1 unchanged sentence
Consolidated Financial Statements:
−Removed: Report of Independent Registered Public Accounting Firm 80
+Added: Report of Independent Registered Public Accounting Firm (PCAOB Firm ID 238 )
Consolidated Statements of Operations — Years ended December 31, 2021, 2020 and 2019
9 unchanged sentences
Variable Interest Entities
−Removed: Investments 111
Financing Receivables
−Removed: Reinsurance 117
Goodwill and Other Intangible Assets
11 unchanged sentences
Regulatory Requirements
−Removed: Income Taxes 150
Retirement Plans and Profit Sharing Arrangements
2 unchanged sentences
Segment Information
−Removed: Quarterly Financial Data (Unaudited) 161
Report of Independent Registered Public Accounting Firm
2 unchanged sentences
We have audited the accompanying consolidated balance sheets of Ameriprise Financial, Inc.
−Removed: and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedules listed in the index appearing under Item 15 (a)(2) (collectively referred to as the “consolidated financial statements”).
+Added: and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).
We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
14 unchanged sentences
We believe that our audits provide a reasonable basis for our opinions.
+Added: As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded the BMO Global Asset Management (EMEA) business from its assessment of internal control over financial reporting as of December 31, 2021 because it was acquired by the Company in a purchase business combination during 2021.
+Added: We have also excluded the BMO Global Asset Management (EMEA) business from our audit of internal control over financial reporting.
+Added: The BMO Global Asset Management (EMEA) business is a wholly-owned subsidiary whose total assets and total net revenues excluded from management’s assessment and our audit of internal control over financial reporting represent less than 1% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021.
Definition and Limitations of Internal Control over Financial Reporting
6 unchanged sentences
Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
−Removed: complex judgments.
+Added: The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters 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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of the reserves for long term care policies
−Removed: As described in Note 2 and Note 11 to the consolidated financial statements, the total reserves for long term care policies was $5,722 million as of December 31, 2020, which is included in policyholder account balances, future policy benefits and claims on the consolidated balance sheet.
+Added: As described in Notes 2 and 11 to the consolidated financial statements, the total reserves for long term care policies was $5,664 million as of December 31, 2021, which is included in policyholder account balances, future policy benefits and claims on the consolidated balance sheet.
Liabilities for estimates of benefits that will become payable on future claims on long term care policies are based on a gross premium valuation reflecting management’s current best estimate assumptions.
Management utilizes best estimate assumptions as of the date the policy is issued with provisions for the risk of adverse deviation, as appropriate.
−Removed: After the liabilities are initially established, management performs premium deficiency tests, using current best estimate assumptions.
−Removed: If a premium deficiency is recognized, the assumptions as of the date of the loss recognition are locked in and used in subsequent periods.
−Removed: In 2020 , the Company recognized a premium deficiency and losses of $141 million that were recorded through benefits, claims, losses and settlement expenses, which were based on management’s best estimate assumptions including expected premium rate increases, benefit reductions, morbidity rates, policy persistency and interest rates earned on assets supporting the liability.
−Removed: The principal considerations for our determination that performing procedures relating to the valuation of the reserves for long term care policies is a critical audit matter are the significant judgment by management when developing the estimate of the long term care reserves, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to the current best estimate assumptions related to expected premium rate increases, benefit reductions, morbidity rates and interest rates earned on assets supporting the liability.
−Removed: Also, the audit effort included the involvement of professionals with specialized skill and knowledge.
+Added: After the liabilities are initially established, management performs premium deficiency tests using current best estimate assumptions annually in the third quarter of each year unless management identifies a material deviation over the course of quarterly monitoring.
+Added: The best estimate assumptions include expected premium rate increases, benefit reductions, morbidity rates, policy persistency and interest rates earned on assets supporting the liability.
+Added: If a premium deficiency is recognized, the assumptions as of the date of the loss recognition are locked in and used in subsequent periods, and it is recorded as a component of benefits, claims, losses and settlement expenses.
+Added: As disclosed by management, this review did not result in the identification of a premium deficiency for 2021.
+Added: The principal considerations for our determination that performing procedures relating to the valuation of the reserves for long term care policies is a critical audit matter are the significant judgment by management when developing the current best estimate assumptions used in the premium deficiency test on the reserves for long term care policies, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to management’s current best estimate assumptions related to expected premium rate increases, benefit reductions, morbidity rates, and interest rates earned on assets supporting the liability.
+Added: Also, the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to the Company’s valuation of reserves for long term care policies, including controls over management’s development of the current best estimate assumptions.
−Removed: These procedures also included, among others, evaluating and testing management’s process for developing the estimate of the long term care reserves, testing the completeness and accuracy of underlying data used by management and testing that assumptions are accurately reflected in the models.
−Removed: Evaluating and testing management’s process also included the involvement of professionals with specialized skill and knowledge to assist in (i) evaluating the reasonableness of the current best estimate assumptions related to expected premium rate increases, benefit reductions, morbidity rates and interest rates earned on assets supporting the liability, and (ii) evaluating the appropriateness of management’s models.
+Added: These procedures included testing the effectiveness of controls relating to the Company’s premium deficiency test on the reserves for long term care policies, including controls over management’s development of the current best estimate assumptions.
+Added: These procedures also included, among others, evaluating and testing management’s process for performing the premium deficiency testing on the reserves for long term care policies, including testing that assumptions are accurately reflected in the valuation models and testing the completeness and accuracy of underlying data used by management.
+Added: Evaluating and testing management’s process also included the involvement of professionals with specialized skill and knowledge to assist in (i) evaluating the reasonableness of the current best estimate assumptions related to expected premium rate increases, benefit reductions, morbidity rates, and interest rates earned on assets supporting the liability based on industry knowledge and data as well as historical Company data and experience, and (ii) evaluating the appropriateness of management’s valuation models.
Valuation of the embedded derivatives in certain variable annuity riders
−Removed: As described in Note 2, Note 11, Note 12, and Note 15 to the consolidated financial statements, management values the embedded derivatives attributable to the provisions of certain variable annuity riders using internal valuation models.
+Added: As described in Notes 2, 11, 12, and 15 to the consolidated financial statements, management values the embedded derivatives attributable to the provisions of certain variable annuity riders using internal valuation models.
As there is no active market for the transfer of these embedded derivatives, such internal valuation models estimate fair value by discounting expected cash flows.
1 unchanged sentence
Management’s discounted cash flow model for estimating fair value includes observable capital market assumptions and incorporates significant unobservable inputs related to implied volatility, nonperformance risk and contractholder behavior assumptions that include margins for risk, all of which management believes a market participant would expect.
−Removed: The principal considerations for our determination that performing procedures relating to the valuation of the embedded derivatives in certain variable annuity riders is a critical audit matter are the significant judgment by management to estimate the fair value of the embedded derivatives in certain variable annuity riders;
−Removed: this in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence obtained related to the significant unobservable inputs related to implied volatility, non-performance risk and contractholder behavior assumptions that include margins for risk and the audit effort involved the use of professionals with specialized skill and knowledge.
+Added: The principal considerations for our determination that performing procedures relating to the valuation of the embedded derivatives in certain variable annuity riders is a critical audit matter are the significant judgment by management to estimate the fair value of the embedded derivatives in certain variable annuity riders, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to the significant unobservable inputs related to implied volatility, nonperformance risk and contractholder behavior assumptions that include margins for risk.
+Added: Also, the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls related to the Company’s estimate of the fair value of embedded derivatives in certain variable annuity riders, including controls over the significant unobservable inputs.
+Added: These procedures included testing the effectiveness of controls related to the Company’s estimate of the fair value of embedded derivatives in certain variable annuity riders, including controls over the significant
+Added: unobservable inputs.
These procedures also included, among others, evaluating and testing management’s process for developing the fair value estimate.
−Removed: Testing management’s process included evaluating the reasonableness of the significant unobservable inputs related to implied volatility, non-performance risk and contractholder behavior assumptions that include margins for risk, and testing the completeness and accuracy of underlying data used by management in the development of the significant unobservable inputs.
−Removed: Professionals with specialized skill and knowledge were used to assist in (i) evaluating the reasonableness of certain significant unobservable inputs related to implied volatility, non-performance risk and contractholder behavior assumptions that include margins for risk, and (ii) evaluating the appropriateness of management’s models .
+Added: Testing management’s process included evaluating the reasonableness of the significant unobservable inputs related to implied volatility, nonperformance risk and contractholder behavior assumptions that include margins for risk and testing the completeness and accuracy of underlying data used by management in the development of the significant unobservable inputs.
+Added: Professionals with specialized skill and knowledge were used to assist in (i) evaluating the reasonableness of certain significant unobservable inputs related to implied volatility, nonperformance risk and contractholder behavior assumptions that include margins for risk based on industry knowledge and data as well as historical Company data and experience, and (ii) evaluating the appropriateness of management’s models .
Valuation of certain guarantees on variable annuity and certain life insurance policies accounted for as insurance liabilities
−Removed: As described in Note 2, Note 11 and Note 12 to the consolidated financial statements, the Company issues universal life, variable universal life and variable annuity policies that have product features that are accounted for as insurance liabilities.
+Added: As described in Notes 2, 11, and 12 to the consolidated financial statements, the Company issues universal life, variable universal life and variable annuity policies that have product features that are accounted for as insurance liabilities.
As disclosed by management, the liability for these policies, which is included in policyholder account balances, future policy benefits and claims on the consolidated balance sheet, is determined using actuarial models to estimate the present value of the projected benefits in excess of account value and recognizing the excess over the estimated life based on expected assessments.
Significant assumptions used by management in projecting the present value of future benefits and assessments include customer asset value growth rates, mortality, persistency, and investment margins, and additionally for variable annuity policies, benefit utilization.
−Removed: The principal considerations for our determination that performing procedures relating to the valuation of certain guarantees on variable annuity and certain life insurance policies accounted for as insurance liabilities is a critical audit matter are the significant judgment by management when developing the estimate of certain guarantees on variable annuity and certain life insurance policies accounted for as insurance liabilities, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to the significant assumptions related to customer asset value growth rates, persistency, investment margins, and , for variable annuity policies, benefit utilization.
−Removed: Also, the audit effort included the involvement of professionals with specialized skill and knowledge.
+Added: The principal considerations for our determination that performing procedures relating to the valuation of certain guarantees on variable annuity and certain life insurance policies accounted for as insurance liabilities is a critical audit matter are the significant judgment by management when developing the estimate of certain guarantees on variable annuity and certain life insurance policies accounted for as insurance liabilities, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to customer asset value growth rates, persistency, investment margins, and, for variable annuity policies, benefit utilization.
+Added: Also, the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
1 unchanged sentence
These procedures also included, among others, evaluating and testing management’s process for developing the estimate of certain guarantees on variable annuity and certain life insurance policies accounted for as insurance liabilities, testing the completeness and accuracy of underlying data used by management and testing that assumptions are accurately reflected in the models.
−Removed: Evaluating and testing management’s process also included the involvement of professionals with specialized skill and knowledge to assist in (i) evaluating the reasonableness of the significant assumptions related to customer asset value growth rates, persistency, benefit utilization and investment margins, and (ii) evaluating the appropriateness of management’s models.
+Added: Evaluating and testing management’s process also included the involvement of professionals with specialized skill and knowledge to assist in (i) evaluating the reasonableness of the significant assumptions related to customer asset value growth rates, persistency, benefit utilization and investment margins based on industry knowledge and data as well as historical Company data and experience, and (ii) evaluating the appropriateness of management’s models.
/s/ PricewaterhouseCoopers LLP
55 unchanged sentences
Cash of consolidated investment entities
−Removed: Investments (net of allowance for credit losses:
−Removed: 2019, $ 24 (1) )
+Added: Investments (allowance for credit losses:
35,810 41,031
2 unchanged sentences
97,491 92,611
−Removed: Receivables (net of allowance for credit losses:
+Added: Receivables (allowance for credit losses:
Receivables of consolidated investment entities, at fair value
1 unchanged sentence
Restricted and segregated cash, cash equivalents and investments
+Added: 11,444 10,551
Other assets of consolidated investment entities, at fair value 3 2
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$ 175,979 $ 165,883
−Removed: (1) Prior to January 1, 2020, the allowance for credit losses is not applicable to Available-for-Sale securities.
−Removed: See Notes 2, 3, 6 and 7 for more information.
See Notes to Consolidated Financial Statements.
6 unchanged sentences
136,330,747 $ 3 $ 8,260 $ 12,909 $ ( 15,293 ) $ ( 291 ) $ 5,588
−Removed: Cumulative effect of adoption of equity securities guidance — — — 1 — ( 1 ) —
−Removed: Comprehensive income:
+Added: Cumulative effect of adoption of premium amortization on purchased callable debt securities guidance — — — ( 5 ) — — ( 5 )
Net income — — — 1,893 — — 1,893
Other comprehensive income, net of tax — — — — — 553 553
−Removed: Total comprehensive income 1,579
Dividends to shareholders — — — ( 518 ) — — ( 518 )
3 unchanged sentences
123,939,234 3 8,461 14,279 ( 17,276 ) 262 5,729
−Removed: Cumulative effect of adoption of premium amortization on purchased callable debt securities guidance — — — ( 5 ) — — ( 5 )
−Removed: Comprehensive income:
+Added: Cumulative effect of adoption of current expected credit losses guidance — — — ( 9 ) — — ( 9 )
Net income — — — 1,534 — — 1,534
−Removed: Other comprehensive loss, net of tax — — — — — 553 553
−Removed: Total comprehensive income 2,446
+Added: Other comprehensive income, net of tax — — — — — 367 367
Dividends to shareholders — — — ( 512 ) — — ( 512 )
3 unchanged sentences
116,765,613 3 8,822 15,292 ( 18,879 ) 629 5,867
−Removed: Cumulative effect of adoption of current expected credit losses guidance — — — ( 9 ) — — ( 9 )
−Removed: Comprehensive income:
Net income — — — 2,760 — — 2,760
−Removed: Other comprehensive income, net of tax — — — — — 367 367
−Removed: Total comprehensive income 1,901
+Added: Other comprehensive loss, net of tax — — — — — ( 626 ) ( 626 )
Dividends to shareholders — — — ( 527 ) — — ( 527 )
23 unchanged sentences
Net (gains) losses of consolidated investment entities ( 20 ) 7 9
−Removed: Changes in operating assets and liabilities:
+Added: Changes in operating assets and liabilities, net of effects from acquisitions:
Restricted and segregated investments 25 ( 500 ) 124
5 unchanged sentences
Accounts payable and accrued expenses 300 129 46
−Removed: Current income tax expense (benefit) 25 32 ( 57 )
+Added: Current income tax, net ( 308 ) 25 32
Deferred taxes, net 4 334 ( 18 )
18 unchanged sentences
Cash received from written options with deferred premiums 106 133 170
−Removed: Cash paid for deposit receivable ( 4 ) ( 349 ) —
−Removed: Cash received for deposit receivable 93 98 —
+Added: Cash paid for acquisition of business, net of cash acquired ( 576 ) — —
+Added: Cash paid for deposit receivables ( 377 ) ( 4 ) ( 349 )
+Added: Cash received for deposit receivables 254 93 98
Other, net ( 10 ) 17 ( 115 )
54 unchanged sentences
Investments transferred in connection with fixed annuity reinsurance transaction
+Added: 7,513 — 1,265
+Added: Exchange of an investment that resulted in a realized gain and an increase to amortized cost 17 — —
+Added: (in millions)
Reconciliation of cash and cash equivalents, including amounts restricted:
4 unchanged sentences
Restricted and segregated investments
+Added: ( 474 ) ( 500 )
Total cash and cash equivalents, including amounts restricted per consolidated statements of cash flows
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The foreign operations of Ameriprise Financial, Inc.
−Removed: are conducted primarily through Threadneedle Asset Management Holdings Sàrl and Ameriprise Asset Management Holdings Singapore (Pte.) Ltd and their respective subsidiaries (collectively, “Threadneedle”).
+Added: are conducted primarily through Columbia Threadneedle Investments UK International Limited, TAM UK International Holdings Ltd and Ameriprise Asset Management Holdings Singapore (Pte.) Ltd and their respective subsidiaries (collectively, “Threadneedle”).
The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial, Inc., companies in which it directly or indirectly has a controlling financial interest and variable interest entities (“VIEs”) in which it is the primary beneficiary (collectively, the “Company”).
All intercompany transactions and balances have been eliminated in consolidation.
−Removed: During 2020, changes to the Company’s reportable segments were made.
−Removed: See Note 28 for further discussion about the changes to reportable segments.
−Removed: Certain prior period amounts have been revised to conform to current period presentation.
−Removed: These changes have no impact on previously reported consolidated balance sheets or statements of operations, comprehensive income, stockholders equity, or cash flows.
−Removed: In the first quarter of 2020, the Company recorded an out-of-period correction of $ 19 million to management and financial advice fees related to performance fees.
−Removed: The impact of the error was not material to the prior period financial statements.
+Added: In the first quarter of 2021, the Company recorded a favorable out-of-period correction of $ 29 million in other comprehensive income related to defined benefit plans.
+Added: In the first quarter of 2020, the Company recorded an unfavorable out-of-period correction of $ 19 million in management and financial advice fees related to performance fees.
+Added: The impacts of the errors were not material to the current and prior period financial statements.
The accompanying Consolidated Financial Statements are prepared in accordance with U.S.
1 unchanged sentence
Certain reclassifications of prior period amounts have been made to conform with the current presentation.
+Added: On June 2, 2021, the Company filed an application to convert Ameriprise Bank, FSB to a state-chartered industrial bank regulated by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation.
+Added: The Company also filed an application to transition the FSB’s personal trust services business to a new limited purpose national trust bank regulated by the Office of the Comptroller of the Currency.
+Added: During the third quarter of 2021, RiverSource Life Insurance Company (“RiverSource Life”), one of the Company’s life insurance subsidiaries, closed on a transaction with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company, effective July 1, 2021, to reinsure approximately $ 7.0 billion of fixed deferred and immediate annuity policies.
+Added: As part of the transaction, RiverSource Life transferred $ 7.8 billion in consideration primarily consisting of Available-for-Sale securities, commercial mortgage loans, syndicated loans and cash.
+Added: The transaction resulted in a net realized gain of approximately $ 532 million on investments sold.
+Added: A similar previously announced transaction with RiverSource Life Insurance Co.
+Added: of New York (“RiverSource Life of NY”) did not receive regulatory approval in time to close by September 30, 2021 and the transaction was terminated by the parties.
+Added: On November 8, 2021, the Company completed its acquisition of the European-based asset management business of BMO Financial Group.
+Added: See Note 9 for more information on this acquisition.
The Company evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued.
−Removed: No subsequent events or transactions requiring recognition or disclosure were identified.
+Added: Other than disclosed in Note 21 and 23, no other subsequent events or transactions requiring recognition or disclosure were identified.
Summary of Significant Accounting Policies
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All VIEs are assessed for consolidation under this framework.
−Removed: When evaluating entities for consolidation, the Company considers its contractual rights in determining whether it has the power to direct the activities of the VIE that most significantly impact the VIEs economic performance.
+Added: When evaluating entities for consolidation, the Company considers its contractual rights in determining whether it has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance.
In determining whether the Company has this power, it considers whether it is acting in a role that enables it to direct the activities that most significantly impact the economic performance of an entity or if it is acting in an agent role.
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dollars based upon exchange rates prevailing at the end of each period.
−Removed: Revenues and expenses are translated at daily exchange rates during the period.
+Added: Revenues and expenses are translated at average daily exchange rates during the period.
The resulting translation adjustment, along with any related hedge and tax effects, are included in accumulated other comprehensive income (“AOCI”).
The determination of the functional currency is based on the primary economic environment in which the entity operates.
−Removed: Gains and losses from foreign currency transactions are included in General and administrative expenses in the consolidated results of operations.
+Added: Gains and losses from foreign currency transactions are included in General and administrative expenses.
Amounts Based on Estimates and Assumptions
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In part, they are based upon assumptions concerning future events.
−Removed: Among the more significant are those that relate to investment securities valuation and recognition of other-than-temporary impairments, deferred acquisition costs (“DAC”) and the corresponding recognition of DAC amortization, valuation of derivative instruments and hedging activities, litigation reserves, future policy benefits and claims reserves and income taxes and the recognition of deferred tax assets and liabilities.
+Added: Among the more significant are those that relate to investment securities valuation and the recognition of credit losses or impairments, deferred acquisition costs (“DAC”) and the corresponding recognition of DAC amortization, valuation of derivative instruments and hedging activities, litigation reserves, future policy benefits and claims reserves and income taxes and the recognition of deferred tax assets and liabilities.
These accounting estimates reflect the best judgment of management and actual results could differ.
2 unchanged sentences
Available-for-Sale Securities
−Removed: Available-for-Sale securities are carried at fair value with unrealized gains (losses) recorded in AOCI, net of impacts to DAC, deferred sales inducement costs (“DSIC”), unearned revenue, benefit reserves, reinsurance recoverables and income taxes which is consistent with prior periods before January 1, 2020.
−Removed: Available-for-Sale securities are recorded within investments on the Consolidated Balance Sheets.
+Added: Available-for-Sale securities are carried at fair value with unrealized gains (losses) recorded in AOCI, net of impacts to DAC, deferred sales inducement costs (“DSIC”), unearned revenue, benefit reserves, reinsurance recoverables and income taxes .
+Added: Available-for-Sale securities are recorded within Investments.
Gains and losses are recognized on a trade date basis in the Consolidated Statements of Operations upon disposition of the securities.
7 unchanged sentences
The allowance for credit losses is limited to the amount by which the security’s amortized cost basis exceeds its fair value.
−Removed: The amount of the impairment related to other factors is recognized in OCI which is consistent with prior periods before January 1, 2020.
+Added: The amount of the impairment related to other factors is recognized in OCI.
Factors the Company considers in determining whether declines in the fair value of fixed maturity securities due to credit-related factors include:
3 unchanged sentences
If through subsequent evaluation there is a sustained increase in cash flows expected, both the allowance and related charge to earnings may be reversed to reflect the increase in expected principal and interest payments.
−Removed: However, for Available-for-Sale securities that recognized an impairment prior to January 1, 2020 by reducing the book value of the security, the difference between the new amortized cost basis and the improved cash flows expected to be collected is accreted as interest income.
+Added: However, for Available-for-Sale
+Added: securities that recognized an impairment prior to January 1, 2020 by reducing the book value of the security, the difference between the new amortized cost basis and the improved cash flows expected to be collected is accreted as interest income.
In order to determine the amount of the credit loss component for corporate debt securities, a best estimate of the present value of cash flows expected to be collected discounted at the security’s effective interest rate is compared to the amortized cost basis of the security.
The significant inputs to cash flow projections consider potential debt restructuring terms, projected cash flows available to pay creditors and the Company’s position in the debtor’s overall capital structure.
−Removed: When assessing potential credit-related impairments for structured investments (e.g., residential mortgage backed securities, commercial mortgage backed securities, asset backed securities and other structured investments), the Company also considers credit-related factors such as overall deal structure and its
−Removed: position within the structure, quality of underlying collateral, delinquencies and defaults, loss severities, recoveries, prepayments and cumulative loss projections.
+Added: When assessing potential credit-related impairments for structured investments (e.g., residential mortgage backed securities, commercial mortgage backed securities, asset backed securities and other structured investments), the Company also considers credit-related factors such as overall deal structure and its position within the structure, quality of underlying collateral, delinquencies and defaults, loss severities, recoveries, prepayments and cumulative loss projections.
Management has elected to exclude accrued interest in its measurement of the allowance for credit losses for Available-for-Sale securities.
−Removed: Accrued interest on Available-for-Sale securities is recorded as earned in receivables on the Consolidated Balance Sheets.
+Added: Accrued interest on Available-for-Sale securities is recorded as earned in Receivables.
Available-for-Sale securities are placed on nonaccrual status when the accrued balance becomes 90 days past due or earlier based on management’s evaluation of the facts and circumstances of each security under review.
−Removed: At this time all previously accrued interest is reversed through net investment income.
+Added: All previously accrued interest is reversed through Net investment income.
Financing Receivables
1 unchanged sentence
Commercial loans include commercial mortgage loans, syndicated loans, and advisor loans and are recorded at amortized cost less the allowance for loan losses.
−Removed: Commercial mortgage loans and syndicated loans are recorded within investments on the Consolidated Balance Sheets.
−Removed: Advisor loans are recorded within receivables on the Consolidated Balance Sheets.
+Added: Commercial mortgage loans and syndicated loans are recorded within Investments and advisor loans are recorded within Receivables.
Commercial mortgage loans are loans on commercial properties that are originated by the Company.
4 unchanged sentences
Interest income is accrued as earned on the unpaid principal balances of the loans.
−Removed: Interest income recognized on commercial mortgage loans and syndicated loans is recorded in net investment income on the Consolidated Statements of Operations.
−Removed: Interest income recognized on advisor loans is recorded in other revenues on the Consolidated Statements of operations.
+Added: Interest income recognized on commercial mortgage loans and syndicated loans is recorded in Net investment income.
+Added: Interest income recognized on advisor loans is recorded in Other revenues.
Consumer Loans
Consumer loans consist of credit card receivables, policy loans, brokerage margin loans and pledged asset lines of credit and are recorded at amortized cost less the allowance for loan losses.
−Removed: Credit card receivables and policy loans are recorded within investments on the Consolidated Balance Sheets.
−Removed: Brokerage margin loans and pledged asset lines of credit are recorded within receivables on the Consolidated Balance Sheets.
+Added: Credit card receivables and policy loans are recorded within Investments.
+Added: Brokerage margin loans and pledged asset lines of credit are recorded within Receivables.
Credit card receivables are related to Ameriprise-branded credit cards issued to the Company’s customers by a third party.
2 unchanged sentences
Ameriprise Bank, FSB, enters into revolving lines of credit with customers of the Company’s broker dealer subsidiaries, where certain of the customer’s assets held in brokerage accounts serve as collateral.
−Removed: Interest income is accrued as earned on the unpaid principal balances of the loans which is consistent with prior periods before January 1, 2020.
−Removed: Interest income recognized on consumer loans is recorded in net investment income on the Consolidated Statements of Operations.
−Removed: Deposit Receivable
+Added: Interest income is accrued as earned on the unpaid principal balances of the loans.
+Added: Interest income recognized on consumer loans is recorded in Net investment income.
+Added: Deposit Receivables
For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability related to insurance risk in accordance with applicable accounting standards.
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.
−Removed: Deposits made are included in receivables.
−Removed: As amounts are received, consistent with the underlying contracts, the deposit receivable is adjusted.
−Removed: The deposit receivable is accreted using the interest method and the accretion is reported in other revenues.
+Added: Deposits made and any related embedded derivatives are included in Receivables.
+Added: As amounts are received, consistent with the underlying contracts, deposit receivables are adjusted.
+Added: Deposit receivables are accreted using the interest method and the accretion is reported in Other revenues.
See Note 7 for additional information on financing receivables.
4 unchanged sentences
Expected losses related to risks other than credit risk are excluded from the allowance for credit losses.
−Removed: The allowance for credit losses is measured and recorded upon initial recognition of the loan, regardless of whether it is originated or purchased.
+Added: The allowance for credit losses is measured and recorded upon initial recognition of the loan, regardless of whether it is
+Added: originated or purchased.
The methods and information used to develop the allowance for credit losses for each class of financing receivable are discussed below.
1 unchanged sentence
The allowance for credit losses for commercial mortgage loans and syndicated loans utilizes a probability of default and loss severity approach to estimate lifetime expected credit losses.
−Removed: Actual historical default and loss severity data for each type of commercial loan is
−Removed: adjusted for current conditions and reasonable and supportable forecasts of future economic conditions to develop the probability of default and loss severity assumptions that are applied to the amortized cost basis of the loans over the expected life of each portfolio.
+Added: Actual historical default and loss severity data for each type of commercial loan is adjusted for current conditions and reasonable and supportable forecasts of future economic conditions to develop the probability of default and loss severity assumptions that are applied to the amortized cost basis of the loans over the expected life of each portfolio.
The allowance for credit losses on commercial mortgage loans and syndicated loans is recorded through provisions charged to Net investment income and is reduced/increased by net charge-offs/recoveries.
5 unchanged sentences
Management uses its best estimate of future termination and collection rates to estimate expected credit losses over the expected life of the loans.
−Removed: The allowance for credit losses on advisor loans is recorded in distribution expenses.
+Added: The allowance for credit losses on advisor loans is recorded through provisions charged to Distribution expenses and is reduced/increased by net charge-offs/recoveries.
Consumer Loans
2 unchanged sentences
Management evaluates actual historical charge-off experience and monitors risk factors including FICO scores and past-due status within the credit card portfolio to ensure the allowance for loan losses based on industry data appropriately reserves for risks specific to the Company’s portfolio.
−Removed: The allowance for credit losses for credit card receivables is recorded in net investment income.
+Added: The allowance for credit losses for credit card receivables is recorded through provisions charged to Net investment income and is reduced/increased by net charge-offs/recoveries.
The Company monitors the market value of collateral supporting the margin loans and pledged asset lines of credit and requests additional collateral when necessary in order to mitigate the risk of loss.
2 unchanged sentences
As there is minimal risk of loss related to policy loans, there is no allowance for credit losses.
−Removed: Deposit Receivable
+Added: Deposit Receivables
The allowance for credit losses is calculated on an individual reinsurer basis.
−Removed: The deposit receivable is collateralized by an underlying trust arrangement.
+Added: Deposit receivables are collateralized by underlying trust arrangements.
Management evaluates the terms of the reinsurance and trust agreements, the nature of the underlying assets, and the potential for changes in the collateral value when considering the need for an allowance for credit losses.
9 unchanged sentences
Modifications to loan terms do not automatically result in troubled debt restructurings (“TDRs”).
−Removed: Per the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus, modifications made on a good faith basis in response to the coronavirus disease 2019 (“COVID-19”) pandemic to borrowers who were not more than 30 days past due as of December 31, 2019, such as payment deferrals, extensions of repayment terms, fee waivers, or delays in payment that are not significant to the unpaid principal value of the loan, are not considered TDRs.
+Added: Per the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus, modifications made on a good faith basis in response to the coronavirus disease 2019 (“COVID-19”) pandemic to
+Added: borrowers who were not more than 30 days past due as of December 31, 2019, such as payment deferrals, extensions of repayment terms, fee waivers, or delays in payment that are not significant to the unpaid principal value of the loan, are not considered TDRs.
Generally, performance prior to the restructuring or significant events that coincide with the restructuring are considered in assessing whether the borrower can meet the new terms which may result in the loan being returned to accrual status at the time of the restructuring or after a performance period.
6 unchanged sentences
If it is determined that foreclosure on a commercial mortgage loan is probable and the fair value is less than the current loan balance, expected credit losses are measured as the difference between the amortized cost basis of the asset and fair value less estimated selling costs.
−Removed: Upon foreclosure, the commercial mortgage loan and related allowance are reversed, and the foreclosed property is recorded as real estate owned in other assets.
+Added: Upon foreclosure, the commercial mortgage loan and related allowance are reversed, and the foreclosed property is recorded as real estate owned within Other assets.
Concerns regarding the recoverability of loans to advisors primarily arise in the event that the financial advisor is no longer affiliated with the Company.
1 unchanged sentence
Consumer Loans
−Removed: Credit card receivables are not placed on nonaccrual status at 90 days past due, however, are fully charged off upon reaching 180 days past due.
+Added: Credit card receivables are not placed on nonaccrual status at 90 days past due;
+Added: however, they are fully charged off upon reaching 180 days past due.
Separate Account Assets and Liabilities
Separate account assets represent funds held for the benefit of, and Separate account liabilities represent the obligation to, the variable annuity contractholders and variable life insurance policyholders who have a contractual right to receive the benefits of their contract or policy and bear the related investment risk.
−Removed: Gains and losses on separate account assets accrue directly to the contractholder or policyholder and are not reported in the Company’s Consolidated Statements of Operations.
−Removed: Separate account assets are recorded at fair value and separate account liabilities are equal to the assets recognized.
+Added: Gains and losses on separate account assets accrue directly to the contractholder or policyholder and are not reported in the Consolidated Statements of Operations.
Included in separate account assets and liabilities is the fair value of the pooled pension funds that are offered by Threadneedle.
+Added: Separate account assets are recorded at fair value and Separate account liabilities are equal to the assets recognized.
Restricted and Segregated Cash, Cash Equivalents and Investments
Amounts segregated under federal and other regulations are held in special reserve bank accounts for the exclusive benefit of the Company’s brokerage customers.
−Removed: Cash and cash equivalents included in restricted and segregated cash, cash equivalents and investments are presented as part of cash balances in the Company’s Consolidated Statements of Cash Flows.
+Added: Cash and cash equivalents included in Restricted and segregated cash, cash equivalents and investments are presented as part of cash balances in the Consolidated Statements of Cash Flows.
Land, Buildings, Equipment and Software
−Removed: Land, buildings, equipment and internally developed or purchased software are carried at cost less accumulated depreciation or amortization and are reflected within other assets.
+Added: Land, buildings, equipment and internally developed software are carried at cost less accumulated depreciation or amortization and are reflected within Other assets.
The Company uses the straight-line method of depreciation and amortization over periods ranging from three to 39 years.
93 unchanged sentences
Reinsurance premiums paid and benefits received are accounted for consistently with the basis used in accounting for the policies from which risk is reinsured and consistently with the terms of the reinsurance contracts.
−Removed: Reinsurance premiums for traditional life, long term care (“LTC”) and DI, net of the change in any prepaid reinsurance asset, are reported as a reduction of premiums, policy and contract charges.
+Added: Reinsurance premiums for traditional life, long term care (“LTC”) , DI and life contingent immediate annuities, net of the change in any prepaid reinsurance asset, are reported as a reduction of Premiums, policy and contract charges.
UL and VUL reinsurance premiums are reported as a reduction of Premiums, policy and contract charges.
11 unchanged sentences
In addition, the Company has a reinsurance protection agreement that provides credit protections for its reinsured long-term care business.
−Removed: The allowance for credit losses on reinsurance recoverable is recorded through provisions charged to benefits, claims, losses and settlement expenses on the Consolidated Statements of Operations.
+Added: The allowance for credit losses on reinsurance recoverable is recorded through provisions charged to Benefits, claims, losses and settlement expenses.
The Company also assumes life insurance and fixed annuity risk from other insurers in limited circumstances.
6 unchanged sentences
Traditional long-duration products include term life, whole life, DI and LTC insurance products.
−Removed: Prior to the sale of Ameriprise Auto & Home (“AAH”), reserves for short-duration products were established to provide adequately for incurred losses primarily related to auto and home policies.
Guarantees accounted for as insurance liabilities include guaranteed minimum death benefit (“GMDB”), gain gross-up (“GGU”), guaranteed minimum income benefit (“GMIB”) and the life contingent benefits associated with GMWB.
33 unchanged sentences
These unpaid amounts are calculated using anticipated claim continuance rates based on established industry tables, adjusted as appropriate for the Company’s experience.
−Removed: The discount rates used to calculate present values are based on average interest rates earned on assets supporting the liability for unpaid amounts.
+Added: discount rates used to calculate present values are based on average interest rates earned on assets supporting the liability for unpaid amounts.
Liabilities for estimated benefits payable on claims that have been incurred but not yet reported are based on periodic analysis of the actual time lag between when a claim occurs and when it is reported.
2 unchanged sentences
Gross premium valuation includes expected premium rate increases, benefit reductions, morbidity rates, policy persistency and interest rates earned on assets supporting the liability.
−Removed: Anticipated mortality and
−Removed: morbidity rates are based on established industry mortality and morbidity tables, with modifications based on the Company’s experience.
+Added: Anticipated mortality and morbidity rates are based on established industry mortality and morbidity tables, with modifications based on the Company’s experience.
Anticipated premium payments and persistency rates vary by policy form, issue age, policy duration and certain other pricing factors.
13 unchanged sentences
The Company measures and recognizes the cost of share-based awards granted to employees and directors based on the grant-date fair value of the award and recognizes the expense (net of estimated forfeitures) on a straight-line basis over the vesting period.
−Removed: Excess tax benefits or deficiencies are created upon distribution or exercise of awards and are recognized as income tax expense or benefit in the income statement.
+Added: Excess tax benefits or deficiencies are created upon distribution or exercise of awards and are recognized within the Income tax provision.
The fair value of each option is estimated on the grant date using a Black-Scholes option-pricing model.
20 unchanged sentences
When actual prepayments differ significantly from originally anticipated prepayments, the retrospective effective yield is recalculated to reflect actual payments to date and updated future payment assumptions and a catch-up adjustment is recorded in the current period.
−Removed: In addition, the new effective yield, which reflects anticipated
−Removed: future payments, is used prospectively.
+Added: In addition, the new effective yield, which reflects anticipated future payments, is used prospectively.
Realized gains and losses on securities, other than trading securities and equity method investments, are recognized using the specific identification method on a trade date basis.
−Removed: Prior to the sale of AAH, premiums on auto and home insurance were net of reinsurance premiums and recognized ratably over the coverage period.
+Added: Prior to the sale of Ameriprise Auto & Home (“AAH”), premiums on auto and home insurance were net of reinsurance premiums and recognized ratably over the coverage period.
Premiums on traditional life, health insurance and immediate annuities with a life contingent feature are net of reinsurance ceded and are recognized as revenue when due.
3 unchanged sentences
Adoption of New Accounting Standards
−Removed: Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments
−Removed: In June 2016, the Financial Accounting Standards Board (“FASB”) updated the accounting standards related to accounting for credit losses on certain types of financial instruments.
−Removed: The update replaces the current incurred loss model for estimating credit losses with a new model that requires an entity to estimate the credit losses expected over the life of the asset.
−Removed: At adoption, the initial estimate of the expected credit losses will be recorded through retained earnings and subsequent changes in the estimate will be reported in current period earnings and recorded through an allowance for credit losses on the balance sheet.
−Removed: The credit loss model for Available-for-Sale debt securities did not change;
−Removed: however, the credit loss calculation and subsequent recoveries are required to be recorded through an allowance.
−Removed: The standard is effective for interim and annual periods beginning after December 15, 2019.
−Removed: A modified retrospective cumulative adjustment to retained earnings should be recorded as of the first reporting period in which the guidance is effective for loans, receivables, and other financial instruments subject to the new expected credit loss model.
−Removed: Prospective adoption is required for establishing an allowance related to Available-for-Sale debt securities, certain beneficial interests, and financial assets purchased with a more-than-insignificant amount of credit deterioration since origination.
−Removed: The Company adopted the standard on January 1, 2020.
−Removed: The adoption of this update did not have a material impact on the Company’s consolidated results of operations or financial condition.
−Removed: Intangibles – Goodwill and Other – Internal-Use Software – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
−Removed: In August 2018, the FASB updated the accounting standards related to customer’s accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract.
−Removed: The update requires implementation costs for a CCA to be evaluated for capitalization using the same approach as implementation costs associated with internal-use software.
−Removed: The update also addresses presentation, measurement and impairment of capitalized implementation costs in a CCA that is a service contract.
−Removed: The update requires new disclosures on the nature of hosting arrangements that are service contracts, significant judgements made when applying the guidance and quantitative disclosures, including amounts capitalized, amortized and impaired.
−Removed: The update is effective for interim and annual periods beginning after December 15, 2019, and can be applied either prospectively or retrospectively.
−Removed: The Company adopted the standard using a prospective approach on January 1, 2020.
−Removed: The adoption of this update did not have a material impact on the Company’s consolidated results of operations or financial condition.
−Removed: Intangibles – Goodwill and Other – Simplifying the Test for Goodwill Impairment
−Removed: In January 2017, the FASB updated the accounting standards to simplify the accounting for goodwill impairment.
−Removed: The update removes the hypothetical purchase price allocation (Step 2) of the goodwill impairment test.
−Removed: Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value.
−Removed: The standard is effective for interim and annual periods beginning after December 15, 2019, and should be applied prospectively with early adoption permitted for any impairment tests performed after January 1, 2017.
−Removed: The Company adopted the standard on January 1, 2020.
−Removed: The adoption of this update did not have a material impact on the Company’s consolidated results of operations or financial condition.
−Removed: Leases – Recognition of Lease Assets and Liabilities on Balance Sheet
−Removed: In February 2016, the FASB updated the accounting standards for leases.
−Removed: The update was issued to increase transparency and comparability for the accounting of lease transactions.
−Removed: The standard requires most lease transactions for lessees to be recorded on the balance sheet as lease assets and lease liabilities and both quantitative and qualitative disclosures about leasing arrangements.
−Removed: The standard was effective for interim and annual periods beginning after December 15, 2018.
−Removed: Entities had the option to adopt the standard using a modified retrospective approach at either the beginning of the earliest period presented or as of the date of adoption.
−Removed: The Company adopted the standard using a modified retrospective approach as of January 1, 2019.
−Removed: The Company also elected the package of practical expedients permitted under the transition guidance within the accounting standard that allows entities to carryforward their historical lease classification and to not reassess contracts for embedded leases among other things.
−Removed: The Company recorded a right-of-use asset of $ 274 million and a corresponding lease liability of $ 295 million substantially related to real estate leases.
−Removed: The amount the lease liability exceeds the right-of-use asset primarily reflects lease incentives recorded as a reduction of the right-of-use asset that were previously recorded as a liability.
−Removed: The adoption of the standard did not have other material impacts on the Company’s consolidated results of operations or financial condition.
−Removed: See Note 18 for additional disclosures on leases.
−Removed: Income Statement – Reporting Comprehensive Income – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
−Removed: In February 2018, the FASB updated the accounting standards related to the presentation of tax effects stranded in AOCI.
−Removed: The update allows a reclassification from AOCI to retained earnings for tax effects stranded in AOCI resulting from the Tax Act.
−Removed: The election of the update was optional.
−Removed: The update was effective for fiscal years beginning after December 15, 2018.
−Removed: Entities could record the impacts either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S.
−Removed: federal corporate income tax rate in the Tax Act is recognized.
−Removed: The Company adopted the standard on January 1, 2019 and elected not to reclassify the stranded tax effects in AOCI.
−Removed: Derivatives and Hedging – Targeted Improvements to Accounting for Hedging Activities
−Removed: In August 2017, the FASB updated the accounting standards to amend the hedge accounting recognition and presentation requirements.
−Removed: The objectives of the update are to better align the financial reporting of hedging relationships to the economic results of an entity’s risk management activities and simplify the application of the hedge accounting guidance.
−Removed: The update also adds new disclosures and amends existing disclosure requirements.
−Removed: The standard was effective for interim and annual periods beginning after December 15, 2018, and was required to be applied on a modified retrospective basis.
−Removed: The Company adopted the standard on January 1, 2019.
−Removed: The adoption did not have a material impact on the Company’s consolidated results of operations or financial condition.
−Removed: Receivables – Nonrefundable Fees and Other Costs – Premium Amortization on Purchased Callable Debt Securities
−Removed: In March 2017, the FASB updated the accounting standards to shorten the amortization period for certain purchased callable debt securities held at a premium.
−Removed: Under previous guidance, premiums were generally amortized over the contractual life of the security.
−Removed: The amendments require the premium to be amortized to the earliest call date.
−Removed: The update applies to securities with explicit, non-contingent call features that are callable at fixed prices and on preset dates.
−Removed: The standard was effective for interim and annual periods beginning after December 15, 2018, and was required to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.
+Added: Income Taxes – Simplifying the Accounting for Income Taxes
+Added: In December 2019, the Financial Accounting Standards Board (“FASB”) updated the accounting standards to simplify the accounting for income taxes.
+Added: The update eliminates certain exceptions to:
+Added: (1) accounting principles related to intra-period tax allocation to be applied on a prospective basis, (2) deferred tax liabilities related to outside basis differences to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption, and (3) year-to-date losses in interim periods to be applied on a prospective basis.
+Added: The update also amends existing guidance related to situations when an entity receives:
+Added: (1) a step-up in the tax basis of goodwill to be applied on a prospective basis, (2) an allocation of income tax expense when members of a consolidated tax filing group issue separate financial statements to be applied on a retrospective basis for all periods presented, (3) interim recognition of enactment of tax laws or rate changes to be applied on a prospective basis, and (4) franchise taxes and other taxes partially based on income to be applied on a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption.
+Added: The standard is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.
The Company adopted the standard on January 1, 2021.
−Removed: The adoption did not have a material impact on the Company’s consolidated results of operations or financial condition.
−Removed: In October 2020, the FASB issued amendments clarifying that, at each reporting date if a security contains additional future call dates, an entity must reevaluate whether the amortized cost basis exceeds the amount repayable by the issuer at the next call date.
−Removed: If so, the excess should be amortized to the next call date.
−Removed: The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.
−Removed: Early application is not permitted.
−Removed: All entities should apply this update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities.
−Removed: The Company currently accounts for the additional call dates in accordance with this amendment.
−Removed: Compensation – Retirement Benefits – Defined Benefit Plans – General – Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans
−Removed: In August 2018, the FASB updated the accounting standards related to disclosures for sponsors of defined benefit plans.
−Removed: The update requires disclosure of the weighted-average interest crediting rate for cash balance plans and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period.
−Removed: The update also eliminates the disclosure of the amounts in AOCI expected to be recognized as components of net period benefit cost over the next fiscal year.
−Removed: The update is effective for annual periods ending after December 15, 2020, and should be applied retrospectively.
−Removed: The Company early adopted the standard in the fourth quarter of 2018 on a retrospective basis.
−Removed: The adoption did not have an impact on the Company’s consolidated results of operations or financial condition.
−Removed: Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement
−Removed: In August 2018, the FASB updated the accounting standards related to disclosures for fair value measurements.
−Removed: The update eliminates the following disclosures:
−Removed: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy of timing of transfers between levels of the fair value hierarchy, and (3) the valuation processes for Level 3 fair value measurements.
−Removed: The new disclosures include changes in unrealized gains and losses for the period included in OCI for recurring Level 3 fair value measurements of instruments held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated.
−Removed: The new disclosures are required on a prospective basis;
−Removed: all other provisions should be applied retrospectively.
−Removed: The update is effective for interim and annual periods beginning after December 15, 2019.
−Removed: Early adoption is permitted for the entire standard or only the provisions to eliminate or modify disclosure requirements.
−Removed: The Company early adopted the provisions of the standard to eliminate or modify disclosure requirements in the fourth quarter of 2018.
−Removed: The update does not have an impact on the Company’s consolidated results of operations or financial condition.
+Added: The adoption of this standard had no impact on the Company’s consolidated results of operations and financial condition.
Future Adoption of New Accounting Standards
+Added: Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
+Added: In October 2021, the FASB updated the accounting standards to require an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue for Contracts with Customers (“Topic 606”).
+Added: At the acquisition date, an acquirer is required to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.
+Added: Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree prepared financial statements in accordance with GAAP).
+Added: The amendments apply to all contract assets and contract liabilities acquired in a business combination that result from contracts accounted for under the principals of Topic 606.
+Added: The standard is effective for interim and annual periods beginning after December 15, 2022.
+Added: Early adoption is permitted, including adoption in an interim period.
+Added: An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of the early application and (2) prospectively to all business combinations that occur on or after the date of initial application.
+Added: The adoption of the standard is not expected to have a material impact on the Company’s consolidated results of operations and financial condition.
Reference Rate Reform – Expedients for Contract Modifications
In March 2020, the FASB updated the accounting standards to provide optional expedients and exceptions for applying GAAP to contracts, hedging or other transactions that are affected by reference rate reform (i.e., the elimination of LIBOR).
−Removed: The following
−Removed: expedients are provided for modified contracts whose reference rate is changed:
+Added: The following expedients are provided for modified contracts whose reference rate is changed:
(1) receivables and debt contracts are accounted for prospectively by adjusting the effective interest rate, (2) leases are accounted for as a continuation of the existing contracts with no reassessments of the lease classification and discount rate or remeasurements of lease payments that otherwise would be required, and (3) an entity is not required to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract.
+Added: The amendments in this update were effective
+Added: upon issuance and must be elected prior to December 31, 2022.
When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions.
−Removed: In January 2021, FASB updated the standard to allow an entity to elect to apply the treatment under the original guidance to derivative instruments that use an interest rate that for margining, discounting or contract price alignment that will be modified due to reference rate reform but did not qualify under the original guidance The adoption of the standard is not expected to have an impact on the Company’s consolidated results of operations and financial condition.
−Removed: Income Taxes – Simplifying the Accounting for Income Taxes
−Removed: In December 2019, the FASB updated the accounting standards to simplify the accounting for income taxes.
−Removed: The update eliminates certain exceptions to:
−Removed: (1) accounting principles related to intraperiod tax allocation to be applied on a prospective basis, (2) deferred tax liabilities related to outside basis differences to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption, and (3) year-to-date losses in interim periods to be applied on a prospective basis.
−Removed: The update also amends existing guidance related to situations when an entity receives:
−Removed: (1) a step-up in the tax basis of goodwill to be applied on a prospective basis, (2) an allocation of income tax expense when members of a consolidated tax filing group issue separate financial statements to be applied on a retrospective basis for all periods presented, (3) interim recognition of enactment of tax laws or rate changes to be applied on a prospective basis, and (4) franchise taxes and other taxes partially based on income to be applied on a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption.
−Removed: The standard is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.
+Added: In January 2021, FASB updated the standard to allow an entity to elect to apply the treatment under the original guidance to derivative instruments that use an interest rate for margining, discounting or contract price alignment that will be modified due to reference rate reform but did not qualify under the original guidance.
+Added: The Company has not yet applied any of the optional expedients.
The adoption of the standard is not expected to have an impact on the Company’s consolidated results of operations and financial condition.
7 unchanged sentences
The portion of the change in fair value attributable to a change in the instrument-specific credit risk of market risk benefits in a liability position will be recorded in OCI.
−Removed: Significant changes also relate to the measurement of the liability for future policy benefits for nonparticipating traditional long-duration insurance contracts and immediate annuities with a life contingent feature include the following:
+Added: Significant changes also relate to the measurement of the liability for future policy benefits for nonparticipating traditional long-duration insurance contracts and immediate annuities with a life contingent feature including the following:
• Insurers will be required to review and update the cash flow assumptions used to measure the liability for future policy benefits rather than using assumptions locked in at contract inception.
12 unchanged sentences
The update requires significant additional disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account balances, market risk benefits, DAC and DSIC, as well as qualitative and quantitative information about expected cash flows, estimates and assumptions.
−Removed: On November 5, 2020, the FASB released an updated ASU to defer the effective date of the standard to interim and annual periods beginning after December 15, 2022, and interim periods within those years.
−Removed: should be applied to the liability for future policy benefits and DAC and DSIC on a modified retrospective basis and applied to market risk benefits on a retrospective basis with the option to apply full retrospective transition if certain criteria are met.
+Added: The standard is effective for interim and annual periods beginning after December 15, 2022.
+Added: The standard should be applied to the liability for future policy benefits and DAC and DSIC on a modified retrospective basis and applied to market risk benefits on a retrospective basis with the option to apply full retrospective transition if certain criteria are met.
Early adoption is permitted.
−Removed: The Company is currently evaluating the impact of the standard on its consolidated results of operations, financial condition and disclosures.
+Added: The Company is currently in the process of implementing the standard, including the implementation of controlled measurement and reporting processes.
+Added: The Company expects the impact of adopting the standard to be material to its consolidated results of operations and financial condition.
Revenue from Contracts with Customers
−Removed: During the third quarter of 2020, the composition of the Company’s reportable segments changed from five to four segments.
−Removed: The Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance).
−Removed: In addition, the Company moved the Fixed Annuities and Fixed Indexed Annuities business to the Corporate & Other segment as a closed block.
−Removed: Certain prior period amounts have been revised to conform to the current presentation.
−Removed: See Note 28 for additional information on this change.
The following tables present revenue disaggregated by segment on an adjusted operating basis with a reconciliation of segment revenues to those reported on the Consolidated Statements of Operations:
Year Ended December 31, 2021
−Removed: Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate
−Removed: Other Total Segments Non-operating Revenue Total
+Added: Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Revenue Total
(in millions)
19 unchanged sentences
Total distribution fees 2,253 471 409 — 3,133 — 3,133
−Removed: 2,002 411 363 — 2,776 — 2,776
Other revenues 196 4 — — 200 — 200
5 unchanged sentences
Banking and deposit interest expense ( 12 ) — — ( 2 ) ( 14 ) — ( 14 )
−Removed: 59 — — 3 62 — 62
Total segment net revenues
8,021 3,682 3,244 487 15,434 ( 414 ) 15,020
−Removed: Intersegment revenues 893 53 433 ( 2 ) 1,377 7 1,384
+Added: Elimination of intersegment revenues ( 1,043 ) ( 50 ) ( 478 ) ( 2 ) ( 1,573 ) ( 16 ) ( 1,589 )
Total net revenues $ 6,978 $ 3,632 $ 2,766 $ 485 $ 13,861 $ ( 430 ) $ 13,431
Year Ended December 31, 2020
−Removed: Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate
−Removed: Other Total Segments Non-operating Revenue Total
+Added: Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Revenue Total
(in millions)
27 unchanged sentences
Banking and deposit interest expense ( 59 ) — — ( 3 ) ( 62 ) — ( 62 )
−Removed: 136 — — 8 144 — 144
Total segment net revenues
6,675 2,891 3,094 546 13,206 77 13,283
−Removed: Intersegment revenues 924 55 429 ( 6 ) 1,402 8 1,410
+Added: Elimination of intersegment revenues ( 893 ) ( 53 ) ( 433 ) 2 ( 1,377 ) ( 7 ) ( 1,384 )
Total net revenues $ 5,782 $ 2,838 $ 2,661 $ 548 $ 11,829 $ 70 $ 11,899
Year Ended December 31, 2019
−Removed: Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate
−Removed: Other Total Segments Non-operating Revenue Total
+Added: Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Revenue Total
(in millions)
27 unchanged sentences
Banking and deposit interest expense ( 136 ) — — ( 8 ) ( 144 ) — ( 144 )
−Removed: 89 — — 6 95 — 95
Total segment net revenues
6,599 2,913 3,123 1,477 14,112 265 14,377
−Removed: Intersegment revenues 952 50 417 ( 5 ) 1,414 17 1,431
+Added: Elimination of intersegment revenues ( 924 ) ( 55 ) ( 429 ) 6 ( 1,402 ) ( 8 ) ( 1,410 )
Total net revenues $ 5,675 $ 2,858 $ 2,694 $ 1,483 $ 12,710 $ 257 $ 12,967
49 unchanged sentences
Custodial service fees are invoiced or charged to brokerage accounts on an annual basis.
−Removed: Contract liabilities for custodial service fees, which are included in other liabilities in the Consolidated Balance Sheets, were nil as of both December 31, 2020 and 2019.
The Company earns revenue for providing trade execution services to franchise advisors.
11 unchanged sentences
The Company earns revenue for providing unaffiliated partners an opportunity to educate the Company’s advisors or to support availability and distribution of their products on the Company’s platforms.
−Removed: These payments allow the outside parties to train and support the advisors, explain the features of their products and distribute marketing and educational materials, and support trading and operational systems necessary to enable the Company’s client servicing and production distribution efforts.
+Added: These payments allow the outside parties to train and
+Added: support the advisors, explain the features of their products and distribute marketing and educational materials, and support trading and operational systems necessary to enable the Company’s client servicing and production distribution efforts.
The Company earns revenue for placing and maintaining unaffiliated fund partners and insurance companies’ products on the Company’s sales platform (subject to the Company’s due diligence standards).
27 unchanged sentences
The consulting and other services performance obligations are satisfied as the services are delivered and revenue is earned based upon the level of service requested.
+Added: Contract Costs Asset
+Added: During the fourth quarter of 2021, the Company recognized an asset of $ 39 million related to the transition of investment advisory services under an arrangement with BMO Financial Group for clients that elected to transfer U.S.
+Added: retail and institutional assets to the Company.
Receivables for revenue from contracts with customers are recognized when the performance obligation is satisfied and the Company has an unconditional right to the revenue.
9 unchanged sentences
See Note 2 for further discussion of the Company’s accounting policy on consolidation.
−Removed: CLOs are asset backed financing entities collateralized by a pool of assets, primarily syndicated loans and, to a lesser extent, high-yield bonds.
+Added: CLOs are asset backed financing entities collateralized by a pool of assets, primarily syndicated loans and, to a lesser extent, high-
Multiple tranches of debt securities are issued by a CLO, offering investors various maturity and credit risk characteristics.
2 unchanged sentences
The assets of the CLOs cannot be used by the Company.
−Removed: Scheduled debt payments are based on the
−Removed: performance of the CLO’s collateral pool.
+Added: Scheduled debt payments are based on the performance of the CLO’s collateral pool.
The Company earns management fees from the CLOs based on the value of the CLO’s collateral pool and, in certain instances, may also receive incentive fees.
The fee arrangement is at market and commensurate with the level of effort required to provide those services.
−Removed: The Company has invested in a portion of the unrated, junior subordinated notes of certain CLOs.
+Added: The Company has invested in a portion of the unrated, junior subordinated notes and highly rated senior notes of certain CLOs.
The Company consolidates certain CLOs where it is the primary beneficiary and has the power to direct the activities that most significantly impact the economic performance of the CLO.
31 unchanged sentences
The Company invests in structured investments which are considered VIEs for which it is not the sponsor.
−Removed: These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities, commercial and residential mortgage backed securities.
+Added: These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities, and commercial and residential mortgage backed securities.
The Company classifies these investments as Available-for-Sale securities.
9 unchanged sentences
(in millions)
−Removed: Corporate debt securities $ — $ 8 $ — $ 8
Common stocks $ — $ 3 $ — $ 3
15 unchanged sentences
Receivables — 16 — 16
+Added: Other assets — — 2 2
Total assets at fair value $ — $ 1,842 $ 94 $ 1,936
9 unchanged sentences
Total gains (losses) included in:
+Added: Net income 2 (1) 1 (1)
Transfers into Level 3
Transfers out of Level 3
−Removed: Balance, December 31, 2020
−Removed: Changes in unrealized gains (losses) included in income relating to assets held at December 31, 2020
( 150 ) ( 2 )
−Removed: Syndicated Loans
+Added: Deconsolidation of consolidated investment entities
+Added: Balance, December 31, 2021
+Added: Changes in unrealized gains (losses) included in net income relating to assets held at December 31, 2021
+Added: Syndicated Loans Other Assets
(in millions)
1 unchanged sentence
Total gains (losses) included in:
+Added: Net income ( 16 ) (1) —
Transfers into Level 3
1 unchanged sentence
Balance, December 31, 2020
−Removed: Changes in unrealized gains (losses) included in income relating to assets held at December 31, 2019
−Removed: Common Stocks Syndicated Loans
+Added: Changes in unrealized gains (losses) included in net income relating to assets held at December 31, 2020
+Added: $ ( 2 ) (1) $ —
+Added: Syndicated Loans
(in millions)
1 unchanged sentence
Total gains (losses) included in:
−Removed: 6 (1) ( 1 ) (1)
−Removed: ( 10 ) ( 41 )
+Added: Net income ( 2 ) (1)
Transfers into Level 3
Transfers out of Level 3
−Removed: ( 2 ) ( 160 )
−Removed: Consolidation of consolidated investment entities
−Removed: Deconsolidation of consolidated investment entities
Balance, December 31, 2019
−Removed: Changes in unrealized gains (losses) included in income relating to assets held at December 31, 2018
−Removed: $ — $ ( 4 ) (1)
−Removed: (1) Included in net investment income in the Consolidated Statements of Operations.
+Added: Changes in unrealized gains (losses) included in net income relating to assets held at December 31, 2019
+Added: (1) Included in Net investment income.
Securities and loans transferred from Level 3 primarily represent assets with fair values that are now obtained from a third-party pricing service with observable inputs or priced in active markets.
14 unchanged sentences
The fair value of these liabilities is classified as Level 2.
+Added: Other liabilities also include accrued interest on CLO debt.
Fair Value Option
16 unchanged sentences
The estimated fair value of the CLOs’ debt was $ 2.2 billion and $ 2.0 billion as of December 31, 2021 and 2020, respectively.
−Removed: During the third quarter of 2020, the Company launched a new CLO and issued debt of $ 394 million .
+Added: During the first quarter of 2021, the Company launched two new CLOs and issued debt of $ 817 million.
Interest income from syndicated loans, bonds and structured investments is recorded based on contractual rates in Net investment income.
1 unchanged sentence
Interest expense on debt is recorded in interest and debt expense with gains and losses related to changes in the fair value of debt recorded in Net investment income.
−Removed: Total net gains (losses) recognized in net investment income related to changes in the fair value of financial assets and liabilities for which the fair value option was elected were $( 7 ) million, $( 9 ) million and $ 47 million for the years ended December 31, 2020, 2019 and 2018, respectively.
+Added: Total net gains (losses) recognized in Net investment income related to the changes in fair value of investments the Company owns in the consolidated CLOs where it has elected the fair value option and collateralized financing entity accounting were immaterial for the years ended December 31, 2021, 2020 and 2019.
Debt of the consolidated investment entities and the stated interest rates were as follows:
5 unchanged sentences
Debt of consolidated CLOs due 2028-2034
−Removed: The debt of the consolidated CLOs has both fixed and floating interest rates, which range from 0.0 % to 8.9 %.
+Added: $ 2,164 $ 1,913 1.7 % 2.1 %
+Added: The debt of the consolidated CLOs has both fixed and floating interest rates, which range from nil to 9.4 %.
The interest rates on the debt of CLOs are weighted average rates based on the outstanding principal and contractual interest rates.
−Removed: The following is a summary of investments:
+Added: The following is a summary of Ameriprise Financial investments:
(in millions)
Available-for-Sale securities, at fair value $ 32,050 $ 36,283
−Removed: Mortgage loans, net (net of allowance for credit losses:
+Added: Mortgage loans (allowance for credit losses:
Policy loans 835 846
−Removed: Other investments, net (net of allowance for credit losses:
+Added: Other investments (allowance for credit losses:
Total $ 35,810 $ 41,031
−Removed: Other investments primarily reflect the Company’s interests in affordable housing partnerships, trading securities, seed money investments, syndicated loans, credit card receivables and certificates of deposit with original or remaining maturities at the time of purchase of more than 90 days.
+Added: Other investments primarily reflect the Company’s interests in affordable housing partnerships, trading securities, equity securities, seed money investments, syndicated loans, credit card receivables and certificates of deposit with original or remaining maturities at the time of purchase of more than 90 days.
The following is a summary of Net investment income:
8 unchanged sentences
Total $ 1,683 $ 1,251 $ 1,463
−Removed: (1) Includes the change in the allowance for credit losses of $( 27 ) million for the year ended December 31 , 2020.
Available-for-Sale securities distributed by type were as follows:
12 unchanged sentences
Description of Securities December 31, 2020
−Removed: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
+Added: Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value
(in millions)
8 unchanged sentences
Total $ 33,601 $ 2,727 $ ( 34 ) $ ( 11 ) $ 36,283
−Removed: As of December 31, 2020 and 2019, accrued interest of $ 178 million and $ 177 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in receivables on the Consolidated Balance Sheets.
+Added: As of December 31, 2021 and 2020, accrued interest of $ 140 million and $ 178 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in Receivables.
As of December 31, 2021 and 2020, investment securities with a fair value of $ 3.1 billion and $ 3.6 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $ 314 million and $ 454 million, respectively, may be sold, pledged or rehypothecated by the counterparty.
16 unchanged sentences
Total fixed maturities $ 30,541 $ 32,050 100 % $ 33,601 $ 36,283 100 %
−Removed: (1) The amortized cost and fair value of below investment grade securities includes interest in CLOs managed by the Company of $ 3 million, as of December 31, 2020, and $ 5 million and $ 6 million, respectively, as of December 31, 2019.
+Added: (1) The amortized cost and fair value of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $ 1 million and $ 2 million, respectively, as of December 31, 2021 and $ 3 million as of December 31, 2020.
These securities are not rated but are included in below investment grade due to their risk characteristics.
As of December 31, 2021 and 2020, approximately 30 % and 33 %, respectively, of securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities.
−Removed: No holdings of any issuer were greater than 10 % of total equity.
−Removed: The following tables provide information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position:
+Added: No holdings of any issuer were greater than 10% of total equity as of both December 31, 2021 and 2020.
+Added: The following tables summarize the fair value and gross unrealized losses on Available-for-Sale securities, aggregated by major investment type and the length of time that individual securities have been in a continuous unrealized loss position for which no allowance for credit losses has been recorded:
Description of Securities December 31, 2021
33 unchanged sentences
Total 153 $ 2,193 $ ( 17 ) 122 $ 1,046 $ ( 17 ) 275 $ 3,239 $ ( 34 )
−Removed: As part of the Company’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities during the twelve months ended December 31, 2020 is primarily attributable to lower interest rates as well as credit spread tightening.
−Removed: Consistent with the accounting policy described in Note 2, the Company did not recognize any of the total unrealized losses in earnings because it was determined that such losses were due to non-credit factors.
+Added: As part of the Company’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities for which an allowance for credit losses has not been recognized during the year ended December 31, 2021 is primarily attributable to higher interest rates.
+Added: The Company did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors.
The Company does not intend to sell these securities and does not believe that it is more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis.
−Removed: As of December 31, 2020 , 92 % of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade.
−Removed: The following table presents a rollforward of the allowance for credit losses on Available-for-Sale securities:
+Added: As of December 31, 2021 and 2020, approximately 96 % and 92 %, respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade.
+Added: The following tables present a rollforward of the allowance for credit losses on Available-for-Sale securities:
+Added: Corporate Debt Securities Asset Backed Securities State and Municipal Obligations Total
+Added: (in millions)
+Added: Balance at January 1, 2021
+Added: $ 10 $ 1 $ — $ 11
+Added: Additions for which credit losses were not previously recorded
+Added: Charge-offs ( 10 ) ( 1 ) — ( 11 )
+Added: Balance at December 31, 2021
+Added: $ — $ — $ 1 $ 1
Corporate Debt Securities Asset Backed Securities Total
(in millions)
−Removed: Balance, January 1, 2020 (1)
+Added: Balance at January 1, 2020 (1)
Additions for which credit losses were not previously recorded
1 unchanged sentence
( 3 ) — ( 3 )
−Removed: Balance, December 31 , 2020
+Added: Balance at December 31, 2020
$ 10 $ 1 $ 11
(1) Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired.
−Removed: There is no adoption impact due to the prospective transition for Available-for-Sale securities.
−Removed: Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in earnings were as follows:
+Added: Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in Net investment income were as follows:
Years Ended December 31,
4 unchanged sentences
Credit losses ( 1 ) ( 11 ) ( 22 )
+Added: Other impairments ( 13 ) — —
Total $ 561 $ 11 $ ( 6 )
−Removed: Credit losses for the year ended December 31, 2020 primarily related to credit losses on corporate debt securities, primarily in the oil and gas industry.
−Removed: Other-than-temporary impairments for the year ended December 31, 2019 primarily related to corporate debt securities and investments held by AAH.
+Added: Credit losses for the year ended December 31, 2021 primarily related to recording an allowance for credit losses on certain state and municipal securities.
+Added: For the year ended December 31, 2020, credit losses primarily related to recording an allowance for credit losses on certain corporate debt securities, primarily in the oil and gas industry.
+Added: Other-than-temporary impairments (“OTTI”) for the year ended December 31, 2019 primarily related to corporate debt securities and investments held by AAH.
The Company recognized an impairment of $ 5 million in the first quarter of 2019 on investments held by AAH as the Company no longer intended to hold the securities until the recovery of fair value to book value.
+Added: Other impairments for the year ended December 31, 2021 related to Available-for-Sale securities that were impaired when they were classified as held for sale prior to being sold in the reinsurance transaction.
+Added: See Note 1 for more information on the reinsurance transaction.
See Note 21 for a rollforward of net unrealized investment gains (losses) included in AOCI.
15 unchanged sentences
Financing Receivables
−Removed: Financing receivables are comprised of commercial loans, consumer loans, and the deposit receivable.
+Added: Financing receivables are comprised of commercial loans, consumer loans, and deposit receivables.
See Note 2 for information regarding the Company’s accounting policies related to financing receivables and the allowance for credit losses.
Allowance for Credit Losses
−Removed: The following tables present a rollforward of the allowance for credit losses for the year ended December 31, 2020:
+Added: The following tables present a rollforward of the allowance for credit losses:
Commercial Loans Consumer Loans Total
(in millions)
+Added: Balance, January 1, 2021
+Added: $ 66 $ 2 $ 68
+Added: Provisions ( 13 ) 2 ( 11 )
+Added: Charge-offs ( 8 ) ( 2 ) ( 10 )
+Added: Recoveries — 1 1
Balance, December 31, 2021
$ 47 $ 3 $ 50
+Added: Commercial Loans Consumer Loans Total
+Added: (in millions)
+Added: Balance, December 31, 2019 (1)
+Added: $ 51 $ — $ 51
Cumulative effect of adoption of current expected credit losses guidance 2 3 5
8 unchanged sentences
Balance at January 1, 2019
−Removed: Provisions 5 6
Charge-offs ( 4 )
1 unchanged sentence
Balance at December 31, 2019
−Removed: Accrued interest on commercial loans was $ 16 million and $ 14 million as of December 31, 2020 and 2019, respectively, and is recorded in receivables on the Consolidated Balance Sheets and excluded from the amortized cost basis of commercial loans.
+Added: The decrease in the allowance for credit losses provision for commercial loans reflects the sale of certain commercial mortgage loans and syndicated loans in conjunction with the fixed deferred and immediate annuity reinsurance transaction discussed in Note 1.
+Added: Accrued interest on commercial loans was $ 13 million and $ 16 million as of December 31, 2021 and 2020, respectively, and is recorded in Receivables and excluded from the amortized cost basis of commercial loans.
Purchases and Sales
+Added: During the year ended December 31, 2021, the Company sold $ 746 million of commercial mortgage loans.
During the years ended December 31, 2021, 2020 and 2019, the Company purchased $ 37 million, $ 173 million and $ 162 million, respectively, of syndicated loans, and sold $ 354 million, $ 17 million and $ 54 million, respectively, of syndicated loans.
−Removed: During the year ended December 31, 2020, the Company purchased $ 22 million of residential loans from a third-party originator shortly after origination.
−Removed: The allowance for credit losses for residential mortgage loans was not material as of December 31, 2020.
−Removed: During the year ended December 31, 2020, the Company acquired $ 224 million of pledged asset lines of credit that are a 50% participation interest with a third party bank.
+Added: During the years ended December 31, 2021 and 2020, the Company purchased $ 33 million and $ 22 million, respectively, of residential mortgage loans, and sold $ 1 million and nil , respectively, of residential mortgage loans.
+Added: The allowance for credit losses for residential mortgage loans was not material as of both December 31, 2021 and 2020.
The Company has not acquired any loans with deteriorated credit quality as of the acquisition date.
9 unchanged sentences
Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months.
−Removed: Total commercial mortgage loan modifications in 2020 due to the COVID-19 pandemic consisted of 93 loans with a total unpaid balance of $ 369 million.
+Added: Total commercial mortgage loan modifications through December 31, 2020 due to the COVID-19 pandemic consisted of 93 loans with a total unpaid balance of $ 369 million.
Modifications primarily consisted of short-term forbearance and interest only payments.
−Removed: As of December 31, 2020, there was one loan with interest only payments with an unpaid balance of $ 10 million.
−Removed: All other loans returned to their normal payment schedules.
+Added: There were no additional modifications during the year ended December 31, 2021.
+Added: As of December 31, 2021, there were no loans remaining that were modified due to COVID-19.
+Added: All loans returned to their normal payment schedules.
Total commercial mortgage loans past due were nil as of December 31, 2021 and 2020, respectively.
−Removed: The table below presents the amortized cost basis of commercial mortgage loans as of December 31, 2020 by the year of origination and loan-to-value ratio:
+Added: The tables below present the amortized cost basis of commercial mortgage loans by the year of origination and loan-to-value ratio:
+Added: December 31, 2021
Loan-to-Value Ratio 2021 2020 2019 2018 2017 Prior Total
6 unchanged sentences
Total $ 204 $ 123 $ 223 $ 115 $ 176 $ 1,075 $ 1,916
+Added: December 31, 2020
+Added: Loan-to-Value Ratio 2020 2019 2018 2017 2016 Prior Total
+Added: (in millions)
+Added: > 100% $ — $ — $ 2 $ — $ — $ 10 $ 12
+Added: 80% - 100% 15 16 12 3 7 15 68
+Added: 60% - 80% 89 166 27 32 46 144 504
+Added: 40% - 60% 23 57 74 155 113 551 973
+Added: < 40% 7 23 80 99 64 895 1,168
+Added: Total $ 134 $ 262 $ 195 $ 289 $ 230 $ 1,615 $ 2,725
Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization rate assumptions based on property type.
16 unchanged sentences
1,916 2,725 100 % 100 %
−Removed: allowance for loan losses 29 19
+Added: allowance for credit losses 12 29
Total $ 1,904 $ 2,696
12 unchanged sentences
1,916 2,725 100 % 100 %
−Removed: allowance for loan losses 29 19
+Added: allowance for credit losses 12 29
Total $ 1,904 $ 2,696
2 unchanged sentences
The Company’s syndicated loan portfolio is diversified across industries and issuers.
−Removed: Total syndicated loans past due were $ 3 million and $ 1 million as of December 31, 2020 and 2019, respectively.
+Added: Total syndicated loans past due were nil and $ 3 million as of December 31, 2021 and 2020, respectively.
The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality.
−Removed: The table below present the amortized cost basis of syndicated loans as of December 31, 2020 by origination year and internal risk rating:
+Added: The tables below present the amortized cost basis of syndicated loans by origination year and internal risk rating:
+Added: December 31, 2021
Internal Risk Rating 2021 2020 2019 2018 2017 Prior Total
6 unchanged sentences
Total $ 23 $ 7 $ 20 $ 26 $ 40 $ 33 $ 149
+Added: December 31, 2020
+Added: Internal Risk Rating 2020 2019 2018 2017 2016 Prior Total
+Added: (in millions)
+Added: Risk 5 $ — $ — $ — $ — $ — $ 3 $ 3
+Added: Risk 4 — — 4 9 — 10 23
+Added: Risk 3 — 9 8 25 13 25 80
+Added: Risk 2 30 57 62 69 14 41 273
+Added: Risk 1 17 32 47 58 22 40 216
+Added: Total $ 47 $ 98 $ 121 $ 161 $ 49 $ 119 $ 595
Financial Advisor Loans
4 unchanged sentences
The allowance for credit losses related to loans to advisors that have terminated their relationship with the Company was $ 5 million and $ 7 million as of December 31, 2021 and December 31, 2020, respectively.
−Removed: The table below presents the amortized cost basis of advisor loans as of December 31, 2020 by origination year and termination status:
+Added: The tables below present the amortized cost basis of advisor loans by origination year and termination status:
+Added: December 31, 2021
Termination Status 2021 2020 2019 2018 2017 Prior Total
3 unchanged sentences
Total $ 137 $ 148 $ 119 $ 89 $ 116 $ 119 $ 728
+Added: December 31, 2020
+Added: Termination Status 2020 2019 2018 2017 2016 Prior Total
+Added: (in millions)
+Added: Active $ 171 $ 137 $ 101 $ 127 $ 83 $ 86 $ 705
+Added: Terminated — — — 1 1 8 10
+Added: Total $ 171 $ 137 $ 101 $ 128 $ 84 $ 94 $ 715
Consumer Loans
3 unchanged sentences
FICO scores and delinquency rates are the primary credit quality indicators for the credit card portfolio.
−Removed: Delinquency rates are measured as based on the number of days past due.
−Removed: Credit card receivables over 30 days past due were 1 % and 2 % as of December 31, 2020 and December 31, 2019, respectively.
−Removed: The table below presents the amortized cost basis of credit card receivables by FICO score as of December 31, 2020:
+Added: Delinquency rates are measured based on the number of days past due.
+Added: Credit card receivables over 30 days past due were 1 % of total credit card receivables as of both December 31, 2021 and December 31, 2020.
+Added: The table below presents the amortized cost basis of credit card receivables by FICO score:
+Added: December 31, 2021 December 31, 2020
(in millions)
+Added: > 800 $ 30 $ 28
+Added: 750 - 799 24 23
+Added: 700 - 749 25 25
+Added: 650 - 699 14 15
+Added: Total $ 98 $ 96
Policy loans do not exceed the cash surrender value at origination.
As there is minimal risk of loss related to policy loans, there is no allowance for credit losses.
+Added: The margin loans balance was $ 1.2 billion and $ 1.0 billion as of December 31, 2021 and 2020, respectively.
The Company monitors collateral supporting margin loans and requests additional collateral when necessary in order to mitigate the risk of loss.
−Removed: As of both December 31, 2020 and December 31, 2019, the allowance for credit losses on margin loans was not material.
+Added: As of both December 31, 2021 and 2020, the allowance for credit losses on margin loans was not material.
Pledged Asset Lines of Credit
−Removed: During the year ended December 31, 2020, the Company acquired a $ 224 million interest in an existing portfolio of brokerage client pledged asset lines of credit.
−Removed: The Company monitors collateral supporting pledged assets lines of credit and requests additional collateral when necessary in order to mitigate the risk of loss.
−Removed: As of December 31, 2020, there was no allowance for credit losses on pledged asset lines of credit.
−Removed: Deposit Receivable
−Removed: The deposit receivable was $ 1.4 billion and $ 1.5 billion as of December 31, 2020 and 2019.
−Removed: The deposit receivable is fully collateralized by the fair value of the assets held in a trust.
−Removed: Based on management’s evaluation of the nature of the underlying assets and the potential for changes in the collateral value, the Company did not have an allowance for credit losses for the deposit receivable as of both December 31, 2020 and 2019.
+Added: The pledged asset lines of credit balance was $ 467 million and $ 224 million million as of December 31, 2021 and 2020, respectively.
+Added: The Company monitors collateral supporting pledged asset lines of credit and requests additional collateral when necessary in order to mitigate the risk of loss.
+Added: As of December 31, 2021 and 2020, there was no allowance for credit losses on pledged asset lines of credit.
+Added: Deposit Receivables
+Added: Deposit receivables were $ 7.9 billion and $ 1.4 billion as of December 31, 2021 and 2020, respectively.
+Added: Deposit receivables are fully collateralized by the fair value of the assets held in trusts.
+Added: Based on management’s evaluation of the nature of the underlying assets and the potential for changes in the collateral value, there was no allowance for credit losses for the deposit receivables as of December 31, 2021 and 2020.
+Added: The increase in deposit receivables is primarily driven by the reinsurance transaction, effective July 1, 2021, to reinsure fixed deferred and non-life contingent immediate annuity policies.
+Added: See Note 1 for more information on the fixed deferred and immediate annuity reinsurance transaction.
Troubled Debt Restructurings
2 unchanged sentences
The Company reinsures a portion of the insurance risks associated with its traditional life, DI and LTC insurance products through reinsurance agreements with unaffiliated reinsurance companies.
+Added: During the third quarter of 2021, RiverSource Life reinsured 100 % of its insurance risk associated with its life contingent immediate annuity policies in force as of July 1, 2021 through a reinsurance agreement with Commonwealth.
+Added: Policies issued after July 1, 2021 are not subject to this reinsurance agreement.
+Added: See Note 1 for more information on the fixed deferred and immediate annuity reinsurance transaction.
Reinsurance contracts do not relieve the Company from its primary obligation to policyholders.
24 unchanged sentences
The effect of reinsurance on premiums for the Company’s short-duration contracts was as follows:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
(in millions)
Written premiums
−Removed: Direct $ 864 $ 1,101
−Removed: Ceded ( 23 ) ( 55 )
Total net written premiums $ 841
Earned premiums
−Removed: Direct $ 841 $ 1,124
−Removed: Ceded ( 24 ) ( 94 )
Total net earned premiums $ 817
5 unchanged sentences
Goodwill and intangible assets deemed to have indefinite lives are not amortized but are instead subject to impairment tests.
−Removed: There were $ 2 million and $ 5 million of impairments of indefinite-lived intangible assets recorded for the years ended December 31, 2020 and 2019.
−Removed: There was no impairment for the year ended December 31, 2018.
+Added: There were nil , $ 2 million and $ 5 million of impairments of indefinite-lived intangible assets recorded for the years ended December 31, 2021, 2020 and 2019, respectively.
The changes in the carrying amount of goodwill reported in the Company’s main operating segments were as follows:
8 unchanged sentences
279 806 91 1,176
+Added: Acquisitions — 287 — 287
Foreign currency translation — ( 4 ) — ( 4 )
2 unchanged sentences
$ 279 $ 1,088 $ 91 $ 1,458
−Removed: As of December 31, 2020 and 2019, the carrying amount of indefinite-lived intangible assets included $ 640 million and $ 641 million, respectively, of investment management contracts.
−Removed: As of both December 31, 2020 and 2019, the carrying amount of indefinite-lived intangible assets included $ 69 million of trade names.
+Added: On November 8, 2021, the Company completed its acquisition of the European-based asset management business of BMO Financial Group for $ 973 million, excluding an estimated $ 7 million reduction due to customary deferred and contingent adjustments.
+Added: The all-cash transaction added $ 136 billion of assets under management in EMEA.
+Added: The acquisition extends our reach in EMEA and accelerates our core strategy of growing fee-based businesses.
+Added: Acquisition-related costs were $ 32 million and are included in General and administrative expense.
+Added: The fair value of the total consideration paid and the recognized assets and acquired liabilities assumed for this business are included in the table below.
+Added: Goodwill of $ 287 million arising from acquisition consists largely of the synergies and economies of scale expected from combining the Company’s EMEA operations.
+Added: All goodwill was assigned to the Asset Management segment.
+Added: The following table summarizes the consideration paid, assets acquired, and liabilities assumed at the acquisition date:
+Added: November 8, 2021
+Added: (in millions)
+Added: Consideration paid
+Added: Deferred considerations ( 35 )
+Added: Contingent considerations 28
+Added: Total fair value $ 966
+Added: Recognized Assets / Liabilities
+Added: Cash and cash equivalents $ 397
+Added: Investments 77
+Added: Receivables 116
+Added: Other assets 295
+Added: Total assets 885
+Added: Accounts payable and accrued expenses 235
+Added: Other liabilities 190
+Added: Total liabilities 427
+Added: Identifiable net assets $ 458
+Added: Intangible assets $ 295
+Added: Deferred tax liability 74
+Added: The fair value of the pension plan assets and liabilities, the recognized deferred tax assets and other components of deferred and contingent consideration reflects the provisional valuation of those assets and liabilities.
+Added: The carrying amount of indefinite-lived intangible assets consist of the following:
+Added: (in millions)
+Added: Customer contracts $ 848 $ 640
+Added: Trade names 69 69
+Added: Total $ 917 $ 709
Definite-lived intangible assets consisted of the following:
15 unchanged sentences
These aforementioned changes are collectively referred to as unlocking.
+Added: The impact of unlocking to DAC for the year ended December 31, 2021 primarily reflected a favorable impact from lower surrenders on variable annuities with living benefits and UL and VUL insurance products.
The impact of unlocking to DAC for the year ended December 31, 2020 primarily reflected updates to interest rate assumptions, partially offset by a favorable impact from lower surrenders on annuity contracts with a withdrawal benefit.
The impact of unlocking to DAC for the year ended December 31, 2019 primarily reflected updated mortality assumptions on UL and VUL insurance products and lower surrender rate assumptions on variable annuities, partially offset by an unfavorable impact from updates to assumptions on utilization of guaranteed withdrawal benefits.
−Removed: The impact of unlocking to DAC for the year ended December 31, 2018 primarily reflected improved persistency and mortality on UL and VUL insurance products and a correction related to a variable annuity model assumption partially offset by updates to market-related inputs to the living benefit valuation.
The balances of and changes in DAC were as follows:
41 unchanged sentences
(1) Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts.
−Removed: (2) Includes the fair value of GMAB embedded derivatives that was a net asset as of both December 31, 2020 and 2019 reported as a contra liability.
+Added: (2) Includes the fair value of GMAB embedded derivatives that was a net asset as of December 31, 2021 reported as a contra liability.
Fixed Annuities
22 unchanged sentences
A vast majority of the premiums received for variable annuity contracts are held in separate accounts where the assets are held for the exclusive benefit of those contractholders.
−Removed: Most of the variable annuity contracts currently issued by the Company contain one or more guaranteed benefits, including GMWB, GMAB, GMDB and GGU provisions.
+Added: Most of the variable annuity contracts issued by the Company contain one or more guaranteed benefits, including GMWB, GMAB, GMDB or GGU provisions.
The Company previously offered contracts with GMIB provisions.
10 unchanged sentences
IUL is a UL policy that includes an indexed account.
−Removed: The rate of credited interest above the minimum guarantee for funds allocated to the indexed account is linked to the performance of the specific index for the indexed account (subject to a cap and floor).
+Added: The rate of credited interest above the minimum guarantee for funds allocated to the indexed account is linked to the performance of the specific index for the indexed account (subject to stated account parameters, which include a cap and floor, or a spread ).
The Company offers an S&P 500 ® Index account option and a blended multi-index account option comprised of the S&P 500 Index, the MSCI ® EAFE Index and the MSCI EM Index.
30 unchanged sentences
Variable Annuity and Insurance Guarantees
−Removed: The majority of the variable annuity contracts offered by the Company contain GMDB provisions.
−Removed: The Company also offers variable annuities with GGU, GMWB and GMAB provisions.
+Added: Most of the variable annuity contracts issued by the Company contain one or more guaranteed benefits, including GMWB, GMAB, GMDB or GGU provisions.
The Company previously offered contracts containing GMIB provisions.
8 unchanged sentences
The variable annuity contracts with GMWB riders typically have account values that are based on an underlying portfolio of mutual funds, the values of which fluctuate based on fund performance.
−Removed: At issue the guaranteed amount is equal to the amount deposited but the guarantee may be increased annually to the account value (a “step-up”) in the case of favorable market performance or by a benefit credit if the contract includes this provision.
+Added: At contract issue the guaranteed amount is equal to the amount deposited but the guarantee may be increased annually to the account value (a “step-up”) in the case of favorable market performance or by a benefit credit if the contract includes this provision.
The Company has GMWB riders in force, which contain one or more of the following provisions:
8 unchanged sentences
If the contract value is less than the guarantee at the end of the 10 -year period, a lump sum will be added to the contract value to make the contract value equal to the guarantee value.
−Removed: Certain UL policies offered by the Company provide secondary guarantee benefits.
+Added: Certain UL policies provide secondary guarantee benefits.
The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.
59 unchanged sentences
Stock market certificates 287 389
−Removed: Stock market embedded derivative 8 7
+Added: Stock market embedded derivatives 4 8
accrued interest classified in other liabilities ( 5 ) ( 10 )
3 unchanged sentences
Investment Certificates
−Removed: The Company offers fixed rate investment certificates primarily in amounts ranging from $ 1,000 to $ 2 million with interest crediting rate terms ranging from 3 to 36 months.
+Added: The Company offers fixed rate investment certificates primarily in amounts ranging from $ 1 thousand to $ 2 million with interest crediting rate terms ranging from 3 to 36 months.
Investment certificates may be purchased either with a lump sum payment or installment payments.
2 unchanged sentences
Certain investment certificates allow for a surrender charge on premature surrenders.
−Removed: Reserves for certificates that do not allow for a surrender charge were $ 3.2 billion as of December 31, 2020.
+Added: Reserves for certificates that do not allow for a surrender charge were $ 2.7 billion and $ 3.2 billion as of December 31, 2021 and 2020, respectively.
The Company generally invests the proceeds from investment certificates in fixed and variable rate securities.
2 unchanged sentences
Purchasers can choose 100 % participation in the market index up to the cap or 25 % participation plus fixed interest with a combined total up to the cap.
−Removed: Current first term certificates have maximum returns of 1.10 % to 7.50 %, depending on the term length.
+Added: Current first term certificates have maximum returns of nil to 2.35 %, depending on the term length.
The equity component of these certificates is considered an embedded derivative and is accounted for separately.
14 unchanged sentences
Senior notes due 2026 500 500 2.9 2.9
−Removed: Senior notes due 2026 500 500 2.9 2.9
Finance lease liabilities 40 44 N/A N/A
4 unchanged sentences
Total $ 3,032 $ 3,031
+Added: (1) Includes adjustments for net unamortized discounts, debt issuance costs and other lease obligations.
N/A Not Applicable
−Removed: (1) Amounts include adjustments for fair value hedges on the Company’s long-term debt and unamortized discount and debt issuance costs.
−Removed: See Note 17 for information on the Company’s fair value hedges.
Long-Term Debt
−Removed: On April 2, 2020, the Company issued $ 500 million of unsecured 3.0 % senior notes due April 2, 2025 and incurred debt issuance costs of $ 4 million.
−Removed: Interest payments are due semi-annually in arrears on April 2 and October 2, commencing on October 2, 2020.
−Removed: The Company repaid $ 750 million principal amount of its 5.3 % senior notes at maturity on March 16, 2020.
−Removed: The Company’s senior notes due 2022, 2023, 2024, 2025 and 2026 may be redeemed, in whole or in part, at any time prior to maturity at a price equal to the greater of the principal amount and the present value of remaining scheduled payments, discounted to the redemption date, plus accrued interest.
+Added: The Company’s senior notes may be redeemed, in whole or in part, at any time prior to maturity at a price equal to the greater of the principal amount and the present value of remaining scheduled payments, discounted to the redemption date, plus accrued interest.
Short-Term Borrowings
1 unchanged sentence
The Company has pledged Available-for-Sale securities consisting of commercial mortgage backed securities and residential mortgage backed securities as collateral to access these borrowings.
−Removed: The fair value of the securities pledged is recorded in investments and was $1.3 billion and $905 million, of commercial mortgage backed securities, and $604 million and $184 million, of residential mortgage backed securities, as of December 31, 2020 and 2019, respectively.
−Removed: The remaining maturity of outstanding FHLB advances was less than three months as of December 31, 2020 and less than two months as of December 31, 2019.
+Added: The fair value of the securities pledged is recorded in Investments and was $ 1.2 billion and $ 1.3 billion, of commercial mortgage backed securities, and $ 581 million and $ 604 million, of residential mortgage backed securities, as of December 31, 2021 and 2020, respectively.
+Added: The remaining maturity of outstanding FHLB advances was less than three months as of both December 31, 2021 and 2020.
The stated interest rate of the FHLB advances is a weighted average annualized interest rate on the outstanding borrowings as of the balance sheet date.
−Removed: On October 12, 2017, the Company entered into an amended and restated credit agreement that provides for an unsecured revolving credit facility of up to $ 750 million that expires in October 2022.
+Added: On June 11, 2021, the Company entered into an amended and restated credit agreement that provides for an unsecured revolving credit facility of up to $ 1.0 billion that expires in June 2026.
Under the terms of the credit agreement for the facility, the Company may increase the amount of this facility up to $ 1.25 billion upon satisfaction of certain approval requirements.
−Removed: As of both December 31, 2020 and 2019, the Company had no borrowings outstanding and $ 1 million of letters of credit issued against these facilities.
+Added: As of both December 31, 2021 and 2020, the Company had no borrowings outstanding and $ 1 million of letters of credit issued against the facility.
The Company’s credit facility contains various administrative, reporting, legal and financial covenants.
27 unchanged sentences
Total Available-for-Sale securities 1,301 30,205 544 32,050
−Removed: Investments at NAV 8 (1)
+Added: Investments at net asset value (“NAV”) 11 (1)
Trading and other securities 217 25 — 242
1 unchanged sentence
Investments and cash equivalents segregated for regulatory purposes 600 — — 600
+Added: Fixed deferred indexed annuity ceded embedded derivatives — — 59 59
Other assets:
16 unchanged sentences
Equity derivative contracts 101 3,653 — 3,754
−Removed: Credit derivative contracts — 1 — 1
Foreign exchange derivative contracts 1 — — 1
16 unchanged sentences
Total Available-for-Sale securities 1,456 34,014 813 36,283
−Removed: Equity securities 1 — — 1
Investments at NAV 8 (1)
13 unchanged sentences
GMWB and GMAB embedded derivatives — — 2,316 2,316 (4)
+Added: Structured variable annuity embedded derivatives
Total policyholder account balances, future policy benefits and claims — 3 3,370 3,373 (5)
−Removed: — 3 1,687 1,690 (5)
Customer deposits — 8 — 8
2 unchanged sentences
Equity derivative contracts 183 3,388 — 3,571
+Added: Credit derivative contracts — 1 — 1
Foreign exchange derivative contracts 2 4 — 6
5 unchanged sentences
(3) The Company’s adjustment for nonperformance risk resulted in a $ 598 million cumulative decrease to the embedded derivatives as of December 31, 2021.
−Removed: (4) The fair value of the GMWB and GMAB embedded derivatives included $ 981 million of individual contracts in a liability position and $ 218 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2019.
+Added: (4) The fair value of the GMWB and GMAB embedded derivatives included $ 2.4 billion of individual contracts in a liability position and $ 67 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2020.
(5) The Company’s adjustment for nonperformance risk resulted in a $ 727 million cumulative decrease to the embedded derivatives as of December 31, 2020 .
The following tables provide a summary of changes in Level 3 assets and liabilities of Ameriprise Financial measured at fair value on a recurring basis:
−Removed: Available-for-Sale Securities
−Removed: Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total
+Added: Available-for-Sale Securities Receivables
+Added: Corporate Debt Securities Residential Mortgage Backed Securities Commercial Mortgage Backed Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives
(in millions)
−Removed: Balance, January 1, 2020
+Added: Balance at January 1, 2021
$ 772 $ 9 $ — $ 32 $ 813 $ —
Total gains (losses) included in:
−Removed: ( 1 ) — — ( 1 ) (1)
+Added: Net income ( 1 ) — — — ( 1 ) (1) 3
Other comprehensive income (loss) ( 10 ) — — — ( 10 ) —
−Removed: 15 1 ( 1 ) 15
Purchases 108 78 35 — 221 —
+Added: Sales — — — ( 1 ) ( 1 ) —
+Added: Issues — — — — — 57 (5)
Settlements ( 119 ) — — ( 2 ) ( 121 ) ( 1 )
1 unchanged sentence
Transfers out of Level 3 ( 416 ) ( 87 ) — ( 24 ) ( 527 ) —
−Removed: Balance, December 31, 2020
+Added: Balance at December 31, 2021
$ 502 $ — $ 35 $ 7 $ 544 $ 59
−Removed: Changes in unrealized gains (losses) relating to assets held at December 31, 2020
+Added: Changes in unrealized gains (losses) in net income relating to assets held at December 31, 2021
$ ( 1 ) $ — $ — $ ( 1 ) $ ( 2 ) (1) $ —
2 unchanged sentences
Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities
−Removed: Fixed Deferred Indexed Annuity Embedded Derivatives IUL
−Removed: Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total
+Added: Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total
(in millions)
−Removed: Balance, January 1, 2020
+Added: Balance at January 1, 2021
$ 49 $ 935 $ 2,316 $ 70 $ 3,370 $ 43
3 unchanged sentences
Settlements ( 3 ) ( 98 ) 145 ( 29 ) 15 ( 14 )
−Removed: Balance, December 31, 2020
+Added: Balance at December 31, 2021
$ 56 $ 905 $ 1,486 $ 406 $ 2,853 $ 61
−Removed: Changes in unrealized (gains) losses relating to liabilities held at December 31, 2020
+Added: Changes in unrealized (gains) losses in net income relating to liabilities held at December 31, 2021
$ — $ 68 (2) $ ( 1,299 ) (3) $ — $ ( 1,231 ) $ —
Available-for-Sale Securities
−Removed: Corporate Debt Securities Residential Mortgage Backed Securities Commercial Mortgage Backed Securities Asset Backed Securities Total
+Added: Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total
(in millions)
−Removed: Balance, January 1, 2019
+Added: Balance at January 1, 2020
$ 750 $ 17 $ 19 $ 786
Total gains (losses) included in:
−Removed: ( 1 ) — — — ( 1 ) (1)
+Added: Net income ( 1 ) — — ( 1 ) (1)
Other comprehensive income (loss) 15 1 ( 1 ) 15
( 54 ) — — ( 54 )
−Removed: 55 477 — 18 550
−Removed: ( 248 ) ( 12 ) — — ( 260 )
Transfers into Level 3
1 unchanged sentence
— ( 229 ) — ( 229 )
−Removed: Balance, December 31, 2019
+Added: Balance at December 31, 2020
$ 772 $ 9 $ 32 $ 813
−Removed: Changes in unrealized gains (losses) relating to assets held at December 31, 2019
+Added: Changes in unrealized gains (losses) in net income relating to assets held at December 31, 2020
$ ( 1 ) $ — $ ( 1 ) $ ( 2 ) (1)
+Added: Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at December 31, 2020
+Added: $ 16 $ 1 $ ( 1 ) $ 16
Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities
−Removed: Fixed Deferred Indexed Annuity Embedded Derivatives IUL
−Removed: Derivatives GMWB and GMAB Embedded Derivatives Total
+Added: Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total
(in millions)
−Removed: Balance, January 1, 2019
+Added: Balance at January 1, 2020
$ 43 $ 881 $ 763 $ — $ 1,687 $ 44
3 unchanged sentences
Settlements ( 1 ) ( 83 ) 39 — ( 45 ) ( 9 )
−Removed: Balance, December 31, 2019
+Added: Balance at December 31, 2020
$ 49 $ 935 $ 2,316 $ 70 $ 3,370 $ 43
−Removed: Changes in unrealized (gains) losses relating to liabilities held at December 31, 2019
+Added: Changes in unrealized (gains) losses in net income relating to liabilities held at December 31, 2020
$ — $ 76 (2) $ 1,206 (3) $ — $ 1,282 $ —
−Removed: Available-for-Sale Securities Other Derivative Contracts
+Added: Available-for-Sale Securities
Corporate Debt Securities Residential Mortgage Backed Securities Commercial Mortgage Backed Securities Asset Backed Securities Total
(in millions)
−Removed: Balance, January 1, 2018
+Added: Balance at January 1, 2019
$ 913 $ 136 $ 20 $ 6 $ 1,075
Total gains (losses) included in:
−Removed: ( 1 ) — — — ( 1 ) (1) ( 3 ) (3)
+Added: Net income ( 1 ) — — — ( 1 ) (1)
Other comprehensive income (loss) 31 — — ( 1 ) 30
1 unchanged sentence
( 248 ) ( 12 ) — — ( 260 )
−Removed: ( 214 ) ( 29 ) — ( 1 ) ( 244 ) —
Transfers into Level 3
1 unchanged sentence
— ( 584 ) ( 20 ) ( 18 ) ( 622 )
−Removed: Balance, December 31, 2018
+Added: Balance at December 31, 2019
$ 750 $ 17 $ — $ 19 $ 786
−Removed: Changes in unrealized gains (losses) relating to assets held at December 31, 2018
+Added: Changes in unrealized gains (losses) in net income relating to assets held at December 31, 2019
$ ( 1 ) $ — $ — $ — $ ( 1 ) (1)
Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities
−Removed: Fixed Deferred Indexed Annuity Embedded Derivatives IUL
−Removed: Derivatives GMWB and GMAB Embedded Derivatives Total
+Added: Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Total
(in millions)
−Removed: Balance, January 1, 2018
+Added: Balance at January 1, 2019
$ 14 $ 628 $ 328 $ 970 $ 30
3 unchanged sentences
— ( 69 ) ( 6 ) ( 75 ) ( 1 )
−Removed: Balance, December 31, 2018
+Added: Balance at December 31, 2019
$ 43 $ 881 $ 763 $ 1,687 $ 44
−Removed: Changes in unrealized (gains) losses relating to liabilities held at December 31, 2018
+Added: Changes in unrealized (gains) losses in net income relating to liabilities held at December 31, 2019
$ — $ 209 (2) $ 82 (3) $ 291 $ —
−Removed: (1) Included in net investment income in the Consolidated Statements of Operations.
−Removed: (2) Included in interest credited to fixed accounts in the Consolidated Statements of Operations.
−Removed: (3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations.
−Removed: (4) Included in general and administrative expense in the Consolidated Statements of Operations.
+Added: (1) Included in Net investment income.
+Added: (2) Included in Interest credited to fixed accounts.
+Added: (3) Included in Benefits, claims, losses and settlement expenses.
+Added: (4) Included in General and administrative expense.
+Added: (5) Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021.
+Added: See Note 1 for additional information on the reinsurance transaction.
The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $( 92 ) million, $ 196 million and $( 190 ) million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: Securities transferred from Level 3 primarily represent securities with fair values that are now obtained from a third-party pricing service with observable inputs.
+Added: Securities transferred from Level 3 primarily represent securities with fair values that are obtained from a third-party pricing service with observable inputs or fair values that were included in an observable transaction with a market participant.
+Added: Securities transferred to Level 3 represent securities with fair values that are now based on a single non-binding broker quote.
The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities:
6 unchanged sentences
Asset backed securities $ 2 Discounted cash flow Annual short-term default rate (2)
−Removed: 2.9 % – 3.0 % 2.9 %
Annual long-term default rate (2)
−Removed: 3.5 % – 4.5 % 3.8 %
Discount rate 12.0 % 12.0 %
1 unchanged sentence
Loss recovery 63.6 % 63.6 %
+Added: Fixed deferred indexed annuity ceded embedded derivatives $ 59 Discounted cash flow Surrender rate (4)
+Added: 0.0 % – 66.8 % 1.4 %
IUL embedded derivatives $ 905 Discounted cash flow Nonperformance risk (3)
23 unchanged sentences
Treasuries (1)
+Added: 1.0 % – 3.3 % 1.5 %
Asset backed securities $ 3 Discounted cash flow Annual short-term default rate (2)
+Added: 2.9 % – 3.0 % 2.9 %
Annual long-term default rate (2)
+Added: 3.5 % – 4.5 % 3.8 %
Discount rate 13.0 % 13.0 %
2 unchanged sentences
IUL embedded derivatives $ 935 Discounted cash flow Nonperformance risk (3)
+Added: 65 bps 65 bps
Fixed deferred indexed annuity embedded derivatives $ 49 Discounted cash flow Surrender rate (4)
+Added: 0.0 % – 50.0 % 1.2 %
Nonperformance risk (3)
+Added: 65 bps 65 bps
GMWB and GMAB embedded derivatives $ 2,316 Discounted cash flow Utilization of guaranteed withdrawals (5) (6)
1 unchanged sentence
Surrender rate (4)
+Added: 0.1 % – 73.5 % 3.8 %
Market volatility (7) (8)
1 unchanged sentence
Nonperformance risk (3)
+Added: 65 bps 65 bps
+Added: Structured variable annuity embedded derivatives $ 70 Discounted cash flow Surrender rate (4)
+Added: 0.8 % – 40.0 % 0.9 %
+Added: Nonperformance risk (3)
+Added: 65 bps 65 bps
Contingent consideration liabilities $ 43 Discounted cash flow Discount rate (9)
+Added: 0.0 % – 9.0 % 3.1 %
(1) The weighted average for the spread to U.S.
6 unchanged sentences
The calculation excludes policies that have already started taking withdrawals.
−Removed: (7) Market volatility is implied volatility of fund of funds and managed volatility funds.
+Added: (7) Market volatility represents the implied volatility of fund of funds and managed volatility funds.
(8) The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit.
6 unchanged sentences
Significant increases (decreases) in the constant prepayment rate in isolation would have resulted in a significantly lower (higher) fair value measurement.
+Added: Significant increases (decreases) in the surrender rate used in the fair value measurement of the fixed deferred indexed annuity ceded embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement.
Significant increases (decreases) in nonperformance risk used in the fair value measurement of the IUL embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement.
18 unchanged sentences
If quoted prices are not available, fair values are obtained from third-party pricing services, non-binding broker quotes, or other model-based valuation techniques.
−Removed: Level 1 securities primarily include U.S.
+Added: Level 1 securities primarily include equity securities and U.S.
Level 2 securities primarily include corporate bonds, residential mortgage backed securities, commercial mortgage backed securities, asset backed securities, state and municipal obligations and foreign government securities.
−Removed: The fair value of these Level 2 securities is
−Removed: based on a market approach with prices obtained from third-party pricing services.
+Added: The fair value of these Level 2 securities is based on a market approach with prices obtained from third-party pricing services.
Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes.
+Added: The fair value of securities included in an observable transaction with a market participant are also considered Level 2 when the market is not active.
Level 3 securities primarily include certain corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and asset backed securities with fair value typically based on a single non-binding broker quote.
18 unchanged sentences
Treasuries that are classified as Level 1.
+Added: During the third quarter of 2021, the Company reinsured its fixed deferred indexed annuity products which have an indexed account that is accounted for as an embedded derivative.
+Added: The Company uses discounted cash flow models to determine the fair value of these ceded embedded derivatives.
+Added: The fair value of fixed deferred indexed annuity ceded embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates.
+Added: Given the significance of the unobservable surrender rates, these embedded derivatives are classified as Level 3.
+Added: See Note 1 for more information on the reinsurance transaction.
Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements.
14 unchanged sentences
The projected cash flows generated by this model are based on significant observable inputs related to interest rates, volatilities and equity index levels and, therefore, are classified as Level 2.
−Removed: The Company uses discounted cash flow models including Black-Scholes calculations to determine the fair value of the embedded derivatives associated with the provisions of its fixed deferred indexed annuity, structured variable annuity and IUL products.
+Added: The Company uses discounted cash flow models to determine the fair value of the embedded derivatives associated with the provisions of its fixed deferred indexed annuity, structured variable annuity and IUL products.
The structured variable annuity product is a limited flexible purchase payment annuity that offers 45 different indexed account options providing equity market exposure and a fixed account.
Each indexed account includes a protection option (a buffer or a floor).
−Removed: If the index has a negative return, contractholder losses will be reduced by buffer or limited to a floor.
+Added: If the index has a negative return, contractholder losses will be reduced by a buffer or limited to a floor.
The portion allocated to an indexed account is accounted for as an embedded derivative.
−Removed: The fair value of fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives includes significant observable interest rates, volatilities and equity index levels and the significant unobservable estimate of the Company’s nonperformance risk.
−Removed: Given the significance of the nonperformance risk assumption to the
−Removed: fair value, the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3.
+Added: The fair value of fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates and the estimate of the Company’s nonperformance risk.
+Added: Given the significance of the unobservable surrender rates and the nonperformance risk assumption, the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3.
The embedded derivatives attributable to these provisions are recorded in Policyholder account balances, future policy benefits and claims.
8 unchanged sentences
These measurements are classified as Level 2 within the fair value hierarchy and include swaps, foreign currency forwards and the majority of options.
−Removed: The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial as of December 31, 2020 and 2019.
+Added: The Company’s nonperformance risk associated with uncollateralized derivative liabilities was
+Added: immaterial as of December 31, 2021 and 2020.
See Note 16 and Note 17 for further information on the credit risk of derivative instruments and related collateral.
2 unchanged sentences
If quoted prices are not available, fair values are obtained from nationally-recognized pricing services, or other model-based valuation techniques such as the present value of cash flows.
−Removed: Level 1 securities sold but not yet purchased primarily include U.S Treasuries traded in active markets.
+Added: Level 1 securities sold but not yet purchased primarily include equity securities and U.S.
+Added: Treasuries traded in active markets.
Level 2 securities sold but not yet purchased primarily include corporate bonds.
Contingent consideration liabilities consist of earn-outs and/or deferred payments related to the Company’s acquisitions.
−Removed: Contingent consideration liabilities are recorded at fair value using a discounted cash flow model using an unobservable input (discount rate).
+Added: Contingent consideration liabilities are recorded at fair value utilizing a discounted cash flow model using an unobservable input (discount rate).
Given the use of a significant unobservable input, the fair value of contingent consideration liabilities is classified as Level 3 within the fair value hierarchy.
5 unchanged sentences
The balance of affordable housing partnerships measured at fair value on a nonrecurring basis was $ 93 million and $ 101 million as of December 31, 2021 and 2020, respectively, and is classified as Level 3 in the fair value hierarchy.
−Removed: Asset and Liabilities Not Reported at Fair Value
+Added: The Company also measured certain equity-method investments at fair value on a nonrecurring basis using a discounted cash flow model.
+Added: Inputs to the model include projected cash flows and a market-based discount rate.
+Added: At December 31, 2021, the fair value of these investments was $ 7 million and is classified as Level 3 in the fair value hierarchy.
+Added: Assets and Liabilities Not Reported at Fair Value
The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value:
30 unchanged sentences
Investment certificate reserves 6,752 — — 6,752 6,752
−Removed: Brokerage deposits 6,929 6,929 — — 6,929
+Added: Banking and brokerage deposits 10,891 10,891 — — 10,891
Separate account liabilities — investment contracts 5,406 — 5,406 — 5,406
Debt and other liabilities 3,214 205 3,253 11 3,469
−Removed: (1) During the third quarter of 2020, management changed the fair value methodology for policy loans from estimating future expected cash flows and discounting the cash flows at a rate based on the U.S.
−Removed: Treasury curve to using the carrying value as an approximation of fair value as the policy loans are fully collateralized by the cash surrender value of the underlying policies.
−Removed: As a result, policy loans were reclassified from Level 3 to Level 2 in the valuation hierarchy.
−Removed: For comparability and consistency purposes, prior period amounts were revised to reflect the current methodology and classification.
−Removed: Receivables include the deposit receivable, brokerage margin loans, securities borrowed, pledged asset lines of credit, and loans to financial advisors.
+Added: Receivables include deposit receivables, brokerage margin loans, securities borrowed, pledged asset lines of credit, and loans to financial advisors.
Restricted and segregated cash includes cash segregated under federal and other regulations held in special reserve bank accounts for the exclusive benefit of the Company’s brokerage customers.
Other investments and assets primarily include syndicated loans, credit card receivables, certificate of deposits with original or remaining maturities at the time of purchase of more than 90 days, the Company’s membership in the FHLB and investments related to the Community Reinvestment Act.
−Removed: See Note 7 for additional information on mortgage loans, policy loans, syndicated loans, credit card receivables and the deposit receivable.
−Removed: Policyholder account balances, future policy benefit and claims include fixed annuities in deferral status, non-life contingent fixed annuities in payout status, indexed and structured variable annuity host contracts, and the fixed portion of a small number of variable annuity contracts classified as investment contracts.
+Added: See Note 7 for additional information on mortgage loans, policy loans, syndicated loans, credit card receivables and deposit receivables.
+Added: Policyholder account balances, future policy benefits and claims include fixed annuities in deferral status, non-life contingent fixed annuities in payout status, indexed and structured variable annuity host contracts, and the fixed portion of a small number of variable annuity contracts classified as investment contracts.
See Note 11 for additional information on these liabilities.
6 unchanged sentences
Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets.
−Removed: The Company’s derivative instruments, repurchase agreements and securities borrowing and lending agreements are subject to master netting and collateral arrangements and qualify for offset.
+Added: The Company’s derivative instruments and securities borrowing and lending agreements are subject to master netting and collateral arrangements and qualify for offset.
A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy.
71 unchanged sentences
See Note 16 for additional information regarding the estimated fair value of the Company’s freestanding derivatives after considering the effect of master netting arrangements and collateral.
−Removed: The Company uses derivatives as economic hedges and accounting hedges.
+Added: Generally, the Company uses derivatives as economic hedges and accounting hedges.
The following table presents the notional value and gross fair value of derivative instruments, including embedded derivatives:
5 unchanged sentences
Derivatives designated as hedging instruments
−Removed: Interest rate contracts - fair value hedges $ — $ — $ — $ 375 $ 3 $ —
+Added: Equity contracts - cash flow hedges $ 19 $ — $ — $ — $ — $ —
Foreign exchange contracts - net investment hedges
10 unchanged sentences
2,380 20 1 3,423 23 4
−Removed: Other contracts
Total non-designated hedges 144,738 5,574 4,223 140,925 5,870 4,310
3 unchanged sentences
IUL N/A — 905 N/A — 935
−Removed: Fixed deferred indexed annuities N/A — 52 N/A — 46
+Added: Fixed deferred indexed annuities and deposit receivables N/A 59 61 N/A — 52
Structured variable annuities N/A — 406 N/A — 70
5 unchanged sentences
N/A Not applicable.
−Removed: (1) The fair value of freestanding derivative assets is included in Other assets on the Consolidated Balance Sheets.
−Removed: (2) The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets.
−Removed: The fair value of GMWB and GMAB, IUL, and fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets.
−Removed: The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets.
+Added: (1) The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables.
+Added: (2) The fair value of freestanding derivative liabilities is included in Other liabilities.
+Added: The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims.
+Added: The fair value of the SMC embedded derivative liability is included in Customer deposits.
(3) The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $ 3.2 billion and $ 3.7 billion as of December 31, 2021 and 2020, respectively.
1 unchanged sentence
(4) The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2021 included $ 1.6 billion of individual contracts in a liability position and $ 133 million of individual contracts in an asset position.
−Removed: The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2019 included $ 981 million of individual contracts in a liability position and $ 218 million of individual contracts in an asset position.
+Added: The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2020 included $ 2.4 billion of individual contracts in a liability position and $ 67 million of individual contracts in an asset position.
See Note 15 for additional information regarding the Company’s fair value measurement of derivative instruments.
As of December 31, 2021 and 2020, investment securities with a fair value of $ 123 million and $ 325 million, respectively, were received as collateral to meet contractual obligations under derivative contracts, of which $ 123 million and $ 325 million, respectively, may be sold, pledged or rehypothecated by the Company.
−Removed: As of both December 31, 2020 and 2019, the Company had sold, pledged or
−Removed: rehypothecated none of these securities.
+Added: As of both December 31, 2021 and 2020, the Company had sold, pledged or rehypothecated none of these securities.
In addition, as of both December 31, 2021 and 2020, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets.
8 unchanged sentences
Foreign exchange contracts 1 — — — 5 8
−Removed: Other contracts — — — — — —
GMWB and GMAB embedded derivatives — — — — 830 —
IUL embedded derivatives — — — 30 — —
−Removed: Fixed deferred indexed annuity embedded derivatives — — — ( 4 ) — —
−Removed: SMC embedded derivatives — ( 1 ) — — — —
+Added: Fixed deferred indexed annuity and deposit receivables embedded derivatives — — — ( 8 ) — —
Structured variable annuity embedded derivatives — — — — ( 393 ) —
+Added: SMC embedded derivatives — ( 1 ) — — — —
Total gain (loss) $ ( 26 ) $ — $ 116 $ 113 $ ( 1,218 ) $ 25
4 unchanged sentences
Foreign exchange contracts 1 — — — ( 8 ) 10
−Removed: Other contracts — — — — — —
GMWB and GMAB embedded derivatives — — — — ( 1,553 ) —
1 unchanged sentence
Fixed deferred indexed annuity embedded derivatives — — — ( 4 ) — —
+Added: Structured variable annuity embedded derivatives — — — — ( 91 ) —
SMC embedded derivatives — ( 1 ) — — — —
5 unchanged sentences
Foreign exchange contracts — — — — ( 30 ) ( 1 )
−Removed: Other contracts — — — — ( 3 ) —
GMWB and GMAB embedded derivatives — — — — ( 435 ) —
IUL embedded derivatives — — — ( 140 ) — —
−Removed: Indexed annuity embedded derivatives — — — 3 — —
+Added: Fixed deferred indexed annuity embedded derivatives — — — ( 8 ) — —
SMC embedded derivatives — ( 9 ) — — — —
3 unchanged sentences
Certain annuity contracts contain GMWB or GMAB provisions, which guarantee the right to make limited partial withdrawals each contract year regardless of the volatility inherent in the underlying investments or guarantee a minimum accumulation value of consideration received at the beginning of the contract period, after a specified holding period, respectively.
−Removed: The indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings.
−Removed: The Company economically hedges the aggregate exposure related to the indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions using options (equity index, interest rate swaptions, etc.), swaps (interest rate, total return, etc.) and futures.
−Removed: The deferred premium associated with certain of the above options and swaptions is paid or received semiannually over the life of the contract or at maturity.
+Added: The indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with
+Added: changes in fair value reported in earnings.
+Added: The Company economically hedges the aggregate exposure related to the indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions using options, swaptions, swaps and futures.
+Added: The deferred premium associated with certain of the above options and swaptions is paid or received semi-annually over the life of the contract or at maturity.
The following is a summary of the payments the Company is scheduled to make and receive for these options and swaptions as of December 31, 2021:
9 unchanged sentences
The Company’s macro hedge derivatives that contain settlement provisions linked to both equity returns and interest rates, if any, are shown in other contracts in the tables above.
−Removed: Fixed deferred indexed annuity, structured variable annuity, IUL and stock market certificate products have returns tied to the performance of equity markets.
−Removed: As a result of fluctuations in equity markets, the obligation incurred by the Company related to fixed deferred indexed annuity, structured variable annuity, IUL and stock market certificate products will positively or negatively impact earnings over the life of these products.
−Removed: The equity component of fixed deferred indexed annuity, structured variable annuity, IUL and stock market certificate product obligations are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings.
−Removed: As a means of economically hedging its obligations under the provisions of these products, the Company enters into index options and futures contracts.
−Removed: The Company enters into futures, credit default swaps and commodity swaps to manage its exposure to price risk arising from seed money investments in proprietary investment products.
+Added: Structured variable annuity, IUL and stock market certificate products have returns tied to the performance of equity markets.
+Added: As a result of fluctuations in equity markets, the obligation incurred by the Company related to structured variable annuity, IUL and stock market certificate products will positively or negatively impact earnings over the life of these products.
+Added: The equity component of structured variable annuity, IUL and stock market certificate product obligations are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings.
+Added: As a means of economically hedging its obligations under the provisions of these products, the Company enters into interest rate swaps, index options and futures contracts.
+Added: The Company enters into futures, credit default swaps, commodity swaps and foreign currency forwards to manage its exposure to price risk arising from seed money investments in proprietary investment products.
The Company enters into foreign currency forward contracts to economically hedge its exposure to certain foreign transactions.
−Removed: The Company enters into futures and total return swaps to economically hedge its exposure related to compensation plans.
+Added: The Company enters into futures contracts, total return swaps and foreign currency forwards to economically hedge its exposure related to compensation plans.
The Company enters into interest rate swaps to offset interest rate changes on unrealized gains or losses for certain investments.
Cash Flow Hedges
−Removed: The Company has designated derivative instruments as a cash flow hedge of interest rate exposure on forecasted debt interest payments.
+Added: The Company has designated derivative instruments as a cash flow hedge for equity exposure of certain compensation-related liabilities and interest rate exposure on forecasted debt interest payments.
For derivative instruments that qualify as cash flow hedges, the gain or loss on the derivative instruments is reported in AOCI and reclassified into earnings when the hedged item or transaction impacts earnings.
The amount that is reclassified into earnings is presented within the same line item as the earnings impact of the hedged item in interest and debt expense.
−Removed: Prior to the adoption of the new accounting standard Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities on January 1, 2019, the Company recorded the effective portion of the gain or loss on the derivative instruments in AOCI and any ineffective portion in current period earnings.
−Removed: See Note 3 for additional information on the adoption of the new accounting standard.
For the years ended December 31, 2021, 2020 and 2019, the amounts reclassified from AOCI to earnings related to cash flow hedges were immaterial.
The estimated net amount recorded in AOCI as of December 31, 2021 that the Company expects to reclassify to earnings as a reduction to interest and debt expense within the next twelve months is $ 0.5 million.
−Removed: Currently, the longest period of
−Removed: time over which the Company is hedging exposure to the variability in future cash flows is 15 years and relates to forecasted debt interest payments.
+Added: Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is 14 years and relates to forecasted debt interest payments.
See Note 21 for a rollforward of net unrealized derivative gains (losses) included in AOCI related to cash flow hedges.
Fair Value Hedges
−Removed: The Company entered into and designated as fair value hedges two interest rate swaps to convert senior notes due 2019 and 2020 from fixed rate debt to floating rate debt.
−Removed: The interest rate swap related to the senior notes due March 2020 was settled during the first quarter when the debt was repaid.
−Removed: The swaps have identical terms as the underlying debt being hedged.
−Removed: The Company no longer had any fair value hedges outstanding as of December 31, 2020.
−Removed: The Company recognizes gains and losses on the derivatives and the related hedged items within interest and debt expense.
−Removed: See Note 14 for the cumulative basis adjustments for fair value hedges.
+Added: The Company entered into and designated as fair value hedges an interest rate swap to convert senior notes due 2020 from fixed rate debt to floating rate debt.
+Added: The interest rate swap related to the senior notes due March 2020 was settled during the first quarter of 2020 when the debt was repaid.
+Added: The swap had identical terms as the underlying debt being hedged.
+Added: The Company recognized gains and losses on the derivatives and the related hedged items within interest and debt expense.
+Added: The Company has not had any fair value hedges since March 2020.
The following table is a summary of the impact of derivatives designated as hedges on the Consolidated Statements of Operations:
Years Ended December 31,
+Added: (in millions)
Total interest and debt expense per Consolidated Statements of Operations
7 unchanged sentences
As the Company determined that the forward contracts are effective, the change in fair value of the derivatives is recognized in AOCI as part of the foreign currency translation adjustment.
−Removed: For the years ended December 31, 2020 and 2019, the Company recognized a gain of $ 1 million and loss of $2 million, respectively, in OCI.
+Added: For the years ended December 31, 2021, 2020 and 2019 , the Company recognized a loss of $ 1 million, a gain of $ 1 million and loss of $ 2 million, respectively, in OCI.
Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract.
7 unchanged sentences
The aggregate fair value of assets posted as collateral for such instruments as of December 31, 2021 and 2020 was $ 383 million and $ 324 million, respectively.
−Removed: If the credit contingent provisions of derivative contracts in a net liability position as of December 31, 2020 and 2019 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been $ 2 million and nil , respectively.
+Added: If the credit contingent provisions of derivative contracts in a net liability position as of December 31, 2021 and 2020 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been nil and $ 2 million, respectively.
The following table presents the balances for operating and finance ROU assets and lease liabilities:
1 unchanged sentence
December 31, 2020
+Added: (in millions)
Operating lease assets Other assets $ 291 $ 215
4 unchanged sentences
Total lease liabilities $ 381 $ 298
−Removed: The components of lease expense include operating and finance lease costs.
−Removed: For the year ended December 31, 2020, operating lease costs were $ 57 million.
−Removed: For the year ended December 31, 2020, finance lease costs consisted of $ 10 million in amortization and $ 2 million of interest expense.
−Removed: Amortization is recorded in general and administrative expenses and interest expense is recorded in interest and debt expense in the Consolidated Statements of Operations.
−Removed: Maturities of lease liabilities, weighted-average remaining term and weighted-average discount rate are as follows:
−Removed: Maturity of Lease Liabilities December 31, 2020
−Removed: Finance Leases Operating Leases
+Added: The following table presents the components of lease expense:
+Added: Years Ended December 31,
+Added: Lease cost Income Statement Classification 2021 2020 2019
(in millions)
−Removed: 2021 $ 9 $ 64
−Removed: Thereafter — 58
−Removed: Total lease payments 48 275
−Removed: Interest ( 4 ) ( 21 )
−Removed: Present value of lease liabilities $ 44 $ 254
+Added: Operating lease cost General and administrative expense $ 57 $ 57 $ 58
+Added: Finance lease costs:
+Added: Amortization of ROU assets General and administrative expense 13 10 8
+Added: Interest on lease liabilities Interest and debt expense 2 2 2
+Added: Total lease cost $ 72 $ 69 $ 68
+Added: The following table presents the weighted-average lease term and weighted-average discount rate related to operating and finance leases:
+Added: December 31, 2021
+Added: December 31, 2020
+Added: Lease term and discount rate Finance Leases Operating Leases Finance Leases Operating Leases
Weighted-average remaining lease term (years) 3.8 7.2 4.8 5.8
Weighted-average discount rate 3.4 % 2.1 % 3.4 % 2.6 %
+Added: The following table presents supplemental cash flow information related to operating and finance leases:
+Added: Years Ended December 31,
+Added: Supplemental cash flow information 2021 2020 2019
+Added: (in millions)
+Added: Operating cash flows:
+Added: Cash paid for amounts included in measurement of operating lease liabilities $ 50 $ 65 $ 62
+Added: Cash paid for amounts included in measurement of finance lease liabilities 2 2 2
+Added: Financing cash flows:
+Added: Cash paid for amounts included in measurement of finance lease liabilities $ 9 $ 12 $ 13
+Added: The following table presents the maturities of lease liabilities:
Maturity of Lease Liabilities December 31, 2021
6 unchanged sentences
Present value of lease liabilities $ 40 $ 341
−Removed: Weighted-average remaining lease term (years) 5.8 6.1
−Removed: Weighted-average discount rate 3.4 % 3.0 %
−Removed: For the year ended December 31, 2020, operating cash flows included $ 65 million of cash paid for amounts included in the measurement of operating lease liabilities and $ 2 million of cash paid for amounts included in the measurement of finance lease liabilities.
−Removed: For the year ended December 31, 2020, financing cash flows included $ 12 million of cash paid for amounts included in the measurement of finance lease liabilities.
Disposal of Business
6 unchanged sentences
The components of the Company’s share-based compensation expense, net of forfeitures, were as follows:
+Added: Years Ended December 31,
2021 2020 2019
30 unchanged sentences
The expected volatility is based on the Company’s historical and implied volatilities.
−Removed: The risk-free
−Removed: interest rate for periods within the expected option life is based on the U.S.
+Added: The risk-free interest rate for periods within the expected option life is based on the U.S.
Treasury yield curve at the grant date.
46 unchanged sentences
Share units receive dividend equivalents, as dividends are declared by the Company’s Board of Directors, until distribution and are subject to forfeiture until vested.
+Added: BMO Share Plans
+Added: As part of the acquisition of the BMO Global Asset Management (EMEA)business, the Company will maintain certain legacy BMO Financial Group share based awards that were granted prior to the acquisition.
+Added: All relevant awards are cash settled with the last vesting date in 2023.
+Added: As of December 31, 2021, the liability related to these awards is $ 48 million and included in Other liabilities.
Ameriprise Advisor Group Deferred Compensation Plan
14 unchanged sentences
Vested ( 0.7 ) 177.39
+Added: Forfeited ( 0.1 ) 165.98
Non-vested shares at December 31 1.3 170.91
9 unchanged sentences
The value of each target PSU is equal to the value of one share of Ameriprise Financial common stock.
−Removed: The total amount of target PSUs outstanding at the end of December 31, 2020, 2019 and 2018 was 0.4 million, 0.4 million and 0.3 million, respectively.
+Added: The total number of target PSUs outstanding at the end of December 31, 2021, 2020 and 2019 was 0.4 million, 0.4 million and 0.4 million, respectively.
The PSUs are liability awards.
20 unchanged sentences
Defined benefit plans:
−Removed: Prior service credit
−Removed: ( 2 ) — ( 2 )
−Removed: Net gain (loss) arising during the period
−Removed: ( 82 ) 18 ( 64 )
+Added: Prior service credits and costs ( 3 ) 1 ( 2 )
+Added: Net gains (losses) 70 ( 15 ) 55
Defined benefit plans
−Removed: ( 84 ) 18 ( 66 )
Foreign currency translation
+Added: ( 16 ) 3 ( 13 )
Total other comprehensive income (loss)
7 unchanged sentences
Reclassification of net (gains) losses on securities included in net income (2)
+Added: ( 11 ) 2 ( 9 )
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables
8 unchanged sentences
Defined benefit plans:
−Removed: Prior service credit
−Removed: Net gain (loss) arising during the period
−Removed: ( 36 ) 7 ( 29 )
+Added: Prior service credits ( 2 ) — ( 2 )
+Added: Net gains (losses) ( 82 ) 18 ( 64 )
Defined benefit plans
10 unchanged sentences
Reclassification of net (gains) losses on securities included in net income (2)
−Removed: ( 9 ) 2 ( 7 )
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables
2 unchanged sentences
722 ( 166 ) 556
−Removed: Defined benefit plans:
−Removed: Net gain (loss) arising during the period
+Added: Net unrealized gains (losses) on derivatives:
+Added: Reclassification of net (gains) losses on derivatives included in net income (3)
( 3 ) 1 ( 2 )
+Added: Net unrealized gains (losses) on derivatives
+Added: ( 3 ) 1 ( 2 )
Defined benefit plans:
+Added: Prior service credits 14 ( 3 ) 11
+Added: Net gains (losses) ( 36 ) 7 ( 29 )
+Added: Defined benefit plans
( 22 ) 4 ( 18 )
Foreign currency translation
−Removed: ( 32 ) 1 ( 31 )
Total other comprehensive income (loss)
2 unchanged sentences
(2) Reclassification amounts are recorded in Net investment income.
−Removed: (3) Includes a $ 1 million, $ 2 million and $ 2 million pretax gain reclassified to interest and debt expenses and nil , nil and $ 2 million pretax loss reclassified to net investment income for the years ended December 31, 2020, 2019 and 2018, respectively.
+Added: (3) Includes a $ 1 million, $ 1 million and $ 2 million pretax gain reclassified to interest and debt expenses and nil pretax loss reclassified to net investment income for the years ended December 31, 2021, 2020 and 2019, respectively.
Other comprehensive income (loss) related to net unrealized gains (losses) on securities includes three components:
7 unchanged sentences
$ 20 $ 8 $ ( 120 ) $ ( 198 ) $ ( 1 ) $ ( 291 )
−Removed: Cumulative effect of adoption of equity securities guidance ( 1 ) — — — — ( 1 )
OCI before reclassifications
19 unchanged sentences
$ 318 (1) $ 4 $ ( 151 ) $ ( 167 ) $ ( 1 ) $ 3
−Removed: (1) Includes nil , $ 1 million and $ 1 million of noncredit related impairments on securities and net unrealized gains (losses) on previously impaired securities as of December 31, 2020, 2019 and 2018, respectively.
+Added: (1) Includes nil , nil and $ 1 million of noncredit related impairments on securities and net unrealized gains (losses) on previously impaired securities as of December 31, 2021, 2020 and 2019, respectively.
For the years ended December 31, 2021, 2020 and 2019, the Company repurchased a total of 7.1 million shares, 8.4 million shares and 13.4 million shares, respectively, of its common stock for an aggregate cost of $ 1.8 billion, $ 1.3 billion and $ 1.9 billion, respectively.
In April 2017, the Company's Board of Directors authorized an expenditure of up to $ 2.5 billion for the repurchase of shares of the Company’s common stock through June 30, 2019, which was exhausted in the second quarter of 2019.
−Removed: In February 2019, the Company’s Board of Directors authorized an additional repurchase up to $2.5 billion of the Company’s common stock through
−Removed: March 31, 2021.
+Added: In February 2019, the Company’s Board of Directors authorized an additional repurchase up to $ 2.5 billion of the Company’s common stock through March 31, 2021, which was exhausted in the fourth quarter of 2020.
In August 2020, the Company’s Board of Directors authorized an additional expenditure of up to $ 2.5 billion for the repurchase of shares of the Company’s common stock through September 30, 2022.
−Removed: As of December 31, 2020, the Company had $ 2.3 billion remaining under these share repurchase authorizations.
+Added: As of December 31, 2021, the Company had $ 432 million remaining under this share repurchase authorization.
+Added: On January 26, 2022, the Company’s Board of Directors authorized an additional $ 3.0 billion for the repurchase of the Company’s common stock through March 31, 2024.
The Company may also reacquire shares of its common stock under its share-based compensation plans related to restricted stock awards and certain option exercises.
5 unchanged sentences
For the years ended December 31, 2021, 2020 and 2019, the Company reacquired 1.3 million shares, 1.5 million shares and 0.7 million shares, respectively, of its common stock through the net settlement of options for an aggregate value of $ 306 million, $ 263 million and $ 106 million, respectively.
−Removed: For the years ended December 31, 2020, 2019 and 2018, respectively, the Company reissued 0.5 million, 0.7 million and 0.8 million, respectively, treasury shares for restricted stock award grants, performance share units, and issuance of shares vested under advisor deferred compensation plans.
+Added: For the years ended December 31, 2021, 2020 and 2019, the Company reissued 0.4 million, 0.5 million and 0.7 million, respectively, treasury shares for restricted stock award grants, performance share units, and issuance of shares vested under advisor deferred compensation plans.
Earnings per Share
13 unchanged sentences
$ 23.00 $ 12.20 $ 13.92
−Removed: The calculation of diluted earnings per share excludes the incremental effect of nil , $ 1.0 million and $ 3.2 million options as of December 31, 2020, 2019 and 2018, respectively, due to their anti-dilutive effect.
+Added: The calculation of diluted earnings per share excludes the incremental effect of nil , nil and $ 1.0 million options as of December 31, 2021, 2020 and 2019, respectively, due to their anti-dilutive effect.
Regulatory Requirements
1 unchanged sentence
As of December 31, 2021, the aggregate amount of unrestricted net assets was approximately $ 1.9 billion.
+Added: Insurance subsidiaries
The National Association of Insurance Commissioners (“NAIC”) defines Risk-Based Capital (“RBC”) requirements for insurance companies.
2 unchanged sentences
The Company’s life insurance companies each met their respective minimum RBC requirements.
−Removed: The Company’s life insurance companies are required to prepare statutory financial statements in accordance with the accounting practices prescribed or permitted by the insurance departments of their respective states of domicile, which vary materially from GAAP.
+Added: The Company’s life insurance companies are required to prepare statutory financial statements in accordance with the accounting practices prescribed or permitted by the insurance departments of their respective states of domicile, which vary materially from
Prescribed statutory accounting practices include publications of the NAIC, as well as state laws, regulations and general administrative rules.
7 unchanged sentences
For RiverSource Life, payments in excess of unassigned surplus, as determined in accordance with accounting practices prescribed by the State of Minnesota, require advance notice to the Minnesota Department of Commerce, RiverSource Life’s primary regulator, and are subject to potential disapproval.
−Removed: RiverSource Life’s statutory unassigned surplus aggregated $ 1.3 billion and $ 326 million as of December 31, 2020 and 2019, respectively.
+Added: RiverSource Life’s statutory unassigned surplus aggregated $ 175 million and $ 1.3 billion as of December 31, 2021 and 2020, respectively.
In addition, dividends whose fair market value, together with that of other dividends made within the preceding 12 months, exceed the greater of the previous year’s statutory net gain from operations or 10 % of the previous year-end statutory capital and surplus are referred to as “extraordinary dividends.” Extraordinary dividends also require advance notice to the Minnesota Department of Commerce, and are subject to potential disapproval.
Statutory capital and surplus for RiverSource Life was $ 3.4 billion and $ 4.8 billion as of December 31, 2021 and 2020, respectively.
−Removed: Statutory net gain from operations and net income (loss) are summarized as follows:
+Added: On February 23, 2022, RiverSource Life’s Board of Directors declared a cash dividend of $ 300 million to Ameriprise Financial, Inc., payable on or after March 25, 2022, pending approval by the Minnesota Department of Commerce.
+Added: Statutory net gain from operations and net income are summarized as follows:
Years Ended December 31,
4 unchanged sentences
$ 1,366 $ 1,393 $ 1,505
−Removed: Statutory net income (loss)
−Removed: 1,582 786 1,628
−Removed: Government debt securities of $ 4 million as of both December 31, 2020 and 2019 held by the Company’s life insurance subsidiaries were on deposit with various states as required by law.
−Removed: Ameriprise Certificate Company (“ACC”) is registered as an investment company under the Investment Company Act of 1940 (the “1940 Act”).
−Removed: ACC markets and sells investment certificates to clients.
−Removed: ACC is subject to various capital requirements under the 1940 Act, laws of the State of Minnesota and understandings with the Securities and Exchange Commission (“SEC”) and the Minnesota Department of Commerce.
−Removed: The terms of the investment certificates issued by ACC and the provisions of the 1940 Act also require the maintenance by ACC of qualified assets.
−Removed: Under the provisions of its certificates and the 1940 Act, ACC was required to have qualified assets (as that term is defined in Section 28(b) of the 1940 Act) in the amount of $ 6.8 billion and $ 7.5 billion as of December 31, 2020 and 2019, respectively.
−Removed: ACC had qualified assets of $ 7.2 billion and $ 8.0 billion as of December 31, 2020 and 2019, respectively.
−Removed: Threadneedle’s required capital is predominantly based on the requirements specified by its regulator, the Financial Conduct Authority (“FCA”), under its Capital Adequacy Requirements for asset managers.
+Added: Statutory net income 253 1,582 786
+Added: Government debt securities of $ 5 million and $ 4 million as of December 31, 2021 and 2020, respectively, held by the Company’s life insurance subsidiaries were on deposit with various states as required by law.
+Added: Broker-dealer subsidiaries
The Company’s broker-dealer subsidiaries are subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Securities Exchange Act of 1934.
13 unchanged sentences
Ameriprise Trust Company is subject to capital adequacy requirements under the laws of the State of Minnesota as enforced by the Minnesota Department of Commerce.
+Added: Bank subsidiary
The Company is a savings and loan holding company that is subject to various banking regulations.
22 unchanged sentences
Tier 1 leverage 657 8.36 314 4.00 393 5.00
+Added: Other subsidiaries
+Added: Ameriprise Certificate Company (“ACC”) is registered as an investment company under the Investment Company Act of 1940 (the “1940 Act”).
+Added: ACC markets and sells investment certificates to clients.
+Added: ACC is subject to various capital requirements under the 1940 Act, laws of the State of Minnesota and understandings with the Securities and Exchange Commission (“SEC”) and the Minnesota Department of Commerce.
+Added: The terms of the investment certificates issued by ACC and the provisions of the 1940 Act also require the maintenance by ACC of qualified assets.
+Added: Under the provisions of its certificates and the 1940 Act, ACC was required to have qualified assets (as that term is defined in Section 28(b) of the 1940 Act) in the amount of $ 5.3 billion and $ 6.8 billion as of December 31, 2021 and 2020, respectively.
+Added: ACC had qualified assets of $ 5.7 billion and $ 7.2 billion as of December 31, 2021 and 2020, respectively.
+Added: Ameriprise Trust Company is subject to capital adequacy requirements under the laws of the State of Minnesota as enforced by the Minnesota Department of Commerce.
+Added: Required capital for Threadneedle and BMO Global Asset Management (EMEA) is predominantly based on the requirements specified by its regulator, the Financial Conduct Authority (“FCA”), under its Capital Adequacy Requirements for asset managers.
The components of income tax provision attributable to continuing operations were as follows:
13 unchanged sentences
Total income tax provision $ 590 $ 297 $ 339
−Removed: On December 22, 2017, the Tax Act was signed into law.
−Removed: In 2018, the Company finalized its accounting related to the Tax Act and recorded a $ 3 million benefit related to foreign provisions.
The geographic sources of pretax income from continuing operations were as follows:
13 unchanged sentences
State taxes, net of federal benefit 1.8 2.1 2.4
−Removed: Dividends received deduction ( 2.1 ) ( 1.8 ) ( 1.6 )
Incentive compensation ( 1.6 ) ( 1.4 ) —
+Added: Dividends received deduction — ( 2.1 ) ( 1.8 )
Foreign tax credits, net of addback — — ( 2.2 )
1 unchanged sentence
Income tax provision 17.6 % 16.2 % 15.2 %
+Added: The increase in the Company’s effective tax rate for the year ended December 31, 2021 compared to 2020 is primarily the result of a decrease in the dividends received deduction and low income housing tax credits, partially offset by various other adjustments.
Deferred income tax assets and liabilities result from temporary differences between the assets and liabilities measured for GAAP reporting versus income tax return purposes.
Deferred income tax assets and liabilities are measured at the statutory rate of 21 % as of both December 31, 2021 and 2020.
−Removed: The significant components of the Company’s deferred income tax assets and liabilities, which are included net within other assets or other liabilities on the Consolidated Balance Sheets, were as follows:
+Added: The significant components of the Company’s deferred income tax assets and liabilities, which are included net within Other assets or Other liabilities, were as follows:
(in millions)
2 unchanged sentences
Deferred compensation 586 493
−Removed: Postretirement benefits 65 45
Right of use lease liability 73 60
−Removed: Investment related — 188
+Added: Postretirement benefits — 65
Gross deferred income tax assets 2,761 2,287
2 unchanged sentences
Deferred income tax liabilities
−Removed: Deferred acquisition costs 435 456
−Removed: Net unrealized gains on Available-for-Sale securities 295 186
Investment related 565 253
+Added: Deferred acquisition costs 481 435
Intangible assets 209 124
+Added: Net unrealized gains on Available-for-Sale securities 113 295
Depreciation expense 89 99
4 unchanged sentences
Net deferred income tax assets $ 1,088 $ 880
−Removed: Included in the Company’s deferred income tax assets are tax benefits primarily related to state net operating losses of $ 16 million, net of federal benefit, which will expire beginning December 31, 2021.
+Added: Included in the Company’s deferred income tax assets are tax benefits primarily related to state net operating losses of $ 12 million, net of federal benefit, which will expire beginning December 31, 2022 and foreign net operating losses of $ 42 million.
Based on analysis of the Company’s tax position, management believes it is more likely than not that the Company will not realize certain state net operating losses of $ 11 million, state deferred tax assets of $ 3 million and foreign deferred tax assets of $ 18 million;
13 unchanged sentences
It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months.
−Removed: The Company estimates that the total amount of gross unrecognized tax benefits may decrease by $ 20 million to $ 30 million in the next 12 months primarily due to Internal Revenue Service (“IRS”) settlements and state exams.
+Added: The Company estimates that the total amount of gross unrecognized tax benefits may decrease by $ 50 million to $ 60 million in the next 12 months primarily
+Added: due to Internal Revenue Service (“IRS”) settlements and state exams.
The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision.
−Removed: The Company recognized a net increase of $ 2 million, a net decrease of $ 2 million, and a net increase of $ 2 million, in interest and penalties for the years ended December 31, 2020, 2019, and 2018, respectively.
−Removed: As of December 31, 2020 and 2019, the Company had a payable of $ 10 million and $ 8 million, respectively, related to accrued interest and penalties.
+Added: The Company recognized nil , a net increase of $ 2 million, and a net decrease of $ 2 million, in interest and penalties for the years ended December 31, 2021, 2020, and 2019, respectively.
+Added: As of both December 31, 2021 and 2020, the Company had a payable of $ 10 million related to accrued interest and penalties.
The Company or one or more of its subsidiaries files income tax returns in the U.S.
2 unchanged sentences
The IRS is currently auditing the Company’s U.S.
−Removed: income tax returns for 2016, 2017 and 2018.
+Added: income tax returns for 2016 through 2020.
The Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from 2015 through 2019.
−Removed: In the United Kingdom (“UK”), Her Majesty’s Revenue and Customs is performing a business risk review of the Company’s UK subsidiaries for the 2016 tax year.
Retirement Plans and Profit Sharing Arrangements
2 unchanged sentences
The Company’s U.S.
−Removed: non-advisor employees are generally eligible for the Ameriprise Financial Retirement Plan (the “Retirement Plan”), a noncontributory defined benefit plan which is a qualified plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
+Added: non-advisor employees who were hired prior to April of 2019 are generally eligible for the Ameriprise Financial Retirement Plan (the “Retirement Plan”), a noncontributory defined benefit plan which is a qualified plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
However, effective April 2020, the Company no longer enrolled new employees in the Retirement Plan.
2 unchanged sentences
Each pay period these balances are credited with an amount equal to a percentage of eligible compensation as defined by the Retirement Plan (which includes, but is not limited to, base pay, performance based incentive pay, commissions, shift differential and overtime).
−Removed: The percentage ranges from 2.5% to 10% depending on several factors including years of service.
−Removed: However, the percentage credited will not change from the percentage received as of April 2020.
+Added: The percentage ranges from 2.5 % to 10 % depending on several factors including years of service as of April 2020 and will no longer increase with more years of service.
Employees’ balances are also credited with a fixed rate of interest that is updated each January 1 and is based on the average of the daily five -year U.S.
Treasury Note yields for the previous October 1 through November 30, with a minimum crediting rate of 5 %.
−Removed: Employees are fully vested after three years of service or upon retirement at or after age 65, disability or death while employed.
+Added: Employees are fully vested after 3 years of service or upon retirement at or after age 65, disability or death while employed.
Employees have the option to receive annuity payments or a lump sum payout of vested balance at termination or retirement.
The Retirement Plan’s year-end is September 30.
−Removed: Effective April 2020, the Company will no longer enroll employees in the Retirement Plan.
−Removed: Instead, newly eligible employees will receive a company contribution to the Ameriprise Financial 401(k) Plan (the “401(k) Plan”).
−Removed: Active participants in the Retirement Plan as of April 2020 will continue to receive company allocations to the Retirement Plan each pay period.
−Removed: However, the company allocations to the Retirement Plan will not increase from the percentage received as of April 2020.
−Removed: These plan changes are reflected in the obligations disclosed as of December 31, 2020.
In addition, the Company sponsors the Ameriprise Financial Supplemental Retirement Plan (the “SRP”), an unfunded non-qualified deferred compensation plan subject to Section 409A of the Internal Revenue Code.
7 unchanged sentences
are covered by local retirement plans, some of which are funded, while other employees receive payments at the time of retirement or termination under applicable labor laws or agreements.
+Added: As part of the acquisition of the BMO Global Asset Management (EMEA) business, some employees are covered by legacy pension plans.
+Added: All plans are closed to new participants.
+Added: The plans provide benefits calculated using salary data of the participants.
+Added: The plans are based on final salary payments and benefits are adjusted in line with plan rules (e.g.
+Added: in line with price inflation in the U.K.) once in payment during retirement.
+Added: The level of benefits provided depends on the member’s length of service and pensionable salary at retirement date or date of termination if earlier.
All components of the net periodic benefit cost are recorded in General and administrative expense and were as follows:
5 unchanged sentences
Expected return on plan assets ( 57 ) ( 55 ) ( 53 )
−Removed: Amortization of prior service costs ( 2 ) — —
+Added: Amortization of prior service credits ( 2 ) ( 2 ) —
Amortization of net loss 23 15 5
12 unchanged sentences
Actuarial (gain) loss 16 117 — 1
−Removed: Curtailments — ( 7 ) — —
+Added: Acquisitions 498 — — —
Settlements ( 27 ) ( 30 ) — —
1 unchanged sentence
Benefit obligation, December 31 $ 1,815 $ 1,271 $ 13 $ 14
−Removed: The actuarial losses for pension plans for 2020 and 2019 were primarily due to a decrease in the discount rate assumption as of December 31, 2020 and 2019, respectively, compared to the prior year-end.
−Removed: The actuarial loss for 2019 also resulted from demographic experience during the Retirement Plan year.
+Added: The actuarial losses for pension plans for 2021 and 2020 were primarily due to a decrease in the discount rate assumption as of December 31, 2021 and 2020, respectively.
The following table provides a reconciliation of changes in the fair value of assets:
5 unchanged sentences
Benefits paid ( 12 ) ( 10 )
+Added: Acquisitions 586 —
Settlements ( 27 ) ( 30 )
39 unchanged sentences
which are allocated at the discretion of the individual and will be converted at retirement into the defined benefit pension plan.
+Added: In addition, pension plan assets acquired in the acquisition of the BMO Global Asset Management (EMEA) business include target portfolio allocations of approximately 90 % collective funds investing primarily in debt securities, equity securities, and certain derivatives, either directly or through other collective funds and 10 % to a growth portfolio primarily investing in private equity hedge fund investments.
Actual allocations will generally be within 5 % of these targets.
5 unchanged sentences
Equity securities:
−Removed: large cap stocks $ 119 $ — $ — $ 119
small cap stocks $ 102 $ — $ — $ 102
3 unchanged sentences
investment grade bonds 17 — — 17
+Added: Insurance contracts — — 41 41
Cash equivalents at NAV 20 (1)
13 unchanged sentences
investment grade bonds 47 21 — 68
−Removed: high yield bonds 6 — — 6
investment grade bonds 18 — — 18
22 unchanged sentences
The fair value of the Level 2 securities is determined based on a market approach using observable inputs.
+Added: Insurance contracts of $ 41 million acquired during the year ended December 31, 2021 support certain non-U.S.
+Added: plans and are classified as Level 3.
The amounts recognized in AOCI, net of tax, as of December 31, 2021 but not recognized as components of net periodic benefit cost included an unrecognized actuarial loss of $ 160 million, an unrecognized prior service credit of $ 9 million, and a currency exchange rate adjustment of $ 2 million related to the Company’s pension plans.
−Removed: The Company’s other postretirement plans included an unrecognized actuarial gain of $ 3 million and an unrecognized prior service credit of $ 1 million.
+Added: The Company’s other postretirement plans included an unrecognized actuarial gain of $ 2 million and an unrecognized prior service credit of nil as of December 31, 2021.
See Note 21 for a rollforward of AOCI related to the Company’s defined benefit plans.
5 unchanged sentences
2027-2031 451 5
−Removed: The Company expects to contribute $ 15 million and $ 1 million to its pension plans and other postretirement plans, respectively, in 2021.
+Added: The Company expects to contribute $ 50 million and nil to its pension plans and other postretirement plans, respectively, in 2022.
Defined Contribution Plans
−Removed: The Company’s employees are generally eligible to participate in the 401(k) Plan.
+Added: The Company’s employees are generally eligible to participate in the Ameriprise Financial 401(k) Plan (the “401(k) Plan”).
The 401(k) Plan allows eligible employees to make contributions through payroll deductions up to IRS limits and invest their contributions in one or more of the 401(k) Plan investment options, which include the Ameriprise Financial Stock Fund.
23 unchanged sentences
These include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industries in which it operates.
−Removed: The Company can also be subject to legal proceedings arising out of its
−Removed: general business activities, such as its investments, contracts, leases and employment relationships.
−Removed: Uncertain economic conditions, heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the financial services industry generally.
+Added: The Company can also be subject to legal proceedings arising out of its general business activities, such as its investments, contracts, leases and employment relationships.
+Added: Uncertain economic conditions,
+Added: heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the financial services industry generally.
As with other financial services firms, the level of regulatory activity and inquiry concerning the Company’s businesses remains elevated.
From time to time, the Company receives requests for information from, and/or has been subject to examination or claims by, the SEC, the Financial Industry Regulatory Authority, the OCC, the U.K.
−Removed: Financial Conduct Authority, the FRB, state insurance and securities regulators, state attorneys general and various other domestic or foreign governmental and quasi-governmental authorities on behalf of themselves or clients concerning the Company’s business activities and practices, and the practices of the Company’s financial advisors.
−Removed: The Company typically has numerous pending matters which include information requests, exams or inquiries that the Company has received during recent periods regarding certain matters, including:
+Added: Financial Conduct Authority, the Federal Reserve Board, state insurance and securities regulators, state attorneys general and various other domestic or foreign governmental and quasi-governmental authorities on behalf of themselves or clients concerning the Company’s business activities and practices, and the practices of the Company’s financial advisors.
+Added: The Company typically has numerous pending matters which include information requests, exams or inquiries regarding certain subjects, including from time to time:
sales and distribution of mutual funds, exchange traded funds, annuities, equity and fixed income securities, real estate investment trusts, insurance products, and financial advice offerings, including managed accounts;
+Added: wholesaler activity;
supervision of the Company’s financial advisors and other associated persons;
4 unchanged sentences
The Company has cooperated and will continue to cooperate with the applicable regulators.
−Removed: These legal and regulatory proceedings are subject to uncertainties and, as such, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to reasonably estimate the amount of any loss.
+Added: These legal proceedings are subject to uncertainties and, as such, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to reasonably estimate the amount of any loss.
The Company cannot predict with certainty if, how or when any such proceedings will be initiated or resolved.
Matters frequently need to be more developed before a loss or range of loss can be reasonably estimated for any proceeding.
−Removed: An adverse outcome in one or more proceeding could eventually result in adverse judgments, settlements, fines, penalties or other sanctions, in addition to further claims, examinations or adverse publicity that could have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.
+Added: An adverse outcome in one or more proceedings could eventually result in adverse judgments, settlements, fines, penalties or other sanctions, in addition to further claims, examinations or adverse publicity that could have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.
In accordance with applicable accounting standards, the Company establishes an accrued liability for contingent litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated.
20 unchanged sentences
Segment Information
−Removed: During the third quarter of 2020, as the Company continued to reposition its business and implement strategies focusing on product features and sales, the composition of its reportable segments changed from five to four segments.
−Removed: The Chief Operating Decision Maker (“CODM”) manages the annuities and protection business as one operating segment, referred to as Retirement & Protection Solutions.
−Removed: The Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance).
−Removed: In addition, the Company moved the Fixed Annuities and Fixed Indexed Annuities business to the Corporate & Other segment as a closed block.
−Removed: These segment reporting changes align with the way the CODM began assessing the performance of the Company’s reportable segments and other business activities effective in the third quarter of 2020.
−Removed: Certain prior period amounts have been revised to conform to the current presentation.
The Company’s four reporting segments are Advice & Wealth Management, Asset Management, Retirement & Protection Solutions and Corporate & Other.
12 unchanged sentences
Intersegment expenses for this segment include expenses for investment management services provided by the Asset Management segment.
−Removed: The Asset Management segment provides investment management, advice and products to retail, high net worth and institutional clients on a global scale through the Columbia Threadneedle Investments® brand, which represents the combined capabilities, resources and reach of Columbia Management Investment Advisers, LLC (“Columbia Management”) and Threadneedle.
+Added: The Asset Management segment provides investment management, advice and products to retail, high net worth and institutional clients on a global scale through the Columbia Threadneedle Investments ® brand (including the newly acquired BMO Global Asset Management (EMEA) business), which represents the combined capabilities, resources and reach of Columbia Management Investment Advisers, LLC (“Columbia Management”) and Threadneedle, which is integrating the newly acquired BMO Global Asset Management (EMEA) business.
Columbia Management primarily provides products and services in the U.S.
and Threadneedle primarily provides products and services internationally.
−Removed: Additional subsidiaries are also included in our Asset Management segment such as Lionstone Partners, LLC, the U.S.
−Removed: investment adviser for certain private funds and investment products focused on real estate.
+Added: Additional subsidiaries beyond Columbia Management and Threadneedle are also included in our Asset Management segment.
The Company offers U.S.
12 unchanged sentences
The fees for all such services are reflected within the Asset Management segment results through intersegment transfer pricing.
−Removed: Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management and Annuities and Protection segments.
+Added: Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management and Retirement & Protection Solutions segments.
The Retirement & Protection Solutions segment includes Retirement Solutions (variable annuities and payout annuities) and Protection Solutions (life and disability insurance).
2 unchanged sentences
Revenues for the Company’s variable annuity products are primarily earned as fees based on underlying account balances, which are impacted by both market movements and net asset flows.
−Removed: The Company also earns net investment income on general account assets supporting reserves for immediate annuities with a non-life contingent feature and for certain guaranteed benefits offered with variable annuities and on
−Removed: capital supporting the business.
+Added: The Company also earns net investment income on general account assets supporting reserves for immediate annuities with a non-life contingent feature and for certain guaranteed benefits offered with variable annuities and on capital supporting the business.
Revenues for the Company’s immediate annuities with a life contingent feature are earned as premium revenue.
5 unchanged sentences
The Company also receives fees based on the level of the RiverSource Life companies’ separate account assets supporting VUL investment options.
−Removed: Intersegment revenues for this segment reflect fees paid by the Asset Management segment for marketing support and other services provided in connection with the availability of variable insurance trust funds (“VIT Funds”) under the variable annuity contracts and VUL contracts.
+Added: Intersegment revenues for
+Added: this segment reflect fees paid by the Asset Management segment for marketing support and other services provided in connection with the availability of variable insurance trust funds (“VIT Funds”) under the variable annuity contracts and VUL contracts.
Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management segment, as well as expenses for investment management services provided by the Asset Management segment.
3 unchanged sentences
Beginning in the first quarter of 2019, the results of AAH, which had been reported as part of the Protection segment, were reflected in the Corporate & Other segment.
−Removed: Prior periods presented have been restated to reflect the change.
The Company sold AAH on October 1, 2019.
1 unchanged sentence
Revenues for the Company’s fixed deferred annuity products are primarily earned as net investment income on the RiverSource Life companies’ general account assets supporting fixed account balances, with profitability significantly impacted by the spread between net investment income earned and interest credited on the fixed account balances.
−Removed: Prior periods presented have been restated to reflect the changes from the sale of AAH and the segment restructuring.
+Added: Prior periods presented have been restated to reflect the changes from the segment restructuring.
Management uses segment adjusted operating measures in goal setting, as a basis for determining employee compensation and in evaluating performance on a basis comparable to that used by some securities analysts and investors.
2 unchanged sentences
The Company believes the presentation of segment adjusted operating earnings, as the Company measures it for management purposes, enhances the understanding of its business by reflecting the underlying performance of its core operations and facilitating a more meaningful trend analysis.
−Removed: Effective first quarter of 2019, management has excluded mean reversion related impacts from the Company’s adjusted operating measures.
−Removed: Prior periods have been updated to reflect this change to be consistent with the current period presentation.
+Added: Management excludes mean reversion related impacts from the Company’s adjusted operating measures.
The mean reversion related impact is defined as the impact on variable annuity and VUL products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves.
+Added: Effective in the third quarter of 2021, management has excluded the impacts of block transfer reinsurance transactions from the adjusted operating measures.
+Added: Prior periods have been updated to reflect this change to be consistent with the current period presentation.
Adjusted operating earnings is defined as adjusted operating net revenues less adjusted operating expenses.
2 unchanged sentences
mean reversion related impacts (the impact on variable annuity and VUL products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves);
−Removed: the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments;
+Added: block transfer reinsurance transaction impacts;
+Added: the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments;
gain or loss on disposal of a business that is not considered discontinued operations;
19 unchanged sentences
Corporate & Other 487 546 1,477
−Removed: Eliminations (1)
+Added: Elimination of intersegment revenues (1)
( 1,573 ) ( 1,377 ) ( 1,402 )
3 unchanged sentences
Market impact on non-traditional long-duration products, net 38 10 —
+Added: Mean reversion related impacts 1 — —
Market impact of hedges on investments ( 22 ) — ( 35 )
+Added: Block transfer reinsurance transaction impacts ( 644 ) — 8
Integration and restructuring charges — — ( 3 )
20 unchanged sentences
Market impact of hedges on investments ( 22 ) — ( 35 )
+Added: Block transfer reinsurance transaction impacts 521 — 8
Integration and restructuring charges ( 32 ) ( 4 ) ( 17 )
1 unchanged sentence
Pretax income per consolidated statements of operations $ 3,350 $ 1,831 $ 2,232
−Removed: Quarterly Financial Data (Unaudited)
−Removed: 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31
−Removed: (in millions, except per share data)
−Removed: Net revenues $ 3,183 $ 3,003 $ 2,712 $ 3,001 $ 3,287 $ 3,317 $ 3,245 $ 3,118
−Removed: Pretax income 190 ( 184 ) ( 526 ) 2,351 534 641 587 470
−Removed: Net income 177 ( 140 ) ( 539 ) 2,036 463 543 492 395
−Removed: Earnings per share:
−Removed: Basic $ 1.46 $ ( 1.14 ) $ ( 4.31 ) $ 16.11 $ 3.59 $ 4.09 $ 3.61 $ 2.85
−Removed: Diluted $ 1.43 $ ( 1.14 ) (1) $ ( 4.31 ) (1) $ 15.88 $ 3.53 $ 4.04 $ 3.57 $ 2.82
−Removed: Weighted average common shares outstanding:
−Removed: Basic 120.9 123.0 125.0 126.4 129.0 132.7 136.1 138.8
−Removed: Diluted 123.4 124.9 126.2 128.2 131.3 134.5 138.0 140.1
−Removed: Cash dividends declared per common share $ 1.04 $ 1.04 $ 1.04 $ 0.97 $ 0.97 $ 0.97 $ 0.97 $ 0.90
−Removed: (1) Diluted shares used in this calculation represent basic shares due to the net loss.
−Removed: Using actual diluted shares would result in anti-dilution.
−Removed: Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of the quarterly earnings per share data may not equal the earnings per share data for the year.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.