3)Amortization of prior service cost recognized in Operating expenses in the Consolidated Statements of Operations(1)(3)— (1)
Change in pension and other postretirement benefits liabilityChange in pension and other postretirement benefits liability(1)Change in pension and other postretirement benefits liability(1)— (1)
Change in Other comprehensive income (loss)$1,323 $(276)$1,047 
Change in Accumulated other comprehensive income (loss)Change in Accumulated other comprehensive income (loss)$747 $(157)$590 
(1) See the Deferred Policy Acquisition Costs and Value of Business Acquired Note to these Consolidated Financial Statements for additional information.
(2) See the Derivative Financial Instruments Note to these Consolidated Financial Statements for additional information.
(3) See the Benefit Plans Note to these Consolidated Financial Statements for amounts reported in Net Periodic (Benefit) Costs.



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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Year Ended December 31, 2018Year Ended December 31, 2019
Before-Tax AmountIncome TaxAfter-Tax AmountBefore-Tax AmountIncome TaxAfter-Tax Amount
Available-for-sale securities:Available-for-sale securities:Available-for-sale securities:
Fixed maturitiesFixed maturities$(1,401)$299 (4)$(1,102)Fixed maturities$1,996 $(419)$1,577 
OtherOther(5)(4)Other— — — 
Impairments(2)
Adjustments for amounts recognized in Net realized capital gains (losses) in the Consolidated Statements of Operations69 (14)55 
Adjustments for amounts recognized in Net gains (losses) in the Consolidated Statements of OperationsAdjustments for amounts recognized in Net gains (losses) in the Consolidated Statements of Operations(11)(9)
DAC/VOBA and Sales inducementsDAC/VOBA and Sales inducements360 (1)(76)284 DAC/VOBA and Sales inducements(479)(1)100 (379)
Premium deficiency reserve adjustmentPremium deficiency reserve adjustment64 (13)51 Premium deficiency reserve adjustment(160)33 (127)
Change in unrealized gains/losses on available-for-sale securities(905)195 (710)
Change in unrealized gains (losses) on available-for-sale securitiesChange in unrealized gains (losses) on available-for-sale securities1,346 (284)1,062 
Derivatives:Derivatives:Derivatives:
DerivativesDerivatives40 (2)(8)32 Derivatives(2)— 
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Consolidated Statements of OperationsAdjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Consolidated Statements of Operations(24)(19)Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Consolidated Statements of Operations(23)(18)
Change in unrealized gains/losses on derivatives16 (3)13 
Change in unrealized gains (losses) on derivativesChange in unrealized gains (losses) on derivatives(22)(17)
Pension and other postretirement benefits liability:Pension and other postretirement benefits liability:Pension and other postretirement benefits liability:
Amortization of prior service cost recognized in Operating expenses in the Consolidated Statements of OperationsAmortization of prior service cost recognized in Operating expenses in the Consolidated Statements of Operations(1)(3)(1)Amortization of prior service cost recognized in Operating expenses in the Consolidated Statements of Operations(1)(3)
Change in pension and other postretirement benefits liabilityChange in pension and other postretirement benefits liability(1)(1)Change in pension and other postretirement benefits liability(1)
Change in Other comprehensive income (loss)$(890)$192 $(698)
Change in Accumulated other comprehensive income (loss)Change in Accumulated other comprehensive income (loss)$1,323 $(276)$1,047 
(1)See the Deferred Policy Acquisition Costs and Value of Business Acquired Note to these Consolidated Financial Statements for additional information.
(2) See the Derivative Financial Instruments Note to these Consolidated Financial Statements for additional information.
(3) See the Benefit Plans Note to these Consolidated Financial Statements for amounts reported in Net Periodic (Benefit) Costs.
(4) Amount includes $9 valuation allowance. See the Income Taxes Note these Consolidated Financial Statements for additional information.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)

10.    Income Taxes

Income tax expense (benefit) consisted of the following for the periods indicated:
Year Ended December 31,Year Ended December 31,
202020192018202120202019
Current tax expense (benefit):Current tax expense (benefit):Current tax expense (benefit):
FederalFederal$$$Federal$(45)$$
Total current tax expense
Total current tax expense (benefit)Total current tax expense (benefit)(45)
Deferred tax expense (benefit):Deferred tax expense (benefit):Deferred tax expense (benefit):
FederalFederal(20)23 58 Federal208 (20)23 
Total deferred tax expense (benefit)Total deferred tax expense (benefit)(20)23 58 Total deferred tax expense (benefit)208 (20)23 
Total income tax expense (benefit)Total income tax expense (benefit)$(14)$32 $61 Total income tax expense (benefit)$163 $(14)$32 

Income taxes were different from the amount computed by applying the federal income tax rate to Income (loss) before income taxes for the following reasons for the periods indicated:
Year Ended December 31,Year Ended December 31,
202020192018202120202019
Income (loss) before income taxesIncome (loss) before income taxes$152 $332 $506 Income (loss) before income taxes$989 $152 $332 
Tax rateTax rate21.0 %21.0 %21.0 %Tax rate21.0 %21.0 %21.0 %
Income tax expense (benefit) at federal statutory rateIncome tax expense (benefit) at federal statutory rate32 70 106 Income tax expense (benefit) at federal statutory rate208 32 70 
Tax effect of:Tax effect of:Tax effect of:
Dividends received deductionDividends received deduction(37)(35)(49)Dividends received deduction(33)(37)(35)
Valuation allowance
Tax Attributes(8)(4)
Tax attributesTax attributes(11)(8)(4)
OtherOther(1)(5)Other(1)(1)
Income tax expense (benefit)Income tax expense (benefit)$(14)$32 $61 Income tax expense (benefit)$163 $(14)$32 
Effective tax rateEffective tax rate(9.2)%9.6 %12.1 %Effective tax rate16.5 %(9.2)%9.6 %




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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Temporary Differences

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of the dates indicated, are presented below.
December 31,December 31,
2020201920212020
Deferred tax assetsDeferred tax assetsDeferred tax assets
Insurance reservesInsurance reserves$112 $107 Insurance reserves$— $112 
InvestmentsInvestments23 Investments57 
Compensation and benefitsCompensation and benefits60 57 Compensation and benefits63 60 
Loss carryforwardsLoss carryforwards211 — 
Other assetsOther assets35 34 Other assets— 35 
Total gross assetsTotal gross assets216 221 Total gross assets331 216 
Deferred tax liabilitiesDeferred tax liabilitiesDeferred tax liabilities
Net unrealized investment (gains) lossesNet unrealized investment (gains) losses(645)(424)Net unrealized investment (gains) losses(463)(645)
Insurance reservesInsurance reserves(23)— 
Deferred policy acquisition costsDeferred policy acquisition costs(10)(101)Deferred policy acquisition costs(71)(10)
Other liabilitiesOther liabilities(1)— 
Total gross liabilitiesTotal gross liabilities(655)(525)Total gross liabilities(558)(655)
Net deferred income tax asset (liability)Net deferred income tax asset (liability)$(439)$(304)Net deferred income tax asset (liability)$(227)$(439)

Due to the Individual Life Transaction, $1,668 of federal net operating loss ("NOL") carryforwards were contributed to VRIAC in 2021. The following table sets forth the NOLs as of the dates indicated.
December 31,
20212020
Federal net operating loss carryforward$1,006 (1)$— 
(1) NOL not subject to expiration.

Valuation allowances are provided when it is considered more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 20202021 and 2019,2020, the Company had 0no valuation allowance. However, the application of intra-period tax allocation rules to benefits associated with capital deferred tax assets resulted in a valuation allowance as of December 31, 20202021 and 20192020 of $128 and $128, respectively, in continuing operations, offset by a corresponding benefit in Other comprehensive income.

Tax Sharing Agreement

As of December 31, 20202021 and 2019,2020, the Company had a (payable)/receivable from Voya Financial of $5$(42) and $9,$5, respectively, for federal income taxes under the intercompany tax sharing agreement.

The results of the Company's operations are included in the consolidated tax return of Voya Financial. Generally, the Company's consolidated financial statements recognize the current and deferred income tax consequences that result from the Company's activities during the current and preceding periods pursuant to the provisions of Income Taxes (ASC 740) as if the Company were a separate taxpayer rather than a member of Voya Financial's consolidated income tax return group with the exception of any net operating loss carryforwards and capital loss carryforwards, which are recorded pursuant to the tax sharing agreement. If the Company instead were to follow a separate taxpayer approach without any exceptions, there would be no impact to income tax expense (benefit) for the periods indicated above. However, any current tax benefit related to the Company's tax attributes realized by virtue of its inclusion in the consolidated tax return of Voya Financial would have been recorded directly to equity rather than income. Under the tax sharing agreement, Voya Financial will pay the Company for the tax benefits of ordinary and capital losses only in the event that the consolidated tax group actually uses the tax benefit of losses generated.

Unrecognized Tax Benefits

The Company had 0 unrecognized tax benefits as of December 31, 2020 and December 31, 2019.





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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
recorded directly to equity rather than income. Under the tax sharing agreement, Voya Financial will pay the Company for the tax benefits of ordinary and capital losses only in the event that the consolidated tax group actually uses the tax benefit of losses generated.

Unrecognized Tax Benefits

The Company had no unrecognized tax benefits as of December 31, 2021 and December 31, 2020.

Interest and Penalties

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in current income taxes and Income tax expense on the Consolidated Balance Sheets and the Consolidated Statements of Operations, respectively. The Company had 0no accrued interest as of December 31, 20202021 and December 31, 2019.2020.

Tax Regulatory Matters

For the tax years 20182019 through 2020, Voya Financial, Inc.2021, the Company participated in the Internal Revenue Service ("IRS") Compliance
Assurance Process ("CAP"), which is a continuous audit program provided by the IRS. The IRS finalized the audit of Voya
Financial, Inc. for the period ended December 31, 2018. For the periods ended December 31, 2019 and December 31, 2020 tax years, the
IRS has determined that Voya Financial, Inc. would be Company was in the Compliance Maintenance Bridge ("Bridge") phase of CAP. In the
Bridge phase, the IRS does not intend todid conduct any review or provide any letters of assurance for thethose tax year.

Tax Legislative Matters

The Coronavirus Aid, Relief and Economic Security (“CARES”) Act, which became effective on March 27, 2020, and the
Consolidated Appropriations Act, which became effective on December 27, 2020, have not had any material impact on
corporate income taxes.years.

11.    Benefit Plans

Defined Benefit Plan

Voya Services Company sponsors the Voya Retirement Plan (the "Retirement Plan"). Substantially all employees of Voya Services Company and its affiliates (excluding certain employees) are eligible to participate, including the Company's employees other than Company agents.participate.

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 will 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 Internal Revenue Service in the preceding August of each year. The accrued vested cash pension balance benefit is portable; participants can take it if they leave the Company.

The costs allocated to the Company for its employees' participation in the Retirement Plan were $11,$13, $11 and $11 for the years ended December 31, 2021, 2020 2019 and 2018,2019, respectively, and are included in Operating expenses in the Consolidated Statements of Operations.
 
Defined Contribution Plan

Voya Services Company sponsors the Voya Savings Plan (the "Savings Plan"). Substantially all employees of Voya Services Company and its affiliates (excluding certain employees, including but not limited to Career Agents) are eligible to participate, including the Company's employees other than Company agents. Career Agents are certain, full-time insurance salespeople who have entered into a career agent agreement with the Company and certain other individuals who meet specified eligibility criteria ("Career Agents"). The Savings Plan is a tax qualified defined contribution plan. Savings Plan benefits are not guaranteed by the PBGC. The Savings Plan allows eligible participants to defer into the Savings Plan a specified percentage of eligible compensation on a pre-tax basis. Voya Services Company matches such pre-tax contributions, up to a maximum of 6% of eligible compensation. Matching contributions are subject to a 4-year4.0-year graded vesting schedule. Contributions made to the Savings Plan are subject to certain limits imposed by applicable law. The costs allocated to the Company for the Savings Plan were $18, $17 $15 and $15, for the years ended December 31, 2021, 2020 2019 and 2018,2019, respectively, and are included in Operating expenses in the Consolidated Statements of Operations.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Non-Qualified Retirement Plans

The Company, in conjunction with Voya Services Company, offers certain eligible employees (other than Career Agents) a Supplemental Executive Retirement Plan and an Excess Plan (collectively, the "SERPs"). Benefit accruals under Aetna Financial Services SERPs ceased, effective as of December 31, 2001 and participants began accruing benefits under Voya Services SERPs.  Benefits under the SERPs are determined based on an eligible employee's years of service and average annual compensation for the highest five years during the last ten years of employment.
 
Effective January 1, 2012, the Supplemental Executive Retirement Plan was amended to coordinate with the amendment of the Retirement Plan from its current final average pay formula to a cash balance formula.
 
The Company, in conjunction with Voya Services Company, sponsors the Pension Plan for Certain Producers of Voya Retirement Insurance and Annuity Company (the "Agents Non-Qualified Plan"). This plan covers Career Agents. The Agents Non-Qualified Plan was frozen effective January 1, 2002. In connection with the termination, all benefit accruals ceased and all accrued benefits were frozen.
 
The SERPs and Agents Non-Qualified Plan are non-qualified defined benefit pension plans, which means all the SERPs benefits are payable from the general assets of the Company and Agents Non-Qualified Plan benefits are payable from the general assets of the Company and Voya Services Company. These non-qualified defined benefit pension plans are not guaranteed by the PBGC.
 
Obligations and Funded Status
 
The following table summarizes the benefit obligations for the SERPs and Agents Non-Qualified Plan as of December 31, 20202021 and 2019:2020:
Year Ended December 31,Year Ended December 31,
2020201920212020
Change in benefit obligation:Change in benefit obligation:Change in benefit obligation:
Benefit obligation, January 1Benefit obligation, January 1$82 $80 Benefit obligation, January 1$84 $82 
Interest costInterest costInterest cost
Benefits paidBenefits paid(6)(5)Benefits paid(6)(6)
Actuarial (gains) losses on obligationActuarial (gains) losses on obligationActuarial (gains) losses on obligation(3)
Benefit obligation, December 31Benefit obligation, December 31$84 $82 Benefit obligation, December 31$78 $84 

Amounts recognized on the Consolidated Balance Sheets in Other liabilities and in AOCI were as follows as of December 31, 20202021 and 2019:2020:
December 31,December 31,
2020201920212020
Accrued benefit costAccrued benefit cost$(84)$(82)Accrued benefit cost$(78)$(84)
Accumulated other comprehensive income (loss):Accumulated other comprehensive income (loss):Accumulated other comprehensive income (loss):
Prior service cost (credit)Prior service cost (credit)Prior service cost (credit)— — 
Net amount recognizedNet amount recognized$(84)$(82)Net amount recognized$(78)$(84)

Assumptions

The discount rate used in the measurement of the December 31, 2020 and 2019 benefit obligation for the SERPs and Agents Non-Qualified Plan, were as follows:
20202019
Discount rate2.67 %3.36 %
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Assumptions

The discount rate used in the measurement of the December 31, 2021 and 2020 benefit obligation for the SERPs and Agents Non-Qualified Plan, were as follows:
20212020
Discount rate3.00 %2.67 %
In determining the discount rate assumption, the Company utilizes current market information provided by its plan actuaries, including a discounted cash flow analysis of the Company's pension obligation and general movements in the current market environment. The discount rate modeling process involves selecting a portfolio of high quality, noncallable bonds that will match the cash flows of the SERPs and Agents Non-Qualified Plan.
 
The weighted-average discount rate used in calculating the net pension cost was as follows:
202020192018
Discount rate3.36 %4.46 %3.85 %
202120202019
Discount rate2.67 %3.36 %4.46 %
 
Since the benefit plans of the Company are unfunded, an assumption for return on plan assets is not required.

Net Periodic Benefit Costs
 
Net periodic benefit costs for the SERPs and Agents Non-Qualified Plan were as follows for the years ended December 31, 2021, 2020 2019 and 2018:2019:
Year Ended December 31,Year Ended December 31,
202020192018202120202019
Interest costInterest cost$$$Interest cost$$$
Amortization of prior service cost (credit)(1)
Net (gain) loss recognitionNet (gain) loss recognition(4)Net (gain) loss recognition(3)
Net periodic (benefit) costNet periodic (benefit) cost$$$(2)Net periodic (benefit) cost$(1)$$
 
Expected Future Benefit Payments

The following table summarizes the expected benefit payments related to the SERPs and Agents Non-Qualified Plan for the years indicated:
2021$
202220222022$
202320232023
202420242024
202520252025
2026-202925 
20262026
2027-20312027-203124 

In 2021,2022, the Company is expected to contribute $6 to the SERPs and Agents Non-Qualified Plan. 

Share Based Compensation Plans
 
Certain employees of the Company participate in the 2013, 2014 and 2019 Omnibus Employee Incentive Plans ("the Omnibus Plans") sponsored by Voya Financial. The Omnibus Plans each permit the granting of a wide range of equity-based awards, including restricted stock units ("RSUs"), performance share units ("PSUs"), and stock options.

The Company was allocated compensation expense from Voya Financial of $34, $27 $31 and $29$31 for the years ended December 31, 2021, 2020 and 2019, and 2018, respectively.
The Company recognized tax benefits of $6, $7 and $6 for the years ended 2020, 2019 and 2018, respectively.

All excess tax benefits and tax deficiencies related to share-based compensation are reported in Net Income.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
 The Company recognized tax benefits of $8, $6 and $7 for the years ended 2021, 2020 and 2019, respectively.

All excess tax benefits and tax deficiencies related to share-based compensation are reported in Net Income.
Other Benefit Plans

In addition, the Company, in conjunction with Voya Services Company, sponsors the following benefit plans:
 
The Voya 401(k) Plan for VRIAC Agents, which allows participants to defer a specified percentage of eligible compensation on a pre-tax basis. Effective January 1, 2006, the Company match equals 60% of a participant's pre-tax deferral contribution, with a maximum of 6% of the participant's eligible pay. A request for a determination letter on the qualified status of the Voya 401(k) Plan for VRIAC Agents was filed with the IRS on January 1, 2014. A favorable determination letter was received dated August 28, 2014.
The Producers' Incentive Savings Plan, which allows participants to defer up to a specified portion of their eligible compensation on a pre-tax basis. The Company matches such pre-tax contributions at specified amounts.
The Producers' Deferred Compensation Plan, which allows participants to defer up to a specified portion of their eligible compensation on a pre-tax basis.
Certain health care and life insurance benefits for retired employees and their eligible dependents. The postretirement health care plan is contributory, with retiree contribution levels adjusted annually and the Company subsidizes a portion of the monthly per-participant premium. Prior to April 1, 2017, coverage for Medicare eligible retirees was provided through a fully insured Medicare Advantage plan. Effective April 1, 2017, the fully insured Medicare Advantage Plan was replaced with access to individual coverage through a private exchange. The Company's premium subsidy ended and was replaced with a monthly HRA contribution. The Company continues to offer access to medical coverage until retirees become eligible for Medicare. The life insurance plan provides a flat amount of noncontributory coverage and optional contributory coverage.
The Voya Financial Deferred Compensation Savings Plan, which is a non-qualified deferred compensation plan that includes a 401(k) excess component.

The benefit charges incurred by the Company related to these plans were immaterial for the years ended December 31, 2021, 2020, 2019, and 2018.2019.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
12.    Commitments and Contingencies

Leases

All of the Company's expenses for leased and subleased office properties are paid for by an affiliate and allocated back to the Company, as all remaining operating leases were executed by Voya Services Company as of December 31, 2008, which resulted in the Company no longer being party to any operating leases. For the years ended December 31, 2021, 2020 2019 and 2018,2019, rent expense for leases was $5,$3, $5 and $5, respectively.

Commitments

Through the normal course of investment operations, the Company commits to either purchase or sell securities, mortgage loans, or money market instruments, at a specified future date and at a specified price or yield. The inability of counterparties to honor these commitments may result in either a higher or lower replacement cost. Also, there is likely to be a change in the value of the securities underlying the commitments. As of December 31, 20202021 the Company had off-balance sheet commitments to acquire mortgage loans of $50$73 and purchase limited partnerships and private placement investments of $565.$590.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)
Restricted Assets

The Company is required to maintain assets on deposit with various regulatory authorities to support its insurance operations. The Company may also post collateral in connection with certain securities lending, repurchase agreements, funding agreement, letter of credit ("LOC") and derivative transactions as described further in this note. The components of the fair value of the restricted assets were as follows as of the dates indicated:
December 31,December 31,
2020201920212020
Fixed maturity collateral pledged to FHLB(1)
Fixed maturity collateral pledged to FHLB(1)
$997 $1,087 
Fixed maturity collateral pledged to FHLB(1)
$1,124 $997 
FHLB restricted stock(2)
FHLB restricted stock(2)
44 44 
FHLB restricted stock(2)
47 44 
Other fixed maturities-state depositsOther fixed maturities-state deposits14 14 Other fixed maturities-state deposits14 14 
Cash and cash equivalentsCash and cash equivalentsCash and cash equivalents
Securities pledged(3)
Securities pledged(3)
220 828 
Securities pledged(3)
799 220 
Total restricted assetsTotal restricted assets$1,279 $1,978 Total restricted assets$1,987 $1,279 
(1) Included in Fixed maturities, available for sale, at fair value, on the Consolidated Balance Sheets.
(2) Included in Other investments on the Consolidated Balance Sheets.
(3) Includes the fair value of loaned securities of $143$739 and $715$143 as of December 31, 20202021 and 2019,2020, respectively. In addition, as of December 31, 20202021 and 2019,2020, the Company delivered securities as collateral of $77$60 and $113,$77, respectively. Loaned securities and securities delivered as collateral are included in Securities pledged on the Consolidated Balance Sheets.

Federal Home Loan Bank Funding

On January 18, 2018, the Company became a member of the Federal Home Loan Bank of Boston (“FHLB”). The Company is required to pledge collateral to back funding agreements issued to the FHLB. As of December 31, 2020,2021, the Company had $795$925 in non-putable funding agreements, which are included in Future policy benefits and contract owner account balances on the Consolidated Balance sheets. As of December 31, 2020,2021, assets with a market value of approximately $997$1,124 collateralized the FHLB funding agreements. Assets pledged to the FHLB are included in Fixed maturities, available for sale, at fair value on the Consolidated Balance Sheets.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Litigation, Regulatory Matters and Loss Contingencies

Litigation, regulatory and other loss contingencies arise in connection with the Company's activities as a diversified financial services firm. The Company is a defendant in a number of litigation matters arising from the conduct of its business, both in the ordinary course and otherwise. In some of these matters, claimants seek to recover very large or indeterminate amounts, including compensatory, punitive, treble and exemplary damages. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages and other relief. Claimants are not always required to specify the monetary damages they seek or they may be required only to state an amount sufficient to meet a court's jurisdictional requirements. Moreover, some jurisdictions allow claimants to allege monetary damages that far exceed any reasonably possible verdict. The variability in pleading requirements and past experience demonstrates that the monetary and other relief that may be requested in a lawsuit or claim often bears little relevance to the merits or potential value of a claim. Litigation against the Company includes a variety of claims including negligence, breach of contract, fraud, violation of regulation or statute, breach of fiduciary duty, negligent misrepresentation, failure to supervise, elder abuse and other torts.

As with other financial services companies, the Company periodically receives informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the Company or the financial services industry. It is the practice of the Company to cooperate fully in these matters.

The outcome of a litigation or regulatory matter is difficult to predict and the amount or range of potential losses associated with these or other loss contingencies requires significant management judgment. It is not possible to predict the ultimate outcome or to provide reasonably possible losses or ranges of losses for all pending regulatory matters, litigation and other loss contingencies.
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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
While it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company's financial position, based on information currently known, management believes that neither the outcome of pending litigation and regulatory matters, nor potential liabilities associated with other loss contingencies, are likely to have such an effect. However, given the large and indeterminate amounts sought in certain litigation and the inherent unpredictability of all such matters, it is possible that an adverse outcome in certain of the Company's litigation or regulatory matters, or liabilities arising from other loss contingencies, could, from time to time, have a material adverse effect upon the Company's results of operations or cash flows in a particular quarterly or annual period.

For some matters, the Company is able to estimate a possible range of loss. For such matters in which a loss is probable, an accrual has been made. For matters where the Company, however, believes a loss is reasonably possible, but not probable, no accrual is required. For matters for which an accrual has been made, but there remains a reasonably possible range of loss in excess of the amounts accrued or for matters where no accrual is required, the Company develops an estimate of the unaccrued amounts of the reasonably possible range of losses. As of December 31, 2020,2021, the Company estimates the aggregate range of reasonably possible losses, in excess of any amounts accrued for these matters as of such date, not material to the Company.

For other matters, the Company is currently not able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from plaintiffs and other parties, investigation of factual allegations, rulings by a court on motions or appeals, analysis by experts and the progress of settlement discussions. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation and regulatory contingencies and updates the Company's accruals, disclosures and reasonably possible losses or ranges of loss based on such reviews.

Litigation includes Ravarino, et al. v. Voya Financial, Inc., et al. (USDC District of Connecticut, No. 3:21-cv-01658)(filed December 14, 2021). In this putative class action, the plaintiffs allege that the named defendants, which include VRIAC, breached their fiduciary duties of prudence and loyalty in the administration of the Voya 401(k) Savings Plan. The plaintiffs claim that the named defendants did not exercise proper prudence in their management of allegedly poorly performing investment options, including proprietary funds, and passed excessive investment-management and other administrative fees for proprietary and non-proprietary funds onto plan participants. The plaintiffs also allege that the defendants engaged in self-dealing through the inclusion of the Voya Stable Value Option into the plan offerings and by setting the “crediting rate” for participants’ investment in the Stable Value Fund artificially low in relation to Voya’s general account investment returns in order to maximize the spread and Voya’s profits at the participants’ expense. The complaint seeks disgorgement of unjust profits as well as costs incurred. The Company denies the allegations, which it believes are without merit, and intends to defend the case vigorously.

Finally, industry wide, life insurers continue to be exposed to class action litigation related to the cost of insurance rates and periodic deductions from cash value. Common allegations include that insurance companies have breached the terms of their universal life insurance policies by establishing or increasing the cost of insurance rates using cost factors not permitted by the contract, thereby unjustly enriching themselves. This litigation is generally known as cost of insurance litigation.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
13.    Related Party Transactions

Operating Agreements

VRIAC has certain agreements whereby it generates revenues and incurs expenses with affiliated entities. The agreements are as follows:

Investment Advisory agreement with Voya Investment Management LLC ("VIM"), an affiliate, in which VIM provides asset management, administrative and accounting services for VRIAC's general account. VRIAC incurs a fee, which is paid quarterly, based on the value of the assets under management. For the years ended December 31, 2021, 2020 2019 and 2018,2019, expenses were incurred in the amounts of $69, $73 $68 and $65,$68, respectively.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Services agreements with Voya Services Company and other insurance and non-insurance company affiliates for administrative, management, financial and information technology services. For the years ended December 31, 2021, 2020 2019 and 2018,2019, expenses were incurred in the amounts of $505, $458 $443 and $379,$443, respectively.
Intercompany agreement with VIM, as amended pursuant to which VIM agreed, effective January 1, 2010, to pay the Company, on a monthly basis, a portion of the revenues VIM earns as investment adviser to certain U.S. registered investment companies that are investment options under certain of the Company's variable insurance products. For the years ended December 31, 2021, 2020 2019 and 2018,2019, revenue under the VIM intercompany agreement was $67, $57 $59 and $63,$59, respectively.

Variable annuity, fixed insurance and mutual fund products issued by VRIAC are sold by Voya Financial Advisors, an affiliate of VRIAC. For the years ended December 31, 2021, 2020 2019 and 20182019 commission expenses incurred by VRIAC were $84, $81 $82 and $79,$82, respectively.

Management and service contracts and all cost sharing arrangements with other affiliated companies are allocated in accordance with the Company's expense and cost allocation methods. Revenues and expenses recorded as a result of transactions and agreements with affiliates may not be the same as those incurred if the Company was not a wholly owned subsidiary of its Parent.

As disclosed in the Business, Basis of Presentation and Significant Accounting Policies Note to these Consolidated Financial Statements, DSL was divested as part of the 2018 Transaction. DSL had certain intercompany agreements whereby it generated revenues and expenses with affiliated entities related to underwriting, distribution, investment advisory and administrative services. For the years ended December 31, 2018, commissions were collected in the amount of $69 and paid in turn to broker-dealers. In addition, for the years ended December 31, 2018, revenues earned and expenses incurred were $27 and $26, respectively.

Reinsurance Agreements

In March 2020, the Company recaptured an automatic reinsurance agreement entered into in 2012 with its affiliate, SLDI, to manage the reserve and capital requirements in connection with a portion of its deferred annuities business. Under the terms of the agreement, the Company reinsured to SLDI, on an indemnity reinsurance basis, a quota share of its liabilities on certain contracts. The agreement was accounted for under the deposit method. As of December 31, 2019, the Company had deposit assets of $36 and deposit liabilities of $76, related to this agreement which were included in Other assets and Other liabilities, respectively on the Consolidated Balance Sheet, The recapture resulted in a loss of $20 that was recorded in the Consolidated Statements of Operations for the year ended December 31, 2020.

Additionally, VRIAC entered in 2014 into a coinsurance agreement with Langhorne I, LLC ("Langhorne"), an affiliated captive reinsurance company, to manage reserve and capital requirements in connection with a portion of its Stabilizer and Managed Custody Guarantee business. Effective January 1, 2018, the Company recaptured the coinsurance agreement and recorded a $74 pre-tax gain on the recapture which was reported in Operating expenses in the Consolidated Statement of Operations for the year ended December 31, 2018.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Investment Advisory and Other Fees

VFP acts as a distributor of insurance products issued by its affiliates, which may in turn invest in mutual fundsfund products issued by certain of its affiliates. For each of the years ended December 31, 2021, 2020 2019 and 2018,2019, distribution revenues received by VFP related to affiliated mutual fund products were $31, $26, $27, and $27.

Financing Agreements

Reciprocal Loan Agreement

The Company maintains a reciprocal loan agreement with Voya Financial, an affiliate, to facilitate the handling of unanticipated short-term cash requirements that arise in the ordinary course of business. Under this agreement, which became effective in June 2001 and expires on April 1, 2021,2026, either party can borrow from the other up to 3.0% of the Company's statutory admitted assets as of the preceding December 31. During the years ended December 31, 2021, 2020, 2019, and 2018,2019, interest on any borrowing by either the Company or Voya Financial was charged at a rate based on the prevailing market rate for similar third-party borrowings for securities.

Under this agreement, the Company incurred and earned immaterial interest expense and earned interest income of $1, $5 $2 and $0$2 for the years ended December 31, 2021, 2020 2019 and 2018.2019. Interest expense and income are included in Operating expenses and Net investment income, respectively, in the Consolidated Statements of Operations. As of December 31, 2021, the Company had an outstanding receivable of $130 and VIPS had a $19 outstanding payable. As of December 31, 2020, the Company had an outstanding receivable of $653 and VIPS had a $7 outstanding payable. As of December 31, 2019, the Company had an outstanding receivable of $69 and no outstanding payable from/to Voya Financial under the reciprocal loan agreement.

Note with Affiliate

On December 29, 2004, VIAC issued a surplus note in the principal amount of $175 (the "Note") scheduled to mature on December 29, 2034, to VRIAC. The Note bears interest at a rate of 6.26% per year. Interest is scheduled to be paid semi-annually in arrears on June 29 and December 29 of each year, commencing on June 29, 2005. For the year ended December 31, 2020 and 2019, the Company earned 0 affiliate interest income on this Note. Interest income was $5 for the years ended December 31, 2018. As of June 1, 2018, VIAC ceased to be an affiliate of the Company following the closing of the 2018 Transaction as disclosed in the Business, Basis of Presentation and Significant Accounting Policies Note to these Consolidated Financial Statements. The investment in surplus notes is reported in Fixed maturities, available-for-sale on the Company's Consolidated Balance Sheet as of December 31, 2020 and 2019.
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Item 9.        Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended ("Exchange Act")) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company's current disclosure controls and procedures are effective in ensuring that material information relating to the Company required to be disclosed in the Company's periodic SEC filings is made known to them in a timely manner.

Management's Annual Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for the Company. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements of the Company in accordance with U.S. generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles and that receipts and expenditures are being made only in accordance with authorizations of the Company's management and directors; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2020.2021. In making its assessment, management has used the criteria set forth in "Internal Control - Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In the opinion of management, the Company has maintained effective internal control over financial reporting as of December 31, 2020.2021.

Attestation Report of the Company's Registered Public Accounting Firm

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to Title IX, Section 989G of the Dodd-Frank Act, which provides non-accelerated filers such as the Company with an exemption from Section 404(b) of the Sarbanes-Oxley Act, the provision that otherwise requires an issuer to provide an attestation report by its registered public accounting firm on management's assessment of internal control over financial reporting.

Changes in Internal Control Over Financial Reporting

DuringThere were no changes to the third quarter of 2020, we implemented a new accounting and financial reporting platform, including a new general ledger system. This new system will standardize processes, improve the efficiency of our operations and further strengthenCompany's internal controls over financial reporting. As such, we modified our internal controlscontrol over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the year ended December 31, 2021 that have materially affected, or are reasonably likely to align withmaterially affect, the new processes and system.Company's internal control over financial reporting.
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PART III

Item 10.     Directors, Executive Officers and Corporate Governance

Omitted pursuant to General Instruction I(2) of Form 10-K, except with respect to compliance with Sections 406 and 407 of the Sarbanes-Oxley Act of 2002.

a.Code of Ethics for Financial Professionals
The Company has approved and adopted a Code of Ethics for Financial Professionals (which was filed as Exhibit 14 to the Company's Form 10-K, as filed with the Securities and Exchange Commission on March 29, 2004, File No. 033-23376), pursuant to the requirements of Section 406 of the Sarbanes-Oxley Act of 2002.  Any waiver of the Code of Ethics will be disclosed by the Company by way of a Form 8-K filing.

b.Designation of Board Financial Expert
The Company has designated Michael S. Smith, Director, as its Board Financial Expert, pursuant to the requirements of Section 407 of the Sarbanes-Oxley Act of 2002.  Because the Company is not subject to the requirements of Exchange Act Rule 10A-3, it does not have any outside directors sitting on its board.

Item 11.        Executive Compensation

Omitted pursuant to General Instruction I(2) of Form 10-K.

Item 12.        Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Omitted pursuant to General Instruction I(2) of Form 10-K.

Item 13.        Certain Relationships, Related Transactions and Director Independence

Omitted pursuant to General Instruction I(2) of Form 10-K.

Item 14.        Principal Accounting Fees and Services
        (Dollar amounts in millions, unless otherwise stated)

In 20202021 and 2019,2020, Ernst & Young LLP ("Ernst & Young") served as the principal external auditing firm for Voya Financial, Inc., including Voya Retirement Insurance and Annuity Company ("VRIAC"). Voya Financial, Inc.'s subsidiaries, including VRIAC, are allocated Ernst & Young fees attributable to services rendered by Ernst & Young to each subsidiary. Ernst & Young fees allocated to the Company along with a description of the services rendered by Ernst & Young to the Company are detailed below for the periods indicated.
Year Ended December 31,Year Ended December 31,
20202019
($ in millions)($ in millions)20212020
Audit feesAudit fees$$Audit fees$$
Audit-related feesAudit-related feesAudit-related fees
Tax feesTax fees$— *
All other feesAll other fees— All other fees
$$$$
*Less than $1.

Audit Fees

Audit fees were allocated to VRIAC and include fees associated with professional services rendered by the auditors for the audit of the annual financial statements of the Company and review of the Company's interim financial statements.

Audit-related Fees

Audit-related fees were allocated to VRIAC and include the audit of the financial statements of employee benefit plans, service organization control reports, and accounting consultations.


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Tax Fees

There were minimal tax fees allocated to VRIAC in 2020 and 2019. Tax fees allocated to VRIAC were primarily for tax compliance. These services consisted of tax compliance, including the review of tax disclosures and proper completion of tax forms, assistance with questions regarding tax audits and tax planning and advisory services related to common forms of domestic taxation (i.e., income tax and capital tax).

All Other Fees

There were minimal fees allocated to VRIAC in 2020 and 2019 under the category "All other fees." Other fees allocated to VRIAC under this category typically include fees paid for products and services other than the audit fees, audit-related fees and tax fees described above and consist primarily of advisory services.

Pre-approval Policies and Procedures

VRIAC is subject to the pre-approval policies and procedures of Voya Financial, Inc. Audit, audit-related and non-audit services provided to the Company by the independent registered public accountants of Voya Financial, Inc. (the "External Auditor") are included in the total annual budgeted amounts for Voya Financial, Inc. and pre-approved by the audit committee of Voya Financial, Inc. (the "Voya Financial audit committee"). Pursuant to the pre-approval policies and procedures of Voya Financial, Inc., the Voya Financial audit committee is required to pre-approve all services provided by the External Auditor to Voya Financial, Inc. and its subsidiaries, including the Company. The pre-approval policies and procedures of Voya Financial, Inc. distinguish five types of services: (1) audit services, (2) audit-related services, (3) tax services, (4) other services that are not audit, audit-related, tax, or prohibited services and (5) prohibited services (as described in the Sarbanes-Oxley Act of 2002).

The pre-approval procedures of Voya Financial, Inc. consist of a general pre-approval procedure and a specific pre-approval procedure.

General Pre-approval Procedure

The Voya Financial audit committee pre-approves audit, audit-related, tax and other services to be provided by the External Auditor to Voya Financial, Inc. and its subsidiaries on an annual basis, and sets the maximum annual amount for such pre-approved services. Throughout the year, the Voya Financial audit committee receives from the External Auditor an overview of all services provided, including related fees and supported by sufficiently detailed information. The Voya Financial audit committee evaluates this overview quarterly. Additionally, the Voya Financial, Inc. Corporate Controller monitors the amounts paid versus the pre-approved amounts throughout the year.

Specific Pre-approval Procedure

In addition to the general pre-approval procedure of Voya Financial, Inc., each proposed External Auditor engagement by Voya Financial, Inc. or one of its subsidiaries that is expected to generate fees in excess of the pre-approved amounts, must be approved by the Voya Financial audit committee after recommendation of Voya Financial, Inc. management on a case-by-case basis.

In 20202021 and 2019,2020, 100% of each of the audit, audit-related services, tax services and all other services provided to the Company were pre-approved by the audit committee of Voya Financial, Inc.
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PART IV

Item 15.        Exhibits, Consolidated Financial Statement Schedules

a.    The following documents are filed as part of this report:

1.Financial statements (See Item 8. Financial Statements and Supplementary data)data
Consolidated Balance SheetsSheet
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Shareholder's EquityEquity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditor's ReportRegistered Public Accounting Firm
2.Financial statement schedules.
Schedule I - Summary of Investments - Other than Investments in Affiliates
Schedule IV - Reinsurance

3.Exhibits


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Index to Consolidated Financial Statement Schedules
PAGE
Report of Independent Registered Public Accounting Firm
I. Summary of Investments - Other than Investments in Affiliates as of December 31, 2020
IV. Reinsurance Information as of and for the years ended December 31, 2020, 2019 and 2018
Schedules other than those listed above are omitted because they are not required or not applicable.
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Report of Independent Registered Public Accounting Firm



To the Shareholder and the Board of Directors of
Voya Retirement Insurance and Annuity Company

We have audited the consolidated financial statements of Voya Retirement Insurance and Annuity Company (the Company) as of December 31, 20202021 and 2019,2020, and for each of the three years in the period ended December 31, 2020,2021, and have issued our report thereon dated March 16, 202111, 2022 included elsewhere in this Annual Report (Form 10-K). Our audits of the consolidated financial statements included the financial statement schedules listed in Item 15.a. of this Annual Report (Form 10-K). These schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's schedules, based on our audits.

In our opinion, the schedules present fairly, in all material respects, the information set forth therein when considered in conjunction with the consolidated financial statements.


/s/ Ernst & Young LLP
San Antonio, Texas
March 16, 202111, 2022

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Schedule I

Summary of Investments – Other than Investments in Affiliates
As of December 31, 20202021
(In millions)
Type of InvestmentsType of InvestmentsCostFair ValueAmount Shown on Consolidated Balance SheetsType of InvestmentsCostFair ValueAmount Shown on Consolidated Balance Sheets
Fixed maturitiesFixed maturitiesFixed maturities
U.S. TreasuriesU.S. Treasuries$535 $721 $721 U.S. Treasuries$554 $691 $691 
U.S. Government agencies and authoritiesU.S. Government agencies and authorities18 19 19 U.S. Government agencies and authorities20 20 20 
State, municipalities and political subdivisionsState, municipalities and political subdivisions698 814 814 State, municipalities and political subdivisions716 803 803 
U.S. corporate public securitiesU.S. corporate public securities7,632 9,156 9,156 U.S. corporate public securities7,314 8,269 8,269 
U.S. corporate private securitiesU.S. corporate private securities3,870 4,379 4,379 U.S. corporate private securities3,620 3,939 3,939 
Foreign corporate public securities and foreign governments(1)
Foreign corporate public securities and foreign governments(1)
2,539 2,951 2,951 
Foreign corporate public securities and foreign governments(1)
2,352 2,591 2,591 
Foreign corporate private securities(1)
Foreign corporate private securities(1)
2,991 3,303 3,303 
Foreign corporate private securities(1)
2,563 2,703 2,703 
Residential mortgage-backed securitiesResidential mortgage-backed securities4,071 4,237 4,237 Residential mortgage-backed securities3,081 3,164 3,164 
Commercial mortgage-backed securitiesCommercial mortgage-backed securities2,712 2,893 2,893 Commercial mortgage-backed securities2,766 2,881 2,881 
Other asset-backed securitiesOther asset-backed securities1,500 1,520 1,520 Other asset-backed securities1,341 1,351 1,351 
Total fixed maturities, including securities pledgedTotal fixed maturities, including securities pledged26,566 29,993 29,993 Total fixed maturities, including securities pledged24,327 26,412 26,412 
Equity securities116 
Equity securities, available-for-saleEquity securities, available-for-sale— — 141 
Mortgage loans on real estateMortgage loans on real estate4,694 5,013 4,627 Mortgage loans on real estate4,233 4,495 4,222 
Policy loansPolicy loans187 187 187 Policy loans171 171 171 
Short-term investments17 17 17 
Limited partnerships/corporationsLimited partnerships/corporations815 815 815 Limited partnerships/corporations980 980 980 
DerivativesDerivatives30 145 145 Derivatives(4)149 149 
Other investmentsOther investments43 43 43 Other investments143 143 143 
Total investmentsTotal investments$32,352 $36,213 $35,943 Total investments$29,850 $32,350 $32,218 
(1) Primarily U.S. dollar denominated.

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Voya Retirement Insurance and Annuity Company and Subsidiaries
(A wholly owned subsidiary of Voya Holdings Inc.)
Schedule IV

Reinsurance
Years Ended December 31, 2021, 2020 2019 and 20182019
(In millions)
GrossCededAssumedNetPercentage
of Assumed to Net
Year Ended December 31, 2021Year Ended December 31, 2021
Life insurance in forceLife insurance in force$7,006 $7,184 $178 $— NM**
Premiums:Premiums:
Accident and health insuranceAccident and health insurance— — — — *
— %
Annuity contractsAnnuity contracts34 2,459 — (2,425)— %
Total premiumsTotal premiums$34 $2,459 $— $(2,425)— %
GrossCededAssumedNetPercentage
of Assumed to Net
Year Ended December 31, 2020Year Ended December 31, 2020Year Ended December 31, 2020
Life insurance in forceLife insurance in force$7,540 $7,733 $193 $NM**Life insurance in force$7,540 $7,733 $193 $— NM**
Premiums:Premiums:Premiums:
Accident and health insuranceAccident and health insurance*
%Accident and health insurance— — — — *
— %
Annuity contractsAnnuity contracts32 32 %Annuity contracts32 — — 32 — %
Total premiumsTotal premiums$32 $$$32 %Total premiums$32 $— *$— $32 — %
Year Ended December 31, 2019Year Ended December 31, 2019Year Ended December 31, 2019
Life insurance in forceLife insurance in force$8,201 $8,410 $209 $NM**Life insurance in force$8,201 $8,410 $209 $— NM**
Premiums:Premiums:Premiums:
Accident and health insuranceAccident and health insurance***
%Accident and health insurance— *— *— — *— %
Annuity contractsAnnuity contracts31 31 %Annuity contracts31 — — 31 — %
Total premiumsTotal premiums$31 $*$$31 %Total premiums$31 $— *$— $31 — %
Year Ended December 31, 2018
Life insurance in force$8,974 $9,202 $228 $NM**
Premiums:
Accident and health insurance***%
Annuity contracts41 41 %
Total premiums$41 $*$$41 %
* Less than $1
** Not meaningful
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Voya Retirement Insurance and Annuity Company ("VRIAC")
Form 10-K for Fiscal Year Ended December 31, 20202021
Exhibit Index
Exhibit
Number
Description of Exhibit
3.1
3.2
3.3
3.4
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
10.14
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Exhibit Index
Exhibit
Number
Description of Exhibit
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.2210.21

10.2310.22

10.2410.23
10.2510.24
10.2610.25
10.2710.26
10.27
10.28
10.29
14.
23.1+
31.1+
31.2+
32.1+
32.2+
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Table of Contents
Exhibit Index
Exhibit
Number
Description of Exhibit
101.INS+
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH+
XBRL Taxonomy Extension Schema
101.CAL+
XBRL Taxonomy Extension Calculation Linkbase
101.DEF+
XBRL Taxonomy Extension Definition Linkbase
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Table of Contents
Exhibit Index
Exhibit
Number
Description of Exhibit
101.LAB+
XBRL Taxonomy Extension Label Linkbase
101.PRE+
XBRL Taxonomy Extension Presentation Linkbase

+Filed herewith.
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


March 16, 202111, 2022Voya Retirement Insurance and Annuity Company
(Date)(Registrant)
By: /s/Francis G. O'Neill/s/Michael Katz
Francis G. O'Neill
Senior Vice President and
Michael Katz
Chief Financial Officer
(Duly (Duly Authorized Officer and Principal Financial Officer)




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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on or before March 16, 2021.11, 2022.


SignaturesTitle
/s/Rodney O. Martin, Jr.Chairman and Director
Rodney O. Martin, Jr.
/s/Charles P. NelsonDirector and President
Charles P. Nelson
/s/William T. BainbridgeDirector
William T. Bainbridge
/s/Michael S. SmithChairman and Director
Michael S. Smith
/s/Anthony J. BrantzegCharles P. NelsonVice Chairman and Director
Anthony J. BrantzegCharles P. Nelson
/s/C. Landon Cobb, Jr.Robert L. GrubkaSenior Vice President andDirector
C. Landon Cobb, Jr.Robert L. Grubka
/s/Chief Accounting OfficerHeather H. LavalleeDirector
Heather H. Lavallee
/s/Francis G. O'NeillO'NeilSenior Vice President andDirector
Francis G. O'Neill
O'Neil
/s/Mona M. ZielkeDirector
Mona M. Zielke
/s/Michael KatzChief Financial Officer
Michael Katz

147142