Table of Contents

As filed with the Securities and Exchange Commission on April 25, 2024

Registration No.  333-185574

811- 08750

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM N-4

REGISTRATION STATEMENT UNDER THE

SECURITIES ACT OF 1933

Pre-Effective Amendment No. ___

Post-Effective Amendment No. 18

and

REGISTRATION STATEMENT UNDER THE

INVESTMENT COMPANY ACT OF 1940

Amendment No. 269

 

 

SEPARATE ACCOUNT VA BNY

(Exact Name of Registrant)

TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY

(Name of Depositor)

440 Mamaroneck Avenue

Harrison, NY 10528

(Address of Depositor’s Principal Executive Offices)

Depositor’s Telephone Number: (914) 627-3630

Brian Stallworth, Esquire

Transamerica Financial Life Insurance Company

c/o Office of the General Counsel

440 Mamaroneck Avenue

Harrison, NY 10528

(Name and Address of Agent for Service)

It is proposed that this filing become effective:

    

immediately upon filing pursuant to paragraph (b) of Rule 485

__X__

   

on May 1, 2024 pursuant to paragraph (b) of Rule 485

    

60 days after filing pursuant to paragraph (a)(1) of Rule 485

    

on (date) pursuant to paragraph (a)(1) of Rule 485

If appropriate, check the following box:
_____    This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Table of Contents
Transamerica Variable Annuity Series    Transamerica PrincipiumSM III
Transamerica AxiomSM II    Transamerica Variable Annuity I-Share
Transamerica Inspire® Variable Annuity    Transamerica AxiomSM NY Variable Annuity
Transamerica LandmarkSM NY Variable Annuity   

Issued by

TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY

SEPARATE ACCOUNT VA BNY

Rate Sheet Supplement dated May 1, 2024

to the

Prospectus dated May 1, 2024

This Rate Sheet Prospectus Supplement (this “supplement”) applies to the above listed Transamerica variable annuities and should be read and retained with the prospectus. If you would like another copy of the current prospectus, please call us at (800) 525-6205.

All Rate Sheet Prospectus Supplements are also available on the EDGAR system at www.sec.gov. Please see the SEC file number table below for your applicable product.

We are issuing this supplement to provide the rider fee, growth and withdrawal percentages that we are currently offering for the Retirement Income Choice® 1.6 rider as described in the prospectus.

The information listed below applies to applications signed on or after and rider election forms received on or after May 1, 2024.

We will file a new Rate Sheet Prospectus Supplement at least 10 business days prior to changing the rider fee percentages, growth percentage, and withdrawal percentages.

For riders issued as part of the new policy application process. In order to receive the terms listed below we must receive Your completed application within 7 calendar days from the date that this supplement is no longer effective, and the policy must be funded within 60 calendar days from the date that this supplement is no longer effective. If these conditions are not met, Your application will be considered not in good order and additional paperwork may be required to issue the policy with the applicable rates in effect at that time.

For riders issued to existing policy Owners: In order to receive the terms listed below, Your rider election form must be signed and received in good order while this supplement is in effect. If Your rider election form is received in good order after this supplement is no longer in effect, You will receive the rider terms that are in effect on the date Your rider election form is received in good order. Election forms must be received in good order while the New York Stock Exchange is open for regular trading to get same-day pricing of the transaction. Election forms received in good order on non-business days or after our close of business will get next-day pricing

The rider fee and withdrawal percentages applicable to your policy will not change for the life of your policy (unless subject to an automatic step-up as described in the Automatic Step-Up section of your prospectus. At the time of an automatic step-up the rider fee percentage may increase by no more than 0.75% from the current rider fee percentage listed below). The growth percentage can change upon manual reset, which is a manual process under which your current rider is terminated and a new rider is issued. You can only elect to reset during the 30 day period following each successive fifth rider anniversary and if all other rider issue requirements are met as further described in the Retirement Income Choice® 1.6 – Base Benefit- Manual Resets section of your prospectus. The Rate Sheet Prospectus Supplement applicable to your policy will be included with your prospectus. Please work with your financial professional or visit www.transamerica.com to confirm the current rates.

 

This Supplement must be accompanied or preceded by the current Prospectus.

Please read this Supplement carefully and retain it for future reference.

1

Table of Contents

RIDER FEES

 

Rider Benefit    Single Life Option      Joint Life Option 
Base Benefit Designated Allocation Group A   1.85%   1.95%
Base Benefit Designated Allocation Group B   1.40%   1.50%
Base Benefit Designated Allocation Group C   0.95%   1.05%
Death Benefit   0.40%   0.35%

GROWTH PERCENTAGE

5.00%

WITHDRAWAL PERCENTAGE

 

Age at time of

first withdrawal

  

Withdrawal Percentage -

Single Life Option*

 

Withdrawal Percentage -

Joint Life Option*

0-58   0.00%   0.00%
59-64   3.50%   3.00%
65-80   4.75%   4.25%
≥ 81   5.25%   4.75%

* The withdrawal percentage is determined by the annuitant’s age (or the annuitant’s spouse’s age if younger and the joint life option is elected) at the time of the first withdrawal taken on or after the rider anniversary immediately following the annuitant’s (or the annuitant’s spouse’s if younger and the joint life option is elected) 59th birthday.

 

Transamerica Financial Life Insurance Company
Product Name   

SEC File

Number

    Product Name   

SEC File

Number

Transamerica Variable Annuity Series

 

   

333-185574

 

   

Transamerica PrincipiumSM III

 

    333-186034

Transamerica AxiomSM II

 

   

333-186033

 

   

Transamerica Variable Annuity I-Share

 

    333-186035
Transamerica Inspire® Variable Annuity    333-215599    Transamerica AxiomSM NY Variable Annuity    333-187920
Transamerica LandmarkSM NY Variable Annuity    33-83560          

 

This Supplement must be accompanied or preceded by the current Prospectus.

Please read this Supplement carefully and retain it for future reference.

2

Table of Contents

Transamerica Variable Annuity Series

    Transamerica Inspire® Variable Annuity

Transamerica AxiomSM II

    Transamerica Variable Annuity I-Share

Transamerica PrincipiumSM III

    Transamerica LandmarkSM NY Variable Annuity

Transamerica AxiomSM NY Variable Annuity

   

Issued by

TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY

SEPARATE ACCOUNT VA BNY

Rate Sheet Supplement dated May 1, 2024

to the

Prospectus dated May 1, 2024

This Rate Sheet Prospectus Supplement (this “supplement”) applies to the above listed Transamerica variable annuities and should be read and retained with the prospectus. If you would like another copy of the current prospectus, please call us at (800) 525-6205.

All Rate Sheet Prospectus Supplements are also available on the EDGAR system at www.sec.gov. Please see the SEC file number table below for your applicable product.

We are issuing this supplement to provide the rider fee, growth and withdrawal percentages that we are offering for the Retirement Income Max® rider as described in the prospectus.

The information listed below applies to applications signed on or after and rider election forms received on or after May 1, 2024.

We will file a new Rate Sheet Prospectus Supplement at least 10 business days prior to changing the rider fee percentages, growth percentage, and withdrawal percentages.

For riders issued as part of the new policy application process. In order to receive the terms listed below we must receive Your completed application within 7 calendar days from the date that this supplement is no longer effective, and the policy must be funded within 60 calendar days from the date that this supplement is no longer effective. If these conditions are not met, Your application will be considered not in good order and additional paperwork may be required to issue the policy with the applicable rates in effect at that time.

For riders issued to existing policy Owners: In order to receive the terms listed below, Your rider election form must be signed and received in good order while this supplement is in effect. If Your rider election form is received in good order after this supplement is no longer in effect, You will receive the rider terms that are in effect on the date Your rider election form is received in good order. Election forms must be received in good order while the New York Stock Exchange is open for regular trading to get same-day pricing of the transaction. Election forms received in good order on non-business days or after our close of business will get next-day pricing.

The rider fee and withdrawal percentages applicable to your policy will not change for the life of your policy (unless subject to an automatic step-up as described in the Automatic Step-Up section of your prospectus. At the time of an automatic step-up the rider fee percentage may increase by no more than 0.75% from the current rider fee percentage listed below). The Rate Sheet Prospectus Supplement applicable to your policy will be included with your prospectus. Please work with your financial professional or visit www.transamerica.com to confirm the current rates.

RIDER FEE

 

Single   Joint
1.50%   1.60%

GROWTH PERCENTAGE

5.00%

 

This Supplement must be accompanied or preceded by the current Prospectus.

Please read this Supplement carefully and retain it for future reference.

1

Table of Contents

SINGLE LIFE WITHDRAWAL PERCENTAGE

Age at time of

first withdrawal

  

Withdrawal Percentage -

Single Life Option*

0-58   0.00%
59-64   3.75%
65-80   5.00%
≥ 81   5.50%

JOINT LIFE WITHDRAWAL PERCENTAGE

Age at time of

first withdrawal

  

Withdrawal Percentage -

Joint Life Option*

0-58   0.00%
59-64   3.25%
65-80   4.50%
≥ 81   5.00%

* The withdrawal percentage is determined by the annuitant’s age (or the annuitant’s spouse’s age if younger and the joint life option is elected) at the time of the first withdrawal taken on or after the benefit anniversary immediately following the annuitant’s (or the annuitant’s spouse’s if younger and the joint life option is elected) 59th birthday.

 

Transamerica Financial Life Insurance Company
Product Name    SEC File
Number		    Product Name    SEC File
Number
Transamerica Variable Annuity Series    333-185574    Transamerica Inspire® Variable Annuity    333-215599

Transamerica AxiomSM II

 

   

333-186033

 

   

Transamerica Variable Annuity I-Share

 

    333-186035
Transamerica PrincipiumSM III    333-186034    Transamerica LandmarkSM NY Variable Annuity    33-83560
Transamerica AxiomSM NY Variable Annuity    333-187920          

 

This Supplement must be accompanied or preceded by the current Prospectus.

Please read this Supplement carefully and retain it for future reference.

2

Table of Contents
Transamerica Variable Annuity Series    Transamerica Variable Annuity I-Share
Transamerica AxiomSM II    Transamerica PrincipiumSM III
Transamerica Inspire® Variable Annuity   

Issued by

TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY

SEPARATE ACCOUNT VA BNY

Rate Sheet Supplement dated May 1, 2024

to the

Prospectus dated May 1, 2024

This Rate Sheet Prospectus Supplement (this “supplement”) applies to the above listed Transamerica variable annuities and should be read and retained with the prospectus. If you would like another copy of the current prospectus, please call us at (800) 525-6205.

All Rate Sheet Prospectus Supplements are also available on the EDGAR system at www.sec.gov. Please see the SEC file number table below for your applicable product.

We are issuing this Rate Sheet Prospectus Supplement to provide the premium and rebalance allocation requirements as well as the rider fee and withdrawal percentages that we are currently offering for the Transamerica Income Edge rider as described in the prospectus

The information listed below applies to applications signed on or after and rider election forms received on or after May 1, 2024.

We will file a new Rate Sheet Prospectus Supplement at least 10 business days prior to changing the rider fee percentages, required allocations and withdrawal percentages.

For riders issued as part of the new policy application process. In order to receive the terms listed below we must receive Your completed application within 7 calendar days from the date that this supplement is no longer effective, and the policy must be funded within 60 calendar days from the date that this supplement is no longer effective. If these conditions are not met, Your application will be considered not in good order and additional paperwork may be required to issue the policy with the applicable rates in effect at that time.

For riders issued to existing policy Owners: In order to receive the terms listed below, Your rider election form must be signed and received in good order while this supplement is in effect. If Your rider election form is received in good order after this supplement is no longer in effect, You will receive the rider terms that are in effect on the date Your rider election form is received in good order. Election forms must be received in good order while the New York Stock Exchange is open for regular trading to get same-day pricing of the transaction. Election forms received in good order on non-business days or after our close of business will get next-day pricing.

The rider fee and withdrawal percentages applicable to your policy will not change for the life of your policy (unless subject to an automatic step-up as described in the Automatic Step-Up section of your prospectus. At the time of an automatic step-up the rider fee percentage may increase by no more than 0.75% from the current rider fee percentage listed below.) The premium and rebalance allocation requirements will not change for the life of your policy. The Rate Sheet Prospectus Supplement applicable to your policy will be included with your prospectus. Please work with your financial professional or visit www.transamerica.com to confirm the current rates.

RIDER FEE

 

Single   Joint
1.45%   1.55%

 

This Supplement must be accompanied or preceded by the current Prospectus.

Please read this Supplement carefully and retain it for future reference.

1

Table of Contents

REQUIRED ALLOCATIONS

 

      Premium    Rebalance
    Minimum      Maximum      Minimum      Maximum 

Stable Account*

    30%    30%    N/A    N/A

Select Investment Options

    0%    70%    0%    100%

Flexible Investment Options

    0%    70%    0%    100%

*The stable account is excluded from rebalancing

SINGLE LIFE WITHDRAWAL PERCENTAGE

 

Age at time of

 first withdrawal 

  

 Rider Years 1-5 

Withdrawal

Percentage -

Single Life

Option**

 

 Rider Years 6-10 

Withdrawal

Percentage -

Single Life

Option**

  

 Rider Years 11+ 

Withdrawal

Percentage -

Single Life

Option**

0-58   0.00%   0.00%    0.00%
59-64   3.75%   4.25%    4.75%
65-80   5.00%   5.50%    6.00%
≥ 81   5.50%   6.00%    6.50%

JOINT LIFE WITHDRAWAL PERCENTAGE

 

Age at time of

 first withdrawal 

  

Rider Years 1-5

Withdrawal

Percentage -

 Joint Life Option**  

  

 Rider Years 6-10 

Withdrawal

Percentage -

Joint Life

Option**

  

 Rider Years 11+ 

Withdrawal

Percentage -

Joint Life

Option**

0-58   0.00%   0.00%    0.00%
59-64   3.25%   3.75%    4.25%
65-80   4.50%   5.00%    5.50%
≥ 81   5.00%   5.50%    6.00%

** The withdrawal percentage is determined by the number of rider years and the annuitant’s age (or the annuitant’s spouse’s age if younger and the joint life option is elected) at the time of the first withdrawal taken on or after the rider anniversary immediately following the annuitant’s (or the annuitant’s spouse’s if younger and the joint life option is elected) attainment of the minimum benefit age.

 

Transamerica Financial Life Insurance Company
Product Name    SEC File Number    Product Name    SEC File Number
Transamerica Variable Annuity Series    333-185574    Transamerica Variable Annuity I-Share    333-186035
Transamerica AxiomSM II    333-186033    Transamerica PrincipiumSM III    333-186034
Transamerica Inspire® Variable Annuity    333-215599          

 

This Supplement must be accompanied or preceded by the current Prospectus.

Please read this Supplement carefully and retain it for future reference.

2

Table of Contents
TRANSAMERICA VARIABLE ANNUITY SERIES 
Transamerica Life Insurance Company
Separate Account VA B (EST. 1/19/1990)
Administrative Office
6400 C Street SW
Cedar Rapids, Iowa 52499-0001
(800)525-6205
www.transamerica.com
Transamerica Financial Life Insurance Company
Separate Account VA BNY (EST. 9/27/1994)
Administrative Office
6400 C Street SW
Cedar Rapids, Iowa 52499-0001
(800)525-6205
www.transamerica.com
Sales of this Policy were discontinued for new purchasers effective December 7, 2020 for the B-Share, June 29, 2020 for the C-Share, April 30, 2018 for the L-Share and June 29, 2020 for the X-Share classes.
This prospectus describes information You should know before You purchase a Transamerica Variable Annuity Series variable annuity. The prospectus describes a contract between each Owner and joint Owner (“You”) and Transamerica Life Insurance Company or Transamerica Financial Life Insurance Company (“us,” “we,” “our” or “Company” ). This is an individual, deferred, flexible premium variable annuity. This variable annuity allows You to allocate Your premium payments among the Fixed Account (if available) and the underlying fund portfolios.
This prospectus and the underlying fund prospectuses give You important information about the policies and the underlying fund portfolios. Please read them carefully before You invest and keep them for future reference.
The Securities and Exchange Commission has not approved or disapproved these securities, or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
If you elected the X-Share, we will add a premium enhancement to your Policy Value for each premium payment that You make. Generally, an annuity with a premium enhancement will have higher overall expenses than a similar annuity without a premium enhancement; the amount credited under the premium enhancement may be more than offset by the additional fees and charges associated with the premium enhancement. You should always consider the expenses along with the features and enhancements to be sure that any annuity meets your financial needs and goals.
This variable annuity may not be suitable for everyone. This variable annuity may not be appropriate for people who do not have a long-term investment time horizon and is not appropriate for people who intend to engage in market timing or other frequent (disruptive) trading. You will get no additional tax advantage from this variable annuity if You are investing in a variable annuity through a tax-advantaged retirement plan (such as a 401(k) plan or Individual Retirement Account (“IRA”)). This prospectus is not intended to provide tax, accounting or legal advice.
We are not an investment adviser nor are we registered as such with the SEC or any state securities regulatory authority. We are not acting in any fiduciary capacity with respect to Your Policy nor are we acting in any capacity on behalf of any tax-advantaged retirement plan. This information does not constitute personalized investment advice or financial planning advice.
Additional information about certain investment products, including variable annuities, has been prepared by the Securities and Exchange Commission’s staff and is available at Investor.gov.
Prospectus Date: May 1, 2024
 
TABLE OF CONTENTS
 
glossary of terms___________________
3
5
9
11
Policy ____________________________
16
Business Continuity____________________
17
17
Information About Us___________________
17
17
The Separate Account___________________
18
18
18
VOTING RIGHTS______________________
19
THE ANNUITY policy__________________
19
PURCHASE___________________________
20
Policy Issue Requirements_________________
20
Premium Payments_____________________
20
Policy Value_________________________
21
INVESTMENT OPTIONS_________________
22
23
23
The Fixed Account_____________________
24
Transfers___________________________
25
Investment Restrictions__________________
26
26
EXPENSES____________________________
28
Transaction Expenses___________________
28
Surrender Charges_____________________
28
29
Premium Taxes_______________________
29
29
Special Service Fees_____________________
30
Transfer Fee_________________________
30
Base Contract Expenses__________________
30
30
Administrative Charges__________________
30
Annual Service Charge___________________
30
Fund Facilitation Fee____________________
30
Optional Benefits______________________
30
30
Reduced Fees and Charges________________
31
Revenue We Receive____________________
31
32
Ownership__________________________
32
Beneficiary__________________________
32
Assignment_________________________
32
33
Certain Offers________________________
33
33
ACCESS TO YOUR MONEY_______________
33
Surrenders__________________________
34
34
34
Signature Guarantee____________________
35
36
Annuity Payment Options________________
36
38
DEATH BENEFIT_______________________
45
46
46
46
Owner Death________________________
47
Spousal Continuation___________________
47
Amount of Death Benefit_________________
47
48
49
49
ADDITIONAL FEATURES________________
60
Systematic Payout Option________________
60
61
61
Unemployment Waiver__________________
61
62
62
Asset Rebalancing_____________________
63
Loans______________________________
63
TAX INFORMATION____________________
63
OTHER INFORMATION_________________
72
State Variations_______________________
72
73
74
74
Mixed and Shared Funding________________
74
74
Legal Proceedings______________________
75
75
 
77
 
84
 
88
ii
TABLE OF CONTENTS continued
 
Examples ______________________
90
 
Death Benefit____________________
93
 
95
 
96
 
97
 
102
 
105
 
109
 
113
 
115
 
116
iii
glossary of terms
Accumulation Unit- An accounting unit of measure used in calculating the Policy Value in the Separate Account before the Annuity Commencement Date. For more information on unit values, including how they are calculated after the Annuity Commencement Date, please see the Statement of Additional Information.
Adjusted Policy Value- The Policy Value increased or decreased by any Excess Interest Adjustment.
Administrative Office- Transamerica Life Insurance Company and Transamerica Financial Life Insurance Company, Attention: Customer Care Group, 6400 C Street SW, Cedar Rapids, IA 52499, (800)525-6205.
Annuitant- The person on whose life any annuity payments involving life contingencies will be based.
Annuitize (Annuitization)- When You switch from the accumulation phase to the income phase and we begin to make annuity payments to You (or Your payee).
Annuity Commencement Date- The date upon which annuity payments are to commence. This date may not be later than the last day of the Policy month following the month in which the Annuitant attains age 99 (earlier if required by state law).
Annuity Payment Option- A method of receiving a stream of annuity payments selected by the Owner.
Assumed Investment Return or AIR- The annual effective rate shown in Your Policy that is used in the calculation of each variable annuity payment.
Business Day- A day when the New York Stock Exchange is open for regular trading. Business Day may be referred to as Market Day in Your Policy.
Cash Value- The Adjusted Policy Value less any applicable surrender charge.
Code- The Internal Revenue Code of 1986, as amended.
Death Proceeds- The amount payable upon death.
Excess Interest Adjustment- A positive or negative adjustment to amounts paid out or transferred from the Fixed Account Guaranteed Period Options prior to the end of the guaranteed period. The adjustment reflects changes in the interest rates declared by us since the date any payment was received by, or an amount was transferred to, the Guaranteed Period Option. The Excess Interest Adjustment can either decrease or increase the amount to be received by the Owner upon withdrawals, surrenders or commencement of annuity payments, depending upon whether there has been an increase or decrease in interest rates, respectively. The Excess Interest Adjustment will not decrease the interest credited to Your Policy below the guaranteed minimum. The Excess Interest Adjustment does not apply to policies issued in New York by Transamerica Financial Life Insurance Company.
Fixed Account- One or more Investment Options under the Policy that are part of our general assets and are not in the Separate Account.
Fund Facilitation Fee- A fee we charge in order to make certain Portfolio Companies available as Investment Options under the Policy. This may also be referred to as a Platform Charge.
Guaranteed Lifetime Withdrawal Benefit- Any optional benefit under the Policy that provides a guaranteed minimum withdrawal benefit, including the Guaranteed Principal SolutionSM rider, the Retirement Income Max® rider, the Retirement Income Choice® 1.6 rider and the Transamerica Income EdgeSM rider.
Guaranteed Minimum Accumulation Benefit- A benefit under the optional Guaranteed Principal SolutionSM (GPS) rider that provides a guaranteed future value.
Guaranteed Period Options- The various guaranteed interest rate periods of the Fixed Account which we may offer and into which premium payments may be paid or amounts transferred when available.
Investment Option(s) - The Subaccounts and the Fixed Account.
Investment Restrictions - The requirement of the Owners to invest in certain underlying fund portfolios, as required by certain optional riders.
Owner (You, Your)- The person who may exercise all rights and privileges under the Policy.
Physician- A doctor of medicine or osteopathy as set forth in Section 186 (r)(1) of the Social Security Act, as amended, who is legally authorized to practice medicine and surgery within the United States by the jurisdiction in which he or she performs such function or action.
4
Policy- The Transamerica Variable Annuity Series, an individual deferred, flexible premium variable annuity. Also referred to as the contract.
Policy Date- The date shown on the Policy data page attached to the Policy and the date on which the Policy becomes effective.
Policy Value- On or before the Annuity Commencement Date, the Policy Value is equal to the Owner's:
•
premium payments; minus
•
gross withdrawals (withdrawals plus the surrender charge on the portion of the requested withdrawal that is subject to the surrender charge plus or minus any Excess Interest Adjustment plus taxes (on the withdrawal)); plus
•
interest credited in the Fixed Account; plus
•
accumulated gains in the Separate Account; minus
•
accumulated losses in the Separate Account; minus
•
service charges, rider fees, premium taxes, transfer fees, and other charges (including those imposed upon termination), if any.
Policy Year- A Policy Year begins on the Policy Date and on each anniversary thereafter.
Portfolio Company(ies)- The investment company(ies) made available as Investment Options under the Policy. Also referred to as underlying fund portfolios.
Separate Account- Separate Account VA B and Separate Account VA BNY, Separate Accounts established and registered as unit investment trusts under the Investment Company Act of 1940, as amended (the “1940 Act”), to which premium payments under the policies may be allocated.
Separate Account Value- The portion of the Policy Value that is invested in the Separate Account.
Stable Account- A Fixed Account option, only available if You elect the Transamerica Income EdgeSM rider, to which You must allocate a portion of Your premium payments and Policy Value. Assets in the Stable Account are not subject to Separate Account Annual Expenses as set forth under ANNUITY POLICY FEE TABLE AND EXPENSE EXAMPLES.
Subaccount- A subdivision within the Separate Account, the assets of which are invested in a specified underlying fund portfolio.
Surrender Charge Free Amount- The amount that can be withdrawn each Policy Year without incurring any Surrender Charges. Please see EXPENSES – Surrender Charges for more explanation.
Valuation Period- The period of time from one determination of Accumulation Unit values and annuity unit values to the next subsequent determination of those values. Such determination shall be made generally at the close of business on each Business Day.
Written Notice- Written Notice, signed by the Owner, that gives us the information we require and is received in good order at the Administrative Office. For some transactions, we may accept an electronic notice or telephone instructions. Such electronic notice must meet the requirements for good order that we establish for such notices.
5
important INFORMATION you should consider about the policy 
 
FEES AND EXPENSES
Location in
Prospectus
Charges for Early
Withdrawal
If You withdraw money during a specified number of Policy Years
following each premium payment being withdrawn, You may be assessed a
surrender charge. The surrender charge is assessed for 7 years with a
maximum of 8% under the B-Share. The surrender charge is assessed for 4
years with a maximum of 8% under the L-Share. The surrender charge is
assessed for 9 years with a maximum of 9% under the X-Share. The
C-Share does not assess a surrender charge.
For example, if You make an early withdrawal, You could pay a surrender
charge on a $100,000 investment of up to $8,000 for the B-Share or
L-Share or $9,000 for the X-Share.
Annuity Policy Fee
Tables and Expense
Examples
Transaction Expenses
– Surrender Charge
Access to Your Money
Surrenders
Transaction Charges
In addition to surrender charges, You also may be assessed a transfer fee
and special services fee.
Transfer Fee. We reserve the right to charge for transfers among Investment
Options after the first 12 transfers per Policy Year. For each such
additional transfer, we may impose a transfer fee of $10. Currently, we do
not charge a transfer fee, but reserve the right to do so.
Special Service Fee. We reserve the right to deduct a $50 charge for special
services, including overnight delivery, duplicate policies, handling
insufficient checks on new business, duplicate Form 1099 and Form 5498
tax forms, check copies, printing and mailing previously submitted forms,
and asset verification requests from mortgage companies. For policies
issued prior to May 1, 2015, the special services fee may be up to $25.
Annuity Policy Fee
Tables and Expense
Examples
Expenses –
Transaction Expenses
6
 
FEES AND EXPENSES
Location in
Prospectus
Ongoing Fees and
Expenses
(annual charges)
The table below describes the fees and expenses that You may pay each
year, depending on the options You choose. Please refer to Your Policy
specifications page for information about the specific fees You will pay
each year based on the options You have elected.
Annuity Policy Fee
Tables and Expense
Examples
Base Contract Expenses
Appendix – Portfolio
Companies Available
Under the Policy
Annual Fee
Minimum
Maximum
Base Policy1
1.15%
3.55%
Portfolio Company (fund fees and
expenses)2
0.54%
1.45%
Optional Benefit Expenses (if elected)
0.15%1
2.50%3
1 As a percentage of average Separate Account Value.
2 As a percentage of Portfolio Company assets.
3 As a percentage of the withdrawal base.
Because Your Policy is customizable, the choices You make affect how
much You will pay. To help You understand the cost of owning Your
Policy, the following table shows the lowest and highest cost You could pay
each year based on current charges. This estimate assumes that You do not
take withdrawals from the Policy, which could add surrender charges
that substantially increase costs.
Lowest Annual Cost
$1,729
Highest Annual Cost
$6,782
Assumes:
Assumes:
•Investment of $100,000
•5% annual appreciation
•Least expensive Portfolio Company
fees and expenses
•No optional benefits
•No sales charges
•No additional purchase payments,
transfers, or withdrawals
•Investment of $100,000
•5% annual appreciation
•Most expensive combination
of optional benefits and
Portfolio Company fees and
expenses
•No sales charges
•No additional purchase
payments, transfers, or
withdrawals
 
RISKS
Location in
Prospectus
Risk of Loss
You can lose money by investing in this Policy.
Principal Risks of
Investing in the Policy
Not a Short-Term
Investment
This Policy is not a short-term investment and is not appropriate for an
investor who needs ready access to cash.
Surrender charges may apply for several years under the Policy, depending
on the Share Class. Surrender charges will reduce the value of Your Policy
if You withdraw money during that time.
The benefits of tax deferral and living benefit protection also means the
Policy is more beneficial to investors with a long-term time horizon.
Principal Risks of
Investing in the Policy
Transaction Expenses -
Surrender Charges
Tax Information
7
 
RISKS
Location in
Prospectus
Risks Associated with
Investment Options
•An investment in this Policy is subject to the risk of poor investment
performance and can vary depending on the performance of the
Investment Options available under the Policy.
•Each Investment Option, including the Fixed Account, has its own
unique risks.
•You should review the prospectuses for the available Portfolio
Companies before making an investment decision.
Principal Risks of
Investing in the Policy
Investment Options
Appendix: Portfolio
Companies Available
Under the Policy
Insurance Company
Risks
Any obligations (including under the Fixed Account), guarantees, and
benefits under the Policy are subject to our claims-paying ability. If we
experience financial distress, we may not be able to meet our obligations
to You. More information about Transamerica Life Insurance Company or
Transamerica Financial Life Insurance Company, including our financial
strength ratings, is available by visiting transamerica.com or by calling
toll-free (800)525-6205.
Principal Risks of
Investing in the Policy
Information About Us
Financial Condition
 
RESTRICTIONS
Location in
Prospectus
Investments
•We reserve the right to impose a charge for transfers in excess of 12
transfers per Policy Year.
•We reserve the right to limit transfers in circumstances of large or
frequent transfers.
•The Fixed Account option may not be available for investment
depending on when You applied for Your Policy and when it was issued.
•We reserve the right to remove or substitute the Portfolio Companies
that are available as Investment Options under the Policy.
Transaction Expenses
Investment Option –
Transfers
Market Timing and
Disruptive Trading
Optional Benefits
•Certain optional benefits limit or restrict the Investment Options that
You may select under the Policy. We reserve the right to change these
restrictions in the future.
•Withdrawals that exceed limits specified by the terms of an optional
benefit may reduce the value of an optional benefit by an amount
greater than the value withdrawn, which could significantly reduce the
value or even terminate the benefit.
•We reserve the right to stop offering an optional benefit at any time for
new sales, which includes sales to the Owners who may want to
purchase the benefit after they purchase the Policy.
•In some cases, a benefit may not be available through all financial
intermediaries or all states. For more information on the options
available for electing a benefit, please contact Your financial
intermediary or our Administrative Office.
Investment Restrictions
Benefits Available
Under the Policy
Optional Benefit Riders
8
 
TAXES
Location in
Prospectus
Tax Implications
•Consult with a tax professional to determine the tax implications of an
investment in and payments received under the Policy.
•If You purchase the Policy as an individual retirement account or
through a tax qualified plan, You do not get any additional tax benefit.
•You will generally not be taxed on increases in the value of Your Policy
until they are withdrawn. Earnings on Your Policy are taxed at ordinary
income tax rates when withdrawn, and You may have to pay a penalty if
You take a withdrawal before age 59 ½.
Tax Information
 
CONFLICT OF INTEREST
Location in
Prospectus
Investment Professional
Compensation
Your investment professional may receive compensation for selling this
Policy to You, in the form of commissions, additional cash benefits (e.g.,
bonuses), and non-cash compensation. Our affiliate, Transamerica
Capital, Inc. (“TCI”) is the principal underwriter and may share the
revenue we earn on this Policy with Your investment professional’s firm. In
addition, we may pay all or a portion of the cost of affiliates’ operating
and other expenses. This conflict of interest may influence Your
investment professional to recommend this Policy over another investment
for which the investment professional is not compensated or compensated
less.
Distribution of the
Policies
Exchanges
If You already own an insurance Policy, some investment professionals
may have a financial incentive to offer You a new Policy in place of the
one You own. You should only exchange a Policy you already own if You
determine, after comparing the features, fees, and risks of both policies,
that it is better for You to purchase the new Policy rather than continue to
own Your existing Policy.
Exchanges and/or
Reinstatements
9
Overview of the policy
Purpose
The Transamerica Variable Annuity Series is a variable annuity Policy. You can use the Policy to accumulate assets for retirement or other long-term financial planning purposes. The amount of money You are able to accumulate in Your Policy depends upon the performance of Your Investment Options. The Policy also offers a death benefit to protect Your designated beneficiaries.
This Policy may not be appropriate for people who do not have a long-term investment time horizon and is not appropriate for people who intend to engage in market timing or other frequent (disruptive) trading.
Who the Policy is Appropriate For
The Policy is designed for investors who intend to accumulate assets for retirement or other long-term financial planning best suited for those with a long-term investment horizon. Although You have the ability to make partial withdrawals and/or surrender the Policy at any time during the accumulation phase, the Policy should not be viewed as a highly liquid investment. In that regard, withdrawals taken in the near term can result in Your being assessed a surrender charge, which can be a significant amount. In addition, if You participate in certain optional benefits, withdrawals can markedly reduce the benefit’s value. Finally, failure to hold the Policy for the long-term would mean that You lose the opportunity for the performance of Your chosen Investment Options to grow on a tax-deferred basis. Thus, the Policy’s features are appropriate for an investor who does not have significant liquidity needs with respect to money dedicated to the Policy, has a long-term investment horizon, and has purchased the Policy for retirement purposes or other long-term financial planning purposes.
Share Classes
Originally, four different Share Classes were sold under the Policy – B-Share, C-Share, L-Share and X-Share: (a) the B-Share features a seven year surrender charge period and base Separate Account annual expenses of 1.15% (b) the C-Share has no surrender charge but has base Separate Account annual expenses of 1.55% (c) the L-Share has a four-year surrender charge period and base Separate Account annual expenses of 1.50% for the first four years and 1.00% thereafter (d) the X-Share features a nine year surrender charge period and base Separate Account annual expenses of 1.50%.
Phases of the Policy
The Policy has two phases: (1) an accumulation (or savings) phase and (2) and annuity (or income) phase.
Accumulation Phase. To help You accumulate assets during the accumulation phase, You can invest Your Premium payments and Policy Value in:
•
Underlying fund portfolios available under the Policy, each of which has its own investment strategies and risks; investment adviser(s); expense ratio; and performance history; and
•
The Fixed Account option, which offers a guaranteed interest rate during a selected period.
A list of Portfolio Companies in which You can invest is provided in an Appendix to this Prospectus. See Appendix - Portfolio Companies Available Under the Policy.
Annuity Phase. You can elect to Annuitize Your Policy and turn Your Policy Value into a stream of income payments called annuity payments. When You Annuitize Your Policy, the accumulation phase ends, and You will no longer be able to withdraw money from Your Policy. Any guaranteed benefits You elected will terminate without value.
You can choose from among several Annuity Payment Options, including those guaranteeing payments for life and/or for a fixed time period. If You choose income for a specified period, life income with 10 years certain, life income with guaranteed return of Policy proceeds, or income of a specified amount, and the person receiving annuity payments dies prior to the end of the guaranteed period, then the remaining guaranteed annuity payments will be continued to a new payee, or their present value may be paid in a single sum.
Primary Features and Options of the Policy
Type of Policy. Transamerica Variable Annuity Series Policy is a flexible premium deferred variable annuity Policy. It is a “deferred” annuity because You defer taking annuity payments during the accumulation phase. It is a “flexible premium” annuity because You are generally not required to make any premium payments in addition to the initial minimum premium payment. The Policy is
10
“variable” because its value can go up or down based on the performance of the Investment Options You choose. The Policy is available as a non-qualified or qualified Policy. The tax treatment of Your Policy may impact the benefits, as well as fees and charges under Your Policy.
Accessing Your Money. Before You Annuitize, You can withdraw money from Your Policy at any time. If You take a withdrawal, You may be subject to a negative Excess Interest Adjustment and/or have to pay a surrender charge and/or income taxes, including a tax penalty if You are younger than age 59½.
Tax Treatment. You can transfer money between Investment Options without tax implications, and earnings (if any) on Your investments are generally tax-deferred. You are taxed only upon: (1) making a withdrawal; (2) receiving a payment from us; or (3) payment of a death benefit.
Death Benefits. The Policy includes, at no additional cost, a default death benefit that will pay Your designated beneficiaries at least the Policy Value. You can purchase a guaranteed minimum death benefit for an additional fee, which may increase the amount of money payable to Your designated beneficiaries upon Your death
Optional Living Benefits. For an additional fee, You may have purchased one of several Guaranteed Lifetime Withdrawal Benefits, which are designed to provide a guaranteed level of withdrawals from Your Policy, regardless of investment performance.
Optional Liquidity Rider. For an additional fee, You can reduce the number of years that each premium payment is subject to surrender charges from seven years to four years.
Additional Services. At no additional charge, You may select the following additional services:
•
Dollar-Cost Averaging. This service allows You to automatically transfer amounts between certain Investment Options on a monthly basis.
•
Asset Rebalancing. This service automatically reallocates Your Policy Value among Your Investment Options on a periodic basis to maintain Your standing allocation instructions.
•
Systematic Payout Options. This service allows You to receive regular automatic withdrawals from Your Policy either on a monthly, quarterly, semi-annual and annual basis.
•
Telephone and Electronic Transactions. This service allows You to make certain transactions by telephone or other electronic means with the appropriate authorization from You.
11
Annuity Policy FEE TABLE AND EXPENSE EXAMPLES
The following table describes the fees and expenses that You will pay when buying, owning, and surrendering or making withdrawals from the Policy. Please refer to Your Policy specification page for information about the specific fees You will pay each year based on the options You have elected.
The first table describes the fees and expenses that You will pay at the time that You buy the Policy, surrender or make withdrawals from the Policy, or transfer Cash Value between Investment Options. State premium taxes may also be deducted.
Transaction Expenses: 
Share Classes
B-Share
C-Share
L-Share
X-Share
Sales Load Imposed on Purchase Payments
0%
0%
0%
0%
Contingent Deferred Surrender Charges (as a percentage of premium surrendered
or withdrawn)(1)
 
 
 
 
Number of Years Since Premium Payment Date
 
 
 
 
Year 1
8%
0%
8%
9%
Year 2
8%
0%
8%
8%
Year 3
7%
0%
7%
7%
Year 4
6%
0%
6%
6%
Year 5
5%
0%
0%
5%
Year 6
4%
0%
0%
4%
Year 7
3%
0%
0%
3%
Year 8
0%
0%
0%
2%
Year 9
0%
0%
0%
1%
Year 10+
0%
0%
0%
0%
Transfer Fee(2)
$10
$10
$10
$10
Special Service Fee(3)
$50*
$50*
$50*
$50*
*
$0 - $25 for policies issued prior to May 1, 2015.
The next table describes the fees and expenses that you will pay each year during the time that you own the Policy, not including portfolio fees and expenses.
Annual Contract Expenses: 
Share Classes
B-Share
C-Share
L-Share
X-Share
Annual Service Charge(4)
$0-$50
$0-$50
$0-$50
$0-$50
Base Contract Expenses (as a percentage, annually, of average Separate Account
Value)(5):
1.15%
1.55%
1.50%
1.50%
Fund Facilitation Fee (as a percentage, annually, of the net asset value of
Subaccount)
0.30%
0.30%
0.30%
0.30%
Optional Benefit Expenses:
 
 
 
 
Return of Premium Death Benefit (as a percentage of average Separate Account
Value)
0.15%
0.15%
0.15%
0.15%
Annual Step-Up Death Benefit (as a percentage, annually, of average Separate
Account Value)
0.35%
0.35%
0.35%
0.35%
Liquidity Rider (only available with B-Share) (as a percentage, annually, of
average Separate Account Value)
0.50%
—
—
—
Optional Death Benefit Riders - No Longer Available:
 
 
 
 
Additional Death DistributionSM (annual charge based on Policy Value)
0.25%
0.25%
0.25%
0.25%
Additional Death Distribution+SM (annual charge based on Policy Value)
0.55%
0.55%
0.55%
0.55%
12
Maximum Fee: All Share Classes 
 
Maximum
Optional Guaranteed Lifetime Withdrawal Benefit Riders - No Longer Available(6)
 
Retirement Income Max® rider (annual charge - % of Withdrawal Base)*
(for riders issued on or after May 1, 2017)
2.50%
Retirement Income Choice® 1.6 rider (annual charge - % of Withdrawal Base)
(for riders issued on or after May 1, 2017)
 
Base Benefit Designated Allocation Group A*
2.50%
Base Benefit Designated Allocation Group B*
2.50%
Base Benefit Designated Allocation Group C*
2.50%
Additional Benefits available with Retirement Income Choice® 1.6 rider:
(for riders issued on or after May 1, 2017)
 
Death Benefit - (Single Life Option)* (annual charge - % of Withdrawal Base)
0.55%
Death Benefit - (Joint Life Option)* (annual charge - % of Withdrawal Base)
0.50%
Income EnhancementSM - (Single Life Option - Not available in NY)* (annual charge - % of Withdrawal Base)
0.45%
Income EnhancementSM - (Joint Life Option - Not available in NY)* (annual charge - % of Withdrawal Base)
0.65%
Transamerica Income EdgeSM rider (annual charge - % of Withdrawal Base)*
(for riders issued on or after May 1, 2017)
2.50%
*
The current rider fee will be less than or equal to the Maximum for each Share Class. Your rider fee may increase (or decrease) at the time of any automatic step-up. See Automatic Step-Up discussion for each applicable optional benefit. Your rider fee percentage will not exceed the maximum fee percentage shown in this table. The current rider fee will be disclosed in a Rate Sheet Prospectus Supplement. All Rate Sheet Prospectus Supplements are also available on the EDGAR system at sec.gov (File Numbers 333-185573 for TLIC and 333-185574 for TFLIC).
Maximum Fee and Current Fee: All Share Classes 
 
Maximum
Current
Optional Guaranteed Lifetime Withdrawal Benefit Riders - No Longer Available
 
 
Guaranteed Principal SolutionSM rider (also known as Living Benefits Rider) (annual charge - % of
Principal Back Total Withdrawal Base)
1.25%
1.25%
Retirement Income Max® rider (annual charge - % of Withdrawal Base)*
(for riders issued prior to May 1, 2017)
2.00%
1.25%
Retirement Income Choice® 1.6 rider (annual charge - % of Withdrawal Base)
(for riders issued May 1, 2014 to April 30, 2017)
 
 
Base Benefit Designated Allocation Group A
2.20%
1.45%
Base Benefit Designated Allocation Group B
1.85%
1.10%
Base Benefit Designated Allocation Group C
1.45%
0.70%
Additional Benefits available with Retirement Income Choice® 1.6 rider:
(for riders issued May 1, 2014 to April 30, 2017)
 
 
Death Benefit - (Single Life Option)
0.40%
0.40%
Death Benefit - (Joint Life Option)
0.35%
0.35%
Income EnhancementSM - (Single Life Option - Not available in NY)
0.30%
0.30%
Income EnhancementSM - (Joint Life Option - Not available in NY)
0.50%
0.50%
Transamerica Income EdgeSM rider (annual charge - % of Withdrawal Base)*
(for riders issued prior to May 1, 2017)
2.15%
1.40%
 
 
Maximum
Current
Optional Guaranteed Lifetime Withdrawal Benefit Riders - No Longer Available
 
 
Guaranteed Principal SolutionSM rider (also known as Living Benefits Rider) (annual charge - %
of Principal Back Total Withdrawal Base)
1.25%
1.25%
13
 
Maximum
Current
Retirement Income Choice® 1.6 rider (annual charge - % of Withdrawal Base)
(for riders issued prior to May 1, 2014)
 
 
Base Benefit Designated Allocation Group A
2.30%
1.55%
Base Benefit Designated Allocation Group B
1.85%
1.10%
Base Benefit Designated Allocation Group C
1.45%
0.70%
Additional Benefits available with Retirement Income Choice® 1.6 rider:
(for riders issued prior to May 1, 2014)
 
 
Death Benefit - (Single Life Option)
0.40%
0.40%
Death Benefit - (Joint Life Option)
0.35%
0.35%
Income EnhancementSM - (Single Life Option - Not available in NY)
0.30%
0.30%
Income EnhancementSM - (Joint Life Option - Not available in NY)
0.50%
0.50%
Income LinkSM rider (annual charge - % of Withdrawal Base)
2.00%
1.25%
Notes to Fee Table
Transaction Expenses:
1) Maximum Surrender Charge:
The surrender charge, if any is imposed, applies to each premium payment, regardless of how Policy Value is allocated among the Investment Options. The surrender charge decreases based on the number of years since that premium payment was made. The surrender charge varies among the B-Share, L-Share and X-Share classes, as indicated in the B, L, and X columns in the Transaction Expenses table.
2) Transfer Fee:
The transfer fee, if any is imposed, applies to each Policy, regardless of how Policy Value is allocated among the Investment Options. There is no fee for the first 12 transfers per Policy Year. For additional transfers, we may charge a fee of $10 per transfer. Currently, we do not charge a transfer fee, but reserve the right to do so.
3) Special Service Fees:
We may deduct a charge for special services, including overnight delivery and duplicate policies. We reserve the right to deduct a charge for special services in the future, including non-sufficient checks on new business; duplicate Form 1099 and Form 5498 tax forms; check copies; printing and mailing previously submitted forms; and asset verification requests from mortgage companies. We may charge a fee for each service performed and fees may vary based on the type of service but will not exceed the maximum Special Service Fee shown above.
4) Annual Service Charge:
The annual service charge is assessed on each Policy anniversary and at the time of surrender. The maximum annual service charge is the lesser of $50 per Policy or 2% of the Policy Value. As indicated in the table immediately below, we may waive some or all of the Annual Service Charge, based on the greater of the Policy Value and the sum of all premium payments less withdrawals. 
Criteria for Potential Waiver
Potential Waiver Amount**
$50,000 thru $249,999.99*
up to $35
$250,000 or more*
up to $50
*
Based on the greater of Policy Value or sum of all premium payments less all withdrawals.
**
In no event will we waive in the aggregate more than the actual annual service charge for any Policy Year.
Annual Contract Expenses:
5) Base Contract Expenses:
Base contract expenses consist of the Mortality & Expense Risk Fee and the Administrative Fee.
14
Mortality and Expense Risk and Administrative Fee: The mortality and expense risk fee shown is for the accumulation phase with the base death benefit. The mortality and expense risk fee is 1.00% annually for the B-Share, 1.40% annually for the C-Share, 1.35% annually for the L-Share and 1.35% annually for the X-Share. During the income phase, the mortality and expense risk and administrative fee is at an annual rate of 1.25%. The Administrative Charge is 0.15% for each of the Share Classes.
Fund Facilitation Fee: Any Fund Facilitation Fee is a Separate Account expense in addition to the mortality and expense risk and administrative fees. This daily fee is applied only to Policy Value in the subaccounts invested in the following Portfolio Companies: 
Portfolio Companies
Annualized
Fee %
American Funds - Asset Allocation FundSM - Class 2
American Funds - The Bond Fund of AmericaSM - Class 2
American Funds - Growth FundSM - Class 2
American Funds - Growth-Income FundSM - Class 2
American Funds - International FundSM - Class 2
0.30%
AB Balanced Hedged Allocation Portfolio - Class B
State Street Total Return V.I.S. Fund - Class 3
0.20%
TA MSCI EAFE Index - Service Class
TA S&P 500 Index - Service Class
0.15%
We charge a Fund Facilitation Fee in order to make certain Portfolio Companies available as investment choices under the policies. We apply the fee to Portfolio Companies that invest in underlying fund portfolios that do not provide us with the amount of revenue we require in order for us to meet our expenses and revenue targets. This fee is assessed daily based on the net asset value of Portfolio Companies that we specify.
Optional Benefit Separate Account Expenses: Any optional benefit separate account expense is in addition to the mortality and expense risk and administrative fees. 
Liquidity Rider: The Liquidity Rider fee is a Separate Account expense in addition to the mortality and expense risk and administrative fees. This fee is only charged for the first four Policy years.
OPTIONAL RIDERS
In some cases, riders to the Policy are available that provide optional benefits. There are additional fees (annualized fee charged on a yearly or quarterly basis, depending on the rider) for those riders.
6) Optional Guaranteed Lifetime Withdrawal Benefit Riders - No Longer Available
Guaranteed Principal SolutionSM Rider - Total Withdrawal Base: We use the total withdrawal base to calculate the maximum annual withdrawal amount. The total withdrawal base on the rider date is the Policy Value (if X-Share is elected, less any premium enhancement if the rider is added in the first Policy Year).
Retirement Income Max® Rider and Retirement Income Choice® 1.6 Rider - Withdrawal Base: We use the withdrawal base to calculate the rider withdrawal amount and the rider fee. The withdrawal base on the rider date is the Policy Value (if the X-Share was elected, less any premium enhancement if the rider is added in the first Policy Year). For riders issued prior to the date of this prospectus, the withdrawal percentage, growth percentage and fee information can be found in the Statement of Additional Information “Appendix - Prior Withdrawal/Growth Percentages and Rider Fees”.
Transamerica Income EdgeSM Rider - Withdrawal Base: We use the withdrawal base to calculate the rider withdrawal amount and the rider fee. The withdrawal base on the rider date is the Policy Value. For riders issued prior to the date of this prospectus, the withdrawal percentage and growth rate percentage information can be found in the Statement of Additional Information “Appendix - Prior Withdrawal and Growth Percentages”.
Income LinkSM Rider - Withdrawal Base: We use the withdrawal base to calculate the rider withdrawal amount and the rider fee. The withdrawal base on the rider date is the Policy Value (if the X-Share was elected, less any premium enhancement if the rider is added in the first Policy Year).
Annual Portfolio Company Expenses:
The next section shows the minimum and maximum total operating expenses charged by the Portfolio Companies that You may pay periodically during the time You own the Policy. A complete list of the Portfolios available under the Policy, including their annual expenses may be found under Appendix - Portfolio Companies Available Under the Policy. 
15
Annual Portfolio Company Expenses
Minimum
Maximum
Expenses that are deducted from Portfolio Company assets, including
management fees, distribution and/or service 12b-1 fees, Fund Facilitation
Fee if applicable and other expenses
0.54%
1.45%
Expenses that are deducted from Portfolio Company assets, including
management fees, 12b-1 fees, Fund Facilitation Fee if applicable and other
expenses, after any waivers or expense reimbursement
0.54%
1.41%
Expense Examples(1):
The following Examples are intended to help You compare the cost of investing in the Policy with the cost of investing in other variable annuity policies. These costs include Owner transaction expenses, annual Policy expenses, and annual Portfolio Company operating expenses.
The Examples assume that you invest $100,000 in the Policy for the time periods indicated. The Examples also assume that Your Policy has a 5% return each year and assumes the most expensive combination of annual Portfolio Company expenses and optional benefits available for an additional charge. This includes the maximum annual Portfolio Company expenses (including Fund Facilitation Fee, if applicable) Annual Step-Up Death Benefit, Additional Death Distribution+SM rider and Retirement Income Choice® 1.6 rider - Joint Life with additional Death Benefit and Income EnhancementSM options. Although your actual costs may be higher or lower, based on these assumptions, Your costs would be:
If the Policy is surrendered at the end of the applicable time period: 
 
B-Share
B-Share
w/Liquidity
Rider
C-Share
L-Share
X-Share
1 Year
$14,328
$14,813
$7,523
$14,671
$15,576
3 Years
$27,993
$29,353
$22,801
$28,955
$28,971
5 Years
$41,179
$38,357
$38,394
$38,169
$42,693
10 Years
$76,054
$77,731
$78,786
$78,432
$78,470
If the Policy is Annuitized at the end of the applicable time period or if you do not surrender your Policy: 
 
B-Share
B-Share
w/Liquidity
Rider
C-Share
L-Share
X-Share
1 Year
$7,128
$7,613
$7,523
$7,471
$7,476
3 Years
$21,693
$23,053
$22,801
$22,655
$22,671
5 Years
$36,679
$38,357
$38,394
$38,169
$38,193
10 Years
$76,054
$77,371
$78,786
$78,432
$78,470
(1)Please remember that these Examples are illustrations and do not represent past or future expenses. Your actual expenses may be lower or higher than those reflected in the Examples. Similarly, your rate of return may be more or less than the 5% assumed in the Examples. The Examples don't reflect premium tax charges, special service fees, or transfer fees. Different fees and expenses not reflected in the Examples may be assessed during the income phase of the Policy.
16
Principal Risks of Investing in the Policy
There are risks associated with investing in the Policy. You can lose money in a variable annuity, including potential loss of Your original investment. The value of Your investment and any returns will depend primarily on the performance of the underlying fund portfolios You select. Each underlying fund portfolio may have its own unique risks.
Variable annuities are not a short-term investment vehicle. The surrender charge applies for a number of years, so that the Policy should only be purchased for the long-term. Under some circumstances, You may receive less than the sum of Your premium payments. In addition, full or partial withdrawals will be subject to income tax and may be subject to a 10% Internal Revenue Service (“IRS”) penalty if taken before age 59½. Accordingly, You should carefully consider Your income and liquidity needs before purchasing a Policy. Additional information about these risks appears in the Tax Information section of this prospectus.
Risks Of An Increase In Current Fees And Expenses. Certain fees and expenses are currently assessed at less than their guaranteed maximum levels. In the future, these charges may be increased up to the guaranteed (maximum) levels.
Investment Risk. You bear the risk of any decline in the Policy Value caused by the performance of the underlying fund portfolios held by the Subaccounts. Those funds could decline in value very significantly, and there is a risk of loss of your entire amount invested. The risk of loss varies with each underlying fund. This risk could have a significant negative impact on the value of certain optional benefits offered under the Policy. The investment risks are described in the prospectuses for the underlying funds.
Investment Restrictions – Opportunity Risks. Generally, the living benefit riders offered under the Policy restrict Your choice of available underlying fund portfolios. These restrictions are intended to protect us financially, in that they reduce the likelihood that we will have to pay guaranteed benefits under the riders from our own assets. These restrictions could result in an opportunity cost – in the form of underlying fund portfolios that You did not invest in that ultimately generated superior investment performance. Thus, You should consider these underlying fund portfolio restrictions when deciding whether to elect an optional benefit that features such restrictions.
Risk Associated With Election of Optional Benefits. Several of the optional benefits include a host of requirements that must be adhered to in order to preserve and maximize the guarantees we offer under the benefit. If You fail to adhere to these requirements, that may diminish the value of the benefit and even possibly cause termination of the benefit. In addition, it is possible that You will pay fees for the optional benefit without fully realizing the guarantees available under the optional benefit. For example, such would be the case if You were to hold a Guaranteed Lifetime Withdrawal Benefit for many years yet die sooner than anticipated, without having taken a significant number of lifetime withdrawals.
Risks of Managing General Account Assets. The general account assets of the Company are used to support the payment of guaranteed benefits under the Policy. To the extent that the Company is required to pay amounts in addition to the Policy Value, such amounts will come from our general account assets. You should be aware that the general account assets are exposed to the risks normally associated with a portfolio of fixed-income securities, including interest rate, option, liquidity and credit risk, and are also subject to the claims of the Company’s general creditors. The Company’s financial statements contained in the Statement of Additional Information include a further discussion of risks inherent in the general account investments.
Insurance Company Insolvency. It is possible that we could experience financial difficulty in the future and even become insolvent, and therefore unable to provide all of the guarantees and benefits that exceed the assets in the Separate Account that we promise.
Tax Consequences. Withdrawals are generally taxable to the extent of any earnings in the Policy, and prior to age 59½ a tax penalty may apply. In addition, even if the Policy is held for years before any withdrawal is made, withdrawals are taxable as ordinary income rather than capital gains.
Cybersecurity and Certain Business Continuity Risks
Our operations support complex transactions and are highly dependent on the proper functioning of information technology and communication systems. Any failure of or gap in the systems and processes necessary to support complex transactions and avoid systems failure, fraud, information security failures, processing errors, cyber intrusion, loss of data and breaches of regulation may lead to a materially adverse effect on our results of operations and corporate reputation. In addition, we must commit significant resources to maintain and enhance its existing systems in order to keep pace with applicable regulatory requirements, industry standards and customer preferences. If we fail to maintain secure and well-functioning information systems, we may not be able to rely on information for product pricing, compliance obligations, risk management and underwriting decisions. In addition, we cannot assure investors or consumers that interruptions, failures or breaches in security of these processes and systems will not occur, or if they do occur, that they can be timely detected and remediated. The occurrence of any of these events may have a materially adverse effect on our businesses, results of operations and financial condition.
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For additional detail regarding cybersecurity and related risks, please reference the Cyber Security section in the Statement of Additional Information.
Business Continuity
Our business operations may be adversely affected by volatile natural and man-made disasters, including (but not limited to) hurricanes, earthquakes, terrorism, civil unrest, geopolitical disputes, military action, fires and explosions, pandemic diseases, and other catastrophes (“Catastrophic Events”). Over the past several years, changing weather patterns and climatic conditions have added to the unpredictability and frequency of natural disasters in certain parts of the world. To date, the COVID-19 pandemic has caused significant uncertainty and disruption to governments, business operations, and consumer behavior on a global scale. Such uncertainty as to future trends and exposure may lead to financial losses to our businesses. Furthermore, Catastrophic Events may disrupt our operations and result in the loss of, or restricted access to, property and information about Transamerica and its clients. Such events may also impact the availability and capacity of our key personnel. If our business continuity plans do not include effective contingencies for Catastrophic Events, we may experience business disruption, damage to corporate reputation, and damage to financial condition for a prolonged period of time.
Transamerica life insurance company, transamerica financial life insurance company, The separate account, and portfolio companies
Information About Us
Transamerica Life Insurance Company and Transamerica Financial Life Insurance Company, located at 6400 C Street SW, Cedar Rapids, Iowa 52499, is the insurance company issuing the Policy.
We are engaged in the sale of life insurance and annuity policies. Transamerica Life Insurance Company was incorporated under the laws of the State of Iowa on April 19, 1961 as NN Investors Life Insurance Company Inc., and is licensed in the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands and all states except New York. Transamerica Financial Life Insurance Company was incorporated under the laws of the State of New York on October 3, 1947 as Zurich Life Insurance Company and is licensed in all states and the District of Columbia. We are a wholly-owned indirect subsidiary of Transamerica Corporation which conducts most of its operations through subsidiary companies engaged in the insurance business or in providing non-insurance financial services. All of the stock of Transamerica Corporation is indirectly owned by Aegon Ltd., the securities of which are publicly traded. Aegon Ltd., a holding company, conducts its business through subsidiary companies engaged primarily in the insurance business.
All obligations arising under the policies, including the promise to make annuity payments, and payment of any amounts held in the Fixed Account are general corporate obligations of ours and subject to our claims paying ability. Accordingly, no financial institution, brokerage firm or insurance agency is responsible for our financial obligations arising under the policies.
Financial Condition of the Company
We pay benefits under Your Policy from our general account assets and/or from Your Policy Value held in the Separate Account. It is important that You understand that benefit payments are not assured and depend upon certain factors discussed below.
Assets in the Separate Account. You assume all of the investment risk for Your Policy Value that is allocated to the Subaccounts of the Separate Account. Your Policy Value in those Subaccounts constitutes a portion of the assets of the Separate Account. These assets are segregated and insulated from our general account, and may not be charged with liabilities arising from any other business that we may conduct. For more information see The Separate Account below.
Assets in the General Account. You also may be permitted to make allocations to Guaranteed Period Options of the Fixed Account, which are supported by the assets in our general account. Any guarantees under a Policy that exceed Policy Value, such as those associated with any lifetime withdrawal benefit riders and any optional death benefits, are paid from our general account (and not the Separate Account). Therefore, any amounts that we may be obligated to pay under the policy in excess of Policy Value are subject to our financial strength and claims-paying ability and our long-term ability to make such payments. The assets of the Separate Account, however, are also available to cover the liabilities of our general account, but only to the extent that the Separate Account assets exceed the Separate Account liabilities arising under the policies supported by it. For more information see The Fixed Account.
We issue other types of insurance policies and financial products as well, and we also pay our obligations under these products from our assets in the general account.
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As an insurance company, we are required by state insurance regulation to hold a specified amount of general account reserves in order to meet all the contractual obligations to our Owners. We monitor our reserves so that we hold sufficient amounts to cover actual or expected Policy and claims payments. In addition, we monitor our reserves so that we hold sufficient amounts to cover actual or expected Policy and claims payments. In addition we hedge our investments in our general account, and may require purchasers of certain benefits of the variable insurance products that we offer to allocation premium payments and Policy Value in accordance with specified investment requirements. However, it is important to note that there is no guarantee that we will always be able to meet our claims-paying obligations, and that there are risks to purchasing any insurance product.
State insurance regulators also require insurance companies to maintain a minimum amount of capital, which acts as a cushion in the event that the insurer suffers a financial impairment, based on the inherent risks in the insurer’s operations. These risks include those associated with losses that we may incur as the result of defaults on the payment of interest or principal on our general account assets, which include bonds, mortgages, general real estate investments, and stocks, as well as the loss in market value of these investments. We may also experience liquidity risk if our general account assets cannot be readily converted into cash to meet obligations to our policy Owners or to provide the collateral necessary to finance our business operations.
How to Obtain More Information. We encourage Owners to read and understand our financial statements. We prepare our financial statements on a statutory basis. Our financial statements, which are presented in conformity with accounting practices prescribed or permitted by the Iowa Department of Insurance as well as the financial statements of the Separate Account are located in the Statement of Additional Information (SAI). For a free copy of the SAI, simply call or write us at the phone number or address of our Administrative Office referenced in this prospectus. In addition, the SAI is available on the SEC’s website at SEC.gov. Our financial strength ratings which reflect the opinions of leading independent rating agencies of our ability to meet our obligations to our Owners, are available on our website https://www.transamerica.com/why-transamerica/financial-strength, and the websites of these nationally recognized statistical ratings organizations – https://www.ambest.com/home/default.aspx, https://www.moodys.com/, and https://www.spglobal.com/ratings/en/.
The Separate Account
Each Separate Account receives and invests the premium payments that are allocated to it for investment in shares of the underlying fund portfolios. Each Separate Account is registered with the SEC as a unit investment trust under the 1940 Act. However, the SEC does not supervise the management, the investment practices, or the policies of the Separate Account or us. Income, gains and losses (whether or not realized), from assets allocated to the Separate Account are, in accordance with the policies, credited to or charged against the Separate Account without regard to our other income, gains or losses.
The assets of each Separate Account are held in our name on behalf of the Separate Account and belong to us. However, those assets that underlie the policies are not chargeable with liabilities arising out of any other business we may conduct. The Separate Account may include other Subaccounts that are not available under these policies. We do not guarantee the investment results of the Separate Account.
The Underlying Fund Portfolios
At the time You purchase Your Policy, You may allocate Your premium payment to Subaccounts. These are subdivisions of our Separate Account, an account that keeps Your Policy assets separate from our company assets. The Subaccounts then purchase shares of underlying fund portfolios set up exclusively for variable annuity or variable life insurance products. These are not the same mutual funds that You buy through Your investment professional even though they may have similar investment strategies and the same portfolio managers. Each underlying fund portfolio has varying degrees of investment risk. Underlying fund portfolios are also subject to separate fees and expenses such as management fees and operating expenses. “Master-feeder” or “fund of funds” invest substantially all of their assets in other mutual funds and will therefore bear a pro-rata share of fees and expenses incurred by both funds. This will reduce Your investment return. Read the underlying fund portfolio prospectuses carefully before investing. We do not guarantee the investment results of any underlying fund portfolio. Certain underlying fund portfolios may not be available in all states and in all share classes. Please see Appendix - Portfolio Companies Available Under the Policy for additional information.
Other Transamerica Policies
We offer a variety of fixed and variable annuity policies. They may offer features, including Investment Options, and have fees and charges, that are different from those in the Policy offered by this prospectus. Not every Policy we issue is offered through every financial intermediary. Some financial intermediaries may not offer and/or limit the offering of certain features or options, as well as limit the availability of the policies, based on issue Age, or other criteria established by the financial intermediary. Upon request, Your financial professional can show You information regarding other Transamerica annuity policies that he or she distributes. You can also contact us to find out more about the availability of any of the Transamerica annuity policies.
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You should work with Your financial professional to decide whether this Policy is appropriate for You based on a thorough analysis of Your particular insurance needs, financial objectives, investment goals, time horizons and risk tolerance.
VOTING RIGHTS
To the extent required by law, we will vote the underlying fund portfolios' shares held by the Separate Account at regular and special shareholder meetings of the underlying fund portfolios in accordance with instructions received from persons having voting interests in the portfolios, although none of the underlying fund portfolios hold regular annual shareholder meetings. If, however, the 1940 Act or any regulation thereunder should be amended or if the present interpretation thereof should change, and as a result we will determine that it is permitted to vote the underlying fund portfolios shares in its own right, it may elect to do so.
Before the Annuity Commencement Date, You hold the voting interest in the selected portfolios. The number of votes that You have the right to instruct will be calculated separately for each Subaccount. The number of votes that You have the right to instruct for a particular Subaccount will be determined by dividing Your Policy Value in the Subaccount by the net asset value per share of the corresponding portfolio in which the Subaccount invests. Fractional shares will be counted.
After the Annuity Commencement Date, You have the voting interest, and the number of votes decreases as annuity payments are made and as the reserves for the Policy decrease. The person's number of votes will be determined by dividing the reserve for the Policy allocated to the applicable Subaccount by the net asset value per share of the corresponding portfolio. Fractional shares will be counted.
The number of votes that You have the right to instruct will be determined as of the date established by the underlying fund portfolio for determining shareholders eligible to vote at the meeting of the underlying fund portfolio. We will solicit voting instructions by sending You, or other persons entitled to vote, requests for instructions prior to that meeting in accordance with procedures established by the underlying fund portfolio. Portfolio shares as to which no timely instructions are received, and shares held by us in which You, or other persons entitled to vote have no beneficial interest, will be voted in proportion to the voting instructions that are received with respect to all policies participating in the same Subaccount. Accordingly, it is possible for a small number of Owners (assuming there is a quorum) to determine the outcome of a vote, especially if they have large Policy Values. If, however, we determine that we are permitted to vote the shares in our own right, we may do so. Shares owned by the insurance company and its affiliates will also be proportionately voted.
Each person having a voting interest in a Subaccount will receive proxy material, reports, and other materials relating to the appropriate portfolio.
THE ANNUITY policy
This prospectus describes information You should know before You purchase the Transamerica Variable Annuity Series.
An annuity is a contract between You (the Owner) and an insurance company (in this case us), where the insurance company promises to pay You an income in the form of annuity payments. These payments begin on a designated date, referred to as the Annuity Commencement Date. Until the Annuity Commencement Date, Your annuity is in the accumulation phase and the earnings (if any) are generally tax deferred. Tax deferral means You are not taxed until You take money out of Your annuity. After You Annuitize, Your annuity switches to the income phase.
The Policy is a “deferred” annuity. You can use the Policy to accumulate assets for retirement or other long-term financial planning purposes. Your individual investment and Your rights are determined primarily by Your own Policy.
The Policy is a “flexible premium” annuity because after You purchase it, You can generally make additional premium payments of at least $50 (but not more than the stated maximum total premium payment amount) until the Annuity Commencement Date. You are not required to make any additional premium payments.
The Policy is a “variable” annuity because the value of Your Policy can go up or down based on the performance of Your Subaccounts. If You invest in the Separate Account, the amount of money You are able to accumulate in Your Policy during the accumulation phase depends upon the performance of Your Subaccounts. You could lose the amount You allocate to the Separate Account. The amount of annuity payments You receive from the Separate Account during the income phase also depends upon the investment performance of Your Subaccounts.
We do not guarantee that the Fixed Account will always be available. If the Fixed Account is offered it will offer interest at a rate(s) that we guarantee will not decrease during the selected guaranteed period. There may be different interest rates for each different guaranteed period that we may offer and that You select.
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Do not purchase this Policy if You plan to use it, or any of its riders, for resale, speculation, arbitrage, viatication, or any other type of collective investment scheme. Your Policy is not intended or designed to be traded on any stock exchange or secondary market. By purchasing this Policy, You represent and warrant that You are not using the Policy, or any of its riders for resale, speculation, arbitrage, viatication, or any other type of collective investment scheme.
PURCHASE
Policy Issue Requirements
We will not issue a Policy unless:
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we receive in good order (See Sending Forms and Transaction Requests in Good Order) all information needed to issue the Policy;
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we receive in good order (at our Administrative Office) a minimum initial premium (including anticipated premiums from 1035 exchanges on nonqualified policies and transfers or rollovers on qualified policies as indicated on Your application or electronic order form) payment;
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the Annuitant, Owner, and any joint Owner are age 89 or younger (the limit may be lower for qualified policies)
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the Owner and Annuitant have an immediate familial relationship.
Please note, certain riders described herein may require a younger age. Please carefully read the applicable rider sections regarding any age limitations.
We reserve the right to reject any application.
Premium Payments
General. You should make checks for premium payments payable to Transamerica Life Insurance Company or Transamerica Financial Life Insurance Company, as applicable, and send them to the Administrative Office. Your check must be honored in order for us to pay any associated annuity payments and benefits due under the Policy.
We do not accept cash. We reserve the right to not accept third party checks. A third party check is a check that is made payable to one person who endorses it and offers it as payment to a second person. Checks should normally be payable to us, however, in some circumstances, at our discretion we may accept third party checks that are from a rollover or transfer from other financial institutions. Any third party checks not accepted by us will be returned.
We reserve the right to reject or accept any form of payment. Any unacceptable forms of payment will be returned.
Initial Premium Requirements. The initial premium payment for nonqualified policies must be at least $5,000 (including anticipated premiums from Internal Revenue Code Section 1035 exchanges as indicated on your application or electronic order form), and at least $1,000 for qualified policies (including anticipated premiums from transfers or rollovers as indicated on your application or electronic order form). You must obtain our prior approval to purchase a Policy with an amount in excess of our maximum premium amount.
Your initial premium payment may not be credited to Your Policy on the day that You leave Your premium payment with Your financial intermediary. Your financial intermediary may take up to seven Business Days to assess whether buying this Policy is suitable for You. Your financial intermediary may send us Your initial premium payment while they complete this assessment. Your financial intermediary must also ensure that we have all the information needed for us to process Your Policy. We will not begin to process Your Policy during this period.
We will first begin our review only once we receive both Your initial premium payment and Your application (or an electronic order form). We will credit Your initial premium payment to Your Policy within two Business Days after the Business Day that we receive Your initial premium payment, Your application (or order form) and once we determine that Your Policy information is both complete and in good order. This time period is in addition to the time Your financial intermediary may take to complete their part of the process. If we are unable to complete our part of the process within five Business Days after the Business Day that we receive Your initial premium payment and Your application (or electronic order form), then we will notify You or Your financial intermediary, if applicable, and explain why we can't process Your Policy. We will also return Your initial premium payment at that time unless You consent to us holding the premium up to 30 days. We must receive Your consent to hold prior to the market close on the fifth Business Day after receipt of the premium. If Your information is not received in good order within 30 days of our receipt of the premium, then it will be returned. We will credit Your initial premium payment within two Business Days after Your information is both complete and in good order.
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Neither we nor Your financial intermediary are responsible for lost investment opportunities while we each complete our review processes. Any initial premium payments received by us will be held in our general account until credited to Your Policy. You will not earn interest on Your initial premium payment during these review periods.
The date on which we credit Your initial premium payment to Your Policy is generally the Policy Date. The Policy Date is used to determine Policy Years, Policy quarters, Policy months and Policy anniversaries.
Additional Premium Payments. You are not required to make any additional premium payments. However, You can generally make additional premium payments during the accumulation phase. Additional premium payments must be at least $50. After the first Policy Year, additional premium payments each Policy Year cannot, in the aggregate, without our prior approval, exceed $25,000 for nonqualified policies and the lesser of (1) the IRS maximum contribution limit or (2) $60,000 for qualified policies. We reserve the right to refuse any additional premium payment in excess of these limits, and if You do not obtain prior approval for premiums in excess of the dollar amounts listed above, the business will be deemed not in good order. We will credit additional premium payments to Your Policy as of the Business Day we receive Your premium and required information in good order at our Administrative Office. Additional premium payments must be received in good order before the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern time) to get same-day pricing of the additional premium payment. Additional premium payments received in good order on non-Business Days or after our close of business on Business Days will receive next-day pricing. See Sending Forms and Transaction Requests in Good Order.
Maximum Total Premium Payments. For issue ages 0-80, we reserve the right to require prior approval of any cumulative premium payments over $1,000,000 (this includes subsequent premium payments) for policies with the same Owner or same Annuitant issued by us or an affiliate. We may approve premium payments over $1,000,000 but restrict access to certain optional benefits. For issue ages over 80, we reserve the right to require prior approval of any cumulative premium payments over $500,000 (this includes subsequent premium payments) for policies with the same Owner or same Annuitant issued by us or an affiliate. If You do not obtain prior approval for premium payments in excess of the dollar amounts listed above, the business will be deemed not in good order.
Allocation of Premium Payments. When You purchase a Policy, we will allocate Your premium payment to the investment choices You select. Your allocation must be in whole percentages and must total 100%. We will allocate additional premium payments the same way, unless You request a different allocation. You could lose the amount You allocate to the Subaccounts.
If You allocate premium payments to the Dollar Cost Averaging program (if it is available), You must give us instructions regarding the Subaccount(s) to which transfers are to be made or we cannot accept Your premium payment.
You may change allocations for future additional premium payments by sending written instructions to our Administrative Office, or by telephone, or other electronic means acceptable to us, subject to the limitations described in ADDITIONAL FEATURES - Telephone and Electronic Transactions, or any other means acceptable to us. The allocation change will apply to premium payments received on or after the date we receive the change request in good order.
We reserve the right to restrict or refuse any premium payment.
Policy Value
You should expect Your Policy Value to change from Valuation Period to Valuation Period. A Valuation Period begins at the close of regular trading on the New York Stock Exchange on each Business Day and ends at the close of regular trading on the next succeeding Business Day. A Business Day is each day that the New York Stock Exchange is open for business. Regular trading on the New York Stock Exchange usually closes at 4:00 p.m., Eastern Time. Holidays are generally not Business Days.
Premium Enhancement (X-Share) – No Longer Available for New Issue. If You elect the X-Share, an amount equal to the applicable premium enhancement percentage (as set forth below) of the premium payment will be added to the Policy Value. The amount of the premium enhancement is not considered a premium payment and therefore may not be included in the calculation of certain Policy features (such as certain death benefits or living benefits) or in the calculation of fees and charges that are based on premium payments made. The premium enhancement percentage may vary from premium to premium on subsequent premium payments, but will never be less than 0.25% nor more than 7.0%. A confirmation will be sent advising the Owner of the amount of premium enhancement applicable to each subsequent premium payment. No premium enhancement will apply if the policy is canceled pursuant to the right to cancel provision.
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The premium enhancement percentage is determined by the Annuitant's age at the time of each premium payment. The percentage will decrease as the Annuitant's attained age increases. The following schedule shows the current premium enhancement percentages: 
Annuitant's Age
Premium Enhancement Percentage
0-59
5.5%
60-69
5.0%
70-79
4.0%
80+
2.0%
The current premium enhancement percentages are not guaranteed and, as noted above, may change to as little as 0.25%.
Generally, an annuity with a premium enhancement may have higher expenses than a similar annuity without a premium enhancement. Accordingly, You should always consider the expenses along with the features and enhancements to be sure any annuity meets Your financial needs and goals.
There is no specific charge for the premium enhancement. We expect to use a portion of the mortality and expense risk fee, administrative charge and/or the surrender charge to pay the premium enhancement.
We will take back or “recapture” the full dollar amount of any premium enhancement upon the occurrence of any of the following events: (1) exercise of the right to cancel option; (2) exercise of the Nursing Care and Terminal Condition Withdrawal Option or the Unemployment Waiver within one year from the time we apply the premium enhancement; (3) a death benefit is payable within one year from the time we apply the premium enhancement; or (4) annuitization within one year from the time we apply the premium enhancement. In certain circumstances, you might be worse off because of the premium enhancement. This could happen if we recapture the dollar amount of the premium enhancement and the overall investment performance of Your Policy was negative (if the overall investment performance of Your Policy was positive you would be better off).
The Internal Revenue Code generally requires that interests in a qualified Policy be non-forfeitable, and it is unclear whether the premium enhancement feature is consistent with those requirements. Consult a tax adviser before purchasing the X-Share as a qualified policy.
The premium enhancement may vary for certain policies and may not be available for all policies.
INVESTMENT OPTIONS
This Policy offers You a means of investing in various underlying fund portfolios offered by different investment companies (by investing in the corresponding Subaccounts). The companies that provide investment advice and administrative services for the underlying fund portfolios offered through this Policy are listed in the Appendix - Portfolio Companies Available Under the Policy.
The general public may not purchase shares of any of these underlying fund portfolios. The names and investment objectives and policies may be similar to other portfolios managed by the same investment adviser or manager that are sold directly to the public. You should not expect the investment results of the underlying fund portfolios to be the same as those of other portfolios.
More detailed information, including an explanation of the portfolios' fees and investment objectives, may be found in the current prospectuses for the underlying fund portfolios, which can be found at http://dfinview.com/Transamerica/TAHD/89354G588?site=VAVUL. You should read the prospectuses for the underlying fund portfolios carefully before You invest.
In addition, information regarding each underlying fund portfolio, including (i) its name (ii) its investment objective (iii) its investment adviser and any sub-investment adviser (iv) current expenses and (v) performance is available in the Appendix - Portfolio Companies Available Under the Policy. Each underlying fund portfolio has issued a prospectus that contains more detailed information about its investment holdings, including a description of investment risks. You may obtain a free copy of the underlying fund portfolio prospectuses by contacting our Administrative Office at (800)525-6205 or by visiting our website at http://dfinview.com/Transamerica/TAHD/89354G588?site=VAVUL.
Note: If You received a summary prospectus for any of the underlying fund portfolios listed in Appendix - Portfolio Companies Available Under the Policy, please follow the instructions on the first page of the summary prospectus to obtain a copy of the full underlying fund prospectus or its Statement of Additional Information.
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Selection of Underlying Fund Portfolios
The underlying fund portfolios offered through this variable annuity are selected by us, and we may consider various factors, including, but not limited to, asset class coverage, the strength of the adviser's or sub-adviser's reputation and tenure, brand recognition, performance, volatility, hedge ability, and the capability and qualification of each investment firm. Another factor that we may consider is whether the underlying fund portfolio or its service providers (e.g., the investment adviser or sub-advisers) or its affiliates will make payments to us or our affiliates. For additional information about these arrangements, see Revenue We Receive. We review the portfolios periodically and may remove a portfolio, or limit its availability to new premium payments and/or transfers of Cash Value if we determine that a portfolio no longer satisfies one or more of the selection criteria, and/or if the portfolio has not attracted significant allocations from Owners. We have included the Transamerica Series Trust (“TST” ) underlying fund portfolios at least in part because they are managed by one of our affiliates, Transamerica Asset Management, Inc. (“TAM”).
We have developed this variable annuity in cooperation with one or more distributors, and may include certain underlying fund portfolios based on their recommendations. Their selection criteria may differ from our selection criteria.
If You elect a Guaranteed Lifetime Withdrawal Benefit rider, as discussed later in this prospectus, we require You to allocate Your Policy Value to designated Investment Options. This requirement is intended to reduce the Company’s costs and risks associated with offering the rider, and we select which underlying fund portfolios to make available under the riders with these factors in mind. Certain designated Investment Options invest in underlying fund portfolios with volatility control strategies, which could limit full participation in market gains and the growth of the riders. See the Investment Restrictions section for information regarding the potential impact of volatility control strategies on the value of the Guaranteed Lifetime Withdrawal Benefit riders.
Designated Investment Options, including those that invest in underlying fund portfolios with volatility control strategies, are also available to Owners who do not elect a Guaranteed Lifetime Withdrawal Benefit rider. Although volatility control strategies are intended to help limit overall volatility and reduce the effects of significant market downturns during periods of high market volatility, providing Policy Owners with the opportunity for smoother performance and better risk adjusted returns, such strategies could limit Your full participation in market gains and ability to maximize potential growth of Your Policy Value.
You are responsible for choosing the Subaccounts which invest in the underlying fund portfolios, and the amounts allocated to each, that are appropriate for Your own individual circumstances and Your investment goals, financial situation, and risk tolerance. Because investment risk is borne by You, decisions regarding investment allocations should be carefully considered. We do not recommend or endorse any particular underlying fund portfolio and we do not provide investment advice.
In making Your investment selections, we encourage You to thoroughly investigate all of the information regarding the underlying fund portfolios that are available to You, including each underlying fund portfolio's prospectus, statement of additional information and annual and semi-annual reports. Other sources such as the underlying fund's website provide more current information, including information about any regulatory actions or investigations relating to a fund or underlying fund portfolio. After You select underlying fund portfolios for Your initial premium payment, You should monitor and periodically re-evaluate Your allocations to determine if they are still appropriate.
You bear the risk of any decline in the Cash Value of Your Policy resulting from the performance of the underlying fund portfolios You have chosen.
We do not guarantee that any of the Subaccounts will always be available for premium payments, allocations, or transfers.
We reserve the right to limit the number of Subaccounts You are invested in at any one time.
If You elect certain optional riders, You will be subject to Investment Restrictions. In the future, we may change the Investment Restrictions.
Not all Subaccounts may be available for all policies, in all states, or through all financial intermediary firms.
Addition, Deletion, or Substitution of Investment Options
We cannot and do not guarantee that any of the Subaccounts will always be available for premium payments, allocations, or transfers. We retain the right, subject to any applicable law, to make certain changes to the Separate Account and its Investment Options. We reserve the right to add new Subaccounts or close existing Subaccounts. We also reserve the right to eliminate the shares of any portfolio held by a Subaccount and to substitute shares of other underlying fund portfolios or of other registered open-end management investment companies. To the extent required by applicable law, substitutions of shares attributable to Your interest in a Subaccount will not be made without prior notice to You and the prior regulatory approval. Nothing contained herein shall prevent the Separate Account from purchasing other securities for other series or classes of variable annuity policies, or from affecting an exchange between series or classes of variable annuity policies on the basis of Your requests.
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New Subaccounts may be established when, in our sole discretion, marketing, tax, investment or other conditions warrant. Any new Subaccounts may be made available to existing Owners on a basis to be determined by us. Each additional Subaccount will purchase shares in an underlying fund portfolio or other investment vehicle. We may also close one or more Subaccounts if, in our sole discretion, marketing, tax, investment or other conditions warrant such change. In the event any Subaccount is closed, we will notify You and request a reallocation of the amounts invested in the closed Subaccount. If we do not receive additional instructions, any subsequent premium payments, or transfers (including Dollar Cost Averaging transactions or asset rebalance programs transactions) into a closed Subaccount will be re-allocated to the remaining available Investment Options according to the investment allocation instructions You previously provided. If Your previous investment allocation instructions do not include any available Investment Options, we will require new instructions. If we do not receive new instructions, the requested transaction will be canceled and any premium payment will be returned. Under asset rebalance programs the value remaining in the closed Subaccount will be excluded from any future rebalancing. The value of the closed Subaccount will continue to fluctuate due to portfolio performance, and may exceed the original rebalance percentages You requested. As You consider Your overall investment strategy within Your Policy, You should also consider whether or not to re-allocate the value remaining in the closed Subaccount to another Investment Option. If You decide to re-allocate the value of the closed Subaccount, You will need to provide us with instructions. Under certain situations involving death benefit adjustments for continued policies, if an Investment Option is closed to new investment, the amount that would have been allocated thereto will instead be allocated pro rata to the other current Investment Options You have value allocated to and which are open to new investment.
In the event of any such substitution or change, we may, by appropriate endorsement, make such changes in the policies as may be necessary or appropriate to reflect such substitution or change. Furthermore, if deemed to be in the best interests of persons having voting rights under the policies, the Separate Account may be (1) operated as a management company under the 1940 Act or any other form permitted by law, (2) deregistered under the 1940 Act in the event such registration is no longer required or (3) combined with one or more other Separate Accounts. To the extent permitted by applicable law, we also may (1) transfer the assets of the Separate Account associated with the policies to another account or accounts, (2) restrict or eliminate any voting rights of Owners or other persons who have voting rights as to the Separate Account, (3) create new Separate Accounts, (4) add new Subaccounts to or remove existing Subaccounts from the Separate Account, or combine Subaccounts or (5) add new underlying fund portfolios, or substitute a new underlying fund portfolio for an existing underlying fund portfolio.
In addition, a Subaccount could become no longer available due to the liquidation of its corresponding underlying fund portfolio. To the extent permitted by applicable law, upon advance notice to You and unless You otherwise instruct us, we will:
1) 
Re-allocate any Policy Value in the liquidated underlying fund portfolio to the money market Subaccount or a Subaccount investing in another underlying fund portfolio designated by us; and
2) 
If You are using an automated transfer feature such as the Rebalancing program or Dollar Cost averaging with the Subaccount for the portfolio, You should contact us immediately to make alternate arrangements. If you do not make alternate arrangements before the closure date, any subsequent allocations to the Subaccount for the portfolio will be directed to the Money Market Subaccount.
We reserve the right, subject to compliance with applicable law, to make certain changes to the Separate Account and its investments. We reserve the right to add new portfolios (or portfolio classes), close existing portfolios (or portfolio classes), or substitute portfolio shares that are held by any Subaccount for shares of a different portfolio. We will not add, delete or substitute any Underlying Fund Portfolio shares attributable to Your interest in a Subaccount without notice to You and prior approval of the SEC, to the extent required by the 1940 Act or other applicable law.
The Fixed Account
We do not guarantee that the Fixed Account will always be available. If available, premium payments allocated and amounts transferred to the Fixed Account become part of our general account. Interests in the general account have not been registered under the Securities Act of 1933 (the “1933 Act”), nor is the general account registered as an investment company under the 1940 Act. Accordingly, neither the general account nor any interests therein are generally subject to the provisions of the 1933 or 1940 Acts. Disclosures relating to interests in the general account are, however, subject to certain generally applicable provisions of the federal securities laws relating to the accuracy of statements made in a registration statement.
While we do not guarantee that the Fixed Account will always be available for investment, we do guarantee that the interest credited to the Fixed Account when available will not be less than the guaranteed minimum effective annual interest rate shown on Your Policy (the “guaranteed minimum”). We determine credited rates, which are guaranteed for at least one year, in our sole discretion. You bear the risk that we will not credit interest greater than the guaranteed minimum. At the end of the Guaranteed Period Option You selected, the value in that Guaranteed Period Option will automatically be transferred into the money market Subaccount or if a
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money market Subaccount is unavailable to a new Guaranteed Period Option of the same length (or the next shorter period if the same period is no longer offered) at the current interest rate for that period. You can transfer to another Investment Option by giving us notice within 30 days before the end of the expiring guaranteed period.
Surrenders, withdrawals, transfers, and amounts applied to an Annuity Payment Option from a Guaranteed Period Option of the Fixed Account prior to the end of the guaranteed period are generally subject to an Excess Interest Adjustment. See ACCESS TO YOUR MONEY - Excess Interest Adjustment for more information about when an Excess Interest Adjustment applies. This adjustment will also be made to amounts that You apply to an Annuity Payment Option. The Excess Interest Adjustment will not decrease the interest credited to Your Policy below the guaranteed minimum. Please see Appendix – Excess Interest Adjustment Examples for an example showing the effect of a hypothetical Excess Interest Adjustment calculation.
We also guarantee that upon full surrender Your Cash Value attributable to the Fixed Account will not be less than the amount required by the applicable nonforfeiture law at the time the Policy is issued.
If You select the Fixed Account, when it is available, Your money will be placed with our other general assets. Assets in the Stable Account are not subject to Separate Account Annual Expenses as set forth under ANNUITY POLICY FEE TABLE AND EXPENSE EXAMPLES. The amount of money You are able to accumulate in the Fixed Account during the accumulation phase depends upon the total interest credited. The amount of each annuity payment You receive during the income phase from the fixed portion of Your Policy will remain level for the entire income phase. The interest credited as well as principal invested in the Fixed Account is based on our claims-paying ability.
We reserve the right to refuse any premium payment or transfer to the Fixed Account.
Transfers
During the accumulation phase, You may make transfers to or from any Investment Option within certain limitations. Transfers out of a Guaranteed Period Option of the Fixed Account are limited to the following:
•
Transfers at the end of a guaranteed period.
•
Transfers of amounts equal to interest credited. This may affect Your overall interest-crediting rate, because unless otherwise directed, transfers are deemed to come from the oldest premium payment first.
•
Other than at the end of a guaranteed period, transfers of amounts from the Guaranteed Period Option in excess of amounts equal to interest credited, including transfers in connection with the Portfolio Allocation Method discussed later in this prospectus, are subject to an Excess Interest Adjustment. If it is a negative adjustment, the maximum amount you can transfer in any one Policy Year may be limited to 25% of the amount in that Guaranteed Period Option, less any previous transfers during the current Policy Year. If it is a positive adjustment, we do not limit the amount that you can transfer.  (Note: This restriction may prolong the period of time it takes to transfer the full amount in the Guaranteed Period Option of the Fixed Account.  You should carefully consider whether investment in the Fixed Account meets your needs and investment criteria.) Please see Appendix - Excess Interest Adjustment Examples for an example showing the effect of a hypothetical Excess Interest Adjustment calculation.
In general, each transfer from a Subaccount must be at least $500, or the entire Subaccount value if less than $500. Transfers of interest from a Guaranteed Period Option of the Fixed Account must be at least $50. If less than $500 remains as a result of the transfer, then we reserve the right to include that amount in the transfer. Transfer requests must be received in good order while the New York Stock Exchange is open for regular trading to get same-day pricing of the transaction. Transfer requests received in good order on non-Business Days or after our close of business on Business Days will get next-day pricing. See Sending Forms and Transaction Requests in Good Order.
The number of transfers permitted may be limited and a $10 charge for each transfer in excess of 12 in any Policy Year may apply. Currently, we do not charge a transfer fee but reserve the right to do so in the future. We reserve the right to prohibit transfers to the Fixed Account.
During the income phase, You may transfer values out of any Subaccount; however, You cannot transfer values out of the Fixed Account. The minimum amount that can be transferred during this phase is the lesser of $10 of monthly income, or the entire monthly income of the annuity units in the Subaccount from which the transfer is being made.
Transfers made by telephone, or other electronic means acceptable to us, are subject to the limitations described in ADDITIONAL FEATURES - Telephone and Electronic Transactions.
Additional Restrictions for the Transamerica Income Edge Rider. If You elect the Transamerica Income Edge rider, a certain percentage of Your Policy Value must be allocated to the Stable Account, the select Investment Options and the flexible Investment Options as specified below. See Optional Benefit Riders - Transamerica Income EdgeSM Rider. Any transfer requests to
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and from the select Investment Options and flexible Investment Options will be validated using the prior Business Day’s Policy Value to ensure compliance with the required allocations for rebalancing at the time of the request. Transfer requests that do not comply with the required allocations for rebalancing will be deemed not in good order. Changes in Policy Values due to market movements on other dates will not be treated as a violation of the required allocations. Transfers to the Stable Account are not permitted except at the time of election of the rider. Transfers from the Stable Account are not permitted except upon termination of the rider.
Investment Restrictions
If You elect certain optional riders, You will be subject to Investment Restrictions requiring You to invest in certain underlying fund portfolios, which may be referred to (depending on Your rider) as designated Investment Options, flexible Investment Options and/or select Investment Options. In addition, the Transamerica Income Edge rider may require You to invest in the Stable Account.
One or more of the underlying fund portfolios that may be designated, flexible or select Investment Options under an optional rider, in part, may include a volatility control strategy. Volatility control strategies, in periods of high market volatility, could limit Your participation in market gains; this may conflict with Your investment objectives by limiting Your ability to maximize potential growth of Your Policy Value and, in turn, the value of any guaranteed benefit that is tied to investment performance. Volatility control strategies are intended to help limit overall volatility and reduce the effects of significant market downturns during periods of high market volatility, providing Policy Owners with the opportunity for smoother performance and better risk adjusted returns. Volatility control (and similar terms) can encompass a variety of investment strategies of different types and degrees; therefore, You should read the applicable annuity and underlying fund portfolio prospectuses carefully to understand how these investment strategies may affect Your Policy Value and rider benefits. Our requirement to invest in accordance with certain Investment Options, which may include volatility control, may reduce our costs and risks associated with the applicable riders. You pay an additional fee for the rider benefits which, in part, pays for protecting the rider benefit base from investment losses. Since the rider benefit base does not decrease as a result of investment losses, volatility control strategies might not provide meaningful additional benefit to You. You should carefully evaluate with Your financial professional whether to invest in underlying fund portfolios with volatility control strategies, taking into consideration the potential positive or negative impact that such strategy may have on Your investment objectives, Your Policy Value and the benefits under the riders. If You determine that underlying fund portfolios with volatility control strategies are not consistent with Your investment objectives, other Investment Options are available under the riders that do not invest in underlying fund portfolios that utilize volatility control strategies.
For more information about the underlying fund portfolios and the investment strategies they employ, please refer to the underlying fund portfolios' current prospectuses.
Market Timing and Disruptive Trading
Statement of Policy. This variable annuity Policy was not designed to accommodate market timing or facilitate frequent or large transfers among the Subaccounts or between the Subaccounts and the Fixed Account. (Both frequent and large transfers may be considered disruptive.)
Market timing and disruptive trading can adversely affect You, other Owners, beneficiaries and underlying fund portfolios. The adverse effects may include: (1) dilution of the interests of long-term investors in a Subaccount if purchases or transfers into or out of an underlying fund portfolio are made at prices that do not reflect an accurate value for the underlying fund portfolio’s investments (some market timers attempt to do this through methods known as “time-zone arbitrage” and “liquidity arbitrage”); (2) an adverse effect on portfolio management, such as (a) impeding a portfolio manager’s ability to seek or sustain an investment objective; (b) causing the underlying fund portfolio to maintain a higher level of cash than would otherwise be the case; or (c) causing an underlying fund portfolio to liquidate investments prematurely (or otherwise at an inopportune time) in order to pay withdrawals or transfers out of the underlying fund portfolio; and (3) increased brokerage and administrative expenses. These risks and costs are borne by all Owners invested in those Subaccounts, not just those making the transfers.
We have developed policies and procedures with respect to market timing and disruptive trading (which vary for certain Subaccounts at the request of the corresponding underlying fund portfolios) and we do not make special arrangements or grant exceptions to accommodate market timing or potentially disruptive trading. As discussed herein, we cannot detect or deter all market timing or potentially disruptive trading. Do not invest with us if You intend to conduct market timing or potentially disruptive trading or have concerns about our inability to detect or prevent any such trading.
Detection. We employ various means in an attempt to detect and deter market timing and disruptive trading. However, despite our monitoring we may not be able to detect nor halt all harmful trading. In addition, because other insurance companies (and retirement plans) with different policies and procedures may invest in the underlying fund portfolios, we cannot guarantee that all harmful trading will be detected or that an underlying fund portfolio will not suffer harm from market timing and disruptive trading among Subaccounts of variable products issued by these other insurance companies or retirement plans.
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Deterrence. If we determine You or anyone acting on Your behalf is engaged in market timing or disruptive trading, we may take one or more actions in an attempt to halt such trading. Your ability to make transfers is subject to modification or restriction if we determine, in our sole opinion, that Your exercise of the transfer privilege may disadvantage or potentially harm the rights or interests of other Owners (or others having an interest in the variable insurance products). As described below, restrictions may take various forms, but under our current policies and procedures will include loss of expedited transfer privileges. We consider transfers by telephone, fax, overnight mail, or the Internet to be “expedited” transfers. This means that we would accept only written transfer requests with an original signature sent to us only by U.S. mail. We may also restrict the transfer privileges of others acting on Your behalf, including Your registered representative or an asset allocation or investment advisory service.
We reserve the right to reject any premium payment or transfer request from any person without prior notice, if, in our judgment, (1) the premium payment or transfer, or series of premium payments or transfers, would have a negative impact on an underlying fund portfolio's operations, or (2) if an underlying fund portfolio would reject or has rejected our purchase order or has instructed us not to allow that purchase or transfer, or (3) because of a history of market timing or disruptive trading. We may impose other restrictions on transfers, or even prohibit transfers for any Owner who, in our view, has abused, or appears likely to abuse, the transfer privilege on a case-by-case basis. We may, at any time and without prior notice, discontinue transfer privileges, modify our procedures, impose holding period requirements or limit the number, size, frequency, manner, or timing of transfers we permit. We also reserve the right to reverse a potentially harmful transfer if an underlying fund portfolio refuses or reverses our order; in such instances some Owners may be treated differently than others in that some transfers may be reversed and others allowed. For all of these purposes, we may aggregate two or more trades or variable insurance products that we believe are connected by Owner or persons engaged in trading on behalf of Owners.
In addition, transfers for multiple policies invested in the Transamerica Series Trust underlying fund portfolios which are submitted together may be disruptive at certain levels. At the present time, such aggregated transactions likely will not cause disruption if less than one million dollars total is being transferred with respect to any one underlying fund portfolio (a smaller amount may apply to smaller underlying fund portfolios). Please note that transfers of less than one million dollars may be disruptive in some circumstances; we may change the maximum dollar mount of permitted transfer quickly and without notice.
For policies with Portfolio Allocation Method, the effect of transfers pursuant thereto may be considered disruptive for certain underlying fund portfolios. As a result, Policy Owners using Portfolio Allocation Method may have to change their selected underlying fund portfolios. We will contact You in the event this occurs.
Please note: If You engage a third party investment adviser for asset allocation services, then You may be subject to these transfer restrictions because of the actions of Your investment adviser in providing these services.
In addition to our internal policies and procedures, we will administer Your variable annuity Policy to comply with any applicable state, federal, and other regulatory requirements concerning transfers. We reserve the right to implement, administer, and charge You for any fee or restriction, including redemption fees, imposed by any underlying fund portfolio. To the extent permitted by law, we also reserve the right to defer the transfer privilege at any time that we are unable to purchase or redeem shares of any of the underlying fund portfolios.
Under our current policies and procedures, we do not:
•
impose redemption fees on transfers; or
•
expressly limit the number or size of transfers in a given period except for certain Subaccounts where an underlying fund portfolio has advised us to prohibit certain transfers that exceed a certain size; or
•
provide a certain number of allowable transfers in a given period.
Redemption fees, transfer limits, and other procedures or restrictions imposed by the underlying fund portfolios or our competitors may be more or less successful than ours in deterring market timing or other disruptive trading and in preventing or limiting harm from such trading.
In the absence of preventative transfer restriction (e.g., expressly limiting the number of trades within a given period or limiting trades by their size), it is possible that some level of market timing and disruptive trading will occur before it is detected and steps taken to deter it.
Please note that the limits and restrictions described herein are subject to our ability to monitor transfer activity. Our ability to detect market timing or disruptive trading may be limited by operational and technological systems, as well as by our ability to predict strategies employed by Owners (or those acting on their behalf) to avoid detection. As a result, despite our efforts to prevent harmful trading activity among the variable Investment Options available under this variable insurance product, there is no assurance that we
28
will be able to detect or deter market timing or disruptive trading by such Owners or intermediaries acting on their behalf. Moreover, our ability to discourage and restrict market timing or disruptive trading may be limited by decisions of state regulatory bodies and court orders that we cannot predict.
Furthermore, we may revise our policies and procedures in our sole discretion at any time and without prior notice, as we deem necessary or appropriate (1) to better detect and deter harmful trading that may adversely affect other Owners, other persons with material rights under the variable insurance products, or underlying fund shareholders generally, (2) to comply with state or federal regulatory requirements, or (3) to impose additional or alternative restrictions on Owners engaging in market timing or disruptive trading among the Investment Options under the variable insurance product. In addition, we may not honor transfer requests if any variable Investment Option that would be affected by the transfer is unable to purchase or redeem shares of its corresponding underlying fund portfolio.
Underlying Fund Portfolio Frequent Trading Policies. The underlying fund portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares. Underlying fund portfolios may, for example, assess a redemption fee (which we reserve the right to collect) on shares held for less than a certain period of time. The prospectuses for the underlying fund portfolios describe any such policies and procedures. The frequent trading policies and procedures of an underlying fund portfolio may be different, and more or less restrictive, than the frequent trading policies and procedures of other underlying fund portfolios and the policies and procedures we have adopted for our variable insurance products to discourage market timing and disruptive trading. We do not monitor transfer requests for compliance with the frequent trading policies and procedures of the respective underlying fund portfolios.
We are required to provide to an underlying fund portfolio or its payee certain information about the trading activity of individual Owners. We are required to restrict or prohibit further purchases or transfers by specific Owners or persons acting on their behalf, if identified by an underlying fund portfolio as violating frequent trading policies.
Please read the underlying fund portfolio prospectus for information about restrictions on transfers.
Omnibus Orders. Owners and other persons with material rights under the variable insurance products also should be aware that the purchase and redemption orders received by the underlying fund portfolios generally are “omnibus” orders from intermediaries such as retirement plans and Separate Accounts funding variable insurance products. The omnibus orders reflect the aggregation and netting of multiple orders from individual retirement plan participants and individual Owners of variable insurance products. The omnibus nature of these orders may limit the underlying fund portfolio companies' ability to apply their respective frequent trading policies and procedures.
We cannot guarantee that the underlying fund portfolios will not be harmed by transfer activity relating to the retirement plans or other insurance companies that may invest in the underlying fund portfolios. These other insurance companies are responsible for their own policies and procedures regarding frequent transfer activity. If their policies and procedures fail to successfully discourage harmful transfer activity, it may affect other Owners of underlying fund portfolio shares, as well as the Owners of all of the variable annuity or life insurance policies, including ours, whose variable Investment Options correspond to the affected underlying fund portfolios. In addition, if an underlying fund portfolio believes that an omnibus order we submit may reflect one or more transfer requests from Owners engaged in market timing and disruptive trading, the underlying fund portfolio may reject the entire omnibus order and thereby delay or prevent us from implementing Your request.
EXPENSES
There are charges and expenses associated with Your Policy that reduce the return on Your investment in the Policy. In addition to the following charges, there are optional benefits that if selected, assess additional charges. Please see ADDITIONAL FEATURES for more information.
Transaction Expenses
Surrender Charges
During the accumulation phase, You can surrender part or all of the Cash Value (restrictions may apply to qualified policies). We may apply a surrender charge to compensate us for start-up expenses of the Policy relating to sales, including commissions to registered representatives and other promotional expenses.
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You can take a withdrawal of up to 10% of your premium payments each Policy Year free of surrender charges. This amount is referred to as the Surrender Charge Free Amount and is determined at the time of surrender. (This amount is not cumulative, so not surrendering anything in one year does not increase the Surrender Charge Free Amount in subsequent years.) If the surrender is in excess of the Surrender Charge Free Amount, You might have to pay a surrender charge, which is a contingent deferred sales charge, on the excess amount.
For example, assume you selected the B-Share and Your premium is $100,000 and Your Policy value is $106,000 at the beginning of the second Policy Year and You surrender $30,000. Since that amount is more than Your Surrender Charge Free Amount ($10,000), You would pay a surrender charge of $1,600 on the remaining $20,000 [8% of ($30,000 - $10,000)]. Likewise, assume you selected the B-Share and Your Policy Value is $80,000 (premium payments $100,000) at the beginning of the second Policy Year and You surrender Your Policy. You would pay a surrender charge of $7,200 [8% of ($100,000 - ($100,000 x 10%))].
You can generally choose to receive the full amount of a requested withdrawal by directing us to deduct any applicable surrender charge (and any applicable Excess Interest Adjustment) from Your remaining Policy Value. You receive Your Cash Value upon full surrender.
Surrender charges and Excess Interest Adjustments are waived if You surrender money under the Nursing Care and Terminal Condition Withdrawal Option or the Unemployment Waiver.
For surrender charge purposes, earnings are considered to be surrendered first, then the oldest premium is considered to be surrendered next. Please note, while there is no surrender charge on the withdrawal of earnings, withdrawn earnings count towards Your Surrender Charge Free Amount. This means that withdrawing earnings will reduce (possibly to zero) Your Surrender Charge Free Amount (10% of premium payments) for that Policy Year.
Keep in mind that withdrawals may be taxable and, if made before age 59½, may be subject to a 10% federal penalty tax. For tax purposes, surrenders from nonqualified policies are considered to come from taxable earnings first.
We may elect to reduce or eliminate the amount of the surrender charge when the Policy is sold under circumstances which reduce our sales or other expenses or when required to by regulation or regulatory authority.
Liquidity Rider Surrender Charge Schedule. The optional Liquidity Rider (only available with the B-Share) reduces the number of years each premium payment is subject to surrender charges from seven years to four years. The surrender charge schedule is the same as the B-Share during the first four years for each premium payment. There is an extra charge for this rider.
Excess Interest Adjustment
Surrenders, withdrawals, transfers, amounts applied when a death benefit is calculated, and amounts applied to an annuity option from the Fixed Account may be subject to an Excess Interest Adjustment. This adjustment could retroactively reduce the interest credited in the Fixed Account to the guaranteed minimum or increase the amount credited. This adjustment may also apply to amounts applied to an Annuity Payment Option. However, please note that a death benefit will not be reduced if the Excess Interest Adjustment results in a decrease in the Cash Value available to You. Please see Appendix - Excess Interest Adjustment Examples for an example showing the effect of a hypothetical Excess Interest Adjustment calculation. The Excess Interest Adjustment plays a role in calculating the total interest credited to the Fixed Account.
Premium Taxes
A deduction is also made for premium taxes, if any, imposed on us by a state, municipality or other government agency. The tax, currently ranging from 0% to 3.50%, is assessed at the time premium payments are made or when annuity payments begin. We pay the premium tax at the time it is imposed. We will, at our discretion, deduct the total amount of premium taxes, if any, from the Policy Value when such taxes are due to the applicable taxing authority, You begin receiving annuity payments, You surrender the Policy or a death benefit is paid.
Federal, State and Local Taxes
We may in the future deduct charges from the Policy for any taxes we incur because of the Policy. However, no deductions are being made at the present time.
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Special Service Fees
We currently deduct a charge for overnight delivery and duplicate policies. We reserve the right to deduct a charge for special services in the future, including non-sufficient checks on new business; duplicate Form 1099 and Form 5498 tax forms; check copies; printing and mailing previously submitted forms; and asset verification requests from mortgage companies. We may charge a fee for each service performed and fees may vary based on the type of service but will not exceed the maximum Special Service Fee shown in the Fee Table.
Transfer Fee
You are generally allowed to make 12 free transfers per Policy Year before the Annuity Commencement Date. If You make more than 12 transfers per Policy Year, we reserve the right to charge for each additional transfer. Premium payments, Asset Rebalancing, and Dollar Cost Averaging transfers do not count as one of Your free transfers. All transfer requests made at the same time are treated as a single transfer. Currently, we are not charging for transfers, but reserve the right to do so in the future.
Base Contract Expenses
Mortality and Expense Risk Fees
We charge a fee as compensation for bearing certain mortality and expense risks under the Policy. This fee is assessed daily based on the net asset value of each Subaccount. Examples of such risks include a guarantee of annuity rates, the death benefit, certain expenses of the Policy (including distribution related expenses), and assuming the risk that the current charges will be insufficient in the future to cover costs of selling, distributing and administering the Policy.
If this charge does not cover our actual costs, we absorb the loss. Conversely, if the charge more than covers actual costs, the excess is added to our surplus. We expect to profit from this charge. We may use any profit for any proper purpose, including distribution expenses.
Administrative Charges
We deduct a daily administrative charge to cover the costs of supporting and administering the Policy (including certain distribution-related expenses). This charge is equal to a percentage of the daily net asset value of each Subaccount during both the accumulation phase and the income phase.
Annual Service Charge
We reserve the right to increase the annual service charge up to the maximum. A portion of the service charge may be waived, but is not guaranteed to always be waived. We reserve the right to vary the amount of any waiver and the circumstances in which any waiver or waivers apply.
Fund Facilitation Fee
We charge a Fund Facilitation Fee in order to make certain Portfolio Companies available as Investment Options under the policies. We apply the fee to Portfolio Companies that invest in underlying fund portfolios that do not provide us with the amount of revenue we require in order for us to meet our expenses and revenue targets. This fee is assessed daily based on the net asset value of Portfolio Companies that we specify.
Optional Benefits
If You elect to purchase optional benefits, we will deduct an additional fee. For some optional benefits the fee is assessed against the daily net asset value of each Subaccount and for others it is deducted from each Investment Option in proportion to the amount of Policy Value in each Investment Option. Please refer to the ANNUITY POLICY FEE TABLE AND EXPENSE EXAMPLES for the list of fees for each optional benefit and Optional Benefit Riders section for more information.
Underlying Fund Portfolio Fees and Expenses
The value of the assets in each Subaccount will reflect the fees and expenses paid by the underlying Fund Portfolios. The lowest and highest Underlying Fund Portfolio expenses for the previous calendar year are found in ANNUITY POLICY FEE TABLE AND EXPENSE EXAMPLES in this prospectus. See the prospectuses for the Underlying Fund Portfolios for more information.
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Reduced Fees and Charges
We may, at our discretion, reduce or eliminate certain fees and charges for certain policies (including employer-sponsored savings plans) which may result in decreased costs and expenses.
Revenue We Receive
This prospectus describes generally the payments that we (and/or our affiliates) may directly or indirectly receive from the underlying fund portfolios, their advisers, sub-advisers, distributors or affiliates thereof, in connection with certain administrative, marketing and other support services we (and/or our affiliates) provide and expenses we incur in offering and selling our variable insurance products. These arrangements are described further below. While only certain of the types of payments described below may be made in connection with Your particular Policy, all such payments may nonetheless influence or impact actions we (and/or our affiliates) take, and recommendations we (and our affiliates) make, regarding each of the variable insurance products that we (and our affiliates) offer, including Your Policy.
We (and/or our affiliates) may receive some or all of the following types of payments:
• Rule 12b-1 Fees. We and/or our affiliate, Transamerica Capital, Inc. (“TCI” ) who is the principal underwriter for the policies, indirectly receive 12b-1 fees from certain underlying fund portfolios available as Investment Options under our variable insurance products. Any 12b-1 fees received by TCI that are attributable to our variable insurance products are then credited to us. These fees range from 0.00% to 0.45% of the average daily assets of the certain underlying fund portfolios attributable to the policies and to certain other variable insurance products that we and our affiliates issue. These fees are paid from the underlying fund portfolios’ assets. Policy Owners, through their indirect investment in the underlying fund portfolios, bear the costs of 12b-1 fees (see the prospectuses for the underlying fund portfolios for more information).
• Administrative, Marketing and Support Service Fees (“Support Fees”). As noted above, an investment adviser, sub-adviser, administrator and/or distributor (or affiliates thereof) of the underlying fund portfolios may make payments to us and/or our affiliates, including TCI. These payments may be derived, in whole or in part, from the profits the investment adviser or sub-adviser realized on the advisory fee deducted from underlying fund portfolio assets. Policy Owners, through their indirect investment in the underlying fund portfolios, bear the costs of these advisory fees (see the prospectuses for the underlying fund portfolios for more information). The amount of the payments we (or our affiliates) receive is generally based on a percentage of the assets of the particular underlying fund portfolios attributable to the Policy and to certain other variable insurance products that our affiliates and we issue. These percentages differ and the amounts may be significant. Some advisers or sub-advisers (or other affiliates) pay us more than others.
The following chart provides the maximum combined percentages of Support Fees and underlying fund portfolio fees (i.e. sub-transfer agent, Rule 12b-1, and Shareholder Services) that we anticipate will be paid to us on an annual basis. 
Incoming Payments to Us and/or TCI
Underlying Fund Portfolio
Maximum Fee % of assets
TRANSAMERICA SERIES TRUST (“TST”)
0.25%
AB VARIABLE PRODUCTS SERIES FUND, INC.
0.45%
AMERICAN FUNDS INSURANCE SERIES® TRUST
0.25%
FIDELITY® VARIABLE INSURANCE PRODUCTS FUND
0.395%
STATE STREET VARIABLE INSURANCE SERIES FUNDS, INC.
0.45%
NOTES TO INCOMING PAYMENTS TABLE:
Maximum Fee % of assets: Payments are based on a percentage of the average assets of each underlying fund portfolio owned by the Subaccounts available under this Policy and under certain other variable insurance products offered by our affiliates and us. We and/or TCI may continue to receive 12b-1 fees and administrative fees on assets invested in Subaccounts that are closed to new premium payments, depending on the terms of the agreements supporting those payments and on the services provided.
TST: Because TST is managed by TAM, an affiliate of ours, there are additional benefits to us and our affiliates for amounts You allocate to the TST underlying fund portfolios, in terms of our and our affiliates’ overall profitability. These additional benefits may be significant. Payments or other benefits may be received from TAM. Such payments or benefits may be entered into for a variety of purposes, such as to allocate resources to us and to provide administrative services to the policyholders who invest in Subaccounts that invest in the TST underlying fund portfolios. These payments or benefits may take the form of internal credits, recognition, or cash payments. A variety of financial and accounting methods may be used to allocate resources and profits to us. Additionally, if a TST portfolio is subadvised by an entity that is affiliated with us, we may retain more revenue than on those TST portfolios that are subadvised by non-affiliated entities. During 2023 we received approximately $174.1 million for Transamerica
32
Life Insurance Company and $12.3 million for Transamerica Financial Life Insurance Company in benefits from TAM pursuant to these arrangements. This includes the 0.25% amount in the above chart. We anticipate that the amounts will decline in 2023.
Fidelity® Variable Insurance Products Fund: We receive this percentage once $100 million in shares are held by the Subaccounts of ours and our affiliates.
Other Payments. TCI also serves as the wholesale distributor for the policies, and in that capacity directly or indirectly receives additional amounts or different percentages of assets under management from certain advisers and sub-advisers to the underlying fund portfolios (or their affiliates) with regard to variable insurance products and/or mutual funds that are issued by us and our affiliates. These amounts may be derived, in whole or in part, from the profits the investment adviser or sub-adviser receives from the advisory fee deducted from underlying fund portfolio assets. Owners, through their indirect investment in the underlying fund portfolios, bear the costs of these advisory fees. Certain advisers and sub-advisers of the underlying fund portfolios (or their affiliates):
•
may directly or indirectly pay TCI conference sponsorship or marketing allowance payments that provides such advisers and sub-advisers with access to TCI's wholesalers at TCI's national and regional sales conferences as well as internal and external meetings and events that are attended by TCI's wholesalers and/or other TCI employees.
•
may provide our affiliates and/or selling firms with wholesaling services to assist us in the distribution of the policies.
•
may provide us and/or certain affiliates and/or selling firms with occasional gifts, meals, tickets or other compensation as an incentive to market the underlying fund portfolios and to assist with their promotional efforts. The amounts may be significant and these arrangements provide the adviser or sub-adviser (or other affiliates) with increased access to us and to our affiliates involved in the distribution of the policies.
For the calendar year ended December 31, 2023, TCI and its affiliates received revenue sharing payments from asset managers including Rothschild • Thompson Siegel and Walmsley • Aegon Asset Managment • BlackRock • Fidelity Investments • Franklin Templeton • J.P. Morgan Asset Management • Janus Henderson • Madison Investments • Milliman Financial Risk Management • PGIM Quantitative Solutions • PineBridge • Systematic Financial • Wellington • PIMCO • T. Rowe Price and Goldman Sachs in the amount of $550,000.00 to participate in TCI sponsored events.
Please note some of the aforementioned managers and/or sub-advisers may not be associated with underlying fund portfolios currently available in this product.
Proceeds from certain of these payments by the underlying fund portfolios, the advisers, the sub-advisers and/or their affiliates may be used for any corporate purpose, including payment of expenses (1) that we and our affiliates incur in promoting, marketing, and administering the Policy, and (2) that we incur, in our role as intermediary, in promoting, marketing, and administering the underlying fund portfolios. We and our affiliates may profit from these payments.
For further details about the compensation payments we make in connection with the sale of the policies, see OTHER INFORMATION - Distribution of the Policies in this prospectus.
general description of the policy
Ownership
You, as Owner of the Policy, exercise all rights under the Policy. You can generally change the Owner at any time by notifying us in writing at our Administrative Office. If we do not have an originating signature or guaranteed signature on file or if the Company suspects fraud, we may require a notarized signature. There may be limitations on Your ability to change the ownership of a qualified Policy. An ownership change may be a taxable event.
Beneficiary
The beneficiary designation will remain in effect until changed. The Owner may change the designated beneficiary by sending us Written Notice. The beneficiary's consent to such change is not required unless the beneficiary was irrevocably designated or law requires consent. (If an irrevocable beneficiary dies, the Owner may then designate a new beneficiary.) We will not be liable for any payment made before the Written Notice is received in our Administrative Office. If more than one beneficiary is designated, and the Owner fails to specify their interests, they will share equally. If, upon the death of the Annuitant, there is a surviving Owner (s), then the surviving Owner (s) automatically takes the place of any beneficiary designation.
Assignment
You can also generally assign the Policy any time during Your lifetime. We will not be bound by the assignment until we receive Written Notice of the assignment in good order at our Administrative Office and approve it. We reserve the right, except to the extent prohibited by applicable laws, regulations, or actions of the State insurance commissioner, to require that an assignment will be
33
effective only upon acceptance by us, and to refuse assignments or transfers at any time on a non-discriminatory basis. We will not be liable for any payment or other action we take in accordance with the Policy before we approve the assignment. There may be limitations on Your ability to assign a qualified Policy. An assignment may have tax consequences.
Termination for Low Value
If a withdrawal or fee (including an optional rider fee, administrative fee, or Owner transaction fee) reduces Your Cash Value below the minimum specified in Your Policy, we reserve the right to terminate Your Policy and send You a full distribution of Your remaining Cash Value. All benefits associated with Your annuity Policy will be terminated. Federal law may impose restrictions on our right to terminate certain qualified policies. We do not currently anticipate exercising this right if You have certain optional benefits, however, we reserve the right to do so.
Certain Offers
From time to time, we have (and we may again) offered You some form of payment or incentive in return for terminating or modifying certain guaranteed benefits.
When we make an offer, we may vary the offer amount, up or down, among the same group of Policy Owners based on certain criteria such as account value, the difference between account value and any applicable benefit base, investment allocations and the amount and type of withdrawals taken. For example, for guaranteed benefits that have benefit bases that can be reduced on either a pro rata or dollar-for-dollar basis depending on the amount of withdrawals taken, we may consider whether You have taken any withdrawal that has caused a pro rata reduction in Your benefit base, as opposed to a dollar-for-dollar reduction. Also, we may increase or decrease offer amounts from offer to offer. In other words, we may make an offer to a group of Policy Owners based on an offer amount, and, in the future, make another offer based on a higher or lower offer amount to the remaining Policy Owners in the same group.
If You accept an offer that requires You to terminate a guaranteed benefit and You retain Your Policy, we will no longer charge You for the benefit, and You will not be eligible for any future offers related to that type of guaranteed benefit, even if such future offer would have included a greater offer amount or different payment or incentive.
We may also make an offer to You to exchange an existing rider for a different rider.
Exchanges and/or Reinstatements
You can generally exchange a nonqualified annuity Policy for another in a “tax-free exchange” under Section 1035 of the Internal Revenue Code or transfer qualified policies directly to another life insurance company as a “trustee-to-trustee transfer”. Before making an exchange or transfer, You should compare both annuities carefully. Remember that if You exchange or transfer another annuity for the one described in this prospectus, then You may pay a surrender charge on the other annuity, and there may be a new surrender charge period under this annuity and other charges may be higher (or lower) and the benefits under this annuity may be different. You should not exchange or transfer another annuity for this one unless You determine, after knowing all the facts, that the exchange or transfer is in Your best interest and not just better for the person trying to sell You this Policy (that person will generally earn a commission if You buy this Policy through an exchange, transfer or otherwise).
You may ask us to reinstate Your Policy after such an exchange, transfer, withdrawal or surrender and in certain limited circumstances we will allow You to do so by returning the same total dollar amount of funds distributed to the applicable Investment Options. The dollar amount will be used to purchase new Accumulation Units at the then current price. In the event any Subaccount previously invested in is closed and we don’t receive additional instructions, funds will be reallocated to the remaining available Investment Options according to the investment allocation instructions You previously provided. Because of changes in market value, Your new Accumulation Units may be worth more or less than the units You previously owned. Generally for non-qualified annuity reinstatements, unless You return the original company check, if a portion of the prior withdrawal was taxable, we are required to report the taxable amount from the distribution even though the funds have been reinstated. The cost basis will be adjusted accordingly. The taxable amount will be reported on Form 1099-R which You will receive in January of the year following the distribution. Qualified annuity reinstatements may be subject to the same tax reporting and rollover requirements. We recommend that You consult a tax professional to explain the possible tax consequences of reinstatements.
ACCESS TO YOUR MONEY
During the accumulation phase, You can have access to the money in Your Policy in the following ways:
•
by taking a withdrawal or surrender; or
•
by taking systematic payouts (See ADDITIONAL FEATURES - Systematic Payout Option for more details).
34
Surrenders
During the accumulation phase, if You take a full surrender You will receive your Cash Value. If You want to take a withdrawal, in most cases it must be for at least $500. Certain optional benefits have specific requirements regarding the order in which surrenders can be taken from Investment Options. Unless You tell us otherwise, we will take the surrender from each of the Investment Options in proportion to the Policy Value. Surrenders may be referred to as withdrawals on your Policy statement and other documents.
You may elect to take up to the Surrender Charge Free amount each Policy Year without incurring a surrender charge. Remember that any withdrawal You take will reduce the Policy Value, and the amount of the death benefit. See DEATH BENEFIT, for more details. A withdrawal also may have a negative impact on certain other benefits and guarantees of Your Policy. See ADDITIONAL FEATURES, for more details.
Withdrawals in excess of the Surrender Charge Free Amount may be subject to a surrender charge. Withdrawals from the Fixed Account may be subject to an Excess Interest Adjustment. Income taxes, federal tax penalties and certain restrictions may apply to any withdrawals You make.
Withdrawals from qualified policies may be restricted or prohibited.
During the income phase, You will receive annuity payments under the Annuity Payment Option you select; however, You generally may not take any other surrenders, either full or partial.
Delay of Payment and Transfer
Payment of any amount due from the Separate Account for a surrender, a death benefit, or the death of the Owner of a nonqualified Policy, will generally occur within seven days from the date we receive in good order all required information at our Administrative Office. We may defer such payment from the Separate Account if:
•
the New York Stock Exchange is closed other than for usual weekends or holidays or trading on the Exchange is otherwise restricted;
•
an emergency exists as defined by the SEC or the SEC requires that trading be restricted; or
•
the SEC permits a delay for the protection of Owners.
Transfers of amounts from the Subaccounts also may be deferred under these circumstances. In addition, if, pursuant to SEC rules, the Transamerica BlackRock Government Money Market VP portfolio (or any money market portfolio offered under this Policy) suspends payment of redemption proceeds in connection with a liquidation of the portfolio, then we may delay payment of any transfer, surrender, withdrawal, loan, or death benefit from the TA BlackRock Government Money Market Subaccount until the portfolio is liquidated.
Any payment or transfer request which is not in good order will cause a delay. See OTHER INFORMATION - Sending Forms and Transaction Requests in Good Order.
Pursuant to the requirements of certain state laws, we reserve the right to defer payment of the Cash Value from the Fixed Account for up to six months. We may defer payment of any amount until Your premium payment check has cleared Your bank.
Excess Interest Adjustment
Surrenders, withdrawals, transfers, and amounts applied to an annuity option, from a Guaranteed Period Option of the Fixed Account before the end of its guaranteed period (the number of years You specified the money would remain in the Guaranteed Period Option) may be subject to an Excess Interest Adjustment. If, at the time of such transactions the guaranteed interest rate set by us for the applicable period has risen since the date of the initial guarantee, the Excess Interest Adjustment will result in a lower Cash Value (but not below the Excess Interest Adjustment floor described in Appendix - Excess Interest Adjustment Examples). However, if the guaranteed interest rate for the applicable period has fallen since the date of the initial guarantee, the Excess Interest Adjustment will result in a higher Cash Value upon withdrawal, surrender or transfer. Please see Appendix - Excess Interest Adjustment Examples to see how the Excess Interest Adjustment is calculated and illustrative examples using hypothetical values.
Any amount withdrawn in excess of the cumulative interest credited for that Guaranteed Period Option is generally subject to an Excess Interest Adjustment. An Excess Interest Adjustment may also be made on amounts applied to an Annuity Payment Option.
35
The formula that will be used to determine the Excess Interest Adjustment is: 
S* (G-C)* (M/12)
S
=
Is the amount (before surrender charges, premium taxes and the application of any
Guaranteed Minimum Death Benefits, if any) being surrendered, withdrawn,
transferred, paid upon death, or applied to an income option that is subject to the
Excess Interest Adjustment;
G
=
Is the guaranteed interest rate for the guaranteed period applicable to “S”;
C
=
Is the current guaranteed interest rate then being offered on new premium payments
for the next longer option period than “M”. If this Policy form or such an option
period is no longer offered, “C” will be the U.S. Treasury rate for the next longer
maturity (in whole years) than “M” on the 25th day of the previous calendar month,
M
=
Number of months remaining in the current option period for “S”, rounded up to
the next higher whole number of months; and
*
=
Multiplication
Please see Appendix - Excess Interest Adjustment Examples for more detailed information concerning the Excess Interest Adjustment calculation.
There will be no Excess Interest Adjustment on any of the following:
•
withdrawals or transfers of cumulative interest credited for that Guaranteed Period Option;
•
Nursing Care and Terminal Condition Waiver surrenders;
•
Unemployment Waiver withdrawals;
•
transfers from a Dollar Cost Averaging fixed source;
•
withdrawals to satisfy any minimum distribution requirements;
•
systematic withdrawals, which do not exceed cumulative interest credited at the time of payment; and
•
the Stable Account as defined in the glossary.
Please note that in these circumstances You will not receive a higher Cash Value if interest rates have fallen nor will You receive a lower Cash Value if interest rates have risen.
The Excess Interest Adjustment may not be applicable for all policies.
Signature Guarantee
As a protection against fraud, we require a signature guarantee (i.e., Medallion Signature Guarantee as required by us) for the following transaction requests:
•
Any withdrawals or surrenders over $250,000 unless it is a custodial owned annuity;
•
Any non-electronic disbursement request made on or within 15 days of a change to the address of record for the Policy Owner’s account;
•
Any electronic fund transfer instruction changes on or within 15 days of an address change;
•
Any withdrawal or surrender when we have been directed to send proceeds to a different personal address from the address of record for that Owner. PLEASE NOTE: This requirement will not apply to requests made in connection with exchanges of one annuity for another with the same Owner in a “tax-free exchange”;
•
Any withdrawal or surrender when we do not have an originating or guaranteed signature on file unless it is a custodial owned annuity;
•
Any other transaction we require.
We may change the specific requirements listed above, or add signature guarantees in other circumstances, at our discretion if we deem it necessary or appropriate to help protect against fraud. For current requirements, please refer to the requirements listed on the appropriate form or call us at (800)525-6205.
You can obtain a Medallion signature guarantee from more than 7,000 financial institutions across the United States and Canada that participate in a Medallion signature guarantee program. The best source of a Medallion signature guarantee is a bank, savings and loan association, brokerage firm, or credit union with which You do business. A notary public cannot provide a Medallion signature guarantee. Notarization will not substitute for a Medallion signature guarantee.
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ANNUITY PAYMENTS (THE INCOME PHASE)
Upon the Annuity Commencement Date, which is the date Your Policy is Annuitized and annuity payments begin, Your annuity switches from the accumulation phase to the income phase. You can generally change the Annuity Commencement Date by giving us 30 days notice with the new date or age. Unless required by state law this date cannot be earlier than the third Policy anniversary. The latest Annuity Commencement Date generally cannot be later than the last day of the month following the month in which the Annuitant attains age 99 (earlier if required by state law).
Before the Annuity Commencement Date, if the Annuitant is alive, You may choose an Annuity Payment Option or change Your election. If the Annuitant dies before the Annuity Commencement Date, the death benefit is payable in a lump sum or under one of the Annuity Payment Options (unless the surviving spouse is eligible to and elects to continue the Policy). If the Annuitant dies after the Annuity Commencement Date, no death benefit is payable and any remaining guaranteed payment will be paid to the beneficiary as provided for in the annuity income option elected.
Your Policy may not be “partially” Annuitized, i.e., You may not apply a portion of Your Policy Value to an annuity option while keeping the remainder of Your Policy in force.
Unless You specify otherwise, the Owner will receive the annuity payments. After the Annuitant's death, the beneficiary You designate at Annuitization will receive any remaining guaranteed payments.
Annuity Payment Options
The Policy provides several Annuity Payment Options (also known as income options) that are described below. You may choose any combination of Annuity Payment Options. We will use Your Adjusted Policy Value to provide these annuity payments. If the Adjusted Policy Value on the Annuity Commencement Date is less than $2,000, we reserve the right to pay it in one lump sum in lieu of applying it under an Annuity Payment Option. You can receive annuity payments monthly, quarterly, semi-annually, or annually. (We reserve the right to change the frequency if annuity payments would be less than the amount specified in Your Policy.) We may require proof of life before making annuity payments.
In deciding on which Annuity Payment Option to elect, You must decide if fixed or variable payments are better for You. If You choose to receive fixed annuity payments, then the amount of each payment will be set on the Annuity Commencement Date and will not change. You may, however, choose to receive variable annuity payments. The dollar amount of the first variable annuity payment will be determined in accordance with the annuity payment rates set forth in the applicable table contained in the Policy. The dollar amount of additional variable annuity payments will vary based on the investment performance of the Subaccount(s) You select. The dollar amount of each variable annuity payment after the first may increase, decrease, or remain constant. If the actual investment performance (net of fees and expenses) exactly matched the Assumed Investment Return of 3% at all times, the amount of each variable annuity payment would remain constant. If actual investment performance (net of fees and expenses) exceeds the Assumed Investment Return, the amount of the variable annuity payments would increase.
For example, assume the first monthly variable annuity payment is $500.00, further assume that the investment performance for the 1st month is an 8.00% annual rate of return, then the second monthly variable annuity payment would increase to $501.37. Conversely, if actual investment performance (net of fees and expenses) is lower than the Assumed Investment Return, the amount of the variable annuity payments would decrease. Continuing from the previous example, further assume that the investment performance for the 2nd month is a -2.00% annual rate of return, then the 3rd monthly variable payment would decrease to $498.88.
You must also decide if You want Your annuity payments to be guaranteed for the Annuitant's lifetime, a period certain, or a combination thereof. Generally, annuity payments will be lower if You combine a period certain, guaranteed amount, or liquidity with a lifetime guarantee (e.g., Life Income with 10 years Certain and Life with Guaranteed Return of Policy proceeds). Likewise, annuity payments will also generally be lower the longer the period certain (because You are guaranteed payments for a longer time).
A charge for premium taxes and an Excess Interest Adjustment may be made when annuity payments begin.
The Annuity Payment Options currently available are explained below. Some options are fixed only.
Income for a Specified Period (fixed only). We will make level annuity payments only for a fixed period. No assets will remain at the end of the period. If Your Policy is a qualified Policy, this Annuity Payment Option may not satisfy minimum required distribution rules. Consult a financial professional before electing this option.
37
Income of a Specified Amount (fixed only). Payments are made for any specified amount until the amount applied to this option, with interest, is exhausted. This will be a series of level annuity payments followed by a smaller final annuity payment. If Your Policy is a qualified Policy, this Annuity Payment Option may not satisfy minimum required distribution rules. Consult a financial professional before electing this option.
Life Income. You may choose between:
•
No Period Certain (fixed or variable) - Payments will be made only during the Annuitant's lifetime. The last annuity payment will be the payment immediately before the Annuitant's death. If You choose this option and the Annuitant dies before the due date of the first annuity payment no payments will be made.
•
10 Years Certain (fixed or variable) - Payments will be made for the longer of the Annuitant's lifetime or ten years.
•
Guaranteed Return of Policy Proceeds (fixed only) - Payments will be made for the longer of the Annuitant's lifetime or until the total dollar amount of annuity payments we made to You equals the Annuitized amount (i.e., the Adjusted Policy Value less premium tax, if applicable).
Joint and Survivor Annuity. You may choose:
•
No Period Certain (fixed or variable) - Payments are made during the joint lifetime of the Annuitant and a joint Annuitant of Your selection. Annuity payments will be made as long as either person is living. If You choose this option and both joint Annuitants die before the due date of the first annuity payment no payments will be made.
•
10 Year Certain (fixed only) - Payments will be made for the longer of the lifetime of the Annuitant and joint Annuitant or ten years.
Other Annuity Payment Options may be arranged by agreement with us. Some Annuity Payment Options may not be available for all policies, all ages or we may limit certain Annuity Payment Options to ensure they comply with the applicable tax law provisions.
NOTE CAREFULLY
IF:
•
You choose Life Income with No Period Certain or a Joint and Survivor Annuity with No Period Certain; and
•
the Annuitant dies (or both joint Annuitants die) before the due date of the second (third, fourth, etc.) annuity payment;
THEN:
•
we may make only one (two, three, etc.) annuity payments.
IF:
•
You choose Income for a Specified Period, Life Income with 10 Years Certain, Life Income with Guaranteed Return of Policy Proceeds, or Income of a Specified Amount; and
•
the person receiving annuity payments dies prior to the end of the guaranteed period;
THEN:
•
the remaining guaranteed annuity payments will be continued to a new payee, or their present value may be paid in a single sum.
We will not pay interest on amounts represented by uncashed annuity payment checks if the postal or other delivery service is unable to deliver checks to the payee's address of record. The person receiving annuity payments is responsible for keeping us informed of his/her current address.
You must Annuitize Your Policy no later than the maximum Annuity Commencement Date specified in Your Policy (earlier for certain distribution channels) or a later date if agreed to by us. If You do not elect an Annuity Payment Option, the default option will be variable payments under Life with 10 Years Certain. If any portion of the default Annuitization is a variable payout option, then annuity units will be purchased proportionally based off Your available current investment allocations. Please note, all benefits (including guaranteed minimum death benefits and living benefits) terminate upon Annuitization. The only benefits that remain include the guarantees provided under the terms of the annuity option.
Please Note: If You Annuitize before the maximum Annuity Commencement Date, the payments You receive under the Annuity Payment Options may be less than the guaranteed minimum payments You are entitled to under a GLWB rider (if elected). Please consult Your financial professional about the advisability of Annuitization before the maximum commencement date and the Annuity Payment options available to You.
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Benefits Available Under the Policy
The following table summarizes information about the benefits available under the Policy. 
Name of Benefit
Purpose
Standard
or
Optional
Maximum
Annual Fee
Brief Description of
Restrictions/Limitations
Liquidity Rider
For B-Share contracts, reduces
the number of years each
premium payment is subject to
surrender charges from 7 years
to 4 years.
Optional
Equal to 0.50%
annually of the
Separate Account
Value for the first 4
Policy Years only
•This rider is no longer
available.
•Was available only at
purchase.
•You cannot drop this benefit
once elected.
•We may credit lower interest
rate to amounts allocated to
the Fixed Account while the
rider is in effect.
•May not be available in all
states.
“Base Policy” Death
Benefit
Pays base death benefit
generally equal to the greatest of
Policy Value, Cash Value plus
positive Excess Interest
Adjustment and Fixed Account
portion of minimum required
Cash Value plus the Separate
Account portion of the Policy
Value.
Standard
No Charge
•Available only at purchase.
•Cannot change death benefit
once elected.
•Death benefit terminates
without value upon
Annuitization.
•May not be available in all
states.
Return of Premium
Death Benefit
Pays minimum death benefit
equal to total premium
payments (minus any adjusted
withdrawals as of the date of
death, and minus withdrawals
from the date of death to the
date the death benefit is paid).
Optional
0.15% annually of
average Separate
Account Value
•Available only at purchase.
•Cannot change death benefit
once elected.
•Not available if You or
Annuitant is 86 or older on
Policy Date.
•Must allocate 100% of Policy
Value to designated
Investment Options.
•Withdrawals can significantly
reduce benefit value or
terminate benefit.
•Terminates upon
Annuitization.
•May not be available in all
states.
39
Name of Benefit
Purpose
Standard
or
Optional
Maximum
Annual Fee
Brief Description of
Restrictions/Limitations
Annual Step-Up Death
Benefit
Pays death benefit equal to
highest Policy Value on Policy
Date or on any Policy
Anniversary prior to
Annuitant’s 81st birthday
(adjusted for premium
payments and withdrawals).
Optional
0.35% annually of
average Separate
Account Value
•Available only at purchase.
•Cannot change death benefit
once elected.
•Not available if You or
Annuitant is 76 or older on
Policy Date.
•Must allocate 100% of Policy
Value to designated
Investment Options.
•Withdrawals can significantly
reduce benefit value or
terminate benefit.
•”Step-Up” ends on Policy
Anniversary prior to Your
81st birthday.
•Terminates upon
Annuitization.
•May not be available in all
states.
Additional Death
DistributionSM
Pays an additional death benefit
amount based on any rider
earnings, since the rider was
issued.
Optional
0.25% annually of
the Policy Value
•This rider is no longer
available.
•Was available for issue ages
through 75 and younger.
•Was not available to Inherited
IRAs.
•Was available only with
Return of Premium Death
Benefit or Annual Step-Up
Death Benefit and subject to
the same Investment
Restrictions.
•Additional benefit amount
varies by issue age.
•Terminates upon
Annuitization.
40
Name of Benefit
Purpose
Standard
or
Optional
Maximum
Annual Fee
Brief Description of
Restrictions/Limitations
Additional Death
Distribution+SM
Pays an additional death benefit
amount that varies depending
on time elapsed since rider date.
Optional
0.55% annually of
the Policy Value
•This rider is no longer
available.
•Was available only for issue
ages 69 and younger.
•Was not available to Inherited
IRAs.
•Was available only with the
Return of Premium Death
Benefit or Annual Step-Up
Death Benefit, and subject to
the same Investment
Restrictions.
•Additional benefit amount
during first five years after
rider date equal to sum of all
rider fees paid since rider
date, after five years, benefit
equal to percentage of rider
benefit base.
•Terminates upon
Annuitization.
Nursing Care and
Terminal Condition
Waiver
Waives Surrender Charges and
Excess Interest Adjustments if
You or Your spouse are confined
to a nursing home or have
terminal illness.
Standard
No charge
•Withdrawals are subject to a
$1,000 minimum.
•Qualifying conditions related
to nursing home stay and
terminal illness.
•May not be available in all
states.
Unemployment Waiver
Waives Surrender Charges and
Excess Interest Adjustments if
You or Your spouse become
unemployed due to involuntary
job termination or lay-off.
Standard
No charge
•Qualifying conditions related
to job termination and job
history.
•Must be unemployed for a
certain period of time prior to
taking withdrawal, be
receiving unemployment
benefits, and have $5,000
minimum in Cash Value.
•May not be available in all
states.
41
Name of Benefit
Purpose
Standard
or
Optional
Maximum
Annual Fee
Brief Description of
Restrictions/Limitations
Dollar Cost Averaging
Program
Allows you to automatically
make transfers into one or more
Subaccounts in accordance with
Your allocation instructions in
order, on average, to buy more
Accumulation Units when
prices are low and fewer
Accumulation Units when
prices are high.
Standard
No charge
•Traditional – A minimum of
$500 per transfer is required.
•Minimum and maximum
number of transfers.
•Special – Limited to six
month or twelve-month
transfer program and only
available for new premium
payments.
•May not be available in all
states.
Asset Rebalancing
Automatically rebalances the
amounts in Your Subaccounts
to maintain Your desired asset
allocation percentages.
Standard
No charge
•Does not include any
amounts allocated to the
Fixed Account.
Systematic Payout
Option
Provides monthly, quarterly,
semi-annual or annual
withdrawals.
Optional
No charge
•Subject to $40 minimum
withdrawals.
•Systematic withdrawals in
excess of cumulative interest
credited from Guaranteed
Period Options may be
subject to Excess Interest
Adjustment.
•Systematic withdrawals in
excess of remaining Surrender
Charge Free Amount may be
subject to Surrender Charge.
•Systematic withdrawals can
significantly reduce benefit
value or terminate benefit.
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Name of Benefit
Purpose
Standard
or
Optional
Maximum
Annual Fee
Brief Description of
Restrictions/Limitations
Guaranteed Principal
SolutionSM Rider
Provides combination
Guaranteed Minimum
Accumulation Benefit and
Guaranteed Lifetime
Withdrawal Benefit.
Optional
1.25% annually of
principal back total
withdrawal base.
•This rider is no longer
available.
•Could not be added to a
Policy with another active
Guaranteed Minimum Living
Benefit or Guaranteed
Minimum Income Benefit
Rider, or with Inherited IRA
policies.
•Was available for Annuitant
issue ages 0-80.
•Benefit subject to Investment
Restrictions including
Portfolio Allocation Method
(“PAM”).
•Guaranteed minimum
accumulation portion of
benefit applies only if rider is
held for at least 10 years.
•Maximum annual withdrawal
amount under guaranteed
minimum withdrawal portion
of benefit equal to specified
percentage of total
withdrawal base.
•Withdrawals could
significantly reduce or
terminate benefit.
•Benefit terminates upon
Annuitization.
43
Name of Benefit
Purpose
Standard
or
Optional
Maximum
Annual Fee
Brief Description of
Restrictions/Limitations
Retirement Income
Max® Rider
Provides Guaranteed Lifetime
Withdrawal Benefit amount,
which can be withdrawn in any
rider year after age 59.
Optional
2.50% annually of
the Withdrawal Base
(riders issued on or
after May 1, 2017)
•This rider is no longer
available.
•Could not be added to a
Policy with another active
Guaranteed Minimum Living
Benefit or Guaranteed
Minimum Income Benefit
Rider, or with Inherited IRA
policies.
•Was available for
Owner/Annuitant issue ages
of 0-85.
•Joint Life options available
subject to certain restrictions
and differences, including
right to charge higher fee and
provide lower annual
withdrawal amounts.
•Rider fees subject to increase
(or decrease) at time of any
automatic step-up of
withdrawal base.
•Policy Value must be
allocated to designated
Investment Options.
•Excess withdrawals may
significantly reduce or
terminated the benefit.
•Terminates upon
Annuitization.
44
Name of Benefit
Purpose
Standard
or
Optional
Maximum
Annual Fee
Brief Description of
Restrictions/Limitations
Retirement Income
Choice 1.6 Rider
Provides Guaranteed Lifetime
Withdrawal Benefit amount,
which can be withdrawn in any
rider year after age 59. Also
provides death protection
and/or long-term care benefit
for an additional fee.
Optional
2.50% annually of
the Withdrawal Base
(riders issued on or
after May 1, 2017)
Death Benefit Rider
to base benefit:
0.55% annually
(Single Life) or
0.50% annually
(Joint Life), of
Withdrawal Base
Income
Enhancement
Option: 0.45%
annually (Single Life)
or 0.65% annually
(Joint Life) of
Withdrawal Base
If qualifications are
met, the Income
Enhancement
Option increases the
income benefit by
50%
•This rider is no longer
available.
•Could not be added to a
Policy with another active
Guaranteed Minimum Living
Benefit or Guaranteed
Minimum Income Benefit
Rider, or with Inherited IRA
policies.
•Was available for
Owner/Annuitant issue ages
of 0-85.
•Joint Life options available
subject to certain restrictions
and differences, including
right to charge higher fee and
provide lower annual
withdrawal amounts.
•Beginning on the 5th rider
anniversary, rider fees subject
to increase (or decrease) at
time of any automatic
step-up.
•Policy Value must be
allocated to designated
Investment Options.
•Excess withdrawals could
significantly reduce or
terminate the benefits.
•The Income Enhancement
Option subject to qualifying
conditions, including
conditions related to the
hospital and/or nursing home
stay.
45
Name of Benefit
Purpose
Standard
or
Optional
Maximum
Annual Fee
Brief Description of
Restrictions/Limitations
Transamerica Income
EdgeSM Rider
Provides Guaranteed Lifetime
Withdrawal Benefit amount,
which can be withdrawn in any
rider year after age 59.
Optional
2.50% annually of
Withdrawal Base
(riders issued after
May 1, 2017)
•This rider is no longer
available.
•Could not be added to a
Policy with another active
Guaranteed Minimum Living
Benefit or Guaranteed
Minimum Income Benefit
Rider, or with Inherited IRA
policies.
•Was available for
Owner/Annuitant issue ages
of 0-85.
•Joint Life options available
subject to certain restrictions
and differences, including
right to charge higher fee and
provide lower annual
withdrawal amounts.
•Rider fees subject to increase
(or decrease) at time of any
automatic step-up.
•Policy Value must be
allocated to designated
Investment Options.
•Excess withdrawals could
significantly reduce or
terminate the benefits.
Transamerica Income
LinkSM Rider
Guaranteed Lifetime
Withdrawal Benefit using
higher withdrawal percentage
for a defined period of time and
then resets to a lower
percentage and an opportunity
for increases in the rider
withdrawal amount.
Optional
(No longer
offered)
2.00% annually of
Withdrawal Base
•This rider is no longer
available.
•Must allocate 100% of Policy
Value to designated
Investment Options.
•Could not be elected with
another active GLWB or a
GMIB rider.
•A non-Income LinkSM rider
withdrawal (not an RMD)
decreases the withdrawal base,
impact of withdrawal may be
greater than dollar for dollar.
DEATH BENEFIT
We will pay a death benefit to Your beneficiary, under certain circumstances, if the Annuitant dies during the accumulation phase. If there is a surviving Owner(s) when the Annuitant dies, the surviving Owner(s) will receive the death benefit instead of the listed beneficiary. The person receiving the death benefit may choose an Annuity Payment Option (if You pick a variable Annuity Payment Option fees and expenses will apply), or may choose to receive the death benefit as a lump sum withdrawal. The guarantees of these death benefits are based on our claims-paying ability. No death benefit will be payable upon or after the Annuity Commencement Date. Please note that there is a mandatory Annuity Commencement Date. See ANNUITY PAYMENTS (THE INCOME PHASE) section in this prospectus.
46
We will determine the amount of and process the death benefit proceeds, if any are payable on a Policy, upon receipt at our Administrative Office of satisfactory proof of the Annuitant's death, directions regarding how to process the death benefit, and any other documents, forms and information that we need (collectively referred to as “due proof of death”). For policies with multiple beneficiaries, we will process the death benefit when the first beneficiary provides us with due proof of their share of the Death Proceeds. We will not pay any remaining beneficiary their share until we receive due proof of death from that beneficiary. Such beneficiaries continue to bear the investment risk until they submit due proof of death. Please note, we may be required to remit the death benefit proceeds to a state prior to receiving “due proof of death”. See Abandoned or Unclaimed Property.
Please Note: Such due proof of death must be received in good order to avoid a delay in processing the death benefit claim. See OTHER INFORMATION - Sending Forms and Transaction Requests in Good Order.
The death benefit proceeds remain invested in the Separate Account in accordance with the allocations made by the Policy Owner until the beneficiary has provided us with due proof of death. Once we receive due proof of death, investments in the Separate Account may be reallocated in accordance with the beneficiary's instructions.
We may permit the beneficiary to give a “one-time” written instruction to reallocate the Policy Value in the Separate Account to the money market Subaccount after the death of the Annuitant. If there is more than one beneficiary, all beneficiaries must agree to the reallocation instructions. This one-time reallocation will be permitted if the beneficiary provides satisfactory evidence of the Annuitant's death (satisfactory evidence may include a certified death certificate).
When We Pay A Death Benefit
We will pay a death benefit IF:
•
You are both the Annuitant and sole Owner of the Policy; and
•
You die before the Annuity Commencement Date.
We will pay a death benefit to You (Owner) IF:
•
You are not the Annuitant; and
•
the Annuitant dies before the Annuity Commencement Date.
Please note: If there is a surviving Owner(s) when the Annuitant dies, the surviving Owner(s) will receive the death benefit (i.e., the surviving Owner(s) takes the place of any beneficiary designation).
If the designated beneficiary receiving the death benefit is the surviving spouse of the Owner, then he or she may elect, if eligible, to continue the Policy as the new Annuitant and Owner, instead of receiving the death benefit. See DEATH BENEFIT - Spousal Continuation. All currently existing surrender charges will be waived.
When We Do Not Pay A Death Benefit
We will not pay a death benefit IF:
•
You are the Owner but not the Annuitant; and
•
You die prior to the Annuity Commencement Date.
Please note: If an Owner (who is not the Annuitant) dies before the Annuitant, the amount payable will be equal to the Cash Value. Distribution requirements apply upon the death of any Owner. Generally, upon the Owner's death (who is not the Annuitant) the entire interest must be distributed in accordance with the Internal Revenue Code. See TAX INFORMATION for a more detailed discussion of the distribution requirements under the Code.
If an Owner (who is not the Annuitant) dies during the accumulation phase, the Cash Value will be paid to the person or entity first listed below who is alive or in existence on the date of that death:
•
any surviving Owner(s);
•
primary beneficiary(ies);
•
contingent beneficiary(ies); or
•
deceased Owner's estate.
Deaths After the Annuity Commencement Date
The amount payable, if any, on or after the Annuity Commencement Date depends on the annuity income option.
47
IF:
•
You are not the Annuitant; and
•
You die on or after the Annuity Commencement Date; and
•
the entire guaranteed amount in the Policy has not been paid;
THEN:
•
the remaining portion of such guaranteed amount in the Policy will continue to be distributed at least as rapidly as under the method of distribution being used as of the date of Your death.
IF:
•
You are the Owner and Annuitant; and
•
You die after the Annuity Commencement Date; and
•
the Annuity Payment Option You selected did not have or no longer has a guaranteed period;
THEN:
•
no additional payments will be made.
Owner Death
If an Owner (who is not the Annuitant) dies during the accumulation phase, the Cash Value will be paid to the person or entity first listed below who is alive or in existence on the date of that death:
•
any surviving Owner(s);
•
primary beneficiary(ies);
•
contingent beneficiary(ies); or
•
deceased Owner's estate.
Spousal Continuation
If the sole primary beneficiary is the spouse of the deceased, upon the Owner's or the Annuitant's death, the beneficiary may elect to continue the Policy in his or her own name. Upon the Annuitant's death if such election is made, the Policy Value will be adjusted upward (but not downward) to an amount equal to the death benefit amount determined upon such election and receipt of due proof of death of the Annuitant. Any excess of the death benefit amount over the Policy Value will be allocated to each applicable Investment Option in the ratio that the Policy Value in the Investment Option bears to the total Policy Value. The terms and conditions of the Policy that applied prior to the Annuitant's death will continue to apply, with certain exceptions described in the Policy. For purposes of the death benefit on the continued Policy, the death benefit is calculated in the same manner as it was prior to continuation on the date the spouse continues the Policy. See TAX INFORMATION - Same Sex Relationships for more information concerning spousal continuation involving same sex spouses.
For these purposes, if the sole primary beneficiary of the Policy is a revocable grantor trust and the spouse of the Owner/Annuitant is the sole grantor, trustee, and beneficiary of the trust and the trust is using the spouse of the Owner/Annuitant's social security number at the time of claim, she or he shall be treated as the Owner/Annuitant's spouse. In those circumstances, the Owner/Annuitant's spouse will be treated as the beneficiary of the Policy for purposes of applying the spousal continuation provisions of the Policy.
For these purposes, if the Owner is an individual retirement account within the meaning of IRC sections 408 or 408A and if the Annuitant's spouse is the sole primary beneficiary of the Annuitant's interest in such account, the Annuitant's spouse will be treated as the beneficiary of the Policy for purposes of applying the spousal continuation provisions of the Policy.
Amount of Death Benefit
Death benefit provisions may differ from state to state. The death benefit may be paid as a lump sum, as annuity payments or as otherwise permitted by the Company in accordance with applicable law. The amount of the death benefit depends on the guaranteed minimum death benefit option, if any, You choose when You buy the Policy. The “base Policy” death benefit will generally be the greatest of:
•
the Policy Value on the date we receive the required information in good order at our Administrative Office;
•
the Cash Value on the date we receive in good order the required information at our Administrative Office (this will be more than the Policy Value if there is a positive Excess Interest Adjustment that exceeds the surrender charge);
•
the Fixed Account portion of the minimum required Cash Value plus the Separate Account portion of the Policy Value, on the date we receive the required information in good order at our Administrative Office; and
48
•
the guaranteed minimum death benefit (if one was elected) on the date of death; plus premium payments, minus gross withdrawals, from the date of death to the date the death benefit is paid less any recaptured premium enhancement. Please see Appendix - Death Benefit for illustrative examples regarding death benefit calculations.
Please note: The death benefit terminates upon Annuitization.
Guaranteed Minimum Death Benefit
The guaranteed minimum death benefit terminates upon Annuitization and there is a mandatory Annuity Commencement Date. On the Policy application, You may choose the Annual Step-Up death benefit or the Return of Premium (age limitations may apply) for an additional fee. After the Policy is issued, You cannot make an election and the death benefit cannot be changed.
Annual Step-Up Death Benefit
Under this option, on each Policy anniversary prior to Your 81st birthday, a new “stepped-up” death benefit is determined and becomes the guaranteed minimum death benefit for that Policy Year. This “step-up” death benefit is equal to:
•
the largest Policy Value on the Policy Date or on any Policy anniversary prior to the earlier of the Annuitant's date of death or the Annuitant's 81st birthday; plus
•
any premium payments since the date of any Policy anniversary with the largest Policy Value; minus
•
any adjusted withdrawals (please see Appendix - Death Benefit) since the date of the Policy anniversary with the largest Policy Value to the date of death; minus
•
withdrawals from the date of death to the date the death benefit is paid.
The Annual Step-Up Death Benefit is not available if You or the Annuitant is 76 or older on the Policy Date. There is an extra charge for this death benefit. See ANNUITY POLICY FEE TABLE AND EXPENSE EXAMPLES.
Designated Investment Options. If You elected the Annual Step-Up Death Benefit, You must allocate 100% of Your Policy Value to one or more of the designated Investment Options approved for the Annual Step-Up Death Benefit. See Appendix - Designated Investment Options for a complete listing of available Investment Options. Requiring that You designate 100% of Your Policy Value to the designated Investment Options, some of which employ strategies that are intended to reduce the risk of loss and/or manage volatility, may reduce investment returns and may reduce the likelihood that we will be required to use our own assets to pay amounts due under this benefit.
Please note:
•
You may transfer amounts among the designated Investment Options; however, You cannot transfer any amount to any other Subaccount if You elect this death benefit.
•
We have processes and procedures in place that will prevent allocation to a Subaccount that is not a designated Investment Option. These processes and procedures include restricting transfers requested by telephone and internet.
•
You will not receive an optional guaranteed minimum death benefit if You do not choose one when You purchase Your Policy.
Return of Premium Death Benefit
The Return of Premium Death Benefit is equal to:
•
total premium payments; minus
•
any adjusted withdrawals (please see Appendix - Death Benefit) as of the date of death; minus
•
withdrawals from the date of death to the date the death benefit is paid.
This benefit is not available if You or the Annuitant is 86 or older on the Policy Date. There is an extra charge for this death benefit. See ANNUITY POLICY FEE TABLE AND EXPENSE EXAMPLES.
Designated Investment Options. If You elected the Return of Premium Death Benefit, You must allocate 100% of Your Policy Value to one or more of the designated Investment Options approved for the Return of Premium Death Benefit. See Appendix - Designated Investment Options for a complete listing of available designated options. Requiring that You designate 100% of Your Policy Value to the designated Investment Options, some of which employ strategies that are intended to reduce the risk of loss and/or manage volatility, may reduce investment returns and may reduce the likelihood that we will be required to use our own assets to pay amounts due under this benefit.
49
Please note:
•
You may transfer amounts among the designated Investment Options; however, You cannot transfer any amount to any other Subaccount if You elect this death benefit.
•
We have processes and procedures in place that will prevent allocation to a Subaccount that is not a designated Investment Option. These processes and procedures include restricting transfers requested by telephone and internet.
•
You will not receive an optional guaranteed minimum death benefit if You do not choose one when You purchase Your Policy.
The Guaranteed Minimum Death Benefit may vary for certain policies and may not be available for all policies, in all states, at all times or through all financial intermediaries. Once You elect a death benefit and Your Policy is issued, Your death benefit cannot be changed and You will not be impacted by a decision to discontinue offering any particular guaranteed minimum death benefit to new sales.
Adjusted Partial Withdrawal
When You request a partial withdrawal, Your guaranteed minimum death benefit will be reduced by an amount called the adjusted partial withdrawal. Under certain circumstances, the adjusted partial withdrawal may be more than the dollar amount of Your withdrawal request. This will generally be the case if the guaranteed minimum death benefit exceeds the Policy Value at the time of withdrawal. It is also possible that if a death benefit is paid after You have made a partial withdrawal, then the total amount paid could be less than the total premium payments.
The formula used to calculate the adjusted partial withdrawal amount is: adjusted partial withdrawal = (amount of the withdrawal * the current death proceeds prior to the withdrawal) / Policy Value prior to the withdrawal.
We have included a detailed explanation of this adjustment with examples in the Appendix - Death Benefit. This is referred to as “adjusted partial withdrawal” in Your Policy. If You have a qualified Policy, minimum required distributions rules may require You to request a partial withdrawal.
Optional Benefit Riders
You may have elected one of the following optional riders previously available for purchase which are no longer available. The following rider grid describes the material features of each of those riders. Please refer to Your personal rider pages and any supplemental mailings for Your specific coverage and features regarding these riders.
Listed below are the abbreviations that will be used in the following grid for Your reference.
 
Abbreviation
Definition
ADB
Additional Death Benefit
ADD
Additional Death Distribution
ADD+
Additional Death Distribution Plus
DB
Death Benefit
DCA
Dollar Cost Averaging
GFV
Guaranteed Future Value
GMAB
Guaranteed Minimum Accumulation Benefit
GMDB
Guaranteed Minimum Death Benefit
GMIB
Guaranteed Minimum Income Benefit
GMLB
Guaranteed Minimum Living Benefit
GMWB
Guaranteed Minimum Withdrawal Benefit
GLWB
Guaranteed Living Withdrawal Benefit
GPO
Guaranteed Period Option
GPS
Guaranteed Principal SolutionSM
IE
Income EnhancementSM
ILSD
Income Link Start Date
ILSW
Income Link Systematic Withdrawal
Abbreviation
Definition
ILWY
Income Link Withdrawal Year
ISFL
Income SelectSM For Life
MAV
Minimum Annuitization Value
MAWA
Maximum Annual Withdrawal Amount
MIB
Minimum Income Base
MRWA
Minimum Remaining Withdrawal Amount
N/A
Not Applicable
PAM
Portfolio Allocation Method
RDB
Rider Death Benefit
RIC
Retirement Income Choice®
RMD
Required Minimum Distribution
RWA
Rider Withdrawal Amount
SPO
Systematic Pay Out
TWB
Total Withdrawal Base
WB
Withdrawal Base
WD
Withdrawal
Income LinkSM Rider Specific Withdrawal Benefit Terms:
Withdrawal Option Election Date - This is the date the withdrawal option is selected by the Policy Owner. The RWA is zero prior to the establishment of this date. The date and the corresponding withdrawal option can change any time prior to the ILSD. Once ILSD is set, it cannot be changed.
ILSD - This is the date the Policy Owner elects to begin receiving payments using one of the 4 ILSW options. This date may be changed prior to the establishment of the withdrawal year.
50
ILWY - Also known as the withdrawal year, is each 12 month period beginning on the ILSD. This is the time period for withdrawing your RWA which is reset at the beginning of each withdrawal year.
ILSW - This rider offers 4 new systematic payment options specific to this rider only. ANY withdrawal that is not an ILSW (including other systematic payment options) will be treated as a 100% excess.
The information below is a summary of riders previously available for purchase which are no longer available. 
Rider Name
Income LinkSM3
Additional Death Distribution32003
Additional Death Distribution+3
Rider Form Number1
RGMB 39 0110
RGMB 39 0110 (NY)
RTP 18 0103
ICC12 RTP 170513
RTP 17 0103
ICC12 RTP 180513
Purpose of Rider
This is a GLWB rider that guarantees
tiered withdrawals for the Annuitant's2
lifetime.
•The Policyholder can withdraw
(required to use systematic
withdrawals) the RWA each rider
year until the death of the
Annuitant2.
•This benefit is intended to provide a
level of tiered payments regardless of
the performance of the designated
variable Investment Option You
select.
This is an Additional Death Benefit
Rider which can pay an additional
benefit at time of death to help alleviate
the burden of taxes.
This is an Additional Death Benefit
Rider which can pay an additional
benefit at time of death to help alleviate
the burden of taxes.
Availability
•Issue age 55-80, but not yet 81 years
old (unless state law requires a lower
maximum issue age).
•Single Annuitant ONLY. Annuitant
must be an Owner (unless Owner is
a non-natural person).
•Maximum of 2 living Joint Owners
(with one being the Annuitant).
•Cannot be added to a Policy with
other active GMLB riders.
•Not available on qualified annuity
which has been continued by
surviving spouse or beneficiary as a
new Owner.
•Issue age 0-75 but not yet 76 years
old (Policy application signed on or
after May 1, 2020).
•Issue age 0-80 but not yet 81 years
old (policy application signed prior
to May 1, 2020).
•Not available in all states.
•Issue age 0-69 but not yet 70 years
old (Policy application signed on or
after May 1, 2020).
•Issue age 0-75 but not yet 76 years
old (Policy application signed prior
to May 1, 2020).
•Not available in all states.
Base Benefit and Optional Fees at
issue
Percentage of WB - 0.90% for Single
and Joint Life Riders (prior to
11/3/2013)
Percentage of Policy Value – 0.25%
Percentage of Policy Value – 0.55%
Fee Frequency
•The fee is calculated at issue and
each subsequent calendar rider
quarter for the upcoming quarter
based on the values and WB at that
point in time and stored.
•Deducted at each rider
quarterversary in arrears during the
accumulation phase.
•The fee is adjusted for new deposits
that increase the WB and decreased
for withdrawals that are not ILSW or
RMD systematic withdrawals.
•The rider fee adjustment may be
positive or negative and will be
added to or subtracted from the rider
fee to be allocated.
•A pro-rated fee is assessed at the time
of rider termination or full
surrender.
Assessed each rider anniversary and at
rider termination and equal to the
Policy Value multiplied by rider fee
percentage.
Assessed each rider anniversary and at
rider termination and equal to the
Policy Value multiplied by rider fee
percentage.
Death Benefit
N/A
Amount is paid whenever a death
benefit is paid and the rider is attached.
Amount is paid whenever a death
benefit is paid and the rider is attached.
51
Rider Name
Income LinkSM3
Additional Death Distribution32003
Additional Death Distribution+3
Rider Form Number1
RGMB 39 0110
RGMB 39 0110 (NY)
RTP 18 0103
ICC12 RTP 170513
RTP 17 0103
ICC12 RTP 180513
 
 
•Amount paid=ADB Factor x Rider
Earnings*.
•ADB Factor - 40% for issue ages
0-70 and 25% for issue ages 71-80
(when application signed date is
prior to May 1, 2020).
•ADB Factor - 40% for issue ages
0-70 and 25% for issue ages 71-75
(when application signed date is after
May 1, 2020).
*Rider earnings are defined as:
- the Policy Value on the date the death
benefit is determined; minus
-Policy Value on the rider date; minus
- premium payments after the rider
date; plus
- surrenders after the rider date that
exceed the rider earnings on the date of
the surrender.
NOTE: No benefit is payable under
the ADD rider if there are no rider
earnings on the date the death benefit
is calculated.
•Prior to 5th rider anniversary = Sum
of all fees paid for this rider since the
rider date.
•On or after 5th rider anniversary =
Rider Benefit Base* x Rider Benefit
Percentage**.
**The rider benefit percentage =
30% for issue ages 0-70 and 20% for
issue ages 71-75 (when application
signed date is prior to May 1, 2020).
**The rider benefit percentage =
30% for issue ages 0-69 (when
application signed date is after May
1, 2020).
*The Rider Benefit Base at any time is
equal to the Policy Value less any
premiums added after the Rider Date.
NOTE: No benefit is payable under
the ADD+ rider if the Policy Value on
the date the death benefit is paid is less
than the premium payments after the
rider date.
Designated Investment Options
Available - Policyholder who add these
riders may only invest in the
Investment Options listed.
Requiring that You designate 100% of
Your Policy Value to the designated
Investment Options, some of which
employ strategies that are intended to
reduce the risk of loss and/or manage
volatility, may reduce investment
returns and may reduce the likelihood
that we will be required to make
payments under this benefit.
PLEASE NOTE: These Investment
Options may not be available on all
products, may vary for certain policies
and may not be available for all
policies. Please reference “Portfolio
Companies Available Under the Policy”
Appendix in Your prospectus for
available Portfolio Companies. You
cannot transfer any amount to any
other non-designated Subaccount
without losing all Your benefits under
this rider.
American Funds The Bond Fund of
AmericaSM
TA Aegon Bond
TA Aegon Core Bond
TA Aegon U.S. Government Securities
TA BlackRock Government Money
Market
TA BlackRock iShares Active Asset
Allocation - Conservative
TA BlackRock iShares Edge 40
TA BlackRock iShares Tactical -
Conservative
TA Goldman Sachs Managed Risk -
Conservative ETF
TA JP Morgan Asset Allocation -
Conservative
TA JP Morgan Tactical Allocation
TA PineBridge Inflation Opportunities
Fixed Account
N/A
N/A
Allocation Methods
N/A
N/A
N/A
Withdrawal Benefits - See “Adjusted
Withdrawals - Income Link” appendix
for examples showing the effect of
withdrawals on the WB.
Withdrawal Option Election Date -
This is the date the withdrawal option
is selected by the Policy Owner.
ILSD - This is the date the Policy
Owner elects to begin receiving
payments.
ILWY - This is each 12-month period
beginning on the ILSD and establishes
the time period for withdrawing Your
RWA and is reset at the beginning of
each withdrawal year.
ILSW - There are 4 systematic payment
options specific to this rider. Any
withdrawal that is not an ILSW will be
considered an excess withdrawal.
N/A
N/A
52
Rider Name
Income LinkSM3
Additional Death Distribution32003
Additional Death Distribution+3
Rider Form Number1
RGMB 39 0110
RGMB 39 0110 (NY)
RTP 18 0103
ICC12 RTP 170513
RTP 17 0103
ICC12 RTP 180513
 
The withdrawal percentage is used to
calculate the RWA and is determined
by electing a withdrawal option, which
is not required to elect at the time of
issue. Once selected, the ILSWs are not
required to begin immediately. Your
withdrawal option is not locked in
until the ILSD and the percentage is
not recalculated at the time of an
automatic step-up. Withdrawal options
are as listed below:
Single Life
5% for 7 years and 4% thereafter
6% for 6 years and 4% thereafter
7% for 5 years and 4% thereafter
8% for 4 years and 4% thereafter
9% for 3 years and 4% thereafter
10% for 2 years and 4% thereafter
Joint Life
4.5% for 7 years and 3.5% thereafter
5.5% for 6 years and 3.5% thereafter
6.5% for 5 years and 3.5% thereafter
7.5% for 4 years and 3.5% thereafter
8.5% for 3 years and 3.5% thereafter
9.5% for 2 years and 3.5% thereafter
On each ILSD and the beginning of
each ILWY thereafter, the RWA is equal
to the withdrawal option percentage
multiplied by the withdrawal base.
 
 
Automatic Step-Up Benefit
On each rider anniversary, the WB will
be set to the greatest of:
1)The current WB;
2)The Policy Value on the rider
anniversary; or
3)The highest Policy Value on a rider
monthiversarySM for the current
rider year*.
* Item 3) is set to zero if there have
been any withdrawals that are not
ILSW or RMD systematic withdrawals
in the current rider year. The highest
monthly value is the largest Policy
Value on each rider monthiversary
during the rider year.
A step-up will occur if the largest value
is either 2) or 3) above. A step-up will
allow us to change the rider fee
percentage.
•Owner will have a 30 day window
after the rider anniversary to reject
an automatic step-up if we increase
the rider fee.—Must be in writing.
•If an Owner rejects an automatic
step-up, they retain the right to all
future automatic step-ups.
N/A
N/A
Exercising Rider
Exercising Base Benefit: The
Policyholder is guaranteed to be able to
withdraw up to the RWA each
withdrawal year even if the Policy Value
is zero at the time of withdrawal. The
rider benefits cease when the
Annuitant2 has died.
No further action required to exercise
the rider.
No further action required to exercise
the rider.
Income Benefit or Other Benefit
Payout Considerations
Systematic Withdrawal Options:
1.72t/72q SPO - This allows fixed
N/A
N/A
53
Rider Name
Income LinkSM3
Additional Death Distribution32003
Additional Death Distribution+3
Rider Form Number1
RGMB 39 0110
RGMB 39 0110 (NY)
RTP 18 0103
ICC12 RTP 170513
RTP 17 0103
ICC12 RTP 180513
 
level payments that will not change
for at least 5 years and payments
will not exceed RWA. Only 5, 6 and
7 year options available.
2.RMD Only SPO - This allows a
modal amount equal to the annual
RMD requirement for the current
calendar year less all withdrawals
taken in current calendar year
divided by the number of payments
remaining in the calendar year. Will
not reduce RWA and is only
available prior to ILSD.
3.RWA SPO no RMD kick out -
Allows modal payments of the
remaining RWA divided by the
number of payments remaining in
the current withdrawal year.
Payments will be adjusted for any
step-ups, premium additions or
excess withdrawals and will reduce
the RWA with each payment.
4.RWA SPO with RMD kick out -
This allows for payments equal to
#3 above with an additional
payment to satisfy the RMD paid
on December 27th each calendar
year. Modal payments are not
affected by this RMD payment.
 
 
Rider Upgrade
N/A
N/A
N/A
Rider Termination
•The rider will be terminated upon
Policy surrender, Annuitization or
Annuitant2 death.
•The date the Policy to which this
rider is attached is assigned or if the
Owner is changed without our
approval.
•Termination allowed at any time
after the 5th rider anniversary.
•The rider will be terminated the date
we receive Written Notice from You
requesting termination.
The rider can be added or dropped at
any time.  If the rider is dropped and
re-added, the rider will only cover
earnings accumulated since the rider
was re-added.
The rider will remain in effect until:
•You cancel it by notifying our
Administrative Office in writing,
•the Policy is Annuitized or
surrendered,
•or the additional death benefit is
paid.
The rider can be added or dropped at
any time.  If the rider is terminated
they must wait one year to re-add rider.
The rider will remain in effect until:
•You cancel it by notifying our
Administrative Office in writing,
•the Policy is Annuitized or
surrendered,
•or the additional death benefit is
paid.
 
Rider Name
Guaranteed Principal
Solutions Rider (2005)3
Retirement Income Max®3
Retirement Income Choice®
1.63
Transamerica Income
EdgeSM3
Rider Form Number1
RGMB 4 0504
RGMB 41 0513
RGMB 41 0111 (NY)
RGMB 37 0809 - (w/o IE)
RGMB 38 0809 - (with IE)
RGMB 51 0616
Purpose of Rider
This is a Living Benefit Rider
and should be viewed as a way
to permit You to invest in
variable Investment Options
while still having Your Policy
Value and liquidity protected
to the extent provided by this
rider.
This rider is a combination of
two separate annuity
guarantees:
1)A GMWB and
2)A GMAB (a.k.a. principal
protection benefit or
guarantee future value
benefit).
This is a GLWB rider that
guarantees withdrawals for the
Annuitant's2 lifetime,
regardless of Policy Value.
•The policyholder can
withdraw the RWA each
rider year until the death of
the Annuitant.2
•This benefit is intended to
provide a level of payments
regardless of the
performance of the
designated variable
Investment Options You
select.
This is a GLWB rider that
guarantees withdrawals for the
Annuitant's2 lifetime,
regardless of Policy Value.
•The policyholder can
withdraw the RWA each
rider year until the death of
the Annuitant.2
•This benefit is intended to
provide a level of payments
regardless of the
performance of the
designated variable
Investment Options You
select.
This is a GLWB rider that
guarantees withdrawals for the
Annuitant's2 lifetime,
regardless of Policy Value.
•The policyholder can
withdraw the RWA each
rider year until the death of
the Annuitant.2
•This benefit is intended to
provide a level of payments
regardless of the
performance of the
designated variable
Investment Options You
select.
54
Rider Name
Guaranteed Principal
Solutions Rider (2005)3
Retirement Income Max®3
Retirement Income Choice®
1.63
Transamerica Income
EdgeSM3
Rider Form Number1
RGMB 4 0504
RGMB 41 0513
RGMB 41 0111 (NY)
RGMB 37 0809 - (w/o IE)
RGMB 38 0809 - (with IE)
RGMB 51 0616
 
The rider will guarantee that
the Policy Value of the Policy
will be at least as high as the
GFV after a waiting period has
expired.
 
 
 
Availability
•Issue age 0-80, but not yet
81 years old (unless state law
requires a lower maximum
issue age).
•Cannot be added to a Policy
with other active GMLB
riders.
•Not available on qualified
annuity which has been
continued by surviving
spouse or beneficiary as a
new Owner.
•Issue age 0-85, but not yet
86 years old (unless state law
requires a lower maximum
issue age).
•Single Annuitant ONLY.
Annuitant must be an
Owner (unless Owner is a
non-natural person).
•Maximum of 2 living Joint
Owners (with one being the
Annuitant).
•Cannot be added to a Policy
with other active GMLB
riders.
•Not available on qualified
annuity which has been
continued by surviving
spouse or beneficiary as a
new Owner.
•Issue age 0-85, but not yet
86 years old (unless state law
requires a lower maximum
issue age).
•Single Annuitant ONLY.
Annuitant must be an
Owner (unless Owner is a
non-natural person).
•Maximum of 2 living Joint
Owners (with one being the
Annuitant).
•Cannot be added to a Policy
with other active GMLB
riders.
•Not available on qualified
annuity which has been
continued by surviving
spouse or beneficiary as a
new Owner.
•Issue age 0-85, but not yet
86 years old (unless state law
requires a lower maximum
issue age).
•Single Annuitant ONLY.
Annuitant must be an
Owner (unless Owner is a
non-natural person).
•Maximum of 2 living Joint
Owners (with one being the
Annuitant).
•Cannot be added to a Policy
with other active GMLB
riders.
•Not available on qualified
annuity which has been
continued by surviving
spouse or beneficiary as a
new Owner.
Base Benefit and Optional
Fees at issue
Percentage of “Principal Back”
TWB:
For riders issued after
11/13/131.25%
For riders issued between
5/1/09 and 11/3/130.90%
For riders issued prior to
5/1/090.60%
Rider Fees:
Single Life1.50%
Joint Life1.60%
For riders issued prior to the
date of this prospectus, please
reference the “Appendix –
Prior Withdrawal/Growth
Percentages and Rider Fees” in
the Statement of Additional
Information.
Fee based on designated
allocation groups and the
optional benefits selected. If
You elect a combination of
designated allocations from
among the various groups
below, then Your fee will be
based on a weighted average of
Your choices.
Rider Fees:
Single Life
Group A1.85%
Group B1.40%
Group C0.95%
DB0.40%
IE0.30%
Joint Life
Group A1.95%
Group B1.50%
Group C1.05%
DB0.35%
IE0.50%
For riders issued prior to the
date of this prospectus, please
reference the “Appendix –
Prior Withdrawal/Growth
Percentages and Rider Fees” in
the Statement of Additional
Information.
We use the withdrawal base to
calculate the rider withdrawal
amount and the rider fee. The
withdrawal base on the rider
date is the Policy Value.
Rider Fees:
Single Life1.45%
Joint Life1.55%
For riders issued prior to the
date of this prospectus, please
reference the “Appendix –
Prior Allocation/Withdrawal
Percentages and Rider Fees” in
the Statement of Additional
Information.
55
Rider Name
Guaranteed Principal
Solutions Rider (2005)3
Retirement Income Max®3
Retirement Income Choice®
1.63
Transamerica Income
EdgeSM3
Rider Form Number1
RGMB 4 0504
RGMB 41 0513
RGMB 41 0111 (NY)
RGMB 37 0809 - (w/o IE)
RGMB 38 0809 - (with IE)
RGMB 51 0616
Fee Frequency
•Fee is deducted annually
during the accumulation
phase on each rider
anniversary.
•A pro-rated fee is deducted
at the time the rider is
terminated or upgraded.
•The fee is calculated at issue
and each subsequent rider
quarter for the upcoming
quarter based on the fund
values and WB at that point
in time and stored.
•Deducted at each rider
quarterversary in arrears
during the accumulation
phase.
•The fee is calculated on a
quarterly basis.
•A rider fee adjustment will
be applied for subsequent
premium payments and
withdrawals that change the
withdrawal base.
•The base rider fee
adjustment will be
calculated using the same
formula as the base rider fee.
•The rider fee adjustment
may be positive or negative
and will be added to or
subtracted from the rider fee
to be allocated.
•A pro-rated fee is deducted
at the time the rider is
terminated or upgraded.
•The fee is calculated at issue
and each subsequent rider
quarter for the upcoming
quarter based on the fund
values and WB at that point
in time and stored.
•Deducted at each rider
quarterversary in arrears
during the accumulation
phase.
•The fee is calculated on a
quarterly basis and varies
depending on the allocation
option You have chosen.
•A rider fee adjustment will
be applied for transfers
between allocation groups
and for subsequent
premium payments and
withdrawals that change the
withdrawal base.
•The base rider fee
adjustment will be
calculated using the same
formula as the base rider fee.
•The rider fee adjustment
may be positive or negative
and will be added to or
subtracted from the rider fee
to be allocated.
•A pro-rated fee is deducted
at the time the rider is
terminated or upgraded.
•The fee is calculated at issue
and each subsequent rider
quarter for the upcoming
quarter
•Deducted at each rider
quarter and will be deducted
automatically from the
flexible Investment Options
and the select Investment
Options on a pro-rata basis
at the end of each rider
quarter.
•Once select and flexible
Investment Options have
been depleted, fees can be
deducted out of the stable
account, except for riders in
New York.
•The fee is calculated and
stored at issue and at each
subsequent rider quarter for
the upcoming quarter.
•A rider fee adjustment will
be applied for any premium
additions and excess
withdrawals that change the
withdrawal base.
•The rider fee adjustment
may be positive or negative
and will be added to or
subtracted from the rider fee
to be collected.
•A pro-rated fee is deducted
at the time the rider is
terminated.
Death Benefit
N/A
N/A
N/A
N/A
Designated Investment
Options Available -
Policyholders who add these
riders may only invest in the
Investment Options listed.
Investment Options may not
be available as a designated
fund based on rider issue date.
Requiring that You designate
100% of Your Policy Value to
the designated Investment
Options, some of which
employ strategies that are
intended to reduce the risk of
loss and/or manage volatility,
may reduce investment returns
and may reduce the likelihood
that we will be required to use
our own assets to pay amounts
due under this benefit.
PLEASE NOTE: These
Investment Options may not
be available on all products,
may vary for certain policies
and may not be available for all
policies. Please reference
Portfolios Companies Available
All funds within the product
are considered designated
Investment Options for this
purpose. You must, however,
adhere to the Portfolio
Allocation Method. See below.
For a list of designated funds
for this rider, please reference
the Appendix - Designated
Investment Options.
For a list of designated funds
for this rider, please reference
the Appendix - Designated
Investment Options.
For a list of Select and Flexible
Investment Options, please
reference the Appendix -
Transamerica Income EdgeSM
Investment Options.
56
Rider Name
Guaranteed Principal
Solutions Rider (2005)3
Retirement Income Max®3
Retirement Income Choice®
1.63
Transamerica Income
EdgeSM3
Rider Form Number1
RGMB 4 0504
RGMB 41 0513
RGMB 41 0111 (NY)
RGMB 37 0809 - (w/o IE)
RGMB 38 0809 - (with IE)
RGMB 51 0616
Under the Policy Appendix in
Your prospectus for available
Portfolio Companies. You
cannot transfer any amount to
any other non-designated
subaccount without losing all
Your benefits under this rider.
 
 
 
 
Allocation Methods
Portfolio Allocation Method
(PAM):
•This program will
automatically allocate assets
from the policyholder's
Subaccount to a Subaccount
of our choosing when the
Policy Value has dropped
relative to the guaranteed
amount.
•If the Policy Value increases
enough in relation to the
guaranteed amounts, the
money may be moved back
into the Subaccounts
(pro-rata based on the
policyholder's current
Subaccount values).
•The allocation of assets
between the accounts is at
our sole discretion but will
initially use modern
financial theory to
determine the correct
allocation.
•The policyholder may not
allocate premium payments
to, nor transfer Policy Value
into or out of, the PAM
Investment Options.
Current PAM Subaccount:
TA Aegon U.S. Government
Securities
N/A
N/A
Required Allocations:
A certain percentage of Your
Policy Value on the rider date
must be allocated to the Stable
Account, the select and the
flexible Investment Options as
specified in the applicable Rate
Sheet Prospectus Supplement.
Stable Account
•This is a Fixed Account
option.
•Allocations applied to the
Stable Account will be
credited interest based on a
fixed rate.
•Withdrawals from the Stable
Account are not permitted
until all other Investment
Options are depleted of
value.
Flexible and Select
Options
•You must allocate certain
percentages of Your
premium payments and
Policy Value to these
Investment Options.
•Withdrawals from the
flexible and select
Investment Options will be
deducted on a pro-rated
basis from each Investment
Option that You have
allocated to.
•If You do not wish to
maintain the required
allocation percentages the
rider must be terminated.
For riders issued prior to the
date of this prospectus,
please reference the
“Appendix – Prior
Allocation/Withdrawal
Percentages and Rider Fees”
in the Statement of
Additional Information.
Withdrawal Benefits - See
Hypothetical Adjusted
Withdrawals - Guaranteed
Lifetime Withdrawal Benefit
Riders“ appendix for examples
showing the effect of
withdrawals on the WB.
The GMWB guarantees a
withdrawal amount regardless
of the Policy Value. The
policyholder has 2 withdrawal
guarantees available. Once the
rider is issued, values for both
withdrawal guarantees will be
calculated indefinitely as
follows:
The percentage is determined
by the attained age of the
Annuitant2 at the time of the
first withdrawal.
Single Life Riders
Age 1st WDSingle Life WD%
0 - 580.00%
59-643.75%
65-805.00%
The withdrawal percentage is
determined by the attained age
of the Annuitant2 at the time
of the first withdrawal.
Single Life Riders
Age 1st WDSingle Life WD%
0 - 580.00%
59-643.50%
65-804.75%
The withdrawal percentage is
determined by the attained age
of the Annuitant2 at the time
of the first withdrawal.
Single Life Riders
Age 1st WD during Rider
Years 1-5Single Life WD%
0 - 580.0%
59-643.75%
57
Rider Name
Guaranteed Principal
Solutions Rider (2005)3
Retirement Income Max®3
Retirement Income Choice®
1.63
Transamerica Income
EdgeSM3
Rider Form Number1
RGMB 4 0504
RGMB 41 0513
RGMB 41 0111 (NY)
RGMB 37 0809 - (w/o IE)
RGMB 38 0809 - (with IE)
RGMB 51 0616
 
a)7% Principal Back: The
policyholder can withdraw
up to 7% of the 7%
Principal Back TWB per
year until at least the time
at which the 7% Principal
Back MRWA has reached
zero.
b)5% For Life: The
policyholder can withdraw
up to 5% of the 5% For
Life TWB each year starting
with the rider anniversary
following the Annuitant's
59th birthday until at least
the later of the death of the
Annuitant or the time when
the 5% For Life MRWA*
has reached zero.
* The MRWA represents the
total minimum dollar amount
of guaranteed withdrawals the
policyholder has remaining
provided they take no more
than the MAWA each year.
•The policyholder does not
have to take the entire
MAWA in any year.
•If they do not take the full
amount available, the
remaining portion does not
carry over to the next
calendar year.
81 +5.50%
Joint Life Riders
Age 1st WDJoint Life WD%
0 - 580.00%
59-643.25%
65-804.50%
81 +5.00%
•Starting the rider
anniversary following the
Annuitant's259th birthday,
the withdrawal percentage
increases above 0% which
creates a RWA available
under the rider for
withdrawal.
•On each rider anniversary,
the RWA will be reset equal
to the greater of:
 1)The WB multiplied by
the Withdrawal
Percentage based on the
attained age of the
Annuitant2 at the time of
their first withdrawal if
applicable, and
 2)The RMD amount for
this Policy for the current
calendar year.
•The policyholder does not
have to take the entire RWA
in any year.
•If they do not take the full
amount available, the
remaining portion does not
carry over to the next rider
year.
For riders issued prior to the
date of this prospectus,
please see the “Appendix
Prior Withdrawal/Growth
Percentages and Rider Fees”
in the Statement of
Additional Information.
81 +5.25%
Joint Life Riders
Age 1st WDJoint Life WD%
0 - 580.00%
59-643.00%
65-804.25%
81 +4.75%
•Starting the rider
anniversary following the
Annuitant's259th birthday,
the withdrawal percentage
increases above 0% which
creates a RWA available
under the rider for
withdrawal.
•On each rider anniversary,
the RWA will be reset equal
to the greater of:
 1)The WB multiplied by
the Withdrawal
Percentage based on the
attained age of the
Annuitant2 at the time of
their first withdrawal if
applicable, and
 2)The RMD amount for
this Policy for the current
calendar year.
•The policyholder does not
have to take the entire RWA
in any year.
•If they do not take the full
amount available, the
remaining portion does not
carry over to the next rider
year.
For riders issued prior to the
date of this prospectus,
please reference the
“Appendix – Prior
Withdrawal/Growth
Percentages and Rider Fees”
in the Statement of
Additional Information.
65-805.00%
81 +5.50%
Joint Life Riders
Age 1st WD during Rider
Years 1-5Joint Life WD%
0 - 580.0%
59-643.25%
65-804.50%
81 +5.00%
Single Life Riders
Age 1st WD during Rider
Years 6-10Single Life WD%
0 - 580.0%
59-644.25%
65-805.50%
81 +6.00%
Joint Life Riders
Age 1st WD during Rider
Years 6-10Joint Life WD%
0 - 580.0%
59-643.75%
65-805.00%
81 +5.50%
Single Life Riders
Age 1st WD during Rider
Years 11+Single Life WD%
0 - 580.0%
59-644.75%
65-806.00%
81 +6.50%
Joint Life Riders
Age 1st WD during Rider
Years 11+Joint Life WD%
0 - 580.0%
59-644.25%
65-805.50%
81 +6.00%
•Starting the rider
anniversary following the
Annuitant's259th birthday,
the withdrawal percentage
increases above 0% which
creates a RWA available
under the rider for
withdrawal.
•On each rider anniversary,
the RWA will be reset equal
to the greater of:
 1)The WB multiplied by
the withdrawal
percentage based on the
attained age of the
Annuitant2 at the time of
their first withdrawal if
applicable, and
 2)The RMD amount for
this Policy for the current
calendar year.
•The policyholder does not
have to take the entire RWA
in any year.
•If they do not take the full
amount available, the
remaining portion does not
carry over to the next rider
year.
For riders issued prior to the
58
Rider Name
Guaranteed Principal
Solutions Rider (2005)3
Retirement Income Max®3
Retirement Income Choice®
1.63
Transamerica Income
EdgeSM3
Rider Form Number1
RGMB 4 0504
RGMB 41 0513
RGMB 41 0111 (NY)
RGMB 37 0809 - (w/o IE)
RGMB 38 0809 - (with IE)
RGMB 51 0616
 
 
 
 
date of this prospectus,
please reference the
“Appendix – Prior
Allocation/Withdrawal
Percentages and Rider Fees”
in the Statement of
Additional Information.
Automatic Step-Up Benefit
N/A
On each rider anniversary, the
WB will be set to the greatest
of:
1)The current WB:
2)The Policy Value on the
rider anniversary;
3)The highest Policy Value on
a rider monthiversarySM*;
or
4)The current WB
immediately prior to
anniversary processing
increased by the growth rate
percentage**
* Item 3) is set to zero if there
have been any excess
withdrawals in the current
rider year.
** Item 4) is set to zero after
the first 10 years or if there
have been any withdrawals in
the current rider year.
A step-up will occur if the
largest value is either 2) or 3)
above. A step-up will allow us
to change the rider fee
percentage after the 1st rider
anniversary.
•If the largest value is 1) or 4)
above, this is not considered
a step-up.
•Owner will have a 30 day
window after the rider
anniversary to reject an
automatic step-up if we
increase the rider
fee.—Must be in writing.
•If an Owner rejects an
automatic step-up, they
retain the right to all future
automatic step-ups.
NOTE: The withdrawal
percentage will also increase if
You have crossed into another
age band prior to an automatic
step-up after the election date.
On each rider anniversary, the
WB will be set to the greatest
of:
1)The current WB:
2)The Policy Value on the
rider anniversary;
3)The highest Policy Value on
a rider monthiversarySM*;
or
4)The current WB
immediately prior to
anniversary processing
increased by the growth rate
percentage**
* Item 3) is set to zero if there
have been any excess
withdrawals in the current
rider year.
** Item 4) is set to zero after
the first 10 years or if there
have been any withdrawals in
the current rider year.
A step-up will occur if the
largest value is either 2) or 3)
above. A step-up will allow us
to change the rider fee
percentage after the 5th rider
anniversary.
•If the largest value is 1) or 4)
above, this is not considered
a step-up.
•Owner will have a 30 day
window after the rider
anniversary to reject an
automatic step-up if we
increase the rider
fee.—Must be in writing.
•If an Owner rejects an
automatic step-up, they
retain the right to all future
automatic step-ups.
NOTE: The withdrawal
percentage will also increase if
You have crossed into another
age band prior to an automatic
step-up after the election date.
On each rider anniversary, the
rider will receive an automatic
step-up if the WB is equal to
the Policy Value on the rider
anniversary immediately after
the WB reset on the rider
anniversary.
•If the Policy Value is not
greater than the current WB
no automatic step-up will
occur
•The withdrawal percentage
will also increase if You have
crossed into another age
band or rider year duration
prior to the step-up.
•The rider fee percentage
may increase or decrease at
the time of the step-up.
•Owner will have a 30 day
window after the rider
anniversary to reject an
automatic step-up if the
rider fee increased.
•If an Owner rejects an
automatic step-up, they
retain the right to all future
automatic step-ups.
Exercising Rider
“For Life” GMWB:
The policyholder is guaranteed
to be able to withdraw up to
the “For Life” MAWA until the
later of 1) the Annuitant's
death or 2) the “For Life”
MRWA is zero.
“Principal Back” GMWB:
The policyholder is guaranteed
to be able to withdraw up to
the “Principal Back” MAWA
until the “Principal Back”
Exercising Base Benefit: The
policyholder is guaranteed to
be able to withdraw up to the
RWA each rider year if the
Policy Value does not reach
zero as a result of an excess
withdrawal. The rider benefits
cease when the Annuitant2 has
died.
Exercising Base Benefit: The
policyholder is guaranteed to
be able to withdraw up to the
RWA each rider year if the
Policy Value does not reach
zero as a result of an excess
withdrawal. The rider benefits
cease when the Annuitant2 has
died.
Exercising Death Option:
This optional feature may be
elected with this rider. Upon
Exercising Base Benefit: The
policyholder is guaranteed to
be able to withdraw up to the
RWA each rider year (after the
attainment of the minimum
benefit age) without causing an
excess withdrawal, even if the
Policy Value is zero at the time
of withdrawal. The rider
benefits cease when the
Annuitant2 has died.
59
Rider Name
Guaranteed Principal
Solutions Rider (2005)3
Retirement Income Max®3
Retirement Income Choice®
1.63
Transamerica Income
EdgeSM3
Rider Form Number1
RGMB 4 0504
RGMB 41 0513
RGMB 41 0111 (NY)
RGMB 37 0809 - (w/o IE)
RGMB 38 0809 - (with IE)
RGMB 51 0616
 
MRWA is zero.
“GMAB”:
At the end of the GMAB
waiting period (currently 10
years), should the Policy Value
be less than the GFV, the
GMAB feature will add the
difference to the Policy Value
on a pro-rata basis based on
their current account value.
a)The addition to the Policy
will not be considered
premium and should not
affect any other Policy
calculations, including the
GMDB calculations.
b)At the end of the waiting
period, the GMAB will not
provide any more benefits,
unless the policyholder
chooses to upgrade the
rider.
 
the death of an Annuitant2,
this rider will pay an additional
death benefit amount equal to
the excess, if any, of the RDB
over the greater of the base
Policy death benefit or any
GMDB.
Exercising the Income
Enhancement Option4:
If qualifications are met, this
optional feature doubles the
income benefit percentage
until the Annuitant2 is no
longer confined (either has left
the facility or deceased).
Qualifications:
–Confinement must be due
to a medical necessity due to
physical or cognitive ailment.
–Must be the Annuitant2 who
is confined.
–Waiting period of 1 year
from the rider date before the
increase in the income benefit
percentage is applicable.
–Elimination period is 180
days within the last 12 months
which can be satisfied during
the waiting period.
–Proof of confinement is
required. This may be a
statement from a Physician or
a hospital or nursing facility
administrator.
–Qualification standards can
be met again on the
Annuitant's2 life.
 
Income Benefit or Other
Benefit Payout
Considerations
The GFV is the Policy Value
we are guaranteeing on the
GFV date. After the Rider
Issue Date, the GFV is equal to
the GFV on the Rider Issue
Date, plus a percentage of
premiums received after the
Rider Date as shown in the
table below, less an adjustment
for withdrawals.
Year Rec'd% Added to GFV
1100% 
290% 
380% 
470% 
560% 
6-1050% 
10+0% 
At the end of the GMAB
waiting period (currently 10
years), should the Policy Value
be less than the GFV, we will
add the difference to the Policy
Value on a pro-rata basis based
on their current Policy Value.
Growth: Benefit is not elected
separately but is built into the
rider. The WB will grow
annually. This will only be
credited on the rider
anniversary for up to 10 rider
years. This is not added on top
of a step-up if applicable. If a
withdrawal has occurred in the
current rider year growth will
not be applied.
NOTE: There is not an
adjustment or credit for partial
years of interest. Growth is not
accumulated daily. Only
calculated at the end of the
year if no withdrawals were
taken.
For riders issued prior to the
date of this prospectus, please
reference the “Appendix –
Prior Withdrawal/Growth
Percentages and Rider Fees” in
the Statement of Additional
Information.
Growth: Benefit is not elected
separately but is built into the
rider. The WB will grow
annually. This will only be
credited on the rider
anniversary for up to 10 rider
years. This is not added on top
of a step-up if applicable. If a
withdrawal has occurred in the
current rider year growth will
not be applied.
NOTE: There is not an
adjustment or credit for partial
years of interest. Growth is not
accumulated daily. Only
calculated at the end of the
year if no withdrawals were
taken.
For riders issued prior to the
date of this prospectus, please
reference the “Appendix –
Prior Withdrawal/Growth
Percentages and Rider Fees” in
the Statement of Additional
Information.
N/A
Rider Upgrade
•May upgrade any time after
the 3rd Anniversary by
terminating the rider and
adding the new rider in
place at that time, as long as
N/A
•Upgrades allowed within a
30-day window following
each successive 5th rider
anniversary.
N/A
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Rider Name
Guaranteed Principal
Solutions Rider (2005)3
Retirement Income Max®3
Retirement Income Choice®
1.63
Transamerica Income
EdgeSM3
Rider Form Number1
RGMB 4 0504
RGMB 41 0513
RGMB 41 0111 (NY)
RGMB 37 0809 - (w/o IE)
RGMB 38 0809 - (with IE)
RGMB 51 0616
 
the covered lives meet the
age requirements in effect at
that time.
•Must be prior to the
annuitant's 86th birthday
•An upgrade will reset the
MRWA, TWB, MAWA and
the GFV values.
•Rider Fee will be the fee that
applies to the new rider at
the time of upgrade.
 
•Rider availability and fees
may vary at time of upgrade
•Upgrades are subject to issue
age restrictions of the rider
at the time of upgrade.
Currently the maximum
upgrade age is 85 years old.
•An upgrade will reset the
WB and RDB.
•Rider Fee Percentage will be
the fee percentage that
applies to the new rider at
the time of upgrade.
•Growth percentage will be
the percentage available at
the time of upgrade.
 
Rider Termination
•The rider will be terminated
upon Policy surrender,
Annuitization or upgrade.
•The policyholder must wait
3 years from the Rider Start
Date to terminate.
•After the three-year waiting
period, the policyholder may
terminate the rider at any
time.
•The rider will be terminated
the date we receive Written
Notice from You requesting
termination.
•The rider will be terminated
upon Policy surrender,
Annuitization, Annuitant2
death or upgrade.
•The date the Policy to which
this rider is attached is
assigned or if the Owner is
changed without our
approval.
•Termination allowed within
30 day window following
each successive 5th rider
anniversary.
•The rider will be terminated
the date an excess
withdrawal reduces Your
Policy Value to zero, or we
receive Written Notice from
You requesting termination.
•The rider will be terminated
upon Policy surrender,
Annuitization, Annuitant2
death or upgrade.
•The date the Policy to which
this rider is attached is
assigned or if the Owner is
changed without our
approval.
•Termination allowed within
30 day window following
each successive 5th rider
anniversary.
•The rider will be terminated
the date an excess
withdrawal reduces Your
Policy Value to zero, or we
receive Written Notice from
You requesting termination.
•The rider will be terminated
upon Policy surrender,
Annuitization, Annuitant2
death or upgrade.
•The date the Policy to which
this rider is attached is
assigned or if the Owner is
changed without our
approval.
•Termination allowed within
30 day window following
each successive 5th rider
anniversary.
•The rider will be terminated
the date we receive Written
Notice from You requesting
termination.
(1) 
Rider form number may be found on the bottom left corner of your rider pages.
(2) 
If the rider's Joint Life option has been elected for an additional fee, the benefits and features available could differ from the Single Life Option based on the age of the Annuitant's spouse if younger.
(3) 
This rider and additional options may vary for certain policies and may not be available for all policies. This disclosure explains the material features of the riders. The application and operation of the riders are governed by the terms and conditions of the rider itself.
(4) 
Single and Joint Life Income Enhancement Options are not available in New York.
ADDITIONAL FEATURES
Systematic Payout Option
You can select at any time during the accumulation phase to receive regular withdrawals from Your Policy by using the systematic payout option. Any systematic withdrawal in excess of the cumulative interest credited from the Guaranteed Period Options at the time of the withdrawal may be subject to an Excess Interest Adjustment. Any systematic withdrawal in excess of Your remaining Surrender Charge Free Amount may be subject to a surrender charge. Any systematic withdrawal could reduce Your rider values (perhaps significantly). Systematic withdrawals can be taken monthly, quarterly, semi-annually, or annually. Each withdrawal must be at least $40. Monthly and quarterly systematic withdrawals must generally be taken by electronic funds transfer directly to Your checking or savings account. There is no charge for this benefit.
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Keep in mind that withdrawals under the systematic payout option may be taxable, and if taken before age 59½, may be subject to a 10% federal penalty tax.
Liquidity Rider - No Longer Available
The optional Liquidity Rider (only available with the B-Share) reduces the number of years each premium payment is subject to surrender charges. You can only elect this rider at the time You purchase the Policy.
The Liquidity Rider may vary for certain policies and may not be available for all policies, in all states, at all times or through all financial intermediaries. We may discontinue offering this benefit at any time for new sales. In some cases, a benefit not available through a financial intermediary may be obtained by contacting us directly. For more information on the options available for electing a benefit, please contact Your financial intermediary or our Administrative Office.
Surrender Charge Schedule. The Liquidity Rider reduces the number of years each premium payment is subject to surrender charges from seven years to four years. The surrender charge will remain unchanged from that of the B-Share for the first four years.
Rider Fee. There is an additional charge for this rider which is a percentage of the daily net asset value in the Separate Account which is deducted in calculating the accumulation unit values. The rider fee is only charged for the first four Policy Years.
Accumulation Unit Values. We intend to administer the removal of the Liquidity Rider fee by changing to a different class of Accumulation Units. This will result in adjusting the number of Accumulation Units and adjusting the unit value of the Subaccounts in which You were invested once the Liquidity Rider fee is no longer charged. The elimination of the fee and the adjustment in the number of Accumulation Units and unit values will not affect Policy Values.
Termination. The rider is irrevocable.
Please note:
•
This feature terminates upon Annuitization and there is a mandatory Annuity Commencement Date.
•
We may credit interest in the Fixed Account (if available) at a different rate if You select this rider.
•
The Liquidity Rider is not suitable for You if You are purchasing the Policy for a long-term investment.
Nursing Care and Terminal Condition Waiver
No surrender charges or Excess Interest Adjustments will apply if You take a withdrawal ($1,000 minimum), under certain circumstances, because You or Your spouse has been:
•
confined in a hospital or nursing facility for 30 days in a row after the Policy issue date; or
•
diagnosed with a terminal condition after the Policy issue date (usually a life expectancy of 12 months or less).
You may exercise this benefit at any time during the accumulation phase. This benefit is also available to the Annuitant or Annuitant's spouse if the Owner is not a natural person. There is no restriction on the maximum amount You may withdraw under this benefit. There is no charge for this benefit.
The Nursing Care and Terminal Condition Waiver may vary for certain policies and may not be available for all policies, in all states or at all times.
Unemployment Waiver
No surrender charges or Excess Interest Adjustments will apply to withdrawals after You or Your spouse become unemployed due to:
•
involuntary termination of employment
•
involuntary lay off;
In order to qualify, You (or Your spouse, whichever is applicable) must have been:
•
employed full time for at least two years prior to becoming unemployed;
•
employed full time on the Policy Date;
•
unemployed for at least 60 days in a row at the time of withdrawal;
•
must have a minimum Cash Value at the time of withdrawal of $5,000; and
•
You (or Your spouse) must be receiving unemployment benefits.
You must provide written proof from Your State's Department of Labor, which verifies that You qualify for and are receiving unemployment benefits at the time of withdrawal.
62
You may use this benefit at any time during the accumulation phase and for so long as You meet the criteria specified above. This benefit is also available to the Annuitant or Annuitant's spouse if the Owner is not a natural person. There is no restriction on the maximum amount You may withdraw under this benefit. There is no charge for this benefit.
The Unemployment Waiver may vary for certain policies and may not be available for all policies, in all states or at all times.
Telephone and Electronic Transactions
Currently, certain transactions may be made by telephone or other electronic means acceptable to us upon our receipt of the appropriate authorization. We may discontinue this option at any time. To access information and perform transactions electronically, we require You to create an account with a username and password, and to maintain a valid e-mail address.
We will not be liable for following instructions communicated by telephone or electronically we reasonably believe to be genuine. We will employ reasonable procedures to confirm that instructions we receive are genuine. Our procedures require You to provide information to verify Your identity when You call us and we will record conversations with You. We may also require written confirmation of the request. When someone contacts our Administrative Office and follows our procedures, we will assume You are authorizing us to act upon those instructions. For electronic transactions through the internet, You will need to provide Your username and password. You are responsible for keeping Your password confidential and must notify us of any loss, theft or unauthorized use of Your password.
Telephone and other electronic transactions must be received in good order while the New York Stock Exchange is open for regular trading to get same-day pricing of the transaction. Transactions received in good order on non-Business Days or after our close of business on Business Days will get next-day pricing. See OTHER INFORMATION – Sending Forms and Transaction Requests in Good Order. Please note that the telephone and/or electronic device transactions may not always be available. Any telephone, fax machine or other electronic device, whether it is Yours, Your service provider's, or Your financial representative(s) can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of Your request if the volume of transactions is unusually high, we might not have anyone available, or lines available, to take Your transaction. Although we have taken precautions to limit these problems, we cannot promise complete reliability under all circumstances. If You are experiencing problems, You should make Your request by writing to our Administrative Office.
We reserve the right to revoke Your telephone and other electronic transaction privileges at any time without revoking all Owners' privileges. We may deny telephone and electronic transaction privileges to market timers or disruptive traders.
Dollar Cost Averaging Program
During the accumulation phase, You may instruct us to automatically make transfers into one or more Subaccounts in accordance with Your allocation instructions. This is known as Dollar Cost Averaging. While Dollar Cost Averaging buys more Accumulation Units when prices are low and fewer Accumulation Units when prices are high, it does not guarantee profits or assure that You will not experience a loss.
Dollar Cost Averaging programs that may be available under Your Policy:
•
Traditional – You may specify the dollar amount to be transferred and the number of transfers, or just the number of transfers, in which case we will calculate the amount to be transferred. Unless a specified date is requested, transfers will begin as soon as the program is started. A minimum of $500 per transfer is required. The minimum number of transfers is 6 monthly transfers or 4 quarterly transfers, and the maximum is 24 monthly transfers or 8 quarterly transfers. You can elect to transfer from the Fixed Account, money market or other specified Subaccount. If You elect to transfer from the Fixed Account, or if You elect to transfer from the money market or other specified Subaccount and only the number of transfers is provided, we will transfer 100% of the remaining value in the elected source Subaccount for the final transfer. If the money market or other Subaccount is elected as the source Subaccount and a specified dollar amount is provided with the number of transfers, You must choose if You want to transfer all remaining value out of the source Subaccount or if You would like any remaining value to stay within the Subaccount.
•
Special – You may only elect either a six or twelve month program. Transfers will begin as soon as the program is started. You cannot transfer from another Investment Option into a Special Dollar Cost Averaging program. This program is only available for new premium payments, requires transfers from a fixed source, and may credit a higher or lower interest rate than a traditional program. A minimum of $500 per transfer is required ($3,000 or $6,000 to start a 6-month or 12-month program, respectively). If the value in the source fund is less than the scheduled transfer, 100% of the value remaining in the source fund will be transferred for the final transfer.
Unless a specific date is requested, the Dollar Cost Averaging program will begin the next market day after we have received in good order all necessary information and the minimum required amount. See Sending Forms and Transaction Requests in Good Order. Please Note: Dollar Cost Averaging programs will not begin on the 29th, 30th or 31st. If a program would have started on one of those
63
dates, it will start on the 1st Business Day of the following month. If we receive additional premium payments while a Dollar Cost Averaging program is running, and You instruct us to add it to the Dollar Cost Averaging program, the amount of the Dollar Cost Averaging transfers will increase proportionally.
NOTE CAREFULLY:
New Dollar Cost averaging instructions are required to start a new Dollar Cost Averaging program once the previous Dollar Cost Averaging program has completed. Additional premium payments, absent new allocation instructions, received after a Dollar Cost Averaging program has completed, will be allocated according to the current premium payment allocations at that time but will not reactivate a completed Dollar Cost Averaging program.
IF:
•
we do not receive all necessary information to begin or restart a Dollar Cost Averaging program
THEN:
•
any amount allocated to a fixed source will be invested in that fixed source but will be transferred to the money market Investment Option within 30 days of allocation to fixed source if new Dollar Cost Averaging instructions are not received;
•
any amount allocated to a variable source will be invested in that variable source and will remain in that variable Investment Option; and
•
new Dollar Cost Averaging instructions will be required to begin a Dollar Cost Averaging program.
You should consider Your ability to continue a Dollar Cost Averaging program during all economic conditions. Transfers from a Dollar Cost Averaging fixed source are not subject to an Excess Interest Adjustment. A Dollar Cost Averaging program can be used in conjunction with Asset Rebalancing and may be available with the Guaranteed Lifetime Withdrawal Benefits. Any amount in the Dollar Cost Averaging source account or any Fixed Account are ignored for the purposes of Asset Rebalancing. There is no charge for this benefit.
The Dollar Cost Averaging Program may vary for certain policies and may not be available for all policies, in all states or at all times. See Your Policy for availability of the Fixed Account options. We reserve the right to terminate the availability of any Dollar Cost Averaging program at any time.
Asset Rebalancing
During the accumulation phase You can instruct us to automatically rebalance the amounts in Your Subaccounts to maintain Your desired asset allocation. This feature is called asset rebalancing and can be started and stopped at any time. If a transfer is requested, we will honor the requested transfer and discontinue asset rebalancing. New instructions are required to start asset rebalancing. Asset rebalancing ignores amounts in the Fixed Account. You can choose to rebalance monthly, quarterly, semi-annually, or annually. Asset rebalancing can be used in conjunction with a Guaranteed Lifetime Withdrawal Benefit. Please note, any amounts rebalanced may be immediately transferred to the Portfolio Allocation Method (PAM) Investment Options as applicable under the Portfolio Allocation Method. There is no charge for this benefit. We reserve the right to terminate the availability of any asset rebalancing program at any time.
Loans
No Loans are available on this Policy.
TAX INFORMATION
NOTE: We have prepared the following information on federal taxes as a general discussion of the subject. It is not intended as tax advice to any taxpayer. The federal tax consequences discussed herein reflects our understanding of current law, and the law may change. No representation is made regarding the likelihood of continuation of the present federal tax law or of the current interpretations by the Internal Revenue Service. The discussion briefly references federal estate, gift and generation-skipping transfer taxes, but principally discusses federal income taxes. No attempt is made to consider any applicable state or other income tax laws, any state and local estate or inheritance tax, or other tax consequences of ownership or receipt of distributions under the Policy. You should consult Your own financial professional about Your own circumstances.
64
Introduction
Deferred annuity policies are a way of setting aside money for future needs like retirement. Congress recognized how important saving for retirement is and provided special rules in the Internal Revenue Code (the “Code”) for annuities. Simply stated, these rules generally provide that individuals will not be taxed on the earnings, if any, on the money held in an annuity Policy until withdrawn. This is referred to as tax deferral. When a non-natural person (e.g., corporation or certain trusts) owns a nonqualified Policy, the Policy will generally not be treated as an annuity for tax purposes. Thus, the Owner must generally include in income any increase in the Policy Value over the investment in the Policy during each taxable year.
There are different rules as to how You will be taxed depending on how You take the money out and the type of Policy-qualified or nonqualified.
If You purchase the Policy as an individual retirement annuity or as a part of a 403(b) plan, 457 plan, a pension plan, a profit sharing plan (including a 401(k) plan), or certain other employer sponsored retirement programs, Your Policy is referred to as a qualified Policy. There is no additional tax deferral benefit derived from placing qualified funds into a variable annuity. Features other than tax deferral should be considered in the purchase of a qualified Policy. There are limits on the amount of contributions You can make to a qualified Policy. Other restrictions may apply including terms of the plan in which You participate. To the extent there is a conflict between a plan's provisions and a Policy's provisions, the plan's provisions will control.
If You purchase the Policy other than as part of any arrangement described in the preceding paragraph, the Policy is referred to as a nonqualified Policy.
You will generally not be taxed on increases in the value of Your Policy, whether qualified or nonqualified, until a distribution occurs (e.g., as a surrender, withdrawal, or as annuity payments). However, You may be subject to current taxation if You assign or pledge or enter into an agreement to assign or pledge any portion of the Policy. You may also be subject to current taxation if You make a gift of a nonqualified Policy without valuable consideration. All amounts received from the Policy that are includible in income are taxed at ordinary income rates; no amounts received from the Policy are taxable at the lower rates applicable to capital gains.
The Internal Revenue Service (“IRS”) has not reviewed the Policy for qualification as an IRA annuity, and has not addressed in a ruling of general applicability whether the death benefit options and riders available, with the Policy, if any, comport with IRA qualification requirements.
The value of living and death benefit options and riders elected may need to be taken into account in calculating minimum required distributions from a qualified plan/or Policy.
We may occasionally enter into settlements with Owners and beneficiaries to resolve issues relating to the Policy. Such settlements will be reported on the applicable tax form (e.g., Form 1099) provided to the taxpayer and the taxing authorities.
Taxation of Us
We are at present taxed as a life insurance company under part I of Subchapter L of the Code. The Separate Account is treated as a part of us and, accordingly, will not be taxed separately as a “regulated investment company” under Subchapter M of the Code. We do not expect to incur any federal income tax liability with respect to investment income and net capital gains arising from the activities of the Separate Account retained as part of the reserves under the Policy. Based on this expectation, it is anticipated that no charges will be made against the Separate Account for federal income taxes. If in future years, any federal income taxes are incurred by us with respect to the Separate Account, we may make a charge to that account. We may benefit from any deductions for dividends received by the Separate Account or foreign tax credits attributable to taxes paid by certain underlying fund portfolios to foreign jurisdictions to the extent permitted under federal tax law.
Tax Status of a Nonqualified Policy
Diversification Requirements. In order for a nonqualified variable Policy which is based on a segregated asset account to qualify as an annuity Policy under Section 817(h) of the Code, the investments made by such account must be “adequately diversified” in accordance with Treasury Regulations. The Regulations apply a diversification requirement to each of the Subaccounts. Each Separate Account, through its underlying fund portfolios and their portfolios, intends to comply with the diversification requirements of the Regulations. We have entered into agreements with each underlying fund Portfolio Company that require the portfolios to be operated in compliance with the Regulations but we do not have control over the underlying fund Portfolio Companies. The Owners bear the risk that the entire contract could be disqualified as an annuity Policy under the Code due to the failure of a Subaccount to be deemed to be “adequately diversified”.
65
Owner Control. In some circumstances, Owners of variable policies who retain excessive control over the investment of the underlying Separate Account assets may be treated as the Owners of those assets and may be subject to tax on income produced by those assets. In Revenue Ruling 2003-91, the IRS stated that whether the Owner of a variable Policy is to be treated as the Owner of the assets held by the insurance company under the Policy will depend on all of the facts and circumstances.
Revenue Ruling 2003-91 also gave an example of circumstances under which the Owner of a variable Policy would not possess sufficient control over the assets underlying the Policy to be treated as the Owner of those assets for federal income tax purposes. To the extent the circumstances relating to the issuance and ownership of a Policy vary from those described in Revenue Ruling 2003-91, Owners bear the risk that they will be treated as the Owner of Separate Account assets and taxed accordingly.
We believe that the Owner of a Policy should not be treated as the Owner of the underlying assets. We reserve the right to modify the policies to bring them into conformity with applicable standards should such modification be necessary to prevent Owners of the policies from being treated as the Owners of the underlying Separate Account assets. Concerned Owners should consult their own financial professionals regarding the tax matter discussed above.
Distribution Requirements. The Code requires that nonqualified policies contain specific provisions for distribution of Policy proceeds upon the death of any Owner. In order to be treated as an annuity Policy for federal income tax purposes, the Code requires that such policies provide that if any Owner dies on or after the annuity starting date and before the entire interest in the Policy has been distributed, the remaining portion must be distributed at least as rapidly as under the method in effect on such Owner's death. If any Owner dies before the annuity starting date, the entire interest in the Policy must generally be distributed (1) within 5 years after such Owner's date of death or (2) to (or for the benefit of) a designated beneficiary, over the life of such designated beneficiary (or over a period not extending beyond the life expectancy of such beneficiary) and such distribution begin not later than 1 year after the date of the Owner’s death (also known as a “stretch” payout). The designated beneficiary must be an individual. The only method we use for making distribution payments from a nonqualified “stretch” payment option is the required minimum distribution method as set forth in Revenue Ruling 2022-6. The applicable payments are calculated using the Single Life Expectancy Table set forth in Treasury Regulations 1.401(a)(9)-9(b). However, if upon such Owner's death the Owner's surviving spouse is the designated beneficiary of the Policy, then the Policy may be continued with the surviving spouse as the new Owner. If any Owner is a non-natural person (except in the case of certain grantor trusts), then for purposes of these distribution requirements, the primary Annuitant shall be treated as an Owner and any death or change of such primary Annuitant shall be treated as the death of an Owner.
The nonqualified policies contain provisions intended to comply with these requirements of the Code. No regulations interpreting these requirements of the Code have yet been issued and thus no assurance can be given that the provisions contained in the policies satisfy all such Code requirements. The provisions contained in the policies will be reviewed and modified if necessary to assure that they comply with the Code requirements when clarified by regulation or otherwise.
Taxation of a Nonqualified Policy
The following discussion assumes the Policy qualifies as an annuity Policy for federal income tax purposes.
In General. Code Section 72 governs taxation of annuities in general. We believe that an Owner who is an individual will not be taxed on increases in the value of a Policy until such amounts are surrendered or distributed. For this purpose, the assignment, pledge, or agreement to assign or pledge any portion of the Policy Value as collateral for a loan generally will be treated as a distribution of such portion. You may also be subject to current taxation if You make a gift of a nonqualified Policy without valuable consideration. The taxable portion of a distribution is taxable as ordinary income.
Non-Natural Persons. Pursuant to Section 72(u) of the Code, a nonqualified Policy held by a taxpayer other than a natural person generally will not be treated as an annuity Policy under the Code; accordingly, an Owner who is not a natural person will recognize as ordinary income for a taxable year the excess, if any, of the Policy Value over the “investment in the contract”. There are some exceptions to this rule and a prospective purchaser of the Policy that is not a natural person should discuss these rules with a competent financial professional. A Policy owned by a trust using the grantor's social security number as its taxpayer identification number will be treated as owned by the grantor (natural person) for the purposes of our application of Section 72 of the Code. Consult a financial professional for more information on how this may impact Your Policy.
Different Individual Owner and Annuitant
If the Owner and Annuitant on the Policy are different individuals, there may be negative tax consequences to the Owner and/or beneficiaries under the Policy if the Annuitant predeceases the Owner including, but not limited, to the assessment of penalty tax and the loss of certain death benefit distribution options. You may wish to consult Your legal counsel or financial professional if You are considering designating a different individual as the Annuitant on Your Policy to determine the potential tax ramifications of such a designation.
66
Annuity Starting Date
This section makes reference to the annuity starting date as defined in Section 72 of the Code and the applicable regulations. Generally, the definition of annuity starting date will correspond with the definition of Annuity Commencement Date used in Your Policy and the dates will be the same. However, in certain circumstances, Your annuity starting date and Annuity Commencement Date will not be the same date. If there is a conflict between the definitions, we will interpret and apply the definitions in order to ensure Your Policy maintains its status as an annuity Policy for federal income tax purposes. You may wish to consult a financial professional for more information on when this issue may arise.
It is possible that at certain advanced ages a Policy might no longer be treated as an annuity contract if the Policy has not been Annuitized before that age or have other tax consequences. You should consult with a financial professional about the tax consequences in such circumstances.
Taxation of Annuity Payments
Although the tax consequences may vary depending on the Annuity Payment Option You select, in general, for nonqualified and certain qualified policies, only a portion of the annuity payments You receive will be includable in Your gross income.
In general, the excludable portion of each annuity payment You receive will be determined as follows:
•
Fixed payments-by dividing the “investment in the Policy” on the annuity starting date by the total expected return under the Policy (determined under Treasury regulations) for the term of the payments. This is the percentage of each annuity payment that is excludable.
•
Variable payments-by dividing the “investment in the Policy” on the annuity starting date by the total number of expected periodic payments. This is the amount of each annuity payment that is excludable.
The remainder of each annuity payment is includable in gross income. Once the “investment in the Policy” has been fully recovered, the full amount of any additional annuity payments is includable in gross income and taxed as ordinary income. The “investment in the Policy” is generally equal to the premiums You pay for the Policy, reduced by any amounts You have previously received from the Policy that are excludible from gross income.
If You select more than one Annuity Payment Option, special rules govern the allocation of the Policy's entire “investment in the Policy” to each such option, for purposes of determining the excludable amount of each payment received under that option. We advise You to consult a competent financial professional as to the potential tax effects of allocating amounts to any particular Annuity Payment Option.
If, after the annuity starting date, annuity payments stop because an Annuitant died, the excess (if any) of the “investment in the Policy” as of the annuity starting date over the aggregate amount of annuity payments received that was excluded from gross income may possibly be allowable as a deduction on Your tax return.
Taxation of Surrenders and Withdrawals - Nonqualified Policies
When You surrender Your Policy, You are generally taxed on the amount that Your surrender proceeds exceeds the “investment in the Policy”. The “investment in the Policy” is generally equal to the premiums You pay for the Policy, reduced by any amounts You have previously received from the Policy that are excludible from gross income. Withdrawals are generally treated first as taxable income to the extent of the excess in the Policy Value over the “investment in the policy.” Distributions taken under the systematic payout option are treated for tax purposes as withdrawals, not annuity payments. In general, loans, pledges, and collateral assignments as security for a loan are taxed in the same manner as withdrawals and surrenders. You may also be subject to current taxation if You make a gift of a nonqualified Policy without valuable consideration. All taxable amounts received under a Policy are subject to tax at ordinary rather than capital gain tax rates.
If Your Policy contains an Excess Interest Adjustment feature (also known as a market value adjustment), then Your Policy Value immediately before a Policy withdrawal (or transaction taxed like a withdrawal) may have to be increased by any positive Excess Interest Adjustments that result from the transaction. There is, however, no definitive guidance on the proper tax treatment of Excess Interest Adjustments, and You may want to discuss the potential tax consequences of an Excess Interest Adjustment with Your financial professional.
The Code also provides that amounts received from the Policy that are includible in gross income (including the taxable portion of some annuity payments) may be subject to a penalty tax. The amount of the penalty tax is equal to 10% of the amount that is includable in income. Some withdrawals and other amounts will be exempt from the penalty tax. Amounts received that are not subject to the penalty tax include, among others, any amounts: (1) paid on or after the taxpayer reaches age 59½; (2) paid after an Owner (or where the Owner is a non-natural person, an Annuitant) dies; (3) paid if the taxpayer becomes disabled (as that term is
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defined in the Code); (4) paid in a series of substantially equal payments made annually (or more frequently) over the life of the taxpayer or the joint life of the taxpayer and the taxpayer's designated beneficiary; (5) paid under an immediate annuity; or (6) which come from premium payments made prior to August 14, 1982. Regarding the disability exception, because we cannot verify that the Owner is disabled, we will report such withdrawals to the IRS as early withdrawals with no known exception from the penalty tax.
Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. You may wish to consult a financial professional for more information regarding the imposition of penalty tax.
Guaranteed Lifetime Withdrawal Benefits
For policies with a Guaranteed Lifetime Withdrawal Benefit or a Guaranteed Minimum Accumulation Benefit the application of certain tax rules, particularly those rules relating to distributions from Your Policy, are not entirely clear. It is possible that the withdrawal base (with respect to the Guaranteed Lifetime Withdrawal Benefits) and the guaranteed future value (with respect to the Guaranteed Minimum Accumulation Benefit) could be taken into account to determine the Policy Value that is used to calculate required distributions and the amount of the distribution that would be included in income. The proper treatment of the Income Enhancement Option under a Guaranteed Lifetime Withdrawal Benefit is unclear. It is possible that the IRS could determine that the benefit provides some form of long-term care insurance. In that event, the Internal Revenue Service may determine the Income Enhancement Option is an incidental benefit with adverse consequences for qualification as an Individual Retirement Annuity, You could be treated as in receipt of some amount of income attributable to the value of the benefit even though You have not received a payment from Your Policy, and the amount of income attributable to guaranteed lifetime withdrawal payments could be affected. In addition, if the Income Enhancement Benefit causes an increase in payments calculated to meet the Required Minimum Distribution requirements it may violate the rules governing such distributions with adverse tax consequences. In view of this uncertainty, You should consult a financial professional with any questions.
Aggregation
All nonqualified deferred annuity policies that are issued by us (or our affiliates) to the same Owner (policyholder) during the same calendar year are treated as one annuity for purposes of determining the amount includable in the Owner's income when a taxable distribution (other than annuity payments) occurs. If You are considering purchasing multiple policies from us (or our affiliates) during the same calendar year, You may wish to consult with Your financial professional regarding how aggregation will apply to Your policies.
Tax-Free Exchanges of Nonqualified Policies
We may issue the nonqualified Policy in exchange for all or part of another annuity contract that You own. Such an exchange will be tax free if certain requirements are satisfied. If the exchange is tax free, Your investment in the Policy immediately after the exchange will generally be the same as that of the annuity contract exchanged, increased by any additional premium payment made as part of the exchange. Your Policy Value immediately after the exchange may exceed Your investment in the Policy. That excess may be includable in income should amounts subsequently be withdrawn or distributed from the Policy (e.g., as a withdrawal, surrender, annuity income payment or death benefit).
If You exchange part of an existing contract for the Policy, and within 180 days of the exchange You received a payment other than certain annuity payments (e.g., You take a withdrawal) from either contract, the exchange may not be treated as a tax free exchange. Rather, some or all of the amount exchanged into the Policy could be includible in Your income and subject to a 10% penalty tax.
You should consult Your financial professional in connection with an exchange of all or part of an annuity contract for the Policy, especially if You may take a withdrawal from either contract within 180 days after the exchange.
Medicare Tax
Distributions from nonqualified annuity policies are considered “investment income” for purposes of the Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may be applied to some or all of the taxable portion of distributions (e.g., earnings) to individuals, trusts, and estates whose income exceeds certain threshold amounts. We are required to report distributions taken from nonqualified annuity policies as being potentially subject to this tax. While distributions from qualified policies are not subject to the tax, such distributions may be includable in income for purposes of determining whether certain Medicare Tax thresholds have been met. As such, distributions from Your qualified Policy could cause Your other investment income to be subject to the tax. Please consult a financial professional for more information.
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Same Sex Relationships
Same sex couples have the right to marry in all states. The parties to each marriage that is valid under the law of any state will each be treated as a spouse as defined in this Policy. Individuals in other arrangements, such as civil unions, registered domestic partnerships, or other similar arrangements, that are treated as a valid marriage under the applicable state law, will each be treated as a spouse as defined in this Policy for state law purposes. However, individuals in other arrangements that are not recognized as marriage under the relevant state law, will not be treated as married or as spouses as defined in this Policy for federal tax purposes. Therefore, exercise of the spousal continuation provisions of this Policy or any riders by individuals who do not meet the definition of “spouse” may have adverse tax consequences and/or may not be permissible. Please consult a financial professional for more information on this subject.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the Policy because of Your death or the death of the Annuitant. Generally, such amounts should be includable in the income of the recipient: (1) if distributed in a lump sum, these amounts are taxed in the same manner as a surrender; (2) if distributed via withdrawals, these amounts are taxed in the same manner as surrenders; or (3) if distributed under an Annuity Payment Option, these amounts are taxed in the same manner as annuity payments.
Transfers, Assignments or Exchanges of Policies
A transfer of ownership or assignment of a Policy, the designation of an Annuitant or payee or other beneficiary who is not also the Owner, the exchange of a Policy and certain other transactions, or a change of Annuitant other than the Owner, may result in certain income or gift tax consequences to the Owner that are beyond the scope of this discussion. An Owner contemplating any such transaction or designation should contact a competent financial professional with respect to the potential tax effects.
Charges
It is possible that the IRS may take a position that fees for certain optional benefits (e.g., death benefits other than the Return of Premium death benefit) are deemed to be taxable distributions to You. In particular, the IRS may treat fees associated with certain optional benefits as a taxable withdrawal, which might also be subject to a tax penalty if the withdrawal occurs prior to age 59½. Although we do not believe that the fees associated with any optional benefit provided under the Policy should be treated as taxable withdrawals, the tax rules associated with these benefits are unclear, and we advise that You consult Your financial professional prior to selecting any optional benefit under the Policy.
Federal Estate, Gift and Generation-Skipping Transfer Taxes
The estate and gift tax unified credit basic exclusion amount is $13.61 million for 2024 and will be indexed for inflation (using the C-CPI-U), for each taxable year through January 1, 2026. The maximum rate is 40%.
The uncertainty as to how the current law might be modified in the future underscores the importance of seeking guidance from a competent professional to help ensure that Your estate plan adequately addresses Your needs and that of Your beneficiaries under all possible scenarios.
Federal Estate Taxes. While no attempt is being made to discuss the Federal estate tax implications of the Policy in detail, a purchaser should keep in mind that the value of an annuity Policy owned by a decedent and payable to a beneficiary by virtue of surviving the decedent is included in the decedent's gross estate. Depending on the terms of the annuity Policy, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the designated beneficiary or the actuarial value of the payments to be received by the beneficiary. Consult an estate planning professional for more information.
Generation-Skipping Transfer Tax. Under certain circumstances, the Code may impose a “generation skipping transfer tax” when all or part of an annuity Policy is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Owner. Regulations issued under the Code may require us to deduct the tax from Your Policy, or from any applicable payment, and pay it directly to the IRS.
Qualified Policies
The qualified Policy is designed for use with several types of tax-qualified retirement plans which are briefly described below. The tax rules applicable to participants and beneficiaries in tax-qualified retirement plans vary according to the type of plan and the terms and conditions of the plan. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from contributions in excess of specified limits, distributions prior to age 59½ (subject to certain exceptions), distributions that do not conform to specified commencement and minimum distribution rules, and in other specified
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circumstances. The distribution rules under Section 72(s) of the Code do not apply to annuities provided under a plan described in Sections 401(a), 403(a), 403(b), 408 or 408A of the Code, but other similar rules may. Some retirement plans are subject to distribution and other requirements that are not incorporated into the policies or our Policy administration procedures. Owners, employers, participants, and beneficiaries are responsible for determining that contributions, distributions, and other transactions with respect to the policies comply with applicable law.
Distribution Requirements. Under Section 401(a) and/or Section 401(k) Contracts, the underlying tax-qualified plan may require payment of the death benefit in the form of a “qualified pre-retirement survivor annuity” or other payment method.
The information below generally applies to Owners who die after 2019. Post-death required distribution requirements are complex and frequently unclear. Please consult with Your financial professional for information relating to required post-death distributions for an Owner who died prior to 2020 or for information specific to Your own unique situation.
Upon a Owner’s death, if the Owner does not have a Beneficiary who is an individual, the Owner’s entire interest in the contract must generally be (1) distributed by the end of the calendar year ending five years after the date of death if the Owner died before the Owner was required to receive distributions under the contract or (2) at least as rapidly as the method being used as of the date of the Owner’s death if the Owner died after the Owner was required to begin receiving distributions under the contract. An exception may apply if the Beneficiary is a trust, and all of the trust Beneficiaries are individuals. If the Owner has a Beneficiary, who is an individual, but is not an eligible designated Beneficiary, the Owner’s entire interest in the contract must generally be distributed by the end of the calendar year ending ten years after the date of death.
If the Owner has a Beneficiary who is an eligible designated Beneficiary, the eligible designated Beneficiary may choose to receive the Owner’s interest under the contract either:
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by the end of the calendar year ending ten years after the date of death
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as an annuity over the life of the eligible designated Beneficiary or over a period not extending beyond the life expectancy of that Beneficiary, provided that such distributions begin within by the end of the calendar year following the calendar year of the Owner’s death.
An eligible designated Beneficiary is a Beneficiary who, meets any of the following criteria as of the date of the Owner’s death:
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is the Owner’s spouse
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the Owner’s child who has not reached the age of majority, but any remaining interest must be distributed within 10 years of when the child reaches the age of majority
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is disabled within the meaning of IRC section 72(m)(7)
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is chronically ill individual within the meaning of section 7702B(c)(2)
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is not more than 10 years younger than the Owner.
If the Beneficiary is the Owner’s spouse, distributions are not required to be made until the April 1st after the end of the calendar year in which the Owner would have attained age 73 if the spouse dies before distributions begin, the rules discussed above will apply as if the spouse were the Owner. If a spouse is the surviving Beneficiary, the spouse may elect to maintain an investment in the contract to the extent permitted by the Owner’s retirement arrangement.
Traditional Individual Retirement Annuities. In order to qualify as a traditional individual retirement annuity under Section 408(b) of the Code, a Policy must satisfy certain conditions: (i) the Owner must be the Annuitant; (ii) the Policy generally is not transferable by the Owner, e.g., the Owner may not designate a new Owner, designate a contingent Owner or assign the Policy as collateral security; (iii) subject to special rules, the total premium payments for any calendar year may not exceed the amount specified in the Code for the year, except in the case of a rollover amount or contribution under Section 402(c), 402(e)(6), 403(a)(4), 403(b)(8), 403(b)(10), 408(d)(3) or 457(e)(16) of the Code; (iv) annuity payments or withdrawals according to the requirements in the IRS regulations (minimum required distributions) must begin no later than April 1 of the calendar year following the calendar year in which the Annuitant attains age 73 (age 72 if the Annuitant attained age 72 before 1/1/2023, or age 70½ if the Annuitant attained age 70½ before 1/1/2020); (v) an Annuity Payment Option with a period certain that will guarantee annuity payments beyond the life expectancy of the Annuitant and the beneficiary may not be selected; (vi) certain payments of death benefits must be made in the event the Annuitant dies prior to the distribution of the Policy Value; (vii) the entire interest of the Owner is non-forfeitable; and (viii) the premiums must not be fixed. Policies intended to qualify as traditional individual retirement annuities under Section 408(b) of the Code contain such provisions. Amounts in the individual retirement annuity (other than nondeductible contributions) generally are taxed only when distributed from the annuity. Distributions prior to age 59½ (unless certain exceptions apply) are subject to a 10% penalty tax.
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SIMPLE and SEP IRAs are types of IRAs that allow employers to contribute to IRAs on behalf of their employees. SIMPLE IRAs permit certain small employers to establish SIMPLE plans as provided by section 408(p) of the Code, under which employees may elect to defer to a SIMPLE IRA a specified percentage of compensation. The sponsoring employer is required to make matching or non-elective contributions on behalf of employees. Distributions from SIMPLE IRAs are subject to the same restrictions that apply to IRA distributions. Subject to certain exceptions, distributions prior to age 59½ are subject to a 10 percent penalty tax, which is increased to 25 percent if the distribution occurs within the first two years after the commencement of the employee's participation in the plan. SEP IRAs permit employers to make contributions to IRAs on behalf of their employees, up to a specified dollar amount for the year and subject to certain eligibility requirements as provided by Section 408(k) of the Code. Distributions from SEP IRAs are subject to the same rules that apply to IRA distributions and are taxed as ordinary income.
The IRS has not reviewed this Policy for qualification as a traditional IRA, SIMPLE IRA or SEP IRA, and has not addressed in a ruling of general applicability whether any death benefits available under the Policy comport with qualification requirements.
Roth Individual Retirement Annuities (Roth IRA). The Roth IRA, under Section 408A of the Code, contains many of the same provisions as a traditional IRA. However, there are some differences. First, the contributions are not deductible and must be made in cash or as a rollover or transfer from another Roth IRA, a traditional IRA or other allowed qualified plan. A rollover from or conversion of an IRA to a Roth IRA may be subject to tax. The ability to make cash contributions to Roth IRAs is available to individuals with earned income and whose modified adjusted gross income is under a specified dollar amount for the year. Subject to special rules, the amount per individual that may be contributed to all IRAs (Roth and traditional) is an amount specified in the Code for the year. Secondly, the distributions are taxed differently. The Roth IRA offers tax-free distributions when taken 5 tax years after the first contribution to any Roth IRA of the individual and taken after one of the following: attaining age 59½, to pay for qualified first time home buyer expenses (lifetime maximum of $10,000), or due to death or disability. All other distributions are subject to income tax when taken from earnings and may be subject to a penalty tax unless an exception applies. Please note that specific tax ordering rules apply to Roth IRA distributions. Unlike the traditional IRA, there are no minimum required distributions during the Owner's lifetime; however, minimum required distributions at death are generally the same as for traditional IRAs.
The IRS has not reviewed this Policy for qualification as a Roth IRA, and has not addressed in a ruling of general applicability whether any death benefits available under the Policy comport with qualification requirements.
Section 403(b) Plans. Under Section 403(b) of the Code, payments made by public school systems and certain tax exempt organizations to purchase policies for their employees are generally excludable from the gross income of the employee, subject to certain limitations. However, such payments may be subject to Federal Insurance Contributions Act (FICA or Social Security) taxes. The Policy includes a death benefit that in some cases may exceed the greater of the premium payments or the Policy Value. Additionally, in accordance with the requirements of the Code, Section 403(b) annuities generally may not permit distribution of (i) elective contributions made in years beginning after December 31, 1988, and (ii) earnings on those contributions, and (iii) earnings on amounts attributed to elective contributions held as of the end of the last year beginning before January 1, 1989, unless certain events have occurred. Specifically distributions of such amounts will be allowed only upon the death of the employee, on or after attainment of age 59½, severance from employment, disability, or financial hardship, except that income attributable to elective contributions may not be distributed in the case of hardship. These rules may prevent the payment of guaranteed withdrawals under a Guaranteed Lifetime Withdrawal Benefit prior to age 59½. For policies issued after 2008, amounts attributable to non-elective contributions may be subject to distribution restrictions specified in the employer's section 403(b) plan. Employers using the Policy in connection with Section 403(b) plans may wish to consult with their financial professional.
Pursuant to tax regulations, we generally are required to confirm, with Your 403(b) plan sponsor or otherwise, that surrenders, loans or transfers You request from a 403(b) Policy comply with applicable tax requirements before we process Your request. We will defer such payments You request until all information required under the tax law has been received. By requesting a surrender or transfer, You consent to the sharing of confidential information about You, the Policy, and transactions under the Policy and any other 403(b) policies or accounts You have under the 403(b) plan among us, Your employer or plan sponsor, any plan administrator or record keeper, and other product providers.
Pension and Profit-Sharing Plans. Sections 401(a) and 403(a) of the Code permit employers to establish various types of retirement plans for employees and self-employed individuals to establish qualified plans for themselves and their employees. Such retirement plans may permit the purchase of the policies to accumulate retirement savings. Adverse tax consequences to the plan, the participant or both may result if the Policy is assigned or transferred to any individual as a means to provide benefit payments. Contributions to and distributions from such plans are limited by the Code and may be subject to penalties.
Deferred Compensation Plans. Section 457(b) of the Code, while not actually providing for a qualified plan as that term is normally used, provides for certain deferred compensation plans established and maintained by state and local governments (and their agencies and instrumentalities) and tax exempt organizations. Under such plans a participant may be able to specify the form of investment in which his or her participation will be made. For non-governmental Section 457(b) plans, all such investments, however, are typically
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owned by, and are subject to, the claims of the general creditors of the sponsoring employer. Depending on the terms of the particular plan, a non-government employer may be entitled to draw on deferred amounts for purposes unrelated to its Section 457(b) plan obligations. In general, all amounts received under a non-governmental Section 457 plan are taxable in the year paid (or in the year paid or made available in the case of a non-governmental 457(b) plan). Distributions from non-governmental 457(b) plans are subject to federal income tax withholding as wages, distributions from governmental 457(b) plans are subject to withholding as “eligible rollover distributions” as described in the section entitled “Withholding.” below. Contributions to and distributions from such plans are limited by the Code and may be subject to penalties. Deferred compensation plans of governments and tax-exempt entities that do not meet the requirements of Section 457(b) are taxed under Section 457(f), which means compensation deferred under the plan is included in gross income in the first year in which the compensation is not subject to substantial risk of forfeiture.
Ineligible Owners-Qualified
We currently will not issue new policies to/or for the following plans: 403(a), 403(b), 412(i)/412(e)(3), 419, 457 (we will in certain limited circumstances accept 457(f) plans), employee stock ownership plans, Keogh/H.R.-10 plans and any other types of plans at our sole discretion.
Taxation of Surrenders and Withdrawals - Qualified Policies
In the case of a withdrawal under a qualified Policy (other than from a deferred compensation plan under Section 457 of the Code), a pro rata portion of the amount You receive is taxable, generally based on the ratio of Your “investment in the Policy” to Your total account balance or accrued benefit under the retirement plan. Your “investment in the Policy” generally equals the amount of any non-deductible premium payments made by You or on Your behalf. If You do not have any non-deductible premium payments, Your investment in the contract will be treated as zero.
In addition, a penalty tax may be assessed on amounts surrendered from the Policy prior to the date You reach age 59½, unless You meet one of the exceptions to this rule which are similar to the penalty exceptions for distributions from nonqualified policies discussed above. However, the exceptions applicable for qualified policies differ from those provided to nonqualified policies. You may wish to consult a financial professional for more information regarding the application of these exceptions to Your circumstances. You may also be required to begin taking minimum distributions from the Policy by a certain date. The terms of the plan may limit the rights otherwise available to You under the Policy.
Qualified Plan Required Distributions
For qualified plans under Section 401(a), 403(a), 403(b), and 457, the Code requires that distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the Owner (or plan participant) (i) reaches age 73 (age 72 if the Annuitant attained age 72 before 1/1/2023, or age 70½ if the annuitant attained age 70½ prior to 1/1/2020) or (ii) retires, and must be made in a specified form or manner. If a participant is a “5 percent Owner” (as defined in the Code), or in the case of an IRA (other than a Roth IRA which is not subject to the lifetime required minimum distribution rules), distributions generally must begin no later than April 1 of the year following the calendar year in which the Owner (or plan participant) reaches 73 (age 72 if the Annuitant attained age 72 before 1/1/2023, or age 70½ if the annuitant attained age 70½ prior to 1/1/2020). The actuarial present value of death and/or living benefit options and riders elected may need to be taken into account in calculating required minimum distributions. Please consult with your financial professional to learn more about an optional living or death benefit prior to purchase.
Each Owner is responsible for requesting distributions under the Policy that satisfy applicable tax rules. We do not attempt to provide more than general information about the use of the Policy with the various types of retirement plans. Purchasers of policies for use with any retirement plan should consult their legal counsel and financial professional regarding the suitability of the Policy.
The Code generally requires that interest in a qualified Policy be non-forfeitable.
You should consult Your legal counsel or financial professional if You are considering purchasing an enhanced death benefit or other optional rider, or if You are considering purchasing a Policy for use with any qualified retirement plan or arrangement.
Optional Living Benefits
For policies with a Guaranteed Lifetime Withdrawal Benefit or a Guaranteed Minimum Accumulation Benefit the application of certain tax rules, particularly those rules relating to distributions from Your Policy, are not entirely clear. The tax rules for qualified policies may impact the value of these optional benefits. Additionally, the actions of the qualified plan as contract holder may cause the qualified plan participant to lose the benefit of the Guaranteed Lifetime Withdrawal Benefit. In view of this uncertainty, You should consult a financial professional before purchasing this Policy as a qualified Policy.
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Withholding
The portion of any distribution under a Policy that is includable in gross income will be subject to federal income tax withholding unless the recipient of such distribution elects not to have federal income tax withheld. Election forms will be provided at the time distributions are requested or taken. The amount of withholding varies according to the type of distribution. The withholding rates applicable to the taxable portion of periodic payments (other than eligible rollover distributions) are the same as the withholding rates generally applicable to payments of wages. A 10% withholding rate applies to the taxable portion of non-periodic payments. Regardless of whether You elect not to have federal income tax withheld, You are still liable for payment of federal income tax on the taxable portion of the payment. For qualified policies taxable, “eligible rollover distributions” from Section 401(a) plans, Section 403(a) annuities, Section 403(b) tax-sheltered annuities, and governmental 457 plans are subject to a mandatory federal income tax withholding of 20%. An eligible rollover distribution is any distribution from such a plan, other than specified distributions such as distributions required by the Code, distributions in a specified annuity form or hardship distributions. The 20% withholding does not apply, however, to nontaxable distributions or if (i) the employee (or employee's spouse or former spouse as beneficiary or alternate payee) chooses a “direct rollover” from the plan to a tax-qualified plan, IRA, Roth IRA or 403(b) tax-sheltered annuity or to a governmental 457 plan that agrees to separately account for rollover contributions; or (ii) a non-spouse beneficiary chooses a “direct rollover” from the plan to an IRA established by the direct rollover.
Annuity Purchases by Residents of Puerto Rico
The IRS has announced that income received by residents of Puerto Rico under life insurance or annuity policies issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States federal income tax.
Annuity Policies Purchased by Non-resident Aliens and Foreign Corporations
The discussion above provided general information (but not tax advice) regarding U.S. federal income tax consequences to annuity Owners that are U.S. persons. Taxable distributions made to Owners who are not U.S. persons will generally be subject to U.S. federal income tax withholding at a 30% rate, unless a lower treaty rate applies. In addition, distributions may be subject to state and/or municipal taxes and taxes that may be imposed by the Owner's country of citizenship or residence. Prospective foreign Owners are advised to consult with a qualified financial professional regarding U.S., state, and foreign taxation for any annuity Policy purchase.
Foreign Account Tax Compliance Act (“FATCA”)
If the payee of a distribution from the Policy is a foreign financial institution (“FFI”) or a non-financial foreign entity (“NFFE”) within the meaning of the Code as amended by the Foreign Account Tax Compliance Act (“FATCA” ), the distribution could be subject to U.S. federal withholding tax on the taxable amount of the distribution at a 30% rate irrespective of the status of any beneficial Owner of the Policy or the distribution. The rules relating to FATCA are complex, and a financial professional should be consulted if an FFI or NFFE is or may be designated as a payee with respect to the Policy.
Possible Tax Law Changes
Although the likelihood and nature of legislative or regulatory changes is uncertain, there is always the possibility that the tax treatment of the Policy could change by legislation, regulation, or otherwise. You should consult a financial professional with respect to legal or regulatory developments and their effect on the Policy.
We have the right to modify the Policy to meet the requirements of any applicable laws or regulations, including legislative changes that could otherwise diminish the favorable tax treatment that annuity Owners currently receive.
OTHER INFORMATION
State Variations
The following section describes modifications to this prospectus required by one or more state insurance departments as of the date of this prospectus. Unless otherwise noted, variations apply to all forms of policies we issue. References to certain state's variations do not imply that we actually offer policies in each such state. These variations are subject to change without notice and additional variations may be imposed as specific states approve new riders. The Company will amend this prospectus upon notification of any additional variations received from one or more state insurance departments.
Arizona. Owners age 65 and above have a 30 day right to cancel. If canceled, the amount returned will include any fees and charges.
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California. The Policy may be canceled by returning the Policy. A refund will be paid within 30 days from the date notice of cancellation was received and refund will include any fees or charges. Owners age 60 or above have the option to elect immediate investment in Investment Options of their choice, and receive Policy Value if they cancel; or, they may allocate the initial premium payment to the money market portfolio for 35 calendar days at the end of which the Policy Value is moved to the Investment Options of their choice, and they would receive return of premium if they cancel. Owners of the Transamerica Income EdgeSM rider, age 60 or above have the option to elect immediate investment consistent with the allocations permitted in the applicable Rate Sheet Prospectus Supplement, or, they may allocate the initial premium payment to the Stable Account as permitted in the applicable Rate Sheet Prospectus Supplement and the remaining premium to the money market portfolio for 35 calendar days (unless the Owner specifies that initial premium should be allocated to the underlying Subaccount(s)) at the end of which the Policy Value is moved to the Investment Options of their choice consistent with the allocations permitted in the applicable Rate Sheet Prospectus Supplement. The Nursing Care and Terminal Condition and the Unemployment Waivers are not available. The Income EnhancementSM is not available under the Retirement Income Choice® 1.6 rider. Restrictions on ownership change and assignments are not permitted. The Fixed Account is not available.
Connecticut. During the right to cancel period, prior to delivery of the Policy, the Owner will receive return of premium. The Unemployment Waiver is not available. There is no Excess Interest Adjustment upon Annuitization. Premium enhancement recapture only allowed under right to cancel period. The Nursing Care and Terminal Condition Waiver is not available with X-Share. Service charge cannot be assessed at time of surrender. Transfer restrictions apply if more than one transfer is made in a 30 day period. The Income EnhancementSM is not available under the Retirement Income Choice® 1.6 rider. The Retirement Income Max®, Retirement Income Choice® 1.6 and Transamerica Income EdgeSM riders will not terminate for unapproved ownership changes and assignments, however, we have the right to reject certain ownership changes and assignments involving institutional investors, settlement companies or other similar organizations.
Florida. Owners have a 21 day right to cancel period and will receive return of premium. The Unemployment Waiver is not available. Excess Interest Adjustment is not applied upon Annuitization or death. The Annuity Commencement Date is not allowed until after the first Policy Year. The Retirement Income Max® rider will terminate if the Policy to which this rider is attached has an ownership change or the Policy is assigned. The Transamerica Income EdgeSM rider will not terminate due to a misstatement of age.
Montana. The unemployment waiver is not available. Premium enhancement recapture does not include unemployment. The death benefit must be paid within 60 days and any interest due after 30 days.
New York. Under the right to cancel provision the premium payment allocated to the Fixed Account, if any, plus the Policy Value in the Separate Account, if any, including any fees and charges is returned. If the Policy is a replacement, the right to cancel period is extended to 60 days. Additional Death DistributionSM rider, Additional Death Distribution+SM rider and the Income EnhancementSM under the Retirement Income Choice® 1.6 rider, the Unemployment Waiver and telephone transactions are not available. There is no Excess Interest Adjustment. Premium enhancement recapture is not available with death or Annuitization. The death benefit payable during the accumulation phase is the greater of Policy Value or guaranteed minimum death benefit, if any. The Policy Value is used upon Annuitization. The Annuity Commencement Date cannot be earlier than the first Policy anniversary. Guaranteed Principal SolutionSM, Retirement Income Max® and Retirement Income Choice® 1.6 rider fees cannot be deducted from the Fixed Account if available. Restrictions on ownership change and assignments are not permitted. Transamerica Income EdgeSM rider fees cannot be deducted from the Stable Account.
North Dakota. Right to cancel period is 20 days.
Oregon. The Retirement Income Choice® 1.6 rider will not terminate upon assignment or ownership changes.
Washington. Retirement Income Choice® 1.6 designated funds excludes fixed account and does not allow funds to be allocated to the Dollar Cost Averaging fixed account. The Guaranteed Principal SolutionSM rider fee cannot be deducted from the fixed account.
Sending Forms and Transaction Requests in Good Order
We cannot process Your requests for transactions relating to the Policy until they are received in good order. “Good order” means the actual receipt of the instructions relating to the requested transaction in writing (or, when appropriate, by telephone or electronically), along with all forms, information and supporting legal documentation necessary to effect the transaction. This information and documentation generally includes, to the extent applicable to the transaction: Your completed application; the Policy number; the transaction amount (in dollars or percentage terms); the names and allocations to and/or from the Subaccounts affected by the requested transaction; the dated signatures of all Owners (exactly as registered on the Policy) if necessary; Social Security Number or Taxpayer I.D.; and any other information or supporting documentation that we may require, including any spousal or joint Owner's consents. With respect to purchase requests, “good order” also generally includes receipt of sufficient funds to effect the purchase. We may, in our sole discretion, determine whether any particular transaction request is in good order, and we reserve the right to change or waive any good order requirements at any time.
74
“Received” or receipt in good order generally means that everything necessary must be received by us, at our Administrative Office specified in the Glossary of Terms. We reserve the right to reject electronic transactions that do not meet our requirements.
Regulatory Modifications to Policy
We reserve the right to amend the Policy or any riders attached thereto as necessary to comply with specific direction provided by state or federal regulators, through change of law, rule, regulation, bulletin, regulatory directives or agreements.
Anti-Money Laundering (AML) and Sanctions
The Company and the Separate Account are subject to laws and regulations designed to combat money laundering and terrorist financing. The Company, on its own behalf and on behalf of the Separate Account, has implemented and operates an anti-money laundering (“AML”) program. The Company shall not be held liable for any losses that an Owner, Annuitant, or beneficiary may incur as a result of actions taken to prevent suspected violations of AML laws, rules, and regulations.
The Company and the Separate Account are subject to the provisions of various sanctions programs administered and enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”). These programs prohibit financial institutions from doing business with certain identified enemies of the United States as set forth in various lists maintained by OFAC. Depending on the program under which a transaction falls, financial institutions must either (i) reject and report the transaction, or (ii) block the transaction, place the funds or assets in a separate blocked transaction account, and report the matter to OFAC. In order to comply with OFAC requirements, the Company reviews applicants, Owners, and Annuitants against the OFAC list and stops processing and rejects any transaction from an individual or entity who is listed on the OFAC list. The Company only accepts premium payments that are not subject to sanctions and in United States currency.
If an Owner or Annuitant is subject to sanctions, the Company is required to block access to an Owner’s Policy and thereby refuse to pay any request for partial withdrawals, surrenders, or other distributions until permitted by OFAC. Further, if additional premium payments are received, we are required under applicable U.S. laws and regulations to place such funds in the blocked account as well. In addition, the Company may be required to block a beneficiary’s request for payment of death benefit proceeds. Blocking access may include transferring Cash Value and death benefit proceeds to the Fixed Account or money market subaccount until permitted by OFAC. The Company shall not be held liable for any losses that an Owner, Annuitant, or beneficiary may incur as a result of sanctions.
Mixed and Shared Funding
The underlying fund portfolios may serve as investment vehicles for variable life insurance policies, variable annuity policies and retirement plans (“mixed funding”) and shares of the underlying fund portfolios also may be sold to Separate Accounts of other insurance companies (“shared funding”). While we currently do not foresee any disadvantages to Owners and participants arising from either mixed or shared funding, it is possible that the interests of Owners of various policies and/or participants in various plans for which the underlying fund portfolios serve as investments might at some time be in conflict. We and each underlying fund portfolio’s Board of Directors intend to monitor events in order to identify any material conflicts and to determine what action, if any, to take. Such action could include the sale of underlying fund portfolio shares by one or more of the Separate Accounts, which could have adverse consequences. Such action could also include a decision that separate funds should be established for variable life and variable annuity Separate Accounts. In such an event, we would bear the attendant expenses, but Owners and plan participants would no longer have the economies of scale resulting from a larger combined fund. Please read the prospectuses for the underlying fund portfolios, which discuss the underlying fund portfolios’ risks regarding mixed and shared funding, as applicable. Please see Voting Rights section for how shares held by the Company would be voted.
Abandoned or Unclaimed Property
Every state has unclaimed property laws that generally provide for escheatment to the state of unclaimed property (including proceeds of annuity, life and other insurance policies) under various circumstances. In addition to the state unclaimed property laws, we may be required to escheat property pursuant to regulatory demand, finding, agreement or settlement. To help prevent such escheatment, it is important that You keep Your contact and other information on file with us up to date, including the names, contact information and identifying information for Owners, insureds, Annuitants, beneficiaries and other payees. Such updates should be communicated in a form and manner satisfactory to us.
75
Legal Proceedings
We, like other life insurance companies, are subject to regulatory and legal proceedings, in the ordinary course of our business. Such legal and regulatory matters include proceedings specific to us and other proceedings generally applicable to business practices in the industry in which we operate. In some lawsuits and regulatory proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any litigation or regulatory proceeding cannot be predicted with certainty, at the present time, we believe that there are no pending or threatened proceedings or lawsuits that are likely to have a material adverse impact on the Separate Account, on TCI's ability to perform under its principal underwriting agreement, or on our ability to meet our obligations under the Policy.
Distribution of the Policies
Distribution and Principal Underwriting Agreement. We have entered into a principal underwriting agreement with our affiliate, Transamerica Capital, Inc. (TCI), for the distribution and sale of the policies. We pay commissions to TCI which are passed through to selling firms. (See below). We also pay TCI an “override” that is a percentage of total commissions paid on sales of our policies which is not passed through to the selling firms and we may reimburse TCI for certain expenses it incurs in order to pay for the distribution of the policies. TCI may market the policies through bank affiliated firms, national brokerage firms, regional and independent broker-dealers and independent financial planners.
Compensation to Broker-Dealers Selling the Policies. The policies are offered to the public through broker-dealers (“selling firms”) that are licensed under the federal securities laws; the selling firm and/or its affiliates are also licensed under state insurance laws. The selling firms have entered into written selling agreements with us and with TCI as principal underwriter for the policies. We pay commissions through TCI to the selling firms for their sales of the policies.
The selling firms are paid commissions for the promotion and sale of the policies according to one or more schedules. The amount and timing of commissions may vary depending on the selling agreement, and the share purchased, but the commission range is from 1.25% up to 7.2% of premium payments (additional amounts may be paid as overrides to wholesalers).
To the extent permitted by Financial Industry Regulatory Authority (FINRA) rules, the Company and TCI may pay (or allow other broker-dealers to provide) promotional incentives or payments in the form of cash or non-cash compensation or reimbursement to some, but not all, selling firms and their sales representatives. These arrangements are described further below.
The sales representative who sells You the Policy typically receives a portion of the compensation we (and our affiliates) pay to the selling firms, depending on the agreement between the selling firm and its representative and the firm's internal compensation program. These programs may include other types of cash and non-cash compensation and other benefits. Ask Your sales representative for further information about the compensation Your sales representative, and the selling firm that employs Your sales representative, may receive in connection with Your purchase of a Policy. Also inquire about any compensation arrangements that we and our affiliates may have with the selling firm, including the conflicts of interests that such arrangements may create.
You should be aware that a selling firm or its sales representatives may receive different compensation or incentives for selling one product over another. In some cases, these differences may create an incentive for the selling firm or its sales representatives to recommend or sell the Policy to You. You may wish to take such incentives into account when considering and evaluating any recommendation relating to the policies.
Special Compensation Paid to Affiliated Firms. We and/or our affiliates provide paid-in capital to TCI and we or our affiliates may pay all or a portion of the cost of TCI's operating and other expenses, including costs for facilities, legal and accounting services, and other internal administrative functions. We and/or our affiliates also provide TCI with a percentage of total commissions paid on sales of our policies and provide TCI with capital payments that are not contingent on sales.
TCI's registered representatives and supervisors may receive non-cash compensation, such as attendance at conferences, seminars and trips (such as travel, lodging and meals in connection therewith), entertainment, merchandise and other similar items, payments, loans, loan forgiveness or loan guarantees.
Additional Compensation That We, TCI and/or Our Affiliates Pay to Selected Selling Firms. TCI, in connection with the sales of the policies, may pay certain selling firms additional cash amounts in order to receive enhanced marketing services and increased access to their sales representatives. In exchange for providing TCI with access to their distribution network, such selling firms may receive additional compensation or reimbursement for, among other things, the hiring and training of sales personnel, marketing, sponsoring of conferences, meetings, seminars, events, and/or other services they provide to us and our affiliates. To the extent permitted by applicable law, We, TCI and other parties may provide the selling firms with occasional gifts, meals, tickets or other non-cash compensation as an incentive to sell the policies. These special compensation arrangements are not offered to all selling firms and the terms of such arrangements may differ among selling firms.
76
During 2023, in general, payments calculated as a percentage of sales ranged from 10 basis point (0.1%) to 50 basis points (0.50%), payments calculated as a percentage of assets under management ranged from 2 basis points (0.02%) to 15 basis points (0.15%), and flat annual fees ranged from $5,000.00 to $500,000.00 (calculated after revenue sharing offsets for sales), which included at times payments for a series of meetings and/or events of other broker-dealers and banks.
As of December 31, 2023, TCI had revenue sharing agreements with more than 75 brokers and other financial intermediaries including, without limitation:
Ameriprise Financial Services, Inc.•  Advisor Group, Inc./Osaic Wealth, Inc. (FSC Securities, Royal Alliance, SagePoint, Questar, Woodbury Financials Services, Securities America, Triad, American Portfolios, and Infinex Investments, Inc.)•  Atria Wealth Solutions, Inc. (Cadaret Grant & Co., CUSO Financial, Next Financial, Sorrento and Western International Securities, Inc.) •  Avantax Investment Services, Inc. • Cabot Lodge Securities, LLC • Cambridge Investment Research •  Centaurus Financial, Inc. • Cetera Financial Group, Inc. (Cetera Advisors, LLC, Cetera Advisor Networks, LLC, Cetera Financial Specialists, LLC, Cetera Investment Services, LLC, First Allied, Summit Brokerage Services, Inc.) • Charles Schwab •  Citigroup Global Markets, Inc. •  Citizens Securities Inc.•  Commonwealth Financial Network • D.A. Davidson & Co., Inc. •  Edward Jones •  Equitable Advisors, LLC •  Equity Services, Inc. •  Financial Data Services, Inc. •  GWFS Equities Inc. •  Geneos Wealth Management •  Great West Financial • Hantz Financial Services, Inc. •  Independent Financial Group, LLC • Janney Montgomery Scott •  J.P. Morgan Securities LLC •  Kestra Investment Services •  LPL Financial Corp. •  Logan Group Securities • Merrill Lynch •  Morgan Stanley Smith Barney •  MML Investors Services • Mutual of Omaha Investor Services Inc. • National Financial Services, Inc. • OneAmerica Securities Inc. • Oppenheimer & Co. •  Park Avenue Securities •  Pershing LLC •  Principal Connectivity •  PNC Investments •  Pursche Kaplan Sterling •  Securian Financial Services Inc. •  Raymond James and Associates, Inc. • Raymond James Financial Services, Inc. • RBC Wealth Management • Stifel Nicolaus & Company Inc •  TD Ameritrade •  UBS Financial Services Inc.• United Planners Financial Services of America • US Bancorp Investments, Inc. • Voya Financial Advisors, Inc. • Wells Fargo Advisors, LLC and • World Equity Group Inc.
For the calendar year ended December 31, 2023 TCI paid approximately $33.4 million to these brokers and other financial intermediaries in connection with revenue sharing arrangements. TCI expects to have revenue sharing arrangements with a number of brokers and other financial intermediaries in 2024, including some or all of the foregoing brokers and financial intermediaries, among others, on terms similar to those discussed above.
No specific charge is assessed directly to Owners or the Separate Account to cover commissions, non-cash compensation, and other incentives or payments described above. We do intend to recoup commissions and other sales expenses and incentives we pay, however, through fees and charges deducted under the Policy and other corporate revenue.
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APPENDIX
PORTFOLIO COMPANIES AVAILABLE UNDER THE POLICY
The following is a list of current Portfolio Companies available under the Policy, which are subject to change as discussed in this prospectus.  Depending on the optional benefits you choose, you may not be able to invest in certain Portfolio Companies.
Certain Subaccounts may not be available in all states, at all times or through all financial intermediaries. We may discontinue offering any Subaccount at any time. In some cases, a Subaccount not available through a financial intermediary may be obtained by contacting us directly. For more information on the options available for electing a Subaccount, please contact Your financial intermediary or our Administrative Office.
More information about the Portfolio Companies is available in the prospectuses for the Portfolio Companies, which may be amended from time to time and can be found online at http://dfinview.com/Transamerica/TAHD/89354G588?site=VAVUL. You can also request this information at no cost by calling our Administrative Office at (800)525-6205.
The current expenses and performance below reflects fee and expenses of the Portfolio Companies, but do not reflect the other fees and expenses that Your Policy may charge. Expenses would be higher and performance would be lower if these other charges were included. Each Portfolio Company’s past performance is not necessarily an indication of future performance. 
Investment Objective
Underlying Fund Portfolio and
Adviser/Sub-adviser (1)
Current
Expenses
Platform
Charges
Current
Expenses
Plus
Platform
Charges
Average Annual Total Returns
(as of 12/31/22)
1 year
5 years
10 years
To maximize total return consistent
with the Adviser's determination of
reasonable risk.
AB Balanced Hedged Allocation
Portfolio - Class B
 
Advised by: AllianceBernstein L.P.
0.99%
0.20%
1.19%
12.66%
5.92%
5.04%
Long-term growth of capital.
AB Relative Value Portfolio - Class B
 
Advised by: AllianceBernstein L.P.
0.87%
-
0.87%
11.72%
11.57%
9.05%
To provide high total return (including
income and capital gains) consistent
with preservation of capital over the
long term.
American Funds - Asset
Allocation FundSM - Class 2
 
Advised by: Capital Research and
Management CompanySM
0.55%
0.30%
0.85%
14.27%
9.20%
7.25%
To provide growth of capital.
American Funds - Growth FundSM -
Class 2
 
Advised by: Capital Research and
Management CompanySM
0.59%
0.30%
0.89%
38.49%
18.68%
14.36%
To achieve long-term growth of capital
and income.
American Funds - Growth-Income
FundSM - Class 2
 
Advised by: Capital Research and
Management CompanySM
0.53%
0.30%
0.83%
26.14%
13.36%
10.91%
To achieve long-term growth of capital.
American Funds - International
FundSM - Class 2
 
Advised by: Capital Research and
Management CompanySM
0.78%
0.30%
1.08%
15.84%
4.83%
3.41%
To provide as high a level of current
income as is consistent with the
preservation of capital.
American Funds - The Bond Fund of
AmericaSM - Class 2
 
Advised by: Capital Research and
Management CompanySM
0.63%
0.30%
0.93%
5.02%
1.89%
2.08%
Seeks income and capital growth
consistent with reasonable risk.
Fidelity® VIP Balanced Portfolio -
Service Class 2
 
Advised by: Fidelity Management &
Research Company
0.69%
-
0.69%
21.29%
12.16%
8.81%
Seeks long-term capital appreciation.
Fidelity® VIP Contrafund® Portfolio -
Service Class 2
 
Advised by: Fidelity Management &
Research Company
0.81%
-
0.81%
33.12%
16.36%
11.33%
78
PORTFOLIO COMPANIES AVAILABLE UNDER THE POLICY — (Continued)
Investment Objective
Underlying Fund Portfolio and
Adviser/Sub-adviser (1)
Current
Expenses
Platform
Charges
Current
Expenses
Plus
Platform
Charges
Average Annual Total Returns
(as of 12/31/22)
1 year
5 years
10 years
Seeks long-term growth of capital.
Fidelity® VIP Mid Cap Portfolio -
Service Class 2
 
Advised by: Fidelity Management &
Research Company
0.82%
-
0.82%
14.80%
12.17%
7.85%
Seeks capital appreciation.
Fidelity® VIP Value Strategies Portfolio
- Service Class 2
 
Advised by: Fidelity Management &
Research Company
0.85%
-
0.85%
20.61%
16.63%
9.10%
The highest total return, composed of
current income and capital
appreciation, as is consistent with
prudent investment risk.
State Street Total Return V.I.S. Fund -
Class 3
 
Advised by: SSGA Funds Management,
Inc.
0.90%
0.20%
1.10%
15.21%
5.90%
4.66%
Seeks long-term capital appreciation
and current income.
Transamerica 60/40 Allocation VP -
Service Class
 
Advised by: Transamerica Asset
Management, Inc.
0.90%
-
0.90%
15.95%
8.88%
N/A
Seeks maximum total return consistent
with preservation of capital and
prudent investment management.
Transamerica Aegon Bond VP –
Service Class
 
Sub-Advised by: Aegon USA Investment
Management, LLC
0.78%
-
0.78%
6.18%
0.73%
1.44%
Seeks total return, consisting of current
income and capital appreciation.
Transamerica Aegon Core Bond VP -
Service Class
 
Sub-Advised by: Aegon USA Investment
Management, LLC
0.75%
-
0.75%
5.78%
1.06%
1.60%
Seeks a high level of current income by
investing in high-yield debt securities.
Transamerica Aegon High Yield Bond
VP - Service Class
 
Sub-Advised by: Aegon USA Investment
Management, LLC
0.90%
-
0.90%
10.87%
4.47%
4.00%
Seeks total return gained from the
combination of dividend yield, growth
of dividends and capital appreciation.
Transamerica Aegon Sustainable Equity
Income VP - Service Class
 
Sub-Advised by: Aegon Asset
Management UK plc (“AAM”)
0.98%
-
0.98%
6.00%
5.44%
5.13%
Seeks to provide as high a level of total
return as is consistent with prudent
investment strategies.
Transamerica Aegon U.S. Government
Securities VP - Service Class
 
Sub-Advised by: Aegon USA Investment
Management, LLC
0.83%
-
0.83%
3.69%
0.25%
0.79%
Seeks to provide total return (including
income and capital gains) consistent
with preservation of capital over the
long term while seeking to manage
volatility and provide downside
protection.
Transamerica American Funds
Managed Risk VP - Service Class
 
Sub-Advised by: Milliman Financial
Risk Management LLC
1.10%
-
1.10%
10.39%
6.32%
N/A
Seeks as high a level of current income
as is consistent with preservation of
capital and liquidity.
Transamerica BlackRock Government
Money Market VP - Service Class(2)
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.54%
-
0.54%
4.66%
1.58%
0.87%
Seeks current income and preservation
of capital.
Transamerica BlackRock iShares Active
Asset Allocation - Conservative VP -
Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.92%
-
0.92%
9.96%
3.16%
2.79%
79
PORTFOLIO COMPANIES AVAILABLE UNDER THE POLICY — (Continued)
Investment Objective
Underlying Fund Portfolio and
Adviser/Sub-adviser (1)
Current
Expenses
Platform
Charges
Current
Expenses
Plus
Platform
Charges
Average Annual Total Returns
(as of 12/31/22)
1 year
5 years
10 years
Seeks capital appreciation and current
income.
Transamerica BlackRock iShares Active
Asset Allocation - Moderate VP -
Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.88%
-
0.88%
13.37%
3.15%
2.73%
Seeks capital appreciation with current
income as secondary objective.
Transamerica BlackRock iShares Active
Asset Allocation - Moderate Growth
VP - Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.91%
-
0.91%
17.62%
2.43%
2.30%
Seeks capital appreciation and income.
Transamerica BlackRock iShares
Dynamic Allocation - Balanced VP -
Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.89%
-
0.89%
12.66%
3.61%
3.01%
Seeks capital appreciation and income.
Transamerica BlackRock iShares
Dynamic Allocation - Moderate
Growth VP - Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.89%
-
0.89%
17.28%
4.96%
3.63%
Seeks long term capital appreciation
and capital preservation.
Transamerica BlackRock iShares Edge
40 VP - Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.71%
-
0.71%
9.07%
4.46%
3.37%
Seeks long-term capital appreciation
and capital preservation.
Transamerica BlackRock iShares Edge
50 VP - Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.69%
-
0.69%
9.79%
5.19%
N/A
Seeks long-term capital appreciation
and capital preservation as a secondary
objective.
Transamerica BlackRock iShares Edge
75 VP - Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.73%
-
0.73%
12.09%
7.36%
N/A
Seeks long-term capital appreciation.
Transamerica BlackRock iShares Edge
100 VP - Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
0.81%
-
0.81%
14.47%
9.34%
N/A
Seeks a combination of capital
appreciation and income.
Transamerica BlackRock iShares
Tactical - Balanced VP - Service Class(3)
 
Sub-Advised by: Pacific Investment
Management Company LLC
0.89%
 
0.89%
10.66%
4.27%
3.59%
Seeks a combination of capital
appreciation and income.
Transamerica BlackRock iShares
Tactical - Conservative VP - Service
Class(4)
 
Sub-Advised by: Pacific Investment
Management Company LLC
0.92%
 
0.92%
7.24%
3.61%
3.40%
Seeks a combination of capital
appreciation and income.
Transamerica BlackRock iShares
Tactical - Growth VP - Service Class(5)
 
Sub-Advised by: Pacific Investment
Management Company LLC
0.93%
 
0.93%
13.94%
6.23%
4.44%
80
PORTFOLIO COMPANIES AVAILABLE UNDER THE POLICY — (Continued)
Investment Objective
Underlying Fund Portfolio and
Adviser/Sub-adviser (1)
Current
Expenses
Platform
Charges
Current
Expenses
Plus
Platform
Charges
Average Annual Total Returns
(as of 12/31/22)
1 year
5 years
10 years
Seeks to maximize total return.
Transamerica BlackRock Real Estate
Securities VP - Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
1.15%
-
1.15%
13.15%
4.85%
3.59%
Seeks capital appreciation with current
income as a secondary objective.
Transamerica BlackRock Tactical
Allocation VP - Service Class
 
Sub-Advised by: BlackRock Investment
Management, LLC
1.02%
-
1.02%
14.88%
6.54%
4.90%
Seeks to balance capital appreciation
and income.
Transamerica Goldman Sachs Managed
Risk - Balanced ETF VP - Service Class
 
Sub-Advised by: Goldman Sachs Asset
Management, L.P.
0.64%
-
0.64%
13.20%
5.04%
3.97%
Seeks current income and preservation
of capital.
Transamerica Goldman Sachs Managed
Risk - Conservative ETF VP - Service
Class
 
Sub-Advised by: Goldman Sachs Asset
Management, L.P.
0.66%
-
0.66%
10.59%
3.35%
3.22%
Seeks capital appreciation as a primary
objective and income as a secondary
objective.
Transamerica Goldman Sachs Managed
Risk - Growth ETF VP - Service Class
 
Sub-Advised by: Goldman Sachs Asset
Management, L.P.
0.67%
-
0.67%
17.68%
7.38%
5.13%
Seeks long-term capital appreciation.
Transamerica Great Lakes Advisors
Large Cap Value VP - Service Class(6)
 
Sub-Advised by: Great Lakes Advisors
LLC
0.97%
-
0.97%
12.78%
9.66%
N/A
Seeks long-term capital appreciation.
Transamerica International Focus VP -
Service Class
 
Sub-Advised by: Epoch Investment
Partners, Inc.
1.10%
-
1.10%
12.27%
8.75%
4.09%
Seeks long-term capital growth,
consistent with preservation of capital
and balanced by current income.
Transamerica Janus Balanced VP -
Service Class
 
Sub-Advised by: Janus Henderson
Investors US LLC
0.99%
-
0.99%
15.01%
9.00%
7.27%
Seeks long-term capital appreciation.
Transamerica Janus Mid-Cap Growth
VP - Service Class
 
Sub-Advised by: Janus Henderson
Investors US LLC
1.11%
-
1.11%
16.80%
12.97%
7.98%
Seeks current income and preservation
of capital.
Transamerica JPMorgan Asset
Allocation - Conservative VP –
Service Class
 
Sub-Advised by: J.P. Morgan
Investment Management Inc.
0.99%
-
0.99%
6.83%
3.76%
3.04%
Seeks current income and preservation
of capital.
Transamerica JPMorgan Asset
Allocation - Growth VP – Service
Class
 
Sub-Advised by: J.P. Morgan
Investment Management Inc.
1.11%
-
1.11%
20.00%
11.61%
7.40%
81
PORTFOLIO COMPANIES AVAILABLE UNDER THE POLICY — (Continued)
Investment Objective
Underlying Fund Portfolio and
Adviser/Sub-adviser (1)
Current
Expenses
Platform
Charges
Current
Expenses
Plus
Platform
Charges
Average Annual Total Returns
(as of 12/31/22)
1 year
5 years
10 years
Seeks capital appreciation and current
income.
Transamerica JPMorgan Asset
Allocation - Moderate VP – Service
Class
 
Sub-Advised by: J.P. Morgan
Investment Management Inc.
1.02%
-
1.02%
8.86%
5.31%
4.13%
Seeks capital appreciation with current
income as a secondary objective.
Transamerica JPMorgan Asset
Allocation - Moderate Growth VP –
Service Class
 
Sub-Advised by: J.P. Morgan
Investment Management Inc.
1.08%
-
1.08%
11.93%
7.59%
5.41%
Seeks to earn a total return modestly in
excess of the total return performance
of the S&P 500® (including the
reinvestment of dividends) while
maintaining a volatility of return
similar to the S&P 500®.
Transamerica JPMorgan Enhanced
Index VP – Service Class
 
Sub-Advised by: J.P. Morgan
Investment Management Inc.
0.87%
-
0.87%
27.39%
16.10%
11.67%
Seeks capital appreciation with current
income as a secondary objective.
Transamerica JPMorgan International
Moderate Growth VP – Service Class
 
Sub-Advised by: J.P. Morgan
Investment Management Inc.
1.14%
-
1.14%
8.70%
5.68%
3.33%
Seeks current income and preservation
of capital.
Transamerica JPMorgan Tactical
Allocation VP - Service Class
 
Sub-Advised by: J.P. Morgan
Investment Management Inc.
1.02%
-
1.02%
8.57%
3.90%
3.44%
Seeks high total return through the
combination of income and capital
appreciation.
Transamerica Madison Diversified
Income VP - Service Class
 
Sub-Advised by: Madison Asset
Management. LLC
1.08%
-
1.08%
3.97%
4.51%
4.38%
Seeks capital appreciation.
Transamerica Market Participation
Strategy VP - Service Class
 
Sub-Advised by: PGIM Quantitative
Solutions LLC
0.98%
-
0.98%
11.55%
9.06%
6.12%
Seeks high total return..
Transamerica Morgan Stanley Global
Allocation VP - Service Class
 
Sub-Advised by: Morgan Stanley
Investment Management Inc.
1.28%
-
1.28%
13.69%
7.12%
4.51%
Seeks to provide capital appreciation
and income while seeking to manage
volatility.
Transamerica Morgan Stanley Global
Allocation Managed Risk - Balanced
VP - Service Class
 
Sub-Advised by: Milliman Financial
Risk Management LLC
1.45%
-
1.45%
9.00%
3.64%
N/A
Seeks to track the investment results of
an index composed of large- and
mid-capitalization developed market
equities, excluding the U.S. and
Canada.
Transamerica MSCI EAFE Index VP -
Service Class
 
Sub-Advised by: SSGA Funds
Management, Inc.
0.61%
0.15%
0.76%
17.46%
7.80%
N/A
Seeks to provide a high total
investment return through investments
in a broadly diversified portfolio of
stock, bonds and money market
instruments.
Transamerica Multi-Managed Balanced
VP – Service Class
 
Sub-Advised by: J.P. Morgan
Investment Management Inc. and Aegon
USA Investment Management, LLC
0.89%
-
0.89%
18.44%
10.16%
7.75%
82
PORTFOLIO COMPANIES AVAILABLE UNDER THE POLICY — (Continued)
Investment Objective
Underlying Fund Portfolio and
Adviser/Sub-adviser (1)
Current
Expenses
Platform
Charges
Current
Expenses
Plus
Platform
Charges
Average Annual Total Returns
(as of 12/31/22)
1 year
5 years
10 years
Seeks maximum real return, consistent
with appreciation of capital.
Transamerica PineBridge Inflation
Opportunities VP - Service Class
 
Sub-Advised by: PineBridge
Investments LLC
0.78%
-
0.78%
5.44%
2.87%
2.00%
Seeks to provide investment results
that, before expenses, correspond
generally to the price and yield
performance of the S&P 500® Index.
Transamerica S&P 500 Index VP -
Service Class
 
Sub-Advised by: SSGA Funds
Management, Inc.
0.39%
0.15%
0.54%
25.73%
15.20%
N/A
Seeks to maximize total return.
Transamerica Small/Mid Cap Value VP
– Service Class
 
Sub-Advised by: Systematic Financial
Management L.P. & Thompson, Siegel &
Walmsley LLC
1.07%
-
1.07%
12.15%
11.19%
7.88%
Seeks long-term growth of capital by
investing primarily in common stocks
of small growth companies.
Transamerica T. Rowe Price Small Cap
VP – Service Class
 
Sub-Advised by: T. Rowe Price
Associates, Inc.
1.09%
-
1.09%
20.88%
11.15%
8.74%
Seeks maximum long-term total return,
consistent with reasonable risk to
principal, by investing in a diversified
portfolio of common stocks of
primarily non-U.S. issuers.
Transamerica TS&W
International Equity VP – Service
Class
 
Sub-Advised by: Thompson, Siegel &
Walmsley LLC
1.11%
-
1.11%
15.26%
7.39%
3.59%
Seeks growth from capital appreciation.
Transamerica TS&W Mid Cap Value
Opportunities VP–Service Class(7)
 
Sub-Advised by: J.P. Morgan
Investment Management Inc.
1.02%
-
1.02%
10.57%
10.68%
7.74%
Seeks to maximize long-term growth.
Transamerica WMC US Growth VP –
Service Class(8)
 
Sub-Advised by: Wellington
Management Company, LLP
0.91%
-
0.91%
41.72%
17.45%
13.31%
(1) 
Some Subaccounts may be available for certain policies and may not be available for all policies. You should work with your registered representative to decide which Subaccount(s) may be appropriate for you based on a thorough analysis of your particular insurance needs, financial objective, investment goals, time horizons, and risk tolerance.
(2) 
There can be no assurance that any money market portfolio offered under this Policy will be able to maintain a stable net asset value per share during extended periods of low interest rates, and partly as a result of Policy charges, the yield on the money market Subaccount may become extremely low and possibly negative.
(3) 
Effective on or about May 1, 2024 Transamerica PIMCO Tactical - Balanced VP was renamed Transamerica BlackRock iShares Tactical - Balanced VP and the sub-advisor was changed to BlackRock Investment Management, LLC.
(4) 
Effective on or about May 1, 2024 Transamerica PIMCO Tactical - Conservative VP was renamed Transamerica BlackRock iShares Tactical - Conservative VP and the sub-advisor was changed to BlackRock Investment Management, LLC.
(5) 
Effective on or about May 1, 2024 Transamerica PIMCO Tactical - Growth VP was renamed Transamerica BlackRock iShares Tactical - Balanced VP and the sub-advisor was changed to BlackRock Investment Management, LLC.
(6) 
Effective on or about May 1, 2023 Transamerica Rothschild & Co. Large Cap Value VP was renamed Transamerica Great Lakes Advisors Large Cap Value VP. Effective April 3, 2023 the sub-advisor was changed from Rothschild & Co. to Great Lakes Advisors LLC.
(7) 
Effective on or about May 1, 2024 Transamerica JPMorgan Mid Cap Value VP was renamed Transamerica TS& W Mid Cap Value Opportunities VP and the sub-advisor was changed to Thompson, Siegel & Walmsley LLC.
(8) 
Effective on or about May 1, 2023 Transamerica Morgan Stanley Capital Growth VP was substituted with Transamerica WMC US Growth VP. The sub-advisor of the acquiring fund is Wellington Management Company, LLP.
83
PORTFOLIO COMPANIES AVAILABLE UNDER THE POLICY — (Continued)
NOTE: All underlying fund portfolios in the Transamerica Series Trust are advised by Transamerica Asset Management. The entities listed are the sub-advisors unless otherwise indicated.
There are no Portfolios that have been closed to new investments or new investors.
84
APPENDIX
Designated Investment Options
The tables below identify the Designated Investment Options available for use with the Guaranteed Minimum Death Benefits and our Guaranteed Lifetime Withdrawal Benefits except for the Transamerica Income EdgeSM rider.  See Appendix - Transamerica Income EdgeSM Investment Options for investment options specifically related to the Transamerica Income EdgeSM rider. 
 
Return of
Premium
Death
Benefit
Annual
Step-Up
Death
Benefit
Retirement
Income
Max®
Rider
Retirement
Income
Max®
Rider
Retirement
Income
Max®
Rider
Retirement
Income
Max®
Rider
Retirement
Income
Max®
Rider
Subaccounts
 
 
Before
11/10/14
11/10/14 to
1/31/18
2/1/18 to
1/30/20
2/1/20 to
4/30/20
Post
5/1/20
AB Balanced Hedged Allocation Portfolio - Class B
√
√
 
 
 
 
 
AB Relative Value Portfolio - Class B
√
√
 
 
 
 
 
American Funds - Asset Allocation FundSM - Class 2
√
√
 
 
 
 
 
American Funds - The Bond Fund of AmericaSM - Class 2
√
√
√
√
√
√
√
American Funds - Growth FundSM - Class 2
√
√
 
 
 
 
 
American Funds - Growth-Income FundSM - Class 2
√
√
 
 
 
 
 
American Funds - International FundSM - Class 2
√
√
 
 
 
 
 
Fidelity® VIP Balanced Portfolio - Service Class 2
√
√
 
 
 
 
 
Fidelity® VIP Contrafund® Portfolio - Service Class 2
√
√
 
 
 
 
 
Fidelity® VIP Mid Cap Portfolio - Service Class 2
√
√
 
 
 
 
 
Fidelity® VIP Value Strategies Portfolio - Service Class 2
√
√
 
 
 
 
 
State Street Total Return V.I.S. Fund - Class 3
√
√
 
 
 
 
 
TA 60/40 Allocation - Service Class
√
√
 
 
 
 
 
TA Aegon Bond - Service Class
√
√
√
√
√
√
√
TA Aegon Core Bond - Service Class
√
√
√
√
√
√
√
TA Aegon High Yield Bond - Service Class
√
√
 
 
 
 
 
TA Aegon Sustainable Equity Income - Service Class
√
√
 
 
 
 
 
TA Aegon U.S. Government Securities - Service Class
√
√
√
√
√
√
√
TA American Funds Managed Risk - Balanced - Service Class(1)
√
√
√
 
√
√
 
TA BlackRock Government Money Market - Service Class
√
√
√
√
√
√
√
TA BlackRock iShares Active Asset Allocation - Conservative - Service
Class(1)
√
√
√
√
√
√
√
TA BlackRock iShares Active Asset Allocation - Moderate - Service
Class(1)
√
√
√
√
√
√
√
TA BlackRock iShares Active Asset Allocation - Moderate Growth -
Service Class(1)
√
√
 
 
 
 
 
TA BlackRock iShares Dynamic Allocation - Balanced - Service Class(1)
√
√
√
√
√
√
√
TA BlackRock iShares Dynamic Allocation - Moderate Growth - Service
Class(1)
√
√
 
 
 
 
 
TA BlackRock iShares Edge 40- Service Class
√
√
√
 
√
√
√
TA BlackRock iShares Edge 50 - Service Class
√
√
√
 
√
√
√
TA BlackRock iShares Edge 75 - Service Class
√
√
 
 
 
 
 
TA BlackRock iShares Edge 100 - Service Class
√
√
 
 
 
 
 
TA BlackRock iShares Tactical - Balanced - Service Class
√
√
√
 
 
 
 
TA BlackRock iShares Tactical - Conservative - Service Class
√
√
√
√
√
√
 
85
Designated Investment Options — (Continued)
 
Return of
Premium
Death
Benefit
Annual
Step-Up
Death
Benefit
Retirement
Income
Max®
Rider
Retirement
Income
Max®
Rider
Retirement
Income
Max®
Rider
Retirement
Income
Max®
Rider
Retirement
Income
Max®
Rider
Subaccounts
 
 
Before
11/10/14
11/10/14 to
1/31/18
2/1/18 to
1/30/20
2/1/20 to
4/30/20
Post
5/1/20
TA BlackRock iShares Tactical - Growth - Service Class
√
√
 
 
 
 
 
TA BlackRock Real Estate Securities - Service Class
√
√
 
 
 
 
 
TA BlackRock Tactical Allocation - Service Class(1)
√
√
 
 
 
 
 
TA Goldman Sachs Managed Risk - Balanced ETF - Service Class(1)
√
√
√
√
√
√
√
TA Goldman Sachs Managed Risk - Conservative ETF - Service Class(1)
√
√
√
√
√
√
√
TA Goldman Sachs Managed Risk - Growth ETF - Service Class(1)
√
√
 
 
 
 
 
TA Great Lakes Advisors Large Cap Value - Service Class
√
√
 
 
 
 
 
TA International Focus - Service Class
√
√
 
 
 
 
 
TA Janus Balanced - Service Class
√
√
 
 
 
 
 
TA Janus Mid-Cap Growth - Service Class
√
√
 
 
 
 
 
TA JPMorgan Asset Allocation - Conservative - Service Class(1)
√
√
√
√
√
√
√
TA JPMorgan Asset Allocation - Growth - Service Class
√
√
 
 
 
 
 
TA JPMorgan Asset Allocation - Moderate - Service Class(1)
√
√
√
 
√
√
√
TA JPMorgan Asset Allocation - Moderate Growth - Service Class(1)
√
√
 
 
 
 
 
TA JPMorgan Enhanced Index - Service Class
√
√
 
 
 
 
 
TA JPMorgan International Moderate Growth - Service Class(1)
√
√
 
 
 
 
 
TA JPMorgan Tactical Allocation - Service Class
√
√
√
√
√
√
√
TA Madison Diversified Income - Service Class
√
√
√
√
√
√
√
TA Market Participation Strategy - Service Class(1)
√
√
√
 
 
 
 
TA Morgan Stanley Global Allocation - Service Class
√
√
 
 
 
 
 
TA Morgan Stanley Global Allocation Managed Risk - Balanced -
Service Class(1)
√
√
√
 
√
√
 
TA MSCI EAFE Index - Service Class
√
√
 
 
 
 
 
TA Multi-Managed Balanced - Service Class
√
√
 
 
 
 
 
TA PineBridge Inflation Opportunities - Service Class
√
√
√
√
√
√
√
TA S&P 500 Index - Service Class
√
√
 
 
 
 
 
TA Small Mid Cap Value - Service Class
√
√
 
 
 
 
 
TA T. Rowe Price Small Cap - Service Class
√
√
 
 
 
 
 
TA TS&W International Equity - Service Class
√
√
 
 
 
 
 
TA TS&W Mid Cap Value Opportunities - Service Class
√
√
 
 
 
 
 
TA WMC US Growth - Service Class
√
√
 
 
 
 
 
Fixed Account
√
√
√
√
√
√
√
 
 
Retirement
Income
Choice®
1.6 Rider
Retirement
Income
Choice®
1.6 Rider
Retirement
Income
Choice®
1.6 Rider
Retirement
Income
Choice®
1.6 Rider
Subaccounts
Before
2/28/19
3/1/19 to
1/30/20
1/31/20 to
8/31/20
9/1/20
and After
Group
A, B or C
AB Balanced Hedged Allocation Portfolio - Class B
A
A
A
B
86
Designated Investment Options — (Continued)
 
Retirement
Income
Choice®
1.6 Rider
Retirement
Income
Choice®
1.6 Rider
Retirement
Income
Choice®
1.6 Rider
Retirement
Income
Choice®
1.6 Rider
Subaccounts
Before
2/28/19
3/1/19 to
1/30/20
1/31/20 to
8/31/20
9/1/20
and After
Group
A, B or C
AB Relative Value Portfolio - Class B
 
A
A
A
American Funds - Asset Allocation FundSM - Class 2
 
A
A
B
American Funds - The Bond Fund of AmericaSM - Class 2
C
A
A
C
American Funds - Growth FundSM - Class 2
 
A
A
A
American Funds - Growth-Income FundSM - Class 2
 
A
A
A
American Funds - International FundSM - Class 2
 
A
A
A
Fidelity® VIP Balanced Portfolio - Service Class 2
 
A
A
B
Fidelity® VIP Contrafund® Portfolio - Service Class 2
 
A
A
A
Fidelity® VIP Mid Cap Portfolio - Service Class 2
 
A
A
A
Fidelity® VIP Value Strategies Portfolio - Service Class 2
 
A
A
A
State Street Total Return V.I.S. Fund - Class 3
A
A
A
B
TA 60/40 Allocation - Service Class
A
A
A
B
TA Aegon Bond - Service Class
C
A
A
C
TA Aegon Core Bond - Service Class
C
A
A
C
TA Aegon High Yield Bond - Service Class
 
A
A
B
TA Aegon Sustainable Equity Income - Service Class
 
A
A
A
TA Aegon U.S. Government Securities - Service Class
C
A
A
C
TA American Funds Managed Risk - Balanced - Service Class(1)
B
A
A
B
TA BlackRock Government Money Market - Service Class
C
A
A
C
TA BlackRock iShares Active Asset Allocation - Conservative - Service Class(1)
C
A
A
B
TA BlackRock iShares Active Asset Allocation - Moderate - Service Class(1)
B
A
A
B
TA BlackRock iShares Active Asset Allocation - Moderate Growth - Service Class(1)
A
A
A
B
TA BlackRock iShares Dynamic Allocation - Balanced - Service Class(1)
B
A
A
B
TA BlackRock iShares Dynamic Allocation - Moderate Growth - Service Class(1)
A
A
A
B
TA BlackRock iShares Edge 40- Service Class
C
A
A
B
TA BlackRock iShares Edge 50 - Service Class
B
A
A
B
TA BlackRock iShares Edge 75 - Service Class
A
A
A
B
TA BlackRock iShares Edge 100 - Service Class
 
A
A
A
TA BlackRock iShares Tactical - Balanced - Service Class(1)
B
A
A
B
TA BlackRock iShares Tactical - Conservative - Service Class(1)
C
A
A
B
TA BlackRock iShares Tactical - Growth - Service Class(1)
A
A
A
B
TA BlackRock Real Estate Securities - Service Class
 
A
A
A
TA BlackRock Tactical Allocation - Service Class(1)
B
A
A
B
TA Goldman Sachs Managed Risk - Balanced ETF - Service Class(1)
B
A
A
B
TA Goldman Sachs Managed Risk - Conservative ETF - Service Class(1)
C
A
A
B
TA Goldman Sachs Managed Risk - Growth ETF - Service Class(1)
A
A
A
B
TA Great Lakes Advisors Large Cap Value - Service Class
 
A
A
A
TA International Focus - Service Class
 
A
A
A
87
Designated Investment Options — (Continued)
 
Retirement
Income
Choice®
1.6 Rider
Retirement
Income
Choice®
1.6 Rider
Retirement
Income
Choice®
1.6 Rider
Retirement
Income
Choice®
1.6 Rider
Subaccounts
Before
2/28/19
3/1/19 to
1/30/20
1/31/20 to
8/31/20
9/1/20
and After
Group
A, B or C
TA Janus Balanced - Service Class
A
A
A
B
TA Janus Mid-Cap Growth - Service Class
 
A
A
A
TA JPMorgan Asset Allocation - Conservative - Service Class(1)
C
A
A
B
TA JPMorgan Asset Allocation - Growth - Service Class
 
A
A
A
TA JPMorgan Asset Allocation - Moderate - Service Class(1)
B
A
A
B
TA JPMorgan Asset Allocation - Moderate Growth - Service Class(1)
A
A
A
B
TA JPMorgan Enhanced Index - Service Class
 
A
A
A
TA JPMorgan International Moderate Growth - Service Class(1)
A
A
A
B
TA JPMorgan Tactical Allocation - Service Class
C
A
A
B
TA Madison Diversified Income - Service Class
B
A
A
B
TA Market Participation Strategy - Service Class(1)
B
A
A
B
TA Morgan Stanley Global Allocation - Service Class
A
A
A
B
TA Morgan Stanley Global Allocation Managed Risk - Balanced - Service Class(1)
B
A
A
B
TA MSCI EAFE Index - Service Class
 
A
A
A
TA Multi-Managed Balanced - Service Class
A
A
A
B
TA PineBridge Inflation Opportunities - Service Class
C
A
A
C
TA S&P 500 Index - Service Class
 
A
A
A
TA Small Mid Cap Value - Service Class
 
A
A
A
TA T. Rowe Price Small Cap - Service Class
 
A
A
A
TA TS&W International Equity - Service Class
 
A
A
A
TA TS&W Mid Cap Value Opportunities - Service Class
 
A
A
A
TA WMC US Growth - Service Class
 
A
A
A
Fixed Account
C
A
A
C
(1)This Subaccount invests in an underlying fund portfolio that utilized a volatility management strategy as part of its investment objective and/or principal investment strategy. See Investment Options - Investment Restrictions earlier in the prospectus for information on how volatility management strategies may impact your policy value in certain optional riders.
Certain designated Investment Options may not be available in all states, at all times or through all financial intermediaries. We may discontinue offering any designated Investment Option at any time. In some cases, a designated Investment Option not available through a financial intermediary may be obtained by contacting us directly. For more information on the options available for electing a designated Investment Option, please contact your financial intermediary or our Administrative Office.
88
APPENDIX
TRANSAMERICA INCOME EDGESM Investment Options
The table below identifies the Select Investment Options and Flexible Investment Options available for use with the Transamerica Income EdgeSM rider. 
 
Select
Investment
Options
Select
Investment
Options
Flexible
Investment
Options
Flexible
Investment
Options
Subaccounts
Before
1/31/20
Post
1/31/20
Before
1/31/20
Post
1/31/20
AB Balanced Hedged Allocation Portfolio - Class B
 
 
√
√
AB Relative Value Portfolio - Class B
 
 
√
√
American Funds - Asset Allocation FundSM - Class 2
 
 
√
√
American Funds - The Bond Fund of AmericaSM - Class 2
√
√
 
 
American Funds - Growth FundSM - Class 2
 
 
√
√
American Funds - Growth-Income FundSM - Class 2
 
 
√
√
American Funds - International FundSM - Class 2
 
 
√
√
Fidelity® VIP Balanced Portfolio - Service Class 2
 
 
√
√
Fidelity® VIP Contrafund® Portfolio - Service Class 2
 
 
√
√
Fidelity® VIP Mid Cap Portfolio - Service Class 2
 
 
√
√
Fidelity® VIP Value Strategies Portfolio - Service Class 2
 
 
√
√
State Street Total Return V.I.S. Fund - Class 3
 
 
√
√
TA 60/40 Allocation - Service Class
 
 
√
√
TA Aegon Bond - Service Class
√
√
 
 
TA Aegon Core Bond - Service Class
√
√
 
 
TA Aegon High Yield Bond - Service Class
 
 
√
√
TA Aegon Sustainable Equity Income - Service Class
 
 
√
√
TA Aegon U.S. Government Securities - Service Class
√
√
 
 
TA American Funds Managed Risk - Balanced - Service Class(1)
 
 
√
√
TA BlackRock Government Money Market - Service Class
√
√
 
 
TA BlackRock iShares Active Asset Allocation - Conservative - Service Class(1)
 
 
√
√
TA BlackRock iShares Active Asset Allocation - Moderate - Service Class(1)
 
 
√
√
TA BlackRock iShares Active Asset Allocation - Moderate Growth - Service Class(1)
 
 
√
√
TA BlackRock iShares Dynamic Allocation - Balanced - Service Class(1)
 
 
√
√
TA BlackRock iShares Dynamic Allocation - Moderate Growth - Service Class(1)
 
 
√
√
TA BlackRock iShares Edge 40- Service Class
 
 
√
√
TA BlackRock iShares Edge 50 - Service Class
 
 
√
√
TA BlackRock iShares Edge 75 - Service Class
 
 
√
√
TA BlackRock iShares Edge 100 - Service Class
 
 
√
√
TA BlackRock iShares Tactical - Balanced - Service Class
 
 
√
√
TA BlackRock iShares Tactical - Conservative - Service Class
 
 
√
√
TA BlackRock iShares Tactical - Growth - Service Class
 
 
√
√
TA BlackRock Real Estate Securities - Service Class
 
 
√
√
TA BlackRock Tactical Allocation - Service Class(1)
 
 
√
√
TA Goldman Sachs Managed Risk - Balanced ETF - Service Class(1)
 
 
√
√
89
TRANSAMERICA INCOME EDGESM Investment Options — (Continued)
 
Select
Investment
Options
Select
Investment
Options
Flexible
Investment
Options
Flexible
Investment
Options
Subaccounts
Before
1/31/20
Post
1/31/20
Before
1/31/20
Post
1/31/20
TA Goldman Sachs Managed Risk - Conservative ETF - Service Class(1)
 
 
√
√
TA Goldman Sachs Managed Risk - Growth ETF - Service Class(1)
 
 
√
√
TA Great Lakes Advisors Large Cap Value - Service Class
 
 
√
√
TA International Focus - Service Class
 
 
√
√
TA Janus Balanced - Service Class
 
 
√
√
TA Janus Mid-Cap Growth - Service Class
 
 
√
√
TA JPMorgan Asset Allocation - Conservative - Service Class(1)
 
 
√
√
TA JPMorgan Asset Allocation - Growth - Service Class
 
 
√
√
TA JPMorgan Asset Allocation - Moderate - Service Class(1)
 
 
√
√
TA JPMorgan Asset Allocation - Moderate Growth - Service Class(1)
 
 
√
√
TA JPMorgan Enhanced Index - Service Class
 
 
√
√
TA JPMorgan International Moderate Growth - Service Class(1)
 
 
√
√
TA JPMorgan Tactical Allocation - Service Class
 
 
√
√
TA Madison Diversified Income - Service Class
 
 
√
√
TA Market Participation Strategy - Service Class(1)
 
 
√
√
TA Morgan Stanley Global Allocation - Service Class
 
 
√
√
TA Morgan Stanley Global Allocation Managed Risk - Balanced - Service Class(1)
 
 
√
√
TA MSCI EAFE Index - Service Class
 
 
√
√
TA Multi-Managed Balanced - Service Class
 
 
√
√
TA PineBridge Inflation Opportunities - Service Class
√
√
 
 
TA S&P 500 Index - Service Class
 
 
√
√
TA Small Mid Cap Value - Service Class
 
 
√
√
TA T. Rowe Price Small Cap - Service Class
 
 
√
√
TA TS&W International Equity - Service Class
 
 
√
√
TA TS&W Mid Cap Value Opportunities - Service Class
 
 
√
√
TA WMC US Growth - Service Class
 
 
√
√
(1) 
This Subaccount invests in an underlying fund portfolio that utilizes a volatility management strategy as part of its investment objective and/or principal investment strategy. See Investment Restrictions earlier in the prospectus for information on how volatility management strategies may impact your Policy value in certain optional riders.
Certain Subaccounts may not be available in all states, at all times or through all financial intermediaries. We may discontinue offering any Subaccount at any time. In some cases, a Subaccount not available through a financial intermediary may be obtained by contacting us directly. For more information on the options available for electing a Subaccount, please contact your financial intermediary or our Administrative Office.
90
APPENDIX
Excess Interest Adjustment Examples
Surrenders, withdrawals, transfers, death benefits and amounts applied to an annuity option, from a Guaranteed Period Option of the Fixed Account before the end of its guaranteed period (the number of years You specified the money would remain in the Guaranteed Period Option) may be subject to an Excess Interest Adjustment (“EIA”). If, at the time of such transactions the guaranteed interest rate set by us for the applicable period has risen since the date of the initial guarantee, the Excess Interest Adjustment will result in a lower Cash Value. However, if the guaranteed interest rate set by us for the applicable period has fallen since the date of the initial guarantee, the Excess Interest Adjustment will result in a higher Cash Value.
Excess Interest Adjustments will not reduce the Adjusted Policy Value for a Guaranteed Period Option below the premium payments and transfers to that Guaranteed Period Option, less any prior withdrawals and transfers from the Guaranteed Period Option, plus interest at the Policy's minimum guaranteed effective annual interest rate. This is referred to as the Excess Interest Adjustment floor.
The formula that will be used to determine the Excess Interest Adjustment is: 
S* (G-C)* (M/12)
S
=
Is the amount (before surrender charges, premium taxes and the application of any
Guaranteed Minimum Death Benefits, if any) being surrendered, withdrawn,
transferred, paid upon death, or applied to an income option that is subject to the
Excess Interest Adjustment.
G
=
Is the guaranteed interest rate for the guaranteed period applicable to “S”;
C
=
Is the current guaranteed interest rate then being offered on new premium payments
for the next longer option period than “M”. If this Policy form or such an option
period is no longer offered, “C” will be the U.S. Treasury rate for the next longer
maturity (in whole years) than “M” on the 25th day of the previous calendar month;
and
M
=
Number of months remaining in the current option period for “S”, rounded up to
the next higher whole number of months.
*
=
Multiplication
The following examples are for illustrative purposes only and are calculated using hypothetical values. Your experience will vary based on circumstances at the time of withdrawal. In the following examples ^ denotes exponentiation. Please note the exponentiation represents the compounding of the interest rate.
91
Excess Interest Adjustment Examples — (Continued)
Example 1 (Full Surrender, rates increase by 3%):
Assumptions:
Single premium payment = $50,000
Guaranteed period = 5 Years
Guarantee rate = 5.5% per annum
Current Rate = 8.5% per annum
Guaranteed minimum interest rate = 1.50%
Surrender in the middle of Policy Year 2 (this is represented by 1.5 in this example) 
Summary:
 
Policy Value at middle of Policy Year 2
= 50,000.00 * (1.055) ^ 1.5 = 54,181.21
Cumulative earnings
= 54,181.21 – 50,000.00 = 4,181.21
Amount free of Excess Interest Adjustment
= 4,181.21
Amount subject to Excess Interest Adjustment
= 54,181.21 – 4,181.21 = 50,000.00
Excess Interest Adjustment floor
= 50,000.00 * (1.015) ^ 1.5 = 51,129.21
Excess Interest Adjustment S*(G-C)*(M/12) where:
G = .055
C = .085
M = 42
= 50,000.00 * (0.055 - 0.085) * (42/12)
 
= -5,250.00, but Excess Interest Adjustment cannot cause the
Adjusted Policy Value to fall below the Excess Interest
Adjustment floor, so the adjustment is limited to
51,129.21 - 54,181.21 = -3,052.00
Adjusted Policy Value = Policy Value + Excess Interest
Adjustment
= 54,181.21 + (-3,052.00) = 51,129.21
Upon full surrender of the Policy, the net surrender value (Adjusted Policy Value less any Surrender Charge) will never be less than that required by the non-forfeiture laws of Your state.
Example 2 (Full Surrender, rates decrease by 1%):
Assumptions:
Single premium payment = $50,000
Guaranteed period = 5 Years
Guarantee rate = 5.5% per annum
Current Rate = 4.5% per annum
Guaranteed minimum interest rate = 1.50%
Surrender in the middle of Policy Year 2 (this is represented by 1.5 in this example) 
Summary:
 
Policy Value at middle of Policy Year 2
= 50,000.00 * (1.055) ^ 1.5 = 54,181.21
Cumulative earnings
= 54,181.21 – 50,000.00 = 4,181.21
Amount free of Excess Interest Adjustment
= 4,181.21
Amount subject to Excess Interest Adjustment
= 54,181.21 – 4,181.21 = 50,000.00
Excess Interest Adjustment floor
= 50,000.00 * (1.015) ^ 1.5 = 51,129.21
Excess Interest Adjustment S* (G-C)* (M/12) where:
G = .055
C = .045
M = 42
= 50,000.00 * (.055-.045) * (42/12) = 1,750.00
Adjusted Policy Value
= 54,181.21 + 1,750.00 = 55,931.21
Upon full surrender of the Policy, the net surrender value will never by less than that required by the non-forfeiture laws of Your state. For the purpose of these illustrations no Surrender Charges are assumed.
92
Excess Interest Adjustment Examples — (Continued)
On a withdrawal, we will pay the policyholder the full amount of withdrawal requested (as long as the Policy Value is sufficient). Amounts withdrawn will reduce the Policy Value by an amount equal to: 
R - E + SC
R
=
the requested withdrawal;
E
=
the Excess Interest Adjustment; and
SC
=
the Surrender Charges on (EPW - E): where
EPW
=
the excess partial withdrawal amount.
Example 3 (Partial Withdrawal, rates increase by 1%):
Assumptions:
Single premium payment = $50,000
Guaranteed period = 5 Years
Guarantee rate = 5.5% per annum
Current rate = 6.5% per annum
Partial Withdrawal = $20,000 in the middle of Policy Year 2 (this is represented by 1.5 in this example) 
Summary:
 
Policy Value at middle of Policy Year 2
= 50,000.00 * (1.055) ^ 1.5 = 54,181.21
Cumulative earnings
= 54,181.21 – 50,000.00 = 4,181.21
Amount free of Excess Interest Adjustment
= 4,181.21
Excess Interest Adjustment S*(G-C)*(M/12) where:
S = 20,000 – 4,181.21 = 15,818.79
G = .055
C = .065
M = 42
= 15,818.79 * (.055 - .065) * (42/12) = -553.66
Remaining Policy Value at middle of Policy Year 2
= 54,181.21 - (R - E + Surrender Charge)
= 54,181.21 - (20,000.00 - (-553.66) + 0.00) = 33,627.55
Example 4 (Partial Withdrawal, rates decrease by 1%):
Assumptions:
Single premium payment = $50,000
Guaranteed period = 5 Years
Guarantee rate = 5.5% per annum
Current rate = 4.5% per annum
Partial Withdrawal = $20,000 in the middle of Policy Year 2 (this is represented by 1.5 in this example) 
Summary:
 
Policy Value at middle of Policy Year 2
= 50,000.00 * (1.055) ^ 1.5 = 54,181.21
Cumulative earnings
= 54,181.21 – 50,000.00 = 4,181.21
Amount free of Excess Interest Adjustment
= 4,181.21
Excess Interest Adjustment S*(G-C)*(M/12) where:
S = 20,000 – 4,181.21 = 15,818.79
G = .055
C = .045
M = 42
= 15,818.79 * (.055 - .045)* (42/12) = 553.66
Remaining Policy Value at middle of Policy Year 2
= 54,181.21 - (R - E + Surrender Charge)
= 54,181.21 - (20,000.00 – 553.66 + 0.00) = 34,734.87
93
APPENDIX
Death Benefit
Adjusted Withdrawals. If You take a withdrawal, then Your guaranteed minimum death benefit is reduced by an amount called the adjusted withdrawal. The amount of the reduction depends on the relationship between Your Death Proceeds and Policy Value. The adjusted withdrawal is equal to the gross withdrawal multiplied by the Death Proceeds immediately prior to the withdrawal divided by the Policy Value immediately prior to the withdrawal. The formula is AW = GW x (DP/PV) where:
AW = adjusted withdrawal
GW= gross withdrawal
DP = Death Proceeds prior to the withdrawal = greatest of (PV, CV, or GMDB)
PV = Policy Value prior to the withdrawal
GMDB = guaranteed minimum death benefit prior to the withdrawal
CV = Cash Value prior to the withdrawal
The following examples describe the effect of a surrender on the guaranteed minimum death benefit and Policy Value.
Example 1: Death Proceeds Greater than Policy Value
Assumptions:
GMDB = $75,000
PV = $50,000
DP = $75,000
GW = $15,494
AW = $15,494 x ($75,000/$50,000) = $23,241 
Summary:
 
Reduction in guaranteed minimum death benefit
=$23,241
Reduction in Policy Value
=$15,494
New guaranteed minimum death benefit amount
=$51,759
New Policy Value (after withdrawal)
=$34,506
The guaranteed minimum death benefit is reduced more than the Policy Value because the guaranteed minimum death benefit was greater than the Policy Value immediately prior to the withdrawal.
Example 2: Death Proceeds Equal to Policy Value
Assumptions:
GMDB = $50,000
PV = $75,000
DP = $75,000
GW = $15,494
AW = $15,494 x ($75,000/$75,000) = $15,494 
Summary:
 
Reduction in guaranteed minimum death benefit
=$15,494
Reduction in Policy Value
=$15,494
New guaranteed minimum death benefit amount
=$34,506
New Policy Value (after withdrawal)
=$59,506
The guaranteed minimum death benefit and Policy Value are reduced by the same amount because the Policy Value was greater than the guaranteed minimum death benefit immediately prior to the withdrawal.
These examples are for illustrative purposes only. The purpose of these illustrations is to demonstrate how this feature is calculated using hypothetical values. Your experience will vary based on circumstances at the time of withdrawal.
94
Death Benefit — (Continued)
Hypothetical Example
In this example, certain death benefit values at various points in time are depicted based on hypothetical assumed rates of performance. This example is for illustrative purposes only and assumes a single $100,000 premium payment by a sole Owner and Annuitant who is age 50. It further assumes no subsequent premium payments or withdrawals. The difference between the two “Policy Value” columns is the fee for the guaranteed minimum death benefit. 
End of Year
Net Rate of
Return*
Policy Value
(No GMDB
Elected)
Policy Value
(Return of
Premium GMDB
Elected)
Return of
Premium
GMDB
Policy Value
(Annual Step-Up
GMDB Elected)
Annual
Step-Up
GMDB
Issue
N/A
$100,000
$100,000
$100,000
$100,000
$100,000
1
-4%
$94,850
$94,700
$100,000
$94,500
$100,000
2
18%
$110,832
$110,515
$100,000
$110,093
$110,093
3
15%
$126,182
$125,655
$100,000
$124,955
$124,955
4
-7%
$115,899
$115,226
$100,000
$114,334
$124,955
5
2%
$116,884
$116,033
$100,000
$114,905
$124,955
6
10%
$127,228
$126,127
$100,000
$124,672
$124,955
7
14%
$143,577
$142,146
$100,000
$140,257
$140,257
8
-3%
$137,618
$136,033
$100,000
$133,945
$140,257
9
17%
$159,431
$157,391
$100,000
$154,706
$154,706
10
6%
$167,163
$164,788
$100,000
$161,668
$161,668
*
The assumed rate does reflect the deduction of a hypothetical fund fee but does not reflect the deduction of any other fees, charges or taxes. The death benefit values do reflect the deduction of hypothetical base Policy fees and hypothetical death benefit fees. For purposes of this example we assumed a Mortality and Expense Risk Fee and Administrative Charge of 1.15% for Policy Value, 1.30% for Return of Premium and 1.50% for Annual Step-Up. Different hypothetical returns and fees would produce different results.
95
APPENDIX
ADDITIONAL DEATH DISTRIBUTIONSM RIDER – No longer available
The following example illustrates the Additional Death DistributionSM additional death benefit payable by this rider as well as the effect of a withdrawal on the Additional Death DistributionSM benefit amount. The Annuitant is less than age 71 on the Rider Date.
Example 1
Assumptions:
Policy Value on the rider date = $100,000
Premiums paid after the rider date before surrender = $25,000
Gross withdrawals after the rider date = $30,000
Policy Value on date of surrender = $150,000 
Summary:
 
Rider earnings on date of surrender (Policy Value on date of surrender – Policy Value on rider date – premiums paid
after rider date + surrenders since rider date that exceeded rider earnings = $150,000 - $100,000 - $25,000 + 0):
$25,000
Amount of surrender that exceeds rider earnings ($30,000 - $25,000):
$5,000
Base Policy death benefit (assumed) on the date of death benefit calculation:
$200,000
Policy Value on the date of death benefit calculations:
$175,000
Rider earnings (= Policy Value on date of death benefit calculations – Policy Value on rider date – premiums since
rider date + surrenders since rider date that exceeded rider earnings = $175,000 - $100,000 - $25,000 + $5,000):
$55,000
Additional death benefit amount (= additional death benefit factor * rider earnings = 40%* $55,000):
$22,000
Total death benefit paid (= base Policy death benefit plus additional death benefit amount):
$222,000
Example 2
Assumptions:
Policy Value on the rider date = $100,000
Premiums paid after the rider date before surrender = $0
Gross withdrawals after the rider date = $0
Base Policy death benefit (assumed) on the date of death benefit calculation = $100,000
Policy Value on the date of death benefit calculations = $75,000 
Summary:
 
Rider earnings (= Policy Value on date of death benefit calculations – Policy Value on rider date – premiums since
rider date + surrenders since rider date that exceeded rider earnings = $75,000 - $100,000 - $0 + $0):
$0
Additional death benefit amount (= additional death benefit factor * rider earnings = 40%* $0):
$0
Total death benefit paid (= base Policy death benefit plus additional death benefit amount):
$100,000
96
APPENDIX
ADDITIONAL DEATH DISTRIBUTION+SM RIDER – no longer available
Assume the Additional Death Distribution+SM rider is added to a new Policy opened with $100,000 initial premium payment. The Annuitant is less than age 70 on the rider date. On the first and second rider anniversaries, the Policy Value is $110,000 and $95,000 respectively when the rider fees are deducted. The Annuitant adds a $25,000 premium payment in the 3rd rider year when the Policy Value is equal to $115,000 and then takes a withdrawal of $35,000 during the 4th rider year when the Policy Value is equal to $145,000. After 5 years, the Policy Value is equal to $130,000 and the Death Proceeds are equal to $145,000.
Example 1
Assumptions:
Account value on rider date (equals initial Policy Value since new Policy) = $100,000
Additional death benefit during first rider year = $0
Rider fee on first rider anniversary (= rider fee * Policy Value = 0.55% * $110,000) = $605
Additional death benefit during 2nd rider year (= sum of total rider fees paid) = $605 
Summary:
 
Rider fee on second rider anniversary (= rider fee * Policy Value = 0.55% * $95,000)
$522.50
Additional death benefit during 3rd rider year (= sum of total rider fees paid = $605 + $522.50)
$1,127.50
Rider benefit base in 3rd rider year prior to premium addition (= account value less premiums added since rider
date = $115,000 – $0)
$115,000.00
Rider benefit base in 3rd rider year after premium addition (= $140,000 - $25,000)
$115,000.00
Rider benefit base in 4th rider year prior to withdrawal (= account value less premiums added since rider date =
$145,000 - $25,000)
$120,000.00
Rider benefit base in 4th rider year after withdrawal = (account value less premiums added since rider date
=$110,000 - $25,000)
$85,000.00
Rider benefit base in 5th rider year (= $130,000 - $25,000)
$105,000.00
Additional death benefit = rider benefit percentage * rider benefit base = 30% * $105,000
$31,500.00
Total Death Proceeds in 5th rider year (= base Policy Death Proceeds + additional death benefit amount = $145,000
+ $31,500)
$176,500.00
97
APPENDIX
GUARANTEED PRINCIPAL SOLUTIONSM RIDER ADJUSTED WITHDRAWALS
The following examples show the effect of withdrawals on the benefits under the Guaranteed Principal SolutionSM rider which is no longer available.
GUARANTEED MINIMUM ACCUMULATION BENEFIT
Gross withdrawals will reduce the guaranteed future value by an amount equal to the greater of:
1) 
the gross withdrawal amount; and
2) 
a pro rata amount, the result of (A / B) * C, where:
A 
is the amount of gross withdrawal;
B 
is the Policy Value immediately prior to the gross withdrawal; and
C 
is the guaranteed future value immediately prior to the gross withdrawal.
The following demonstrates, on a purely hypothetical basis, the effects of withdrawals under the Guaranteed Minimum Accumulation Benefit.
Example 1:
Assumptions:
Policy Value prior to withdrawal (“PV”) = $90,000
Guaranteed future value prior to withdrawal (“GFV”) = $100,000
Gross withdrawal amount (“WD” ) = $10,000
Step One. What is the pro rata value of the amount withdrawn?
1. 
Formula is (WD / PV) * GFV = pro rata amount
2. 
($10,000 / $90,000) * $100,000 = $11,111.11
Step Two. Which is larger, the $10,000 withdrawal or the $11,111.11 pro rata amount?
$11,111.11 pro rata amount
Step Three. After the withdrawal is taken, what will be new guaranteed future value?
$100,000 - $11,111.11 = $88,888.89
Result. If no more withdrawals are taken, the guaranteed future value on the 10th rider anniversary is $88,888.89.
Example 2:
Assumptions:
PV = $120,000
GFV= $100,000
WD= $10,000
Step One. What is the pro rata value of the amount withdrawn?
1. 
Formula is (WD / PV) * GFV = pro rata amount
2. 
($10,000 / $120,000) * $100,000 = $8,333.33
Step Two. Which is larger, the $10,000 withdrawal or the $8,333.33 pro rata amount?
$10,000 withdrawal
Step Three. After the withdrawal is taken, what will be new guaranteed future value?
$100,000 - $10,000 = $90,000
Result. If no more withdrawals are taken, the guaranteed future value on the 10th Rider Anniversary is $90,000.
GUARANTEED LIFETIME WITHDRAWAL BENEFIT
Total Withdrawal Base. Gross withdrawals up to the maximum annual withdrawal amount will not reduce the total withdrawal base. Gross withdrawals in excess of the maximum annual withdrawal amount will reduce the total withdrawal base by an amount equal to the greater of:
1) 
the excess gross withdrawal amount; and
98
GUARANTEED PRINCIPAL SOLUTIONSM RIDER ADJUSTED WITHDRAWALS — (Continued)
2) 
a pro rata amount, the result of (A / B) * C, where:
A 
is the excess gross withdrawal (the amount in excess of the guaranteed annual withdrawal amount remaining prior to the withdrawal);
B 
is the Policy Value after the maximum annual withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and
C 
is the total withdrawal base prior to the withdrawal of the excess amount.
Minimum Remaining Withdrawal Amount. Gross withdrawals up to the maximum annual withdrawal amount will reduce the minimum remaining withdrawal amount by the same amount (dollar-for-dollar). Gross withdrawals in excess of the maximum annual withdrawal amount will reduce the minimum remaining withdrawal amount by an amount equal to the greater of:
1) 
the excess gross partial withdrawal amount; and
2) 
a pro rata amount, the result of (A / B) * C, where:
A 
is the excess withdrawal (the amount in excess of the guaranteed annual withdrawal amount remaining prior to the withdrawal);
B 
is the Policy Value after the maximum annual withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and
C 
is the minimum remaining withdrawal amount after the maximum annual withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount.
The following demonstrates, on a purely hypothetical basis, the effects of withdrawals under the guaranteed lifetime withdrawal benefit.
When a withdrawal is taken, three parts of the guaranteed lifetime withdrawal benefit can be affected:
1. 
Minimum remaining withdrawal amount (“MRWA”)
2. 
Total withdrawal base (“TWB”)
3. 
Maximum annual withdrawal amount (“MAWA”)
Example 1 (7% “principal back”):
Assumptions:
TWB = $100,000
MRWA = $100,000
7% WD would be $7,000 (7% of the current $100,000 total withdrawal base)
WD = $7,000
Excess withdrawal (“EWD”) = None
PV = $100,000
You = Owner and Annuitant (Age 60)
Step One. Is any portion of the withdrawal greater than the “principal back” maximum annual withdrawal amount?
No. There is no excess withdrawal under the “principal back” guarantee if no more than $7,000 is withdrawn.
Step Two. What is the minimum remaining withdrawal amount after the withdrawal has been taken?
1. 
Total to deduct from the minimum remaining withdrawal amount is $7,000 (there is no excess to deduct)
2. 
$100,000 - $7,000 = $93,000.
Result. In this example, because no portion of the withdrawal was in excess of $7,000, the “principal back” total withdrawal base does not change and the “principal back” minimum remaining withdrawal amount is $93,000.00.
Example 2 (7% “principal back”):
Assumptions:
TWB = $100,000
MRWA = $100,000
7% WD would be $7,000 (7% of the current $100,000 total withdrawal base)
WD = $8,000
EWD = $1,000 ($8,000 - $7,000)
PV = $90,000
You = Owner and Annuitant (Age 60)
99
GUARANTEED PRINCIPAL SOLUTIONSM RIDER ADJUSTED WITHDRAWALS — (Continued)
Step One. Is any portion of the total withdrawal greater than the maximum annual withdrawal amount?
Yes. $8,000 - $7,000 = $1,000 (the excess withdrawal amount)
Step Two. Calculate how much of the “principal back” minimum remaining withdrawal amount is affected by the excess withdrawal.
1. 
Formula for pro rata amount is: (EWD / (PV - 7% WD)) * (MRWA - 7% WD)
2. 
($1,000 / ($90,000 - $7,000)) * ($100,000 - $7,000) = $1,120.48
Step Three. Which is larger, the actual $1,000 excess withdrawal amount or the $1,120.48 pro rata amount?
$1,120.48 pro rata amount
Step Four. What is the “principal back” minimum remaining withdrawal amount after the withdrawal has been taken?
1. 
Total to deduct from the minimum remaining withdrawal amount is $7,000 + $1,120.48 (pro rata excess) = $8,120.48
2. 
$100,000 - $8,120.48 = $91,879.52
Result. The “principal back” minimum remaining withdrawal amount is $91,879.52.
NOTE. For the Guaranteed Lifetime Withdrawal Benefit, because there was an excess withdrawal amount, the total withdrawal base needs to be adjusted as well as a new lower maximum annual withdrawal amount. Had the withdrawal for this example not been more than $7,000, the “principal back” total withdrawal base would remain at $100,000 and the “principal back” maximum annual withdrawal amount would be $7,000. However, because an excess withdrawal has been taken, the total withdrawal base is also changed (this is the amount the 7% is based on).
New “principal back” total withdrawal base:
Step One. The total withdrawal base is only reduced by the excess withdrawal amount or the pro rata amount if greater.
Step Two. Calculate how much the total withdrawal base is affected by the excess withdrawal.
1. 
The formula is (EWD / (PV - 7% WD)) * TWB before any adjustments
2. 
($1,000 / ($90,000 - $7,000)) * $100,000 = $1,204.82
Step Three. Which is larger, the actual $1,000 excess withdrawal amount or the $1,204.82 pro rata amount?
$1,204.82 pro rata amount.
Step Four. What is the new total withdrawal base upon which the maximum annual withdrawal amount is based?
$100,000 - $1,204.82 = $98,795.18
Result. The new “principal back” total withdrawal base is $98,795.18
New “principal back” maximum annual withdrawal amount:
Because the “principal back” total withdrawal base was adjusted (due to the excess withdrawal) we have to calculate a new maximum annual withdrawal amount for the 7% “principal back” guarantee that will be available starting on the next rider anniversary. This calculation assumes no more activity prior to the next rider anniversary.
Step One. What is the new “principal back” maximum annual withdrawal amount?
$98,795.18 (the adjusted total withdrawal base) * 7% = $6,915.66
Result. Going forward, the maximum You can take out in a rider year is $6,915.66 without causing an excess withdrawal for the “principal back” guarantee and further reduction of the “principal back” total withdrawal base.
Example 3 (5% “for life”):
Assumptions:
TWB = $100,000
MRWA = $100,000
5% WD would be $5,000 (5% of the current $100,000 total withdrawal base)
WD = $5,000
Excess withdrawal (“EWD” ) = None
PV = $100,000
You = Owner and Annuitant (Age 60)
Step One. Is any portion of the withdrawal greater than the “for life” maximum annual withdrawal amount?
No. There is no excess withdrawal under the “for life” guarantee if no more than $5,000 is withdrawn.
100
GUARANTEED PRINCIPAL SOLUTIONSM RIDER ADJUSTED WITHDRAWALS — (Continued)
Step Two. What is the minimum remaining withdrawal amount after the withdrawal has been taken?
1. 
Total to deduct from the minimum remaining withdrawal amount is $5,000 (there is no excess to deduct).
2. 
$100,000 - $5,000 = $95,000.
Result. In this example, because no portion of the withdrawal was in excess of $5,000, the “for life” total withdrawal base does not change and the “for life” minimum remaining withdrawal amount is $95,000.00.
Example 4 (5% “for life”):
Assumptions:
TWB = $100,000
MRWA = $100,000
5% WD would be $5,000 (5% of the current $100,000 total withdrawal base)
WD = $7,000
EWD = $2,000 ($7,000 - $5,000)
PV = $90,000
You = Owner and Annuitant (Age 60)
Step One. Is any portion of the total withdrawal greater than the maximum annual withdrawal amount?
Yes. $7,000 - $5,000 = $2,000 (the excess withdrawal amount)
Step Two. Calculate how much of the “for life” minimum remaining withdrawal amount is affected by the excess withdrawal.
1. 
Formula for pro rata amount is: (EWD / (PV - 5% WD)) * (MRWA - 5% WD)
2. 
($2,000 / ($90,000 - $5,000)) * ($100,000 - $5,000) = $2,235.29
Step Three. Which is larger, the actual $2,000 excess withdrawal amount or the $2,235.29 pro rata amount?
$2,235.29 pro rata amount
Step Four. What is the “for life” minimum remaining withdrawal amount after the withdrawal has been taken?
1. 
Total to deduct from the minimum remaining withdrawal amount is $5,000 + $2,235.29 (pro rata excess) = $7,235.29
2. 
$100,000 - $7,235.29 = $92,764.71
Result. The “for life” minimum remaining withdrawal amount is $92,764.71.
NOTE. For the Guaranteed Lifetime Withdrawal Benefit, because there was an excess withdrawal amount, the total withdrawal base needs to be adjusted as well as a new lower maximum annual withdrawal amount. Had the withdrawal for this example not been more than $5,000, the “for life” total withdrawal base would remain at $100,000 and the “for life” maximum annual withdrawal amount would be $5,000. However, because an excess withdrawal has been taken, the total withdrawal base is also changed (this is the amount the 5% is based on).
New “for life” total withdrawal base:
Step One. The total withdrawal base is only reduced by the excess withdrawal amount or the pro rata amount if greater.
Step Two. Calculate how much the total withdrawal base is affected by the excess withdrawal.
1. 
The formula is (EWD / (PV - 5% WD)) * TWB before any adjustments
2. 
($2,000 / ($90,000 - $5,000)) * $100,000 = $2,352.94
Step Three. Which is larger, the actual $2,000 excess withdrawal amount or the $2,352.94 pro rata amount?
$2,352.94 pro rata amount.
Step Four. What is the new total withdrawal base upon which the maximum annual withdrawal amount is based?
$100,000 - $2,352.94 = $97,647.06
Result. The new “for life” total withdrawal base is $97,647.06
101
GUARANTEED PRINCIPAL SOLUTIONSM RIDER ADJUSTED WITHDRAWALS — (Continued)
New “for life” maximum annual withdrawal amount:
Because the “for life” total withdrawal base was adjusted (due to the excess withdrawal) we have to calculate a new maximum annual withdrawal amount for the 5% “for life” guarantee that will be available starting on the next rider anniversary. This calculation assumes no more activity prior to the next rider anniversary.
Step One. What is the new “for life” maximum annual withdrawal amount?
$97,647.06 (the adjusted total withdrawal base) * 5% = $4,882.35
Result. Going forward, the maximum You can take out in a rider year is $4,882.35 without causing an excess withdrawal for the “for life” guarantee and further reduction of the “for life” total withdrawal base.
102
APPENDIX
PAM METHOD TRANSFERS
NOTE: The Guaranteed Principal SolutionSM rider is no longer available to elect. For previously elected rider, to make the Guaranteed Principal SolutionSM rider available, we monitor Your Policy Value and guarantees under the rider daily and periodically transfer amounts between Your selected Investment Options and the PAM Subaccount. We determine the amount and timing of PAM Method transfers between the Investment Options and the PAM Subaccount according to a mathematical model. For further clarification on how PAM works, reference Optional Benefit Riders for the Guaranteed Principal SolutionSM rider Allocation Method information in the body of the prospectus.
The mathematical model is designed to calculate how much of Your Policy Value should be allocated to the PAM Subaccount. Based on this calculation and threshold amounts, transfers into or out of the PAM Subaccount may occur. The formula is:
Percent of Policy Value required in PAM Subaccount (or X) = e-Dividend*Time *(1- NormDist(d1))
where:
e = Base of the Natural Logarithm
NormDist = Cumulative Standard Normal Distribution
d1 = [ln(G)+(R – F +.5*V ^ 2)* T]/[V * T^.5]
In order to calculate the percent of Policy Value required in the PAM Subaccount, we must first calculate d1:
d1 = [ln(G)+(R – F +.5*V ^ 2)* T]/[V * T^.5]
where:
ln = Natural Logarithm Function
G = Guarantee Ratio
R = Rate
F = Fees
V = Volatility
T = Time
After calculating d1, the percent of Policy Value required in the PAM Subaccount can be calculated. Once calculated, appropriate transfers into or out of the PAM Subaccount may occur based on the transfer threshold amounts.
Following is a brief discussion of the values used in the formula.
◆
The POLICY VALUE includes the value in both the Investment Options and in the PAM Subaccount.
◆
The GUARANTEE RATIO is the Policy Value divided by 7% “Principal Back” Minimum Remaining Withdrawal Amount.
◆
The RATE is the interest rate used for the PAM Method. It is based on a long-term expectation based on historical interest rates and may vary over time.
◆
The FEES is an approximation of average Policy fees and charges associated with policies that have elected the Guaranteed Principal SolutionSM rider. This value may change over time.
◆
The VOLATILITY represents the volatility of the returns of Policy Value for all in force policies and is based on the long-term expectation of the degree to which the Policy Values tend to fluctuate. This value may vary over time.
◆
The TIME is an approximation based on actuarial calculations of historical average number of years (including any fraction) which we anticipate remain until any potential payments are made under the benefit. This value may vary over time.
◆
The PERCENT OF POLICY VALUE TO BE ALLOCATED TO THE PAM SUBACCOUNT is computed for each Policy. Ultimately the allocation for a Policy takes into account the guarantees under the rider and the limit on allocations to the PAM Subaccount.
◆
The CUMULATIVE STANDARD NORMAL DISTRIBUTION function assumes that random events are distributed according to the classic bell curve. For a given value it computes the percentage of such events which can be expected to be less than that value.
◆
The NATURAL LOGARITHM function for a given value, computes the power to which e must be raised, in order to result in that value. Here, e is the base of the natural logarithms, or approximately 2.718282.
◆
The FIXED ACCOUNT TRANSFER THRESHOLD (FATT) is the percentage that the Guarantee Ratio must be below before any of the Policy Value can be transferred to the PAM Subaccount. This threshold is set to a fixed percentage at rider issue and is then recalculated after each PAM Subaccount transfer.
103
PAM METHOD TRANSFERS — (Continued)
◆
The SEPARATE ACCOUNT TRANSFER THRESHOLD (SATT) is the percentage that the Guarantee Ratio must exceed before any of the Policy Value can be transferred from the PAM Subaccount. This threshold is set to a fixed percentage at rider issue and is then recalculated after each PAM Subaccount transfer.
Example:
Day 1: Policy Value Declines by 10%
For purposes of this example we will assume that the Policy Value declines by 10% to $90,000 the day after the rider issue date from the initial premium amount of $100,000 producing a guarantee ratio of 90% ($90,000/$100,000). We will also assume:
Rate = 3%
Volatility = 15%
Fees = 3.05%
Time = 10
FATT = 95%
SATT =105%
First we calculate d1.
d1=[ln(G)+(R – F +.5*V ^ 2)* T]/[V * T^.5]
d1=[ln(.90)+(.03 – .0305 +.5*.15 ^ 2)* 10]/[.15 * 10^.5]
d1=.658832
Using the value we just calculated for d1 we can now calculate the percent of Policy Value required in the PAM Subaccount.
Percent of Policy Value in PAM Subaccount (or X) = e-Dividend*Time *(1-NormDist(d1))
X= (2.718282 ^ -.0305 * 10) * (1 – NormDist(.004509))
X = 36.7235%
Therefore, 36.7235% of the Policy Value is transferred to the PAM Subaccount since the guarantee ratio (90%) is less than the FATT (95%), resulting in a total transfer of $33,051.15.
Day 2: Policy Value Recovers to 99% of Initial Value after the 10% Decline
For purposes of this example we will assume that after the Policy Value declined to $90,000 it recovered the next day to $99,000 producing a guarantee ratio of 99% ($99,000/$100,000). We will also assume:
Rate = 2%
Volatility = 15%
Fees = 3.05%
Time = 10
FATT = 85.5% (G last transfer *.95) = (.9*.95)
SATT = 94.5% (G last transfer *1.05) = (.9*1.05)
PAM Subaccount Value = $33,051.15
Value in other Investment Options = $65,948.85 ($99,000 - $33,051.15)
PAM Subaccount Value as percent of Policy Value = $33,051.15 / $99,000 = 33.3850%
First we calculate d1.
d1=[ln(G)+(R – F +.5*V ^ 2)* T]/[V * T^.5]
d1=[ln(.99)+(.02 – .0305 +.5*.15 ^ 2)* 10]/[.15 * 10^.5]
d1= -.005376
Using the value we just calculated for d1 we can now calculate the percent of Policy Value required in the PAM Subaccount.
Percent of Policy Value in PAM Subaccount (or X) = e-Dividend*Time *(1 - NormDist(d1))
X= (2.718282 ^ -.0305 * 10) * (1 – NormDist(-0.005376))
X = 37.0143%
Although the GR is greater than the SATT, since the percentage required in the PAM Subaccount (37.0143%) is greater than the amount allocated to the PAM Subaccount (33.3850%), none of the Policy Value will be transferred to the PAM Subaccount. Consequently, the amount in the PAM Subaccount will remain $33,051.15 and the FATT and SATT will not recalculate.
Day 3: Policy Value Recovers to 105% of Initial Value after the increase to 99% of Initial Value
104
PAM METHOD TRANSFERS — (Continued)
For purposes of this example we will assume that after the Policy Value recovered further the next to $105,000 producing a guarantee ratio of 105% ($105,000/$100,000). We will also assume:
Rate = 3%
Volatility = 15%
Fees = 3.05%
Time = 10
FATT = 85.5%
SATT = 94.5%
PAM Subaccount Value = $33,051.15
Value in other Investment Options = $71,948.85 ($105,000 - $33,051.15)
PAM Subaccount Value as percent of Policy Value = $33,051.15 / $105,000 = 31.4773%
First we calculate d1.
d1=[ln(G)+(R – F +.5*V ^ 2)* T]/[V * T^.5]
d1=[ln(1.05)+(.03 – .0305 +.5*.15 ^ 2)* 10]/[.15 * 10^.5]
d1= .329488
Using the value we just calculated for d1 we can now calculate the percent of Policy Value required in the PAM Subaccount.
Percent of Policy Value in PAM Subaccount (or X) = e-Dividend*Time *(1 - NormDist(d1))
X= (2.718282 ^ -.0305 * 10) * (1 – NormDist(.329488))
X = 27.3394%
While the mathematical model would suggest we transfer only a portion of the Policy Value in the PAM Subaccount into Your Investment Options (leaving 27.3394% in the PAM Subaccount), all of the Policy Value in the PAM Subaccount will be transferred into Your Investment Options. If the Guarantee Ratio equals or exceeds 100%. Because the Policy Value is greater than or equal to the value of the guarantee, and there is no current need for any Policy Value to be allocated to the PAM Subaccount.
105
APPENDIX
Guaranteed Lifetime Withdrawal Benefit -
Transamerica Income EdgeSM rider – REBALANCING EXAMPLES
NOTE: The following demonstrates, on a purely hypothetical basis, the rebalancing mechanics of this Guaranteed Lifetime Withdrawal Benefit. The Investment Restrictions, rider fee percentages and withdrawal percentages for Your rider may vary from the percentages used below.
Rebalancing Examples
The following examples assume the initial premium allocations listed in the table below, which we assume satisfy the premium investment requirements provided in the Rate Sheet Prospectus Supplement. 
Investment Option Allocations:
Initial Premium
Allocations
Initial Premium
Allocation Percentages
Stable Account
$20,000
20%
Select Investment Option Fund A
$13,000
13%
Select Investment Option Fund B
$13,000
13%
Select Investment Option Fund C
$4,000
4%
Total Select Investment Options
$30,000
30%
Flexible Investment Option Fund A
$14,000
14%
Flexible Investment Option Fund B
$14,000
14%
Flexible Investment Option Fund C
$22,000
22%
Total Flexible Investment Options
$50,000
50%
Total Investments
$100,000
100%
Example 1: Calculation at rider issue for the rebalance allocations:
The Stable Account portion of the Policy Value is not included in the quarterly Rebalance, therefore the rebalancing allocation percentages are calculated by multiplying the initial premium allocation percentages for the Select Investment Options and Flexible Investment Options by a ratio. The ratio is calculated by taking 100%, divided by 100% less the Stable Account premium allocation percentage. The ratio for this example would be 100% / (100% - 20%) = 1.25. 
Investment Option Allocations:
Initial
Allocations
Initial Allocation
Percentages
Rebalancing
Allocation
Percentages
Stable Account
$20,000
20%
N/A
Total Select Investment Options
$30,000
30%
37.5%
Total Flexible Investment Options
$50,000
50%
62.5%
Total Investments
$100,000
100%
100%
Whole percentages are required for the rebalancing percentages and must sum up to equal 100%. To satisfy this requirement and ensure the rebalancing allocation requirement is met for each of the Investment Options, the sum of the Select Investment Options rebalancing percentage is rounded to the nearest whole percent (hereafter referred to as Select Rebalance Total) but no less than the minimum allocation for rebalance. The Select Rebalance Total is deducted from 100% to get the Total Flexible Investment Options rebalancing percentage (hereafter referred to as Flexible Rebalance Total). The Select Rebalance Total and Flexible Rebalance Total percentages are the end result which will be achieved by the quarterly Rebalance.
106
Guaranteed Lifetime Withdrawal Benefit -
Transamerica Income EdgeSM rider – REBALANCING EXAMPLES — (Continued)
Table 1: 
Investment Option Allocations:
Unrounded
Rebalancing
Percentages
Rounded
Rebalancing
Percentages
Stable Account
N/A
N/A
Total Select Investment Options
37.5%
38%(1)
Total Flexible Investment Options
62.5%
62%(2)
Total Investments
100%
100%
(1)Select Rebalance Total
(2)Flexible Rebalance Total
We apply the same ratio and rounding to each individual Investment Option chosen and sum up the total Select and total Flexible Investment Options separately. The totals are compared to Select Rebalance Total and Flexible Rebalance Total to determine where any adjustments need to be made. In the example below, adjustments will need to be made to the Select Investment Options to bring the total percentage up to 38% and the Flexible Investment Options down to 62%, per the result from Table 1.
Table 2: 
Investment Option Allocations:
Initial
Allocations
Initial
Percentages
Rebalancing
Percentages
Stable Account
$20,000
20%
N/A
Select Investment Option Fund A
$13,000
13%
16%
Select Investment Option Fund B
$13,000
13%
16%
Select Investment Option Fund C
$4,000
4%
5%
Total Select Investment Options
$30,000
30%
37%
Flexible Investment Option Fund A
$14,000
14%
18%
Flexible Investment Option Fund B
$14,000
14%
18%
Flexible Investment Option Fund C
$22,000
22%
28%
Total Flexible Investment Options
$50,000
50%
64%
Total Investments
$100,000
100%
101%
To get the total Select Investment Options rebalancing percent to equal 38%, we must add 1% to one of the funds. Any adjustments will first be made equally to the fund(s) with the greatest allocation. If there are multiple funds with the greatest allocation and the adjustments cannot be divided equally, we will adjust in alphabetical order the fund(s) with the greatest allocation. In the example below, we made the adjustment to the Select Investment Option Fund A.
To get the total Flexible Investment Options rebalancing percent to equal 62%, we must subtract 2% from one or more funds. Since there is only one fund with the greatest allocation, we have made the adjustment to the Flexible Investment Option Fund C.
107
Guaranteed Lifetime Withdrawal Benefit -
Transamerica Income EdgeSM rider – REBALANCING EXAMPLES — (Continued)
Table 3: 
Investment Option Allocations:
Initial
Allocations
Initial
Percentages
Rebalancing
Percentages
Stable Account
$20,000
20%
N/A
Select Investment Option Fund A
$13,000
13%
17%
Select Investment Option Fund B
$13,000
13%
16%
Select Investment Option Fund C
$4,000
4%
5%
Total Select Investment Options
$30,000
30%
38%
Flexible Investment Option Fund A
$14,000
14%
18%
Flexible Investment Option Fund B
$14,000
14%
18%
Flexible Investment Option Fund C
$22,000
22%
26%
Total Flexible Investment Options
$50,000
50%
62%
Total Investments
$100,000
100%
100%
Example 2: Calculation for first quarter rebalance:
At the end of the first Rider Quarter, assume that the Investment Options have the following values:
Table 4: 
Investment Option Allocations:
Allocation
Amounts before
Rebalance
Allocation Percentage
of rebalancing funds
Prior to Rebalance
Stable Account
$20,050
N/A
Select Investment Option Fund A
$13,090
17%
Select Investment Option Fund B
$11,550
15%
Select Investment Option Fund C
$3,850
5%
Total Select Investment Options
$28,490
37%
Flexible Investment Option Fund A
$13,090
17%
Flexible Investment Option Fund B
$14,630
19%
Flexible Investment Option Fund C
$20,790
27%
Total Flexible Investment Options
$48,510
63%
Total Investments
$97,050
100%
The result of the Rebalance back to the rebalancing percentages from Table 3 is:
108
Guaranteed Lifetime Withdrawal Benefit -
Transamerica Income EdgeSM rider – REBALANCING EXAMPLES — (Continued)
Table 5: 
Investment Option Allocations:
Allocation
amounts after
Rebalance
Allocation of
Rebalancing
after Rebalance
Allocation of
Policy Value
Rebalance
Stable Account
$20,050
N/A
21%
Select Investment Option Fund A
$13,090
17%
13%
Select Investment Option Fund B
$12,320
16%
13%
Select Investment Option Fund C
$3,850
5%
4%
Total Select Investment Options
$29,260
38%
30%
Flexible Investment Option Fund A
$13,860
18%
14%
Flexible Investment Option Fund B
$13,860
18%
14%
Flexible Investment Option Fund C
$20,020
26%
21%
Total Flexible Investment Options
$47,740
62%
49%
Total Investments
$97,050
100%
100%
This rebalancing process will continue on a quarterly basis while this rider is in force.
109
APPENDIX
Hypothetical Adjusted withdrawals -Guaranteed
Lifetime Withdrawal Benefit Riders
This appendix explains the material features of the Retirement Income Max® and Retirement Income Choice® 1.6 riders which are no longer available to elect.
When a withdrawal is taken, three parts of the Guaranteed Lifetime Withdrawal Benefit can be affected:
1. 
Withdrawal Base (“WB”) (also referred to as Total Withdrawal Base (“TWB”) for some riders);
2. 
Rider Withdrawal Amount (“RWA”) (also referred to as Maximum Annual Withdrawal Amount (“MAWA”) for some riders); and
3. 
Rider Death Benefit (“RDB”) (also referred to as Minimum Remaining Withdrawal Amount (“MRWA”) for some riders (if applicable)).
Withdrawal Base. Gross withdrawals in a rider year up to the rider withdrawal amount will not reduce the withdrawal base. Gross withdrawals in a rider year in excess of the rider withdrawal amount will reduce the withdrawal base by an amount equal to the greater of:
1) 
the excess gross withdrawal amount; and
2) 
a pro rata amount, the result of (A / B) * C, where:
A 
is the excess withdrawal (the amount in excess of the rider withdrawal amount remaining prior to the withdrawal);
B 
is the Policy Value after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and
C 
is the withdrawal base prior to the withdrawal of the excess amount.
Rider Death Benefit. Gross withdrawals in a rider year up to the rider withdrawal amount will reduce the rider death benefit by the amount withdrawn (dollar-for-dollar). Gross withdrawals in a rider year in excess of the rider withdrawal amount will reduce the rider death benefit by an amount equal to the greater of:
1) 
the excess gross withdrawal amount; and
2) 
a pro rata amount, the result of (A / B) * C, where:
A 
is the excess gross withdrawal (the amount in excess of the rider withdrawal amount remaining prior to the withdrawal);
B 
is the Policy Value after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount; and
C 
is the rider death benefit after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess amount.
The following demonstrates, on a purely hypothetical basis, the effects of withdrawals under a Guaranteed Lifetime Withdrawal Benefit. The withdrawal percentages shown may not be available on all riders. Certain features (growth and rider death benefits) may not be available on all riders. For information regarding a specific rider, please refer to that rider section in this prospectus.
Example 1 (Base):
Assumptions:
WB = $100,000
Withdrawal Percentage = 5%
RWA = 5% withdrawal would be $5,000 (5% of the current $100,000 withdrawal base)
Gross withdrawal (“GPWD”) = $5,000
Excess withdrawal (“EWD” ) = None
Policy Value (“PV” ) = $100,000
Question: Is any portion of the withdrawal greater than the rider withdrawal amount?
No. There is no excess withdrawal under the guarantee since no more than $5,000 is withdrawn.
Result. In this example, because no portion of the withdrawal was in excess of $5,000, the withdrawal base does not change.
110
Hypothetical Adjusted withdrawals -Guaranteed
Lifetime Withdrawal Benefit Riders — (Continued)
Example 2 (Excess Withdrawal):
Assumptions:
WB = $100,000
Withdrawal Percentage = 5%
RWA = 5% withdrawal would be $5,000 (5% of the current $100,000 withdrawal base)
GPWD = $7,000
EWD = $2,000 ($7,000 - $5,000)
PV = $90,000
NOTE. For the Guaranteed Lifetime Withdrawal Benefit, because there was an excess withdrawal amount, the withdrawal base needs to be adjusted and a new lower rider withdrawal amount calculated. Had the withdrawal for this example not been more than $5,000, the withdrawal base would remain at $100,000 and the rider withdrawal amount would be $5,000. However, because an excess withdrawal has been taken, the withdrawal base is also reduced (this is the amount the 5% is based on).
New withdrawal base:
Step One. The withdrawal base is reduced only by the amount of the excess withdrawal or the pro rata amount, if greater.
Step Two. Calculate how much the withdrawal base is affected by the excess withdrawal.
1. 
The formula is (EWD / (PV - 5% withdrawal)) * WB before any adjustments
2. 
($2,000 / ($90,000 - $5,000)) * $100,000 = $2,352.94
Step Three. Which is larger, the actual $2,000 excess withdrawal or the $2,352.94 pro rata amount?
$2,352.94 pro rata amount.
Step Four. What is the new withdrawal base upon which the rider withdrawal amount is based?
$100,000 - $2,352.94 = $97,647.06
Result. The new withdrawal base is $97,647.06
New rider withdrawal amount:
Because the withdrawal base was adjusted (due to the excess withdrawal) we have to calculate a new rider withdrawal amount for the 5% guarantee that will be available starting on the next calendar anniversary. This calculation assumes no more activity prior to the next calendar anniversary.
Question: What is the new rider withdrawal amount?
$97,647.06 (the adjusted withdrawal base) * 5% = $4,882.35
Result. Going forward, the maximum You can take out in a year is $4,882.35 without causing an excess withdrawal for the guarantee and further reduction of the withdrawal base (assuming there are no future automatic step-ups).
Example 3 (Base demonstrating growth):
Assumptions:
WB = $100,000
Withdrawal Percentage = 5%
WB in 10 years (assuming an annual growth rate percentage of 5.0%) = $100,000 * (1 + .05) ^ 10 = $162,889
RWA = 5% withdrawal beginning 10 years from the rider date would be $8,144 (5% of the then-current $162,889 withdrawal base)
Please Note: Withdrawals under these riders can begin prior to the 10th rider anniversary, but the WB growth will not occur during the rider years when a withdrawal is taken, and the growth stops on the 10th rider anniversary.
GPWD = $8,144
EWD = None
PV = $90,000 in 10 years
Question: Is any portion of the withdrawal greater than the rider withdrawal amount?
No. There is no excess withdrawal under the guarantee if no more than $8,144 is withdrawn.
Result. In this example, because no portion of the withdrawal was in excess of $8,144, the withdrawal base does not change.
111
Hypothetical Adjusted withdrawals -Guaranteed
Lifetime Withdrawal Benefit Riders — (Continued)
Example 4 (Base demonstrating WB growth with Additional Death Payment Option):
Assumptions:
Withdrawal Percentage = 5%
WB at rider issue = $100,000
WB in 10 years (assuming an annual growth rate percentage of 5%) = $100,000 * (1 + .05) ^ 10 = $162,889
RDB (optional additional death benefit for additional cost) = $100,000
RWA = 5% withdrawal beginning 10 years from the rider date would be $8,144 (5% of the then-current $162,889 withdrawal base)
Please Note: Withdrawals under these riders can begin prior to the 10th rider anniversary, but the WB growth will not occur during the rider years when a withdrawal is taken, and the growth stops on the 10th rider anniversary.
GPWD = $8,144
EWD = None
PV = $90,000 in 10 years
Step One. Is any portion of the withdrawal greater than the rider withdrawal amount?
No. There is no excess withdrawal under the guarantee if no more than $8,144 is withdrawn.
Step Two. What is the rider death benefit after the withdrawal has been taken?
1. 
Total to deduct from the rider death benefit is $8,144 (there is no excess to deduct)
2. 
$100,000 - $8,144 = $91,856.
Result. In this example, because no portion of the withdrawal was in excess of $8,144, the total withdrawal base does not change and the rider death benefit reduces to $91,856.
Example 5 (Base with WB growth with Additional Death Payment Option illustrating excess withdrawal):
Assumptions:
Withdrawal Percentage = 5%.
WB at rider issue = $100,000
Automatic step-up never occurs and no withdrawals are taken in the first 10 rider years.
WB in 10 years (assuming an annual growth rate percentage of 5%) = $100,000 * (1 + .05) ^ 10 = $162,889.
RDB (optional additional death benefit for additional cost) = $100,000
RWA = 5% withdrawal beginning 10 years from the rider date would be $8,144 (5% of the then-current $162,889 withdrawal base)
Please Note: Withdrawals under these riders can begin prior to the 10th rider anniversary, but the WB growth will not occur during the rider years when a withdrawal is taken and the growth stops on the 10th rider anniversary.
GPWD = $10,000
EWD = $1,856 ($10,000 - $8,144)
PV = $90,000 in 10 years
Step One. Is any portion of the total withdrawal greater than the rider withdrawal amount?
Yes. $10,000 - $8,144 = $1,856 (the excess withdrawal amount)
Step Two. Calculate how much of the rider death benefit is affected by the excess withdrawal.
1. 
Formula for pro rata amount is: (EWD / (PV - 5% withdrawal)) * (RDB - 5% withdrawal)
2. 
($1,856 / ($90,000 - $8,144)) * ($100,000 - $8,144) = $2,082.74
Step Three. Which is larger, the actual $1,856 excess withdrawal amount or the $2,082.74 pro rata amount?
$2,082.74 pro rata amount.
Step Four. What is the rider death benefit after the withdrawal has been taken?
1. 
Total to deduct from the rider death benefit is $8,144 (RWA) + $2,082.74 (pro rata excess) = $10,226.74
2. 
$100,000 - $10,226.74 = $89,773.26.
Result. The rider benefit is $89,773.26.
112
Hypothetical Adjusted withdrawals -Guaranteed
Lifetime Withdrawal Benefit Riders — (Continued)
Note: Because there was an excess withdrawal amount in this example, the withdrawal base needs to be adjusted and a new lower rider withdrawal amount calculated. Had the withdrawal for this example not been more than $8,144, the withdrawal base would remain at $162,889 and the rider withdrawal amount would be $8,144. However, because an excess withdrawal has been taken, the withdrawal base is also reduced (this is the amount the 5% is based on).
113
APPENDIX
Hypothetical Example of the Withdrawal Base Calculation -Retirement
Income Max® rider
The Retirement Income Max® rider can no longer be elected. The following table demonstrates, on a purely hypothetical basis, the withdrawal base calculation for the Retirement Income Max® rider using an initial premium payment of $100,000 for a Single Life Option rider at an issue age of 80. All values shown are post transaction values. The assumed withdrawal percentage in the example below is 6.30% 
Rider Year
Hypothetical
Policy Value
Subsequent
Premium
Payment
Withdrawal
Excess WB
Adjustment
Growth
Amount*
High
MonthiversarySM
Value
Withdrawal
Base
Rider
Withdrawal
Amount
 
$100,000
$
$
$
$
$100,000
$100,000
$6,300
1
$102,000
$
$
$
$
$102,000
$100,000
$6,300
1
$105,060
$
$
$
$
$105,060
$100,000
$6,300
1
$107,161
$
$
$
$
$107,161
$100,000
$6,300
1
$110,376
$
$
$
$
$110,376
$100,000
$6,300
1
$112,584
$
$
$
$
$112,584
$100,000
$6,300
1
$115,961
$
$
$
$
$115,961
$100,000
$6,300
1
$118,280
$
$
$
$
$118,280
$100,000
$6,300
1
$121,829
$
$
$
$
$121,829
$100,000
$6,300
1
$124,265
$
$
$
$
$124,265
$100,000
$6,300
1
$120,537
$
$
$
$
$124,265
$100,000
$6,300
1
$115,716
$
$
$
$
$124,265
$100,000
$6,300
1
$109,930
$
$
$
$105,000
$124,265
$124,2651
$7,829
2
$112,129
$
$
$
$
$112,129
$124,265
$7,829
2
$115,492
$
$
$
$
$115,492
$124,265
$7,829
2
$117,802
$
$
$
$
$117,802
$124,265
$7,829
2
$121,336
$
$
$
$
$121,336
$124,265
$7,829
2
$124,976
$
$
$
$
$124,976
$124,265
$7,829
2
$177,476
$50,000
$
$
$
$177,476
$174,265
$10,979
2
$175,701
$
$
$
$
$177,476
$174,265
$10,979
2
$172,187
$
$
$
$
$177,476
$174,265
$10,979
2
$167,022
$
$
$
$
$177,476
$174,265
$10,979
2
$163,681
$
$
$
$
$177,476
$174,265
$10,979
2
$166,955
$
$
$
$
$177,476
$174,265
$10,979
2
$170,294
$
$
$
$182,979
$177,476
$182,9792
$11,528
3
$166,888
$
$
$
$
$166,888
$182,979
$11,528
3
$171,895
$
$
$
$
$171,895
$182,979
$11,528
3
$173,614
$
$
$
$
$173,614
$182,979
$11,528
3
$178,822
$
$
$
$
$178,822
$182,979
$11,528
3
$175,246
$
$
$
$
$178,822
$182,979
$11,528
3
$151,741
$
$20,000
$9,676
$
$
$173,303
$
3
$154,775
$
$
$
$
$
$173,303
$
3
$159,419
$
$
$
$
$
$173,303
$
3
$161,013
$
$
$
$
$
$173,303
$
3
$165,843
$
$
$
$
$
$173,303
$
3
$174,135
$
$
$
$
$
$173,303
$
114
Hypothetical Example of the Withdrawal Base Calculation -Retirement
Income Max® rider — (Continued)
Rider Year
Hypothetical
Policy Value
Subsequent
Premium
Payment
Withdrawal
Excess WB
Adjustment
Growth
Amount*
High
MonthiversarySM
Value
Withdrawal
Base
Rider
Withdrawal
Amount
3
$181,101
$
$
$
$
$
$181,1011
$11,409
(1) 
Automatic Step Up Applied
(2) 
Growth Applied
* 
Growth Percentage = 5%
115
APPENDIX
Hypothetical Example of the Withdrawal Base Calculation -Transamerica
Income EdgeSM rider
The Transamerica Income EdgeSM Rider can no longer be elected. The following table demonstrates, on a purely hypothetical basis, the withdrawal base calculation for the Transamerica Income EdgeSM rider using an initial premium payment of $100,000 for a Single Life Option rider at an issue age of 80. All values shown are post transaction values. The assumed withdrawal percentage in the example below is 6.30% 
Rider Year
Hypothetical
Policy Value
Subsequent
Premium
Payment
Withdrawal
Excess WB
Adjustment
Withdrawal
Base
Rider
Withdrawal
Amount
 
$100,000
$
$
$
$100,000
$6,000
1
$102,000
$
$
$
$100,000
$6,000
1
$105,060
$
$
$
$100,000
$6,000
1
$107,161
$
$
$
$100,000
$6,000
1
$110,376
$
$
$
$100,000
$6,000
1
$112,584
$
$
$
$100,000
$6,000
1
$115,961
$
$
$
$100,000
$6,000
1
$118,280
$
$
$
$100,000
$6,000
1
$121,829
$
$
$
$100,000
$6,000
1
$124,265
$
$
$
$100,000
$6,000
1
$120,537
$
$
$
$100,000
$6,000
1
$115,716
$
$
$
$100,000
$6,000
1
$109,930
$
$
$
$109,930
$6,596
2
$112,129
$
$
$
$109,930
$6,596
2
$115,492
$
$
$
$109,930
$6,596
2
$117,802
$
$
$
$109,930
$6,596
2
$121,336
$
$
$
$109,930
$6,596
2
$124,976
$
$
$
$109,930
$6,596
2
$177,476
$50,000
$
$
$159,930
$9,596
2
$175,701
$
$
$
$159,930
$9,596
2
$172,187
$
$
$
$159,930
$9,596
2
$167,022
$
$
$
$159,930
$9,596
2
$163,681
$
$
$
$159,930
$9,596
2
$166,955
$
$
$
$159,930
$9,596
2
$170,294
$
$
$
$170,2941
$10,218
3
$166,888
$
$
$
$170,294
$10,218
3
$171,895
$
$
$
$170,294
$10,218
3
$173,614
$
$
$
$170,294
$10,218
3
$178,822
$
$
$
$170,294
$10,218
3
$175,246
$
$
$
$170,294
$10,218
3
$151,741
$
$20,000
$10,314
$159,980
$
3
$154,775
$
$
$
$159,980
$
3
$159,419
$
$
$
$159,980
$
3
$161,013
$
$
$
$159,980
$
3
$165,843
$
$
$
$159,980
$
3
$174,135
$
$
$
$159,980
$
3
$181,101
$
$
$
$181,1011
$10,866
(1)Automatic Step-Up Applied
116
APPENDIX
Guaranteed Lifetime Withdrawal Benefit
Adjusted withdrawals - Income LinkSM Rider - No Longer Available
When a withdrawal is taken, three parts of the Guaranteed Lifetime Withdrawal Benefit can be affected:
1. 
Withdrawal Base (“WB”)
2. 
Rider Withdrawal Amount (“RWA”)
3. 
Income LinkSM rider Systematic Withdrawals (“ILSW”)
Withdrawal Base. Income LinkSM rider Systematic Withdrawals (and certain minimum required distributions) will not reduce the withdrawal base. Non-Income LinkSM rider Systematic Withdrawals (and minimum required distributions calculated other than as provided for in the rider or not taken via a systematic withdrawal program) will reduce the withdrawal base by an amount equal to the greater of:
1) 
the amount of the non-Income LinkSM rider Systematic Withdrawal (or non-qualifying minimum required distribution); and
2) 
a pro rata amount, the result of (A / B) * C, where:
A 
is the amount in 1 above;
B 
is the Policy Value prior to the withdrawal; and
C 
is the withdrawal base prior to the withdrawal.
The following demonstrates, on a purely hypothetical basis, the effects of partial withdrawals under this Guaranteed Lifetime Withdrawal Benefit.
Assumptions:
WB = $100,000
RWA = 6% withdrawal would be $6,000 (6% of the current $100,000 withdrawal base)
ILSW = $500 per month
Non-ILSW = $10,000 (taken after the eighteenth monthly Income LinkSM rider systematic withdrawal)
PV = $90,000
Assumes single life withdrawal option of 6% for 6 years and 4% thereafter has been elected. Non-Income LinkSM rider systematic withdrawal occurs during the second Income LinkSM rider withdrawal year (which means the withdrawal percentage is 6%).
Result. For the Guaranteed Lifetime Withdrawal Benefit, because there was a non-Income LinkSM rider systematic withdrawal, the withdrawal base needs to be adjusted and a new lower rider withdrawal amount and Income LinkSM rider systematic withdrawal amount calculated.
New withdrawal base:
Step One. The withdrawal base is reduced only by the amount of the non-Income LinkSM rider systematic withdrawal or the pro rata amount, if greater.
Step Two. Calculate how much the withdrawal base is affected by the non-Income LinkSM rider systematic withdrawal.
1. 
The formula is (Non-ILSW / (PV before withdrawal)) * WB before any adjustments
2. 
($10,000 / ($90,000)) * $100,000 = $11,111
Step Three. Which is larger, the actual $10,000 non-Income LinkSM rider systematic withdrawal or the $11,111 pro rata amount?
$11,111 pro rata amount.
Step Four. What is the new withdrawal base upon which the rider withdrawal amount is based?
$100,000 - $11,111 = $88,889
Result. The new withdrawal base is $88,889. Please note the percentage reduction in the withdrawal base is used in calculating the revised RWA and ILSW.
New rider withdrawal amount:
Because the withdrawal base was adjusted (due to the non-Income LinkSM rider systematic withdrawal) we have to calculate a new (remaining) rider withdrawal amount. This calculation assumes no more non-Income LinkSM rider systematic withdrawal activity prior to the next Income LinkSM rider withdrawal year.
Question: What is the new (remaining) rider withdrawal amount for the remainder of the Income LinkSM rider withdrawal year?
$3,000 (the remaining rider withdrawal amount) - ($3,000*11.11%) = $2,667
117
Guaranteed Lifetime Withdrawal Benefit
Adjusted withdrawals - Income LinkSM Rider - No Longer Available — (Continued)
Result. Going forward, the maximum You can take out in a benefit year without causing a negative withdrawal base adjustment and further reduction of the withdrawal base (assuming there are no future automatic step-ups) is $5,333.
New Income LinkSM rider systematic withdrawal amount:
Because the withdrawal base was adjusted (due to the non-Income LinkSM rider systematic withdrawal) we have to calculate a new Income LinkSM rider systematic withdrawal amount. This calculation assumes no more non-Income LinkSM rider systematic withdrawal activity prior to the next Income LinkSM rider withdrawal year.
Question: What is the new Income LinkSM rider systematic withdrawal amount?
$500 (the old Income LinkSM rider systematic withdrawal amount) - ($500*11.11%) = $444
Result. Going forward (until the seventh Income LinkSM rider withdrawal year), the Income LinkSM rider systematic withdrawal amount (assuming there are no future automatic step-ups) is $444.
118
where to find additional information
The Statement of Additional Information (SAI) dated May 1, 2024 contains more information about the Policy and the Separate Account. The SAI has been filed with the SEC and is incorporated by reference into this prospectus. The SAI is posted on our website, http://dfinview.com/Transamerica/TAHD/89354G588?site=VAVUL. For a free paper copy of the SAI, to request other information about the Policies, and to make investor inquiries call us at (800)525-6205 or write us at:
Transamerica Life Insurance Company or Transamerica Financial Life Insurance Company
6400 C Street SW
Cedar Rapids, IA 52499
Reports and other information about the Separate Account are available on the SEC’s website at sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.
EDGAR Contract Identifier No. is #C000124123 for TLIC and #C000124124 for TFLIC

Table of Contents
STATEMENT OF ADDITIONAL INFORMATION
TRANSAMERICA VARIABLE ANNUITY SERIES
Issued through 
Transamerica Life Insurance Company
Separate Account VA B (EST. 1/19/1990)
6400 C Street SW
Cedar Rapids, Iowa 52499-0001
(800)525-6205
www.transamerica.com
Transamerica Financial Life Insurance Company
Separate Account VA BNY (EST. 9/27/1994)
6400 C Street SW
Cedar Rapids, Iowa 52499-0001
(800)525-6205
www.transamerica.com
This Statement of Additional Information expands upon subjects discussed in the current prospectus for the Transamerica Variable Annuity Series offered by Transamerica Life Insurance Company and Transamerica Financial Life Insurance Company (“us,” “we” , “our” or “Company” ). You may obtain a copy of the current prospectus, dated May 1, 2024, by calling (800) 525-6205, or write us at the addresses listed above. The prospectus sets forth information that a prospective investor should know before investing in a policy. Terms used in the current prospectus for the policy and in this Statement of Additional Information have the same meaning.
This Statement of Additional Information (SAI) is not a prospectus and should be read only in conjunction with the prospectuses for the policy and the underlying fund portfolios.
Dated: May 1, 2024
TABLE OF CONTENTS
 
Information About Us________________________________________________________________
3
The Separate Accounts________________________________________________________________
3
3
THE POLICY—GENERAL PROVISIONS___________________________________________________
6
Owner__________________________________________________________________________
6
Entire Contract____________________________________________________________________
6
Misstatement of Age or Sex_____________________________________________________________
6
6
Annuity Payment Options_____________________________________________________________
7
Death Benefit_____________________________________________________________________
7
Death of Owner____________________________________________________________________
8
Assignment_______________________________________________________________________
8
Evidence of Survival_________________________________________________________________
8
Non-Participating___________________________________________________________________
8
Amendments______________________________________________________________________
8
Employee and Agent Purchases__________________________________________________________
8
INVESTMENT EXPERIENCE____________________________________________________________
8
Accumulation Units_________________________________________________________________
9
Annuity Unit Value and Annuity Payment Rates_______________________________________________
10
HISTORICAL PERFORMANCE DATA______________________________________________________
11
Money Market Yields_________________________________________________________________
11
Total Returns______________________________________________________________________
12
Other Performance Data_______________________________________________________________
13
Adjusted Historical Performance Data______________________________________________________
13
services__________________________________________________________________________
13
RECORDS AND REPORTS______________________________________________________________
13
DISTRIBUTION OF THE POLICIES_______________________________________________________
13
CUSTODY OF ASSETS_________________________________________________________________
14
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM____________________________________
14
FINANCIAL STATEMENTS______________________________________________________________
14
 
Prior Withdrawal/ Growth Percentages and Rider Fees____________________________________________
15
 
Prior Withdrawal/Growth Percentages and Rider Fees____________________________________________
19
 
Prior Allocation/Withdrawal Percentages and Rider Fees__________________________________________
22
ii
Information About Us
Transamerica Life Insurance Company and Transamerica Financial Life Insurance Company, located at 6400 C Street SW, Cedar Rapids, Iowa 52499, is the insurance company issuing the Policy.
We are engaged in the sale of life insurance and annuity policies. Transamerica Life Insurance Company was incorporated under the laws of the State of Iowa on April 19, 1961 as NN Investors Life Insurance Company Inc., and is licensed in the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands and all states except New York. Transamerica Financial Life Insurance Company was incorporated under the laws of the State of New York on October 3, 1947 as Zurich Life Insurance Company and is licensed in all states and the District of Columbia. We are a wholly-owned indirect subsidiary of Transamerica Corporation which conducts most of its operations through subsidiary companies engaged in the insurance business or in providing non-insurance financial services. All of the stock of Transamerica Corporation is indirectly owned by Aegon Ltd., the securities of which are publicly traded. Aegon Ltd., a holding company, conducts its business through subsidiary companies engaged primarily in the insurance business.
All obligations arising under the policies, including the promise to make annuity payments, and payment of any amounts held in the Fixed Account are general corporate obligations of ours and subject to our claims paying ability. Accordingly, no financial institution, brokerage firm or insurance agency is responsible for our financial obligations arising under the policies.
The Separate Accounts
Separate Account VA B (the “Separate Account”), 6400 C Street S.W., Cedar Rapids, Iowa, was established by the Company on January 19, 1990, and is a unit investment trust registered with the SEC and operating under Iowa law. The Separate Account has various Subaccounts each of which invests solely in a corresponding Portfolio of the Fund.
Separate Account VA BNY (the “Separate Account”), 440 Mamaroneck Avenue, Harrison, New York, was established by the Company on September 27, 1994, and is a unit investment trust registered with the SEC and operating under New York law. The Separate Account has various Subaccounts, each of which invests solely in a corresponding Portfolio of the Fund.
The Separate Accounts are registered with the SEC as unit investment trusts under the 1940 Act (the “1940 Act”). However, the SEC does not supervise the management, the investment practices, or the policies of the separate accounts.
Cybersecurity (continued from “Principal Risks” section of the Prospectus)
OPPORTUNITIES and CHALLENGES
The increasing digitalization of the financial services landscape has intensified the financial and reputational risk presented by cybersecurity threats. The COVID-19 pandemic, and the rise in remote working, have further escalated these threats. As our business becomes more technology driven and our digital reliance increases, we become a greater target for cybercriminals, and more vulnerable to threats such as ransomware attacks.
What Transamerica is doing
Transamerica maintains a well-documented information security program which is based on ISO 27000 series and incorporates aspects of COBIT, NIST, SANS, as well as other industry-recognized frameworks and best practices. The program is designed to protect the infrastructure, information systems, and the information in Transamerica’s systems from unauthorized access, use, or other malicious acts by enabling the organization to identify risks, implement the appropriate protections, and detect and respond to cybersecurity events. Transamerica has established strong security policies, procedures, guidelines, and standards that are reviewed regularly to ensure compliance with applicable laws, regulations, and alignment with industry standards. Our cybersecurity program covers every aspect of security management: data handling and classification; access controls and identity management; business continuity and disaster recovery; configuration management; asset management; risk assessment; data disposal; information security incident response; system operations; vulnerability and patch management; system, application, and network security and monitoring; systems and application development and performance; physical and environmental controls; data privacy; vendor and third- party service provider management; consistent use of multi-factor authentication; cybersecurity awareness training; and encryption.
We continue to take steps to strengthen our information security program, infrastructure, and ability to respond to cyberattacks, for example, by further developing our dedicated Information Security teams and strengthening controls. Transamerica’s Risk Management teams also periodically assesses known potential cyber risk factors, together with the first line functions such as the Security Operations Center, with known trends or material incidents reported to Transamerica’s Management and Supervisory Boards as necessary.
OVERVIEW
3
Information security and privacy regulation
Transamerica’s businesses are regulated with respect to information security, data breach response, privacy, and data use at both the federal and state levels. At the federal level, various Transamerica companies are subject to the Gramm-Leach-Bliley Act (GLBA), the Fair Credit Reporting Act (FCRA), and the Health Insurance Portability and Accountability Act (HIPAA), among other laws. At the state level, Departments of Insurance and Financial Services typically administer a series of privacy and information security laws and regulations that impact several Transamerica businesses such as the New York Department of Financial Services Rule 500 (NYDFS Rule 500). NYDFS amended its Part 500 Cybersecurity Rules to adopt heightened information security requirements in relation to areas such as cybersecurity governance, cybersecurity risk assessments, and incident reporting. In addition, in recent years numerous state legislatures have passed or have attempted to pass additional, more broad-based general consumer privacy laws, such as the California Consumer Privacy Act and the California Privacy Rights Act. Additional laws and regulations with respect to these topics are also anticipated to be promulgated and to go into effect in the coming years, and they may be administered by new or different state agencies or by the offices of state Attorneys General. The White House, SEC, and other regulators have also increased their focus on companies’ cybersecurity vulnerabilities and risks, including in relation to third-party service providers. The SEC has recently adopted the Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure by Public Companies on July 26, 2023 (the “Rule”). The Rule enhances and standardizes disclosures for public companies with regards to their cybersecurity risk strategy, management, and governance. The Rule also requires the reporting of a cybersecurity incident within four business days of determining that an incident is deemed material.
Operational Risks
A computer system failure or security breach of Transamerica’s IT systems or that of critical third parties may disrupt Transamerica’s business, damage Transamerica’s reputation and adversely affect Transamerica’s results of operations, financial condition, and cash flows.
Transamerica relies heavily on computer and information systems and internet and network connectivity (collectively, “IT systems”) to conduct a large portion of its business operations. This includes the need to securely store, process, transmit and dispose of confidential information, including personal information, through a number of complex systems. In many cases this also includes transmission and processing to or through customers, business partners, (semi-) governmental agencies and third-party service providers. Computer system failures, cyber-crime attacks or security or data privacy breaches may materially disrupt Transamerica’s business operations, damage Transamerica’s reputation, result in regulatory and litigation exposure, investigation and remediation costs, and materially and adversely affect Transamerica’s results of operations, financial condition and cash flows.
The information security risk that Transamerica faces includes the risk of malicious outside forces using public networks and other methods, including social engineering and the exploitation of targeted offline processes, to attack Transamerica’s systems and information and potentially demand ransom. It also includes inside threats, both malicious and accidental. For example, human error, bugs and vulnerabilities that may exist in Transamerica’s systems or software, unauthorized user activity and lack of sufficiently automated processing or sufficient logging and monitoring can result in improper information exposure or failure or delayed detection of such activity in a timely manner. Transamerica also faces risk in this area due to its reliance in many cases on third-party systems, all of which may face cyber and information security risks of their own. Third-party administrators or distribution partners used by Transamerica or its subsidiaries may not adequately secure their own IT systems or may not adequately keep pace with the dynamic changes in this area. Potential bad actors that target Transamerica and applicable third parties may include, but are not limited to, criminal organizations, foreign government bodies, political factions, and others.
In recent years, information security risk has increased sharply due to a number of developments in how information systems are used, not only by companies such as Transamerica, but also by society in general. Threats have increased in frequency and magnitude, and are expected to continue to increase, as criminals and other bad actors become more organized and employ more sophisticated techniques. At the same time companies increasingly make information systems and data available through the internet, mobile devices or other network connections to customers, employees and business partners, thereby expanding the attack surface that bad actors can potentially exploit. As a result of the COVID-19 pandemic, Transamerica also faces increased cybersecurity risks due to the number of Transamerica’s and Transamerica’s service providers’ and partners’ employees who are working remotely, which creates additional opportunities for cybercriminals to launch social engineering attacks and exploit vulnerabilities in non-corporate IT environments. The White House, SEC and other regulators have also increased their focus on cybersecurity vulnerabilities and risks.
Large financial institutions such as and including Transamerica have been, and will continue to be, subject to information security attacks. The nature of these attacks will also continue to be unpredictable, and in many cases, may arise from circumstances that are beyond Transamerica’s control. Attackers are also increasingly using tools and techniques that are specifically designed to circumvent controls, to evade detection and even to remove or obfuscate forensic evidence. As a result, Transamerica may be unable to timely or effectively detect, identify, contain, investigate or remediate IT systems in response to, future cyberattacks or security breaches.
4
Especially if and to the extent Transamerica fails to adequately invest in defensive infrastructure, timely response capabilities, technology, controls and processes, or to effectively execute against its information security strategy, it may suffer material adverse consequences.
Transamerica maintains cyber liability insurance to help decrease the financial impact of cyber-attacks and information security events, subject to the terms and conditions of the policy; however, such insurance may not be sufficient to cover all applicable losses that Transamerica may suffer.
A breach of data privacy or security obligations may disrupt Transamerica’s business, damage Transamerica’s reputation and adversely affect financial conditions and results of operations.
Pursuant to applicable laws, various government and semi-governmental and other administrative bodies have established numerous rules protecting the privacy and security of personal information and other confidential or sensitive information held by Transamerica. Notably, certain of Transamerica’s businesses are subject to laws and regulations enacted by US federal and state governments and/or various regulatory organizations relating to the privacy and/or information security of the information of customers, employees or others.
The New York Department of Finance Services (NYDFS), pursuant to its cybersecurity regulation, requires financial institutions regulated by the NYDFS, including certain Transamerica subsidiaries, to, among other things, satisfy an extensive set of minimum information security requirements, including but not limited to governance, management, reporting, policy, technology and control requirements. Other states have adopted similar cybersecurity laws and regulations.
Numerous other US state and federal laws also impose various information security and privacy related obligations with respect to Transamerica, including but not limited to the Gramm-Leach-Bliley Act and related state laws and implementing regulations (GLBA), the California Consumer Privacy Act (CCPA), the California Privacy Rights Act (CPRA), and the Health Insurance Portability and Accountability Act (HIPAA), among many others. These laws generally provide for governmental investigative and enforcement authority, and in certain cases provide for private rights of action.
Numerous other legislators and regulators with jurisdiction over Transamerica’s businesses are considering or have already enacted enhanced information security risk management and privacy laws and regulations, with the overall number and scope of such laws and regulations continuing to increase every year. A number of Transamerica companies are also subject to contractual restrictions with respect to the use and handling of the sensitive information of Transamerica’s clients and business partners.
Transamerica, and numerous of its systems, employees, third-party providers and business partners have access to, and routinely process, the personal information of consumers and employees. Transamerica relies on a large number of processes and controls to protect the confidentiality, integrity and availability of personal information and other confidential information that is accessible to, or in the possession of, Transamerica, its systems, employees and business partners. It is possible that a Transamerica or a third party’s employee, contractor, business partner or system could, intentionally or unintentionally, inappropriately disclose or misuse personal or confidential information. Transamerica’s data or data in its possession could also be the subject of an unauthorized information security attack. If Transamerica fails to maintain adequate processes and controls or if Transamerica or its business partners fail to comply with relevant laws and regulations, policies and procedures, misappropriation or intentional or unintentional inappropriate disclosure or misuse of personal information or other confidential information could occur. Such control inadequacies or non-compliance could cause disrupted operations and misstated or unreliable financial data, materially damage Transamerica’s reputation or lead to increased regulatory scrutiny or civil or criminal penalties or (class action) litigation, which, in turn, could have a material adverse effect on Transamerica’s business, financial condition and results of operations.
In addition, Transamerica analyzes personal information and customer data to better manage its business, subject to applicable laws and regulations and other restrictions. It is possible that additional regulatory or other restrictions regarding the use of such information may be imposed. Additional privacy and information security obligations have been imposed by various governments with jurisdiction over Transamerica or its subsidiaries in recent years, and more similar obligations are likely to be imposed in the near future across Transamerica’s operations. Such restrictions and obligations could have material impacts on Transamerica’s business, financial conditions and results of operations.
In order to supplement the description in the prospectus, the following provides additional information about us and the policy, which may be of interest to a prospective purchaser.
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THE POLICY—GENERAL PROVISIONS
Owner
The policy shall belong to the Owner upon issuance of the policy after completion of an Enrollment Form and delivery of the initial Premium Payment. While the Annuitant is living, the Owner may: (1) assign the policy; (2) surrender the policy; (3) amend or modify the policy with our consent; (4) receive annuity payments or name a payee to receive the payments; and (5) exercise, receive and enjoy every other right and benefit contained in the policy. The exercise of these rights may be subject to the consent of any assignee or irrevocable Beneficiary; and of Your spouse in a community or marital property state.
Unless we have been notified of a community or marital property interest in the policy, we will rely on our good faith belief that no such interest exists and will assume no responsibility for inquiry.
Note carefully. If the Owner predeceases the Annuitant and no joint Owner, primary Beneficiary, or contingent Beneficiary is alive or in existence on the date of death, the Owner's estate will become the new Owner. If no probate estate is opened because the Owner has precluded the opening of a probate estate by means of a trust or other instrument, that trust may not exercise ownership rights to the policy. It may be necessary to open a probate estate in order to exercise ownership rights to the policy.
The Owner may change the ownership of the policy in a Written Notice. When this change takes effect, all rights of ownership in the policy will pass to the new Owner. A change of ownership may have tax consequences.
When there is a change of Owner, the change will not be effective until it is recorded in our records. Once recorded, it will take effect as of the date the Owner signs the Written Notice, subject to any payment we have made or action we have taken before recording the change. Changing the Owner does not change the designation of the Beneficiary or the Annuitant.
Entire Contract
The entire contract consists of the policy and any application, endorsements and riders. If any portion of the policy or rider attached thereto shall be found to be invalid, unenforceable or illegal, the remainder shall not in any way be affected or impaired thereby, but shall have the same force and effect as if the invalid, unenforceable or illegal portion had not been inserted.
Misstatement of Age or Sex
During the Accumulation Phase. If the age of any person whose life or age a benefit provided under a guaranteed benefit has been misstated, any such benefit will be that which would have been purchased on the basis of the correct age. If that person would not have been eligible for that guaranteed benefit at the correct age, (i) the benefit will be rescinded; and (ii) any charges that were deducted for the benefit will be refunded and applied to the total account value of the policy.
We reserve the right to terminate the contract at any time if we discover a misstatement or fraudulent representation of any information provided in connection with the issuance or ongoing administration of the policy.
After the Annuity Commencement Date. We may require proof of the Annuitant’s or Owner’s age and/or sex before any payments associated with any benefits are made. If the age or sex of the Annuitant and/or Owner has been misstated, we will change the payment associated with any benefits payable to that which the Premium Payments would have purchased for the correct age or sex. The dollar amount of any underpayment made by us shall be paid in full with the next payment due such person, Beneficiary, or payee. The dollar amount of any overpayment made by us due to any misstatement shall be deducted from payments subsequently accruing to such person or Beneficiary. Any underpayment or overpayment will include interest specified in Your policy, from the date of the wrong payment to the date of the adjustment. The age of the Annuitant or Owner may be established at any time by the submission of proof satisfactory to us.
Reallocation of Annuity Units After the Annuity Commencement Date
After the Annuity Commencement Date, You may reallocate the value of a designated number of Annuity Units of a Subaccount then credited to a policy into an equal value of Annuity Units of one or more other Subaccounts or the Fixed Account. The reallocation shall be based on the relative value of the Annuity Units of the account(s) or Subaccount(s) at the end of the Market Day on the next payment date. The minimum amount which may be reallocated is the lesser of (1) $10 of monthly income or (2) the entire monthly income of the Annuity Units in the account or Subaccount from which the transfer is being made. If the monthly income of the Annuity Units remaining in an account or Subaccount after a reallocation is less than $10, we reserve the right to include the value of those Annuity Units as part of the transfer. The request must be in writing to our Administrative Office. There is no charge assessed in connection with such reallocation. A reallocation of Annuity Units may be made up to four times in any given Policy Year.
After the Annuity Commencement Date, no transfers may be made from the Fixed Account to the Separate Account.
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Annuity Payment Options
During the lifetime of the Annuitant and before the Annuity Commencement Date, the Owner may choose an Annuity Payment Option or change the election, but notice of any election or change of election must be received by us in good order at least thirty (30) days before the Annuity Commencement Date (elections less than 30 days require prior approval). If no election is made before the Annuity Commencement Date, annuity payments will be made under life income with variable payments for 10 years certain using the existing Policy Value of the Separate Account. The default options may be restricted with respect to Qualified Policies.
The person who elects an Annuity Payment Option can also name one or more Beneficiaries to receive any unpaid, guaranteed amount at the death of the Annuitant. Naming these Beneficiaries cancels any prior choice of a Beneficiary.
A payee who did not elect the Annuity Payment Option does not have the right to advance or assign payments, take the payments in one sum, or make any other change. However, the payee may be given the right to do one or more of these things if the person who elects the option tells us in writing and we agree.
Adjusted Age. For the Life Income and Joint and Survivor Annuity Payment Options, the adjusted age is the Annuitant's actual age nearest birthday, on the Annuity Commencement Date, adjusted as described in Your policy. This adjustment assumes an increase in life expectancy, and therefore it results in lower payments than without such an adjustment.
Variable Payment Options. The dollar amount of the first variable annuity payment will be determined in accordance with the annuity payment rates set forth in the applicable table contained in the policy. For annuity payments the tables are based on a 3% effective annual AIR and the “Annuity 2000” (male, female and unisex if required by law) mortality table projected for improvement using projection scale G. The rates were projected dynamically using an assumed annuity commencement date of 2020. The “Annuity 2000” mortality rates are adjusted based on improvements in mortality to more appropriately reflect increased longevity. The dollar amount of additional Variable Annuity Payments will vary based on the investment performance of the Subaccount(s) of the Separate Account selected by the Annuitant or Beneficiary. For certain Qualified Policies the use of unisex mortality tables may be required.
Determination of the First Variable Payment. The amount of the first variable payment depends upon the sex (if consideration of sex is allowed under state and Federal law) and adjusted age of the Annuitant.
Determination of Additional Variable Payments. All Variable Annuity Payments other than the first are calculated using Annuity Units which are credited to the policy. The number of Annuity Units to be credited in respect of a particular Subaccount is determined by dividing that portion of the first variable annuity payment attributable to that Subaccount by the Annuity Unit value of that Subaccount on the Annuity Commencement Date. The number of Annuity Units of each particular Subaccount credited to the policy then remains fixed, assuming no transfers to or from that Subaccount occur. The dollar value of variable Annuity Units in the chosen Subaccount will increase or decrease reflecting the investment experience of the chosen Subaccount. The dollar amount of each variable annuity payment after the first may increase, decrease or remain constant. This amount is equal to the sum of the amounts determined by multiplying the number of Annuity Units of each particular Subaccount credited to the policy by the Annuity Unit value for the particular Subaccount on the date the payment is made.
Death Benefit
Due proof of death of the Annuitant is proof that the Annuitant died prior to the commencement of annuity payments. A certified copy of a death certificate, a certified copy of a decree of a court of competent jurisdiction as to the finding of death, a written statement by the attending physician, or any other proof satisfactory to us will constitute due proof of death. If the Annuitant dies after the Annuity Commencement Date, no death benefit is payable and the amount payable will depend on the annuity income option.
Upon receipt in good order of this proof and an election of a method of settlement, the death benefit generally will be paid within seven days, or as soon thereafter as we have sufficient information about the Beneficiary(ies) to make the payment. The death benefit may be paid as a lump sum, as annuity payments or as otherwise permitted by the Company in accordance with applicable law, unless a settlement agreement is effective at the death of the Owner preventing such election.
If an Owner is not an Annuitant, and dies prior to the Annuity Commencement Date, the new Owner may surrender the policy at any time for the amount of the Cash Value. If the new Owner is not the deceased Owner's spouse, the Cash Value will be distributed in accordance with the applicable provisions of the Internal Revenue Code, or be used to provide payments to a designated Beneficiary within one year of such Owner’s death that will be made for life of the Beneficiary or for a period not extending beyond the life expectancy of the Beneficiary. If the sole new Owner is the deceased Owner's surviving spouse, such spouse may elect to continue the policy as the new Owner instead of receiving the death benefit.
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Beneficiary. The Beneficiary designation in the Enrollment Form will remain in effect until changed. The Owner may change the designated Beneficiary by sending us Written Notice. The Beneficiary's consent to such change is not required unless the Beneficiary was irrevocably designated or law requires consent. If an irrevocable Beneficiary dies, the Owner may then designate a new Beneficiary. The change will take effect as of the date the Owner signs the Written Notice, whether or not the Owner is living when we receive the notice. We will not be liable for any payment made before the Written Notice is received. If more than one Beneficiary is designated, and the Owner fails to specify their interests, they will share equally. If upon the death of the Annuitant there is a surviving Owner(s), the surviving Owner(s) automatically takes the place of any Beneficiary designation.
Death of Owner
Federal tax law requires that if any Owner (including any joint Owner who has become a current Owner) dies before the Annuity Commencement Date, then the entire value of the policy must generally be distributed within five years of the date of death of such Owner. Certain rules apply where (1) the spouse of the deceased Owner is the sole Beneficiary, (2) the Owner is not a natural person and the primary Annuitant dies or is changed, or (3) any Owner dies after the Annuity Commencement Date. See the TAX INFORMATION section in the prospectus for more information about these rules. Other rules may apply to Qualified Policies.
Assignment
During the lifetime of the Annuitant You may assign any rights or benefits provided by the policy if Your policy is a Nonqualified Policy. An assignment will not be binding on us until a copy has been filed at our Administrative Office. Your rights and benefits and those of the Beneficiary are subject to the rights of the assignee. We assume no responsibility for the validity or effect of any assignment. Any claim made under an assignment shall be subject to proof of interest and the extent of the assignment. An assignment may have tax consequences.
Unless You so direct by filing Written Notice with us, no Beneficiary may assign any payments under the policy before they are due. To the extent permitted by law, no payments will be subject to the claims of any Beneficiary's creditors.
Ownership under Qualified Policies is restricted to comply with the Code.
Evidence of Survival
We reserve the right to require satisfactory evidence that a person is alive if a payment is based on that person being alive. No payment will be made until we receive such evidence.
Non-Participating
The policy will not share in our surplus earnings; no dividends will be paid.
Amendments
No change in the policy is valid unless made in writing by us and approved by one of our officers. No registered representative has authority to change or waive any provision of the policy.
We reserve the right to amend the policies to meet the requirements of the Code, regulations or published rulings. You can refuse such a change by giving Written Notice, but a refusal may result in adverse tax consequences.
Employee and Agent Purchases
The policy may be acquired by an employee or registered representative of any broker/dealer authorized to sell the policy or their immediate family, or by an officer, director, trustee or bona-fide full-time employee of ours or our affiliated companies or their immediate family. In such a case, we may, at our sole discretion, credit an amount equal to a percentage of each Premium Payment to the policy due to lower acquisition costs we experience on those purchases. We may offer certain employer sponsored savings plans, reduced fees and charges including, but not limited to, the annual service charge, the surrender charges, the mortality and expense risk fee and the administrative charge for certain sales under circumstances which may result in savings of certain costs and expenses. In addition, there may be other circumstances of which we are not presently aware which could result in reduced sales or distribution expenses. Credits to the policy or reductions in these fees and charges will not be unfairly discriminatory against any Owner.
INVESTMENT EXPERIENCE
A “net investment factor” is used to determine the value of Accumulation Units and Annuity Units, and to determine annuity payment rates.
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Accumulation Units
Allocations of a Premium Payment directed to a Subaccount are credited in the form of Accumulation Units. Each Subaccount has a distinct Accumulation Unit value. The number of units credited is determined by dividing the Premium Payment or amount transferred to the Subaccount by the Accumulation Unit value of the Subaccount as of the end of the Valuation Period during which the allocation is made. For each Subaccount, the Accumulation Unit value for a given Market Day is based on the net asset value of a share of the corresponding portfolio of the underlying fund portfolios less any applicable charges or fees. The investment performance of the portfolio, expenses, and deductions of certain charges affect the value of an Accumulation Unit.
Upon allocation to the selected Subaccount, Premium Payments are converted into Accumulation Units of the Subaccount. The number of Accumulation Units to be credited is determined by dividing the dollar amount allocated to each Subaccount by the value of an Accumulation Unit for that Subaccount as next determined after the Premium Payment is received at the Administrative Office or, in the case of the initial Premium Payment, when the Enrollment Form is completed, whichever is later. The value of an Accumulation Unit for each Subaccount was arbitrarily established at $10 at the inception of each Subaccount. Thereafter, the value of an Accumulation Unit is determined as of the close of trading on each day the New York Stock Exchange is open for business.
An index (the “net investment factor”) which measures the investment performance of a Subaccount during a Valuation Period, is used to determine the value of an Accumulation Unit for the next subsequent Valuation Period. The net investment factor may be greater or less than or equal to one; therefore, the value of an Accumulation Unit may increase, decrease, or remain the same from one Valuation Period to the next. You bear this investment risk. The net investment performance of a Subaccount and deduction of certain charges affect the Accumulation Unit value.
The net investment factor for any Subaccount for any Valuation Period is determined by dividing (A + B - C) by (D) and subtracting (E) from the result, where the net result of:
A 
the net asset value per share of the shares held in the Subaccount determined at the end of the current Valuation Period, plus
B 
the per share amount of any dividend or capital gain distribution made with respect to the shares held in the Subaccount if the ex-dividend date occurs during the current Valuation Period, plus or minus
C 
a per share credit or charge for any taxes determined by us to have resulted during the Valuation Period from the investment operations of the Subaccount;
D 
is the net asset value per share of the shares held in the Subaccount determined as of the end of the immediately preceding Valuation Period; and
E 
is an amount representing the Separate Account charge and any optional benefit fees, if applicable.
Illustration of Separate Account Accumulation Unit Value Calculations
Formula and Illustration for Determining the Net Investment Factor 
Net Investment Factor =
(A + B - C)
- E
 
D
 
 
Where:
 
A =
The net asset value of an underlying fund portfolio share at of the end of the current Valuation Period.
 
Assume A = $11.57
B =
The per share amount of any dividend or capital gains distribution since the end of the immediately
preceding Valuation Period.
 
Assume B = 0
C =
The per share charge or credit for any taxes reserved for at the end of the current Valuation Period.
 
Assume C = 0
D =
The net asset value of an underlying fund portfolio share at of the end of the immediately preceding
Valuation Period.
 
Assume D = $11.40
E =
The daily deduction for the mortality and expense risk fee and the administrative charge, and any
optional benefit fees, if applicable. Assume E total 1.50% on an annual basis; On a daily basis, this
equals 0.000041096.
 
Then, the net investment factor =
(11.57 + 0 – 0)
- 0.000041096 = Z = 1.014871185
 
(11.40)
 
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Formula for Determining Accumulation Unit Value 
Accumulation Unit Value = A * B
Where:
 
A =
The Accumulation Unit value for the immediately preceding Valuation Period.
 
Assume A = $X
B =
The net investment factor for the current Valuation Period.
 
Assume B = Y
Then, the Accumulation Unit value = $X * Y = $Z
Annuity Unit Value and Annuity Payment Rates
The amount of Variable Annuity Payments will vary with Annuity Unit values. Annuity unit values rise if the net investment performance of the Subaccount exceeds the Assumed Investment Return of 3% annually. Conversely, Annuity Unit values fall if the net investment performance of the Subaccount is less than the annual Assumed Investment Return. The value of a variable Annuity Unit in each Subaccount was established at $10 on the date operations began for that Subaccount. The value of a variable Annuity Unit on any subsequent Business Day is equal to A multiplied by B multiplied by C, where:
A 
is the variable Annuity Unit value for the Subaccount on the immediately preceding Market Day;
B 
is the net investment factor for that Subaccount for the Valuation Period; and
C 
is the Assumed Investment Return adjustment factor for the Valuation Period.
The Assumed Investment Return adjustment factor for the Valuation Period is the product of discount factors of .99986634 per day to recognize the 3% effective annual AIR. The Valuation Period is the period from the close of the immediately preceding Market Day to the close of the current Market Day.
The net investment factor for the policy used to calculate the value of a variable Annuity Unit in each Subaccount for the Valuation Period is determined by dividing (i) by (ii) and subtracting (iii) from the result, where:
(i) 
is the result of:
(1)
the net asset value of a fund share held in that Subaccount determined at the end of the current Valuation Period; plus
(2)
the per share amount of any dividend or capital gain distributions made by the fund for shares held in that Subaccount if the ex-dividend date occurs during the Valuation Period; plus or minus
(3)
a per share charge or credit for any taxes reserved for, which we determine to have resulted from the investment operations of the Subaccount.
(ii) 
is the net asset value of a fund share held in that Subaccount determined as of the end of the immediately preceding Valuation Period.
(iii) 
is a factor representing the mortality and expense risk fee and administrative charge. This factor is equal, on an annual basis, to 1.25% of the daily net asset value of shares held in that Subaccount.
The dollar amount of subsequent Variable Annuity Payments will depend upon changes in applicable Annuity Unit values.
The annuity payment rates generally vary according to the annuity option elected and the gender and adjusted age of the Annuitant at the Annuity Commencement Date. The policy contains a table for determining the adjusted age of the Annuitant.
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Calculations for Annuity Unit
Value and Variable Annuity Payments
Formula for Determining Annuity Unit Value 
Annuity Unit Value = A * B * C
Where:
 
A =
Annuity Unit value for the immediately preceding Valuation Period.
 
Assume A = $X
B =
Net investment factor for the Valuation Period for which the annuity value is being calculated.
 
Assume B = Y
C =
A factor to neutralize the annual Assumed Investment Return of 3% built into the Annuity Tables
used.
 
Assume C = Z
Then, the Annuity Unit value is: $X * Y * Z = $Q
Formula for Determining Amount of
First Monthly Variable Annuity Payment 
First monthly variable annuity payment =
A * B
 
$1,000
 
Where:
 
A =
The Adjusted Policy Value as of the Annuity Commencement Date.
 
Assume A = $X
B =
The annuity purchase rate per $1,000 of Adjusted Policy Value based upon the option selected, the
sex and adjusted age of the Annuitant according to the tables contained in the policy.
 
Assume B = $Y
 
Then, the first monthly variable annuity payment =
$X * $Y
= $Z
 
1,000
 
Formula for Determining the Number of Annuity Units
Represented by Each Monthly Variable Annuity Payment 
Number of Annuity Units =
A
 
B
 
Where:
 
A =
The dollar amount of the first monthly variable annuity payment.
 
Assume A = $X
B =
The Annuity Unit value for the valuation date on which the first monthly payment is due.
 
Assume B = $Y
 
Then, the number of Annuity Units =
$X
= Z
 
$Y
 
HISTORICAL PERFORMANCE DATA
Money Market Yields
We may from time to time disclose the current annualized yield of the money market Subaccount, which invests in the corresponding money market portfolio, for a 7-day period in a manner which does not take into consideration any realized or unrealized gains or losses on shares of the corresponding money market portfolio or on its portfolio securities. This current annualized yield is computed by determining the net change (exclusive of realized gains and losses on the sale of securities and unrealized appreciation and depreciation and income other than investment income) at the end of the 7-day period in the value of a hypothetical account having a balance of 1 unit of the money market Subaccount at the beginning of the 7-day period, dividing such net change in account value by the value of the account at the beginning of the period to determine the base period return, and annualizing this quotient on a
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365-day basis. The net change in account value reflects (i) net income from the portfolio attributable to the hypothetical account; and (ii) charges and deductions imposed under a policy that are attributable to the hypothetical account. The charges and deductions include the per unit charges for the hypothetical account for (i) the administrative charges and (ii) the mortality and expense risk fee. Current yield will be calculated according to the following formula. 
Current Yield = ((NCS * ES)/UV) * (365/7)
Where:
 
 
NCS
=
The net change in the value of the portfolio (exclusive of realized gains and losses on
the sale of securities and unrealized appreciation and depreciation and income other
than investment income) for the 7-day period attributable to a hypothetical account
having a balance of 1 Subaccount unit.
ES
=
Per unit expenses of the Subaccount for the 7-day period.
UV
=
The unit value on the first day of the 7-day period.
Because of the charges and deductions imposed under a policy, the yield for the money market Subaccount will be lower than the yield for the corresponding money market portfolio. The yield calculations do not reflect the effect of any premium taxes. The yield calculations also do not reflect surrender charges that may be applicable to a particular Policy. Surrender charges range from 9% to 0% (depending on which share class You select) of the amount of premium payments surrendered based on the number of years since the premium payment was made. Surrender charges are based on the number of years since the date of the premium payment was made, not the Policy issue date.
We may also disclose the effective yield of the money market Subaccount for the same 7-day period, determined on a compounded basis. The effective yield is calculated by compounding the base period return according to the following formula. 
Effective Yield = (1 + ((NCS - ES)/UV))365/7 - 1
Where:
 
 
NCS
=
The net change in the value of the portfolio (exclusive of realized gains and losses on
the sale of securities and unrealized appreciation and depreciation and income other
than investment income) for the 7-day period attributable to a hypothetical account
having a balance of one Subaccount unit.
ES
=
Per unit expenses of the Subaccount for the 7-day period.
UV
=
The unit value on the first day of the 7-day period.
The yield on amounts held in the money market Subaccount normally will fluctuate on a daily basis. Therefore, the disclosed yield for any given past period is not an indication or representation of future yields or rates of return. The money market Subaccount's actual yield is affected by changes in interest rates on money market securities, average portfolio maturity of the corresponding money market portfolio, the types and quality of portfolio securities held by the corresponding money market portfolio and its operating expenses.
Total Returns
We may from time to time also advertise or disclose total returns for one or more of the Subaccounts for various periods of time. One of the periods of time will include the period measured from the date the Subaccount commenced operations. When a Subaccount has been in operation for 1, 5 and 10 years, respectively, the total return for these periods will be provided. Total returns for other periods of time may from time to time also be disclosed. Total returns represent the average annual compounded rates of return that would equate an initial investment of $1,000 to the redemption value of that investment as of the last day of each of the periods. The ending date for each period for which total return quotations are provided will be for the most recent month end practicable, considering the type and media of the communication and will be stated in the communication.
Total returns will be calculated using Subaccount unit values which we calculate on each Market Day based on the performance of the Separate Account's underlying fund portfolio and the deductions for the mortality and expense risk fee and the administrative charges. Total return calculations will reflect the effect of surrender charges that may be applicable to a particular period. The total return will then be calculated according to the following formula. 
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P (1 + T)N = ERV
Where:
 
 
T
=
The average annual total return net of Subaccount recurring charges.
ERV
=
The ending redeemable value of the hypothetical account at the end of the period.
P
=
A hypothetical initial payment of $1,000.
N
=
The number of years in the period.
Other Performance Data
We may from time to time also disclose average annual total returns in a non-standard format in conjunction with the standard format described above.
We may from time to time also disclose cumulative total returns in conjunction with the standard format described above. The cumulative returns will be calculated using the following formula except that the Surrender Charge percentage will be assumed to be 0%. 
CTR = (ERV / P)-1
Where:
 
 
CTR
=
The cumulative total return net of Subaccount recurring charges for the period.
ERV
=
The ending redeemable value of the hypothetical investment at the end of the period.
P
=
A hypothetical initial payment of $1,000.
All non-standard performance data will only be advertised if the standard performance data is also disclosed.
Adjusted Historical Performance Data
From time to time, sales literature or advertisements may quote average annual total returns for periods prior to the date a particular Subaccount commenced operations. Such performance information for the Subaccounts will be calculated based on the performance of the various portfolios and the assumption that the Subaccounts were in existence for the same periods as those indicated for the portfolios, with the level of policy charges that are currently in effect.
services
We perform administrative services for the policies. These services include issuance of the policies, maintenance of records concerning the policies, and certain valuation services.
RECORDS AND REPORTS
We will maintain all records and accounts relating to the Separate Account. As presently required by the 1940 Act, as amended, and regulations promulgated thereunder, we will mail to all Owners at their last known address of record, at least annually, reports containing such information as may be required under that Act or by any other applicable law or regulation. Owners will also receive confirmation of each financial transaction and any other reports required by law or regulation. However, for certain routine transactions (for example, regular monthly premiums deducted from Your checking account, or regular annuity payments we send to You) You may only receive quarterly confirmations.
DISTRIBUTION OF THE POLICIES
We have entered into a principal underwriting agreement with our affiliate, Transamerica Capital, Inc. (“TCI”), for the distribution and sale of the policies. We may reimburse TCI for certain expenses it incurs in order to pay for the distribution of the policies (e.g., commissions payable to selling firms selling the Policies, as described below).
TCI's home office is located at 1801 California St. Suite 5200 Denver, Colorado 80202. TCI is an indirect, wholly owned subsidiary of Aegon USA. TCI is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934, and is a member of Financial Industry Regulatory Authority (“FINRA” ). TCI is not a member of the Securities Investor Protection Corporation.
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We currently offer the policies on a continuous basis. We anticipate continuing to offer the policies, but reserve the right to discontinue the offering. The policies are offered to the public through sales representatives of broker-dealers (“selling firms”) that have entered into selling agreements with us and with TCI. TCI compensates these selling firms for their services. Sales representatives with these selling firms are appointed as our insurance agents.
We and our affiliates provide paid-in capital to TCI and pay for TCI's operating and other expenses, including overhead, legal and accounting fees. We also pay TCI an “override” payment based on the pricing of the product which becomes part of TCI's assets. In addition, we pay commission to TCI for policy sales; these commissions are passed through to the selling firms with TCI not retaining any portion of the commissions. During fiscal year 2023, 2022 and 2021 the amounts paid to TCI in connection with all Transamerica Variable Annuity Series policies sold through the Transamerica Life Insurance Company Separate Account VA B were $165,038,509, $228,741,766 and $168,947,457, respectively. During fiscal year 2023, 2022 and 2021 the amounts paid to TCI in connection with all Transamerica Variable Annuity Series policies sold through Transamerica Financial Life Insurance Company Separate Account VA BNY were $14,190,783, $17,855,278 and $8,805,416, respectively.
We and/or TCI or another affiliate may pay certain selling firms additional cash amounts for: (1) marketing allowances, which may include marketing services and increased access to their sales representatives; (2) sales promotions relating to the policies; (3) costs associated with sales conferences and educational seminars for their sales representatives; and (4) other sales expenses of the selling firms. We and/or TCI may make bonus payments to certain selling firms based on aggregate sales or persistency standards. These additional payments are not offered to all selling firms, and the terms of any particular agreement governing the payments may vary among selling firms. Differences in compensation paid to a selling firm or its sales representatives for selling one product over another may create conflicts of interests for such firms or its sales representatives.
CUSTODY OF ASSETS
We hold assets of each of the Subaccounts. The assets of each of the Subaccounts are segregated and held separate and apart from the assets of the other Subaccounts and from our general account assets. We maintain records of all purchases and redemptions of shares of the underlying fund portfolios held by each of the Subaccounts. Additional protection for the assets of the Separate Account is afforded by our fidelity bond, presently in the amount of $5,000,000, covering the acts of our officers and employees.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The statutory-basis financial statements and supplementary information of Transamerica Life Insurance Company and Transamerica Financial Life Insurance Company as of December 31, 2023 and December 31, 2022 and for each of the three years in the period ended December 31, 2023 have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The financial statements of each of the subaccounts of Separate Account VA B and Separate Account VA BNY as of December 31, 2023 and for each of the two years in the period ended December 31, 2023, incorporated by reference to the Form N-VPFS dated April 19, 2024 have been so incorporated in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
All required statutory financial statements are included in Part B of this Registration Statement. Required Separate Account VA B financial statements are incorporated by reference to N-VPFS (811-06032) filed on April 19, 2024. Required Separate Account VA BNY financial statements are incorporated by reference to N-VPFS (811-08750) filed on April 19, 2024.
The values of Your interest in the Separate Account will be affected solely by the investment results of the selected Subaccount(s). The statutory-basis financial statements and schedules of Transamerica Life Insurance Company and Transamerica Financial Life Insurance Company should be considered only as bearing on our ability to meet our obligations under the policies. They should not be considered as bearing on the investment performance of the assets held in the Separate Account.
14
APPENDIX
Prior Withdrawal/ Growth Percentages and Rider Fees
To the extent they have changed, the table(s) below identifies the historical changes to the Rate Sheet Prospectus Supplements for the Retirement Income Max® rider. All Rate Sheet Prospectus Supplements are also available on the EDGAR system at sec.gov.
Rider fee Percentages 
Date
Percentage
Prior to February 1, 2018
1.25%
February 1, 2018 to June 30, 2018
1.35%
 
Date
Single Life
Joint Life
July 1, 2018 to November 30, 2019
1.35%
1.45%
December 1, 2019 to April 30, 2020
1.45%
1.55%
On or after May 1, 2020
1.50%
1.60%
New york Rider fee Percentages 
Date
Percentage
Prior to February 1, 2018
1.25%
February 1, 2018 to November 30, 2019
1.35%
 
Date
Single Life
Joint Life
December 1, 2019 to April 30, 2020
1.45%
1.55%
On or after May 1, 2020
1.50%
1.60%
Growth Percentages 
Date
Percentage
Prior to May 1, 2014
5.00%
May 1, 2014 to January 31, 2018
5.50%
February 1, 2018 to April 30, 2020
7.20%
May 1, 2020 to August 31, 2020
6.50%
On or after September 1, 2020
5.00%
Withdrawal Percentages 
Date
Age at time of first withdrawal
Singe Life Percentage
Joint Life Percentage
Prior to May 1, 2014
0-58
59-64
65-79
≥80
0.00%
4.30%
5.30%
6.30%
0.00%
3.80%
4.80%
5.80%
May 1, 2014 to February 16, 2015
0-58
59-64
65-79
≥80
0.00%
4.30%
5.30%
6.30%
0.00%
4.00%
5.00%
6.00%
February 17, 2015 to December 31, 2016
0-58
59-64
65-79
≥80
0.00%
4.20%
5.20%
6.20%
0.00%
3.80%
4.80%
5.80%
15
Prior Withdrawal/ Growth Percentages and Rider Fees — (Continued)
Date
Age at time of first withdrawal
Singe Life Percentage
Joint Life Percentage
January 1, 2017 to January 31, 2018
0-58
59-64
65-79
≥80
0.00%
4.20%
5.20%
6.20%
0.00%
3.70%
4.70%
5.70%
February 1, 2018 to June 30, 2018
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
6.00%
0.00%
3.50%
4.50%
5.50%
July 1, 2018 to February 28, 2019
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
6.00%
0.00%
3.75%
4.75%
5.75%
March 1, 2019 to November 30, 2019
0-58
59-64
65-69
70-74
75-79
≥80
0.00%
4.00%
5.25%
5.40%
5.50%
5.75%
0.00%
3.50%
4.75%
4.90%
5.00%
5.25%
December 1, 2019 to April 30, 2020
0-58
59-64
65-74
75-79
≥80
0.00%
4.00%
5.00%
5.25%
5.75%
0.00%
3.50%
4.50%
4.75%
5.25%
May 1, 2020 to August 31, 2020
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
5.50%
0.00%
3.50%
4.50%
5.00%
On or after September 1, 2020
0-58
59-64
65-80
≥81
0.00%
3.75%
5.00%
5.50%
0.00%
3.25%
4.50%
5.00%
New York single life Withdrawal Percentages 
Date
Age at time of first withdrawal
Singe Life Percentage
Prior to May 1, 2014
0-58
59-64
65-79
≥80
0.00%
4.30%
5.30%
6.30%
May 1, 2014 to March 1, 2015
0-58
59-64
65-79
≥80
0.00%
4.30%
5.30%
6.30%
March 2, 2015 to September 30, 2015
0-58
59-64
65-79
≥80
0.00%
4.20%
5.20%
6.20%
October 1, 2015 to December 31, 2016
0-58
59-64
65-79
≥80
0.00%
4.20%
5.20%
6.20%
January 1, 2017 to January 31, 2018
0-58
59-64
65-79
≥80
0.00%
4.20%
5.20%
6.20%
16
Prior Withdrawal/ Growth Percentages and Rider Fees — (Continued)
Date
Age at time of first withdrawal
Singe Life Percentage
February 1, 2018 to February 28, 2019
0-58
59-64
65-79
≥80
N/A
4.00%
5.00%
6.00%
March 1, 2019 to April 30, 2019
0-58
59-64
65-69
70-74
75-79
≥80
N/A
4.00%
5.15%
5.40%
5.50%
5.75%
May 1, 2019 to November 30, 2019
0-58
59-64
65-70
71-74
75-79
≥80
N/A
4.00%
5.15%
5.40%
5.50%
5.75%
December 1, 2019 to April 30, 2020
0-58
59-64
65-74
75-79
≥80
N/A
4.00%
5.00%
5.25%
5.75%
May 1, 2020 to August 31, 2020
0-58
59-64
65-79
≥80
N/A
4.00%
5.00%
5.50%
On or after September 1, 2020
0-58
59-64
65-80
≥81
N/A
3.75%
5.00%
5.50%
New York Joint life Withdrawal Percentages 
Date
Age at time of first withdrawal
Joint Life Percentage
Prior to May 1, 2014
0-58
59-64
65-79
≥80
0.00%
3.80%
4.80%
5.80%
May 1, 2014 to March 1, 2015
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
6.00%
March 2, 2015 to September 30, 2015
0-58
59-64
65-79
≥80
0.00%
3.80%
4.80%
5.80%
October 1, 2015 to December 31, 2016
0-58
59-64
65-79
≥80
0.00%
0.00%
4.80%
5.80%
January 1, 2017 to January 31, 2018
0-58
59-64
65-79
≥80
0.00%
0.00%
4.70%
5.70%
February 1, 2018 to February 28, 2019
0-61
62-64
65-79
≥80
N/A
3.50%
4.50%
5.50%
17
Prior Withdrawal/ Growth Percentages and Rider Fees — (Continued)
Date
Age at time of first withdrawal
Joint Life Percentage
March 1, 2019 to April 30, 2020
0-61
62-64
65-74
75-79
≥80
N/A
3.50%
4.50%
5.00%
5.25%
May 1, 2020 to August 31, 2020
0-61
62-64
65-79
≥80
N/A
3.50%
4.50%
5.00%
On or after September 1, 2020
0-58
59-64
65-80
≥81
N/A
3.25%
4.50%
5.00%
18
APPENDIX
Prior Withdrawal/Growth Percentages and Rider Fees
To the extent they have changed, the table(s) below identifies the historical changes to the Rate Sheet Prospectus Supplements for the Retirement Income Choice® 1.6 rider. All Rate Sheet Prospectus Supplements are also available on the EDGAR system at sec.gov.
Rider fee Percentages  
Date
Rider Benefit
Single Life Option
Joint Life Option
June 1, 2017 to June 30, 2018
Base Benefit Designated Allocation Group A
1.45%
1.45%
Base Benefit Designated Allocation Group B
1.10%
1.10%
Base Benefit Designated Allocation Group C
0.70%
0.70%
Death Benefit
0.40%
0.35%
Income Enhancement
0.30%
0.50%
  
Date
Rider Benefit
Single Life Option
Joint Life Option
July 1, 2018 to February 28, 2019
Base Benefit Designated Allocation Group A
1.40%
1.50%
Base Benefit Designated Allocation Group B
1.15%
1.25%
Base Benefit Designated Allocation Group C
0.80%
0.90%
Death Benefit
0.40%
0.35%
Income Enhancement
0.30%
0.50%
  
Date
Rider Benefit
Single Life Option
Joint Life Option
March 1, 2019 to August 31, 2020
Base Benefit Designated Allocation Group A
1.50%
1.60%
Base Benefit Designated Allocation Group B
1.50%
1.60%
Base Benefit Designated Allocation Group C
1.50%
1.60%
Death Benefit
0.40%
0.35%
Income Enhancement
0.30%
0.50%
  
Date
Rider Benefit
Single Life Option
Joint Life Option
On or after September 1, 2020
Base Benefit Designated Allocation Group A
1.85%
1.95%
Base Benefit Designated Allocation Group B
1.40%
1.50%
Base Benefit Designated Allocation Group C
0.95%
1.05%
Death Benefit
0.40%
0.35%
Income Enhancement
0.30%
0.50%
new york Rider fee Percentages  
Date
Rider Benefit
Single Life Option
Joint Life Option
June 1, 2017 to June 30, 2018
Base Benefit Designated Allocation Group A
1.45%
1.45%
Base Benefit Designated Allocation Group B
1.10%
1.10%
Base Benefit Designated Allocation Group C
0.70%
0.70%
Death Benefit
0.40%
0.35%
  
Date
Rider Benefit
Single Life Option
Joint Life Option
July 1, 2018 to February 28, 2019
Base Benefit Designated Allocation Group A
1.40%
1.50%
Base Benefit Designated Allocation Group B
1.15%
1.25%
Base Benefit Designated Allocation Group C
0.80%
0.90%
Death Benefit
0.40%
0.35%
  
19
Prior Withdrawal/Growth Percentages and Rider Fees — (Continued)
Date
Rider Benefit
Single Life Option
Joint Life Option
March 1, 2019 to August 31, 2020
Base Benefit Designated Allocation Group A
1.50%
1.60%
Base Benefit Designated Allocation Group B
1.50%
1.60%
Base Benefit Designated Allocation Group C
1.50%
1.60%
Death Benefit
0.40%
0.35%
  
Date
Rider Benefit
Single Life Option
Joint Life Option
On or after September 1, 2020
Base Benefit Designated Allocation Group A
1.85%
1.95%
Base Benefit Designated Allocation Group B
1.40%
1.50%
Base Benefit Designated Allocation Group C
0.95%
1.05%
Death Benefit
0.40%
0.35%
Growth Percentages 
Date
Percentage
May 1, 2016 to February 28, 2019
5.50%
March 1, 2019 to November 30, 2019
6.00%
December 1, 2019 to April 30, 2020
5.25%
On or after May 1, 2020
5.00%
Withdrawal Percentages 
Date
Age at time of first withdrawal
Singe Life Percentage
Joint Life Percentage
Prior to January 1, 2017
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
6.00%
0.00%
3.75%
4.75%
5.75%
January 1, 2017 to June 30, 2018
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
6.00%
0.00%
3.50%
4.50%
5.50%
July 1, 2018 to February 28, 2019
0-58
59-64
65-79
≥80
0.00%
4.50%
5.50%
6.00%
0.00%
4.00%
5.00%
5.50%
March 1, 2019 to April 30, 2020
0-58
59-64
65-69
70-74
75-79
≥80
0.00%
4.00%
5.10%
5.20%
5.50%
6.00%
0.00%
3.50%
4.60%
4.70%
5.00%
5.50%
May 1, 2020 to August 31, 2020
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
5.50%
0.00%
3.50%
4.50%
5.00%
On or after September 1, 2020
0-58
59-64
65-80
≥81
0.00%
3.50%
4.75%
5.25%
0.00%
3.00%
4.25%
4.75%
20
Prior Withdrawal/Growth Percentages and Rider Fees — (Continued)
New york Withdrawal Percentages 
Date
Age at time of first withdrawal
Singe Life Percentage
Joint Life Percentage
Prior to January 1, 2017
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
6.00%
0.00%
3.75%
4.75%
5.75%
January 1, 2017 to June 30, 2018
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
6.00%
0.00%
3.50%
4.50%
5.50%
July 1, 2018 to February 28, 2019
0-58
59-64
65-79
≥80
0.00%
4.50%
5.50%
6.00%
0.00%
4.00%
5.00%
5.50%
March 1, 2019 to April 30, 2020
0-58
59-64
65-66
67-69
70-74
75-79
≥80
0.00%
4.00%
5.00%
5.10%
5.20%
5.50%
6.00%
0.00%
3.50%
4.05%
4.25%
4.70%
5.00%
5.50%
May 1, 2020 to August 31, 2020
0-58
59-64
65-79
≥80
0.00%
4.00%
5.00%
5.50%
0.00%
3.50%
4.50%
5.00%
On or after September 1, 2020
0-58
59-64
65-80
≥81
0.00%
3.50%
4.75%
5.25%
0.00%
3.00%
4.25%
4.75%
21
APPENDIX
Prior Allocation/Withdrawal Percentages and Rider Fees
To the extent they have changed, the table(s) below identifies the historical changes to the Rate Sheet Prospectus Supplements for the Transamerica Income EdgeSM rider. All Rate Sheet Prospectus Supplements are also available on the EDGAR system at sec.gov.
Rider fee Percentages 
Date
Percentage
November 14, 2016 to April 30, 2017
1.40%
May 1, 2017 to November 30, 2019
1.25%
December 1, 2019 to April 30, 2020
1.35%
May 1, 2020 to August 31, 2020
1.45%
 
Date
Single Life
Joint Life
On or after September 1, 2020
1.45%
1.55%
Required Allocation Percentages 
 
 
Premium
Rebalance
 
 
Minimum
Maximum
Minimum
Maximum
Prior to February 1, 2018
Stable
Account
20%
20%
N/A
N/A
Select
Investment
Options
20%
80%
25%
100%
Flexible
Investment
Options
0%
60%
0%
75%
 
 
 
Premium
Rebalance
 
 
Minimum
Maximum
Minimum
Maximum
February 1, 2018 to June 30, 2018
Stable
Account
25%
25%
N/A
N/A
Select
Investment
Options
0%
75%
0%
100%
Flexible
Investment
Options
0%
75%
0%
100%
 
 
 
Premium
Rebalance
 
 
Minimum
Maximum
Minimum
Maximum
July 1, 2018 to April 30, 2020
Stable
Account
20%
20%
N/A
N/A
Select
Investment
Options
0%
80%
0%
100%
Flexible
Investment
Options
0%
80%
0%
100%
22
Prior Allocation/Withdrawal Percentages and Rider Fees — (Continued)
 
 
 
Premium
Rebalance
 
 
Minimum
Maximum
Minimum
Maximum
On or after May 1, 2020
Stable
Account
30%
30%
N/A
N/A
Select
Investment
Options
0%
70%
0%
100%
Flexible
Investment
Options
0%
70%
0%
100%
Withdrawal Percentages 
 
Age at time
of
first
withdrawal
Rider Years 1-3
Withdrawal
Percentage -
Single Life Option
Rider Years 1-3
Withdrawal
Percentage -
Joint Life Option
Rider Years 4+
Withdrawal
Percentage -
Single Life Option
Rider Years 4+
Withdrawal
Percentage -
Joint Life Option
Prior to July 1, 2018
0-58
0.00%
0.00%
0.00%
0.00%
59-64
4.00%
3.50%
5.00%
4.50%
65-79
5.00%
4.50%
6.00%
5.50%
≥80
6.00%
5.50%
7.00%
6.50%
single life Withdrawal Percentages 
 
Age at time
of
first
withdrawal
Rider Years 1-3
Withdrawal
Percentage -
Single Life Option
Rider Years 4-6
Withdrawal
Percentage -
Single Life Option
Rider Years 7+
Withdrawal
Percentage -
Single Life Option
July 1, 2018 to February 28, 2019
0-58
0.00%
0.00%
0.00%
59-64
4.00%
5.00%
6.00%
65-79
5.00%
6.00%
7.00%
≥80
6.00%
7.00%
8.00%
March 1, 2019 to November 30, 2019
0-58
0.00%
0.00%
0.00%
59-64
4.00%
5.00%
6.00%
65-69
5.25%
6.25%
7.25%
70-74
5.50%
6.50%
7.50%
75-79
5.75%
6.75%
7.75%
≥80
6.00%
7.00%
8.00%
December 1, 2019 to April 30, 2020
0-58
0.00%
0.00%
0.00%
59-64
4.00%
5.00%
6.00%
65-69
5.00%
6.00%
7.00%
70-74
5.25%
6.25%
7.25%
75-79
5.50%
6.50%
7.50%
≥80
5.75%
6.75%
7.75%
May 1, 2020 to August 31, 2020
0-58
0.00%
0.00%
0.00%
59-64
4.00%
4.75%
5.50%
65-79
5.00%
5.75%
6.50%
≥80
5.50%
6.25%
7.00%
 
23
Prior Allocation/Withdrawal Percentages and Rider Fees — (Continued)
 
Age at time
of
first
withdrawal
Rider Years 1-5
Withdrawal
Percentage -
Single Life Option
Rider Years 6-10
Withdrawal
Percentage -
Single Life Option
Rider Years 11+
Withdrawal
Percentage -
Single Life Option
On or after September 1, 2020
0-58
0.00%
0.00%
0.00%
59-64
3.75%
4.25%
4.75%
65-80
5.00%
5.50%
6.00%
≥81
5.50%
6.00%
6.50%
joint life Withdrawal Percentages 
 
Age at time
of
first
withdrawal
Rider Years 1-3
Withdrawal
Percentage -
Joint Life Option
Rider Years 4-6
Withdrawal
Percentage -
Joint Life Option
Rider Years 7+
Withdrawal
Percentage -
Joint Life Option
July 1, 2018 to February 28, 2019
0-58
0.00%
0.00%
0.00%
59-64
3.50%
4.50%
5.25%
65-79
4.50%
5.50%
6.25%
≥80
5.50%
6.50%
7.25%
March 1, 2019 to November 30, 2019
0-58
0.00%
0.00%
0.00%
59-64
3.50%
4.50%
5.50%
65-69
4.75%
5.75%
6.75%
70-74
5.00%
6.00%
7.00%
75-79
5.25%
6.25%
7.25%
≥80
5.50%
6.50%
7.50%
December 1, 2019 to April 30, 2020
0-58
0.00%
0.00%
0.00%
59-64
3.50%
4.50%
5.50%
65-69
4.50%
5.50%
6.50%
70-74
4.75%
5.75%
6.75%
75-79
5.00%
6.00%
7.00%
≥80
5.25%
6.25%
7.25%
May 1, 2020 to August 31, 2020
0-58
0.00%
0.00%
0.00%
59-64
3.50%
4.25%
5.00%
65-79
4.50%
5.25%
6.00%
≥80
5.00%
5.75%
6.50%
 
 
Age at time
of
first
withdrawal
Rider Years 1-5
Withdrawal
Percentage -
Single Life Option
Rider Years 6-10
Withdrawal
Percentage -
Single Life Option
Rider Years 11+
Withdrawal
Percentage -
Single Life Option
On or after September 1, 2020
0-58
0.00%
0.00%
0.00%
59-64
3.25%
3.75%
4.25%
65-80
4.50%
5.00%
5.50%
≥81
5.00%
5.50%
6.00%
24
Prior Allocation/Withdrawal Percentages and Rider Fees — (Continued)
New York single life Withdrawal Percentages 
 
Age at time
of
first
withdrawal
Rider Years 1-3
Withdrawal
Percentage -
Single Life Option
Rider Years 4-6
Withdrawal
Percentage -
Single Life Option
Rider Years 7+
Withdrawal
Percentage -
Single Life Option
July 1, 2018 to February 28, 2019
0-58
0.00%
0.00%
0.00%
59-64
4.00%
5.00%
6.00%
65-79
5.00%
6.00%
7.00%
≥80
6.00%
7.00%
8.00%
March 1, 2019 to November 30, 2019
0-58
0.00%
0.00%
0.00%
59-64
4.00%
5.00%
6.00%
65-69
5.25%
6.25%
7.25%
70-74
5.50%
6.50%
7.50%
75-79
5.75%
6.75%
7.75%
≥80
6.00%
7.00%
8.00%
December 1, 2019 to April 30, 2020
0-58
0.00%
0.00%
0.00%
59-64
4.00%
5.00%
6.00%
65-69
5.00%
6.00%
7.00%
70-74
5.25%
6.25%
7.25%
75-79
5.50%
6.50%
7.50%
≥80
5.75%
6.75%
7.75%
May 1, 2020 to August 31, 2020
0-58
0.00%
0.00%
0.00%
59-64
4.00%
4.75%
5.50%
65-79
5.00%
5.75%
6.50%
≥80
5.50%
6.25%
7.00%
 
 
Age at time
of
first
withdrawal
Rider Years 1-5
Withdrawal
Percentage -
Single Life Option
Rider Years 6-10
Withdrawal
Percentage -
Single Life Option
Rider Years 11+
Withdrawal
Percentage -
Single Life Option
On or after September 1, 2020
0-58
0.00%
0.00%
0.00%
59-64
3.75%
4.25%
4.75%
65-80
5.00%
5.50%
6.00%
≥81
5.50%
6.00%
6.50%
New York joint life Withdrawal Percentages 
 
Age at time
of
first
withdrawal
Rider Years 1-3
Withdrawal
Percentage -
Joint Life Option
Rider Years 4-6
Withdrawal
Percentage -
Joint Life Option
Rider Years 7+
Withdrawal
Percentage -
Joint Life Option
July 1, 2018 to February 28, 2019
0-58
0.00%
0.00%
0.00%
59-64
3.50%
4.50%
5.25%
65-79
4.50%
5.50%
6.25%
≥80
5.50%
6.50%
7.25%
March 1, 2019 to November 30, 2019
0-58
0.00%
0.00%
0.00%
59-64
3.50%
4.50%
5.50%
65-69
4.75%
5.75%
6.45%
70-74
5.00%
6.00%
7.00%
75-79
5.25%
6.25%
7.25%
≥80
5.50%
6.50%
7.50%
25
Prior Allocation/Withdrawal Percentages and Rider Fees — (Continued)
 
Age at time
of
first
withdrawal
Rider Years 1-3
Withdrawal
Percentage -
Joint Life Option
Rider Years 4-6
Withdrawal
Percentage -
Joint Life Option
Rider Years 7+
Withdrawal
Percentage -
Joint Life Option
December 1, 2019 to April 30, 2020
0-58
0.00%
0.00%
0.00%
59-64
3.50%
4.50%
5.50%
65-69
4.50%
5.50%
6.20%
70-74
4.75%
5.75%
6.75%
75-79
5.00%
6.00%
7.00%
≥80
5.25%
6.25%
7.25%
May 1, 2020 to August 31, 2020
0-58
0.00%
0.00%
0.00%
59-64
3.50%
4.25%
5.00%
65-79
4.50%
5.25%
6.00%
≥80
5.00%
5.75%
6.50%
 
 
Age at time
of
first
withdrawal
Rider Years 1-5
Withdrawal
Percentage -
Single Life Option
Rider Years 6-10
Withdrawal
Percentage -
Single Life Option
Rider Years 11+
Withdrawal
Percentage -
Single Life Option
On or after September 1, 2020
0-58
0.00%
0.00%
0.00%
59-64
3.25%
3.75%
4.25%
65-80
4.50%
5.00%
5.50%
≥81
5.00%
5.50%
6.00%
26

Table of Contents

 

FINANCIAL STATEMENTS – STATUTORY BASIS

AND SUPPLEMENTARY INFORMATION

Transamerica Financial Life Insurance Company

Years Ended December 31, 2023, 2022 and 2021

Table of Contents

Transamerica Financial Life Insurance Company

Financial Statements – Statutory Basis

and Supplementary Information

Years Ended December 31, 2023, 2022 and 2021

Contents

 

Report of Independent Auditors

      1  

Audited Financial Statements

   

Balance Sheets – Statutory Basis

      3  

Statements of Operations – Statutory Basis

      6  

Statements of Changes in Capital and Surplus – Statutory Basis

      7  

Statements of Cash Flow – Statutory Basis

      9  

Notes to Financial Statements – Statutory Basis

      10  

1. Organization and Nature of Business

      10  

2. Basis of Presentation and Summary of Significant Accounting Policies

      10  

3. Accounting Changes and Correction of Errors

      22  

4. Fair Values of Financial Instruments

      23  

5. Investments

      31  

6. Policy and Contract Attributes

      49  

7. Reinsurance

      65  

8. Income Taxes

      66  

9. Capital and Surplus

      73  

10. Securities Lending

      73  

11. Retirement and Compensation Plans

      75  

12. Related Party Transactions

      76  

13. Managing General Agents and Third-Party Administrators

      80  

14. Commitments and Contingencies

      80  

15. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities

      82  

16. Subsequent Events

      83  

Appendix A – Listing of Affiliated Companies

      82  

Statutory-Basis Financial Statement Schedules

      84  

Summary of Investments – Other Than Investments in Related Parties

      85  

Supplementary Insurance Information

      86  

Reinsurance

      87  

Table of Contents

LOGO

Report of Independent Auditors

To the Board of Directors of Transamerica Financial Life Insurance Company

Opinions

We have audited the accompanying statutory basis financial statements of Transamerica Financial Life Insurance Company (the “Company”), which comprise the balance sheets – statutory basis as of December 31, 2023 and 2022, and the related statements of operations - statutory basis, of changes in capital and surplus - statutory basis, and of cash flow - statutory basis for each of the three years in the period ended December 31, 2023, including the related notes and summary of investments - other than investments in related parties at December 31, 2023, supplementary insurance information at December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021, and reinsurance at December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 listed in the accompanying index (collectively referred to as the “financial statements”).

Unmodified Opinion on Statutory Basis of Accounting

In our opinion, the accompanying financial statements present fairly, in all material respects, the admitted assets, liabilities and capital and surplus of the Company as of December 31, 2023 and 2022 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in accordance with the accounting practices prescribed or permitted by the New York Department of Financial Services described in Note 2.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” section of our report, the accompanying financial statements do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2023 and 2022, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2023.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 2 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the New York Department of Financial Services, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

The effects on the financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

PricewaterhouseCoopers LLP, One North Wacker, Chicago, IL 60606

T: (312) 298 2000, www.pwc.com/us

Table of Contents

LOGO

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the New York Department of Financial Services. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with US GAAS, we:

 

  ●  

Exercise professional judgment and maintain professional skepticism throughout the audit.

  ●  

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

  ●  

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

  ●  

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

  ●  

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/PricewaterhouseCoopers LLP

Chicago, Illinois

April 11, 2024

 

2

Table of Contents

Transamerica Financial Life Insurance Company

Balance Sheets – Statutory Basis

(Dollars in Millions)

 

     December 31
     2023   2022
  

 

 

 

Admitted assets

     

Cash, cash equivalents and short-term investments

     $ 1,247     $ 205  

Bonds

      4,953       5,243  

Preferred stocks

      4       4  

Common stocks

      3       6  

Mortgage loans on real estate

      1,841       1,853  

Policy loans

      151       143  

Securities lending reinvested collateral assets

      321       412  

Derivatives

      39       204  

Other invested assets

      285       268  
  

 

 

 

Total cash and invested assets

      8,844       8,338  

Accrued investment income

      58       62  

Premiums deferred and uncollected

      8       8  

Net deferred income tax asset

      24       30  

Other assets

      14       38  

Separate account assets

      18,447       16,412  
  

 

 

 

Total admitted assets

     $   27,395     $   24,888  
  

 

 

 

Liabilities and capital and surplus

     

Aggregate reserves for policies and contracts

     $ 6,173     $ 6,540  

Policy and contract claim reserves

      37       35  

Liability for deposit-type contracts

      30       31  

Transfers from separate accounts due or accrued

      (65 )      (96 ) 

Asset valuation reserve

      114       106  

Interest maintenance reserve

      4       13  

Derivatives

      59       224  

Payable for collateral under securities loaned and other transactions

      359       463  

Borrowed money

      20       20  

Remittances and items not allocated

      1,265       190  

Other liabilities

      42       103  

Separate account liabilities

      18,447       16,412  
  

 

 

 

Total liabilities

      26,485       24,041  
  

 

 

 

Total capital and surplus

      910       847  
  

 

 

 

Total liabilities and capital and surplus

     $ 27,395     $ 24,888  
  

 

 

 

See accompanying notes.

 

3

Table of Contents

 

Transamerica Financial Life Insurance Company

Statements of Operations – Statutory Basis

(Dollars in Millions)

 

     Year Ended December 31  
     2023     2022   2021  
  

 

 

  

Revenues

       

Premiums and annuity considerations

     $ 3,517     $ 5,185     $ 5,222   

Net investment income

      330       333       342   

Fee revenue and other income

      238       250       292   
  

 

 

  

Total revenue

      4,085       5,768       5,856   

Benefits and expenses

       

Death benefits

      92       84       95   

Annuity benefits

      180       136       176   

Accident and health benefits

      69       58       62   

Surrender benefits

      3,902       10,801       5,642   

Other benefits

      11       9       10   

Net increase (decrease) in reserves

      (360 )      (182 )      (287)  

Commissions

      89       87       104   

Net transfers to (from) separate accounts

      (365 )      (5,617 )      (387)  

General insurance expenses and other

      153       144       120   
  

 

 

  

Total benefits and expenses

      3,771       5,520       5,535   
  

 

 

  

Gain (loss) from operations before federal income taxes

      314       248       321   

Federal income tax (benefit) expense

      24       1       17   
  

 

 

  

Net gain (loss) from operations

      290       247       304   

Net realized capital gains (losses), after tax and amounts transferred to interest maintenance reserve

      (100 )      (179 )      (115)  
  

 

 

  

Net income (loss)

     $     190     $     68     $     189   
  

 

 

  

See accompanying notes.

 

 

 

 

4

Table of Contents

 

Transamerica Financial Life Insurance Company

Statements of Changes in Capital and Surplus – Statutory Basis

(Dollars in Millions)

 

     Common
Stock		      Paid-in
Surplus		      Special
Surplus
Funds		     Unassigned
Surplus		     Total
Capital and
Surplus		  
  

 

 

  

Balance at January 1, 2021

     $ 2      $ 684      $ 13     $ 379     $ 1,078   

Net income (loss)

      —        —        —       189       189   

Change in net unrealized capital gains/losses, net of taxes

      —        —        —       12       12   

Change in net deferred income tax asset

      —        —        —       7       7   

Change in nonadmitted assets

      —        —        —       (11 )      (11)  

Change in asset valuation reserve

      —        —        —       14       14   

Dividends to stockholders

      —        —        —       (200 )      (200)  

Other changes - net

      —        —        2       (2 )      —   
  

 

 

  

Balance at December 31, 2021

     $     2      $   684      $    15     $    388     $ 1,089   

Net income (loss)

      —        —        —       68       68   

Change in net unrealized capital gains/losses, net of taxes

      —        —        —       (23 )      (23)  

Change in net deferred income tax asset

      —        —        —       12       12   

Change in nonadmitted assets

      —        —        —       (26 )      (26)  

Change in reserve on account of change valuation basis

      —        —        —       51       51   

Change in asset valuation reserve

      —        —        —       (2 )      (2)  

Dividends to stockholders

      —        —        —       (300 )      (300)  

Other changes - net

      —        —        (8 )      (14 )      (22)  
  

 

 

  

Balance at December 31, 2022

     $ 2      $ 684      $ 7     $ 154     $ 847   
  

 

 

  

Continued on next page.

 

 

 

 

5

Table of Contents

 

Transamerica Financial Life Insurance Company

Statements of Changes in Capital and Surplus – Statutory Basis

(Dollars in Millions)

 

     Common
Stock		      Paid-in
Surplus		     Special
Surplus
Funds		      Unassigned
Surplus		     Total
Capital and
Surplus		  
  

 

 

  

Balance at December 31, 2022

     $ 2      $ 684     $ 7      $ 154     $ 847   

Net income (loss)

      —        —       —        190       190   

Change in net unrealized capital gains/losses, net of taxes

      —        —       —        14       14   

Change in net deferred income tax asset

      —        —       —        1       1   

Change in nonadmitted assets

      —        —       —        6       6   

Change in reserve on account of change in valuation basis

      —        —       —        —       —   

Change in asset valuation reserve

      —        —       —        (8 )      (8)  

Return of capital

      —        (1 )      —        —       (1)  

Dividends to stockholders

      —        —       —        (170 )      (170)  

Other changes - net

      —        1       5        25       31   
  

 

 

  

Balance at December 31, 2023

     $     2      $   684     $    12      $     212     $    910   
  

 

 

  

See accompanying notes.

 

 

 

 

6

Table of Contents

Transamerica Financial Life Insurance Company

Statements of Cash Flow – Statutory Basis

(Dollars in Millions)

 

     Year Ended December 31
     2023   2022   2021  
  

 

 

 

Operating activities

       

Premiums and annuity considerations

     $ 3,518     $ 5,186     $ 5,229   

Net investment income

      333       331       348   

Other income

      238       251       291   

Benefit and loss related payments

      (4,262 )      (11,090 )      (5,993)  

Net transfers from separate accounts

      395       5,605       405   

Commissions and operating expenses

      (240 )      (234 )      (217)  

Federal income taxes (paid) received

      (23 )      (19 )      (4)  
  

 

 

 

Net cash provided by (used in) operating activities

     $ (41 )    $ 30     $ 59   

Investing activities

       

Proceeds from investments sold, matured or repaid

     $ 680     $ 1,040     $ 1,709   

Costs of investments acquired

      (408 )      (925 )      (1,662)  

Net change in policy loans

      (7 )      (7 )      (5)  
  

 

 

 

Net cash provided by (used in) investing activities

     $ 265     $ 108     $ 42   

Financing and miscellaneous activities

       

Capital and paid in surplus received (returned)

     $ 1     $ —     $ —   

Net deposits (withdrawals) on deposit-type contracts

      1       (4 )      2   

Net change in borrowed money

      —       —       (126)  

Net change in payable for collateral under securities lending and other transactions

      (104 )      27       (5)  
Other cash (applied) provided      1,090       1       (27)  

Dividends to stockholders

      (170 )      (300 )      (200)  
  

 

 

 

Net cash provided by (used in) financing and miscellaneous activities

     $ 818     $ (276 )    $ (356)  
  

 

 

 

Net increase (decrease) in cash, cash equivalents and short-term investments

      1,042       (138 )      (255)  

Cash, cash equivalents and short-term investments:

       

Beginning of year

      205       343       598   
  

 

 

 

End of year

     $    1,247     $    205     $    343   
  

 

 

 

See accompanying notes.

 

7

Table of Contents

 

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

December  31, 2023

1.  Organization and Nature of Business

Transamerica Financial Life Insurance Company (the Company) is a stock life insurance company domiciled in the State of New York and is owned by Transamerica Corporation (TA Corp). TA Corp is an indirect, wholly-owned subsidiary of Aegon Ltd., a holding company organized under the laws of Bermuda.

Nature of Business

The Company sells individual life insurance, including indexed universal life, whole life, term life, and final expense life. It also sells variable annuities. In addition, the Company offers supplemental health insurance, group life insurance, group annuity contracts and stable value solutions. The Company is licensed in 50 states and the District of Columbia. Sales of the Company’s products are primarily through a network of independent agents and broker-dealers, affiliated agencies, and financial institutions.

2.  Basis of Presentation and Summary of Significant Accounting Policies

The accompanying financial statements have been prepared in conformity with accounting practices prescribed or permitted by the New York Department of Financial Services (NYDFS), which differ from accounting principles generally accepted in the United States of America (GAAP).

The NYDFS recognizes only statutory accounting practices prescribed or permitted by the State of New York for determining and reporting the financial condition and results of operations of an insurance company, and for determining its solvency under the New York Insurance Law. The Commissioner of Insurance has the right to permit specific practices that deviate from prescribed practices.

The State of New York has adopted a prescribed accounting practice that differs from that found in the National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures Manual (NAIC SAP) related to the reported value of the assets supporting the Company’s guaranteed separate accounts. As prescribed by Section 1414 of the New York Insurance Law, the Commissioner found that the Company is entitled to value the assets of the guaranteed separate account at amortized cost, whereas the assets would be required to be reported at fair value under Statement of Statutory Accounting Principle (SSAP) No. 56, Separate Accounts, of the NAIC SAP. There is no impact to the Company’s income or surplus as a result of utilizing this prescribed practice.

Use of Estimates

The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

 

 

 

 

8

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The effects of the following variances from GAAP on the accompanying statutory-basis financial statements have not been determined by the Company, but are presumed to be material. Significant accounting policies and variances from GAAP are as follows:

Investments

Investments in bonds, except those to which the Securities Valuation Office (SVO) of the NAIC has ascribed a NAIC designation of 6, are reported at amortized cost using the interest method. Bonds containing call provisions, except make-whole call provisions, are amortized to the call or maturity value/date which produces the lowest asset value, often referred to as yield-to-worst method. Bonds ascribed a NAIC designation of 6 are reported at the lower of amortized cost or fair value with unrealized gains and losses reported in changes in capital and surplus. Prepayment penalty or acceleration fees received in the event a bond is liquidated prior to its scheduled termination date are reported as investment income.

Hybrid securities, as defined by the NAIC, are securities designed with characteristics of both debt and equity and provide protection to the issuer’s senior note holders. These securities meet the definition of a bond, in accordance with SSAP No. 26R, Bonds, and therefore, are reported at amortized cost or fair value based upon their NAIC rating.

For GAAP, such fixed maturity investments would be designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments would be reported at amortized cost, and the remaining fixed maturity investments would be reported at fair value with unrealized holding gains and losses reported in earnings for those designated as trading and as a separate component of other comprehensive income (OCI) for those designated as available-for-sale.

Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method, including anticipated prepayments, except for those with an initial NAIC designation of 6, which are valued at the lower of amortized cost or fair value. These securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium using either the retrospective or prospective methods. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. For statutory reporting, the retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities, which are valued using the prospective method.

For GAAP, all securities purchased or retained that represent beneficial interests in securitized assets, other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If high credit quality securities are adjusted, the retrospective method is used.

The Company closely monitors below investment grade holdings and investment grade issuers where the Company has concerns to determine if an other-than-temporary impairment (OTTI) has occurred. The Company also regularly monitors industry sectors. The Company considers relevant facts and circumstances in evaluating whether the impairment is other-than-temporary

 

 

 

 

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including: (1) the probability of the Company collecting all amounts due according to the contractual terms of the security in effect at the date of acquisition; (2) the Company’s decision to sell a security prior to its maturity at an amount below its carrying amount; and (3) the Company’s ability to hold a structured security for a period of time to allow for recovery of the value to its carrying amount. Additionally, financial condition, near term prospects of the issuer and nationally recognized credit rating changes are monitored. Non-structured securities in unrealized loss positions that are considered other-than-temporary are written down to fair value. The Company will record a charge to the Statements of Operations for the amount of the impairment.

For structured securities, cash flow trends and underlying levels of collateral are monitored. An OTTI is considered to have occurred if the fair value of the structured security is less than its amortized cost basis and the entity intends to sell the security or the entity does not have the intent and ability to hold the security for a period of time sufficient to recover the amortized cost basis. An OTTI is also considered to have occurred if the discounted estimated future cash flows are less than the amortized cost basis of the security and the security is in an unrealized loss position. Structured securities considered other-than-temporarily impaired are written down to discounted estimated cash flows if the impairment is the result of cash flow analysis. If the Company has an intent to sell or lack of ability to hold a structured security, it is written down to fair value. The Company will record a charge to the Statements of Operations for the amount of the impairments.

For GAAP, if it is determined that a decline in fair value is other-than-temporary and the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the OTTI is recognized in earnings equal to the entire difference between the amortized cost basis and its fair value at the impairment date. If the entity does not intend to sell the security or the entity will likely not be required to sell the security before recovery, the OTTI should be separated into a) the amount representing the credit loss, which is recognized in earnings, and b) the amount related to all other factors, which is recognized in OCI, net of applicable taxes.

Investments in both affiliated and unaffiliated redeemable preferred stocks in good standing (those with NAIC designations 1 to 3), are reported at cost or amortized cost, depending on the characteristics of the securities. Investments in both affiliated and unaffiliated redeemable preferred stocks not in good standing (those with NAIC designations 4 to 6), are reported at the lower of cost, amortized cost, or fair value, depending on the characteristics of the securities. Investment in perpetual preferred stocks are reported at fair value, not to exceed any currently effective call price. Investment in mandatory convertible preferred stocks (regardless if the preferred stock is redeemable or perpetual) are reported at fair value, not to exceed any currently effective call price, in the periods prior to conversion. For preferred stocks reported at fair value, the related net unrealized capital gains and losses for all NAIC designations are reported in accordance with SSAP No. 7, Asset Valuation Reserve and Interest Maintenance Reserve.

Common stocks of affiliated noninsurance subsidiaries are reported based on underlying audited GAAP equity. The net change in the subsidiaries’ equity is included in net unrealized capital gains or losses and are reported in changes in capital and surplus.

 

 

 

 

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The Company owns stock issued by the Federal Home Loan Bank (FHLB), which is only redeemable at par, and its fair value is presumed to be par, unless other-than-temporarily impaired.

If the Company determines that a decline in the fair value of a common stock or a preferred stock is other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the Statements of Operations. The Company considers the following factors in determining whether a decline in value is other-than-temporary: (a) the financial condition and prospects of the issuer; (b) whether or not the Company has made a decision to sell the investment; and (c) the length of time and extent to which the value has been below cost.

Mortgage loans are reported at unpaid principal balances, less an allowance for impairment. A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines the impairment is other-than-temporary, the mortgage loan is written down to realizable value and a realized loss is recognized. Prepayment penalty or acceleration fees received in the event a loan is liquidated prior to its scheduled termination date are reported as investment income.

Valuation allowances are established for mortgage loans, if necessary, based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. Under GAAP, an allowance for credit loss is recognized in earnings at time of purchase or origination based on an expected lifetime credit loss, which is an amount that represents the portion of the amortized cost basis of the mortgage loans that the Company does not expect to collect.

The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus as part of the change in asset valuation reserve (AVR), rather than being included as a component of earnings as would be required under GAAP.

The Company has interests in joint ventures and limited partnerships. The Company carries these investments based on its interest in the underlying audited GAAP equity of the investee.

For a decline in the fair value of an investment in a joint venture or limited partnership which is determined to be other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the Statements of Operations. The Company considers an impairment to have occurred if it is probable that the Company will be unable to recover the carrying amount of the investment or if there is evidence indicating inability of the investee to sustain earnings which would justify the carrying amount of the investment.

Investments in Low Income Housing Tax Credit (LIHTC) properties are valued at amortized cost. Tax credits are recognized in operations in the tax reporting year in which the tax credit is utilized by the Company. The carrying value is amortized over the life of the investment. Amortization is calculated as a ratio of the current year tax credits and tax benefits compared to the total expected tax credits and tax benefits over the life of the investment.

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Cash equivalents are short-term highly liquid investments with original maturities of three months or less (principally stated at amortized cost) or money market mutual funds which are reported at fair value.

Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost.

Other invested assets include surplus notes which are valued at either amortized cost (those that have an NAIC designation of 1 or 2) or the lesser of amortized cost or fair value (those that have an NAIC designation of 3 through 6).

Policy loans are reported at unpaid principal balances.

Realized capital gains and losses are determined using the specific identification method and are recorded net of related federal income taxes. Changes in admitted asset carrying amounts of bonds, mortgage loans, common and preferred stocks are credited or charged directly to unassigned surplus.

Interest income is recognized on an accrual basis. The Company does not accrue income on bonds in default, mortgage loans on real estate in default and/or foreclosure or which are delinquent more than twelve months, or real estate where rent is in arrears for more than three months. Income is also not accrued when collection is uncertain. Due and accrued amounts determined to be uncollectible are written off through the Statements of Operations.

Valuation Reserves

Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, primarily bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals into net investment income over the remaining period to maturity of the bond or mortgage loan based on groupings of individual securities sold in five year bands. The net deferral is reported as the interest maintenance reserve (IMR) in the accompanying Balance Sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the Statements of Operations on a pre-tax basis in the period that the assets giving rise to the gains or losses are sold.

The AVR provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus; AVR is not recognized for GAAP.

Derivative Instruments

Overview: The Company may use various derivative instruments (swaps and futures) to manage risks related to its ongoing business operations. On the transaction date of the derivative instrument, the Company designates the derivative as either (A) hedging (fair value, foreign currency fair value, cash flow, foreign currency cash flow, forecasted transactions, or net

 

 

 

 

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investment in a foreign operation), (B) replication, (C) income generation, or (D) held for other investment/risk management activities, which do not qualify for hedge accounting under SSAP No. 86, Derivatives.

 

  (A) 

Derivative instruments used in hedging transactions that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability (amortized cost or fair value). Embedded derivatives are not accounted for separately from the host contract. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value, and the changes in the fair value are recorded in unassigned surplus as unrealized gains and losses. Under GAAP, the effective and ineffective portions of a single hedge are accounted for separately, and the change in fair value for cash flow hedges is credited or charged directly to a separate component of OCI rather than to income as required for fair value hedges, and an embedded derivative within a contract that is not clearly and closely related to the economic characteristics and the risk of the host contract is accounted for separately from the host contract and valued and reported at fair value.

 

  (B) 

Derivative instruments are also used in replication (synthetic asset) transactions (RSAT). A replication transaction is a derivative transaction entered into in conjunction with a cash instrument to reproduce the investment characteristics of an otherwise permissible investment. In these transactions, the derivative is accounted for in a manner consistent with the cash instrument and replicated asset. For GAAP, the derivative is reported at fair value, with the changes in fair value reported in income.

 

  (C) 

Derivative instruments used in income generation relationships are accounted for on a basis that is consistent with the associated covered asset or underlying interest to which the derivative relates (amortized cost or fair value).

 

  (D) 

Derivative instruments held for other investment/risk management activities are measured at fair value with value adjustments recorded in unassigned surplus.

Derivative instruments are subject to market risk, which is the possibility that future changes in market prices may make the instruments less valuable. The Company uses derivatives as hedges, consequently, when the value of the hedged asset or liability changes, the value of the hedging derivative is expected to move in the opposite direction. Market risk is a consideration when changes in the value of the derivative and the hedged item do not completely offset (correlation or basis risk) which is mitigated by active measuring and monitoring.

The Company is exposed to credit-related losses in the event of non-performance by counterparties to derivative instruments, but it does not expect any counterparties to fail to meet their obligations given their high credit rating of ‘BBB’ or better. The credit exposure of interest rate swaps and currency swaps is represented by the fair value of contracts, aggregated at a counterparty level, with a positive fair value at the reporting date. The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets on the Company’s behalf. The posted amount is equal to the difference between the net positive fair value of the contracts and an agreed upon threshold that is based on the credit rating

 

 

 

 

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of the counterparty. Inversely, if the net fair value of all contracts with this counterparty is negative, then the Company is required to post assets instead.

Instruments:

Interest rate swaps are used in the overall asset/liability management process to modify the interest rate characteristics of the underlying asset or liability. These interest rate swaps generally provide for the exchange of the difference between fixed and floating rate amounts based on an underlying notional amount. Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.

Cross currency swaps are utilized to mitigate risks when the Company holds foreign denominated assets or liabilities; therefore, converting the asset or liability to a U.S. dollar denominated security. These cross currency swap agreements involve the exchange of two principal amounts in two different currencies at the prevailing currency rate at contract inception. During the life of the swap, the counterparties exchange fixed or floating rate interest payments in the swapped currencies. At maturity, the principal amounts are again swapped at a pre-determined rate of exchange. Each asset or liability is hedged individually where the terms of the swap must meet the terms of the hedged instrument. For swaps qualifying for hedge accounting, the premium or discount is amortized into income over the life of the contract and the foreign currency translation adjustment is recorded as unrealized gain/loss in capital and surplus. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus. If a swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the hedged instrument receives that treatment.

Total return swaps are used in the asset/liability management process to mitigate the market risk on minimum guarantee insurance contracts linked to an index. These total return swaps generally provide for the exchange of the difference between fixed leg (tied to the Standard & Poor’s (S&P) or other global market financial index) and floating leg (tied to the Secured Overnight Financing Rate (SOFR)) amounts based on an underlying notional amount (also tied to the underlying index). Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.

Futures contracts are used to hedge the liability risk when the Company issues products providing the customer a return based on various global market indices. Futures are marked to market on a

 

 

 

 

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daily basis whereby a cash payment is made or received by the Company. These payments are recognized as realized gains or losses in the financial statements.

The Company replicates investment grade corporate bonds or sovereign debt by combining a highly rated security as a cash component with a written credit default swap which, in effect, converts the high quality asset into an investment grade corporate asset or a sovereign debt. The benefits of using the swap market to replicate credit include possible enhanced relative values as well as ease of executing larger transactions in a shortened time frame. Generally, a premium is received by the Company on a periodic basis and recognized in investment income. In the event the representative issuer defaults on its debt obligation referenced in the contract, a payment equal to the notional amount of the contract will be made by the Company and recognized as a capital loss.

Securities Lending Assets and Liabilities

The Company loans securities to third parties under agent-managed securities lending programs accounted for as secured borrowings. Cash collateral received which may be sold or repledged by the Company is reflected as a one-line entry on the Balance Sheets (Securities lending reinvested collateral assets) and a corresponding liability is established to record the obligation to return the cash collateral. Non-cash collateral received which may not be sold or repledged is not recorded on the Company’s Balance Sheets. Under GAAP, the reinvested collateral is included within invested assets and is not reported as a single line item.

Repurchase Agreements

For dollar repurchase agreements accounted for as secured borrowings, the Company receives cash collateral in an amount at least equal to the fair value of the securities transferred by the Company in the transaction as of the transaction date. The securities transferred are not removed from the Balance Sheets, and the cash received as collateral is invested as needed or used for general corporate purposes of the Company. A liability is established to record the obligation to return the cash collateral and included in borrowed money on the Balance Sheets.

Other Assets and Other Liabilities

Other assets consist primarily of reinsurance receivable and accounts receivable. Other “admitted assets” are valued principally at cost, as required or permitted by New York Insurance Laws.

Other liabilities consist primarily of amounts withheld by the Company, accrued expenses, unearned investment income, current federal and foreign income taxes, and other policyholders’ funds.

Separate Accounts

The majority of separate accounts held by the Company represent funds which are administered for pension plans. The assets in the managed separate accounts consist of common stock, long-term bonds, real estate and short-term investments. The non-managed separate accounts are invested by the Company in a corresponding portfolio of Diversified Investors Portfolios. The

 

 

 

 

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Notes to Financial Statements – Statutory Basis

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portfolios are registered under the Investment Company Act of 1940, as amended, as open-ended, diversified, management investment companies.

Except for some guaranteed separate accounts, which are carried at amortized cost, the assets are carried at fair value, and the investment risks associated with fair value changes are borne entirely by the policyholder. Some of the guaranteed separate accounts provide a guarantee of principal and some include an interest guarantee of 4% or less, so long as the contract is in effect. Separate account asset performance less than guaranteed requirements is transferred from the general account and reported in the Statements of Operations.

Assets held in trust for purchases of separate account contracts and the Company’s corresponding obligation to the contract owners are shown separately in the Balance Sheets. Income and gains and losses with respect to these assets accrue to the benefit of the contract owners and, accordingly, the operations of the separate accounts are not included in the accompanying financial statements.

The investment risks associated with fair value changes of the separate account are borne entirely by the contract owners except in cases where minimum guarantees exist. Income and gains and losses with respect to the assets in the separate accounts supporting modified guaranteed annuity contracts are included in the Company’s Statements of Operations as a component of net transfers from separate accounts.

Separate account assets and liabilities reported in the accompanying financial statements consist of two types: non-indexed guaranteed and nonguaranteed. Non-indexed guaranteed separate accounts represent funds invested by the Company for the benefit of contract holders who are guaranteed certain returns as specified in the contracts. Separate account asset performance different than the guaranteed requirements is either transferred to or received from the general account and reported in the Statements of Operations. Non-indexed guaranteed separate account assets and liabilities are carried at amortized cost.

The non-guaranteed separate account assets and liabilities represent group annuity funds segregated by the Company for the benefit of contract owners. The assets and liabilities of the nonguaranteed separate accounts are carried at fair value.

Aggregate Reserves for Policies and Contracts

Life, annuity and accident and health benefit reserves are calculated by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed cash value, or the amount required by law.

Surrender values are not promised in excess of the legally computed reserves. For annual premium variable life insurance there is an extra premium charged to the policyholder before the premium is transferred to the Separate Accounts. An additional reserve for this policy is held in the General Account that is a multiple of the reserve that would otherwise be held.

 

 

 

 

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In accordance with SSAP No. 51R, Life Contracts, and No. 54R, Individual and Group Accident and Health Contracts, the Company reports the amount of insurance, if any, for which the gross premiums are less than the net premiums according to the valuation standards and any related premium deficiency reserve established. Anticipated investment income is not included as a factor in the health contract premium deficiency calculation.

For GAAP, policy reserves are calculated based on estimated expected experience or actual account balances.

Policy and Contract Claim Reserves

Claim reserves represent the estimated accrued liability for claims reported to the Company and claims incurred but not yet reported through the Balance Sheets date. These reserves are estimated using either individual case-basis valuations or statistical analysis techniques. These estimates are subject to the effects of trends in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes available.

Deposit-Type Contracts

Deposit-type contracts do not incorporate risk from the death or disability of policyholders. These types of contracts may include guaranteed investment contracts (GICs), funding agreements and other annuity contracts. Deposits and withdrawals on these contracts are recorded as a direct increase or decrease, respectively, to the liability balance and are not reported as premiums, benefits or changes in reserves in the Statements of Operations. Interest on these policies is reflected in other benefits.

Premiums and Annuity Considerations

Revenues for life and annuity policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received. Benefits incurred represent surrenders and death benefits paid and the change in policy reserves. Under GAAP, for universal life policies, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent interest credited to the account values and the excess of benefits paid over the policy account value. Under GAAP, for all annuity policies without significant mortality risk, premiums received and benefits paid would be recorded directly to the reserve liability using deposit accounting.

Policyholder Dividends

Policyholder dividends are recognized when declared rather than over the term of the related policies as would be required under GAAP.

Reinsurance

Coinsurance premiums, commissions, expense reimbursements and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original

 

 

 

 

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policies and the terms of the reinsurance contracts. Gains associated with reinsurance of in force blocks of business are included in unassigned surplus and amortized into income as earnings emerge on the reinsured block of business. Premiums ceded and recoverable losses have been reported as a reduction of premium income and benefits, respectively. Policy liabilities and accruals are reported in the accompanying financial statements net of reinsurance ceded.

Any reinsurance amounts deemed to be uncollectible have been written off through a charge to operations. In addition, a liability for reinsurance balances would be established for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability are credited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.

Losses associated with an indemnity reinsurance transaction are reported within income when incurred rather than being deferred and amortized over the remaining life of the underlying reinsured contracts as would be required under GAAP.

Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.

Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.

Under GAAP, for certain reinsurance agreements whereby assets are retained by the ceding insurer (such as funds withheld or modified coinsurance) and a return is paid based on the performance of underlying investments, the assets and liabilities for these reinsurance arrangements must be adjusted to reflect the fair value of the invested assets. The NAIC SAP does not contain a similar requirement.

Deferred Income Taxes

The Company computes deferred income taxes in accordance with SSAP No. 101, Income Taxes. Unlike GAAP, SSAP No. 101 does not consider state income taxes in the measurement of deferred taxes. SSAP No. 101 also requires additional testing to measure gross deferred tax assets. The additional testing limits gross deferred tax asset admission to 1) the amount of federal income taxes paid in prior years recoverable through hypothetical loss carrybacks of existing temporary differences expected to reverse during a timeframe corresponding with the Internal Revenue Service tax loss carryback provisions, not to exceed three years, plus 2) the amount of remaining gross deferred tax assets expected to be realized within three years limited to an amount that is no greater than 15% of current period’s adjusted statutory capital and surplus, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities after considering character (i.e. ordinary versus capital) and reversal patterns. The Company’s reported deferred tax asset or liability is the sum of gross deferred tax assets admitted through this three-part test plus the sum of all deferred tax liabilities.

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

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Policy Acquisition Costs

The costs of acquiring and renewing business are expensed when incurred. Under GAAP, incremental costs directly related to the successful acquisition of insurance and investment contracts are deferred. For traditional life insurance and certain long-duration accident and health insurance, to the extent recoverable from future policy revenues, acquisition costs are deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality and expense margins.

Value of Business Acquired

Under GAAP, value of business acquired (VOBA) is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future contracts and contract changes, premiums, mortality and morbidity, separate account performance, surrenders, operation expenses, investment returns, nonperformance risk adjustment and other factors. VOBA is not recognized under the NAIC SAP.

Subsidiaries and Affiliated Companies

Investments in subsidiaries, controlled and affiliated companies (SCA) are stated in accordance with the Purposes and Procedures Manual of the NAIC SVO, as well as SSAP No. 97, Investments in Subsidiary, Controlled and Affiliated Entities.

The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP. Dividends or distributions received from an investee are recognized in investment income when declared to the extent that they are not in excess of the undistributed accumulated earnings attributable to an investee. Changes in investments in SCA’s are recorded as a change to the carrying value of the investment with a corresponding amount recorded directly to unrealized gain/loss (capital and surplus).

Nonadmitted Assets

Certain assets designated as “nonadmitted”, primarily net deferred tax assets and other assets not specifically identified as an admitted asset within the NAIC SAP, are excluded from the accompanying Balance Sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the Balance Sheets to the extent that they are not impaired.

Statements of Cash Flow

Cash, cash equivalents and short-term investments in the Statements of Cash Flow represent cash balances and investments with initial maturities of one year or less and money market mutual

 

 

 

 

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funds. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less.

3.  Accounting Changes and Correction of Errors

The Company’s policy is to disclose recently adopted accounting pronouncements with a current year effective date, that have been classified by the NAIC as a new statutory accounting principle (SAP) concept change, as well as items classified by the NAIC as SAP clarification changes that have been adopted and have had a material impact on the financial position or results of operations of the Company.

Recent Accounting Pronouncements

On August 13, 2023, the Statutory Accounting Principles Working Group (SAPWG) adopted INT 23-01, Net Negative (Disallowed) Interest Maintenance Reserve, effective immediately. INT 23-01 provides optional, limited-time guidance, which allows the admittance of net negative (disallowed) IMR if certain conditions are met, up to 10% of adjusted general account capital and surplus. Refer to Note 5 for further detail.

On August 13, 2023, the SAPWG adopted revisions to SSAP No. 26R and SSAP No. 43R, Loan-Backed and Structured Securities, for the principles-based bond definition, the accounting for bonds (issuer credit obligations and asset-backed securities), as well as revisions to various SSAPs, that have been updated to reflect the revised definition and/or SSAP references. Additional revisions were adopted on December 1, 2023 to SSAP No. 2R, Cash, Cash Equivalents, Drafts and Short-Term Investments, in relation to the bond project, with all revisions effective January 1, 2025. The Company has been monitoring the progress of the project, and will continue to do so, but the specific impact to the Company’s financials is indeterminable at this time.

Change in Valuation Basis

During 2022, the Company converted its Actuarial Guideline 36 reserve calculation for the Indexed Universal Life block of business to a new actuarial valuation system. At the same time, as a result of increased functionality to allow for more precision and to ensure consistency, the Company refined its statutory valuation rate for specific states to utilize the maximum standard valuation interest rate. This resulted in a reserve decrease of $51 as of January 1, 2022, which has been reported in the Statement of Changes in Capital and Surplus.

Correction of Errors

During 2023, management identified and corrected an error in the Company’s prior year cash. The error resulted in an understatement of premiums and annuity considerations in the amount of $19, net of tax, which was corrected in accordance with SSAP No. 3, Accounting Changes and Corrections of Errors. This is reflected as a correction of an error in Other Changes - net in the Statements of Changes in Capital and Surplus.

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

During 2022, management identified and corrected an error in the Company’s prior year statutory reserves. The error resulted in an understatement of aggregate reserves for life contracts of $16, net of tax, which was corrected in accordance with SSAP No. 3. This is reflected as a correction of an error in the Statements of Changes in Capital and Surplus.

There were additional errors identified in prior year financial statements that have been corrected in the current year financial statements in accordance with SSAP No. 3. These errors do not have a material impact on the financial statements, individually or in aggregate, and therefore have not been separately disclosed.

Reclassifications

Certain amounts in prior year financial statement balances and footnote disclosures have been reclassified to conform to the current year presentation.

4.  Fair Values of Financial Instruments

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Determination of Fair Value

The fair values of financial instruments are determined by management after taking into consideration several sources of data. When available, the Company uses quoted market prices in active markets to determine the fair value of its investments. The Company’s valuation policy utilizes a pricing hierarchy which dictates that publicly available prices are initially sought from indices and third-party pricing services. In the event that pricing is not available from these sources, those securities are submitted to brokers to obtain quotes. Lastly, securities are priced using internal cash flow modeling techniques. These valuation methodologies commonly use reported trades, bids, offers, issuer spreads, benchmark yields, estimated prepayment speeds, and/or estimated cash flows.

To understand the valuation methodologies used by third-party pricing services, the Company reviews and monitors their applicable methodology documents. Any changes to their methodologies are noted and reviewed for reasonableness. In addition, the Company performs in-depth reviews of prices received from third-party pricing services on a sample basis. The objective for such reviews is to demonstrate the Company can corroborate detailed information such as assumptions, inputs and methodologies used in pricing individual securities against documented pricing methodologies. Only third-party pricing services and brokers with a substantial presence in the market and with appropriate experience and expertise are used.

Each month, the Company performs an analysis of the information obtained from indices, third-party services, and brokers to ensure the information is reasonable and produces a reasonable estimate of fair value. The Company considers both qualitative and quantitative factors as part of this analysis, including but not limited to, recent transactional activity for similar securities, review of pricing statistics and trends, and consideration of recent relevant market events. Other controls and procedures over pricing received from indices, third-party pricing services, or

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

brokers include validation checks such as exception reports which highlight significant price changes, stale prices or un-priced securities.

Fair Value Hierarchy

The Company’s financial assets and liabilities carried at fair value are classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100R, Fair Value. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:

 

Level 1 -

   

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

Level 2 -

   

Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:

  

a)  Quoted prices for similar assets or liabilities in active markets

  

b)  Quoted prices for identical or similar assets or liabilities in non-active markets

  

c)  Inputs other than quoted market prices that are observable

  

d)  Inputs that are derived principally from or corroborated by observable market data through correlation or other means

Level 3 -

   

Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect the Company’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash Equivalents and Short-Term Investments: The carrying amounts reported in the accompanying Balance Sheets for these financial instruments is either reported at fair value or amortized cost (which approximates fair value). Cash is not included in the below tables.

Short-Term Notes Receivable from Affiliates: The carrying amounts reported in the accompanying Balance Sheets for these financial instruments approximate their fair value.

 

 

 

 

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(Dollars in Millions, Except per Share amounts)

 

 

Bonds and Stocks: The NAIC allows insurance companies to report the fair value determined by the SVO or to determine the fair value by using a permitted valuation method. The fair values of bonds and stocks are reported or determined using the following pricing sources: indices, third-party pricing services, brokers, external fund managers and internal models.

Fair values for fixed maturity securities (including redeemable preferred stock) actively traded are determined from third-party pricing services, which are determined as discussed above in the description of Level 1 and Level 2 values within the fair value hierarchy. For fixed maturity securities (including redeemable preferred stock) not actively traded, fair values are estimated using values obtained from third-party pricing services, or are based on non-binding broker quotes or internal models. In the case of private placements, fair values are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit and maturity of the investments.

Mortgage Loans on Real Estate: The fair values for mortgage loans on real estate are estimated utilizing discounted cash flow analyses, using interest rates reflective of current market conditions and the risk characteristics of the loans.

Other Invested Assets: The fair values for other invested assets, which include investments in surplus notes issued by other insurance companies and fixed or variable rate investments with underlying characteristics of bonds, are determined primarily by using indices, third-party pricing services and internal models.

Derivative Financial Instruments: The fair value of futures and forwards are based upon the latest quoted market price and spot rates at the Balance Sheets date. The estimated fair values of equity and interest rate options (calls, puts, caps) are based upon the latest quoted market price at the Balance Sheets date. The estimated fair values of swaps, including interest rate and currency swaps, are based on pricing models or formulas using current assumptions. The estimated fair values of credit default swaps are based upon active market data, including interest rate quotes, credit spreads, and recovery rates, which are then used to calculate probabilities of default for the fair value calculation. The Company accounts for derivatives that receive and pass hedge accounting in the same manner as the underlying hedged instrument. If that instrument is held at amortized cost, then the derivative is also held at amortized cost.

Policy Loans: The book value of policy loans is considered to approximate the fair value of the loan, which is stated at unpaid principal balance.

Securities Lending Reinvested Collateral: The cash collateral from securities lending is reinvested in various short-term and long-term debt instruments. The fair values of these investments are determined using the methods described above under Cash Equivalents and Short-Term Investments and Bonds and Stocks.

Separate Account Assets and Annuity Liabilities: The fair value of separate account assets are based on quoted market prices when available. When not available, they are primarily valued either using third-party pricing services or are valued in the same manner as the general account assets as further described in this note. However, some separate account assets are valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

internal modeling which utilizes input that are not market observable. The fair value of separate account annuity liabilities is based on the account value for separate accounts business without guarantees. For separate accounts with guarantees, fair value is based on discounted cash flows.

Investment Contract Liabilities: Fair value for the Company’s liabilities under investment contracts, which include deferred annuities and GICs, are estimated using discounted cash flow calculations. For those liabilities that are short in duration, carrying amount approximates fair value. For investment contracts with no defined maturity, fair value is estimated to be the present surrender value.

Deposit-Type Contracts: The carrying amounts of deposit-type contracts reported in the accompanying Balance Sheets approximate their fair values. These are included in the investment contract liabilities.

Fair values for the Company’s insurance contracts other than investment-type contracts (including separate account universal life liabilities) are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.

The Company accounts for its investments in affiliated common stock in accordance with SSAP No. 97, as such, they are not included in the following disclosures.

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The following tables set forth a comparison of the estimated fair values and carrying amounts of the Company’s financial instruments, including those not measured at fair value in the Balance Sheets, as of December 31, 2023 and 2022, respectively:

 

    December 31, 2023  
 

 

 

  
    Aggregate
 Fair Value 		      Admitted 
Value		      (Level 1)       (Level 2)       (Level 3)   
 

 

 

  

Admitted assets

          

Cash equivalents and short-term

investments, other than affiliates

    $ 1,189     $ 1,189     $ 1,189     $ —     $ —  

Bonds

     4,395       4,953       337       4,051       7  

Preferred stocks, other than affiliates

     4       4       —       4       —  

Common stocks, other than affiliates

     3       3       —       —       3  

Mortgage loans on real estate

     1,632       1,841       —       —       1,632  

Other invested assets

     22       23       —       22       —  

Derivative assets:

          

Interest rate swaps

     26       26       —       26       —  

Currency swaps

     9       7       —       9       —  

Credit default swaps

     10       6       —       10       —  

Derivative assets total

     45       39       —       45       —  

Policy loans

     151       151       —       151       —  

Securities lending reinvested collateral

     269       269       269       —       —  

Separate account assets

     18,401       18,410       17,733       668       —  

Liabilities

          

Investment contract liabilities

     3,844       3,864       —       1       3,843  

Derivative liabilities:

          

Options

     1       1       —       1       —  

Interest rate swaps

     27       32       —       27       —  

Currency swaps

     1       1       —       1       —  

Credit default swaps

     1       1       —       1       —  

Equity swaps

     23       23       —       23       —  

Interest rate futures

     1       1       1       —       —  

Derivative liabilities total

     54       59       1       53       —  

Dollar repurchase agreements

     20       20       —       20       —  

Payable for securities lending

     321       321       —       321       —  

Payable for derivative cash collateral

     38       38       —       38       —  

Separate account liabilities

     18,102       18,102       —       17,729       373  

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

    December 31, 2022  
 

 

 

  
    Aggregate
 Fair Value 		      Admitted 
Value		      (Level 1)       (Level 2)       (Level 3)   
 

 

 

  

Admitted assets

          

Cash equivalents and short-term

investments, other than affiliates

    $ 157     $ 157     $ 84     $ 73     $ —  

Bonds

     4,536       5,243       378       4,158       —  

Preferred stocks, other than affiliates

     4       4       —       4       —  

Common stocks, other than affiliates

     6       6       —       3       3  

Mortgage loans on real estate

     1,637       1,853       —       —       1,637  

Other invested assets

     22       24       —       22       —  

Derivative assets:

          

Interest rate swaps

     181       181       —       181       —  

Currency swaps

     20       12       —       20       —  

Credit default swaps

     4       5       —       4       —  

Equity swaps

     5       5       —       5       —  

Equity futures

     1       1       1       —       —  

Derivative assets total

     211       204       1       210       —  

Policy loans

     143       143       —       143       —  

Securities lending reinvested collateral

     309       309       183       126       —  

Separate account assets

     16,371       16,399       15,518       853       —  

Liabilities

          

Investment contract liabilities

     4,236       4,245       —       1       4,235  

Derivative liabilities:

          

Interest rate swaps

     212       216       —       212       —  

Currency swaps

     1       —       —       1       —  

Equity swaps

     7       7       —       7       —  

Equity futures

     1       1       1       —       —  

Derivative liabilities total

     221       224       1       220       —  

Dollar repurchase agreements

     20       20       —       20       —  

Payable for securities lending

     412       412       —       412       —  

Payable for derivative cash collateral

     51       51       —       51       —  

Separate account liabilities

     16,107       16,107       —       15,636       471  

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The following tables provide information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2023 and 2022:

 

                                                                                       
    2023
    Level 1    Level 2   Level 3   Total

Assets:

        

Bonds

        

Industrial and miscellaneous

    $ —      $ 4      $ —      $ 4  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total bonds

     —       4       —       4  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Preferred stock

        

Industrial and miscellaneous

     —       4       —       4  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total preferred stock

     —       4       —       4  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Common stock

        

Industrial and miscellaneous

     —       —       3       3  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total common stock

     —       —       3       3  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Cash equivalents and short-term investments

        

Money market mutual funds

     1,163       —       —       1,163  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total cash equivalents and short-term investments

     1,163       —       —       1,163  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Derivative assets

     —       24       —       24  

Other long term

     —       3       —       3  

Separate account assets

     17,728       313       —       18,041  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total assets

    $ 18,891       $ 348       $ 3       $ 19,242   
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Liabilities:

        

Derivative liabilities

    $ 1      $ 25      $ —      $ 26  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total liabilities

    $ 1      $ 25      $ —      $ 26  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

 

                                                                                       
     2022
     Level 1   Level 2   Level 3   Total

Assets:

         

Bonds

         

Industrial and miscellaneous

     $ —      $ 3      $ —      $ 3  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total bonds

      —       3       —       3  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Preferred stock

         

Industrial and miscellaneous

      —       4       —       4  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total preferred stock

      —       4       —       4  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Common stock

         

Industrial and miscellaneous

      —       3       3       6  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total common stock

      —       3       3       6  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Cash equivalents and short-term investments

         

Money market mutual funds

      84       62       —       146  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total cash equivalents and short-term investments

      84       62       —       146  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Derivative assets

      1       187       —       188  

Other long term

      —       4       —       4  

Separate account assets

      15,518       403       —       15,921   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total assets

     $ 15,603       $ 666       $ 3       $ 16,272  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Liabilities:

         

Derivative liabilities

     $ 1      $ 187      $ —      $ 188  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total liabilities

     $ 1      $ 187      $ —      $ 188  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Bonds classified as Level 2 are valued using inputs from third party pricing services or broker quotes. Bonds classified as Level 3 are primarily those valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilize significant inputs that are not market observable.

Preferred stock classified as Level 2 are valued using inputs from third party pricing services or broker quotes.

Common stock classified as Level 2 are valued using inputs from third party pricing services or broker quotes. Common stock classified as Level 3 are comprised primarily of shares in the FHLB of New York, which are valued at par as a proxy for fair value as a result of restrictions that allow redemptions only by FHLB.

Money market mutual funds and other cash or cash equivalents classified as Level 2 are valued using inputs from third party pricing services.

Derivatives classified as Level 2 represent over-the-counter (OTC) contracts valued using pricing models based on the net present value of estimated future cash flows, directly observed prices from exchange-traded derivatives, other OTC trades, or external pricing services.

Other long-term classified as Level 2 are comprised of surplus debentures, which are valued using inputs from third party pricing services or broker quotes.

Separate account assets and liabilities are valued and classified in the same way as general account assets and liabilities (described above).

The following tables summarize the changes in assets classified as Level 3 for 2023 and 2022:

 

                                                                                                             
     Beginning
Balance at
 January 1, 2023		      Transfers in
(Level 3)		      Transfers
out (Level 3)		      Total Gains
(Losses) Included
in Net income (a)		     Total Gains
(Losses) Included 
in Surplus (b)
  

 

 

  

Bonds

              

Other

     $ —      $ —      $ —      $ (1 )    $ 1   

Common stock

     $ 3      $ —      $ —      $ —     $ —   
  

 

 

  

Total

     $ 3      $ —      $ —      $ (1 )    $ 1   
  

 

 

  
     Purchases      Issuances      Sales      Settlements     Ending Balance at 
December 31, 2023 
  

 

 

  

Bonds

              

Other

     $ —      $ —      $ —      $ —     $ —   

Common stock

     $ —      $ —      $ —      $ —     $ 3   
  

 

 

  

Total

     $ —      $ —      $ —      $ —     $ 3   
  

 

 

  

 

(a)

Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations

(b)

Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                                                             
     Beginning
Balance at
 January 1, 2022		      Transfers in
(Level 3)		      Transfers
out (Level 3)		      Total Gains
(Losses) Included
in Net income (a)		      Total Gains
(Losses) Included 
in Surplus (b)
  

 

 

  

Common stock

     $ 7      $ —      $ —      $ (3)      $ (1)  
  

 

 

  

Total

     $ 7      $ —      $ —      $ (3)      $ (1)  
  

 

 

  
     Purchases      Issuances      Sales      Settlements      Ending Balance at 
December 31, 2022 
  

 

 

  

Common stock

     $ —      $ —      $ —      $ —      $ 3   
  

 

 

  

Total

     $ —      $ —      $ —      $ —      $ 3   
  

 

 

  

 

(a)

Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations

(b)

Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus

Transfers between fair value hierarchy levels are recognized at the beginning of the reporting period.

5.  Investments

Bonds and Stocks

The carrying amounts and estimated fair value of investments in bonds and stocks are as follows:

 

                                                                           
    Book Adjusted
 Carrying Value		     Gross
Unrealized
Gains		     Gross
Unrealized
Losses		     Estimated Fair 
Value
 

 

 

  

December 31, 2023

        

Bonds:

        

United States Government and agencies

    $ 327     $ 7     $ 29     $ 305   

State, municipal and other government

     117       1       16       102   

Hybrid securities

     41       —       4       37   

Industrial and miscellaneous

     3,473       37       465       3,045   

Mortgage and other asset-backed securities

     995       19       108       906   
 

 

 

  

Total unaffiliated bonds

     4,953       64       622       4,395   

Unaffiliated preferred stocks

     4       —       —       4   
 

 

 

  
   $ 4,957     $ 64     $ 622     $ 4,399   
 

 

 

  
    Cost     Gross
Unrealized
Gains		     Gross
Unrealized
Losses		     Estimated Fair 
Value
 

 

 

  

Unaffiliated common stocks

    $ 3     $ —     $ —     $ 3   
 

 

 

  

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                                                   
    Book Adjusted
 Carrying Value		     Gross
Unrealized
Gains		     Gross
Unrealized
Losses		     Estimated Fair 
Value
 

 

 

  

December 31, 2022

        

Bonds:

        

United States Government and agencies

    $ 367     $ 8     $ 25     $ 350   

State, municipal and other government

     130       1       20       111   

Hybrid securities

     51       —       6       45   

Industrial and miscellaneous

     3,629       22       597       3,054   

Mortgage and other asset-backed securities

     1,082       21       127       976   
 

 

 

  

Total unaffiliated bonds

     5,259       52       775       4,536   

Unaffiliated preferred stocks

     4       —       —       4   
 

 

 

  
   $ 5,263     $ 52     $ 775     $ 4,540   
 

 

 

  
    Cost     Gross
Unrealized
Gains		     Gross
Unrealized
Losses		     Estimated Fair 
Value
 

 

 

  

Unaffiliated common stocks

    $ 4     $ 2     $ —     $ 6   
 

 

 

  

The carrying amount and estimated fair value of long and short-term bonds at December 31, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

 

                                                 
    2023  
 

 

 

  
December 31:   Carrying Value     Fair Value  
 

 

 

  

Due in one year or less

    $ 100     $ 99   

Due after one year through five years

     586       567   

Due after five years through ten years

     851       774   

Due after ten years

     2,433       2,062   
 

 

 

  

Subtotal

     3,970       3,502   

Mortgage and other asset-backed securities

     1,008       919   
 

 

 

  

Total

    $ 4,978     $ 4,421   
 

 

 

  

 

 

 

 

30

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The estimated fair value of bonds, preferred stocks and common stocks with gross unrealized losses at December 31, 2023 and 2022 is as follows:

 

                                                                                       
    2023
    Equal to or Greater than
12 Months		   Less than 12 Months
    Estimated
Fair Value		   Gross
Unrealized
Losses		   Estimated
Fair Value		   Gross
Unrealized 
Losses

United States Government and agencies

    $ 14       $ 4       $ 181       $ 25   

State, municipal and other government

     84       16       —       —  

Hybrid securities

     32       4       —       —  

Industrial and miscellaneous

     2,406       463       99       2  

Mortgage and other asset-backed securities

     718       107       56       1  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total bonds

    $ 3,254      $ 594      $ 336      $ 28  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Preferred stocks-unaffiliated

     —       —       4       —  

Common stocks-unaffiliated

     —       —       3       —  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

   $ 3,254      $ 594      $ 343      $ 28  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

 

                                                                                       
    2022
    Equal to or Greater than
12 Months		   Less than 12 Months
    Estimated
Fair Value		   Gross
Unrealized
Losses		   Estimated
Fair Value		   Gross
Unrealized 
Losses

United States Government and agencies

    $ —      $ —      $ 222      $ 25  

State, municipal and other government

     27        8        64        11   

Hybrid securities

     13       4       28       2  

Industrial and miscellaneous

     542       221       2,212       376  

Mortgage and other asset-backed securities

     240       48       642       80  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total bonds

    $ 822      $ 281      $ 3,168      $ 494  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Preferred stocks-unaffiliated

     —       —       4       —  

Common stocks-unaffiliated

     —       —       3       —  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

   $ 822      $ 281      $ 3,175      $ 494  
 

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

During 2023 and 2022, there were no loan-backed or structured securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold.

For loan-backed and structured securities with a recognized OTTI due to the Company’s cash flow analysis, in which the security is written down to estimated future cash flows discounted at the security’s effective yield, in 2023, 2022 and 2021, the Company recognized OTTI of $6, $3 and $0, respectively.

 

 

 

 

31

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The following loan-backed and structured securities were held at December 31, 2023, for which an OTTI was recognized during the current reporting period:

 

CUSIP   

Amortized

Cost Before

Current

Period OTTI

     

Present

Value of

Projected

Cash Flows

     

Recognized

OTTI

   

Amortized

Cost After

OTTI

     

Fair Value at

Time of

OTTI

     

Date of 

Financial 
Statement 

Where 

Reported 

  

 

  

 46642MAA6

     $ 11       $ 6       $ 5        $ 6       $ 3        12/31/2023   

 05604LAE2

      1        —        1         —        —        12/31/2023   
        

 

 

 

         
          $ 6            
        

 

 

 

         

The unrealized losses of loan-backed and structured securities where fair value is less than cost or amortized cost for which an OTTI has not been recognized in earnings as of December 31, 2023 and 2022 is as follows:

 

                                                                           
    2023     2022  
    Losses 12
 Months or 
More		     Losses Less
Than 12
Months		     Losses 12
Months or
More		     Losses Less
Than 12
Months		  
 

 

 

    

 

 

  

Year ended December 31:

        

The aggregate amount of unrealized losses

    $ 110     $ 1     $ 48     $ 80   
The aggregate related fair value of securities with unrealized losses     718       70       240       648   

At December 31, 2023 and 2022, respectively, for bonds and preferred stocks that have been in a continuous loss position for greater than or equal to twelve months, the Company held 905 and 258 securities with a carrying amount of $3,848 and $1,103, and an unrealized loss of $594 and $281. Of this portfolio, at December 31, 2023 and 2022, 95.6% and 88.4% were investment grade with associated unrealized losses of $567 and $251, respectively.

At December 31, 2023 and 2022, respectively, for bonds and preferred stocks that have been in a continuous loss position for less than twelve months, the Company held 134 and 898 securities with a carrying amount of $367 and $3,666, and an unrealized loss of $28 and $494. Of this portfolio, at December 31, 2023 and 2022, 97.7% and 96.6% were investment grade with associated unrealized losses of $27 and $479, respectively.

At December 31, 2023 and 2022, there were no common stocks that have been in a continuous loss position for greater than or equal to twelve months.

At December 31, 2023 and 2022, respectively, for common stocks that have been in a continuous loss position for less than twelve months, the Company held 2 and 2 securities with a cost of $3 and $3 and no unrealized losses.

During the years ended December 31, 2023 and 2022, the Company held no 5GI securities.

 

 

 

 

32

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

During 2023 and 2022, respectively, the Company sold, redeemed or otherwise disposed of 3 and 17 securities as a result of a callable feature which generated investment income of $0 and $3 as a result of a prepayment penalty and/or acceleration fee.

Proceeds from sales and other disposals of bonds and preferred stock and related gross realized capital gains and losses are reflected in the following table. The amounts exclude maturities and include transfers associated with reinsurance agreements, if applicable.

 

                                                                 
    Year Ended December 31  
    2023     2022     2021
 

 

 

  
     

Proceeds

    $ 371      $ 695      $ 1,177   
 

 

 

  

Gross realized gains

    $ 8       $ 11      $ 38   

Gross realized losses

     (5)       (28)       (12)  
 

 

 

  

Net realized capital gains (losses)

    $ 3      $ (17)     $ 26   
 

 

 

  

The Company had gross realized losses, which relate to losses recognized on other-than-temporary declines in the fair value of bonds and preferred stocks, for the years ended December 31, 2023, 2022 and 2021 of $5, $28 and $2, respectively.

At December 31, 2023 and 2022, the Company had no investments in restructured securities. There were no capital gains (losses) taken as a direct result of restructures in 2023, 2022 and 2021.

Mortgage Loans

The credit quality of mortgage loans by type of property for the years ended December 31, 2023 and 2022 were as follows:

 

                                                                 
December 31, 2023                     
     Farm      Commercial      Total  
  

 

 

  

 AAA - AA

    $ —      $ 934      $ 934   

 A

      14        822        836   

 BBB

      —        69        69   

 B

      —        2        2   
  

 

 

  
   $ 14      $ 1,827      $ 1,841   
  

 

 

  

 

 

 

 

33

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                 
December 31, 2022                     
     Farm      Commercial      Total  
  

 

 

  

 AAA - AA

     $ —      $ 1,190      $ 1,190   

 A

      14        595        609   

 BBB

      —        52        52   

 BB

      —        2        2   
  

 

 

  
    $ 14      $ 1,839      $ 1,853   
  

 

 

  

The credit quality for commercial and farm mortgage loans was determined based on an internal credit rating model which assigns a letter rating to each mortgage loan in the portfolio as an indicator of the credit quality of the mortgage loan. The internal credit rating model was designed based on rating agency methodology, then modified for credit risk associated with the Company’s mortgage lending process, taking into account such factors as projected future cash flows, net operating income and collateral value. The model produces a credit rating score and an associated letter rating which is intended to align with S&P ratings as closely as possible. Information supporting the credit risk rating process is updated at least annually.

During 2023, the Company issued mortgage loans with a maximum interest rate of 6.40% and a minimum interest rate of 5.50% for commercial loans. The maximum percentage of any one admitted loan to the value of the security (exclusive of insured or guaranteed or purchase money mortgages) originated or acquired during the year ending December 31, 2023 at the time of origination was 56%. During 2022, the Company issued mortgage loans with a maximum interest rate of 5.69% and a minimum interest rate of 2.81% for commercial loans. The maximum percentage of any one admitted loan to the value of the security (exclusive of insured or guaranteed or purchase money mortgages) originated or acquired during the year ending December 31, 2022 at the time of origination was 67%.

During 2023 and 2022, the Company issued no farm mortgage loans.

During 2023 and 2022, the Company did not reduce the interest rate on any outstanding mortgage loans.

The age analysis of mortgage loans and identification in which the Company is a participant or co-lender in a mortgage loan agreement is as follows for December 31, 2023 and 2022:

 

                                                                 
          Commercial        
  Farm     All Other     Total  

December 31, 2023

      

Recorded Investment (All)

      

Current

    $ 14     $ 1,827     $ 1,841   

Participant or Co-lender in

Mortgage Loan Agreement

      

Recorded Investment

    $ 14     $ 575     $ 589   

 

 

 

 

34

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                 
          Commercial        
  Farm     All Other     Total  

December 31, 2022

      

Recorded Investment (All)

      

Current

    $ 14     $ 1,839     $ 1,853   

Participant or Co-lender in

Mortgage Loan Agreement

      

Recorded Investment

    $ 14     $ 586     $ 600   

There were no impaired mortgage loans held without an allowance for credit losses as of December 31, 2023 and 2022, respectively, that were subject to participant or co-lender mortgage loan agreement for which the Company is restricted from unilaterally foreclosing on the mortgage loans.

The Company accrues interest income on impaired loans to the extent deemed collectible (delinquent less than 91 days) and the loan continues to perform under its original or restructured contractual terms. Interest income on nonperforming loans generally is recognized on a cash basis.

No mortgage loan foreclosures occurred during 2023, 2022 and 2021.

At December 31, 2023 and 2022, the Company held a mortgage loan loss reserve in the AVR of $18 and $18, respectively.

The Company’s mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:

 

Geographic Distribution  
     December 31  
     2023     2022  
              

Pacific

      31  %      30  % 

South Atlantic

      18       18  

Middle Atlantic

      13       13  

E. North Central

      16       16  

Mountain  

      10       11  

W. North Central

      3       4  

W. South Central

      4       4  

E. South Central

      4       3  

New England

      1       1  
Property Type Distribution  
     December 31  
     2023     2022  
              
Apartment      54  %      53  % 
Industrial      22       23  
Retail      14       14  
Office      7       9  
Medical      2       0  
Agricultural      1       1  
    
    
 

 

 

 

 

35

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Other Invested Assets

During 2023, 2022 and 2021, the Company recognized no impairment write downs for its investments in joint ventures and limited partnerships.

Tax Credits

At December 31, 2023, the Company had ownership interests in five LIHTC investments with a carrying value of $64. The remaining years of unexpired tax credits ranged from one to nine, and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to eleven years. The amount of contingent equity commitments expected to be paid during the year 2024 is $1. Tax credits expenses recognized in 2023 were $15 and other tax benefits recognized in 2023 were $2. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.

At December 31, 2022, the Company had ownership interests in five LIHTC investments with a carrying value of $79. The remaining years of unexpired tax credits ranged from two to ten, and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to twelve years. The amount of contingent equity commitments expected to be paid during the year 2023 is $1. Tax credits expenses recognized in 2022 were $15 and other tax benefits recognized in 2022 were $2. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.

The Company has transferable state tax credits that are insignificant.

The Company did not have any non-transferable state tax credits.

The Company estimated the utilization of the remaining state transferable tax credits by projecting a future tax liability based on projected premium, tax rates and tax credits, and comparing the projected future tax liability to the availability of remaining state transferable tax credits. The Company had no impairment losses related to state transferable tax credits.

Derivatives

The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets (cash or securities) on the Company’s behalf in an amount equal to the difference between the net positive fair value of the contracts and an agreed upon threshold based on the credit rating of the counterparty. If the net fair value of all contracts with this counterparty is negative, then the Company is required to post similar assets (cash or securities). Fair value of derivative contracts, aggregated at a counterparty level at December 31, 2023 and 2022 was as follows:

 

                                                 
    2023     2022
 

 

 

  

Fair value - positive

    $ 49      $ 213    

Fair value - negative

     (56)       (224)   

 

 

 

 

36

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

At December 31, 2023, 2022 and 2021, the Company has recorded unrealized gains (losses) of $2, ($1) and $31, respectively, for the component of derivative instruments utilized for hedging purposes that did not qualify for hedge accounting. This has been recorded directly to unassigned surplus as an unrealized gain (loss). The Company did not recognize any unrealized gains or losses during 2023, 2022 and 2021 that represented the component of derivative instruments gain or loss that was excluded from the assessment of hedge effectiveness.

Summary of realized gains (losses) by derivative type for the years ended December 31, 2023, 2022 and 2021:

 

                                                                          
     2023      2022      2021
  

 

 

  

Swaps:

         

Interest rate

     $ (40)      $ (167)      $ (14)   

Total return

      (49)        55         (77)   
  

 

 

  

Total swaps

     $ (89)      $ (112)      $ (91)   
  

 

 

  

Futures - net positions

      (5)        (76)        (23)   
  

 

 

  

Total realized gains (losses)

     $ (94)      $ (188)      $ (114)   
  

 

 

  

The average estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2023 and 2022:

 

                                                                           
    Asset(1)     Liability(1)  
 

 

 

    

 

 

  
    2023     2022     2023     2022
 

 

 

    

 

 

  

Derivative component of RSATs

        

Credit default swaps

    $ 6     $ 3     $ —     $ —   

(1) Asset and liability classification of derivatives is based on each derivative’s positive (asset) or negative (liability) book/adjusted carrying value.

The estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2023 and 2022:

 

                                                                           
    Asset(1)     Liability(1)  
 

 

 

    

 

 

  
    2023     2022     2023     2022  
 

 

 

    

 

 

  

Derivative component of RSATs

        

Credit default swaps

    $ 10     $ 4     $ —     $ —   

(1) Asset and liability classification of derivatives is based on each derivative’s positive (asset) or negative (liability) book/adjusted carrying value.

The Company did not have net realized gains (losses) on derivatives held for other than hedging purposes for the years ended December 31, 2023, 2022 and 2021.

As stated in Note 2, the Company replicates investment grade corporate bonds and sovereign debt by writing credit default swaps. As a writer of credit swaps, the Company actively monitors the underlying asset, being careful to note any events (default or similar credit event) that would require the Company to perform on the credit swap. If such events would take place, a payment

 

 

 

 

37

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

equal to the notional amount of the contract, less any potential recoveries as determined by the underlying agreement, will be made by the Company to the counterparty to the swap.

The following tables present the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at December 31, 2023 and 2022:

 

                                                                                                               
            2023

Rating Agency Designation of

Referenced Credit Obligations (1)

    NAIC
Designation		      Estimated
Fair Value of
Credit
Default
Swaps		    Maximum
Amount of
Future
Payments
under Credit
Default
Swaps		    Weighted
Average
Years to
Maturity (2)

AAA/AA/A

      1           

Single name credit default swaps  (3)

       $ 2      $ 101        3.4  

Credit default swaps referencing indices

         —        20        37.7  
     

 

 

 

   

 

 

 

   

Subtotal

         2        121        9.1  
     

 

 

 

   

 

 

 

   

BBB

      2           

Single name credit default swaps  (3)

         5        214        3.0  

Credit default swaps referencing indices

         3        166        2.8  
     

 

 

 

   

 

 

 

   

Subtotal

         8        380        2.9  
     

 

 

 

   

 

 

 

   

BB

      3           

Single name credit default swaps  (3)

         —        10        2.5  
     

 

 

 

   

 

 

 

   

Subtotal

         —        10        2.5  
     

 

 

 

   

 

 

 

   

Total

       $ 10      $ 511        4.1  
     

 

 

 

   

 

 

 

   

 

(1) 

The rating agency designations are based on availability and the blending of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard and Poor’s Rating Services (“S&P”), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used.

 

(2) 

The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.

 

(3) 

Includes corporate, foreign government and state entities.

 

 

 

 

38

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                           
          2022

Rating Agency Designation of

Referenced Credit Obligations (1)

    NAIC
Designation		    Estimated
Fair Value of
Credit
Default
Swaps		    Maximum
Amount of
Future
Payments
under Credit
Default
Swaps		    Weighted
Average
Years to
Maturity (2)		  

 AAA/AA/A

    1         

Single name credit default swaps (3)

        $ —       $ 71        4.0  

Credit default swaps referencing indices

         —        20        38.7  
     

 

 

 

   

 

 

 

   

Subtotal

         —        91        11.6  
     

 

 

 

   

 

 

 

   

 BBB

    2         

Single name credit default swaps (3)

         2        249        2.6  

Credit default swaps referencing indices

         1        156        2.3  
     

 

 

 

   

 

 

 

   

Subtotal

         3        405        2.5  
     

 

 

 

   

 

 

 

   

 BB

    3         

Single name credit default swaps (3)

         —        10        3.5  
     

 

 

 

   

 

 

 

   

Subtotal

         —        10        3.5  
     

 

 

 

   

 

 

 

   

 B

    4         

Single name credit default swaps (3)

         —        5        1.0  
     

 

 

 

   

 

 

 

   

Subtotal

         —        5        1.0  
     

 

 

 

   

 

 

 

   

Total

        $ 3       $ 511        4.1  
     

 

 

 

   

 

 

 

   

 

(1) 

The rating agency designations are based on availability and the blending of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard and Poor’s Rating Services (“S&P”), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used.

 

(2) 

The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.

 

(3) 

Includes corporate, foreign government and state entities.

The Company may enter into credit default swaps to purchase credit protection on certain of the referenced credit obligations in the table above. At December 31, 2023, there were not any potential future recoveries available to offset the $511 from the table above. At December 31, 2022, there were not any potential future recoveries available to offset the $511 from the table above.

 

 

 

 

39

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

At December 31, 2023 and 2022, the Company’s outstanding derivative instruments, shown in notional or contract amounts and fair value, are summarized as follows:

 

     Contract or Notional Amount (1)      Fair Value  
       2023         2022          2023          2022    
  

 

 

     

 

 

  

Derivative assets:

           

Credit default swaps

     $ 476     $ 466       $ 10      $ 4  

Currency swaps

      131       138        9        20  

Equity futures

      —       —        —        1  

Equity swaps

      —       192        —        5  

Interest rate swaps

      407       2,097        26        181  

Options

      14       —        —        —  

Derivative liabilities:

           

Credit default swaps

      61       69        1        —  

Currency swaps

      23       16        1        1  

Equity futures

      —       —        —        1  

Equity swaps

      302       101        23        7  

Interest rate futures

      —       —        1        —  

Interest rate swaps

      90       2,182        27        212  

Options

      (43 )      —        1        —  

(1) Futures are presented in contract format. Swaps and options are presented in notional format.

Restricted Assets

The following tables show the pledged or restricted assets as of December 31, 2023 and 2022, respectively:

 

                                                                                                                            
   

Gross Restricted (Admitted & Nonadmitted)

2023

  
 

 

 

  
 Restricted Asset Category   Total General
Account (G/A)		     G/A Supporting
Separate
Account (S/A)
Activity		     Total S/A
Restricted
Assets		     S/A Assets
Supporting
G/A Activity		     Total  

 

  

Collateral held under security lending agreements

    $ 321     $ —     $ —     $ —     $ 321   

Subject to dollar repurchase agreements

     20       —       —       —       20   

FHLB capital stock

     3       —       —       —       3   

On deposit with states

     3       —       —       —       3   

Pledged as collateral not captured in other categories

     149       —       —       —       149   
 

 

 

  

Total restricted assets

    $ 496     $ —     $ —     $ —     $ 496   
 

 

 

  

 

 

 

 

40

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                                                                 
    Gross (Admitted & Nonadmitted) Restricted     Percentage  
 

 

 

  
 Restricted Asset Category    Total From
 Prior Year
 (2022)		    

Increase/

(Decrease)

     Total
Nonadmitted
Restricted		     Total
Admitted
Restricted		    

Gross
(Admitted &
Nonadmitted)

Restricted

to Total

Assets

    

Admitted

Restricted to

Total

Admitted

Assets

  

 

  

Collateral held under security lending agreements

    $ 412     $ (91 )    $ —     $ 321       1.17 %      1.17%  

Subject to dollar repurchase agreements

     20       —       —       20       0.07       0.07    

FHLB capital stock

     3       —       —       3       0.01       0.01    

On deposit with states

     3       —       —       3       0.01       0.01    

Pledged as collateral not captured in other categories

     148       1       —       149       0.54       0.54    
 

 

 

  

Total restricted assets

    $ 586     $ (90 )    $ —     $ 496       1.80 %      1.80%  
 

 

 

  

The following tables show the pledged or restricted assets in other categories as of December 31, 2023 and 2022, respectively:

 

                                                                                                                            
    

Gross Restricted (Admitted & Nonadmitted)

2023

  
  

 

 

  
 Description of Assets    Total General
Account (G/A)		      G/A
Supporting
Separate
Account (S/A)
Activity		      Total S/A
Restricted
Assets		      S/A Assets
Supporting G/A
Activity		      Total  

 

  

 Derivatives

     $ 149      $ —      $ —      $ —      $ 149   
  

 

 

  

 Total

     $ 149      $ —      $ —      $ —      $ 149   
  

 

 

  

 

                                                                                                                 
    Gross (Admitted & Nonadmitted) Restricted     Percentage  
 

 

 

  
 Description of Assets   Total From
Prior Year
(2022)		    

Increase/

(Decrease)

     Total
Nonadmitted
Restricted		     Total
Admitted
Restricted		    

Gross
(Admitted &
Nonadmitted)

Restricted

to Total

Assets

    

Admitted

Restricted to

Total

Admitted

Assets

  

 

  

 Derivatives

    $ 148     $ 1     $ —     $ 149       0.54 %      0.55%  
 

 

 

  

 Total

    $ 148     $ 1     $ —     $ 149       0.54 %      0.55%  
 

 

 

  

 

 

 

 

41

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The following tables show the collateral received and reflected as assets within the financial statements as of December 31, 2023 and 2022:

 

                                                                                                           
2023  

 

  
 Collateral Assets    Carrying Value      Fair Value      % of CV to
Total Assets
(Admitted and
Nonadmitted)		     % of CV to
Total Admitted
Assets		  

 

  

 Cash

     $ 58      $ 58        0.64  %      0.65 %  

 Securities lending collateral assets

      321        321        3.56       3.59    
  

 

 

  

 Total collateral assets

     $ 379      $ 379        4.20  %      4.24 %  
  

 

 

  

 

                                                                                                           
     Amount      % of Liability
to Total
Liabilities		            
  

 

 

  

 Recognized obligation to return collateral asset

     $ 379        4.72%  

 

                                                                                                           
2022  

 

  
 Collateral Assets    Carrying Value      Fair Value      % of CV to
Total Assets
(Admitted
and
Nonadmitted)		     % of CV
to Total
Admitted
Assets		  

 

  

 Cash

     $ 71      $ 68        0.83  %      0.84 %  

 Securities lending collateral assets

      412        412        4.81       4.86   
  

 

 

  

 Total collateral assets

     $ 483      $ 480        5.64  %      5.70 %  
  

 

 

  

 

                                                                                                           
     Amount      % of Liability
to Total
Liabilities		            
  

 

 

  

 Recognized obligation to return collateral asset

     $ 483        6.33 %  

 

 

 

 

42

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Net Investment Income

Detail of net investment income is presented below:

 

     Year Ended December 31  
     2023      2022      2021
  

 

 

  

Income:

         

Bonds

     $ 212      $ 222      $ 249   

Common stocks

      1        —        1   

Mortgage loans on real estate

      74        71        87   

Policy loans

      8        8        8   

Cash, cash equivalents and short-term investments

      7        4        —   

Derivatives

      25        20        16   

Other invested assets

      17        19        (5)  
  

 

 

  

Gross investment income

      344        344        356   

Less: investment expenses

      17        17        20   
  

 

 

  

Net investment income before amortization of IMR

      327        327        336   

Amortization of IMR

      3        6        6   
  

 

 

  

Net investment income

     $    330      $    333      $    342   
  

 

 

  

The gross, nonadmitted and admitted amounts for interest income due and accrued are presented in the following table:

 

     2023      2022  
  

 

 

  

Gross

     $ 58      $ 63   

Nonadmitted

     $ —      $ 1   

Admitted

     $    58      $    62   

At December 31, 2023, the Company had no cumulative amounts for paid-in-kind interest included in the principle balance. At December 31, 2022, the Company did not report a paid-in-kind interest balance.

 

 

 

 

43

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Realized Capital Gains (Losses)

Net realized capital gains (losses) on investments, including OTTI, are summarized below:

 

     Realized  
  

 

 

  
     Year Ended December 31  
     2023     2022     2021  
  

 

 

  

Bonds

     $ (10 )    $ (24 )    $ 25   

Common stocks

      (1 )      1       3   

Derivatives

      (94 )      (188 )      (114)  

Other invested assets

      1       18       (1)  
  

 

 

  

Change in realized capital gains (losses), before taxes

      (104 )      (193 )      (87)  

Federal income tax effect

      (2 )      (2 )      (12)  

Transfer from (to) interest maintenance reserve

      6       16       (16)  
  

 

 

  

Net realized capital gains (losses) on investments

     $    (100 )    $    (179 )    $    (115)  
  

 

 

  

 

 

 

 

44

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Unrealized Capital Gains (Losses)

The changes in net unrealized capital gains and losses on investments, including the changes in net unrealized foreign capital gains and losses were as follows:

 

                                                                       
     Change in Unrealized  
  

 

 

  
     Year Ended December 31  
     2023     2022     2021  
  

 

 

  

Bonds

     $ 2     $   2     $ 2   

Preferred stocks

      —       —       1   

Common stocks

      (2 )      —       —   

Affiliated entities

      —       1       —   

Derivatives

      (1 )      (31 )      (2)  

Other invested assets

      19       11       15   
  

 

 

  

Change in unrealized capital gains (losses), before taxes

      18       (17 )      16   

Taxes on unrealized capital gains (losses)

      (4 )      (6 )      (4)  
  

 

 

  

Change in unrealized capital gains (losses), net of tax

     $   14     $ (23 )    $   12   
  

 

 

  

Admitted Disallowed IMR

The Company has admitted net negative (disallowed) IMR in accordance with the following criteria:

 

  A.

Fixed income investments generating IMR losses comply with the reporting entity’s documented investment or liability management policies.

  B.

IMR losses for fixed income related derivatives are all in accordance with prudent and documented risk management procedures, in accordance with a reporting entity’s derivative use plans and reflect symmetry with historical treatment in which unrealized derivative gains were reversed to IMR and amortized in lieu of being recognized as realized gains upon derivative termination.

  C.

Any deviation to (a) was either because of a temporary and transitory timing issue or related to a specific event, such as a reinsurance transaction, that mechanically made the cause of IMR losses not reflective of reinvestment activities.

  D.

Asset sales that were generating admitted negative IMR were not compelled by liquidity pressures (e.g., to fund significant cash outflows including, but not limited to excess withdrawals and collateral calls).

The aggregate net negative (disallowed) IMR allocation is presented in the following table for the year ended December 31, 2023:

 

                                                                                                       
     Total      General
Account		      Insulated
Separate
Account		     

Non-Insulated
Separate

Account

  
  

 

 

  

2023

     $    18      $    —      $    18      $ —  

 

 

 

 

45

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The allocation of the admitted negative (disallowed) IMR is presented in the following table for the year ended December 31, 2023:

 

                                                                                                           
     Total      General
Account		      Insulated
Separate
Account		      Non-Insulated
Separate
Account		  
  

 

 

  

2023

     $    13      $    —      $    13      $ —   

The calculation of adjusted capital and surplus with consideration of the negative (disallowed) IMR is presented in the following table for the year ended December 31, 2023:

 

    2023  
 

 

 

  
Prior period, as of September 30, 2023, the most recent statement filed with the NYDFS, general account capital and surplus   $     847   

From prior period SAP financials:

  

Net positive goodwill (admitted)

     —   

EDP equipment & operating system software (admitted)

     —   

Net DTAs (admitted)

     23   

Net negative (disallowed) IMR (admitted)

     —   
       

Adjusted capital and surplus

   $ 824   
 

 

 

  

The admitted net negative (disallowed) IMR represents 1.62% of adjusted capital and surplus for 2023.

The Company did not have gains/losses associated with derivatives sold allocated to IMR during 2023.

 

 

 

 

46

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

6.

Policy and Contract Attributes

Insurance Liabilities

Policy reserves, deposit-type contracts and policy claims at December 31, 2023 and 2022 were as follows:

 

     Year Ended December 31  
     2023      2022  
  

 

 

  

Life insurance reserves

     $    1,569      $    1,450   

Annuity reserves and supplementary contracts with life contingencies

      4,325        4,752   

Accident and health reserves (including long term care)

      279        338   
  

 

 

  

Total policy reserves

     $ 6,173      $ 6,540   

Deposit-type contracts

      30        31   

Policy claims

      37        35   
  

 

 

  

Total policy reserves, deposit-type contracts and claim liabilities

     $ 6,240      $ 6,606   
  

 

 

  

Life Insurance Reserves

The aggregate policy reserves for life insurance policies are based upon the 1941, 1958, 1980, 2001 and 2017 Commissioner’s Standard Ordinary Mortality Tables. The reserves are calculated using interest rates ranging from 2.00 to 7.25 percent and are computed principally on the Net Level Premium Valuation and the Commissioner’s Reserve Valuation Method. Reserves for universal life policies are based on account balances adjusted for the Commissioner’s Reserve Valuation Method.

Tabular interest, tabular less actual reserves released and tabular cost have been determined by formula.

The Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the date of death.

Additional premiums are charged or additional mortality charges are assessed for policies issued on substandard lives according to underwriting classification. Generally, reserves are determined by computing the regular reserve for the plan at the true age and holding, in addition, the unearned portion of the extra premium charge for the year. For certain flexible premium and fixed premium universal life insurance products, reserves are calculated utilizing the Commissioner’s Reserve Valuation Method for universal life policies and recognizing any substandard ratings.

As of December 31, 2023 and 2022, the Company had insurance in force aggregating $4,383 and $5,812, respectively, in which the gross premiums are less than the net premiums required by the valuation standards established by the NYDFS. The Company established policy reserves of $471 and $717 to cover these deficiencies as of December 31, 2023 and 2022, respectively.

 

 

 

 

47

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The Company does not issue participating life insurance policies.

Annuity Reserves and Supplementary Contracts Involving Life Contingencies

Deferred annuity reserves are calculated according to the Commissioner’s Annuity Reserve Valuation Method including excess interest reserves to cover situations where the future interest guarantees plus the decrease in surrender charges are in excess of the maximum valuation rates of interest.

Reserves for immediate annuities and supplementary contracts with and without life contingencies are equal to the present value of future payments assuming interest rates ranging from 1.00 to 11.25 percent and mortality rates, where appropriate, from a variety of tables.

Annuity reserves also include GICs and funding agreements classified as life-type contracts as defined in SSAP No. 50, Classifications of Insurance or Managed Care Contracts. These liabilities have annuitization options at guaranteed rates and consist of floating interest rate and fixed interest rate contracts. The contract reserves are carried at the greater of the account balance or the value as determined for an annuity with cash settlement option, on a change in fund basis, according to the Commissioner’s Annuity Reserve Valuation Method.

For variable annuities with guaranteed living benefits and/or minimum guaranteed death benefits, the Company complies with Reg 213. Reg 213 specifies statutory reserve requirements for variable annuity contracts (VACARVM) with benefit guarantees and without benefit guarantees and related products. Examples of covered guaranteed benefits include return of premium death benefits, guaranteed minimum accumulation benefits, guaranteed minimum income benefits, guaranteed minimum withdrawal benefits and guaranteed payout annuity floors. The Reg 213 reserve calculations include standard scenario calculations from the prior Actuarial Guideline 43 (AG 43) as well as reserve requirements based on the NAIC Valuation Manual Section 21 (VM-21) Principles Based Reserving for Variable Annuities. The reserve for contracts falling within the scope of Reg 213 is split into pre and post January 1, 2020 contract issues and is calculated at a contract level with no aggregation. For pre 2020 business, the reserve is the greater of the VM-21 reserve or the modified AG 43 standard scenario reserve. For post 2020 business, the reserve is the greater of the VM-21 reserve and the New York Objective Floor; the New York Objective Floor is the maximum of two distinct modified AG 43 standard scenario reserves, the cash surrender value and the option value floor.

The VM-21 reserve is equal to the Conditional Tail Expectation (CTE) amount plus an additional standard projection amount if the Company’s non-economic assumptions differ enough from industry assumptions. To determine the CTE amount, the Company uses 1,000 of the pre-packaged scenarios developed by the American Academy of Actuaries (AAA) and the Society of Actuaries and prudent estimate assumptions based on Company experience. The Standard Projection Amount is determined using the same CTE calculations but replaces the Company’s own assumptions with prescribed assumptions and methods specified in VM-21.

 

 

 

 

48

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Accident and Health Liabilities

Accident and health policy reserves are equal to the greater of the gross unearned premiums or any required mid-terminal reserves plus net unearned premiums and the present value of amounts not yet due on both reported and unreported claims.

At December 31, 2023 and 2022, the Company had no premium deficiency reserve related to accident and health policies.

Liabilities for losses and loss/claim adjustment expenses for accident and health contracts are estimated using statistical claim development models to develop best estimates of liabilities for medical expense business and using tabular reserves employing mortality/morbidity tables and discount rates meeting minimum regulatory requirements for other business. Unpaid claims include amounts for losses and related adjustment expenses and are estimates of the ultimate net costs of all losses, reported and unreported. These estimates are subject to the impact of future changes in claim severity, frequency and other factors.

Activity in the liability for unpaid claims and related processing costs net of reinsurance is summarized as follows:

 

                                                                                                               
     Unpaid Claims
Liability Beginning
of Year		     

Claims

Incurred

     

Claims

Paid

      Unpaid Claims
Liability End of
Year		  
  

 

 

  

Year ended December 31, 2023

            

2023

     $ —       $ 67      $ 38       $ 29   

2022 and prior

      40        2        30        12   
  

 

 

  
     40       $   69      $   68        41   
     

 

 

     

Active life reserve

     $ 313             $ 252   
  

 

 

           

 

 

  

Total accident and health reserves

     $ 353             $ 293   
  

 

 

           

 

 

  

 

                                                                                                               
     Unpaid Claims
Liability Beginning
of Year		     

Claims

Incurred

     

Claims

Paid

      Unpaid Claims
Liability End of
Year		  
  

 

 

  

Year ended December 31, 2022

            

2022

     $ —       $ 61      $ 33       $ 28   

2021 and prior

      35        7        30        12   
  

 

 

  
     35       $   68      $   63        40   
     

 

 

     

Active life reserve

     $ 301             $ 313   
  

 

 

           

 

 

  

Total accident and health reserves

     $ 336             $ 353   
  

 

 

           

 

 

  

The change in the Company’s unpaid claims reserve was $2 and $7 for the years ended December 31, 2023 and 2022, respectively, for health claims that were incurred prior to those Balance Sheets date. The change in 2023 and 2022 resulted primarily from variances in the estimated frequency of claims and claim severity.

 

 

 

 

49

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Activity in the liability for unpaid claims adjustment expense is summarized as follows:

 

     Liability
Beginning of
Year		      Incurred      Paid      Liability
End of Year		  
  

 

 

  

Year ended December 31, 2023

            

2023

     $ —      $ 1      $ 1      $ —   

2022 and prior

      —        —        —        —   
  

 

 

  
    $    —      $    1      $    1      $    —   
  

 

 

  

Year ended December 31, 2022

            

2022

     $ —      $ 1      $ 1      $ —   

2021 and prior

      —        —        —        —   
  

 

 

  
    $ —      $ 1      $ 1      $ —   
  

 

 

  

The Company increased the claim adjustment expense provision for insured events of prior years during 2023.

Premium and Annuity Considerations Deferred and Uncollected

Reserves on the Company’s traditional life insurance products are computed using mean and interpolated or mid-terminal reserving methodologies. The mean methodologies result in the establishment of assets for the amount of the net valuation premiums that are anticipated to be received between the policy’s paid-through date to the policy’s next anniversary date. The interpolated methodologies do not require the establishment of such assets, however, it is required to hold unearned premium liabilities. At December 31, 2023 and 2022, the gross premiums and net of loading amounts related to these assets (which are reported as premiums deferred and uncollected), are as follows:

 

     2023      2022  
     Gross      Net of Loading      Gross      Net of Loading  

Life and annuity:

            

Ordinary renewal business

     $ 3        $ 3        $ 3        $ 3   
  

 

 

     

 

 

     

 

 

     

 

 

  
    $       3        $       3        $       3        $       3   
  

 

 

     

 

 

     

 

 

     

 

 

  

Deposit-type Contracts

Tabular interest on funds not involving life contingencies has been determined primarily by formula.

 

 

 

 

50

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Withdrawal Characteristics of Annuity Reserves and Deposit Funds

A portion of the Company’s policy reserves and other policyholders’ funds (including separate account liabilities) relates to liabilities established on a variety of the Company’s annuity, deposit fund and life products. There may be certain restrictions placed upon the amount of funds that can be withdrawn without penalty. The amount of reserves on annuity and deposit fund products, by withdrawal characteristics, is summarized as follows:

 

    

December 31

2023

  
  

 

 

  
Individual Annuities:    General
Account		      Separate
Account
with
Guarantees		      Separate
Account
Non-
Guaranteed		      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ —      $ 18      $ —      $ 18         — %   

At book value less surrender charge of 5% or more

      43        —        —        43         1     

At fair value

      —        —        4,123        4,123         83     
  

 

 

  

Total with adjustment or at fair value

      43        18        4,123        4,184         84     

At book value without adjustment
(minimal or no charge or adjustment)

      549        —        —        549         11     

Not subject to discretionary withdrawal provision

      240        —        16        256         5     
  

 

 

  

Total individual annuity reserves

      832        18        4,139        4,989          100 %   
              

 

 

  

Less reinsurance ceded

      135        —        —        135      
  

 

 

     

Net individual annuities reserves

     $ 697      $ 18      $ 4,139      $  4,854      
  

 

 

     

Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date

     $ 9      $ —      $ —      $ 9      
  

 

 

     

 

 

 

 

51

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

    

December 31

2023

  
  

 

 

  
Group Annuities:    General
Account		      Separate
Account
with
Guarantees		      Separate
Account
Non-
Guaranteed		      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ 776      $ 1      $ —      $ 777         4 %   

At book value less surrender charge of 5% or more

      492        —        —        492         3     

At fair value

      —        323        12,770        13,093         75     
  

 

 

  

Total with adjustment or at fair value

      1,268        324        12,770        14,362         82     

At book value without adjustment
(minimal or no charge or adjustment)

      1,892        49        —        1,941         11     

Not subject to discretionary withdrawal provision

      467        —        801        1,268         7     
  

 

 

  

Total group annuities reserves

      3,627        373        13,571        17,571          100 %   
  

 

 

  
              

 

 

  

Net group annuities reserves

     $ 3,627      $ 373      $ 13,571      $  17,571      
  

 

 

     

 

    

December 31

2023

  
  

 

 

  
Deposit-type contracts (no life contingencies):    General
Account		      Separate
Account
with
Guarantees		      Separate
Account
Non-
Guaranteed		      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

At book value without adjustment
(minimal or no charge or adjustment)

     $ 1      $ —      $ —      $ 1         2 %   

Not subject to discretionary withdrawal provision

      44        —        1        45         98     
  

 

 

  

Total deposit-type contracts

      45        —        1        46          100 %   
              

 

 

  

Less reinsurance ceded

      14        —        —        14      
  

 

 

     

Net deposit-type contracts

     $ 31      $ —      $ 1      $   32      
  

 

 

     

 

 

 

 

52

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Reconciliation to the Annual Statement:    Amount  
  

 

 

  

Life & Accident & Health Annual Statement:

   

Exhibit 5, Annuities section, total (net)

     $ 4,269   

Exhibit 5, Supp contracts with life contingencies section, total (net)

      56   

Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance

      30   
  

 

 

  

Subtotal

      4,355   

Separate Accounts Annual Statement:

   

Exhibit 3, Annuities section, total

      18,078   

Exhibit 3, Supp contracts with life contingencies section, total

      23   

Other contract deposit funds

      1   
  

 

 

  

Subtotal

      18,102   
  

 

 

  

Combined total

     $  22,457   
  

 

 

  

 

    

December 31

2022

  
  

 

 

  
Individual Annuities:    General
Account		      Separate
Account
with
Guarantees		      Separate
Account
Non-
Guaranteed		      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ —      $ 20      $ —      $ 20         — %   

At book value less surrender charge of 5% or more

      49        —        —        49         1     

At fair value

      —        —        3,916        3,916         80     
  

 

 

  

Total with adjustment or at fair value

      49        20        3,916        3,985         81     

At book value without adjustment (minimal or no charge or adjustment)

      618        —        —        618         13     

Not subject to discretionary withdrawal provision

      291        —        10        301         6     
  

 

 

  

Total individual annuity reserves

      958        20        3,926        4,904          100 %   
              

 

 

  

Less reinsurance ceded

      136        —        —        136      
  

 

 

     

Net individual annuity reserves

     $ 822      $ 20      $ 3,926      $   4,768      
  

 

 

     

Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date

     $ 12      $ —      $ —      $ 12     
  

 

 

     

 

 

 

 

53

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                               
     December 31
     2022
Group Annuities:    General
Account		    Separate
Account
with
Guarantees		    Separate
Account Non-
Guaranteed		    Total    Percent
  

 

 

 

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ 813      $ 26      $ —      $ 839        5  % 

At book value less surrender charge of 5% or more

      553        —        —        553        3  

At fair value

      —        389        10,845        11,234        70  
  

 

 

 

Total with adjustment or at fair value

      1,366        415        10,845        12,626        78  

At book value without adjustment (minimal or no charge or adjustment)

      2,048        56        —        2,104        13  

Not subject to discretionary withdrawal provision

      493        —        843        1,336        9  
  

 

 

 

Total group annuity reserves

      3,907        471        11,688        16,066        100  % 
  

 

 

 

              

 

 

 

Net group annuity reserves

     $ 3,907      $ 471      $ 11,688      $ 16,066     
  

 

 

 

   
  

 

 

 

   

 

                                                                               
     December 31
     2022
Deposit-type contracts (no life contingencies):    General
Account		    Separate
Account
with
Guarantees		    Separate
Account
Non-
Guaranteed		    Total    Percent
  

 

 

 

Subject to discretionary withdrawal with adjustment:

               

At book value without adjustment
(minimal or no charge or adjustment)

     $ 1      $ —      $ —      $ 1        2  % 

Not subject to discretionary withdrawal provision

      45        —        2        47        98  
  

 

 

 

Total deposit-type contracts

      46        —        2        48        100  % 
              

 

 

 

Less reinsurance ceded

      15        —        —        15     
  

 

 

 

   

Net deposit-type contracts

     $ 31      $ —      $ 2      $ 33     
  

 

 

 

   
  

 

 

 

   

 

 

 

 

54

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Reconciliation to the Annual Statement:     Amount 

Life & Accident & Health Annual Statement:

   

Exhibit 5, Annuities section, total (net)

     $ 4,673  

Exhibit 5, Supp contracts with life contingencies section, total (net)

      56  

Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance

      31  
  

 

 

 

Subtotal

      4,760  

Separate Accounts Annual Statement:

   

Exhibit 3, Annuities section, total

      16,093   

Exhibit 3, Supp contracts with life contingencies section, total

      12  

Other contract deposit funds

      2  
  

 

 

 

Subtotal

      16,107  
  

 

 

 

Combined total

     $  20,867  
  

 

 

 

 

 

 

 

55

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The amount of reserves on life products, by withdrawal characteristics, is summarized as follows:

 

                                                                 
     December 31  
     2023  
     General Account  
     Account Value      Cash Value      Reserve  
  

 

 

  

Subject to discretionary withdrawal, surrender values, or policy loans:

         

Term policies with cash value

     $ —       $ 1       $ 2   

Universal life

      674        578        716   

Universal life with secondary guarantees

      24        25        94   

Indexed universal life with secondary guarantees

      525        433        476   

Other permanent cash value life insurance

      —        66        83   

Variable universal life

      25        25        55   

Not subject to discretionary withdrawal or no cash values

               

Term policies without cash value

      —        —        282   

Accidental death benefits

      —        —        1   

Disability- active lives

      —        —        1   

Disability- disabled lives

      —        —        3   

Miscellaneous reserves

      —        —        55   
  

 

 

  

Total (gross)

      1,248        1,128        1,768   

Reinsurance ceded

      174        174        199   
  

 

 

  

Total (net)

     $ 1,074       $ 954       $ 1,569   
  

 

 

  

As of December 31, 2023, the Company did not hold any life reserves for separate accounts with guarantees.

 

                                                                          
    December 31  
    2023  
    Separate Account - Nonguaranteed  
    Account Value     Cash Value     Reserve  
 

 

 

  

Subject to discretionary withdrawal, surrender values, or policy loans:

      

Variable universal life

    $ 150     $ 150     $ 284   
 

 

 

  

Total (net)

    $ 150     $ 150     $ 284   
 

 

 

  

 

 

 

 

56

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                        
Reconciliation to the Annual Statement:    Amount  

Life & Accident & Health Annual Statement:

   

Exhibit 5, Life insurance section, total (net)

     $ 1,509   

Exhibit 5, Accidental death benefits section total (net)

      1   

Exhibit 5, Disability - active lives section, total (net)

      1   

Exhibit 5, Disability - disabled lives section, total (net)

      3   

Exhibit 5, Miscellaneous reserves section, total (net)

      55   
  

 

 

  

Subtotal

      1,569   

Separate Accounts Annual Statement:

   

Exhibit 3, Life insurance section, total

      284   
  

 

 

  

Subtotal

      284   
  

 

 

  

Combined total

     $ 1,853   
  

 

 

  

 

                                                                          
     December 31
     2022
     General Account
     Account Value    Cash Value    Reserve
  

 

 

 

Subject to discretionary withdrawal, surrender values, or policy loans:

         

Term policies with cash value

     $ 1      $ 1      $ 2  

Universal life

      667        565        697  

Universal life with secondary guarantees

      16        25        97  

Indexed universal life with secondary guarantees

      454        366        389  

Other permanent cash value life insurance

      66        66        83  

Variable universal life

      25        25        61   

Not subject to discretionary withdrawal or no cash values

         

Term policies without cash value

      —        —        280  

Accidental death benefits

      —        —        1  

Disability- active lives

      —        —        1  

Disability- disabled lives

      —        —        3  

Miscellaneous reserves

      —        —        37  
  

 

 

 

Total (gross)

      1,229        1,048        1,651  

Reinsurance ceded

      171        171        200  
  

 

 

 

Total (net)

     $ 1,058      $ 877      $ 1,451  
  

 

 

 

As of December 31, 2022, the Company did not hold any life reserves for separate accounts with guarantees.

 

 

 

 

57

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                          
     December 31  
     2022  
     Separate Account - Nonguaranteed  
     Account Value      Cash Value      Reserve  
  

 

 

  

Subject to discretionary withdrawal, surrender values, or policy loans:

         

Variable universal life

     $ 126      $ 125      $ 247   
  

 

 

  

Total (net)

     $ 126      $ 125      $ 247   
  

 

 

  

 

                        
Reconcililation to the Annual Statement:    Amount  

Life & Accident & Health Annual Statement:

   

Exhibit 5, Life insurance section, total (net)

     $ 1,409   

Exhibit 5, Accidental death benefits section total (net)

      1   

Exhibit 5, Disability - active lives section, total (net)

      1   

Exhibit 5, Disability - disabled lives section, total (net)

      3   
  

 

 

  

Exhibit 5, Miscellaneous reserves section, total (net)

      37   

Subtotal

      1,451   

Separate Accounts Annual Statement:

   

Exhibit 3, Life insurance section, total

      247   
  

 

 

  

Subtotal

      247   
  

 

 

  

Combined total

     $ 1,698   
  

 

 

  

 

 

 

 

58

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

Separate Accounts

Separate account assets held by the Company represent contracts where the benefit is determined by the performance of the investments held in the separate account. Information regarding the separate accounts of the Company as of and for the years ended December 31, 2023, 2022 and 2021 is as follows:

 

                                                        
     Nonindexed                
     Guarantee      Nonguaranteed         
     Less Than or      Separate         
     Equal to 4%      Accounts      Total  
  

 

 

  

Premiums, deposits and other considerations for the year ended December 31, 2023

     $ 48      $ 2,576      $ 2,624   
  

 

 

  

Reserves for separate accounts as of December 31, 2023 with assets at:

         

Fair value

     $ —      $ 17,995      $ 17,995   

Amortized cost

      391        —        391   
  

 

 

  

Total as of December 31, 2023

     $ 391      $ 17,995      $ 18,386   
  

 

 

  

Reserves for separate accounts by withdrawal characteristics as of December 31, 2023:

         

With fair value adjustment

     $ 19      $ —      $ 19   

At fair value

      323        17,177        17,500   

At book value without fair value adjustment and with current surrender charge of less than 5%

      49        —        49   
  

 

 

  

Subtotal

      391        17,177        17,568   

Not subject to discretionary withdrawal

      —        818        818   
  

 

 

  

Total separate account reserve liabilities at December 31, 2023

     $ 391      $ 17,995      $ 18,386   
  

 

 

  

 

 

 

 

59

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                                   
     Nonindexed                
     Guarantee      Nonguaranteed         
     Less Than or      Separate         
     Equal to 4%      Accounts      Total  
  

 

 

  

Premiums, deposits and other considerations for the year ended December 31, 2022

     $ 91      $ 4,347      $ 4,438   
  

 

 

  

Reserves for separate accounts as of December 31, 2022 with assets at:

         

Fair value

     $ —      $ 15,863      $ 15,863   

Amortized cost

      491        —        491   
  

 

 

  

Total as of December 31, 2022

     $ 491      $ 15,863      $ 16,354   
  

 

 

  

Reserves for separate accounts by withdrawal characteristics as of December 31, 2022:

         

With fair value adjustment

     $ 46      $ —      $ 46   

At fair value

      389        15,008        15,397   

At book value without fair value adjustment and with current surrender charge of less than 5%

      56        —        56   
  

 

 

  

Subtotal

      491        15,008        15,499   

Not subject to discretionary withdrawal

      —        855        855   
  

 

 

  

Total separate account reserve liabilities at December 31, 2022

     $ 491      $ 15,863      $ 16,354   
  

 

 

  

 

 

 

 

60

Table of Contents

Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                                 
     Nonindexed                
     Guarantee      Nonguaranteed         
     Less Than or      Separate         
     Equal to 4%      Accounts      Total  
  

 

 

  

Premiums, deposits and other considerations for the year ended December 31, 2021

     $ 96      $ 4,289      $ 4,385   
  

 

 

  

Reserves for separate accounts as of December 31, 2021 with assets at:

         

Fair value

     $ —      $ 26,023      $ 26,023   

Amortized cost

      505        —        505   
  

 

 

  

Total as of December 31, 2021

     $ 505      $ 26,023      $ 26,528   
  

 

 

  

Reserves for separate accounts by withdrawal characteristics as of December 31, 2021:

         

With fair value adjustment

      49        —        49   

At fair value

      395        24,949        25,344   

At book value without fair value adjustment and with current surrender charge of less than 5%

      61        —        61   
  

 

 

  

Subtotal

      505        24,949        25,454   

Not subject to discretionary withdrawal

      —        1,074        1,074   
  

 

 

  

Total separate account reserve liabilities at December 31, 2021

     $ 505      $ 26,023      $ 26,528   
  

 

 

  

A reconciliation of the amounts transferred to and from the Company’s separate accounts is presented below:

 

                                                                 
     Year Ended December 31
     2023   2022   2021
  

 

 

 

Transfer as reported in the Summary of

       

Operations of the separate accounts statement:

       

Transfers to separate accounts

     $ 2,635     $ 4,443     $ 4,389  

Transfers from separate accounts

      (3,006 )      (10,067 )      (4,779 ) 
  

 

 

 

Net transfers from separate accounts

      (371 )      (5,624 )      (390 ) 

Miscellaneous reconciling adjustments

      6       7       3  
  

 

 

 

Net transfers as reported in the Summary of Operations of the life, accident and health annual statement

     $ (365 )    $ (5,617 )    $ (387 ) 
  

 

 

 

 

 

 

 

61

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The legal insulation of separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account. The assets legally insulated from general account claims at December 31, 2023 and 2022 are attributed to the following products:

 

     2023      2022  
  

 

 

  

Variable life

     $ 136      $ 125   

Variable universal life

      150        126   

Variable annuities

      4,425        4,205   

Group annuities

      11,683        9,859   

Registered market value separate accounts

      612        554   

Non-registered market value separate accounts

      64        64   

Par annuities

      970        984   

Registered market value annuity product - SPL

      2        3   

Book value separate accounts

      386        471   
  

 

 

  

Total separate account assets

     $    18,428      $    16,391   
  

 

 

  

At December 31, 2023 and 2022, the Company held separate account assets not legally insulated from the general account in the amount of $19 and $21, respectively.

Some separate account liabilities are guaranteed by the general account. In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the general account. To compensate the general account for the risk taken, the separate account paid risk charges of $49, $51, $53, $52 and $51, to the general account in 2023, 2022, 2021, 2020 and 2019, respectively. During the years ended December 31, 2023 and 2022, the general account of the Company had paid $2 toward separate account guarantees and during the year ended December 31, 2021, the general account of the Company had paid an insignificant amount toward separate account guarantees. During the years 2020 and 2019, the general account of the Company had paid $1 each year toward separate account guarantees.

At December 31, 2023 and 2022, the Company reported guaranteed separate account assets at amortized cost in the amount of $366 and $470, respectively, based upon the prescribed practice granted by the State of New York as described in Note 2. These assets had a fair value of $356 and $442 at December 31, 2023 and 2022, respectively, which would have resulted in an unrealized gain/(loss) of $(10) and ($27), respectively, had these assets been reported at fair value.

The Company does not participate in securities lending transactions within the separate account.

 

 

 

 

62

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

7.

Reinsurance

Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The Company reinsures portions of the risk on certain insurance policies which exceed its established limits, thereby providing a greater diversification of risk and minimizing exposure on larger risks. The Company remains contingently liable with respect to any insurance ceded, and this would become an actual liability in the event that the assuming insurance company became unable to meet its obligation under the reinsurance treaty.

Premiums and annuity considerations include the following reinsurance amounts:

 

                                                                          
     Year Ended December 31
     2023    2022    2021
  

 

 

 

Direct premiums

     $ 3,527      $ 5,196      $ 5,234  

Reinsurance assumed - non affiliates

      189        209        286  

Reinsurance assumed - affiliates

      —        —        —  

Reinsurance ceded - non affiliates

      (125 )       (143 )       (180 ) 

Reinsurance ceded - affiliates

      (74 )       (77 )       (118 ) 
  

 

 

 

Net premiums earned

     $ 3,517      $ 5,185      $ 5,222  
  

 

 

 

The Company received reinsurance recoveries in the amount of $238, $253 and $343 during 2023, 2022 and 2021, respectively. At December 31, 2023 and 2022, estimated amounts recoverable from reinsurers that have been deducted from policy and contract claim reserves totaled $85 and $95, respectively. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2023 and 2022 of $1,644 and $2,043, respectively, of which $898 and $956 were ceded to affiliates, respectively.

Effective July 1, 2022, the Company recaptured business previously ceded to Transamerica International Re (Bermuda), an affiliate. Subsequently, the Company novated the business to a third party. The reserves were initially recorded and then removed from the financials when novated in the amount of $128. Consideration of $9 was paid and subsequently received from the third party. As a result, there was no net financial statement impact.

Effective April 1, 2022, the Company recaptured business previously ceded to Transamerica International Re (Bermuda), an affiliate. Subsequently, the Company novated the business to a third party. The reserves were initially recorded and then removed from the financials when novated in the amount of $121. Consideration of $23 was received and subsequently paid to the third party. As a result, there was no net financial statement impact.

Effective December 1, 2021, the Company recaptured business previously ceded to Transamerica International Re (Bermuda), an affiliate. Subsequently, the Company novated the business to a third party. The reserves were initially recorded and then removed from the financials when novated in the amount of $282. Consideration of $17 was received and subsequently paid to the third party. As a result, there was no net financial statement impact.

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

8.

Income Taxes

The net deferred income tax asset at December 31, 2023 and 2022 and the change from the prior year are comprised of the following components:

 

                                                                          
     December 31, 2023
     Ordinary    Capital   Total
  

 

 

 

Gross Deferred Tax Assets

     $ 105      $ 10     $ 115  

Statutory Valuation Allowance Adjustment

      —        —       —  
  

 

 

 

Adjusted Gross Deferred Tax Assets

      105        10       115  

Deferred Tax Assets Nonadmitted

      52        —       52  
  

 

 

 

Subtotal (Net Deferred Tax Assets)

      53        10       63  

Deferred Tax Liabilities

      20        19       39  
  

 

 

 

Net Admitted Deferred Tax Assets (Liabilities)

     $ 33      $ (9 )    $ 24  
  

 

 

 

 

                                                                          
     December 31, 2022
     Ordinary    Capital   Total
  

 

 

 

Gross Deferred Tax Assets

     $ 115      $ 9     $ 124  

Statutory Valuation Allowance Adjustment

      —        —       —  
  

 

 

 

Adjusted Gross Deferred Tax Assets

      115        9       124  

Deferred Tax Assets Nonadmitted

      49        —       49  
  

 

 

 

Subtotal (Net Deferred Tax Assets)

      66        9       75  

Deferred Tax Liabilities

      27        18       45  
  

 

 

 

Net Admitted Deferred Tax Assets (Liabilities)

     $ 39      $ (9 )    $ 30  
  

 

 

 

 

                                                                          
     Change
     Ordinary   Capital    Total
  

 

 

 

Gross Deferred Tax Assets

     $ (10 )    $ 1      $ (9 ) 

Statutory Valuation Allowance Adjustment

      —       —        —  
  

 

 

 

Adjusted Gross Deferred Tax Assets

      (10 )      1        (9 ) 

Deferred Tax Assets Nonadmitted

      3       —        3  
  

 

 

 

Subtotal (Net Deferred Tax Assets)

      (13 )      1        (12 ) 

Deferred Tax Liabilities

      (7 )      1        (6 ) 
  

 

 

 

Net Admitted Deferred Tax Assets (Liabilities)

     $ (6 )    $ —      $ (6 ) 
  

 

 

 

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The main components of deferred income tax amounts are as follows:

 

                                                                          
     Year Ended December 31     
     2023    2022    Change
  

 

 

 

Deferred Tax Assets:

         

Ordinary

         

Policyholder reserves

     $ 67      $ 77      $ (10 ) 

Investments

      1        2        (1 ) 

Deferred acquisition costs

      29        27        2  

Compensation and benefits accrual

      1        1        —  

Receivables - nonadmitted

      5        7        (2 ) 

Other

      2        1        1  
  

 

 

 

Subtotal

      105        115        (10 ) 

Statutory valuation allowance adjustment

      —        —        —  

Nonadmitted

      52        49        3  
  

 

 

 

Admitted ordinary deferred tax assets

      53        66        (13 ) 

Capital

         

Investments

      10        9        1  

Other

                  —  
  

 

 

 

Subtotal

      10        9        1  

Statutory valuation allowance adjustment

      —           —  

Nonadmitted

      —        —        —  
  

 

 

 

Admitted capital deferred tax assets

      10        9        1  
  

 

 

 

Admitted deferred tax assets

     $ 63      $ 75      $ (12 ) 
  

 

 

 

 

                                                                          
     Year Ended December 31     
     2023    2022    Change
  

 

 

 

Deferred Tax Liabilities:

         

Ordinary

         

Investments

     $ —      $ 2      $ (2 ) 

Policyholder reserves

      19        23        (4 ) 

Capitalized ceding commissions

         —        —  

Other

      1        2        (1 ) 
  

 

 

 

Subtotal

      20        27        (7 ) 

Capital

         

Investments

      19        18        1  

Other

      —        —        —  
  

 

 

 

Subtotal

      19        18        1  
  

 

 

 

Deferred tax liabilities

      39        45        (6 ) 
  

 

 

 

Net admitted deferred tax assets (liabilities)

     $ 24      $ 30      $ (6 ) 
  

 

 

 

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

As a result of the 2017 Tax Cuts and Jobs Act (TCJA), the Company’s tax reserve deductible temporary difference increased by $18. This change results in an offsetting $(18) taxable temporary difference that will be amortized into taxable income evenly over the eight years subsequent to 2017. The remaining amortizable balance is included within the Policyholder Reserves line items above.

The Inflation Reduction Act was enacted during the third quarter 2022 reporting period on August 16, 2022. The act included a provision which subjects high earning corporate taxpayers to the Corporate Alternative Minimum Tax (CAMT). The Company is part of an affiliated group that has determined it is a nonapplicable reporting entity for CAMT in 2023 and has not included any impacts of the CAMT in the financial statements as of December 31, 2023.

As discussed in Note 2, for the years ended December 31, 2023 and 2022, the Company admits deferred income tax assets pursuant to SSAP No. 101. The amount of admitted adjusted gross deferred income tax assets under each component of SSAP No. 101 is as follows:

 

                                                        
     December 31, 2023  
     Ordinary      Capital      Total  
  

 

 

  

Admission Calculation Components SSAP No. 101

         

2(a)   Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks

     $ 1      $ 1      $ 2   

2(b)   Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below)

      20        2        22   

1.  Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date

      20        2        22   

2.  Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold

      XXX        XXX        133   

2(c)   Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities

      32        7        39   
  

 

 

  

2(d)   Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c))

     $ 53      $ 10      $ 63   
  

 

 

  

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                        
     December 31, 2022  
     Ordinary      Capital      Total  
  

 

 

  

Admission Calculation Components SSAP No. 101

         

2(a)   Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks

     $ —      $ 2      $ 2   

2(b)   Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below)

      27        1        28   

1.  Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date

      27        1        28   

2.  Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold

      XXX        XXX        123   

2(c)   Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities

      39        6        45   
  

 

 

  

2(d)   Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c))

     $ 66      $ 9      $ 75   
  

 

 

  

 

                                                        
     Change
     Ordinary   Capital   Total
  

 

 

 

Admission Calculation Components SSAP No. 101

       

2(a)   Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks

     $ 1     $ (1 )    $ —  

2(b)   Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below)

      (7 )      1       (6 ) 

1.  Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date

      (7 )      1       (6 ) 

2.  Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold

      XXX       XXX       10  

2(c)   Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities

      (7 )      1       (6 ) 
  

 

 

 

2(d)   Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c))

     $ (13 )    $ 1     $ (12 ) 
  

 

 

 

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

                                                        
     December 31    
     2023   2022   Change
  

 

 

 

Ratio Percentage Used To Determine Recovery

Period and Threshold Limitation Amount

      1187 %      1017 %      170 % 
  

 

 

 

Amount of Adjusted Capital and Surplus Used To

Determine Recovery Period and Threshold Limitation in 2(b)2
Above

       
  

 

 

 

    $ 887     $ 818     $ 69  
  

 

 

 

The impact of tax planning strategies at December 31, 2023 and 2022 was as follows:

 

                                                                 
     December 31, 2023
     Ordinary   Capital   Total
     Percent   Percent   Percent
  

 

 

 

Impact of Tax Planning Strategies:

       

(% of Total Adjusted Gross DTAs)

      0 %      0 %      0 % 
  

 

 

 

(% of Total Net Admitted Adjusted Gross DTAs)

      6 %      0 %      6 % 
  

 

 

 

 

                                                                 
     December 31, 2022
     Ordinary   Capital   Total
     Percent   Percent   Percent
  

 

 

 

Impact of Tax Planning Strategies:

       

(% of Total Adjusted Gross DTAs)

      0 %      0 %      0 % 
  

 

 

 

(% of Total Net Admitted Adjusted Gross DTAs)

      4 %      0 %      4 % 
  

 

 

 

The Company’s tax planning strategies do not include the use of reinsurance-related tax planning strategies.

Current income taxes incurred consist of the following major components:

 

                                                                 
     Year Ended December 31         
     2023      2022      Change  
  

 

 

  

Current Income Tax

         

Federal

     $ 24      $ 1      $ 23   
  

 

 

  

Subtotal

      24        1        23   

Federal income tax on net capital gains

      2        2        —   
  

 

 

  

Federal and foreign income taxes incurred

     $ 26      $ 3      $ 23   
  

 

 

  

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

     Year Ended December 31         
     2022      2021      Change  
  

 

 

  

Current Income Tax

         

Federal

     $ 1      $ 17      $ (16)  
  

 

 

  

Subtotal

      1        17        (16)  

Federal income tax on net capital gains

      2        12        (10)  
  

 

 

  

Federal and foreign income taxes incurred

     $      3      $      29      $      (26)  
  

 

 

  

The Company’s current income tax incurred and change in deferred income tax differs from the amount obtained by applying the federal statutory rate to income before tax as follows:

 

     Year Ended December 31  
     2023     2022     2021  
  

 

 

  

Current income taxes incurred

     $ 26     $ 3       $ 29     
Change in deferred income taxes
(without tax on unrealized gains and losses)		      (1)       (12)       (7)    
  

 

 

  

Total income tax reported

     $ 25     $ (9)     $ 22     
  

 

 

  

Income before taxes

     $ 210     $ 55     $ 234     

Federal statutory tax rate

      21.00 %      21.00 %      21.00%  
  

 

 

  

Expected income tax expense (benefit) at statutory rate

     $ 44     $     12     $     49     

Increase (decrease) in actual tax reported resulting from:

       

Pre-tax income of disregarded subsidiaries

     $ —     $ —     $ 1     

Dividends received deduction

      (3)       (2)       (4)    

Pre-tax items reported net of tax

      (2)       (3)       (2)    

Tax credits

      (15)       (15)       (19)    

Prior period tax return adjustment

      (1)       6        —     

Deferred tax change on other items in surplus

      2        (7)       (2)    

Other

      —       —       (1)    
  

 

 

  

Total income tax reported

     $     25      $ (9)     $ 22     
  

 

 

  

The Company’s federal income tax return is consolidated with other includible affiliated companies. Please see the listing of companies in Appendix A.

The method of allocation between the companies is subject to a written tax allocation agreement. Under the terms of the tax allocation agreement, allocations are based on separate income tax return calculations. The Company is entitled to recoup federal income taxes paid in the event the future losses and credits reduce the greater of the Company’s separately computed income tax liability or the consolidated group’s income tax liability in the year generated. The Company is also entitled to recoup federal income taxes paid in the event the losses and credits reduce the greater of the Company’s separately computed income tax liability or the consolidated group’s income tax liability in any carryback or carryforward year when so applied. Intercompany income

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

tax balances are settled within thirty days of payment to or filing with the Internal Revenue Service (IRS). A tax return has not been filed for 2023.

The following is income tax expense for current year and preceding years that is available for recoupment in the event of future losses:

 

     Total  
  

 

 

  

2021

     $      14   

2022

      2   

2023

      —   

The total amount of the unrecognized tax benefits that if recognized would affect the effective income tax rate:

 

    

Unrecognized

Tax Benefits

  
  

 

 

  

Balance at January 1, 2022

     $       2   

Tax positions taken during prior period

      —   

Tax positions taken during current period

      —   

Settlements with taxing authorities

      —   

Lapse of applicable statute of limitations

      —   
  

 

 

  

Balance at December 31, 2022

     $ 2   

Tax positions taken during prior period

      —   

Tax positions taken during current period

      —   

Settlements with taxing authorities

      —   

Lapse of applicable statute of limitations

      —   
  

 

 

  

Balance at December 31, 2023

     $ 2   
  

 

 

  

The IRS completed its examination for 2009 through 2013 for which is currently at appeals with a refund pending Joint Committee on Taxation approval. The IRS opened an exam for the 2014 through 2018 amended tax returns. Federal income tax returns filed in 2019 through 2022 remain open, subject to potential future examination. The Company believes there are adequate defenses against, or sufficient provisions established related to any open or contested tax positions.

The Company classifies interest and penalties related to income taxes as income tax expense. The Company’s interest expense/(benefit) related to income taxes:

 

     Interest     Penalties     

Total payable

(receivable)

  
  

 

 

  

Balance at January 1, 2021

     $ (2 )    $ —      $ (2)  

Cash received (paid)

      2       —        2   
  

 

 

  

Balance at December 31, 2021

     $ —     $ —      $ —   

Interest expense (benefit)

      1       —        1   
  

 

 

  

Balance at December 31, 2022

     $ 1     $ —      $ 1   
  

 

 

  

Balance at December 31, 2023

     $      1     $      —      $      1   
  

 

 

  

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

9. Capital and Surplus

The Company has authorized 24,000 common stock shares at $125 per share par value of which 15,067 shares were issued and outstanding at December 31, 2023 and 2022.

The Company is subject to limitations, imposed by the State of New York, on the payment of dividends to its stockholders. Generally, dividends during any twelve-month period may not be paid, without prior regulatory approval, in excess of the greater of (a) 10 percent of the Company’s statutory surplus as of the preceding December 31 or (b) the Company’s statutory gain from operations before net realized capital gains (losses) on investments for the preceding year, not to exceed earned surplus as of the preceding December 31. Subject to the availability of unassigned surplus at the time of such dividend, the maximum payment which may be made in 2024, without the prior approval of insurance regulatory authorities, is $201.

On September 28, 2023, the Company paid an ordinary common stock dividend of $95 to TA Corp.

On March 30, 2023, the Company paid an ordinary common stock dividend of $75 to TA Corp.

On September 29, 2022, the Company paid an ordinary common stock dividend of $150 to TA Corp.

On March 29, 2022, the Company paid an ordinary common stock dividend of $150 to TA Corp.

On September 30, 2021, the Company paid an extraordinary dividend of $100 to TA Corp.

On March 25, 2021, the Company paid an ordinary common stock dividend of $100 to TA Corp.

Life and health insurance companies are subject to certain RBC requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life or health insurance company is to be determined based on various risk factors. At December 31, 2023 and 2022, the Company met the minimum RBC requirements.

The Company held special surplus funds in the amount of $12 and $7, as of December 31, 2023 and 2022, respectively, for annuitant mortality fluctuations as required under New York Regulation 47, Separate Account and Separate Account Annuities.

10. Securities Lending

The Company participates in an agent-managed securities lending program in which the Company primarily loans out US Treasuries and other bonds. The Company receives collateral equal to 102% of the fair value of the loaned government or other domestic securities as of the transaction date. If the fair value of the collateral is at any time less than 102% of the fair value of the loaned securities, the counterparty is mandated to deliver additional collateral, the fair value of which, together with the collateral already held in connection with the lending transaction, is at least equal to 102% of the fair value of the loaned government or other domestic securities. In the event the Company loans a foreign security and the denomination of the currency of the collateral

 

 

 

 

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Transamerica Financial Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

is other than the denomination of the currency of the loaned foreign security, the Company receives and maintains collateral equal to 105% of the fair value of the loaned security.

At December 31, 2023 and 2022, respectively, securities with a fair value of $296 and $386 were on loan under securities lending agreements. At December 31, 2023 and 2022, the collateral the Company received from securities lending activities was in the form of cash and on open terms. This cash collateral is reinvested and is not available for general corporate purposes. The reinvested cash collateral has a fair value of $321 and $412 at December 31, 2023 and 2022, respectively.

The contractual maturities of the securities lending collateral positions are as follows:

 

     Fair Value  
  

 

 

  
     2023      2022  
  

 

 

  

Open

     $ 321      $ 412   

Securities received

      —        —   
  

 

 

  

Total collateral received

     $    321      $    412   
  

 

 

  

The Company receives primarily cash collateral in an amount in excess of the fair value of the securities lent. The Company reinvests the cash collateral into higher yielding securities than the securities which the Company has lent to other entities under the arrangement.

The maturity dates of the reinvested securities lending collateral are as follows:

 

     2023      2022  
  

 

 

     

 

 

  
    

Amortized

Cost

     

Fair

Value

     

Amortized

Cost

     

Fair

Value

  
  

 

 

     

 

 

  

Open

     $ 20       $ 20        $ 53       $ 53   

30 days or less

      126        126         148        148   

31 to 60 days

      53        53         63        63   

61 to 90 days

      27        27         38        38   

91 to 120 days

      51        51         29        29   

121 to 180 days

      44        44         81        81   
  

 

 

     

 

 

  

Total

      321        321         412        412   

Securities received

      —        —         —        —   
  

 

 

     

 

 

  

Total collateral reinvested

     $    321       $    321        $    412       $    412   
  

 

 

     

 

 

  

The Company did not have collateral for securities lending transactions that extended beyond one year from the report date for the years ended December 31, 2023 and 2022.

For securities lending, the Company’s source of cash used to return the cash collateral is dependent upon the liquidity of the current market conditions. Under current conditions, the Company has securities with a par value of $323 (fair value of $321) that are currently tradable securities that could be sold and used to pay for the $321 in collateral calls that could come due under a worst-case scenario.

 

 

 

 

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(Dollars in Millions, Except per Share amounts)

 

 

11. Retirement and Compensation Plans

Defined Contribution Plans

The Company’s employees participate in a contributory defined contribution plan sponsored by TA Corp which is qualified under Section 401(k) of the Internal Revenue Code. Generally, employees of the Company who customarily work at least 20 hours per week and meet the other eligibility requirements are participants of the plan. Participants may elect to contribute up to 100% of eligible earnings, subject to government or other plan restrictions for certain key employees. The Company will contribute an amount up to four percent of the participant’s eligible earnings per the plan’s matching formula. Participants may direct all of their contributions and plan balances to be invested in a variety of investment options. The plan is subject to the reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Benefits expense allocated to the Company for the years ended December 31, 2023, 2022 and 2021 was insignificant.

Defined Benefit Plans

The Company’s employees participate in a qualified defined benefit pension plan sponsored by TA Corp. Generally, employees of the Company who customarily work at least 20 hours per week and complete six months of continuous service and meet the other eligibility requirements are participants of the plan. The Company has no legal obligation for the plan. The benefits are based on the employee’s eligible compensation. The plan provides benefits based on a cash balance formula. The plan is subject to the reporting and disclosure requirements of the ERISA.

TA Corp sponsors supplemental retirement plans to provide the Company’s senior management with benefits in excess of normal pension benefits. The Company has no legal obligation for the plan. The plans are noncontributory. The benefits are based on the employee’s eligible compensation. The plans provide benefits based on a cash balance formula. The plans are unfunded and nonqualified under the Internal Revenue Code.

The Company recognizes pension expense equal to its allocation from TA Corp. The pension expense related to both the qualified defined pension plan and the supplemental retirement plans is allocated among the participating companies based on International Accounting Standards 19 (IAS 19), Accounting for Employee Benefits, and based upon actuarial participant benefit calculations, which is within the guidelines of SSAP No. 102, Pensions. Pension expenses were $1, $1 and $2 for the years ended December 31, 2023, 2022 and 2021, respectively.

In addition to pension benefits, TA Corp sponsors unfunded plans that provide health care and life insurance benefits to retired Company employees meeting certain eligibility requirements. The Company has no legal obligation for the plan. Portions of the medical and dental plans are contributory. The expenses of the postretirement plans are allocated among the participating companies based on IAS 19 and based upon actuarial participant benefit calculations which is within the guidelines of SSAP No. 92, Postretirement Benefits Other Than Pensions. The Company’s allocation of postretirement expenses for the years ended December 31, 2023, 2022 and 2021 was insignificant.

 

 

 

 

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(Dollars in Millions, Except per Share amounts)

 

 

Other Plans

TA Corp has established deferred compensation plans for certain key employees of the Company. The Company’s allocation of expense for these plans for each of the years ended December 31, 2023, 2022 and 2021 was insignificant.

12. Related Party Transactions

The Company shares certain officers, employees and general expenses with affiliated companies.

In accordance with an agreement between TA Corp and the Company, TA Corp will ensure the maintenance of certain minimum tangible net worth, operating leverage and liquidity levels of the Company, as defined in the agreement, through the contribution of additional capital by TA Corp as needed.

Effective August 1, 2020, the Company, and an affiliate, Transamerica Life Insurance Company, amended and finalized a Shared Services and Cost Sharing Agreement for both parties to provide accounting, administrative, and other advisory services in accordance with the agreement. The agreement, filed and approved by the NYDFS, replaces prior agreements between the entities. The amount received by the Company as a result of being a party to these agreements was $102, $100 and $80 during 2023, 2022 and 2021, respectively. The amount paid as a result of being a party to these agreements was $38, $40 and $45 during 2023, 2022 and 2021, respectively. Fees charged between affiliates approximate their cost.

The Company is party to a Management and Administrative and Advisory agreement with AEGON USA Realty Advisors (AURA), LLC whereby AURA serves as the administrator and advisor for the Company’s mortgage loan operations. The Company paid $6, $6 and $5 for these services during 2023, 2022 and 2021, respectively.

The Company is party to an Investment Management Agreement with AEGON USA Investment Management (AUIM), LLC whereby AUIM acts as a discretionary investment manager for the Company. The Company paid $11, $11 and $11 for these services during 2023, 2022 and 2021, respectively.

The Company has an administration service agreement with Transamerica Asset Management (TAM) to provide administrative services to the Transamerica Series Trust. The Company received $7, $8 and $10 for these services during 2023, 2022 and 2021, respectively.

Transamerica Capital, Inc. provides wholesaling distribution services for the Company under a distribution agreement. The Company incurred an insignificant amount of expenses under this agreement for the years ended December 31, 2023 and 2022. The Company incurred expenses under this agreement of $1 for the year ended December 31, 2021.

Receivables from (payables to) affiliates and intercompany borrowings bear interest at the thirty-day commercial paper rate. During 2023, 2022 and 2021, the Company received (paid) an insignificant amount of net interest from (to) affiliates. At December 31, 2023 and 2022, respectively, the Company reported net receivables (payables) from (to) affiliates of $3 and ($17),

 

 

 

 

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(Dollars in Millions, Except per Share amounts)

 

 

respectively. Terms of settlement require that these amounts are settled within 90 days of quarter-end per the requirements of SSAP No. 25, Affiliates and Other Related Parties.

In accordance with SSAP No. 25, the Company reports short-term intercompany notes receivable as short-term investments. At December 31, 2023 and 2022, the Company had no short-term intercompany notes receivable.

The Company utilizes the look-through approach in valuing its investment in the following entities.

 

    

Book Adjusted

 Carrying Value 

  

 

 

 

Real Estate Alternatives Portfolio 4 HR, LLC

     $       8  

Aegon Workforce Housing Fund 2, L.P.

      50  

Aegon Workforce Housing Fund 3, L.P.

      2  

Natural Resources Alternatives Portfolio I, LLC

      14  

Natural Resources Alternatives Portfolio II, LLC

      7  

Natural Resources Alternatives Portfolio 3, LLC

      28  

Zero Beta Fund, LLC

      1  

TA-APOP I-A, LLC

      3  
  

 

 

 

    $ 113  
  

 

 

 

These entity’s financial statements are not audited and the Company has limited the value of its investment in these entities to the value contained in the audited financial statements of the underlying LP/LLC investments, including adjustments required by SSAP No. 97 entities and/or non-SCA SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies, entities owned by these entities. All liabilities, commitments, contingencies, guarantees or obligations of these entities which are required to be recorded as liabilities, commitments, contingencies, guarantees or obligations under applicable accounting guidance, are reflected in the Company’s determination of the carrying value of the investment in these entities.

 

 

 

 

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(Dollars in Millions, Except per Share amounts)

 

 

The following tables show the disclosures for all SCA investments, except 8bi entities, Balance Sheets value (admitted and nonadmitted) and the NAIC responses for the SCA filings as of December 31, 2023 and 2022:

 

December 31, 2023  
SCA Entity   

 Percentage of 

SCA

Ownership

    

Gross

 Amount 

     

 Admitted 

Amount

     

 Nonadmitted 

Amount

 SSAP No. 97 8a Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8a Entities

      XXX      $ —      $ —      $ —  

 SSAP No. 97 8b(ii) Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8b(ii) Entities

      XXX      $ —      $ —      $ —  

 SSAP No. 97 8b(iii) Entities

           

Real Estate Alternatives Portfolio 3A, Inc.

      9  %    $ —      $ —      $ —  

Total SSAP No. 97 8b(iii) Entities

      XXX      $ —      $ —      $ —  

 SSAP No. 97 8b(iv) Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8b(iv) Entities

      XXX      $ —      $ —      $ —  

Total SSAP No. 97 8b Entities (except 8bi entities)

      XXX      $ —      $ —      $ —  

Aggregate Total

      XXX      $ —      $ —      $ —  
                                  

 

December 31, 2022  
SCA Entity   

 Percentage of 

SCA

Ownership

    

Gross

 Amount 

     

 Admitted 

Amount

     

 Nonadmitted 

Amount

SSAP No. 97 8a Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8a Entities

      XXX      $ —      $ —      $ —  

SSAP No. 97 8b(ii) Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8b(ii) Entities

      XXX      $ —      $ —      $ —  

SSAP No. 97 8b(iii) Entities

           

Real Estate Alternatives Portfolio 3A, Inc.

      9  %    $ —      $ —      $ —  

Total SSAP No. 97 8b(iii) Entities

      XXX      $ —      $ —      $ —  

SSAP No. 97 8b(iv) Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8b(iv) Entities

      XXX      $ —      $ —      $ —  

Total SSAP No. 97 8b Entities (except 8bi entities)

      XXX      $ —      $ —      $ —  

Aggregate Total

      XXX      $ —      $ —      $ —  
                                  

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

The following table shows the NAIC responses for the SCA filings (except 8bi entities):

 

December 31, 2023  
SCA Entity   

Type of

NAIC

Filing*

     

Date of

Filing to

the NAIC

     

NAIC
Valuation
Amount

(1)

      NAIC
Response
Received
Y/N		      NAIC
Disallowed
Entities
Valuation
Method,
Submission
Required
Y/N		     

Code**

 

  

SSAP No. 97 8a Entities

                  

None

           $    —         —        —        —  
        

 

 

           

Total SSAP No. 97 8a Entities

      —        —       $ —         —        —        —  
        

 

 

           

SSAP No. 97 8b(ii) Entities

                  

None

           $ —         —        —        —  
        

 

 

           

Total SSAP No. 97 8b(ii) Entities

      —        —       $ —         —        —        —  
        

 

 

           

SSAP No. 97 8b(iii) Entities

                  

Real Estate Alternatives Portfolio 3A, Inc.

      NA          $ —         —        —        I  
        

 

 

           

Total SSAP No. 97 8b(iii) Entities

      —        —       $ —         —        —        —  
        

 

 

           

SSAP No. 97 8b(iv) Entities

                  

None

      —        —       $ —         —        —        —  
        

 

 

           

Total SSAP No. 97 8b(iv) Entities

      —        —       $ —         —        —        —  
        

 

 

           
Total SSAP No. 97 8b Entities (except 8bi entities)      —        —       $ —         —        —        —  
        

 

 

           

Aggregate Total

      —        —       $ —         —        —        —  
        

 

 

           

* S1 – Sub1, S2 – Sub2 or RDF – Resubmission of Disallowed Filing

** I – Immaterial or M – Material

(1) NAIC Valuation Amount is as of the Filing Date to the NAIC

 

 

 

 

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(Dollars in Millions, Except per Share amounts)

 

 

December 31, 2022  
SCA Entity    Type of
NAIC
Filing*		      Date of
Filing to
the NAIC		      NAIC
Valuation
Amount (1)		      NAIC
Response
Received
Y/N		      NAIC
Disallowed
Entities
Valuation
Method,
Submission
Required
Y/N		      Code**  

SSAP No. 97 8a Entities

                  

None

           $    —            
        

 

 

           

Total SSAP No. 97 8a Entities

      —        —       $ —         —        —        —  
        

 

 

           

SSAP No. 97 8b(ii) Entities

                  

None

           $ —            
        

 

 

           

Total SSAP No. 97 8b(ii) Entities

      —        —       $ —         —        —        —  
        

 

 

           

SSAP No. 97 8b(iii) Entities

                  

Real Estate Alternatives Portfolio 3A, Inc.

      NA          $ —         —        —        I  
        

 

 

           

Total SSAP No. 97 8b(iii) Entities

      —        —       $ —         —        —        —  
        

 

 

           

SSAP No. 97 8b(iv) Entities

                  

None

           $ —         —        —        —  
        

 

 

           

Total SSAP No. 97 8b(iv) Entities

      —        —       $ —         —        —        —  
        

 

 

           
Total SSAP No. 97 8b Entities (except 8bi entities)      —        —       $ —         —        —        —  
        

 

 

           

Aggregate Total

      —        —       $ —         —        —        —  
        

 

 

           

* S1 – Sub1, S2 – Sub2 or RDF – Resubmission of Disallowed Filing

** I – Immaterial or M – Material

(1) NAIC Valuation Amount is as of the Filing Date to the NAIC

Information regarding the Company’s affiliated reinsurance transactions is available in Note 7.

13. Managing General Agents and Third-Party Administrators

The Company utilizes managing general agents (MGA) and third-party administrators (TPA) in its operation. There were no MGA’s/TPA’s that wrote premiums in excess of 5% of the Company’s surplus.

14. Commitments and Contingencies

At December 31, 2023 and 2022, the Company has mortgage loan commitments of $9 and $70, respectively.

The Company has contingent commitments of $44 and $47, as of December 31, 2023 and 2022, respectively, to provide additional funding for joint ventures, partnerships and limited liability companies, which includes LIHTC commitments of $1 and $1, respectively.

At December 31, 2023 and 2022, there were no private placement commitments outstanding.

The Company may pledge cash as collateral for derivative transactions. When cash is pledged as collateral, it is derecognized and a receivable is recorded to reflect the eventual return of that cash

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

by the counterparty. The amount of cash collateral pledged by the Company as of December 31, 2023 and 2022, respectively, was $0 and $7.

Cash collateral received from derivative counterparties as well as the obligation to return the collateral is recorded on the Company’s Balance Sheets. The amount of cash collateral received as of December 31, 2023 and 2022, respectively, was $38 and $51.

At December 31, 2023 and 2022, securities in the amount of $6 and $5, respectively, were posted to the Company as collateral from derivative counterparties. The securities were not included on the Company’s Balance Sheets as the Company does not have the ability to sell or repledge the collateral.

The Company is a member of the FHLB of New York. Through its membership, the Company establishes the option to access funds through secured borrowing arrangements with the FHLB. The Company is not in an active borrowing position; therefore, collateral pledged and borrowings are not applicable for this Company.

At December 31, 2023 and 2022, the Company purchased/owned the following FHLB stock as part of the agreement:

 

     Year Ended December 31  
     2023      2022  
  

 

 

  

Membership Stock:

      

Class B

     $     3       $     3  
  

 

 

     

 

 

  

Total

     $     3       $     3  
  

 

 

  

At December 31, 2023 and 2022, Membership Stock (Class A and B) Eligible for Redemption and the anticipated timeframe for redemption was as follows:

 

                                                                   
    

 Less Than 6 

Months

     

6 Months to

Less Than 1

Year

     

1 to Less

Than 3

Years

       3 to 5 Years   
  

 

 

  

December 31, 2023

            

Membership Stock

            

Class B

     $ —       $ —       $ —       $ 3  
  

 

 

  

Total

     $ —       $ —       $ —       $ 3  
  

 

 

  
     Less Than 6
Months		      6 Months to
Less Than 1
Year		      1 to Less
Than 3
Years		      3 to 5 Years  
  

 

 

  

December 31, 2022

            

Membership Stock

            

Class B

     $ —       $ —       $ —       $ 3  
  

 

 

  

Total

     $ —       $ —       $ —       $ 3  
  

 

 

  

The Company is party to legal proceedings involving a variety of issues incidental to its business. Lawsuits may be brought in any federal or state court in the United States or in an arbitral forum.

 

 

 

 

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(Dollars in Millions, Except per Share amounts)

 

 

In addition, there continues to be significant federal and state regulatory activity relating to financial services companies. The Company’s legal proceedings are subject to many variables, and given their complexity and scope, outcomes cannot be predicted with certainty. Although legal proceedings sometimes include substantial demands for compensatory and punitive damages, and injunctive relief, damages arising from such demands are typically not material to the Company’s financial position.

The Company is subject to insurance guaranty laws in the states in which it writes business. These laws provide for assessments against insurance companies for the benefit of policyholders and claimants in the event of insolvency of other insurance companies. Assessments are charged to operations when received by the Company, except where right of offset against other taxes paid is allowed by law. Amounts available for future offsets are recorded as an asset on the Company’s Balance Sheets. The future obligation for known insolvencies has been accrued based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Associations. Potential future obligations for unknown insolvencies are not determinable by the Company and are not required to be accrued for financial reporting purposes. The Company has established a reserve and an offsetting premium tax benefit at December 31, 2023 and 2022 for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. These amounts were not material to the Company’s financial position. The guaranty fund (benefit) expense was insignificant for the years ended December  31, 2023, 2022 and 2021.

15. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities

The Company enters into dollar repurchase agreements in which residential mortgage backed securities are delivered to the counterparty once adequate collateral has been received. At December 31, 2023 and 2022, the Company had dollar repurchase agreements outstanding in the amount of $20 and $20, respectively, which is included in borrowed money on the Balance Sheets. Those amounts include an insignificant amount of accrued interest at both December 31, 2023 and 2022. At December 31, 2023, securities with a book value of $20 and a fair value of $17 were subject to dollar repurchase agreements. At December 31, 2022, securities with a book value of $20 and a fair value of $20 were subject to dollar repurchase agreements. These securities have maturity dates that range from August 1, 2051 to April 1, 2052 for years ended December 31, 2023 and 2022. The Company does not have the legal right to recall or substitute the underlying assets prior to the transaction’s scheduled termination. Upon scheduled termination, the counterparty is obligated to return substantially similar assets.

The contractual maturities of the dollar repurchase agreement positions are as follows:

 

     Fair Value  
  

 

 

  
       2023          2022    
  

 

 

  

Open

     $ 20      $ 20   

Securities received

      —        —   
  

 

 

  

Total collateral received

     $ 20      $ 20   
  

 

 

  

 

 

 

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

 

In the course of the Company’s asset management, securities are sold and reacquired within 30 days of the sale date to enhance the Company’s yield on its investment portfolio. During 2023 and 2022, there were no securities sold and reacquired within 30 days of the sale date.

16. Subsequent Events

The financial statements are adjusted to reflect events that occurred between the Balance Sheets date and the date when the financial statements are available to be issued, provided they give evidence of conditions that existed at the Balance Sheets date (Type I). The Company has not identified any Type 1 subsequent events for the year ended December 31, 2023 through April 11, 2024.

Events that are indicative of conditions that arose after the Balance Sheets date are disclosed, but do not result in an adjustment of the financial statements themselves (Type II). The Company has identified a Type II subsequent event for the year ended December 31, 2023. On March 28, 2024, the Company paid an ordinary common stock dividend of $75 to TA Corp.

 

 

 

 

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Transamerica Financial Life Insurance Company

Appendix A – Listing of Affiliated Companies

 

 

 

Transamerica Corporation

         
   

EIN: 42-1484983

     
   

AFFILIATIONS SCHEDULE

     
   

YEAR ENDED DECEMBER 31, 2023

     
   
Entity Name    FEIN  
   

Transamerica Corporation

      42-1484983  
   

AEGON Asset Management Services Inc

      39-1884868  
   

AEGON Direct Marketing Services Inc

      42-1470697  
   

AEGON Financial Services Group Inc

      41-1479568  
   

AEGON Institutional Markets Inc

      61-1085329  
   

AEGON Management Company

      35-1113520  
   

AEGON USA Real Estate Services Inc

      61-1098396  
   

AEGON USA Realty Advisors of CA

      20-5023693  
   

AUSA Properties Inc

      27-1275705  
   

Commonwealth General Corporation

      51-0108922  
   

Creditor Resources Inc

      42-1079584  
   

CRI Solutions Inc

      52-1363611  
   

Financial Planning Services Inc

      23-2130174  
   

Garnet Assurance Corporation

      11-3674132  
   

Garnet Assurance Corporation II

      14-1893533  
   

Garnet Assurance Corporation III

      01-0947856  
   

Ironwood Re Corp

      47-1703149  
   

LIICA RE II

      20-5927773  
   

Money Services Inc

      42-1079580  
   

Monumental General Administrators Inc

      52-1243288  
   

Pearl Holdings Inc I

      20-1063558  
   

Pearl Holdings Inc II

      20-1063571  
   

Real Estate Alternatives Portfolio 3A Inc

      20-1627078  
   

River Ridge Insurance Company

      20-0877184  
   

Stonebridge Benefit Services Inc

      75-2548428  
   

TLIC Oakbrook Reinsurance Inc.

      47-1026613  
   

TLIC Watertree Reinsurance, Inc.

      81-3715574  
   

Transamerica Affordable Housing Inc

      94-3252196  
   

Transamerica Asset Management

      59-3403585  
   

Transamerica Bermuda Re, Ltd

      98-1701849  
   

Transamerica Capital Inc

      95-3141953  
   

Transamerica Casualty Insurance Company

      31-4423946  
   

Transamerica Corporation (OREGON)

      98-6021219  

 

 

 

 

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Appendix A – Listing of Affiliated Companies

 

 

 

Transamerica Corporation

         
   

EIN: 42-1484983

     
   

AFFILIATIONS SCHEDULE

     
   

YEAR ENDED DECEMBER 31, 2023

     
   
Entity Name    FEIN  
   

Transamerica Finance Corporation

      95-1077235  
   

Transamerica Financial Advisors

      59-2476008  
   

Transamerica Financial Life Insurance Company

      36-6071399  
   

Transamerica Fund Services Inc

      59-3403587  
   

Transamerica International Re (Bermuda) Ltd

      98-0199561  
   

Transamerica Investors Securities Corp

      13-3696753  
   

Transamerica Life Insurance Company

      39-0989781  
   

Transamerica Pacific Re, Inc.

      85-1028131  
   

Transamerica Resources Inc

      52-1525601  
   

Transamerica Stable Value Solutions Inc

      27-0648897  
   

Transamerica Trust Company

      42-0947998  
   

United Financial Services Inc

      52-1263786  
   

World Fin Group Ins Agency of Massachusetts Inc

      04-3182849  
   

World Financial Group Inc

      42-1518386  
   

World Financial Group Ins Agency of Hawaii Inc

      99-0277127  
   

World Financial Group Insurance Agency of WY Inc

      42-1519076  
   

Zahorik Company Inc

      95-2775959  
   

Zero Beta Fund LLC

      26-1298094  

 

 

 

 

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Statutory-Basis Financial

Statement Schedules

 

 

 

 

 

 

 

84

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Transamerica Financial Life Insurance Company

Summary of Investments – Other Than

Investments in Related Parties

(Dollars in Millions)

December 31, 2023

SCHEDULE I

 

 Type of Investment    Cost (1)   

Fair

Value

   

Amount at

Which Shown

in the

Balance Sheet (2)

 Fixed maturities

         

 Bonds:

         

United States government and government agencies and authorities

     $ 295      $    306       $ 327  

States, municipalities and political subdivisions

      39        35        39  

Foreign governments

      102        87        102  

Hybrid securities

      41        38        41  

All other corporate bonds

      4,452        3,929        4,443  

 Preferred stocks

      3        4        4  
  

 

 

 

 Total fixed maturities

      4,932        4,399        4,956  

 Equity securities

         

 Common stocks:

         

Industrial, miscellaneous and all other

      3        3        3  
  

 

 

 

 Total equity securities

      3        3        3  

 Mortgage loans on real estate

      1,841           1,841  

 Policy loans

      151           151  

 Other long-term investments

      57           57  

 Receivable for securities

      9           9  

 Securities lending

      321           321  

 Cash, cash equivalents and short-term

 investments

      1,247           1,247  
  

 

 

 

      

 

 

 

 Total investments

     $    8,561          $    8,585  
  

 

 

 

      

 

 

 

 

 (1)

Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts.

 

 (2)

Bonds of $4 are held at fair value rather than amortized cost. Preferred stocks of $4 are held at fair value.

 

 

 

 

85

Table of Contents

 

Transamerica Financial Life Insurance Company

Supplementary Insurance Information

(Dollars in Millions)

SCHEDULE III

 

                                                                                          
    

 Future Policy 

Benefits and
Expenses

      Unearned
Premiums		      Policy and
Contract
Liabilities		      Premium
Revenue		      Net
Investment
Income*		      Benefits,
Claims
Losses and
Settlement
Expenses		     Other
Operating
Expenses*		  
  

 

 

  

Year ended December 31, 2023

                    

Individual life

     $ 1,477      $ —      $ 20      $ 174      $ 73      $ 234     $ 44   

Individual health

      189        4        14        74        9        57       24   

Group life and health

      176        2        2        54        8        (36 )      15   

Annuity

      4,325        —        1        3,215        240        3,639       (206)  
  

 

 

  
    $ 6,167      $ 6      $ 37      $ 3,517      $ 330      $ 3,894     $ (123)  
  

 

 

  

Year ended December 31, 2022

                    

Individual life

     $ 1,359      $ —      $ 19      $ 171      $ 67      $ 114     $ 46   

Individual health

      174        4        10        69        9        52       24   

Group life and health

      249        2        5        52        9        43       15   

Annuity

      4,752        —        1        4,893        248        10,697       (5,471)  
  

 

 

  
    $ 6,534      $ 6      $ 35      $ 5,185      $ 333      $ 10,906     $ (5,386)  
  

 

 

  

Year ended December 31, 2021

                    

Individual life

     $ 1,404      $ —      $ 23      $ 172      $ 72      $ 194     $ 48   

Individual health

      159        4        15        68        9        56       22   

Group life and health

      236        2        6        49        9        36       14   

Annuity

      4,948        —        —        4,933        252        5,412       (247)  
  

 

 

  
    $ 6,747      $ 6      $ 44      $ 5,222      $ 342      $ 5,698     $ (163)  
  

 

 

  

*Allocations of net investment income and other operating expenses are based on a number of assumptions and estimates, and the results would change if different methods were applied.

 

 

 

 

86

Table of Contents

 

Transamerica Financial Life Insurance Company

Reinsurance

(Dollars in Millions)

SCHEDULE IV

 

     Gross
Amount		      Ceded to
Other
Companies		      Assumed
From Other
Companies		      Net
Amount		      Percentage of
Amount
Assumed to Net		  
  

 

 

  

Year ended December 31, 2023

               

Life insurance in force

    $  26,006      $  55,692      $  53,925      $  24,239        222%  
  

 

 

  

Premiums:

               

Individual life

     $ 187      $ 199      $ 184      $ 174        106%  

Individual health

      74        —        —        74        0%  

Group life and health

      54        —        1        54        1%  

Annuity

      3,212        —        4        3,215        0%  
  

 

 

  
    $ 3,527      $ 199      $ 189      $ 3,517        5%  
  

 

 

  

Year ended December 31, 2022

               

Life insurance in force

     $ 25,777      $ 62,724      $ 60,695      $ 23,748        256%  
  

 

 

  

Premiums:

               

Individual life

     $ 187      $ 220      $ 204      $ 171        119%  

Individual health

      69        —        —        69        0%  

Group life and health

      51        —        1        52        1%  

Annuity

      4,889        —        4        4,893        0%  
  

 

 

  
    $ 5,196      $ 220      $ 209      $ 5,185        4%  
  

 

 

  

Year ended December 31, 2021

               

Life insurance in force

     $ 25,773      $ 87,333      $ 85,219      $ 23,659        360%  
  

 

 

  

Premiums:

               

Individual life

     $ 190      $ 298      $ 280      $ 172        163%  

Individual health

      68        —        —        68        0%  

Group life and health

      48        —        1        49        2%  

Annuity

      4,928        —        5        4,933        0%  
  

 

 

  
    $ 5,234      $ 298      $ 286      $ 5,222        5%  
  

 

 

  

 

 

 

 

87

Table of Contents

 

FINANCIAL STATEMENTS – STATUTORY BASIS

AND SUPPLEMENTARY INFORMATION

Transamerica Life Insurance Company

Years Ended December 31, 2023, 2022 and 2021

Table of Contents

Transamerica Life Insurance Company

Financial Statements – Statutory Basis

and Supplementary Information

Years Ended December 31, 2023, 2022 and 2021

Contents

 

Report of Independent Auditors

     1  

Audited Financial Statements

   

Balance Sheets – Statutory Basis

      3  

Statements of Operations – Statutory Basis

      6  

Statements of Changes in Capital and Surplus – Statutory Basis

      7  

Statements of Cash Flow – Statutory Basis

      9  

Notes to Financial Statements – Statutory Basis

   

1. Organization and Nature of Business

     11  

2. Basis of Presentation and Summary of Significant Accounting Policies

      11  

3. Accounting Changes and Correction of Errors

      24  

4. Fair Values of Financial Instruments

      28  

5. Investments

      37  

6. Policy and Contract Attributes

      60  

7. Reinsurance

      76  

8. Income Taxes

      79  

9. Capital and Surplus

      86  

10. Securities Lending

      87  

11. Retirement and Compensation Plans

      89  

12. Related Party Transactions

      90  

13. Managing General Agents and Third-Party Administrators

      96  

14. Commitments and Contingencies

      97  

15. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities

      102  

16. Subsequent Events

      104  

Appendix A – Listing of Affiliated Companies

      106  

Statutory-Basis Financial Statement Schedules

   

Summary of Investments – Other Than Investments in Related Parties

      109  

Supplementary Insurance Information

      110  

Reinsurance

      111  

Table of Contents

LOGO

Report of Independent Auditors

To the Board of Directors of Transamerica Life Insurance Company

Opinions

We have audited the accompanying statutory basis financial statements of Transamerica Life Insurance Company (the “Company”), which comprise the balance sheets – statutory basis as of December 31, 2023 and 2022, and the related statements of operations - statutory basis, of changes in capital and surplus - statutory basis, and of cash flow - statutory basis for each of the three years in the period ended December 31, 2023, including the related notes and summary of investments - other than investments in related parties at December 31, 2023, supplementary insurance information at December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021, and reinsurance at December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 listed in the accompanying index (collectively referred to as the “financial statements”).

Unmodified Opinion on Statutory Basis of Accounting

In our opinion, the accompanying financial statements present fairly, in all material respects, the admitted assets, liabilities and capital and surplus of the Company as of December 31, 2023 and 2022 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in accordance with the accounting practices prescribed or permitted by the Iowa Insurance Division described in Note 2.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” section of our report, the accompanying financial statements do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2023 and 2022, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2023.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 2 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the Iowa Insurance Division, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

The effects on the financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

PricewaterhouseCoopers LLP, One North Wacker, Chicago, IL 60606

T: (312) 298 2000, www.pwc.com/us

Table of Contents

LOGO

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the Iowa Insurance Division. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with US GAAS, we:

 

  ●  

Exercise professional judgment and maintain professional skepticism throughout the audit.

  ●  

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

  ●  

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

  ●  

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

  ●  

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/PricewaterhouseCoopers LLP

Chicago, Illinois

April 11, 2024

 

2

Table of Contents

Transamerica Life Insurance Company

Balance Sheets – Statutory Basis

(Dollars in Millions)

 

     December 31
     2023   2022
  

 

 

 

Admitted assets

     

Cash, cash equivalents and short-term investments

     $ 3,305     $ 2,420  

Bonds

      46,351       51,131  

Preferred stocks

      59       61  

Common stocks

      3,877       3,251  

Mortgage loans on real estate

      9,409       9,270  

Real estate

      41       44  

Policy loans

      2,109       2,028  

Securities lending reinvested collateral assets

      2,292       2,115  

Derivatives

      1,143       2,339  

Receivable for derivative cash collateral

      361       981  

Other invested assets

      3,395       2,964  
  

 

 

 

Total cash and invested assets

      72,342       76,604  

Accrued investment income

      626       716  

Premiums deferred and uncollected

      151       169  

Net deferred income tax asset

      772       739  

Variable annuity reserve hedge offset deferral

      445       380  

Other assets

      1,649       1,596  

Separate account assets

      98,852       91,494  
  

 

 

 

Total admitted assets

     $   174,837     $   171,698  
  

 

 

 

Liabilities and capital and surplus

     

Aggregate reserves for policies and contracts

     $ 52,496     $ 57,956  

Policy and contract claim reserves

      983       1,098  

Liability for deposit-type contracts

      717       766  

Other policyholders’ funds

      46       42  

Transfers from separate accounts due or accrued

      (421 )      (510 ) 

Funds held under reinsurance treaties

      7,480       3,042  

Asset valuation reserve

      1,302       1,111  

Interest maintenance reserve

      —       407  

Derivatives

      1,214       3,629  

Payable for collateral under securities loaned and other transactions

      3,098       2,271  

Borrowed money

      1,738       3,107  

Other liabilities

      1,414       1,622  

Separate account liabilities

      98,852       91,494  
  

 

 

 

Total liabilities

      168,919       166,035  
  

 

 

 

Total capital and surplus

      5,918       5,663  
  

 

 

 

Total liabilities and capital and surplus

     $ 174,837     $ 171,698  
  

 

 

 

See accompanying notes.

 

3

Table of Contents

Transamerica Life Insurance Company

Statements of Operations – Statutory Basis

(Dollars in Millions)

 

     Year Ended December 31  
     2023     2022   2021  
  

 

 

  

Revenues

       

Premiums and other considerations

     $ 9,516     $ 19,813     $ 14,482   

Net investment income

      3,597       3,297       3,191   

Commissions and expense allowances on reinsurance ceded

      329       1,075       187   

Reserve adjustment on reinsurance ceded

      (139 )      (147 )      (260)  

Consideration received on reinsurance recapture and novations

      140       210       963   

Fee revenue and other income

      2,119       1,982       2,259   
  

 

 

  

Total revenue

      15,562       26,230       20,822   

Benefits and expenses

       

Death benefits

      2,433       2,650       2,928   

Annuity benefits

      1,466       1,552       1,798   

Accident and health benefits

      1,046       1,021       945   

Surrender benefits

      14,692       20,498       18,145   

Other benefits

      257       244       292   

Net increase (decrease) in reserves

      (5,482 )      6,563       942   

Commissions

      1,343       1,688       1,375   

Taxes, licenses and fees

      163       153       180   

Funds withheld ceded investment income

      95       98       131   

Net transfers to (from) separate accounts

      (4,801 )      (10,952 )      (8,881)  

IMR adjustment due to reinsurance

      248       (432 )      (43)  

General insurance expenses and other

      1,291       1,198       1,107   
  

 

 

  

Total benefits and expenses

      12,751       24,281       18,919   
  

 

 

  

Gain (loss) from operations before dividends and federal income taxes

      2,811       1,949       1,903   

Dividends to policyholders

      8       10       10   
  

 

 

  

Gain (loss) from operations before federal income taxes

      2,803       1,939       1,893   

Federal income tax (benefit) expense

      75       (80 )      (185)  
  

 

 

  

Net gain (loss) from operations

      2,728       2,019       2,078   

Net realized capital gains (losses), after tax and amounts transferred to interest maintenance reserve

      (1,999 )      (4,211 )      (1,924)  
  

 

 

  

Net income (loss)

     $     729     $    (2,192 )    $     154   
  

 

 

  

See accompanying notes.

 

4

Table of Contents

Transamerica Life Insurance Company

Statements of Changes in Capital and Surplus – Statutory Basis

(Dollars in Millions)

 

     Common
Stock		      Paid-in
Surplus		     Special
Surplus
Funds		     Unassigned
Surplus		     Total Capital
and Surplus		  
  

 

 

  

Balance at January 1, 2021

     $ 7      $ 4,562     $ (145 )    $ 3,686     $ 8,110   

Net income (loss)

      —        —       —       154       154   

Change in net unrealized capital gains/losses, net of taxes

      —        —       (105 )      555       450   

Change in net deferred income tax asset

      —        —       —       123       123   

Change in nonadmitted assets

      —        —       —       (73 )      (73)  

Change in reserve on account of change valuation basis

      —        —       —       (60 )      (60)  

Cumulative effect of changes in accounting principle

      —        —       —       (15 )      (15)  

Change in asset valuation reserve

      —        —       —       (52 )      (52)  

Change in surplus as a result of reinsurance

      —        —       —       (256 )      (256)  

Dividends to stockholders

      —        —       —       (761 )      (761)  

Distribution of affiliate stock

      —        —       —       (339 )      (339)  

Other changes - net

      —        3       —       (7 )      (4)  
  

 

 

  

Balance at December 31, 2021

     $     7      $   4,565     $    (250 )    $    2,955     $    7,277   

Net income (loss)

      —        —       —       (2,192 )      (2,192)  

Change in net unrealized capital gains/losses, net of taxes

      —        —       630       384       1,014   

Change in net deferred income tax asset

      —        —       —       702       702   

Change in nonadmitted assets

      —        —       —       (834 )      (834)  

Change in reserve on account of change valuation basis

      —        —       —       641       641   

Change in asset valuation reserve

      —        —       —       139       139   

Change in surplus as a result of reinsurance

      —        —       —       (871 )      (871)  

Capital contribution

      —        100       —       —       100   

Dividends to stockholders

      —        —       —       (425 )      (425)  

Other changes - net

      —        (1 )      —       113       112   
  

 

 

  

Balance at December 31, 2022

     $ 7      $ 4,664     $ 380     $ 612     $ 5,663   
  

 

 

  

Continued on next page.

 

5

Table of Contents

Transamerica Life Insurance Company

Statements of Changes in Capital and Surplus – Statutory Basis

(Dollars in Millions)

 

     Common
Stock		      Paid-in
Surplus		      Special
Surplus
Funds		      Unassigned
Surplus		     Total Capital
and Surplus		  
  

 

 

  

Balance at December 31, 2022

     $ 7      $ 4,664      $ 380      $ 612     $ 5,663   

Net income (loss)

      —        —        —        729       729   

Change in net unrealized capital gains/losses, net of taxes

      —        —        136        1,148       1,284   

Change in net deferred income tax asset

      —        —        —        149       149   

Change in nonadmitted assets

      —        —        —        (417 )      (417)  

Change in asset valuation reserve

      —        —        —        (191 )      (191)  

Change in surplus as a result of reinsurance

      —        —        —        (435 )      (435)  

Dividends to stockholders

      —        —        —        (858 )      (858)  

Other changes - net

      —        8        —        (14 )      (6)  
  

 

 

  

Balance at December 31, 2023

     $     7      $   4,672      $    516      $     723     $    5,918   
  

 

 

  

See accompanying notes.

 

6

Table of Contents

Transamerica Life Insurance Company

Statements of Cash Flow – Statutory Basis

(Dollars in Millions)

 

     Year Ended December 31
     2023   2022   2021  
  

 

 

 

Operating activities

       

Premiums and annuity considerations

     $ 13,933     $ 14,606     $ 15,975   

Net investment income

      3,580       3,146       3,105   

Other income

      1,940       2,251       2,025   

Benefit and loss related payments

      (19,702 )      (26,105 )      (24,040)  

Net transfers from separate accounts

      4,842       11,122       9,042   

Commissions and operating expenses

      (2,787 )      (2,771 )      (2,799)  

Dividends paid to policyholders

      (5 )      (6 )      (6)  

Federal income taxes (paid) received

      18       204       148   
  

 

 

 

Net cash provided by (used in) operating activities

     $ 1,819     $ 2,447     $ 3,450   

Investing activities

       

Proceeds from investments sold, matured or repaid

     $ 8,889     $ 10,356     $ 12,231   

Costs of investments acquired

      (8,332 )      (10,957 )      (14,040)  

Net change in policy loans

      (81 )      (35 )      51   
  

 

 

 

Net cash provided by (used in) investing activities

     $ 476     $ (636 )    $ (1,758)  

Financing and miscellaneous activities

       

Capital and paid in surplus received (returned)

     $ 6     $ 101     $ 2   

Dividends to stockholders

      (858 )      (425 )      (761)  

Net deposits (withdrawals) on deposit-type contracts

      (45 )      (67 )      (143)  

Net change in borrowed money

      (1,354 )      (777 )      385   

Net change in funds held under reinsurance treaties

      43       41       74   
Net change in payable for collateral under securities lending and other transactions      828       (42 )      (443)  

Other cash (applied) provided

      (30 )      (348 )      (512)  
  

 

 

 

Net cash provided by (used in) financing and miscellaneous activities

     $ (1,410 )    $ (1,517 )    $ (1,398)  
  

 

 

 

Net increase (decrease) in cash, cash equivalents and short-term investments

      885       294       294   

Cash, cash equivalents and short-term investments:

       

Beginning of year

      2,420       2,126       1,832   
  

 

 

 

End of year

     $    3,305     $    2,420     $    2,126   
  

 

 

 

See accompanying notes.

 

7

Table of Contents

Transamerica Life Insurance Company

Statements of Cash Flow (supplemental) – Statutory Basis

(Dollars in Millions)

 

     Year Ended December 31  

Supplemental disclosures of cash flow information

      2023       2022        2021  
  

 

 

  

Non-cash activities during the year not included in the Statutory Statements of

Cash Flows:

        

Receipt of bonds, other invested assets and interest related to affiliated reinsurance treaty

     $    792     $    4,706      $    —  

Increase of funds withheld related to affiliated reinsurance agreement

      (4,394 )      —        —  

Release of funds withheld related to affiliated reinsurance recaptures

      —       42        963  

Release of reinsurance payable related to affiliate reinsurance recapture

      —       22        —  

Assets transfer in for amended reinsurance treaty

      —       —        47  

Distribution of affiliate stock

      —       —        (339 ) 

Receipt (transfer) of assets related to nonaffiliated reinsurance

      —       —        (1,527 ) 

See accompanying notes.

 

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Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

December 31, 2023

1.  Organization and Nature of Business

Transamerica Life Insurance Company (the Company) is a stock life insurance company domiciled in the State of Iowa, and is owned by Commonwealth General Corporation (CGC). CGC is an indirect, wholly-owned subsidiary of Aegon Ltd., a holding company organized under the laws of Bermuda.

Nature of Business

The Company sells individual life insurance, including indexed universal life, whole life, term life, and final expense whole life. It also sells variable and registered index-linked annuities. In addition, the Company offers supplemental health insurance, group life insurance, group annuity contracts and stable value solutions. The Company is licensed in 49 states and the District of Columbia, Guam, Puerto Rico, and US Virgin Islands. Sales of the Company’s products are primarily through a network of independent agents and broker-dealers, affiliated agencies, and financial institutions.

2.  Basis of Presentation and Summary of Significant Accounting Policies

The accompanying financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Iowa Insurance Division (IID), which differ from accounting principles generally accepted in the United States of America (GAAP).

The IID recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company, and for determining its solvency under the Iowa Insurance Law. The National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed practices by the State of Iowa. Prescribed statutory accounting practices include state laws and regulations. Permitted statutory accounting practices encompass accounting practices that are not prescribed. The Commissioner of Insurance has the right to permit specific practices that deviate from prescribed practices.

The following is a summary of the accounting practices permitted and prescribed by the IID and reflected in the Company’s financial statements which differs from NAIC SAP:

The State of Iowa has adopted a prescribed accounting practice that differs from that found in the NAIC SAP related to credit for reinsurance. As prescribed by Iowa Administrative Code 191-5.33 (10)(d), the Commissioner has deemed the book value of assets held in a comfort trust as acceptable security for purposes of taking reserve credit for liabilities ceded to an unauthorized reinsurer while it seeks reciprocal jurisdiction status. Under Statement of Statutory Accounting Principles (SSAP) No. 61R, Life, Deposit-Type and Accident and Health Reinsurance, the market value of trust assets is considered allowable security. Reciprocal jurisdiction status was granted in 2023.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The State of Iowa has adopted a prescribed accounting practice that differs from that found in the NAIC SAP related to the reported value of the assets supporting the Company’s guaranteed separate accounts. As prescribed by Iowa Administrative Code 508A.1.4, the Commissioner found that the Company is entitled to value the assets of the guaranteed separate account at amortized cost, whereas the assets would be required to be reported at fair value under SSAP No. 56, Separate Accounts, of the NAIC SAP. There is no impact to the Company’s income or surplus as a result of utilizing this prescribed practice.

The State of Iowa has adopted a prescribed accounting practice that differs from that found in the NAIC SAP related to the reported value of assets supporting the Company’s registered index linked annuity (RILA). In accordance with Iowa Administrative Code 508A.1.4, the Commissioner found that the Company is entitled to use book value accounting treatment for separate account investments backing the Company’s RILA, whereas the assets would be required to be reported at fair value under SSAP No. 56 of the NAIC SAP. There is no impact to the Company’s income or surplus as a result of utilizing this prescribed practice.

Pursuant to Iowa Administrative Code 521A.5(1)c, the State of Iowa has allowed a permitted accounting practice that differs from that found in NAIC SAP related to the valuation of a foreign insurance subsidiary, controlled and affiliated (SCA) entity. With the explicit permission of the IID, the Company values Transamerica Life (Bermuda) Ltd. (TLB), a foreign SCA, in accordance with SSAP No. 97, Subsidiary, Controlled and Affiliated Entities, paragraph 8.b.i, as a U.S. insurance SCA entity at its underlying audited U.S. statutory equity. Absent this permitted practice, TLB would be valued in accordance with SSAP No. 97, paragraph 8.b.iv, as a foreign insurance SCA at its audited foreign statutory basis financial statements with certain adjustments. In addition, for Risk Based Capital (RBC) calculation purposes, this entity is categorized on page LR042 with Category 2 - Direct U.S. Life Subsidiaries.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

A reconciliation of the Company’s net income (loss) and capital and surplus between NAIC SAP and practices prescribed and permitted by the State of Iowa is shown below:

 

      SSAP #    F/S Page    F/S Line    2023       2022     2021  
  

 

     

 

 

    

 

 

  

Net income (loss), State of Iowa basis

    XXX    XXX    XXX     $ 729       $ (2,192 )     $ 154   
State prescribed practices that are an increase(decrease) from NAIC SAP:                 

None

               —        —       —   
State permitted practices that are an increase(decrease) from NAIC SAP:                 

None

               —        —       —   
           

 

 

     

 

 

    

 

 

  

Net income (loss), NAIC SAP

    XXX    XXX    XXX     $ 729       $  (2,192 )     $ 154   
           

 

 

     

 

 

    

 

 

  

Statutory surplus, state of Iowa basis

    XXX    XXX    XXX     $ 5,918       $ 5,663      $ 7,277   
State prescribed practices that are an increase(decrease) from NAIC SAP:                 

Comfort trust

    61    3    1      —        263       —   
State permitted practices that are an increase(decrease) from NAIC SAP:                 

TLB valuation

    97    2    2.2      47        72       —   
           

 

 

     

 

 

    

 

 

  

Statutory surplus, NAIC SAP

    XXX    XXX    XXX     $  5,871       $  5,328      $  7,277   
           

 

 

     

 

 

    

 

 

  

Use of Estimates

The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

The effects of the following variances from GAAP on the accompanying statutory-basis financial statements have not been determined by the Company, but are presumed to be material. Significant accounting policies and variances from GAAP are as follows:

Investments

Investments in bonds, except those to which the Securities Valuation Office (SVO) of the NAIC has ascribed a NAIC designation of 6, are reported at amortized cost using the interest method. Bonds containing call provisions, except make-whole call provisions, are amortized to the call or maturity value/date which produces the lowest asset value, often referred to as yield-to-worst method. Bonds ascribed a NAIC designation of 6 are reported at the lower of amortized cost or fair value with unrealized gains and losses reported in changes in capital and surplus. Prepayment penalty or acceleration fees received in the event a bond is liquidated prior to its scheduled termination date are reported as investment income.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Hybrid securities, as defined by the NAIC, are securities designed with characteristics of both debt and equity and provide protection to the issuer’s senior note holders. These securities meet the definition of a bond, in accordance with SSAP No. 26R, Bonds, and therefore, are reported at amortized cost or fair value based upon their NAIC rating.

For GAAP, such fixed maturity investments would be designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments would be reported at amortized cost, and the remaining fixed maturity investments would be reported at fair value with unrealized holding gains and losses reported in earnings for those designated as trading and as a separate component of other comprehensive income (OCI) for those designated as available-for-sale.

Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method, including anticipated prepayments, except for those with an initial NAIC designation of 6, which are valued at the lower of amortized cost or fair value. These securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium using either the retrospective or prospective methods. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. For statutory reporting, the retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities, which are valued using the prospective method.

For GAAP, all securities purchased or retained that represent beneficial interests in securitized assets, other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If high credit quality securities are adjusted, the retrospective method is used.

The Company closely monitors below investment grade holdings and investment grade issuers where the Company has concerns to determine if an other-than-temporary impairment (OTTI) has occurred. The Company also regularly monitors industry sectors. The Company considers relevant facts and circumstances in evaluating whether the impairment is other-than-temporary including: (1) the probability of the Company collecting all amounts due according to the contractual terms of the security in effect at the date of acquisition; (2) the Company’s decision to sell a security prior to its maturity at an amount below its carrying amount; and (3) the Company’s ability to hold a structured security for a period of time to allow for recovery of the value to its carrying amount. Additionally, financial condition, near term prospects of the issuer and nationally recognized credit rating changes are monitored. Non-structured securities in unrealized loss positions that are considered other-than-temporary are written down to fair value. The Company will record a charge to the Statements of Operations for the amount of the impairment.

For structured securities, cash flow trends and underlying levels of collateral are monitored. An OTTI is considered to have occurred if the fair value of the structured security is less than its amortized cost basis and the entity intends to sell the security or the entity does not have the intent and ability to hold the security for a period of time sufficient to recover the amortized cost basis. An OTTI is also considered to have occurred if the discounted estimated future cash flows are less than the amortized cost basis of the security and the security is in an unrealized loss position. Structured securities considered other-than-temporarily impaired are written down to

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

discounted estimated cash flows if the impairment is the result of cash flow analysis. If the Company has an intent to sell or lack of ability to hold a structured security, it is written down to fair value. The Company will record a charge to the Statements of Operations for the amount of the impairments.

For GAAP, if it is determined that a decline in fair value is other-than-temporary and the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the OTTI is recognized in earnings equal to the entire difference between the amortized cost basis and its fair value at the impairment date. If the entity does not intend to sell the security or the entity will likely not be required to sell the security before recovery, the OTTI should be separated into a) the amount representing the credit loss, which is recognized in earnings, and b) the amount related to all other factors, which is recognized in OCI, net of applicable taxes.

Investments in both affiliated and unaffiliated redeemable preferred stocks in good standing (those with NAIC designations 1 to 3), are reported at cost or amortized cost, depending on the characteristics of the securities. Investments in both affiliated and unaffiliated redeemable preferred stocks not in good standing (those with NAIC designations 4 to 6), are reported at the lower of cost, amortized cost, or fair value, depending on the characteristics of the securities. Investment in perpetual preferred stocks are reported at fair value, not to exceed any currently effective call price. Investment in mandatory convertible preferred stocks (regardless if the preferred stock is redeemable or perpetual) are reported at fair value, not to exceed any currently effective call price, in the periods prior to conversion. For preferred stocks reported at fair value, the related net unrealized capital gains and losses for all NAIC designations are reported in accordance with SSAP No. 7, Asset Valuation Reserve and Interest Maintenance Reserve.

Common stocks of affiliated noninsurance subsidiaries are reported based on underlying audited GAAP equity. The net change in the subsidiaries’ equity is included in net unrealized capital gains or losses and are reported in changes in capital and surplus.

Common stocks of unaffiliated companies, which include shares of mutual funds, are reported at fair value and the related net unrealized capital gains or losses are reported in changes in capital and surplus.

The Company owns stock issued by the Federal Home Loan Bank (FHLB), which is only redeemable at par, and its fair value is presumed to be par, unless other-than-temporarily impaired.

If the Company determines that a decline in the fair value of a common stock or a preferred stock is other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the Statements of Operations. The Company considers the following factors in determining whether a decline in value is other-than-temporary: (a) the financial condition and prospects of the issuer; (b) whether or not the Company has made a decision to sell the investment; and (c) the length of time and extent to which the value has been below cost.

Mortgage loans are reported at unpaid principal balances, less an allowance for impairment. A mortgage loan is considered to be impaired when it is probable that the Company will be unable

 

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Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines the impairment is other-than-temporary, the mortgage loan is written down to realizable value and a realized loss is recognized. Prepayment penalty or acceleration fees received in the event a loan is liquidated prior to its scheduled termination date are reported as investment income.

Valuation allowances are established for mortgage loans, if necessary, based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. Under GAAP, an allowance for credit loss is recognized in earnings at time of purchase or origination based on an expected lifetime credit loss, which is an amount that represents the portion of the amortized cost basis of the mortgage loans that the Company does not expect to collect.

The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus as part of the change in asset valuation reserve (AVR), rather than being included as a component of earnings as would be required under GAAP.

Land is reported at cost. Real estate occupied by the Company is reported at depreciated cost net of encumbrances. Real estate held for the production of income is reported at depreciated cost net of encumbrances. Real estate the Company classifies as held for sale is measured at lower of carrying amount or fair value less encumbrances and estimated costs to sell. Depreciation is calculated on a straight-line basis over the estimated useful lives of the properties. The Company recognizes an impairment loss if the Company determines that the carrying amount of the real estate is not recoverable and exceeds its fair value. The Company deems that the carrying amount of the asset is not recoverable if the carrying amount exceeds the sum of undiscounted cash flows expected to result from the use and disposition. The impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value.

Investments in real estate are reported net of related obligations rather than on a gross basis as for GAAP. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset as under GAAP, and investment income and operating expenses for statutory reporting include rent for the Company’s occupancy of those properties. Changes between depreciated cost and admitted amounts are credited or charged directly to unassigned surplus rather than to income as would be required under GAAP.

The Company has interests in joint ventures and limited partnerships. The Company carries these investments based on its interest in the underlying audited GAAP equity of the investee.

For a decline in the fair value of an investment in a joint venture or limited partnership which is determined to be other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the Statements of Operations. The Company considers an impairment to have occurred if it is probable that the Company will be unable to recover the carrying amount of the investment or if there is evidence indicating inability of the investee to sustain earnings which would justify the carrying amount of the investment.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Investments in Low Income Housing Tax Credit (LIHTC) properties are valued at amortized cost. Tax credits are recognized in operations in the tax reporting year in which the tax credit is utilized by the Company. The carrying value is amortized over the life of the investment. Amortization is calculated as a ratio of the current year tax credits and tax benefits compared to the total expected tax credits and tax benefits over the life of the investment.

Cash equivalents are short-term highly liquid investments with original maturities of three months or less (principally stated at amortized cost) or money market mutual funds which are reported at fair value.

Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost.

Other invested assets include surplus notes which are valued at either amortized cost (those that have an NAIC designation of 1 or 2) or the lesser of amortized cost or fair value (those that have an NAIC designation of 3 through 6).

Policy loans are reported at unpaid principal balances.

Realized capital gains and losses are determined using the specific identification method and are recorded net of related federal income taxes. Changes in admitted asset carrying amounts of bonds, mortgage loans, common and preferred stocks are credited or charged directly to unassigned surplus.

Interest income is recognized on an accrual basis. The Company does not accrue income on bonds in default, mortgage loans on real estate in default and/or foreclosure or which are delinquent more than twelve months, or real estate where rent is in arrears for more than three months. Income is also not accrued when collection is uncertain. Due and accrued amounts determined to be uncollectible are written off through the Statements of Operations.

Valuation Reserves

Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, primarily bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals into net investment income over the remaining period to maturity of the bond or mortgage loan based on groupings of individual securities sold in five year bands. The net deferral is reported as the interest maintenance reserve (IMR) in the accompanying Balance Sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the Statements of Operations on a pre-tax basis in the period that the assets giving rise to the gains or losses are sold.

The AVR provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus; AVR is not recognized for GAAP.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Derivative Instruments

Overview: The Company may use various derivative instruments (options, caps, floors, swaps, forwards, and futures) to manage risks related to its ongoing business operations. On the transaction date of the derivative instrument, the Company designates the derivative as either (A) hedging (fair value, foreign currency fair value, cash flow, foreign currency cash flow, forecasted transactions, or net investment in a foreign operation), (B) replication, (C) income generation, or (D) held for other investment/risk management activities, which do not qualify for hedge accounting under SSAP No. 86, Derivatives.

 

  (A) 

Derivative instruments used in hedging transactions that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability (amortized cost or fair value). Embedded derivatives are not accounted for separately from the host contract. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value, and the changes in the fair value are recorded in unassigned surplus as unrealized gains and losses. Under GAAP, the effective and ineffective portions of a single hedge are accounted for separately, and the change in fair value for cash flow hedges is credited or charged directly to a separate component of OCI rather than to income as required for fair value hedges, and an embedded derivative within a contract that is not clearly and closely related to the economic characteristics and the risk of the host contract is accounted for separately from the host contract and valued and reported at fair value.

 

  (B) 

Derivative instruments are also used in replication (synthetic asset) transactions (RSAT). A replication transaction is a derivative transaction entered into in conjunction with a cash instrument to reproduce the investment characteristics of an otherwise permissible investment. In these transactions, the derivative is accounted for in a manner consistent with the cash instrument and replicated asset. For GAAP, the derivative is reported at fair value, with the changes in fair value reported in income.

 

  (C) 

Derivative instruments used in income generation relationships are accounted for on a basis that is consistent with the associated covered asset or underlying interest to which the derivative relates (amortized cost or fair value).

 

  (D) 

Derivative instruments held for other investment/risk management activities are measured at fair value with value adjustments recorded in unassigned surplus.

Derivative instruments are subject to market risk, which is the possibility that future changes in market prices may make the instruments less valuable. The Company uses derivatives as hedges, consequently, when the value of the hedged asset or liability changes, the value of the hedging derivative is expected to move in the opposite direction. Market risk is a consideration when changes in the value of the derivative and the hedged item do not completely offset (correlation or basis risk) which is mitigated by active measuring and monitoring.

The Company is exposed to credit-related losses in the event of non-performance by counterparties to derivative instruments, but it does not expect any counterparties to fail to meet their obligations given their high credit rating of ‘BBB’ or better. The credit exposure of interest

 

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Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

rate swaps and currency swaps is represented by the fair value of contracts, aggregated at a counterparty level, with a positive fair value at the reporting date. The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets on the Company’s behalf. The posted amount is equal to the difference between the net positive fair value of the contracts and an agreed upon threshold that is based on the credit rating of the counterparty. Inversely, if the net fair value of all contracts with this counterparty is negative, then the Company is required to post assets instead.

Instruments:

Interest rate swaps are used in the overall asset/liability management process to modify the interest rate characteristics of the underlying asset or liability. These interest rate swaps generally provide for the exchange of the difference between fixed and floating rate amounts based on an underlying notional amount. Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.

Cross currency swaps are utilized to mitigate risks when the Company holds foreign denominated assets or liabilities; therefore, converting the asset or liability to a U.S. dollar denominated security. These cross currency swap agreements involve the exchange of two principal amounts in two different currencies at the prevailing currency rate at contract inception. During the life of the swap, the counterparties exchange fixed or floating rate interest payments in the swapped currencies. At maturity, the principal amounts are again swapped at a pre-determined rate of exchange. Each asset or liability is hedged individually where the terms of the swap must meet the terms of the hedged instrument. For swaps qualifying for hedge accounting, the premium or discount is amortized into income over the life of the contract and the foreign currency translation adjustment is recorded as unrealized gain/loss in capital and surplus. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus. If a swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the hedged instrument receives that treatment.

Total return swaps are used in the asset/liability management process to mitigate the market risk on minimum guarantee insurance contracts linked to an index. These total return swaps generally provide for the exchange of the difference between fixed leg (tied to the Standard & Poor’s (S&P) or other global market financial index) and floating leg (tied to the Secured Overnight Financing Rate (SOFR)) amounts based on an underlying notional amount (also tied to the underlying index). Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Variance swaps are used in the asset/liability management process to mitigate the gamma risk created when the Company has issued minimum guarantee insurance contracts linked to an index. These variance swaps are similar to volatility options where the underlying index provides for the market value movements. Variance swaps do not accrue interest. Typically, no cash is exchanged at the outset of initiating the variance swap, and a single receipt or payment occurs at the maturity or termination of the contract. Variance swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.

Bond forwards are used to hedge the interest rate risk that future liability claims increase as rates decrease, leading to higher guarantee values. Bond return swaps are also used to hedge interest rate risk of the underlying liability by exchanging performance and interest of a treasury asset for a funding level plus spread.

Futures contracts are used to hedge the liability risk when the Company issues products providing the customer a return based on various global market indices. Futures are marked to market on a daily basis whereby a cash payment is made or received by the Company. These payments are recognized as realized gains or losses in the financial statements.

The Company issues products providing the customer a return based on the various global equity market indices. The Company uses options to hedge the liability option risk associated with these products. Options are marked to fair value in the Balance Sheets and fair value adjustments are recorded as capital and surplus in the financial statements. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment.

Caps are used in the asset/liability management process to mitigate the interest rate risk created due to a rapidly rising interest rate environment. The caps are similar to options where the underlying interest rate index provides for the market value movements. The caps do not accrue interest until the interest rate environment exceeds the caps strike rate. Cash is exchanged at the onset, and a single receipt or payment occurs at the maturity or termination of the contract. Caps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Caps that do not meet hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.

The Company uses zero cost collars to hedge the interest rate risk associated with rising short term interest rates, whereby the exposure would otherwise adversely impact the Company’s capital generation. The collar position(s) help range bound the floating rate by combining a cap and floor position.

The Company may sell products with expected benefit payments extending beyond investment assets currently available in the market. Because assets will have to be purchased in the future to

 

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Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

fund future liability cash flows, the Company is exposed to the risk of future investments made at lower yields than what is assumed at the time of pricing. Forward-starting interest rate swaps are utilized to lock-in the current forward rate. The accrual of income begins at the forward date, rather than at the inception date. These forward-starting swaps meet hedge accounting rules and are carried at cost in the financial statements. Gains and losses realized upon termination of the forward-starting swap are deferred and used to adjust the basis of the asset purchased in the hedged forecasted period. The basis adjustment is then amortized into income as a yield adjustment to the asset over its life.

The Company issues fixed liabilities that have a guaranteed minimum crediting rate. The Company uses receiver swaptions, whereby the swaption is designed to generate cash flows to offset lower yields on assets during a low interest rate environment. The Company pays a single premium at the beginning of the contract and is amortized throughout the life of the swaption. These swaptions are marked to fair value in the Balance Sheets and the fair value adjustment is recorded in unassigned surplus. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment.

The Company replicates investment grade corporate bonds or sovereign debt by combining a highly rated security as a cash component with a written credit default swap which, in effect, converts the high quality asset into an investment grade corporate asset or a sovereign debt. The benefits of using the swap market to replicate credit include possible enhanced relative values as well as ease of executing larger transactions in a shortened time frame. Generally, a premium is received by the Company on a periodic basis and recognized in investment income. In the event the representative issuer defaults on its debt obligation referenced in the contract, a payment equal to the notional amount of the contract will be made by the Company and recognized as a capital loss.

Securities Lending Assets and Liabilities

The Company loans securities to third parties under agent-managed securities lending programs accounted for as secured borrowings. Cash collateral received which may be sold or repledged by the Company is reflected as a one-line entry on the Balance Sheets (Securities lending reinvested collateral assets) and a corresponding liability is established to record the obligation to return the cash collateral. Non-cash collateral received which may not be sold or repledged is not recorded on the Company’s Balance Sheets. Under GAAP, the reinvested collateral is included within invested assets and is not reported as a single line item.

Repurchase Agreements

For dollar repurchase agreements accounted for as secured borrowings, the Company receives cash collateral in an amount at least equal to the fair value of the securities transferred by the Company in the transaction as of the transaction date. The securities transferred are not removed from the Balance Sheets, and the cash received as collateral is invested as needed or used for general corporate purposes of the Company. A liability is established to record the obligation to return the cash collateral and included in borrowed money on the Balance Sheets.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Other Assets and Other Liabilities

Other assets consist primarily of cash surrender value of company owned life insurance, receivable from parent, subsidiaries and affiliates, general insurance accounts receivable, and reinsurance receivable.

Other liabilities consist primarily of amounts withheld by the Company, accrued expenses, reinsurance payable, remittances, payable for securities, custody offset, and municipal repurchase agreements. Municipal repurchase agreements are investment contracts issued to municipalities that pay either a fixed or floating rate of interest on the guaranteed deposit balance. The floating interest rate is based on a market index. The related liabilities are equal to the policyholder deposit and accumulated interest. These municipal repurchase agreements require a minimum of 95% of the fair value of the securities transferred to be maintained as collateral.

Separate Accounts

The majority of separate accounts held by the Company, primarily for individual policyholders as well as for group pension plans, do not have any minimum guarantees, and the investment risks associated with fair value changes are borne by the policyholder. The assets in the accounts, carried at estimated fair value, consist of underlying mutual fund shares, common stocks, long-term bonds and short-term investments.

Certain other separate accounts held by the Company provide a minimum guaranteed return of 3% of the average investment balance to policyholders. The assets consist of long-term bonds and short-term investments which are carried at amortized cost.

Certain other non-indexed guaranteed separate accounts represent funds invested by the Company for the benefit of the contract holders who are guaranteed certain returns as specified in the contracts. Separate account asset performance different than the guaranteed requirements is either transferred to or received from the general account and reported in the Statements of Operations. Non-indexed guaranteed separate account assets and liabilities are carried at fair value. These guarantees are included in the general account due to the nature of the guaranteed return.

Assets held in trust for purchases of variable life, variable universal life, variable annuity, and modified guaranteed annuity contracts and the Company’s corresponding obligation to the contract owners are shown separately in the Balance Sheets. The assets in the separate accounts are valued at fair value.

Income and gains and losses with respect to the assets in the separate accounts accrue to the benefit of the contract owners and, accordingly, the operations of the separate accounts are not included in the accompanying financial statements. The investment risks associated with fair value changes of the separate accounts are borne entirely by the policyholders except in cases where minimum guarantees exist.

Income and gains and losses with respect to the assets in the separate accounts supporting modified guaranteed annuity contracts are included in the statements of operations as a component of net transfers from separate accounts.

 

20

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Surplus funds transferred from the general account to the separate accounts, commonly referred to as seed money, and earnings accumulated on seed money are reported as surplus in the separate accounts until transferred or repatriated to the general account. The transfer of such funds between the separate account and the general account is reported as surplus contributed or withdrawn during the year.

Aggregate Reserves for Policies and Contracts

Life, annuity and accident and health benefit reserves are calculated by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed cash value, or the amount required by law. For direct business issued after October 1964, the Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the month of death. For policies assumed during 1992 from former affiliates, Monumental General Insurance Company and Monumental Life Insurance Group, Inc., and for all business from company mergers occurring in 1998, the Company waives deduction of deferred fractional premium upon death of the insured and returns any portion of the final premium paid beyond the month of death. For fixed premium life insurance business resulting from company mergers occurring in 2004 and 2007, the Company waives deduction of deferred fractional premiums upon death of the insured and refunds portions of premiums unearned after the date of death. Where appropriate, the Company holds a non-deduction and/or refund reserve. The reserve for these benefits is computed using aggregate methods. The reserves are equal to the greater of the cash surrender value and the legally computed reserve.

For GAAP, policy reserves are calculated based on estimated expected experience or actual account balances.

Surrender values are not promised in excess of the legally computed reserves. For annual premium variable life insurance there is an extra premium charged to the policyholder before the premium is transferred to the Separate Accounts. An additional reserve for this policy is held in the General Account that is a multiple of the reserve that would otherwise be held. For interest sensitive whole life, the reserves held in the General Account are equal to the cash surrender value.

In accordance with SSAP No. 51R, Life Contracts, and No. 54R, Individual and Group Accident and Health Contracts, the Company reports the amount of insurance, if any, for which the gross premiums are less than the net premiums according to the valuation standards and any related premium deficiency reserve established. Anticipated investment income is not included as a factor in the health contract premium deficiency calculation.

Policy and Contract Claim Reserves

Claim reserves represent the estimated accrued liability for claims reported to the Company and claims incurred but not yet reported through the Balance Sheets date. These reserves are estimated using either individual case-basis valuations or statistical analysis techniques. These estimates are subject to the effects of trends in claim severity and frequency. The estimates are

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

continually reviewed and adjusted as necessary as experience develops or new information becomes available.

Deposit-Type Contracts

Deposit-type contracts do not incorporate risk from the death or disability of policyholders. These types of contracts may include guaranteed investment contracts (GICs), funding agreements and other annuity contracts. Deposits and withdrawals on these contracts are recorded as a direct increase or decrease, respectively, to the liability balance and are not reported as premiums, benefits or changes in reserves in the Statements of Operations. Interest on these policies is reflected in other benefits.

Premiums and Annuity Considerations

Revenues for life and annuity policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received. Benefits incurred represent surrenders and death benefits paid and the change in policy reserves. Under GAAP, for universal life policies, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent interest credited to the account values and the excess of benefits paid over the policy account value. Under GAAP, for all annuity policies without significant mortality risk, premiums received and benefits paid would be recorded directly to the reserve liability using deposit accounting.

Policyholder Dividends

Policyholder dividends are recognized when declared rather than over the term of the related policies as would be required under GAAP.

Reinsurance

Coinsurance premiums, commissions, expense reimbursements and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies and the terms of the reinsurance contracts. Gains associated with reinsurance of in force blocks of business are included in unassigned surplus and amortized into income as earnings emerge on the reinsured block of business. Premiums ceded and recoverable losses have been reported as a reduction of premium income and benefits, respectively. Policy liabilities and accruals are reported in the accompanying financial statements net of reinsurance ceded.

Any reinsurance amounts deemed to be uncollectible have been written off through a charge to operations. In addition, a liability for reinsurance balances would be established for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability are credited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.

Losses associated with an indemnity reinsurance transaction are reported within income when incurred rather than being deferred and amortized over the remaining life of the underlying reinsured contracts as would be required under GAAP.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.

Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.

Under GAAP, for certain reinsurance agreements whereby assets are retained by the ceding insurer (such as funds withheld or modified coinsurance) and a return is paid based on the performance of underlying investments, the assets and liabilities for these reinsurance arrangements must be adjusted to reflect the fair value of the invested assets. The NAIC SAP does not contain a similar requirement.

Deferred Income Taxes

The Company computes deferred income taxes in accordance with SSAP No. 101, Income Taxes. Unlike GAAP, SSAP No. 101 does not consider state income taxes in the measurement of deferred taxes. SSAP No. 101 also requires additional testing to measure gross deferred tax assets. The additional testing limits gross deferred tax asset admission to 1) the amount of federal income taxes paid in prior years recoverable through hypothetical loss carrybacks of existing temporary differences expected to reverse during a timeframe corresponding with the Internal Revenue Service tax loss carryback provisions, not to exceed three years, plus 2) the amount of remaining gross deferred tax assets expected to be realized within three years limited to an amount that is no greater than 15% of current period’s adjusted statutory capital and surplus, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities after considering character (i.e. ordinary versus capital) and reversal patterns. The Company’s reported deferred tax asset or liability is the sum of gross deferred tax assets admitted through this three-part test plus the sum of all deferred tax liabilities.

Policy Acquisition Costs

The costs of acquiring and renewing business are expensed when incurred. Under GAAP, incremental costs directly related to the successful acquisition of insurance and investment contracts are deferred. For traditional life insurance and certain long-duration accident and health insurance, to the extent recoverable from future policy revenues, acquisition costs are deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality and expense margins.

Value of Business Acquired

Under GAAP, value of business acquired (VOBA) is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future contracts and contract changes, premiums, mortality and morbidity, separate account

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

performance, surrenders, operation expenses, investment returns, nonperformance risk adjustment and other factors. VOBA is not recognized under the NAIC SAP.

Subsidiaries and Affiliated Companies

Investments in SCA are stated in accordance with the Purposes and Procedures Manual of the NAIC SVO, as well as SSAP No. 97.

The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP. Dividends or distributions received from an investee are recognized in investment income when declared to the extent that they are not in excess of the undistributed accumulated earnings attributable to an investee. Changes in investments in SCA’s are recorded as a change to the carrying value of the investment with a corresponding amount recorded directly to unrealized gain/loss (capital and surplus).

Nonadmitted Assets

Certain assets designated as “nonadmitted”, primarily net deferred tax assets and other assets not specifically identified as an admitted asset within the NAIC SAP, are excluded from the accompanying Balance Sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the Balance Sheets to the extent that they are not impaired.

Statements of Cash Flow

Cash, cash equivalents and short-term investments in the Statements of Cash Flow represent cash balances and investments with initial maturities of one year or less and money market mutual funds. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less.

3. Accounting Changes and Correction of Errors

The Company’s policy is to disclose recently adopted accounting pronouncements with a current year effective date, that have been classified by the NAIC as a new statutory accounting principle (SAP) concept change, as well as items classified by the NAIC as SAP clarification changes that have been adopted and have had a material impact on the financial position or results of operations of the Company.

Recent Accounting Pronouncements

On January 10, 2024, the Statutory Accounting Principles Working Group (SAPWG) adopted INT 23-04, Scottish Re Life Reinsurance Liquidation Questions, effective for reporting periods on or after December 31, 2023. INT 23-04 provides clarity that the Scottish Re liquidation should be accounted for as a commutation or recapture and reported as such, including all relevant

 

24

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

disclosures. An impairment analysis shall be conducted and any remaining receivables in dispute or not secured by a trust shall be non-admitted. Refer to Note 7 for further detail.

On August 13, 2023, the SAPWG adopted INT 23-01, Net Negative (Disallowed) Interest Maintenance Reserve, effective immediately. INT 23-01 provides optional, limited-time guidance, which allows the admittance of net negative (disallowed) IMR if certain conditions are met, up to 10% of adjusted general account capital and surplus. Refer to Note 5 for further detail.

On August 13, 2023, the SAPWG adopted revisions to SSAP No. 26R and SSAP No. 43R, Loan-Backed and Structured Securities, for the principles-based bond definition, the accounting for bonds (issuer credit obligations and asset-backed securities), as well as revisions to various SSAPs, that have been updated to reflect the revised definition and/or SSAP references. Additional revisions were adopted on December 1, 2023 to SSAP No. 2R, Cash, Cash Equivalents, Drafts and Short-Term Investments, in relation to the bond project, with all revisions effective January 1, 2025. The Company has been monitoring the progress of the project, and will continue to do so, but the specific impact to the Company’s financials is indeterminable at this time.

Change in Valuation Basis

During 2022, the Company converted its Actuarial Guideline 36 reserve calculation for the Indexed Universal Life block of business to a new actuarial valuation system. At the same time, as a result of increased functionality to allow for more precision and to ensure consistency, the Company refined its statutory valuation rate for specific states to utilize the maximum standard valuation interest rate. This resulted in a reserve decrease of $641 as of January 1, 2022, which has been reported in the Statement of Changes in Capital and Surplus.

Change in Estimates

During 2023, the Company received approval from the IID, pursuant to SSAP No. 97 to change the valuation methodology under which it values its investments in Transamerica Pacific Reinsurance, Inc. (TPRe) and LIICA Re II, Inc. (LIICA Re II). Effective December 31, 2023, TPRe and LIICA Re II are valued at audited statutory equity, including the impacts of permitted practices, and consolidated in the Company’s Risk-Based Capital. This resulted in a $619 increase in affiliated common stock with a corresponding increase in Change in net unrealized capital gains/losses.

Correction of Error

During 2022, the Company identified an error in the way in which it recognized the receipt of certain affiliated distributions in prior years. This error resulted in prior periods’ net investment income being understated by a total of $145, with a corresponding overstatement of the change in unrealized gains/losses. This was corrected as of December 31, 2022 in accordance with SSAP No. 3, Accounting Changes and Corrections of Errors, with the correction reflected in the Statements of Changes in Capital and Surplus in other changes, offset by a corresponding change in net unrealized capital gains/losses. There was no net impact to ending capital or surplus as a result of this error in any period.

 

25

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

There were additional errors identified in prior year financial statements that have been corrected in the current year financial statements in accordance with SSAP No. 3. These errors do not have a material impact on the financial statements, individually or in aggregate, and therefore have not been separately disclosed.

4. Fair Values of Financial Instruments

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Determination of Fair Value

The fair values of financial instruments are determined by management after taking into consideration several sources of data. When available, the Company uses quoted market prices in active markets to determine the fair value of its investments. The Company’s valuation policy utilizes a pricing hierarchy which dictates that publicly available prices are initially sought from indices and third-party pricing services. In the event that pricing is not available from these sources, those securities are submitted to brokers to obtain quotes. Lastly, securities are priced using internal cash flow modeling techniques. These valuation methodologies commonly use reported trades, bids, offers, issuer spreads, benchmark yields, estimated prepayment speeds, and/or estimated cash flows.

To understand the valuation methodologies used by third-party pricing services, the Company reviews and monitors their applicable methodology documents. Any changes to their methodologies are noted and reviewed for reasonableness. In addition, the Company performs in-depth reviews of prices received from third-party pricing services on a sample basis. The objective for such reviews is to demonstrate the Company can corroborate detailed information such as assumptions, inputs and methodologies used in pricing individual securities against documented pricing methodologies. Only third-party pricing services and brokers with a substantial presence in the market and with appropriate experience and expertise are used.

Each month, the Company performs an analysis of the information obtained from indices, third-party services, and brokers to ensure the information is reasonable and produces a reasonable estimate of fair value. The Company considers both qualitative and quantitative factors as part of this analysis, including but not limited to, recent transactional activity for similar securities, review of pricing statistics and trends, and consideration of recent relevant market events. Other controls and procedures over pricing received from indices, third-party pricing services, or brokers include validation checks such as exception reports which highlight significant price changes, stale prices or un-priced securities.

Fair Value Hierarchy

The Company’s financial assets and liabilities carried at fair value are classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100R, Fair Value. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:

 

Level  1 -

   

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

Level  2 -

   

Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:

  

a)  Quoted prices for similar assets or liabilities in active markets

  

b)  Quoted prices for identical or similar assets or liabilities in non-active markets

  

c)  Inputs other than quoted market prices that are observable

  

d)  Inputs that are derived principally from or corroborated by observable market data through correlation or other means

Level  3 -

   

Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect the Company’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash Equivalents and Short-Term Investments: The carrying amounts reported in the accompanying Balance Sheets for these financial instruments is either reported at fair value or amortized cost (which approximates fair value). Cash is not included in the below tables.

Short-Term Notes Receivable from Affiliates: The carrying amounts reported in the accompanying Balance Sheets for these financial instruments approximate their fair value.

Bonds and Stocks: The NAIC allows insurance companies to report the fair value determined by the SVO or to determine the fair value by using a permitted valuation method. The fair values of bonds and stocks are reported or determined using the following pricing sources: indices, third-party pricing services, brokers, external fund managers and internal models.

Fair values for fixed maturity securities (including redeemable preferred stock) actively traded are determined from third-party pricing services, which are determined as discussed above in the description of Level 1 and Level 2 values within the fair value hierarchy. For fixed maturity securities (including redeemable preferred stock) not actively traded, fair values are estimated using values obtained from third-party pricing services, or are based on non-binding broker quotes or internal models. In the case of private placements, fair values are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit and maturity of the investments.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Mortgage Loans on Real Estate: The fair values for mortgage loans on real estate are estimated utilizing discounted cash flow analyses, using interest rates reflective of current market conditions and the risk characteristics of the loans.

Real Estate: Real estate held for sale is typically valued utilizing independent external appraisers in conjunction with reviews by qualified internal appraisers. Valuations are primarily based on active market prices, adjusted for any difference in the nature, location or condition of the specific property. If such information is not available, other valuation methods are applied, considering the value that the property’s net earning power will support, the value indicated by recent sales of comparable properties and the current cost of reproducing or replacing the property.

Other Invested Assets: The fair values for other invested assets, which include investments in surplus notes issued by other insurance companies and fixed or variable rate investments with underlying characteristics of bonds, are determined primarily by using indices, third-party pricing services and internal models.

Derivative Financial Instruments: The fair value of futures and forwards are based upon the latest quoted market price and spot rates at the Balance Sheets date. The estimated fair values of equity and interest rate options (calls, puts, caps) are based upon the latest quoted market price at the Balance Sheets date. The estimated fair values of swaps, including equity, interest rate and currency swaps, are based on pricing models or formulas using current assumptions. The estimated fair values of credit default swaps are based upon active market data, including interest rate quotes, credit spreads, and recovery rates, which are then used to calculate probabilities of default for the fair value calculation. The Company accounts for derivatives that receive and pass hedge accounting in the same manner as the underlying hedged instrument. If that instrument is held at amortized cost, then the derivative is also held at amortized cost.

Policy Loans: The book value of policy loans is considered to approximate the fair value of the loan, which is stated at unpaid principal balance.

Securities Lending Reinvested Collateral: The cash collateral from securities lending is reinvested in various short-term and long-term debt instruments. The fair values of these investments are determined using the methods described above under Cash Equivalents and Short-Term Investments and Bonds and Stocks.

Separate Account Assets and Annuity Liabilities: The fair value of separate account assets are based on quoted market prices when available. When not available, they are primarily valued either using third-party pricing services or are valued in the same manner as the general account assets as further described in this note. However, some separate account assets are valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilizes input that are not market observable. The fair value of separate account annuity liabilities is based on the account value for separate accounts business without guarantees. For separate accounts with guarantees, fair value is based on discounted cash flows.

Investment Contract Liabilities: Fair value for the Company’s liabilities under investment contracts, which include deferred annuities and GICs, are estimated using discounted cash flow calculations. For those liabilities that are short in duration, carrying amount approximates fair

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

value. For investment contracts with no defined maturity, fair value is estimated to be the present surrender value.

Deposit-Type Contracts: The carrying amounts of deposit-type contracts reported in the accompanying Balance Sheets approximate their fair values. These are included in the investment contract liabilities.

Fair values for the Company’s insurance contracts other than investment-type contracts (including separate account universal life liabilities) are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.

The Company accounts for its investments in affiliated common stock in accordance with SSAP No. 97, as such, they are not included in the following disclosures.

 

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Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The following tables set forth a comparison of the estimated fair values and carrying amounts of the Company’s financial instruments, including those not measured at fair value in the Balance Sheets, as of December 31, 2023 and 2022, respectively:

 

     December 31, 2023  
    

Aggregate

 Fair Value 

     

 Admitted 

Value

       (Level 1)        (Level 2)        (Level 3)   
  

 

 

  

Admitted assets

               

Cash equivalents and short-term investments, other than affiliates

     $ 3,077       $ 3,077       $ 3,075       $ 2       $ —   

Short-term notes receivable from affiliates

      250        250        —        250        —   

Bonds

      42,641        46,351        5,022        37,028        591   

Preferred stocks, other than affiliates

      59        59        —        59        —   

Common stocks, other than affiliates

      113        113        11        —        102   

Mortgage loans on real estate

      8,323        9,409        —        —        8,323   

Other invested assets

      345        376        —        329        16   

Derivative assets:

               

Options

      100        100        —        100        —   

Interest rate swaps

      950        951        —        950        —   

Currency swaps

      83        38        —        83        —   

Credit default swaps

      63        38        —        63        —   

Equity swaps

      9        9        —        9        —   

Interest rate futures

      2        2        2        —        —   

Equity futures

      5        5        5        —        —   

Derivative assets total

      1,212        1,143        7        1,205        —   

Policy loans

      2,109        2,109        —        2,109        —   

Securities lending reinvested collateral

      1,974        1,974        1,974        —        —   

Separate account assets

      97,308        97,358        91,472        5,731        105   

Liabilities

                     

Investment contract liabilities

      10,224        9,878        —        216        10,008   

Derivative liabilities:

                     

Options

      44        44        —        44        —   

Interest rate swaps

      1,075        688        —        1,075        —   

Currency swaps

      10        6        —        10        —   

Credit default swaps

      20        30        —        20        —   

Equity swaps

      435        435        —        435        —   

Interest rate futures

      2        2        2        —        —   

Equity futures

      9        9        9        —        —   

Derivative liabilities total

      1,595        1,214        11        1,584        —   

Dollar repurchase agreements

      11        11        —        11        —   

Payable for securities lending

      2,292        2,292        —        2,292        —   

Payable for derivative cash collateral

      806        806        —        806        —   

Separate account liabilities

      87,871        87,873        2        87,802        67   

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

     December 31, 2022  
    

Aggregate

 Fair Value 

    

 Admitted 

Value

       (Level 1)        (Level 2)       (Level 3)   
  

 

 

  

Admitted assets

             

Cash equivalents and short-term investments, other than affiliates

     $ 2,348      $ 2,346       $ 557       $ 1,791      $ —   

Bonds

      45,427       51,131        5,621        39,639       167   

Preferred stocks, other than affiliates

      61       61        —        61       —   

Common stocks, other than affiliates

      151       151        12        6       133   

Mortgage loans on real estate

      8,185       9,270        —        —       8,185   

Other invested assets

      393       441        —        388       5   

Derivative assets:

                   

Options

      86       86        —        86       —   

Interest rate swaps

      2,073       2,073        —        2,073       —   

Currency swaps

      139       67        —        139       —   

Credit default swaps

      28       38        —        28       —   

Equity swaps

      65       65        —        65       —   

Interest rate futures

      1       1        1        —       —   

Equity futures

      9       9        9        —       —   

Derivative assets total

      2,401       2,339        10        2,391       —   

Policy loans

      2,028       2,028        —        2,028       —   

Securities lending reinvested collateral

      1,738       1,738        1,096        642       —   

Separate account assets

      89,800       89,891        84,453        5,321       26   

Liabilities

             

Investment contract liabilities

      15,026       14,781        —        237       14,789   

Derivative liabilities:

                   

Options

      47       47        —        47       —   

Interest rate swaps

      3,903       3,460        —        3,903       —   

Currency swaps

      2       1        —        2       —   

Credit default swaps

      (2 )      5        —        (2 )      —   

Equity swaps

      99       99        —        99       —   

Interest rate futures

      5       5        5        —       —   

Equity futures

      12       12        12        —       —   

Derivative liabilities total

      4,066       3,629        17        4,049       —   

Dollar repurchase agreements

      95       95        —        95       —   

Payable for securities lending

      2,115       2,115        —        2,115       —   

Payable for derivative cash collateral

      156       156        —        156       —   

Separate account liabilities

      81,449       81,494        —        81,440       9   

 

31

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The following tables provide information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2023 and 2022:

 

     2023
     Level 1   Level 2   Level 3   Total  

Assets:

         

Bonds

         

Government

     $ —       $ 2       $ —       $ 2   

Industrial and miscellaneous

      —       22       1       23   

Hybrid securities

      —       5       —       5   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total bonds

      —       29       1       30   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Preferred stock

         

Industrial and miscellaneous

      —       58       —       58   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total preferred stock

      —       58       —       58   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Common stock

         

Industrial and miscellaneous

      11       —       100       111   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total common stock

      11       —           100       111   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Cash equivalents and short-term investments

         

Industrial and miscellaneous

      —       2       —       2   

Money market mutual funds

      2,466       —       —       2,466   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total cash equivalents and short-term investments

        2,466       2       —         2,468   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Derivative assets

      7         1,031       —       1,038   

Other long term

      —       5       —       5   

Separate account assets

      91,312       4,701       —       96,013   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total assets

     $ 93,796      $ 5,826      $ 101      $ 99,723   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Liabilities:

         

Derivative liabilities

     $ 11      $ 604      $ —      $ 615   

Separate account liabilities

      2       —       —       2   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total liabilities

     $ 13      $ 604      $ —      $ 617   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

 

32

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

     2022
     Level 1   Level 2   Level 3   Total  

Assets:

         

Bonds

         

Government

     $ —       $ 1       $ —       $ 1   

Industrial and miscellaneous

      —       53       1       54   

Hybrid securities

      —       35       —       35   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total bonds

      —       89       1       90   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Preferred stock

         

Industrial and miscellaneous

      —       60       —       60   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total preferred stock

      —       60       —       60   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Common stock

         

Mutual funds

      1       —       —       1   

Industrial and miscellaneous

      11       7       132       150   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total common stock

      12       7           132       151   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Cash equivalents and short-term investments

         

Industrial and miscellaneous

      —       2       —       2   

Money market mutual funds

      531       1,729       —       2,260   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total cash equivalents and short-term investments

      531       1,731       —       2,262   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Derivative assets

      10       2,220       —       2,230   

Separate account assets

      84,377         4,689       —        89,066   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total assets

     $ 84,930      $ 8,796      $ 133      $ 93,859   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Liabilities:

         

Derivative liabilities

     $ 17      $ 2,957      $ —      $ 2,974   

Separate account liabilities

      —       2       —       2   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Total liabilities

     $ 17      $ 2,959      $ —      $ 2,976   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

  

Bonds classified as Level 2 are valued using inputs from third party pricing services or broker quotes. Bonds classified as Level 3 are primarily those valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilize significant inputs that are not market observable.

Preferred stock classified as Level 2 are valued using inputs from third party pricing services or broker quotes.

Common stock classified as Level 2 are valued using inputs from third party pricing services or broker quotes. Common stock classified as Level 3 are comprised primarily of shares in the FHLB of Des Moines, which are valued at par as a proxy for fair value as a result of restrictions that allow redemptions only by FHLB.

Money market mutual funds and other cash or cash equivalents classified as Level 2 are valued using inputs from third party pricing services or broker quotes.

Derivatives classified as Level 2 represent over-the-counter (OTC) contracts valued using pricing models based on the net present value of estimated future cash flows, directly observed prices from exchange-traded derivatives, other OTC trades, or external pricing services.

 

33

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Other long-term classified as Level 2 are comprised of surplus debentures, which are valued using inputs from third party pricing services or broker quotes.

Separate account assets and liabilities are valued and classified in the same way as general account assets and liabilities (described above).

The following tables summarize the changes in assets classified as Level 3 for 2023 and 2022:

 

    

Beginning

Balance at

 January 1, 2023 

     

Transfers in

(Level 3)

     

Transfers

out (Level 3)

     

Total Gains

(Losses) Included

in Net income (a)

    

Total Gains

 (Losses) Included 
in Surplus (b)

  
  

 

 

  

Bonds

              

RMBS

     $ —       $ —       $ —       $ —      $ —   

Other

      1        1        —        (3 )      2   

Common stock

      132        1        —        (6 )      9   
  

 

 

  

Total

     $ 133       $ 2       $ —       $ (9 )     $ 11   
  

 

 

  
     Purchases      Issuances      Sales      Settlements     Ending Balance at
December 31, 2023		  
  

 

 

  

Bonds

              

RMBS

     $ —       $ —       $ —       $ —      $ —   

Other

      —        —        —        —       1   

Common stock

      15        —        51        —       100   
  

 

 

  

Total

     $ 15       $ —       $ 51       $ —      $ 101   
  

 

 

  

 

(a)

Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations

(b)

Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus

 

    

Beginning

Balance at

 January 1, 2022 

     

Transfers in

(Level 3)

     

Transfers

out (Level 3)

     

Total Gains

(Losses) Included

in Net income (a)

    

Total Gains

 (Losses) Included 

in Surplus (b)

  
  

 

 

  

Bonds

              

RMBS

     $ —       $ —       $ —       $ 1      $ (1)   

Other

      7        —        4        —       —   

Common stock

      182        —        —        (8 )      (42)   
  

 

 

  

Total

     $ 189       $ —       $ 4       $ (7 )     $ (43)   
  

 

 

  
     Purchases      Issuances      Sales      Settlements     Ending Balance at
December 31, 2022		  
  

 

 

  

Bonds

              

RMBS

     $ —       $ —       $ —       $ —      $ —   

Other

      —        —        2        —       1   

Common stock

      —        —        —        —       132   
  

 

 

  

Total

     $ —       $ —       $ 2       $ —      $ 133   
  

 

 

  

 

(a)

Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations

(b)

Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus

 

34

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Transfers between fair value hierarchy levels are recognized at the beginning of the reporting period.

Nonrecurring Fair Value Measurements

As indicated in Note 2, real estate held for sale is measured at the lower of carrying amount or fair value less encumbrances and estimated costs to sell. At December 31, 2023, the Company held no properties as held-for-sale. At December 31, 2022, the Company held one property classified as held-for-sale with a carrying amount of  $1, which was equal to fair value.

Fair value was determined by utilizing an external appraisal following the sales comparison approach. The fair value measurements are classified as Level  3 as the comparable sales and adjustments for the specific attributes of these properties are not market observable inputs.

5. Investments

Bonds and Stocks

The carrying amounts and estimated fair value of investments in bonds and stocks are as follows:

 

    

Book Adjusted

 Carrying Value 

     

Gross

 Unrealized 

Gains

     

Gross

 Unrealized 

Losses

     

 Estimated Fair 

Value

  
  

 

 

  

December 31, 2023

            

Bonds:

            

United States Government and agencies

     $ 5,477       $ 54       $ 941       $ 4,590   

State, municipal and other government

      3,055        19        438        2,636   

Hybrid securities

      270        10        17        263   

Industrial and miscellaneous

      31,333        671        2,731        29,273   

Mortgage and other asset-backed securities

      6,216        203        540        5,879   
  

 

 

  

Total unaffiliated bonds

      46,351        957        4,667        42,641   

Unaffiliated preferred stocks

      59        —        —        59   
  

 

 

  
    $ 46,410       $ 957       $ 4,667       $ 42,700   
  

 

 

  
     Cost      Gross
Unrealized
Gains		      Gross
Unrealized
Losses		      Estimated Fair
Value		  
  

 

 

  

Unaffiliated common stocks

     $ 105       $ 8       $ —       $ 113   
  

 

 

  

 

35

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

    

Book Adjusted

 Carrying Value 

     

Gross

 Unrealized 

Gains

     

Gross

 Unrealized 

Losses

     

 Estimated Fair 

Value

  
  

 

 

  

December 31, 2022

            

Bonds:

            

United States Government and agencies

     $ 6,180       $ 53       $ 1,010       $ 5,223   

State, municipal and other government

      3,005        7        545        2,467   

Hybrid securities

      396        16        32        380   

Industrial and miscellaneous

      35,212        446        4,183        31,475   

Mortgage and other asset-backed securities

      6,338        203        659        5,882   
  

 

 

  

Total unaffiliated bonds

      51,131        725        6,429        45,427   

Unaffiliated preferred stocks

      61        —        —        61   
  

 

 

  
    $ 51,192       $ 725       $ 6,429       $ 45,488   
  

 

 

  
     Cost      Gross
Unrealized
Gains		      Gross
Unrealized
Losses		      Estimated Fair
Value		  
  

 

 

  

Unaffiliated common stocks

     $ 144       $ 7       $ —       $ 151   
  

 

 

  

The carrying amount and estimated fair value of long and short-term bonds at December 31, 2023 by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

 

     2023  
  

 

 

  
December 31:     Carrying Value         Fair Value    
  

 

 

  

Due in one year or less

     $ 1,024       $ 1,020   

Due after one year through five years

      7,395        7,358   

Due after five years through ten years

      7,296        7,054   

Due after ten years

      24,792        21,702   
  

 

 

  

Subtotal

      40,507        37,134   

Mortgage and other asset-backed securities

      6,455        6,117   
  

 

 

  

Total

     $ 46,962       $ 43,251   
  

 

 

  

 

36

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The estimated fair value of bonds, preferred stocks and common stocks with gross unrealized losses at December 31, 2023 and 2022 is as follows:

 

                                                                                       
     2023
     Equal to or Greater than
12 Months		   Less than 12 Months
     Estimated
Fair Value		   Gross
Unrealized
Losses		   Estimated
Fair Value		   Gross
Unrealized
Losses

United States Government and agencies

     $ 1,582      $ 487      $ 2,155      $ 454  

State, municipal and other government

      2,051       433       214       5  

Hybrid securities

      130       16       37       1  

Industrial and miscellaneous

      15,644        2,605        3,381        125   

Mortgage and other asset-backed securities

      3,866       521       635       20  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total bonds

      23,273       4,062       6,422       605  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Preferred stocks-unaffiliated

      23       —       35       —  

Common stocks-unaffiliated

      —       —       92       —  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

    $ 23,296      $ 4,062      $ 6,549      $ 605  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

 

                                                                                       
     2022
     Equal to or Greater than
12 Months		   Less than 12 Months
     Estimated
Fair Value		   Gross
Unrealized
Losses		   Estimated
Fair Value		   Gross
Unrealized
Losses

United States Government and agencies

     $ 149      $ 70      $ 4,489      $ 940  

State, municipal and other government

      330       120       1,992       425  

Hybrid securities

      79        16        223        16   

Industrial and miscellaneous

      3,475       1,312       21,368       2,871  

Mortgage and other asset-backed securities

      1,034       210       4,143       449  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total bonds

      5,067       1,728       32,215       4,701  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Preferred stocks-unaffiliated

      16       —       44       —  

Common stocks-unaffiliated

      —       —       138       —  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

    $ 5,083      $ 1,728      $ 32,397      $ 4,701  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

During 2023, 2022 and 2021, respectively, there were $13, $2 and $62, of loan-backed or structured securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold for a period of time to recover the amortized cost basis.

For loan-backed and structured securities with a recognized OTTI due to the Company’s cash flow analysis, in which the security is written down to estimated future cash flows discounted at the security’s effective yield, in 2023, 2022 and 2021, the Company recognized OTTI of $25, $1 and $7, respectively.

 

37

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The following loan-backed and structured securities were held at December 31, 2023, for which an OTTI was recognized during the current reporting period:

 

CUSIP   

Amortized

Cost Before

Current

 Period OTTI 

     

Present

Value of

Projected

 Cash Flows 

     

 Recognized 

OTTI

   

 Amortized 

Cost After

OTTI

     

 Fair Value 

at Time of

OTTI

     

Date of

Financial

Statement

Where

 Reported 

  
 22944BCX4     $ 1       $ 1       $ —       $ 1       $ 1        3/31/2023  
 46637TAA8      13        11        2        11        11        6/30/2023  
 22944BCX4      1        1        —        1        1        9/30/2023  
 22944BCX4      1        1        —        1        1        12/31/2023  
 61762TAH9      11        10        1        10        7        12/31/2023  
 05604LAE2      20        —        20        —        6        12/31/2023  
 G4302*AA8      2        —        2        —        1        12/31/2023  
 69640GAA3      5        4        1        4        3        12/31/2023  
        

 

 

 

         
          $ 26           
        

 

 

 

         

The unrealized losses of loan-backed and structured securities where fair value is less than cost or amortized cost for which an OTTI has not been recognized in earnings as of December 31, 2023 and 2022 is as follows:

 

     2023   2022
    

Losses 12

 Months or 
More

   

 Losses Less 

Than 12

Months

  

Losses 12

 Months or 

More

   

 Losses Less 

Than 12

Months

  

 

 

 

  

 

 

 

Year ended December 31:

           

The aggregate amount of unrealized losses

     $ 532      $ 20       $ 224      $ 449   

The aggregate related fair value of securities with unrealized losses

      3,866        863       1,034        4,121  

At December 31, 2023 and 2022, respectively, for bonds and preferred stocks that have been in a continuous loss position for greater than or equal to twelve months, the Company held 3,297 and 1,012 securities with a carrying amount of $27,359 and $6,809, and an unrealized loss of $4,062 and $1,728. Of this portfolio, at December 31, 2023 and 2022, 95.6% and 92.0% were investment grade with associated unrealized losses of $3,899 and $1,621, respectively.

At December 31, 2023 and 2022, respectively, for bonds and preferred stocks that have been in a continuous loss position for less than twelve months, the Company held 856 and 3,939 securities with a carrying amount of $7,061 and $36,960, and an unrealized loss of $605 and $4,701. Of this portfolio, at December 31, 2023 and 2022, 97.8% and 95.8% were investment grade with associated unrealized losses of $597 and $4,520, respectively.

At December 31, 2023 and 2022, for common stocks that have been in a continuous loss position for greater than or equal to twelve months, the Company held 4 and 7 securities, respectively, with an insignificant cost and unrealized loss.

 

38

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

At December 31, 2023 and 2022, for common stocks that have been in a continuous loss position for less than twelve months, the Company held 16 and 30 securities with a cost of $92 and $139 and an unrealized loss of $0 and $1, respectively.

The following table provides the number of 5GI securities, aggregate book adjusted carrying value and aggregate fair value by investment type:

 

                                                                          
     Number of
5GI Securities		      Book / Adjusted
Carrying Value		   Fair Value

December 31, 2023

        

Bond, amortized cost

      7       $ 46       $ 46   
  

 

 

     

 

 

 

  

 

 

 

Total

      7       $ 46      $ 46  
  

 

 

     

 

 

 

  

 

 

 

December 31, 2022

        

Bond, amortized cost

      3       $ 4      $ 4  
  

 

 

     

 

 

 

  

 

 

 

Total

      3       $ 4      $ 4  
  

 

 

     

 

 

 

  

 

 

 

The Company did not have any offsetting assets and liabilities at December 31, 2023 and 2022.

During 2023 and 2022, respectively, the Company sold, redeemed or otherwise disposed of 21 and 75 securities as a result of a callable feature which generated investment income of $1 and $28 as a result of a prepayment penalty and/or acceleration fee.

Proceeds from sales and other disposals of bonds and preferred stock and related gross realized capital gains and losses are reflected in the following table. The amounts exclude maturities and include transfers associated with reinsurance agreements, if applicable.

 

                                                                          
     Year Ended December 31
     2023   2022   2021
  

 

 

 

Proceeds

     $ 7,301      $ 8,218      $ 10,570  
  

 

 

 

Gross realized gains

     $ 184      $ 69      $ 437  

Gross realized losses

      (747 )      (624 )      (108 ) 
  

 

 

 

Net realized capital gains (losses)

     $ (563 )     $ (555 )     $ 329  
  

 

 

 

The Company had gross realized losses, which relate to losses recognized on other-than-temporary declines in the fair value of bonds and preferred stocks, for the years ended December 31, 2023, 2022 and 2021 of $106, $54 and $15, respectively.

At December 31, 2023 and 2022, the Company had recorded investments in restructured securities of $14 and $0.

 

39

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Mortgage Loans

The credit quality of mortgage loans by type of property for the years ended December 31, 2023 and 2022 were as follows:

 

                                                                          
December 31, 2023             
      Farm    Commercial    Total 
  

 

 

 

 AAA - AA

     $ —      $ 4,454      $ 4,454  

 A

      30        4,090        4,120   

 BBB

      7       791       798  

 BB

      —       37       37  
  

 

 

 

    $ 37      $ 9,372      $ 9,409  
  

 

 

 

 

                                                                          
December 31, 2022             
      Farm    Commercial    Total 
  

 

 

 

 AAA - AA

     $ 1      $ 5,139      $ 5,140  

 A

      31        3,389        3,420   

 BBB

      7       653       660  

 BB

      —       50       50  
  

 

 

 

    $ 39      $ 9,231      $ 9,270  
  

 

 

 

The above tables exclude residential mortgage loans.

The credit quality for commercial and farm mortgage loans was determined based on an internal credit rating model which assigns a letter rating to each mortgage loan in the portfolio as an indicator of the credit quality of the mortgage loan. The internal credit rating model was designed based on rating agency methodology, then modified for credit risk associated with the Company’s mortgage lending process, taking into account such factors as projected future cash flows, net operating income and collateral value. The model produces a credit rating score and an associated letter rating which is intended to align with S&P ratings as closely as possible. Information supporting the credit risk rating process is updated at least annually.

During 2023, the Company issued mortgage loans with a maximum interest rate of 7.01% and a minimum interest rate of 5.13% for commercial loans. The maximum percentage of any one admitted loan to the value of the security (exclusive of insured or guaranteed or purchase money mortgages) originated or acquired during the year ending December 31, 2023 at the time of origination was 72%. During 2022, the Company issued mortgage loans with a maximum interest rate of 6.05% and a minimum interest rate of 2.80% for commercial loans. The maximum percentage of any one admitted loan to the value of the security (exclusive of insured or guaranteed or purchase money mortgages) originated or acquired during the year ending December 31, 2022 at the time of origination was 65%.

During 2023, the Company did not issue any agricultural loans. During 2022, the Company issued agricultural mortgage loans with a maximum interest rate of 5.55% and a minimum interest rate of 5.55%.

 

40

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

During 2023 and 2022, the Company did not reduce the interest rate on any outstanding mortgage loans.

The age analysis of mortgage loans and identification in which the Company is a participant or co-lender in a mortgage loan agreement is as follows for December 31, 2023 and 2022:

 

                                                                          
            Commercial         
     Farm      All Other      Total  

December 31, 2023

         

Recorded Investment (All)

         

Current

    $ 37      $ 9,372      $ 9,409  
Participant or Co-lender in Mortgage Loan Agreement         

Recorded Investment

    $ 33      $ 842      $ 875  

 

                                                                          
            Commercial         
     Farm      All Other      Total  

December 31, 2022

         

Recorded Investment (All)

         

Current

    $ 39      $ 9,231      $ 9,270  
Participant or Co-lender in Mortgage Loan Agreement         

Recorded Investment

    $ 14      $ 854      $ 868  

At December 31, 2023 and 2022, the Company held an immaterial amount of mortgage loans that were non-income producing for the previous 180 days. There was an insignificant amount of accrued interest related to these mortgage loans at December 31, 2023 and no amount at December 31, 2022. The Company has a mortgage or deed of trust on the property thereby creating a lien which gives it the right to take possession of the property (among other things) if the borrower fails to perform according to the terms of the loan documents. The Company requires all mortgaged properties to carry fire insurance equal to the value of the underlying property. At December 31, 2023 and 2022, there were no taxes, assessments and other amounts advanced and not included in the mortgage loan total.

At December 31, 2023 and 2022, the Company held no impaired loans with or without a related allowance for credit losses. There were no impaired mortgage loans held without an allowance for credit losses as of December 31, 2023 and 2022, respectively, that were subject to participant or co-lender mortgage loan agreement for which the Company is restricted from unilaterally foreclosing on the mortgage loans. There were no average recorded investments in impaired loans during 2023 and 2022.

The Company did not have an allowance for credit losses on mortgage loans at December 31, 2023, 2022, and 2021.

 

41

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

As of December 31, 2023 and 2022, the Company had no mortgage loans derecognized as a result of foreclosure.

The Company accrues interest income on impaired loans to the extent deemed collectible (delinquent less than 91 days) and the loan continues to perform under its original or restructured contractual terms. Interest income on nonperforming loans generally is recognized on a cash basis. For the years ended December 31, 2023, 2022 and 2021, the Company has recognized no interest income on impaired loans or on a cash basis.

At December 31, 2023 and 2022, the Company held a mortgage loan loss reserve in the AVR of $105 and $98, respectively.

The Company’s mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:

 

Geographic Distribution  
     December 31  
     2023     2022  
              

Pacific

      28  %      29  % 

South Atlantic

      22       22  

Middle Atlantic

      13       12  

E. North Central

      11       10  

W. South Central

      8       8  

Mountain

      8       8  

W. North Central

      4       6  

E. South Central

      3       3  

New England

      3       2  
Property Type Distribution  
     December 31  
     2023     2022  
              
Apartment      53  %      53  % 
Office      14       16  
Retail      13       14  
Industrial      20       17  
 

 

At December 31, 2023 and 2022, the Company had mortgage loans with a total net admitted asset value of $0 and $2, respectively, which had been restructured in accordance with SSAP No. 36, Troubled Debt Restructuring. There were no realized losses during the years ended December 31, 2023, 2022 and 2021 related to such restructurings. At December 31, 2023 and 2022, there were no commitments to lend additional funds to debtors owing receivables.

Real Estate

The fair value of property is determined based on an appraisal from a third-party appraiser, along with information obtained from discussions with internal asset managers and a listing broker regarding recent comparable sales data and other relevant property information. Impairment losses of $0, $1 and $9 were taken on real estate in 2023, 2022 and 2021, respectively, to write the book value down to the current fair value, and included in net realized capital gains (losses), within the Statements of Operations, for the year ended December 31, 2023.

As of December 31, 2023, there was no property classified as held for sale. As of December 31, 2022, there was one property classified as held for sale. The Company is working with an

 

42

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

external commercial real estate advisor firm to actively market the property and negotiate with potential buyers. During 2023, one property classified as held for sale were disposed, resulting in a net realized gain of $0. During 2022, seven properties classified as held for sale was disposed, resulting in a net realized gain of $2. Any associated gains and losses from these held for sale disposals were included in net realized capital gains (losses) within the Statements of Operations.

The Company disposed of other properties during 2023, 2022 and 2021 resulting in an insignificant amount of net realized gains, respectively. These gains and losses were included in net realized capital gains (losses) within the Statements of Operations.

The carrying value of the Company’s real estate assets at December 31, 2023 and 2022 was as follows:

 

                                     
     2023      2022  
  

 

 

  

Home office properties

     $ 41      $ 43   

Properties held for sale

      —        1   
  

 

 

  
    $ 41      $ 44   
  

 

 

  

Accumulated depreciation on real estate at December 31, 2023 and 2022, was $29 and $29, respectively.

Other Invested Assets

The Company recorded impairments of $0, $4 and $13 throughout years 2023, 2022 and 2021, respectively. These impairments were primarily related to private equity funds. The impairments were taken because the decline in fair value of the funds were deemed to be other than temporary and a recovery in value from the remaining underlying investments in the funds were not anticipated. These write-downs are included in net realized capital gains (losses) within the Statements of Operations.

Tax Credits

At December 31, 2023, the Company had ownership interests in 52 LIHTC investments with a carrying value of $75. The remaining years of unexpired tax credits ranged from one to eleven, and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to fourteen years. The amount of contingent equity commitments expected to be paid during the years 2024 to 2029 is $2. Tax credits expenses recognized in 2023 were $49 and other tax benefits recognized in 2023 were $3. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.

At December 31, 2022, the Company had ownership interests in 52 LIHTC investments with a carrying value of $88. The remaining years of unexpired tax credits ranged from one to eleven, and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to fifteen years. The amount of contingent equity commitments expected to be paid during the years 2023 to 2029 is $4. Tax credits expenses recognized in 2022 were $33

 

43

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

and other tax benefits recognized in 2022 were $2. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.

The following tables provide the carrying value of transferable state tax credits gross of any related tax liabilities and total unused transferable tax credits by state and in total as of December 31, 2023 and 2022:

 

          December 31, 2023  
     

 

 

  
Description of State Transferable and Non-transferable Tax Credits    State      Carrying Value        Unused Amount*  

 

  

Economic Redevelopment and Growth Tax Credits

    NJ      13         19   

LIHTC

    CA      —         15   
     

 

 

  

Total

        $ 13       $ 34   
     

 

 

  

 

         December 31, 2022  
    

 

 

  
Description of State Transferable and Non-transferable Tax Credits    State     Carrying Value         Unused Amount   

 

  

Economic Redevelopment and Growth Tax Credits

    NJ     10         34   
    

 

 

  

Total

       $ 10       $ 34   
    

 

 

  

The Company did not have any non-transferable state tax credits.

The Company estimated the utilization of the remaining state transferable tax credits by projecting a future tax liability based on projected premium, tax rates and tax credits, and comparing the projected future tax liability to the availability of remaining state transferable tax credits. The Company had no impairment losses related to state transferable tax credits.

Derivatives

Amounts disclosed in this Derivatives section do not include derivatives utilized in the hedging of variable annuity guarantees in accordance with SSAP No. 108, Derivatives Hedging Variable Annuity Guarantees. Please see the subsequent section “Derivatives Hedging Variable Annuity Guarantees” for results associated with those derivatives.

The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets (cash or securities) on the Company’s behalf in an amount equal to the difference between the net positive fair value of the contracts and an agreed upon threshold based on the credit rating of the counterparty. If the net fair value of all contracts with this counterparty is negative, then the Company is required to post similar assets (cash or securities). Fair value of derivative contracts, aggregated at a counterparty level at December 31, 2023 and 2022 was as follows:

 

     2023     2022  
  

 

 

  

Fair value - positive

    $      322     $      409  

Fair value - negative

      (1,562 )      (1,324 ) 

 

44

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

At December 31, 2023, 2022 and 2021, the Company has recorded unrealized gains (losses) of ($433), ($23) and ($173), respectively, for the component of derivative instruments utilized for hedging purposes that did not qualify for hedge accounting. This has been recorded directly to unassigned surplus as an unrealized gain (loss). The Company did not recognize any unrealized gains or losses during 2023, 2022 and 2021 that represented the component of derivative instruments gain or loss that was excluded from the assessment of hedge effectiveness.

The maximum term over which the Company is hedging its exposure to the variability of future cash flows is approximately 20 years for forecasted hedge transactions. At December 31, 2023 and 2022, none of the Company’s cash flow hedges have been discontinued as it was probable that the original forecasted transactions would occur by the end of the originally specified time period documented at inception of the hedging relationship. As of December 31, 2023 and 2022, the Company has no accumulated deferred gains related to the termination of swaps that were hedging forecasted transactions. It is expected that these gains will be used as basis adjustments on future asset purchases expected to transpire throughout 2024.

Summary of realized gains (losses) by derivative type for the years ended December 31, 2023, 2022 and 2021:

 

                                                                          
     2023   2022   2021
  

 

 

 

Options:

       

Calls

     $ 13     $ —     $ 6  

Puts

      (1 )      —       (6 ) 
  

 

 

 

Total options

     $ 12     $ —     $ —  
  

 

 

 

Swaps:

       

Interest rate

     $ —     $ (1 )    $ 87  

Total return

      (1,092 )      1,054       (1,752 ) 
  

 

 

 

Total swaps

     $ (1,092 )    $ 1,053     $ (1,665 ) 
  

 

 

 

Futures - net positions

      41       (376 )      110  
  

 

 

 

Total realized gains (losses)

     $ (1,039 )    $ 677     $ (1,555 ) 
  

 

 

 

The average estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2023 and 2022:

 

                                                                                                   
     Asset(1)      Liability(1)  
  

 

 

     

 

 

  
     2023      2022      2023     2022  
  

 

 

     

 

 

  

Derivative component of RSATs

           

Credit default swaps

    $ 43      $ 29      $ (4 )    $ —  

Interest rate swaps

      7        6        —       —  

 

(1) 

Asset and liability classification is based on the positive (asset) or negative

(liability) book/adjusted carrying value (BACV) of each derivative.

 

45

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2023 and 2022:

 

                                                                                                   
     Asset(1)    Liability(1)
  

 

 

 

   

 

 

 

     2023    2022    2023    2022
  

 

 

 

   

 

 

 

Derivative component of RSATs

            

Credit default swaps

     $ 63      $ 24      $ 6      $ (2 ) 

Interest rate swaps

      8        6        —        —  
  

 

 

 

   

 

 

 

Total

     $ 71      $ 30      $ 6      $ (2 ) 
  

 

 

 

   

 

 

 

 

(1) 

Asset and liability classification is based on the positive (asset) or negative

(liability) BACV of each derivative.

The Company did not have net realized gains (losses) on derivatives held for other than hedging purposes for the years ended December 31, 2023, 2022 and 2021.

As stated in Note 2, the Company replicates investment grade corporate bonds, sovereign debt, or commercial mortgage backed securities by writing credit default swaps. As a writer of credit swaps, the Company actively monitors the underlying asset, being careful to note any events (default or similar credit event) that would require the Company to perform on the credit swap. If such events would take place, a payment equal to the notional amount of the contract, less any potential recoveries as determined by the underlying agreement, will be made by the Company to the counterparty to the swap.

 

46

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The following tables present the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at December 31, 2023 and 2022:

 

                                                                                                               
            2023

Rating Agency Designation of

Referenced Credit Obligations (1)

    NAIC
Designation		      Estimated
Fair Value of
Credit
Default
Swaps		    Maximum
Amount of
Future
Payments
under Credit
Default
Swaps		    Weighted
Average
Years to
Maturity (2)		  

AAA/AA/A

      1           

Single name credit default swaps (3)

        $ 16       $ 973        3.0  

Credit default swaps referencing indices

         —        32        41.4   
     

 

 

 

   

 

 

 

   

Subtotal

         16         1,005         4.2  
     

 

 

 

   

 

 

 

   

BBB

      2           

Single name credit default swaps (3)

         33        1,466        2.6  

Credit default swaps referencing indices

         19        1,402        2.3  
     

 

 

 

   

 

 

 

   

Subtotal

         52        2,868        2.5  
     

 

 

 

   

 

 

 

   

BB

      3           

Single name credit default swaps (3)

         1        90        1.8  
     

 

 

 

   

 

 

 

   

Subtotal

         1        90        1.8  
     

 

 

 

   

 

 

 

   

B

      4           

Single name credit default swaps (3)

         —        —        —  
     

 

 

 

   

 

 

 

   

Subtotal

         —        —        —  
     

 

 

 

   

 

 

 

   

Total

        $ 69       $ 3,963        2.9  
     

 

 

 

   

 

 

 

   

 

  (1) 

The rating agency designations are based on availability and the blending of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P, and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used.

 

 

  (2) 

The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.

 

 

  (3) 

Includes corporate, foreign government and state entities.

 

 

47

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

                                                                                       
            2022

Rating Agency Designation of

Referenced Credit Obligations (1)

    NAIC
Designation		      Estimated
Fair Value of
Credit
Default
Swaps		    Maximum
Amount of
Future
Payments
under Credit
Default
Swaps		    Weighted
Average
Years to
Maturity (2)

AAA/AA/A

      1           

Single name credit default swaps (3)

        $ 9       $ 948        3.2  

Credit default swaps referencing indices

         —        45        30.6  
     

 

 

 

   

 

 

 

   

Subtotal

         9        993        4.4   
     

 

 

 

   

 

 

 

   

BBB

      2           

Single name credit default swaps (3)

         6        1,801        2.4  

Credit default swaps referencing indices

         13        1,717        2.4  
     

 

 

 

   

 

 

 

   

Subtotal

         19        3,518        2.4  
     

 

 

 

   

 

 

 

   

BB

      3           

Single name credit default swaps (3)

         (1 )       120         2.2  
     

 

 

 

   

 

 

 

   

Subtotal

         (1 )       120        2.2  
     

 

 

 

   

 

 

 

   

B

      4           

Single name credit default swaps (3)

         —        15        1.0  
     

 

 

 

   

 

 

 

   

Subtotal

         —        15        1.0  
     

 

 

 

   

 

 

 

   

Total

        $ 27       $ 4,646        2.8  
     

 

 

 

   

 

 

 

   

 

(1) 

The rating agency designations are based on availability and the blending of the applicable ratings among Moody’s, S&P, and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used.

 

(2) 

The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.

 

(3) 

Includes corporate, foreign government and state entities.

The Company may enter into credit default swaps to purchase credit protection on certain of the referenced credit obligations in the table above. At December 31, 2023 and 2022, there were not any potential future recoveries available to offset the $3,963 and $4,646, respectively, from the table above.

 

48

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

At December 31, 2023 and 2022, the Company’s outstanding derivative instruments, shown in notional or contract amounts and fair value, are summarized as follows:

 

     Contract or Notional Amount*      Fair Value  
       2023          2022          2023          2022    
  

 

 

     

 

 

  

Derivative assets:

            

Credit default swaps

     $ 3,316      $ 4,445       $ 63      $ 28  

Currency swaps

      699        747        83        139  

Equity futures

      —        —        5        9  

Equity swaps

      448        2,169        9        65  

Interest rate swaps

      45        35        7        8  

Options

      2,102        1,859        100        86  

Derivative liabilities:

            

Credit default swaps

      1,183        733        20        (2 ) 

Currency swaps

      213        44        10        2  

Equity futures

      —        —        9        12  

Equity swaps

      5,690        3,785        435        99  

Interest rate futures

      —        —        —        —  

Interest rate swaps

      6,379        7,096        988        1,091  

Options

      (2,641 )       (2,078 )       44        47  

* Futures are presented in contract format. Swaps and options are presented in notional format.

Derivatives Hedging Variable Annuity Guarantees

The hedged obligation consists of guaranteed benefits on variable annuity contracts and resembles a long dated put option where claim payment is made whenever account value is less than a guaranteed amount, adjusted for applicable fees. Changes in interest rates impact the present value of future product cash flows (discount rate) as well as the value of investments comprising the account value to be assessed against the guarantee. Under this VM-21 compliant clearly defined hedging strategy, interest rate risk may be hedged by a duration matched portfolio of interest sensitive derivatives such as treasury bond forwards, treasury futures, interest rate swaps, interest rate swaptions or treasury future options. Effective October 1, 2021 the guaranteed benefits included was expanded to include variable annuity contracts with Guaranteed Minimum Death Benefit and Guaranteed Minimum Income Benefit riders, excluding contracts assumed via reinsurance along with the originally included Guaranteed Minimum Withdrawal Benefit and Guaranteed Minimum Account Benefit riders. The Company received approval from the IID on September 28, 2021 for the expansion of the program. Total return on the designated portfolio of derivatives remains highly effective in covering the interest rate risk (rho) of the hedged obligation. Hedge effectiveness is measured in accordance with the requirements outlined under SSAP No. 108 and entails assessment of the total return on the designated portfolio of derivatives against changes in the fair value of the hedged obligation due to interest rate movements on a cumulative basis.

The Company accelerated the amortization of its SSAP 108 variable annuity deferred interest rate position reported on December 31, 2021. The Company fully amortized the $250 unamortized liability balance as of December 31, 2021 to zero, in 2022. The acceleration of the amortization of the SSAP 108 deferral is consistent with SSAP 108, Paragraph 14 Section c. i. that allows the

 

49

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

accelerating of amortization of the deferral, if consistently done between deferred assets and deferred liabilities within its hedging strategy. The Company did not change any accounting practices under SSAP 108. The Company’s Clearly Defined Hedge Strategy is not being revised.

Scheduled amortization for SSAP No. 108 derivatives as of December 31, 2023 is as follows:

 

   Amortization Year    Deferred Assets     Deferred Liabilities  

 

  

 2024

    $ (66 )    $ 15   

 2025

      (66 )      15   

 2026

      (66 )      15   

 2027

      (66 )      15   

 2028

      (66 )      15   

 2029

      (66 )      15   

 2030

      (66 )      15   

 2031

      (66 )      15   

 2032

      (46 )      15   

 2033

      (17 )      11   
  

 

 

  

 Total

    $ (591 )    $ 146   
  

 

 

  

The following table is a reconciliation of the total deferred balance (net of tax) of SSAP No. 108 derivatives:

 

     Total Deferred
Balance		  

1. Balance at January 1, 2022

    $ (250)  

2. Amortization

      (230)  

3. Deferred Recognition

      (400)  
  

 

 

  

4. Balance at December 31, 2022 [1-(2+3)]

    $ 380   

5. Amortization

      44   

6. Deferred Recognition

      (109)  
  

 

 

  

7. Balance at December 31, 2023 [4-(5+6)]

    $ 445   
  

 

 

  

The following tables provide information regarding SSAP No. 108 hedging instruments:

 

       2023          2022    
    

 

  

Amortized cost

     $ —       $ —  

Fair value

      855        (750 ) 

 

50

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

                                                                                                   
December 31, 2023                    
     Net Investment
Income		    Realized Gain
(Loss)		    Unrealized
Gain (Loss)		    Total* 
    

 

Derivative performance

     $ (13 )     $ (1,725 )     $ 1,606      $ (132 ) 

SSAP No. 108 Adjustments

            
Portion of the derivative performance attributed to natural offset      5        717        (722 )       —  

Deferred

      8        1,008        (884 )       132  

*Totals shown are pre-tax

            

 

                                                                                                   
December 31, 2022                    
     Net Investment
Income		   

Realized Gain

(Loss)

    Unrealized
Gain (Loss)		    Total* 
    

 

Derivative performance

     $ (34 )     $ (3,736 )     $ (654 )     $ (4,424 ) 

SSAP No. 108 Adjustments

            
Portion of the derivative performance attributed to
natural offset		      84        2,275        1,559        3,918  

Deferred

      (50 )       1,461        (905 )       506  

*Totals shown are pre-tax

            

 

                                                 
     Year Ended December 31
     2023    2022
    

 

Prior year fair value of hedged item

     $ 539      $ (3,847)  

Current year fair value of hedged item

      630        938   
  

 

 

 

Change in fair value attributable to interest rates

     $ 91      $ 4,785   
  

 

 

 

Portion of the fair value change attributed to the hedged risk     $ 91      $ 4,785   
  

 

 

 

 

51

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Restricted Assets

The following tables show the pledged or restricted assets as of December 31, 2023 and 2022, respectively:

 

                                                                                                                            
   

Gross Restricted (Admitted & Nonadmitted)

2023

  
 

 

 

  
  Restricted Asset Category   Total General
Account (G/A)		    

G/A Supporting

Separate

Account (S/A)
Activity

     Total S/A
Restricted
Assets		     S/A Assets
Supporting
G/A Activity		     Total  

 

  

Collateral held under security lending agreements

    $ 2,292     $ —     $ —     $ —     $ 2,292   

Subject to repurchase agreements

     157       —       —       —       157   

Subject to dollar repurchase agreements

     11       —       —       —       11   

FHLB capital stock

     88       —       —       —       88   

On deposit with states

     38       —       —       —       38   

Pledged as collateral to FHLB (including assets backing funding agreements)

     3,937       —       —       —       3,937   

Pledged as collateral not captured in other categories

     2,230       —       —       —       2,230   

Other restricted assets

     7,337       —       —       —       7,337   
 

 

 

  

Total restricted assets

    $ 16,090     $ —     $ —     $ —     $ 16,090   
 

 

 

  

 

                                                                                                                 
    Gross (Admitted & Nonadmitted) Restricted     Percentage  
 

 

 

  
  Restricted Asset Category   Total From
Prior Year
(2022)		     Increase/
(Decrease)		     Total
Nonadmitted
Restricted		     Total
Admitted
Restricted		     Gross
(Admitted &
Nonadmitted)
Restricted
to Total
Assets		     Admitted
Restricted to
Total
Admitted
Assets		  

 

  

Collateral held under security lending agreements

    $ 2,115     $ 177     $ —     $ 2,292       1.30 %      1.31%  

Subject to repurchase agreements

     251       (94 )      —       157       0.09       0.09    

Subject to dollar repurchase agreements

     96       (85 )      —       11       0.01       0.01    

FHLB capital stock

     130       (42 )      —       88       0.05       0.05    

On deposit with states

     38       —       —       38       0.02       0.02    

Pledged as collateral to FHLB (including assets backing funding agreements)

     5,335       (1,398 )      —       3,937       2.23       2.25    

Pledged as collateral not captured in other categories

     2,268       (38 )      —       2,230       1.26       1.27    

Other restricted assets

     5,983       1,354       —       7,337       4.16       4.20    
 

 

 

  

Total restricted assets

    $ 16,216     $ (126 )    $ —     $ 16,090       9.12 %      9.20%  
 

 

 

  

The amounts reported as other restricted assets in the table above represent assets held in trust related to reinsurance.

 

52

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The following tables show the pledged or restricted assets in other categories as of December 31, 2023 and 2022, respectively:

 

    

Gross Restricted (Admitted & Nonadmitted)

2023

  
  

 

 

  
Description of Assets   

 Total General 

Account (G/A)

      G/A
Supporting
Separate
Account (S/A)
Activity		      Total S/A
Restricted
Assets		      S/A Assets
Supporting G/A
Activity		        Total    

 

  

Derivatives

     $ 2,229      $ —      $ —      $ —      $ 2,229   

Secured funding agreements

      1        —        —        —        1   
  

 

 

  

Total

     $ 2,230      $ —      $ —      $ —      $ 2,230   
  

 

 

  

 

    Gross (Admitted & Nonadmitted) Restricted     Percentage  
 

 

 

  
Description of Assets  

 Total From 

Prior Year

(2022)

     Increase/
(Decrease)		     Total
Nonadmitted
Restricted		     Total
Admitted
Restricted		     Gross
(Admitted &
Nonadmitted)
Restricted
to Total
Assets		     Admitted
Restricted to
Total
Admitted
Assets		  

 

  

Derivatives

   $ 2,251     $ (22 )    $ —     $ 2,229       1.26 %      1.27%  

Secured funding agreements

     17       (16 )      —       1       0.00       0.00    
 

 

 

  

Total

   $ 2,268     $ (38 )    $ —     $ 2,230       1.26 %      1.27%  
 

 

 

  

 

53

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The following tables show the collateral received and reflected as assets within the financial statements as of December 31, 2023 and 2022:

 

                                                                                                           
2023  

 

  
Collateral Assets    Carrying Value      Fair Value      % of CV to
Total Assets
(Admitted and
Nonadmitted)		     % of CV to
Total Admitted
Assets		  

 

  

Cash

     $ 787      $ 787        1.01  %      1.04 %  

Securities lending collateral assets

      2,292        2,292        2.95       3.02    

Other

      30        30        0.04       0.04    
  

 

 

  

Total collateral assets

     $ 3,109      $ 3,109        4.00  %      4.10 %  
  

 

 

  

 

                                                                                                               
     Amount      % of Liability
to Total
Liabilities		            
  

 

 

  

Recognized obligation to return collateral asset

     $ 3,110        4.44%  

 

                                                                                                           
2022  

 

  
Collateral Assets    Carrying Value      Fair Value     

% of CV to
Total Assets
(Admitted

and
Nonadmitted)

     % of CV
to Total
Admitted
Assets		  

 

  

Cash

    $ 249      $ 243        0.31  %      0.31 %  

Securities lending collateral assets

      2,115        2,115        2.59       2.64    

Other

      —        —        —       —    
  

 

 

  

Total collateral assets

    $ 2,364      $ 2,358        2.90  %      2.95 %  
  

 

 

  

 

                                                                                                               
     Amount      % of Liability
to Total
Liabilities		            
  

 

 

  

Recognized obligation to return collateral asset

    $ 2,367        3.17 %  

 

54

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Net Investment Income

Detail of net investment income is presented below:

 

     Year Ended December 31  
     2023      2022      2021  
  

 

 

  

Income:

         

Bonds

     $ 2,170      $ 2,029      $ 2,151   

Preferred stocks

      5        3        4   

Common stocks

      392        343        228   

Mortgage loans on real estate

      383        415        483   

Real estate

      9        13        25   

Policy loans

      110        108        112   

Cash, cash equivalents and short-term investments

      95        26        1   

Derivatives

      403        273        89   

Other invested assets

      200        180        155   
  

 

 

  

Gross investment income

      3,767        3,390        3,248   

Less: investment expenses

      198        178        167   
  

 

 

  

Net investment income before amortization of IMR

      3,569        3,212        3,081   

Amortization of IMR

      28        85        110   
  

 

 

  

Net investment income

     $   3,597      $   3,297      $   3,191   
  

 

 

  

At December 31, 2023 and 2022, the Company excluded investment income due and accrued of $10 and $40, respectively. There were no amounts excluded for mortgage loans or real estate for either 2023 and 2022.

The gross, nonadmitted and admitted amounts for interest income due and accrued are presented in the following table:

 

     2023      2022  
  

 

 

  

Gross

     $ 636      $ 756   

Nonadmitted

     $ 10      $ 40   

Admitted

     $    626      $    716   

At December 31, 2023, the Company had cumulative amounts for paid-in-kind interest of $1 included in the principle balance. At December 31, 2022, the Company did not report a paid-in-kind interest balance.

 

55

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Realized Capital Gains (Losses)

Net realized capital gains (losses) on investments, including OTTI, are summarized below:

 

                                                                    
     Realized  
  

 

 

  
     Year Ended December 31  
     2023     2022     2021  
  

 

 

  

Bonds

     $ (669 )    $ (614 )    $ 311   

Preferred stocks

      —       —       2   

Common stocks

      (8 )      56       11   

Mortgage loans on real estate

      (1 )      —       —   

Real estate

      —       1       (9)  

Cash, cash equivalents and short-term investments

      (1 )      —       —   

Derivatives

      (2,043 )      (4,555 )      (2,474)  

Variable annuity reserve hedge offset

      (44 )      229       15   

Other invested assets

      27       169       488   
  

 

 

  

Change in realized capital gains (losses), before taxes

      (2,739 )      (4,714 )      (1,656)  

Federal income tax effect

      106       45       (122)  

Transfer from (to) IMR

      634       458       (146)  
  

 

 

  

Net realized capital gains (losses) on investments

     $   (1,999 )    $   (4,211 )    $   (1,924)  
  

 

 

  

Unrealized Capital Gains (Losses)

The changes in net unrealized capital gains and losses on investments, including the changes in net unrealized foreign capital gains and losses were as follows:

 

                                                                       
     Change in Unrealized  
  

 

 

  
     Year Ended December 31  
     2023     2022     2021  
  

 

 

  

Bonds

     $ 10     $ 197     $ 150   

Preferred stocks

      1       (11 )      15   

Common stocks

      1       (40 )      2   

Affiliated entities

      443       (278 )      (46)  

Derivatives

      600       1,142       262   

Other invested assets

      327       51       139   
  

 

 

  

Change in unrealized capital gains (losses), before taxes

      1,382       1,061       522   

Taxes on unrealized capital gains (losses)

      (98 )      (47 )      (72)  
  

 

 

  

Change in unrealized capital gains (losses), net of tax

     $   1,284     $   1,014     $   450   
  

 

 

  

 

56

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Admitted Disallowed IMR

The Company has admitted net negative (disallowed) IMR in accordance with the following criteria:

 

  A.

Fixed income investments generating IMR losses comply with the reporting entity’s documented investment or liability management policies.

  B.

IMR losses for fixed income related derivatives are all in accordance with prudent and documented risk management procedures, in accordance with a reporting entity’s derivative use plans and reflect symmetry with historical treatment in which unrealized derivative gains were reversed to IMR and amortized in lieu of being recognized as realized gains upon derivative termination.

  C.

Any deviation to (a) was either because of a temporary and transitory timing issue or related to a specific event, such as a reinsurance transaction, that mechanically made the cause of IMR losses not reflective of reinvestment activities.

  D.

Asset sales that were generating admitted negative IMR were not compelled by liquidity pressures (e.g., to fund significant cash outflows including, but not limited to excess withdrawals and collateral calls).

The aggregate net negative (disallowed) IMR allocation is presented in the following table for the year ended December 31, 2023:

 

                                                                                                       
     Total      General
Account		      Insulated
Separate
Account		      Non-Insulated
Separate Account		  
  

 

 

  

2023

     $    7      $    7      $    —      $ —  

The allocation of the admitted negative (disallowed) IMR is presented in the following table for the year ended December 31, 2023:

 

                                                                                                           
     Total      General
Account		      Insulated
Separate
Account		     

Non-Insulated

Separate
Account

  
  

 

 

  

2023

     $    7      $    7      $    —      $ —  

 

57

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The calculation of adjusted capital and surplus with consideration of the negative (disallowed) IMR is presented in the following table for the year ended December 31, 2023:

 

     2023  
  

 

 

  
Prior period, as of September 30, 2023 the most recent statement filed with the IID, general account capital and surplus    $   5,731   

From prior period SAP financials:

   

Net positive goodwill (admitted)

      —   

EDP equipment & operating system software (admitted)

      —   

Net DTAs (admitted)

      748   

Net negative (disallowed) IMR (admitted)

      —   
  

 

 

  

Adjusted capital and surplus

    $ 4,983   
  

 

 

  

The admitted net negative (disallowed) IMR represents 0.14% of adjusted capital and surplus for 2023.

The Company did not have gains/losses associated with derivatives sold allocated to IMR during 2023.

 

6.

Policy and Contract Attributes

Insurance Liabilities

Policy reserves, deposit-type contracts and policy claims at December 31, 2023 and 2022 were as follows:

 

     Year Ended December 31  
     2023      2022  
  

 

 

  

Life insurance reserves

     $    32,027      $    33,013   

Annuity reserves and supplementary contracts with life contingencies

      13,368        17,894   

Accident and health reserves (including long term care)

      7,101        7,049   
  

 

 

  

Total policy reserves

     $ 52,496      $ 57,956   

Deposit-type contracts

      717        766   

Policy claims

      983        1,098   
  

 

 

  

Total policy reserves, deposit-type contracts and claim liabilities

     $ 54,196      $ 59,820   
  

 

 

  

 

58

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Life Insurance Reserves

The aggregate policy reserves for life insurance policies are based upon the 1941, 1958, 1980, 2001 and 2017 Commissioner’s Standard Ordinary Mortality Tables, the 1912, 1941 and 1961 Standard Industrial Mortality Tables, the 1960 Commissioner’s Standard Group Mortality Table, the American Men, Actuaries and American Experience Mortality Tables. The reserves are calculated using interest rates ranging from 0.75 to 6.50 percent and are computed principally on the Net Level Premium Valuation and the Commissioner’s Reserve Valuation Method. Reserves for universal life policies are based on account balances adjusted for the Commissioner’s Reserve Valuation Method or Actuarial Guideline XXXVIII. Effective July 1, 2017, term insurance issued follows Valuation Manual section 20 (VM-20) reserve requirements.

Tabular interest, tabular less actual reserves released and tabular cost have been determined by formula.

The Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the date of death.

Additional premiums are charged or additional mortality charges are assessed for policies issued on substandard lives according to underwriting classification. Generally, reserves are determined by computing the regular reserve for the plan at the true age and holding, in addition, the unearned portion of the extra premium charge for the year. Effective July 1, 2017, for substandard term insurance policies, per VM-20 requirements, the substandard rating is applied to the reserve mortality. For certain flexible premium and fixed premium universal life insurance products, reserves are calculated utilizing the Commissioner’s Reserve Valuation Method for universal life policies and recognizing any substandard ratings.

As of December 31, 2023 and 2022, the Company had insurance in force aggregating $33,976 and $39,639, respectively, in which the gross premiums are less than the net premiums required by the valuation standards established by the IID. The Company established policy reserves of $1,463 and $1,506 to cover these deficiencies as of December 31, 2023 and 2022, respectively.

Participating life insurance policies were issued by the Company in prior years which entitle policyholders to a share in the earnings of the participating policies, provided that a dividend distribution, which is determined annually based on mortality and persistency experience of the participating policies, is authorized by the Company. Participating insurance constituted less than 0.05% of ordinary life insurance in force at December 31, 2023 and 2022.

Annuity Reserves and Supplementary Contracts Involving Life Contingencies

Deferred annuity reserves are calculated according to the Commissioner’s Annuity Reserve Valuation Method including excess interest reserves to cover situations where the future interest guarantees plus the decrease in surrender charges are in excess of the maximum valuation rates of interest.

 

59

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Reserves for immediate annuities and supplementary contracts with and without life contingencies are equal to the present value of future payments assuming interest rates ranging from 1.25 to 11.75 percent and mortality rates, where appropriate, from a variety of tables.

Annuity reserves also include GICs and funding agreements classified as life-type contracts as defined in SSAP No. 50, Classifications of Insurance or Managed Care Contracts. These liabilities have annuitization options at guaranteed rates and consist of floating interest rate and fixed interest rate contracts. The contract reserves are carried at the greater of the account balance or the value as determined for an annuity with cash settlement option, on a change in fund basis, according to the Commissioner’s Annuity Reserve Valuation Method.

For variable annuities with guaranteed living benefits and variable annuities with minimum guaranteed death benefits the Company complies with VM-21. VM-21 specifies statutory reserve requirements for variable annuity contracts with benefit guarantees (VACARVM) and without benefit guarantees and related products. The VM-21 reserve calculation covers all variable annuity products. Examples of covered guaranteed benefits include guaranteed minimum accumulation benefits, return of premium death benefits, guaranteed minimum income benefits, guaranteed minimum withdrawal benefits and guaranteed payout annuity floors. The aggregate reserve for contracts falling within the scope of VM-21 is equal to the stochastic reserves plus the additional standard projection amount. During 2022, the Company established a voluntary reserve in addition to the reserve required under VM-21 to help manage volatility associated with unhedged base contract cashflows. The VA voluntary reserve totaled $505 as of December 31, 2023.

Both the stochastic reserves and the standard projection are determined as the conditional tail expectation (CTE)-70 of the scenario reserves. To determine the CTE-70 values, the Company used 1,000 of the pre-packaged scenarios developed by the American Academy of Actuaries (AAA) and Society of Actuaries. The stochastic reserves uses prudent estimate assumptions based on Company experience, while the standard projection uses the assumptions prescribed in VM-21 for determining the additional standard projection amount.

Accident and Health Liabilities

Accident and health policy reserves are equal to the greater of the gross unearned premiums or any required mid-terminal reserves plus net unearned premiums and the present value of amounts not yet due on both reported and unreported claims.

At December 31, 2023 and 2022, the Company had no premium deficiency reserve related to accident and health policies.

The Company’s primary method utilized to estimate premium adjustments for contracts subject to redetermination is to review experience periodically and to adjust premiums for differences between the experience anticipated at the time of redetermination and that underlying the original premiums. The Company has not limited its degree of discretion contractually; however, in some states it has agreed not to raise premiums in order to recoup past losses. The Company forgoes premium changes on existing policies at its option if the administrative cost and other business issues associated with the change outweigh the direct financial impact of the change. Also, the Company has extra-contractually guaranteed the current premium scale for certain policies.

 

60

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

For indeterminate premium products, a full schedule of current and anticipated premium rates is developed at the point of issue. Premium rate adjustments are considered when anticipated future experience foretells deviations from the original profit standards. The source of deviation (mortality, persistency, expense, etc.) is an important consideration in the re-rating decision as well as the potential effect of a rate change on the future experience of the existing block of business.

The Company does not write any accident and health business that is subject to the Affordable Care Act risk sharing provisions.

Liabilities for losses and loss/claim adjustment expenses for accident and health contracts are estimated using statistical claim development models to develop best estimates of liabilities for medical expense business and using tabular reserves employing mortality/morbidity tables and discount rates meeting minimum regulatory requirements for other business. Unpaid claims include amounts for losses and related adjustment expenses and are estimates of the ultimate net costs of all losses, reported and unreported. These estimates are subject to the impact of future changes in claim severity, frequency and other factors.

Activity in the liability for unpaid claims and related processing costs net of reinsurance is summarized as follows:

 

                                                                                                               
    

Unpaid Claims
Liability Beginning

of Year

     

Claims

Incurred

    

Claims

Paid

     

Unpaid Claims

Liability End of

Year

  
  

 

 

  

Year ended December 31, 2023

           

2023

     $ —       $ 1,148     $ 435       $ 713   

2022 and prior

      1,991        (82 )      622        1,287   
  

 

 

  
     1,991       $ 1,066     $ 1,057        2,000   
     

 

 

     

Active life reserve

     $ 5,476            $ 5,508   
  

 

 

          

 

 

  

Total accident and health reserves

     $ 7,467            $ 7,508   
  

 

 

          

 

 

  

 

                                                                                                               
     Unpaid Claims
Liability Beginning
of Year		     

Claims

Incurred

    

Claims

Paid

      Unpaid Claims
Liability End of
Year		  
  

 

 

  

Year ended December 31, 2022

           

2022

     $ —       $ 1,141     $ 444       $ 697   

2021 and prior

      1,941        (49 )      598        1,294   
  

 

 

  
     1,941       $   1,092     $   1,042        1,991   
     

 

 

     

Active life reserve

     $ 5,442            $ 5,476   
  

 

 

          

 

 

  

Total accident and health reserves

     $ 7,383            $ 7,467   
  

 

 

          

 

 

  

The change in the Company’s unpaid claims reserve was ($82) and ($49) for the years ended December 31, 2023 and 2022, respectively, for health claims that were incurred prior to those Balance Sheets date. The change in 2023 and 2022 was due to better than expected experience primarily due to reduced medical claims and accidental deaths.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Activity in the liability for unpaid claims adjustment expense is summarized as follows:

 

     Liability
Beginning of
Year		      Incurred      Paid      Liability
End of
Year		  
  

 

 

  

Year ended December 31, 2023

            

2023

     $ —      $ 38      $ 23      $ 15   

2022 and prior

      42        (12 )       3        27   
  

 

 

  
    $    42      $    26      $    26      $    42   
  

 

 

  

Year ended December 31, 2022

            

2022

     $ —      $ 25      $ 10      $ 15   

2021 and prior

      37        8        18        27   
  

 

 

  
    $ 37      $ 33      $ 28      $ 42   
  

 

 

  

The Company increased the claim adjustment expense provision for insured events of prior years during 2023.

Premium and Annuity Considerations Deferred and Uncollected

Reserves on the Company’s traditional life insurance products are computed using mean and interpolated or mid-terminal reserving methodologies. The mean methodologies result in the establishment of assets for the amount of the net valuation premiums that are anticipated to be received between the policy’s paid-through date to the policy’s next anniversary date. The interpolated methodologies do not require the establishment of such assets, however, it is required to hold unearned premium liabilities. At December 31, 2023 and 2022, the gross premiums and net of loading amounts related to these assets (which are reported as premiums deferred and uncollected), are as follows:

 

     2023      2022  
     Gross      Net of Loading      Gross      Net of Loading  

Life and annuity:

            

Ordinary first-year business

     $ 1        $ —        $ 1        $ —   

Ordinary renewal business

      122         96         142         115   

Group life direct business

      14         10         15         11   
  

 

 

     

 

 

     

 

 

     

 

 

  
    $    137        $    106        $    158        $    126   
  

 

 

     

 

 

     

 

 

     

 

 

  

Deposit-type Contracts

Tabular interest on funds not involving life contingencies has been determined primarily by formula.

The Company issues certain funding agreements with well-defined class-based annuity purchase rates defining either specific or maximum purchase rate guarantees. However, these funding agreements are not issued to or for the benefit of an identifiable individual or group of individuals. These contracts are classified as deposit-type contracts in accordance with SSAP No. 50.

 

62

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Included in the liability for deposit-type contracts at December 31, 2023 and 2022 are approximately $11 and $11, respectively, of funding agreements issued to special purpose entities in conjunction with non-recourse medium-term note programs. Under these programs, the proceeds from each note series issuance are used to purchase a funding agreement from the Company which secures that particular series of notes. In general, the payment terms of the note series match the payment terms of the funding agreement that secures that series. Claims for the principal and interest for these funding agreements are afforded equal priority as other policyholders.

Withdrawal Characteristics of Annuity Reserves and Deposit Funds

A portion of the Company’s policy reserves and other policyholders’ funds (including separate account liabilities) relates to liabilities established on a variety of the Company’s annuity, deposit fund and life products. There may be certain restrictions placed upon the amount of funds that can be withdrawn without penalty. The amount of reserves on annuity and deposit fund products, by withdrawal characteristics, is summarized as follows:

 

    

December 31

2023

  
  

 

 

  
Individual Annuities:    General
Account		      Separate
Account
with
Guarantees		     

Separate
Account
Non-

Guaranteed

      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ 316      $ 714      $ —      $ 1,030        2 %  

At book value less surrender charge of 5% or more

      919        —        —        919        1    

At fair value

      6        —        58,435        58,441        84    
  

 

 

  

Total with adjustment or at fair value

      1,241        714        58,435        60,390        87    

At book value without adjustment (minimal or no charge or adjustment)

      6,679        —        —        6,679        10    

Not subject to discretionary withdrawal provision

      1,723        —        488        2,211        3    
  

 

 

  

Total individual annuity reserves

      9,643        714        58,923        69,280        100 %  
              

 

 

  

Less reinsurance ceded

      6,228        —        —        6,228     
  

 

 

     

Net individual annuities reserves

     $ 3,415      $ 714      $ 58,923      $ 63,052     
  

 

 

     

Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date

     $ 235      $ —      $ —      $ 235     
  

 

 

     

 

63

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

                                                                                    
    

December 31

2023

  
  

 

 

  
Group Annuities:    General
Account		      Separate
Account
with
Guarantees		     

Separate
Account
Non-

Guaranteed

      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ 4,104      $ 13      $ —      $ 4,117        11 %  

At book value less surrender charge of 5% or more

      20        —        —        20        —    

At fair value

      —        —        28,070        28,070        72    
  

 

 

  

Total with adjustment or at fair value

      4,124        13        28,070        32,207        83    

At book value without adjustment (minimal or no charge or adjustment)

      4,848        —        —        4,848        12    

Not subject to discretionary withdrawal provision

      1,846        —        64        1,910        5    
  

 

 

  

Total group annuities reserves

      10,818        13        28,134        38,965        100 %  
              

 

 

  

Less reinsurance ceded

      864        —        —        864     
  

 

 

     

Net group annuities reserves

     $ 9,954      $ 13      $ 28,134      $ 38,101     
  

 

 

     

 

                                                                                    
    

December 31

2023

  
  

 

 

  
Deposit-type contracts (no life contingencies):    General
Account		      Separate
Account
with
Guarantees		     

Separate
Account
Non-

Guaranteed

      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ —      $ —      $ —      $ —        0 %  

Total with adjustment or at fair value

      —        —        —        —        0    
  

 

 

  

At book value without adjustment (minimal or no charge or adjustment)

      220        —        —        220        27    

Not subject to discretionary withdrawal provision

      504        68        19        591        73    
  

 

 

  

Total deposit-type contracts

      724        68        19        811        100 %  
              

 

 

  

Less reinsurance ceded

      8        —        —        8     
  

 

 

     

Net deposit-type contracts

     $ 716      $ 68      $ 19      $ 803     
  

 

 

     

 

64

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Reconciliation to the Annual Statement:    Amount  
  

 

 

  

Life & Accident & Health Annual Statement:

   

Exhibit 5, Annuities section, total (net)

    $ 12,438  

Exhibit 5, Supp contracts with life contingencies section, total (net)

      931  

Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance

      716  
  

 

 

  

Subtotal

      14,085  

Separate Accounts Annual Statement:

   

Exhibit 3, Annuities section, total

      87,269  

Exhibit 3, Supp contracts with life contingencies section, total

      515  

Other contract deposit funds

      87  
  

 

 

  

Subtotal

      87,871  
  

 

 

  

Combined total

    $ 101,956  
  

 

 

  

 

    

December 31

2022

  
  

 

 

  
Individual Annuities:    General
Account		      Separate
Account
with
Guarantees		     

Separate
Account
Non-

Guaranteed

      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ 368      $ 137      $ —      $ 505        1  % 

At book value less surrender charge of 5% or more

      1,193        —        —        1,193        1   

At fair value

      6        —        56,032        56,038        83   
  

 

 

  

Total with adjustment or at fair value

      1,567        137        56,032        57,736        85   

At book value without adjustment (minimal or no charge or adjustment)

      7,190        —        —        7,190        11   

Not subject to discretionary withdrawal provision

      2,484        —        408        2,892        4   
  

 

 

  

Total individual annuity reserves

      11,241        137        56,440        67,818        100  % 
              

 

 

  

Less reinsurance ceded

      2,736        —        —        2,736     
  

 

 

     

Net individual annuity reserves

     $ 8,505      $ 137      $ 56,440      $  65,082     

Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date

     $ 2      $ —      $ —      $ 2     
  

 

 

     

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

                                                                     
    

December 31

2022

  
  

 

 

  
Group Annuities:    General
Account		      Separate
Account
with
Guarantees		     

Separate
Account
Non-

Guaranteed

      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ 3,641      $ 16      $ —      $ 3,657        11  % 

At book value less surrender charge of 5% or more

      20        —        —        20        —   

At fair value

      —        —        24,776        24,776        71   
  

 

 

  

Total with adjustment or at fair value

      3,661        16        24,776        28,453        82   

At book value without adjustment (minimal or no charge or adjustment)

      4,116        —        —        4,116        12   

Not subject to discretionary withdrawal provision

      1,946        —        58        2,004        6   
  

 

 

  

Total group annuity reserves

      9,723        16        24,834        34,573        100  % 
              

 

 

  

Less reinsurance ceded

      334        —        —        334     
  

 

 

     

Net group annuity reserves

     $ 9,389      $ 16      $ 24,834      $  34,239     
  

 

 

     

 

                                                                     
    

December 31

2022

  
  

 

 

  
Deposit-type contracts (no life contingencies):    General
Account		      Separate
Account
with
Guarantees		     

Separate
Account
Non-

Guaranteed

      Total      Percent  
  

 

 

  

Subject to discretionary withdrawal with adjustment:

               

With fair value adjustment

     $ 5      $ —      $ —      $ 5        1  %  
  

 

 

  

Total with adjustment or at fair value

      5        —        —        5        1    

At book value without adjustment (minimal or no charge or adjustment)

      237        —        —        237        28    

Not subject to discretionary withdrawal provision

      533        53        14        600        71    
  

 

 

  

Total deposit-type contracts

      775        53        14        842        100 %  
              

 

 

  

Less reinsurance ceded

      9        —        —        9     
  

 

 

     

Net deposit-type contracts

     $ 766      $ 53      $ 14      $ 833     
  

 

 

     

 

66

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Reconciliation to the Annual Statement:    Amount  
  

 

 

  

Life & Accident & Health Annual Statement:

   

Exhibit 5, Annuities section, total (net)

    $ 16,961   

Exhibit 5, Supp contracts with life contingencies section, total (net)

      933   

Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance

      766   
  

 

 

  

Subtotal

      18,660   

Separate Accounts Annual Statement:

   

Exhibit 3, Annuities section, total

      80,995   

Exhibit 3, Supp contracts with life contingencies section, total

      432   

Other contract deposit funds

      67   
  

 

 

  

Subtotal

      81,494   
  

 

 

  

Combined total

    $ 100,154   
  

 

 

  

The amount of reserves on life products, by withdrawal characteristics, is summarized as follows:

 

    

December 31

2023

  
  

 

 

  
     General Account  
  

 

 

  
     Account Value      Cash Value      Reserve  
  

 

 

  

Subject to discretionary withdrawal, surrender values, or policy loans:

         

Term policies with cash value

     $ —      $ 319      $ 462   

Universal life

      13,359        12,668        15,050   

Universal life with secondary guarantees

      5,929        5,819        12,845   

Indexed universal life with secondary guarantees

      7,773        5,385        6,486   

Other permanent cash value life insurance

      2        4,755        7,192   

Variable universal life

      681        680        1,002   

Not subject to discretionary withdrawal or no cash values

         

Term policies without cash value

      —        —        8,024   

Accidental death benefits

      —        —        48   

Disability - active lives

      —        —        37   

Disability - disabled lives

      —        —        160   

Miscellaneous reserves

      —        —        1,604   
  

 

 

  

Total (gross)

      27,744        29,626        52,910   

Reinsurance ceded

      5,065        4,914        21,387   
  

 

 

  

Total (net)

     $   22,679      $   24,712      $   31,523   
  

 

 

  

 

67

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

     December 31  
     2023  
  

 

 

  
     Separate Account - Guaranteed  
  

 

 

  
      Account Value         Cash Value         Reserve    
  

 

 

  

Subject to discretionary withdrawal, surrender values, or policy loans:

         

Variable universal life

     $ 684      $ 684      $ 684   
  

 

 

  

Total (net)

     $ 684      $ 684      $ 684   
  

 

 

  
     December 31  
     2023  
  

 

 

  
     Separate Account - Nonguaranteed  
  

 

 

  
     Account Value      Cash Value      Reserve  
  

 

 

  

Subject to discretionary withdrawal, surrender values, or policy loans:

         

Variable universal life

     $ 8,003      $ 8,000      $ 9,208   
  

 

 

  

Total (net)

     $ 8,003      $ 8,000      $ 9,208   
  

 

 

  

 

Reconciliation to the Annual Statement:      Amount  
  

 

 

 

Life & Accident & Health Annual Statement:

   

Exhibit 5, Life insurance section, total (net)

     $ 30,751  

Exhibit 5, Accidental death benefits section total (net)

      25   

Exhibit 5, Disability - active lives section, total (net)

      16  

Exhibit 5, Disability - disabled lives section, total (net)

      137  

Exhibit 5, Miscellaneous reserves section, total (net)

      594  
  

 

 

 

Subtotal

      31,523  

Separate Accounts Annual Statement:

   

Exhibit 3, Life insurance section, total

      9,892  
  

 

 

 

Subtotal

      9,892  
  

 

 

 

Combined total

     $ 41,415  
  

 

 

 

 

68

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

     December 31  
     2022  
  

 

 

  
     General Account  
  

 

 

  
      Account Value        Cash Value         Reserve  
    

 

  

Subject to discretionary withdrawal, surrender values, or policy loans:

         

Term policies with cash value

     $ 313      $ 313      $ 442   

Universal life

      14,590        13,706        14,639   

Universal life with secondary guarantees

      5,822        5,760        13,570   

Indexed universal life with secondary guarantees

      6,612        4,539        5,344   

Other permanent cash value life insurance

      4,698        4,698        7,148   

Variable universal life

      672        673        1,491   

Not subject to discretionary withdrawal or no cash values

         

Term policies without cash value

      —        —        8,085   

Accidental death benefits

      —        —        50   

Disability - active lives

      —        —        37   

Disability - disabled lives

      —        —        163   

Miscellaneous reserves

      —        —        1,573   
  

 

 

  

Total (gross)

      32,707        29,689        52,542   

Reinsurance ceded

      4,620        4,621        20,036   
  

 

 

  

Total (net)

     $ 28,087      $ 25,068      $ 32,506   
  

 

 

  

 

     December 31  
     2022  
  

 

 

  
     Separate Account - Guaranteed  
  

 

 

  
      Account Value         Cash Value          Reserve    
  

 

 

  

Subject to discretionary withdrawal, surrender values, or policy loans:

         

Variable universal life

     $ 677      $ 677      $ 677   
  

 

 

  

Total (net)

     $ 677      $ 677      $ 677   
  

 

 

  
     December 31  
     2022  
  

 

 

  
     Separate Account - Nonguaranteed  
  

 

 

  
     Account Value      Cash Value      Reserve  
  

 

 

  

Subject to discretionary withdrawal, surrender values, or policy loans:

         

Variable universal life

     $ 6,989      $ 6,983      $ 8,072   
  

 

 

  

Total (net)

     $ 6,989      $ 6,983      $ 8,072   
  

 

 

  

 

69

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Reconciliation to the Annual Statement:      Amount  
  

 

 

 

Life & Accident & Health Annual Statement:

   

Exhibit 5, Life insurance section, total (net)

     $ 31,686   

Exhibit 5, Accidental death benefits section total (net)

      26  

Exhibit 5, Disability - active lives section, total (net)

      17  

Exhibit 5, Disability - disabled lives section, total (net)

      142  

Exhibit 5, Miscellaneous reserves section, total (net)

      635  
  

 

 

 

Subtotal

      32,506  

Separate Accounts Annual Statement:

   

Exhibit 3, Life insurance section, total

      8,749  
  

 

 

 

Subtotal

      8,749  
  

 

 

 

Combined total

     $    41,255  
  

 

 

 

Separate Accounts

Certain separate and variable accounts held by the Company relate to individual variable life insurance policies. The benefits provided on the policies are determined by the performance and/or fair value of the investments held in the separate account. The net investment experience of the separate account is credited directly to the policyholder and can be positive or negative. The assets of these separate accounts are carried at fair value. The life insurance policies typically provide a guaranteed minimum death benefit.

 

70

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Certain separate accounts held by the Company represent funds which are administered for pension plans. The assets consist primarily of fixed maturities and equity securities and are carried at fair value. The Company provides a minimum guaranteed return to policyholders of certain separate accounts. Certain other separate accounts do not have any minimum guarantees and the investment risks associated with fair value changes are borne entirely by the policyholder. Information regarding the separate accounts of the Company as of and for the years ended December 31, 2023, 2022 and 2021 is as follows:

 

    

 Guaranteed 

Indexed

      Nonindexed
Guarantee
Less Than or
Equal to 4%		      Nonindexed
Guarantee
Greater
Than 4%		      Nonguaranteed
Separate
Accounts		      Total  
  

 

 

  

Premiums, deposits and other considerations for the year ended December 31, 2023

     $ —      $ —      $ 10      $ 6,075      $ 6,085   
  

 

 

  

Reserves for separate accounts as of December 31, 2023 with assets at:

               

Fair value

     $ 710      $ 85      $ —      $ 96,283      $   97,078   

Amortized cost

      —        684        —        —        684   
  

 

 

  

Total as of December 31, 2023

     $ 710      $ 769      $ —      $ 96,283      $ 97,762   
  

 

 

  

Reserves for separate accounts by withdrawal characteristics as of December 31, 2023:

               

With fair value adjustment

     $ 710      $ 18      $ —      $ —      $ 728   

At fair value

      —        —        —        95,712        95,712   
  

 

 

  

At book value without fair value adjustment and with current surrender charge of less than 5%

      —        684        —        —        684   

Subtotal

      710        702        —        95,712        97,124   

Not subject to discretionary withdrawal

      —        68        —        571        639   
  

 

 

  

Total separate account reserve liabilities at December 31, 2023

     $ 710      $ 770      $ —      $ 96,283      $ 97,763   
  

 

 

  

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

    

 Guaranteed 

Indexed

      Nonindexed
Guarantee
Less Than or
Equal to 4%		      Nonindexed
Guarantee
Greater
Than 4%		      Nonguaranteed
Separate
Accounts		      Total  
  

 

 

  

Premiums, deposits and other considerations for the year ended December 31, 2022

     $ —      $ —      $ 10      $ 7,663      $ 7,673   
  

 

 

  

Reserves for separate accounts as of December 31, 2022 with assets at:

               

Fair value

     $ 132      $ 75      $ —      $ 89,360      $ 89,567   

Amortized cost

      —        677        —        —        677   
  

 

 

  

Total as of December 31, 2022

     $ 132      $ 752      $ —      $ 89,360      $   90,244   
  

 

 

  

Reserves for separate accounts by withdrawal characteristics as of December 31, 2022:

               

With fair value adjustment

     $ 132      $ 22      $ —      $ —      $ 154   

At fair value

      —        —        —        88,880        88,880   

At book value without fair value adjustment and with current surrender charge of less than 5%

      —        677        —        —        677   
  

 

 

  

Subtotal

      132        699        —        88,880        89,711   

Not subject to discretionary withdrawal

      —        53        —        479        532   
  

 

 

  

Total separate account reserve liabilities at December 31, 2022

     $ 132      $ 752      $ —      $ 89,359      $ 90,243   
  

 

 

  

 

72

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

    

 Guaranteed 

Indexed

      Nonindexed
Guarantee
Less Than or
Equal to 4%		      Nonindexed
Guarantee
Greater
Than 4%		      Nonguaranteed
Separate
Accounts		      Total  
  

 

 

  

Premiums, deposits and other considerations for the year ended December 31, 2021

     $ —      $ —      $ 11      $ 8,076      $ 8,087   
  

 

 

  

Reserves for separate accounts as of December 31, 2021 with assets at:

               

Fair value

     $ —      $ 93      $ —      $ 123,046      $ 123,139   

Amortized cost

      —        669        —        —        669   
  

 

 

  

Total as of December 31, 2021

     $ —      $ 762      $ —      $ 123,046      $   123,808   
  

 

 

  

Reserves for separate accounts by withdrawal characteristics as of December 31, 2021:

               

With fair value adjustment

     $ —      $ 26      $ —      $ —      $ 26   

At fair value

      —        —        —        122,404        122,404   

At book value without fair value adjustment and with current surrender charge of less than 5%

      —        669        —        —        669   
  

 

 

  

Subtotal

      —        695        —        122,404        123,099   

Not subject to discretionary withdrawal

      —        66        —        643        709   
  

 

 

  

Total separate account reserve liabilities at December 31, 2021

     $ —      $ 761      $ —      $ 123,047      $ 123,808   
  

 

 

  

A reconciliation of the amounts transferred to and from the Company’s separate accounts is presented below:

 

     Year Ended December 31  
     2023     2022     2021  
  

 

 

  

Transfer as reported in the Summary of Operations of the separate accounts statement:

       

Transfers to separate accounts

     $ 6,167     $ 7,757     $ 8,164   

Transfers from separate accounts

         (10,944 )        (18,692 )        (17,029)  
  

 

 

  

Net transfers from separate accounts

      (4,777 )      (10,935 )      (8,865)  

Miscellaneous reconciling adjustments

      (24 )      (17 )      (16)  
  

 

 

  

Net transfers as reported in the Summary of Operations of the life, accident and health annual statement

     $ (4,801 )    $ (10,952 )    $ (8,881)  
  

 

 

  

 

73

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The legal insulation of separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account. At December 31, 2023 and 2022, the Company’s separate account statement included legally insulated assets of $98,092 and $91,338, respectively. The assets legally insulated from general account claims at December 31, 2023 and 2022 are attributed to the following products:

 

       2023          2022    
  

 

 

  

Group annuities

     $ 25,977      $ 22,949   

Variable annuities

      61,550        58,923   

Fixed universal life

      725        717   

Variable universal life

      8,484        7,584   

Variable life

      1,277        1,105   

Modified separate accounts

      78        47   

Registered market value annuity product - SPL

      1        6   

WRL asset accumulator

      —        7   
  

 

 

  

Total separate account assets

     $    98,092      $    91,338   
  

 

 

  

At December 31, 2023 and 2022, the Company held separate account assets not legally insulated from the general account in the amount of $760 and $156, respectively.

Some separate account liabilities are guaranteed by the general account. In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the general account. To compensate the general account for the risk taken, the separate account paid risk charges of $570, $584, $579, $565 and $552, to the general account in 2023, 2022, 2021, 2020 and 2019, respectively. During the years ended December 31, 2023, 2022, 2021, 2020 and 2019 the general account of the Company had paid $63, $56, $45, $75 and $75 respectively, toward separate account guarantees.

At December 31, 2023 and 2022, the Company reported guaranteed separate account assets at amortized cost in the amount of $710 and $705, respectively, based upon the prescribed practice granted by the State of Iowa as described in Note 2. These assets had a fair value of $649 and $617 at December 31, 2023 and 2022, respectively, which would have resulted in an unrealized gain/(loss) of ($61) and ($87), respectively, had these assets been reported at fair value.

The Company does not participate in securities lending transactions within the separate account.

7. Reinsurance

Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The Company reinsures portions of the risk on certain insurance policies which exceed its established limits, thereby providing a greater diversification of risk and minimizing exposure on larger risks. The Company remains contingently liable with respect to any insurance ceded, and this would become an actual liability in the event that the assuming insurance company became unable to meet its obligation under the reinsurance treaty.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Premiums and annuity considerations include the following reinsurance amounts:

 

     Year Ended December 31  
     2023      2022      2021  
  

 

 

  

Direct premiums

     $    16,262      $    15,957      $ 17,591   

Reinsurance assumed - non affiliates

      866        1,017        1,272   

Reinsurance assumed - affiliates

      (10 )       5,366        (1)  

Reinsurance ceded - non affiliates

      (2,547 )       (1,819 )       (3,594)  

Reinsurance ceded - affiliates

      (5,055 )       (708 )       (786)  
  

 

 

  

Net premiums earned

     $ 9,516      $ 19,813      $    14,482   
  

 

 

  

The Company received reinsurance recoveries in the amount of $3,327, $3,764 and $3,824 during 2023, 2022 and 2021, respectively. At December 31, 2023 and 2022, estimated amounts recoverable from reinsurers that have been deducted from policy and contract claim reserves totaled $853 and $987, respectively. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2023 and 2022 of $39,004 and $34,508, respectively, of which $16,868 and $12,465 were ceded to affiliates, respectively.

During 2023, 2022 and 2021, amortization of deferred gains associated with previously transacted reinsurance agreements was released into income in the amount of $684 ($429 after tax), $869 ($574 after tax) and $195 ($127 after tax), respectively.

Effective December 31, 2023, the Company entered into a reinsurance agreement whereby the Company ceded fixed deferred annuity business to an affiliated entity, Transamerica Bermuda Re, Ltd. (TBRe). The Company paid a ceding commission of $138 in addition to reinsurance premiums of $4,394 in the form of a funds withheld payable and ceded $4,394 of statutory reserves. The transaction resulted in a pre-tax loss of $138, which has been included in the Statements of Operations.

Effective July 1, 2023, the Company ceded universal life with secondary guarantee (SGUL) insurance business to an unaffiliated entity. The Company paid considerations of $1,057 in assets and cash, ceded $1,436 of reserves and $555 of policy loans. After a $199 realized loss, the transaction resulted in a pre-tax gain of $179.

Effective July 1, 2023, the Company recaptured a specific list of policies from an affiliate, LIICA Re II. As a result, the Company received $5 in cash and $114 in policyholder reserves. The transaction resulted in a pre-tax loss of $109 which has been included in the Statements of Operations.

Effective July 1, 2023, the Company recaptured a specific list of policies from an affiliate, Transamerica Pacific Re. As a result, the Company received $12 in cash and $33 in policyholder reserves. The transaction resulted in a pre-tax loss of $21 which has been included in the Statements of Operations.

On October 31, 2022, the Company executed an affiliated coinsurance arrangement, effective July 1, 2022, under which it assumes the remaining in force universal life business from TLB net of third-party reinsurance. The Company received consideration of $4,974 in the form of cash and

 

75

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

invested assets and assumed $5,543 in policy and contract reserves along with $6 in policy loans. After establishing a $432 IMR deferral related to the asset transfers, this transaction resulted in a pre-tax loss of $131 which was included in the Summary of Operations. This transaction is secured by a comfort trust equal to 100% of the Company’s U.S. statutory reserves.

Effective April 1, 2022, LIICA Re II, an affiliate, executed a recapture of a specific list of policies to the Company. The Company received consideration of $186 in the form of cash and recaptured policyholder reserves of $838. The transaction resulted in a pre-tax loss of $652 which was included in the Statements of Operations.

Effective December 31, 2021, the Company ceded SGUL insurance business to an unaffiliated entity. The Company paid considerations of $1,738 in assets and cash, ceded $1,470 of reserves and $13 of policy loans. After a $55 realized gain release, the transaction resulted in a pre-tax loss of $243 which was included in the Statement of Operations. There was a reversal of tax timing differences and release of RBC required that offset the pre-tax loss resulting in a neutral impact to the RBC ratio.

Effective October 1, 2021, the Company recaptured a block of universal life business from an affiliate, TLIC Oakbrook Reinsurance, Inc. (TORI). The Company received consideration of $963 in the form of released funds withheld and recaptured policyholder reserves of $1,229 and claims reserves of $7. The transaction resulted in a pre-tax loss of $272 which was included in the Statements of Operations. In addition, the Company released into income a previously deferred unamortized gain resulting from the original cessions of this business to TORI in the amount of $173 with a corresponding charge to unassigned surplus.

Effective May 31, 2021, the Company amended and restated the Military Life and Affinity reinsurance agreements with Ironwood Re Corp, an affiliate, which changed the funds withheld calculation from a GAAP reserve valuation to a Gross Premium Valuation. As a result, the Company increased the funds withheld liability by $43. The transaction resulted in no pre-tax gain or loss.

In January 2018, Scottish Re Group announced a sale and restructuring plan and commenced Chapter 11 (reorganization) procedures for some of its subsidiaries. In December 2018, the Delaware Department of Insurance began oversight procedures of Scottish Re (U.S.), Inc. (SRUS), with whom the Company is a counterparty for some of its reinsurance activities. SRUS was ordered into receivership for the purposes of rehabilitation on March 6, 2019. On May 16, 2019, the IID suspended the certificate of authority for SRUS but later clarified that reserve credit could be taken on reinsurance agreements entered into prior to the revocation date if a recovery analysis could be illustrated. The Company concluded it could not support a favorable recovery analysis and therefore did not take statutory reserve credit in its year-end 2022 financial statements. A loss contingency allowance was also established for the doubtful recoveries of billed and unbilled claims in the amount of $125 as of December 31, 2022. On July 19, 2023, a Motion for Liquidation of SRUS was granted, resulting in any related treaty coverage ending on September 30, 2023. The Company does not believe sufficient information is available at this time to be able to reasonably estimate any potential loss and has therefore reversed the previously established loss contingency allowance and reported gross receivables on billed and unbilled claims of $155 and $260 as of December 31, 2023, respectively, all of which have been fully non-admitted.

 

76

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

8. Income Taxes

The net deferred income tax asset at December 31, 2023 and 2022 and the change from the prior year are comprised of the following components:

 

     December 31, 2023  
     Ordinary     Capital     Total  
  

 

 

  

Gross Deferred Tax Assets

     $     2,492     $       202     $     2,694   

Statutory Valuation Allowance Adjustment

      —       —       —   
  

 

 

  

Adjusted Gross Deferred Tax Assets

      2,492       202       2,694   

Deferred Tax Assets Nonadmitted

      1,023       —       1,023   
  

 

 

  

Subtotal (Net Deferred Tax Assets)

      1,469       202       1,671   

Deferred Tax Liabilities

      628       271       899   
  

 

 

  

Net Admitted Deferred Tax Assets (Liabilities)

     $ 841     $ (69 )    $ 772   
  

 

 

  
     December 31, 2022  
     Ordinary     Capital     Total  
  

 

 

  

Gross Deferred Tax Assets

     $ 2,487     $ 191     $ 2,678   

Statutory Valuation Allowance Adjustment

      —       —       —   
  

 

 

  

Adjusted Gross Deferred Tax Assets

      2,487       191       2,678   

Deferred Tax Assets Nonadmitted

      1,006       —       1,006   
  

 

 

  

Subtotal (Net Deferred Tax Assets)

      1,481       191       1,672   

Deferred Tax Liabilities

      642       291       933   
  

 

 

  

Net Admitted Deferred Tax Assets (Liabilities)

     $ 839     $ (100 )    $ 739   
  

 

 

  
           Change        
     Ordinary     Capital     Total  
  

 

 

  

Gross Deferred Tax Assets

     $ 5     $ 11     $ 16   

Statutory Valuation Allowance Adjustment

      —       —       —   
  

 

 

  

Adjusted Gross Deferred Tax Assets

      5       11       16   

Deferred Tax Assets Nonadmitted

      17       —       17   
  

 

 

  

Subtotal (Net Deferred Tax Assets)

      (12 )      11       (1)  

Deferred Tax Liabilities

      (14 )      (20 )      (34)  
  

 

 

  

Net Admitted Deferred Tax Assets (Liabilities)

     $ 2     $ 31     $ 33   
  

 

 

  

 

77

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The main components of deferred income tax amounts are as follows:

 

     Year Ended December 31         
     2023      2022      Change  
  

 

 

  

Deferred Tax Assets:

         

Ordinary

         

Policyholder reserves

     $ 777      $ 830      $ (53)  

Investments

      237        257        (20)  

Deferred acquisition costs

      699        702        (3)  

Policyholder dividends accrual

      5        4        1   

Compensation and benefits accrual

      42        34        8   

Receivables - nonadmitted

      143        58        85   

Net operating loss carry-forward

      171        269        (98)  

Tax credit carry-forward

      319        231        88   

Other

      99        102        (3)  
  

 

 

  

Subtotal

      2,492        2,487        5   

Statutory valuation allowance adjustment

      —        —        —   

Nonadmitted

      1,023        1,006        17   
  

 

 

  

Admitted ordinary deferred tax assets

      1,469        1,481        (12)  

Capital

         

Investments

      202        191        11   

Other

      —        —        —   
  

 

 

  

Subtotal

      202        191        11   

Statutory valuation allowance adjustment

      —        —        —   

Nonadmitted

      —        —        —   
  

 

 

  

Admitted capital deferred tax assets

      202        191        11   
  

 

 

  

Admitted deferred tax assets

     $     1,671      $    1,672      $     (1)  
  

 

 

  

 

     Year Ended December 31         
     2023      2022      Change  
  

 

 

  

Deferred Tax Liabilities:

         

Ordinary

         

Investments

     $ 463      $ 420      $ 43   

Policyholder reserves

      146        216        (70)  

Other

      19        6        13   
  

 

 

  

Subtotal

      628        642        (14)  

Capital

         

Investments

      271        291        (20)  

Other

      —        —        —   
  

 

 

  

Subtotal

      271        291        (20)  
  

 

 

  

Deferred tax liabilities

      899        933        (34)  
  

 

 

  

Net admitted deferred tax assets (liabilities)

     $     772      $     739      $     33   
  

 

 

  

 

78

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

As a result of the 2017 Tax Cuts and Jobs Act (TCJA), the Company’s tax reserve deductible temporary difference decreased by ($396). This change results in an offsetting $396 deductible temporary difference that will be amortized into taxable income evenly over the eight years subsequent to 2017. The remaining amortizable balance is included within the Policyholder Reserves line items above.

The Inflation Reduction Act was enacted during the third quarter 2022 reporting period on August 16, 2022. The act included a provision which subjects high earning corporate taxpayers to the Corporate Alternative Minimum Tax (CAMT). The Company is part of an affiliated group that has determined it is a nonapplicable reporting entity for CAMT in 2023 and has not included any impacts of the CAMT in the financial statements as of December 31, 2023.

As discussed in Note 2, for the years ended December 31, 2023 and 2022, the Company admits deferred income tax assets pursuant to SSAP No. 101. The amount of admitted adjusted gross deferred income tax assets under each component of SSAP No. 101 is as follows:

 

          December 31, 2023  
          Ordinary      Capital      Total  
     

 

 

  

Admission Calculation Components SSAP No. 101

         

2(a)

    Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks     $ —      $ —      $ —   

2(b)

    Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below)      736        36        772   
  

1.  Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date

      986        48        1,034   
  

2.  Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold

      XXX        XXX        772   

2(c)

    Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities      733        166        899   
     

 

 

  

2(d)

    Deferred Tax Assets Admitted as the result of
application of SSAP No. 101, Total (2(a) + 2(b) + 2(c))		     $    1,469      $    202      $    1,671   
     

 

 

  

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

          December 31, 2022  
          Ordinary      Capital      Total  
     

 

 

  

Admission Calculation Components SSAP No. 101

         

2(a)

    Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks     $ —      $ —      $ —   

2(b)

    Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below)      717        22        739   
  

1.  Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date

      1,129        22        1,151   
  

2.  Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold

      XXX        XXX        739   

2(c)

    Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities      764        169        933   
     

 

 

  

2(d)

    Deferred Tax Assets Admitted as the result of
application of SSAP No. 101, Total (2(a) + 2(b) + 2(c))		     $    1,481      $    191      $    1,672   
     

 

 

  

 

          Change  
          Ordinary     Capital     Total  
     

 

 

  

Admission Calculation Components SSAP No. 101

       

2(a)

    Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks     $ —     $ —     $ —   

2(b)

    Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below)      19       14       33   
  

1.  Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date

      (143 )      26       (117)  
  

2.  Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold

      XXX       XXX       33   

2(c)

    Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities      (31 )      (3 )      (34)  
     

 

 

  

2(d)

    Deferred Tax Assets Admitted as the result of
application of SSAP No. 101, Total (2(a) + 2(b) + 2(c))		     $     (12 )    $     11     $     (1)  
     

 

 

  

 

80

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

     December 31        
     2023     2022     Change  
  

 

 

  

Ratio Percentage Used To Determine Recovery

       
  

 

 

  

Period and Threshold Limitation Amount

      722 %      726 %      (4%)  
  

 

 

  

Amount of Adjusted Capital and Surplus Used To Determine Recovery Period and

Threshold Limitation in 2(b)2 Above

       
  

 

 

  
    $    5,146     $    4,924     $    222   
  

 

 

  

The impact of tax planning strategies at December 31, 2023 and 2022 was as follows:

 

     December 31, 2023  
     Ordinary      Capital      Total  
     Percent      Percent      Percent  
  

 

 

  

Impact of Tax Planning Strategies:

         

(% of Total Adjusted Gross DTAs)

      0%        0%        0%  
  

 

 

  

(% of Total Net Admitted Adjusted Gross DTAs)

          13%           0%            13%  
  

 

 

  

 

     December 31, 2022  
     Ordinary      Capital      Total  
     Percent      Percent      Percent  
  

 

 

  

Impact of Tax Planning Strategies:

         

(% of Total Adjusted Gross DTAs)

          0%            0%             0%  
  

 

 

  

(% of Total Net Admitted Adjusted Gross DTAs)

          0%            0%             0%  
  

 

 

  

The Company’s tax planning strategies include the use of reinsurance-related tax planning strategies.

Current income taxes incurred consist of the following major components:

 

     Year Ended December 31        
     2023     2022     Change  
  

 

 

  

Current Income Tax

       

Federal

     $ 75     $ (80 )    $ 155   
  

 

 

  

Subtotal

      75       (80 )      155   

Federal income tax on net capital gains

      (106 )      (45 )      (61)  
  

 

 

  

Federal and foreign income taxes incurred

     $     (31 )    $    (125 )    $      94   
  

 

 

  

 

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     Year Ended December 31        
     2022     2021     Change  
  

 

 

  

Current Income Tax

       

Federal

     $ (80 )    $ (185 )    $ 105   
  

 

 

  

Subtotal

      (80 )      (185 )      105   

Federal income tax on net capital gains

      (45 )      122       (167)  
  

 

 

  

Federal and foreign income taxes incurred

     $     (125 )    $     (63 )    $     (62)  
  

 

 

  

The Company’s current income tax incurred and change in deferred income tax differs from the amount obtained by applying the federal statutory rate to income before tax as follows:

 

     Year Ended December 31  
     2023     2022     2021  
  

 

 

  

Current income taxes incurred

     $ (31 )    $ (125 )    $ (63)   

Change in deferred income taxes

      (149 )      (702 )      (123)   

(without tax on unrealized gains and losses)

       
  

 

 

  

Total income tax reported

     $ (180 )    $ (827 )    $ (186)   
  

 

 

  

Income before taxes

     $ 312     $ (3,207 )    $ 194    

Federal statutory tax rate

      21.00 %      21.00 %      21.00%  
  

 

 

  

Expected income tax expense (benefit) at statutory rate

     $ 66     $ (673 )    $ 41    

Increase (decrease) in actual tax reported resulting from:

       

Pre-tax income of disregarded subsidiaries

     $ 6     $ 24     $ 15    

Dividends received deduction

      (127 )      (98 )      (94)   

Tax-exempt income

      (4 )      (3 )      (74)   

Nondeductible expenses

      3       5       5    

Pre-tax items reported net of tax

      (97 )      (201 )      (77)   

Tax credits

      (21 )      (29 )      (38)   

Prior period tax return adjustment

      (18 )      22       3    

Change in statutory valuation allowance

      —       (11 )      11    

Change in uncertain tax positions

      —       —       (3)   

Deferred tax change on other items in surplus

      13       140       24    

Other

      (1 )      (3 )      1    
  

 

 

  

Total income tax reported

     $    (180 )    $    (827 )    $    (186)   
  

 

 

  

The Company’s federal income tax return is consolidated with other includible affiliated companies. Please see the listing of companies in Appendix A. The method of allocation between the companies is subject to a written tax allocation agreement. Under the terms of the tax allocation agreement, allocations are based on separate income tax return calculations. The Company is entitled to recoup federal income taxes paid in the event the future losses and credits reduce the greater of the Company’s separately computed income tax liability or the consolidated group’s income tax liability in the year generated. The Company is also entitled to recoup federal

 

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(Dollars in Millions, Except per Share amounts)

 

income taxes paid in the event the losses and credits reduce the greater of the Company’s separately computed income tax liability or the consolidated group’s income tax liability in any carryback or carryforward year when so applied. Intercompany income tax balances are settled within thirty days of payment to or filing with the Internal Revenue Service (IRS). A tax return has not been filed for 2023.

The amounts, origination dates and expiration dates of operating loss and tax credit carryforwards available for tax purposes:

 

Description    Amount    Origination Dates      Expiration Dates   

 

  

Operating Loss

     $ 816        12/31/2022        N/A   
  

 

 

 

      

Operating Loss Total

     $ 816        
  

 

 

 

      

Foreign Tax Credit

     $ 7        12/31/2021        12/31/2031   

Foreign Tax Credit

     $ 15        12/31/2022        12/31/2032   
  

 

 

 

      

Foreign Tax Credit Total

     $ 22        
  

 

 

 

      

General Business Credit

     $ 23        12/31/2009        12/31/2029   

General Business Credit

      26        12/31/2011        12/31/2031   

General Business Credit

      32        12/31/2012        12/31/2032   

General Business Credit

      40        12/31/2013        12/31/2033   

General Business Credit

      25        12/31/2014        12/31/2034   

General Business Credit

      56        12/31/2015        12/31/2035   

General Business Credit

      7        12/31/2016        12/31/2036   

General Business Credit

      9        12/31/2017        12/31/2037   

General Business Credit

      6        12/31/2018        12/31/2038   

General Business Credit

      8        12/31/2019        12/31/2039   

General Business Credit

      14        12/31/2020        12/31/2040   

General Business Credit

      17        12/31/2021        12/31/2041   

General Business Credit

      19        12/31/2022        12/31/2042   

General Business Credit

      14        12/31/2023        12/31/2043   
  

 

 

 

      

General Business Credit Total

     $    296        
  

 

 

 

      

The Company did not have any income tax expense available for recoupment in the event of future losses for December 31, 2023, 2022 and 2021.

The total amount of the unrecognized tax benefits that if recognized would affect the effective income tax rate:

 

     Unrecognized
Tax Benefits		  
  

 

 

  

Balance at January 1, 2022

     $ 18   

Tax positions taken during prior period

      —   
  

 

 

  

Balance at December 31, 2022

     $ 18   

Tax positions taken during prior period

      —   
  

 

 

  

Balance at December 31, 2023

     $      18   
  

 

 

  

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The Company classifies interest and penalties related to income taxes as income tax expense. The amount of interest and penalties accrued on the Balance Sheets as income taxes includes the following:

 

     Interest     Penalties      Total payable
(receivable)		  
  

 

 

  

Balance at January 1, 2021

     $ 9     $ —      $ 9   

Interest expense (benefit)

      1       —        1   

Cash received (paid)

      (9 )      —        (9)  
  

 

 

  

Balance at December 31, 2021

     $ 1     $ —      $ 1   

Interest expense (benefit)

      1       —        1   

Cash received (paid)

      —       —        —   
  

 

 

  

Balance at December 31, 2022

     $ 2     $ —      $ 2   

Interest expense (benefit)

      2       —        2   

Cash received (paid)

      (1 )      —        (1)  
  

 

 

  

Balance at December 31, 2023

     $      3     $      —      $      3   
  

 

 

  

The IRS completed its examination for 2009 through 2013 for which is currently at appeals with a refund pending Joint Committee on Taxation approval. The IRS opened an exam for the 2014 through 2018 amended tax returns. Federal income tax returns filed in 2019 through 2022 remain open, subject to potential future examination. The Company believes there are adequate defenses against, or sufficient provisions established related to any open or contested tax positions.

9. Capital and Surplus

The Company has authorized 1,000,000 common stock shares at $10 per share par value of which 676,190 shares were issued and outstanding at December 31, 2023 and 2022.

The Company has 42,500 Series A preferred shares authorized, of which 0 shares were issued and outstanding at December 31, 2023 and 2022. The Company repurchased its Series A preferred shares for $58,000 on December 26, 2006 and previously reported 42,500 shares of Series A preferred stock outstanding at $10 par, carried as treasury stock. It was determined that these shares were cancelled by operation of law as they were not stipulated by the Board of Directors to be treasury shares at the time they were repurchased. The cancellation and removal of the preferred stock had no impact to capital and surplus of the Company. The Company also has 250,000 Series B preferred non-voting shares authorized at $10 per share par value, of which 0 shares were issued and outstanding at December 31, 2023 and 2022.

The Company is subject to limitations, imposed by the State of Iowa, on the payment of dividends to its stockholders. Generally, dividends during any twelve-month period may not be paid, without prior regulatory approval, in excess of the greater of (a) 10 percent of the Company’s statutory surplus as of the preceding December 31, excluding any admitted net negative (disallowed) IMR recorded as special surplus or (b) the Company’s statutory gain from operations before net realized capital gains (losses) on investments for the preceding year. Subject to the availability of earned surplus at the time of such dividend, the maximum payment which may be made in 2024, without the prior approval of insurance regulatory authorities, is $2,728.

 

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On December 21, 2022, the Company purchased 250,000 shares of TBRe to become its sole shareholder. TBRe received additional capital contributions from the Company of $10 and $490 on December 21, 2022 and December 29, 2023, respectively.

On December 14, 2023, the Company paid an ordinary common stock dividend of $300 to CGC.

On November 9, 2023, the Company received a return of capital of $267 from TLB.

On September 29, 2023, the Company paid an ordinary common stock dividend of $200 to CGC.

On June 21, 2023, the Company paid an ordinary common stock dividend of $300 to CGC.

On March 30, 2023, the Company paid an ordinary common stock dividend of $58 to CGC.

On December 15, 2022, the Company paid an ordinary common stock dividend of $275 to CGC.

On June 30, 2022, the Company received a return of contributed surplus of $165 from LIICA Re II.

On June 21, 2022, the Company paid an ordinary common stock dividend of $150 to CGC.

On March 29 2022, the Company received a capital contribution of $100 from CGC.

On December 15, 2021, the Company paid an ordinary dividend of $411 to CGC.

On December 13, 2021, the Company paid a common stock dividend of stock ownership of $339 to CGC.

On June 21 2021, the Company paid an ordinary common stock dividend of $350 to CGC.

Life and health insurance companies are subject to certain RBC requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life or health insurance company is to be determined based on various risk factors. At December 31, 2023 and 2022, the Company met the minimum RBC requirements.

The Company held special surplus funds in the amount of $445 and $380, as of December 31, 2023 and 2022, respectively, for derivatives hedging variable annuity guarantees as required under SSAP No. 108.

The Company held special surplus funds in the amount of $71 as of December 31, 2023 for admitted disallowed IMR as required under INT 23-01. As of December 31, 2022, there was no admitted disallowed IMR.

10. Securities Lending

The Company participates in an agent-managed securities lending program in which the Company primarily loans out US Treasuries and other bonds. The Company receives collateral equal to 102% of the fair value of the loaned government or other domestic securities as of the

 

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transaction date. If the fair value of the collateral is at any time less than 102% of the fair value of the loaned securities, the counterparty is mandated to deliver additional collateral, the fair value of which, together with the collateral already held in connection with the lending transaction, is at least equal to 102% of the fair value of the loaned government or other domestic securities. In the event the Company loans a foreign security and the denomination of the currency of the collateral is other than the denomination of the currency of the loaned foreign security, the Company receives and maintains collateral equal to 105% of the fair value of the loaned security.

At December 31, 2023 and 2022, respectively, securities with a fair value of $1,967 and $2,141 were on loan under securities lending agreements. At December 31, 2023 and 2022, the collateral the Company received from securities lending activities was in the form of cash and on open terms. This cash collateral is reinvested and is not available for general corporate purposes. The reinvested cash collateral has a fair value of $2,292 and $2,115 at December 31, 2023 and 2022, respectively.

The contractual maturities of the securities lending collateral positions are as follows:

 

         Fair Value      
  

 

 

  
     2023      2022
  

 

 

  

Open

     $    2,292      $    2,115  

Securities received

      —        —  
  

 

 

  

Total collateral received

     $ 2,292      $ 2,115  
  

 

 

  

The Company receives primarily cash collateral in an amount in excess of the fair value of the securities lent. The Company reinvests the cash collateral into higher yielding securities than the securities which the Company has lent to other entities under the arrangement.

The maturity dates of the reinvested securities lending collateral are as follows:

 

         2023                2022    
  

 

 

 

     

 

 

 

     Amortized
Cost		   

Fair

Value

  

 

    Amortized
Cost		   

Fair

Value

  

 

 

 

     

 

 

 

Open

     $ 105       $ 105         $ 99       $ 99  

30 days or less

      938        938          661        661  

31 to 60 days

      562        562          375        375  

61 to 90 days

      84        84          242        242  

91 to 120 days

      296        296          217        217  

121 to 180 days

      307        307          521        521  
  

 

 

 

     

 

 

 

Total

      2,292        2,292          2,115        2,115  

Securities received

      —        —          —        —  
  

 

 

 

     

 

 

 

Total collateral reinvested

     $   2,292       $   2,292         $   2,115       $   2,115  
  

 

 

 

     

 

 

 

For securities lending, the Company’s source of cash used to return the cash collateral is dependent upon the liquidity of the current market conditions. Under current conditions, the Company has securities with a par value of $2,301 (fair value of $2,292) that are currently

 

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tradable securities that could be sold and used to pay for the $2,292 in collateral calls that could come due under a worst-case scenario.

11. Retirement and Compensation Plans

Defined Contribution Plans

The Company’s employees participate in a contributory defined contribution plan sponsored by Transamerica Corporation (TA Corp) which is qualified under Section 401(k) of the Internal Revenue Code. Generally, employees of the Company who customarily work at least 20 hours per week and meet the other eligibility requirements are participants of the plan. Participants may elect to contribute up to 100% of eligible earnings, subject to government or other plan restrictions for certain key employees. The Company will contribute an amount up to four percent of the participant’s eligible earnings per the plan’s matching formula. Participants may direct all of their contributions and plan balances to be invested in a variety of investment options. The plan is subject to the reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Benefits expense of $18, $18 and $13 was allocated to the Company for the years ended December 31, 2023, 2022 and 2021, respectively.

Defined Benefit Plans

The Company’s employees participate in a qualified defined benefit pension plan sponsored by TA Corp. Generally, employees of the Company who customarily work at least 20 hours per week and complete six months of continuous service and meet the other eligibility requirements are participants of the plan. The Company has no legal obligation for the plan. The benefits are based on the employee’s eligible compensation. The plan provides benefits based on a cash balance formula. The plan is subject to the reporting and disclosure requirements of the ERISA.

TA Corp sponsors supplemental retirement plans to provide the Company’s senior management with benefits in excess of normal pension benefits. The Company has no legal obligation for the plan. The plans are noncontributory. The benefits are based on the employee’s eligible compensation. The plans provide benefits based on a cash balance formula. The plans are unfunded and nonqualified under the Internal Revenue Code.

The Company recognizes pension expense equal to its allocation from TA Corp. The pension expense related to both the qualified defined pension plan and the supplemental retirement plans is allocated among the participating companies based on International Accounting Standards 19 (IAS 19), Accounting for Employee Benefits, and based upon actuarial participant benefit calculations, which is within the guidelines of SSAP No. 102, Pensions. Pension expenses were $11, $17 and $28 for the years ended December 31, 2023, 2022 and 2021, respectively.

In addition to pension benefits, TA Corp sponsors unfunded plans that provide health care and life insurance benefits to retired Company employees meeting certain eligibility requirements. The Company has no legal obligation for the plan. Portions of the medical and dental plans are contributory. The expenses of the postretirement plans are allocated among the participating companies based on IAS 19 and based upon actuarial participant benefit calculations which is within the guidelines of SSAP No. 92, Postretirement Benefits Other Than Pensions. The

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

Company’s allocation of postretirement expenses was $4, $4 and $5 for the years ended December 31, 2023, 2022 and 2021, respectively.

Other Plans

TA Corp has established deferred compensation plans for certain key employees of the Company. The Company’s allocation of expense for these plans for each of the years ended December 31, 2023, 2022 and 2021 was insignificant.

12. Related Party Transactions

The Company shares certain officers, employees and general expenses with affiliated companies.

The Company is party to a shared services and cost sharing agreement among and between the Transamerica companies, under which various affiliated companies may perform specified administrative functions in connection with the operation of the Company, in consideration of reimbursement of actual costs of services rendered. Effective August 1, 2020, the Company, and an affiliate, Transamerica Financial Life Insurance Company (TFLIC), entered into a Shared Services and Cost Sharing Agreement for both parties to provide accounting, administrative, and other advisory services in accordance with the agreement. The agreement, filed and approved by the IID, replaces prior agreements between the entities. The amount received by the Company as a result of being a party to these agreements was $621, $564 and $690 during 2023, 2022 and 2021, respectively. The amount paid as a result of being a party to these agreements was $619, $605 and $679 during 2023, 2022 and 2021, respectively. Fees charged between affiliates approximate their cost.

The Company is party to a Management and Administrative and Advisory agreement with AEGON USA Realty Advisors (AURA), LLC whereby AURA serves as the administrator and advisor for the Company’s mortgage loan operations. The Company paid $30, $31 and $29 for these services during 2023, 2022 and 2021, respectively.

The Company is party to an Investment Management Agreement with AEGON USA Investment Management (AUIM), LLC whereby AUIM acts as a discretionary investment manager for the Company. The Company paid $98, $89 and $89 for these services during 2023, 2022 and 2021, respectively.

The Company has an administration service agreement with Transamerica Asset Management (TAM) to provide administrative services to the Transamerica Series Trust. The Company received $115, $130 and $168 for these services during 2023, 2022 and 2021, respectively.

Transamerica Capital, Inc. provides wholesaling distribution services for the Company under a distribution agreement. The Company incurred expenses under this agreement of $10, $6 and $9 for the years ended December 31, 2023, 2022 and 2021, respectively.

Receivables from (payables to) affiliates and intercompany borrowings bear interest at the thirty-day commercial paper rate. During 2023, 2022 and 2021, the Company received (paid) net interest of ($21), ($5) and $0 from (to) affiliates, respectively. At December 31, 2023 and 2022, respectively, the Company reported net receivables (payables) from (to) affiliates of $629 and

 

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$466. Terms of settlement require that these amounts are settled within 90 days of quarter-end per the requirements of SSAP No. 25, Affiliates and Other Related Parties.

At December 31, 2023, the Company had short-term intercompany notes receivables of $350 as follows.

 

Receivable from   Amount   Due By   Interest Rate
                 

 TA Corp

   $    175   March 27, 2024   4.61     % 

 TA Corp

         75   June 21, 2024   5.15       

 ULI Funding LLC (ULIF)

        100   December 30, 2024   5.29       

At December 31, 2022, the Company had one short-term intercompany notes receivable. On December 30, 2022, the Company issued a variable funding promissory note valued at $97 to ULIF. The terms of the loan include a 5.20% annual interest rate and maturity date at December 30, 2023.

On December 20, 2022, the Company purchased all 2,520 common shares held by Aegon International B.V. of TLB at its economic value for a total of $61. The Company now has 100% ownership of TLB.

The Company utilizes the look-through approach in valuing its investment in the following entities.

 

     Book Adjusted
 Carrying Value 
  

 

 

 

Real Estate Alternatives Portfolio 2, LLC

     $       1  

Real Estate Alternatives Portfolio 3, LLC

      14  

Real Estate Alternatives Portfolio 4 HR, LLC

      187  

Real Estate Alternatives Portfolio 4 MR, LLC

      8  

Aegon Workforce Housing Fund 2, L.P.

      199  

Aegon Workforce Housing Fund 3, L.P.

      16  

Natural Resources Alternatives Portfolio I, LLC

      329  

Natural Resources Alternatives Portfolio II, LLC

      132  

Natural Resources Alternatives Portfolio 3, LLC

      255  

TA Private Equity Assets LLC

      359  

Zero Beta Fund, LLC

      5  

TA-APOP I, LLC

      154  

TA-APOP I-A, LLC

      26  

These entity’s financial statements are not audited and the Company has limited the value of its investment in these entities to the value contained in the audited financial statements of the underlying LP/LLC investments, including adjustments required by SSAP No. 97 entities and/or non-SCA SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies, entities owned by these entities. All liabilities, commitments, contingencies, guarantees or obligations of these entities which are required to be recorded as liabilities, commitments, contingencies, guarantees or obligations under applicable accounting guidance, are reflected in the Company’s determination of the carrying value of the investment in these entities.

 

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The following tables show the disclosures for all SCA investments, except 8bi entities, Balance Sheets value (admitted and nonadmitted) and the NAIC responses for the SCA filings as of December 31, 2023 and 2022:

 

December 31, 2023  
SCA Entity   

 Percentage of 

SCA

Ownership

     Gross
 Amount 		       Admitted 
Amount		       Nonadmitted 
Amount

 SSAP No. 97 8a Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8a Entities

      XXX     $ —      $ —      $ —  

 SSAP No. 97 8b(ii) Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8b(ii) Entities

      XXX     $ —      $ —      $ —  

 SSAP No. 97 8b(iii) Entities

           

AEGON Direct Marketing Services, Inc.

      73  %    $ —      $ —      $ —  

AEGON Financial Services Group, Inc.

      100       —        —        —  

Garnet Assurance Corporation

      100       —        —        —  

Garnet Assurance Corporation III

      100       —        —        —  

Life Investors Alliance LLC

      100       —        —        —  

Real Estate Alternatives Portfolio 3A, Inc.

      91       —        —        —  

Transamerica Asset Management, Inc.

      77       136        136        —  

Transamerica Fund Services, Inc.

      44       —        —        —  

Total SSAP No. 97 8b(iii) Entities

      XXX     $ 136      $ 136      $ —  

 SSAP No. 97 8b(iv) Entities

           

Transamerica Bermuda Re, Ltd.

      100  %    $ 415      $ 415      $ —  

Total SSAP No. 97 8b(iv) Entities

      XXX     $ 415      $ 415      $ —  

 Total SSAP No. 97 8b Entities (except 8bi entities)

      XXX     $ 551      $ 551      $ —  

 Aggregate Total

      XXX     $ 551      $ 551      $ —  
                                  

 

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December 31, 2022  
SCA Entity   

 Percentage of 

SCA

Ownership

    

Gross

Amount

     

 Admitted 

Amount

     

 Nonadmitted 

Amount

 SSAP No. 97 8a Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8a Entities

      XXX     $ —      $ —      $ —  

 SSAP No. 97 8b(ii) Entities

           

None

      —  %    $ —      $ —      $ —  

Total SSAP No. 97 8b(ii) Entities

      XXX     $ —      $ —      $ —  

 SSAP No. 97 8b(iii) Entities

           

AEGON Direct Marketing Services, Inc.

      73  %    $ —      $ —      $ —  

AEGON Financial Services Group, Inc.

      100       —        —        —  

Garnet Assurance Corporation

      100       —        —        —  

Garnet Assurance Corporation III

      100       —        —        —  

Life Investors Alliance LLC

      100       —        —        —  

Real Estate Alternatives Portfolio 3A, Inc.

      91       —        —        —  

Transamerica Asset Management, Inc.

      77       124        124        —  

Transamerica Fund Services, Inc.

      44       —        —        —  

Total SSAP No. 97 8b(iii) Entities

      XXX     $ 124      $ 124      $ —  

 SSAP No. 97 8b(iv) Entities

           

Transamerica Bermuda Re, Ltd.

      100  %    $ 10      $ 10      $ —  

Total SSAP No. 97 8b(iv) Entities

      XXX     $ 10      $ 10      $ —  

 Total SSAP No. 97 8b Entities (except 8bi entities)

      XXX     $ 134      $ 134      $ —  

 Aggregate Total

      XXX     $ 134      $ 134      $ —  
                                  

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The following table shows the NAIC responses for the SCA filings (except 8bi entities):

December 31, 2023

 

SCA Entity   

Type of

NAIC

Filing*

     

Date of

Filing to

the NAIC

      NAIC
Valuation
Amount		      NAIC
Response
Received
Y/N		      NAIC
Disallowed
Entities
Valuation
Method,
Submission
Required
Y/N		      Code**  
                                                  

 SSAP No. 97 8a Entities

                  

None

           $ —         —        —        —  
        

 

 

           

Total SSAP No. 97 8a Entities

      —        —       $ —         —        —        —  
        

 

 

           

 SSAP No. 97 8b(ii) Entities

                  

None

           $ —         —        —        —  
        

 

 

           

Total SSAP No. 97 8b(ii) Entities

      —        —       $ —         —        —        —  
        

 

 

           

 SSAP No. 97 8b(iii) Entities

                  

AEGON Direct Marketing Services, Inc.

      NA          $ —         —        —        I  

AEGON Financial Services Group, Inc.

      NA           —         —        —        I  

Garnet Assurance Corporation

      NA           —         —        —        I  

Garnet Assurance Corporation III

      NA           —         —        —        I  

Life Investors Alliance LLC

      NA           —         —        —        I  

Real Estate Alternatives Portfolio 3A, Inc.

      NA           —         —        —        I  

Transamerica Asset Management, Inc.

      S2        10/25/2023        124         Y        N        I  

Transamerica Fund Services, Inc.

      NA           —         —        —        I  
        

 

 

           

Total SSAP No. 97 8b(iii) Entities

      —        —       $ 124         —        —        —  
        

 

 

           

 SSAP No. 97 8b(iv) Entities

                  

Transamerica Bermuda Re, Ltd.

      NA          $ —         —        —        I  
        

 

 

           

Total SSAP No. 97 8b(iv) Entities

      —        —       $ —         —        —        —  
        

 

 

           

 Total SSAP No. 97 8b Entities (except 8bi entities)

      —        —       $  124         —        —        —  
        

 

 

           

 Aggregate Total

      —        —       $   124         —        —        —  
        

 

 

           

*S1 - Sub1, S2 - Sub2 or RDF - Resubmission of Disallowed Filing

** I - Immaterial or M - Material

(1) NAIC Valuation Amount is as of the Filing Date to the NAIC

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

December 31, 2022

 

SCA Entity    Type of
NAIC
Filing*		      Date of
Filing to
the NAIC		      NAIC
Valuation
Amount		      NAIC
Response
Received
Y/N		      NAIC
Disallowed
Entities
Valuation
Method,
Submission
Required
Y/N		      Code**  
                                                  

 SSAP No. 97 8a Entities

                  

None

           $ —         —        —        —  
        

 

 

           

Total SSAP No. 97 8a Entities

      —        —       $ —         —        —        —  
        

 

 

           

 SSAP No. 97 8b(ii) Entities

                  

None

           $ —         —        —        —  
        

 

 

           

Total SSAP No. 97 8b(ii) Entities

      —        —       $ —         —        —        —  
        

 

 

           

 SSAP No. 97 8b(iii) Entities

                  

AEGON Direct Marketing Services, Inc.

      NA          $ —               I  

AEGON Financial Services Group, Inc.

      NA           —               I  

Garnet Assurance Corporation

      NA           —               I  

Garnet Assurance Corporation III

      NA           —               I  

Life Investors Alliance LLC

      NA           —               I  

Real Estate Alternatives Portfolio 3A, Inc.

      NA           —               I  

Transamerica Asset Management, Inc.

      S2        12/5/2022        121         Y        N        I  

Transamerica Fund Services, Inc.

      NA           —               I  
        

 

 

           

Total SSAP No. 97 8b(iii) Entities

      —        —       $ 121         —        —        —  
        

 

 

           

 SSAP No. 97 8b(iv) Entities

                  

Transamerica Bermuda Re, Ltd.

      S1        4/6/2023       $ —         Y        N        I  
        

 

 

           

Total SSAP No. 97 8b(iv) Entities

      —        —       $ —         —        —        —  
        

 

 

           

 Total SSAP No. 97 8b Entities (except 8bi entities)

      —        —       $   121         —        —        —  
        

 

 

           

 Aggregate Total

      —        —       $  121         —        —        —  
        

 

 

           

*S1 - Sub1, S2 - Sub2 or RDF - Resubmission of Disallowed Filing

** I - Immaterial or M - Material

(1) NAIC Valuation Amount is as of the Filing Date to the NAIC

The Company reports an investment in the following insurance SCAs for which the reported statutory equity reflects a departure from NAIC SAP. Each of the insurance SCAs listed in the table below reflects an admitted asset, equal to the value of the excess of loss reinsurance asset provided by an unaffiliated company, whereas this would not be an admitted asset recognized by SSAP No. 4, Assets and Non Admitted Assets.

 

LIICA Re II

      

   Excess of loss reinsurance asset

TPRe

      

   Excess of loss reinsurance asset

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The Company has two Limited Purpose Subsidiaries (LPS) with prescribed practices whereby under Iowa Administrative Code 191-99.11(3), the LPS are entitled to admit the following assets that would not be admissible under the NAIC SAP:

 

TORI

    Credit linked note

TLIC Watertree Reinsurance, Inc. (TWRI)

    Excess of loss reinsurance asset

The monetary effect on net income and surplus as a result of using an accounting practice that differed from NAIC SAP, the amount of the investment in the insurance SCA per reported statutory equity, and amount of the investment if the insurance SCA has completed statutory financial statements in accordance with the NAIC SAP. The SCAs are valued in the Company’s financial statements at zero in accordance with SSAP No. 97.

 

    

Monetary Effect on

NAIC SAP

      Amount of Investment  

       SCA Entity

 (Investments in Insurance SCA Entities)

   

Net

Income
Increase
(Decrease)

     

Surplus

Increase
(Decrease)

     

Per

Reported
Statutory
Equity

      If the
Insurance
SCA Had
Completed
Statutory
Financial
Statements*		  

LIICA Re II

      $    —        $  (1,779)        $    361        $     —  

TPRe

      —        (1,363)        251        —  

TORI

      —        (3,365)        1,147        —  

TWRI

      —        (1,247)        634        —  

*Per AP&P Manual (without permitted or prescribed practices)

Had the above SCA entities not been permitted to recognize the excess of loss reinsurance assets or the credit linked note as admitted assets in the financial statements, the risk-based capital would have been below the mandatory control level which would have triggered a regulatory event.

Information regarding the Company’s affiliated reinsurance transactions is available in Note 7.

Information regarding the Company’s affiliated guarantees is available in Note 14.

13. Managing General Agents and Third-Party Administrators

The Company utilizes managing general agents (MGA) and third-party administrators (TPA) in its operation. There were no MGA’s/TPA’s that wrote premiums in excess of 5% of the Company’s surplus.

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

14. Commitments and Contingencies

At December 31, 2023 and 2022, the Company has mortgage loan commitments of $437 and $110, respectively.

The Company has contingent commitments of $904 and $1,038, as of December 31, 2023 and 2022, respectively, to provide additional funding for joint ventures, partnerships and limited liability companies, which includes LIHTC commitments of $2 and $4, respectively.

The Company leases office buildings and equipment under various non-cancelable operating lease agreements. Rental expense for the years 2023 and 2022 was $11 and $13, respectively.

Private placement commitments outstanding as of December 31, 2023 and 2022 were $90 and $141, respectively.

The Company sold $0 and ($63) of “to-be-announced” (TBA) securities as of December 31, 2023 and 2022, respectively. Due to different counterparties, the receivable related to these TBAs was not reclassed.

The Company may pledge cash as collateral for derivative transactions. When cash is pledged as collateral, it is derecognized and a receivable is recorded to reflect the eventual return of that cash by the counterparty. The amount of cash collateral pledged by the Company as of December 31, 2023 and 2022, respectively, was $361 and $981.

At December 31, 2023 and 2022, securities in the amount of $87 and $27, respectively, were posted to the Company as collateral from derivative counterparties. The securities were not included on the Company’s Balance Sheets as the Company does not have the ability to sell or repledge the collateral.

The Company has provided back-stop guarantees for the performance of non-insurance affiliates or subsidiaries that are involved in the guaranteed sale of investments in low-income housing tax credit partnerships. The nature of the obligation is to provide third party investors with a minimum guaranteed annual and cumulative return on their contributed capital which is based on tax credits and tax losses generated from the low income housing tax credit partnerships. Guarantee payments arise if low income housing tax credit partnerships experience unexpected significant decreases in tax credits and tax losses or there are compliance issues with the partnerships. A significant portion of the remaining term of the guarantees is between 13-18 years. In the event the Company is required to make a payment under this guarantee, the payment would be reflected in the Company’s financial statements as a decrease in net investment income. No payments are required as of December 31, 2023 and 2022. The current assessment of risk of making payments under these guarantees is remote.

The Company has guaranteed to the Hong Kong Insurance Authority that it will provide the financial support to TLB for maintaining TLB’s solvency at all times so as to enable TLB to promptly meet its obligations and liabilities. If at any time the value of TLB’s assets do not exceed its liabilities by the prevailing acceptable level of solvency, the Company will increase the paid up share capital of TLB or provide financial assistance to TLB to maintain the acceptable level of solvency. An acceptable level of solvency is net assets at one hundred and fifty percent of

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

the required margin of solvency as stipulated under the Insurance Companies (Margin of Solvency) Regulation. As of December 31, 2023 and 2022, there is no payment or performance risk because TLB is able to meet its obligations and has assets in excess of its liabilities by the prevailing level of solvency as of this date.

The Company has guaranteed that TLB will (1) maintain tangible net worth of at least equal to the greater of 165% of S&P’s Risk-Based Capital and the minimum required by regulatory authorities in all jurisdictions in which TLB operates, (2) have, at all times, sufficient cash to pay all contractual obligations in a timely manner and (3) have a maximum operating leverage ratio of 20 times. The Company can terminate this agreement upon thirty days written notice, but not until TLB attains a rating from S&P’s the same as without the support from this agreement, or the entire book of TLB business is transferred provided that it is transferred to an entity with a rating from S&P that is the same as or better than the Company’s then current rating or AA, whichever is lower. As of December 31, 2023 and 2022, there is no payment or performance risk because TLB has adequate tangible net worth, sufficient cash to meet its obligations and an operating leverage ratio not in excess of 20 times as of this date.

The Company is not able to estimate the financial statement impact or the maximum potential amount of future payments it could be required to make under these two guarantees as they are considered to be unlimited under the provisions of SSAP No. 5R, Liabilities, Contingencies and Impairments of Assets.

The Company has provided a guarantee to TLB’s (Singapore Branch) policyholders. If TLB fails to pay a valid claim solely by reason of it becoming insolvent as defined by Bermuda law, then the Company shall pay directly to the policy owner or named beneficiary the amount of the valid claim. At December 31, 2023 and 2022, TLB holds related statutory-basis policy and claim reserves of $109 and $55, respectively, which would be the maximum potential amount of future payments the Company could be required to make under this guarantee. In the event the Company is required to make a payment under this guarantee, the payment would be reflected in the Company’s financial statements as an increase to incurred claims. As of December 31, 2023 and 2022, there is no payment or performance risk because TLB is not insolvent as of this date.

The Company has provided a guarantee to TLB’s (Hong Kong Branch) policyholders. If TLB fails to pay a valid claim solely by reason of it becoming insolvent as defined by Bermuda law, then the Company shall pay directly to the policy owner or named beneficiary the amount of the valid claim. At December 31, 2023 and 2022, TLB policies covered by this guarantee would have resulted in US statutory policy and claim reserves of $129 and $125, respectively, which would represent a fair measure of the maximum potential amount of future payments the Company under this guarantee based on the US statutory reserve requirements. TLB is a subsidiary of the Company and TLB has invested assets supporting these policies which mitigates this risk. In the event the Company is required to make a payment under this guarantee, the payment would be reflected in the Company’s financial statements as an increase to incurred claims. As of December 31, 2023 and 2022, there is no payment or performance risk because TLB is not insolvent as of this date.

The Company did not recognize a liability for any of the TLB guarantees due to the adoption of SSAP No. 5R, as a liability is not required for guarantees to or on behalf of a wholly-owned subsidiary. Management monitors TLB’s financial condition, and there are no indications that

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

TLB will become insolvent. As such, management feels the risk of payment under these guarantees on behalf of TLB is remote.

The Company is a party to a fee agreement with TLB whereby the Company continues to provide the guarantees with respect to TLB described in the paragraphs above. The Company received $0 and $1 under this agreement in 2023 and 2022, respectively.

The Company has provided guarantees for the obligations of noninsurance third party assignment companies who have accepted assignments of structured settlement payment obligations from the Company and have purchased structured settlement insurance policies issued by the Company that match those obligations. The guarantees made by the Company are specific to each structured settlement contract and vary in date and duration of the obligation. These are numerous and are backed by the reserves established by the Company to represent the present value of the future payments for those contracts. The direct statutory reserve established at December 31, 2023 and 2022 for the total payout block is $4,765 and $4,880, respectively. As this reserve is already recorded on the Balance Sheets of the Company, there was no additional liability recorded due to the adoption of SSAP No. 5R.

During 2019, the Company entered into an agreement with AURA, LLC to commit to purchase certain tax credit investments up to a maximum of $100,000. Under the terms of the agreement, the Company provides certain commitments to purchase tax credit investments that are part of tax credit funds in the event certain conditions are met. The Company did not acquire any tax credit investments during 2023 or 2022 under this agreement. As of December 31, 2023 and 2022, there is $24 and $0 committed to these purchases.

The following table provides an aggregate compilation of guarantee obligations as of December 31, 2023 and 2022:

 

     December 31  
     2023      2022  
  

 

 

  

Aggregate maximum potential of future payments of all guarantees (undiscounted)

      $    238        $    179   
  

 

 

  

Current liability recognized in financial statements:

      

Noncontingent liabilities

      —        —   
  

 

 

  

Contingent liabilities

      —        —   
  

 

 

  

Ultimate financial statement impact if action required:

      

Incurred claims

      238        179   

Other

      —        —   
  

 

 

  

Total impact if action required

      $    238        $    179   
  

 

 

  

The Company is a member of the FHLB of Des Moines. Through its membership, the Company has conducted business activity (borrowings) with the FHLB. It is part of the Company’s strategy to utilize these funds for asset and liability management and spread lending purposes. The Company has determined the actual/estimated long-term maximum borrowing capacity as $5,601 and $5,585 at December 31, 2023 and 2022, respectively. The Company calculated this amount in accordance with the terms and conditions of agreement with FHLB of Des Moines.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

At December 31, 2023 and 2022, the Company purchased/owned the following FHLB stock as part of the agreement:

 

     Year Ended December 31  
     2023      2022  
  

 

 

  

Membership Stock:

      

Class A

     $ —      $ —   

Class B

      10        10   

Activity Stock

      78        120   

Excess Stock

      —        —   
  

 

 

  

Total

     $     88      $     130   
  

 

 

  

At December 31, 2023 and 2022, Membership Stock (Class A and B) Eligible for Redemption and the anticipated timeframe for redemption was as follows:

 

                                                                   
    

 Less Than 6 

Months

     

6 Months to

Less Than 1

Year

     

1 to Less

Than 3

Years

       3 to 5 Years   
  

 

 

  

December 31, 2023

            

Membership Stock

            

Class A

     $ —      $ —      $ —      $ —   

Class B

      —        —        —        10   
  

 

 

  

Total

     $ —      $ —      $ —      $ 10   
  

 

 

  
     Less Than 6
Months		      6 Months to
Less Than 1
Year		      1 to Less
Than 3
Years		      3 to 5 Years  
  

 

 

  

December 31, 2022

            

Membership Stock

            

Class A

     $ —      $ —      $ —      $ —   

Class B

      —        —        —        10   
  

 

 

  

Total

     $ —      $ —      $ —      $ 10   
  

 

 

  

At December 31, 2023 and 2022, the amount of collateral pledged and the maximum amount pledged to the FHLB was as follows:

 

      Fair Value         Carry Value    
  

 

 

  

December 31, 2023

      

Total Collateral Pledged

     $ 3,452      $ 3,937   

Maximum Collateral Pledged

      4,803        5,290   
     Fair Value      Carry Value  
  

 

 

  

December 31, 2022

      

Total Collateral Pledged

     $ 4,704      $ 5,335   

Maximum Collateral Pledged

      4,704        5,335   

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

At December 31, 2023 and 2022, the borrowings from the FHLB were as follows:

 

                                                                                   
     December 31, 2023      December 31, 2022  
  

 

 

     

 

 

  
    

General

  Account  

     

Funding

Agreements

Reserves

  Established  

     

General

  Account  

     

Funding

Agreements

Reserves

  Established  

  
  

 

 

     

 

 

  

Debt 1

     $ 1,725      $ —        $ 2,995      $ —   

Funding agreements 2

      —        —         —        —   

Other

      —        —         —        —   
  

 

 

     

 

 

  

Total

     $ 1,725      $ —        $ 2,995      $ —   
  

 

 

     

 

 

  

1 The maximum amount of borrowing during 2023 was $2,300

2 The maximum amount of borrowing during 2023 was $0

As of December 31, 2023, the weighted average interest rate on FHLB advances was 4.627% with a weighted average term of 2.0 years. As of December 31, 2022, the weighted average interest rate on FHLB advances was 4.550% with a weighted average term of 2.5 years.

At December 31, 2023 and 2022, the borrowings from the FHLB were not subject to prepayment penalties.

The Company has issued synthetic GIC contracts to benefit plan sponsors totaling $50,150 and $55,298 as of December 31, 2023 and 2022, respectively. A synthetic GIC is an off-balance sheet fee-based product sold primarily to tax qualified plans, where the plan sponsor retains ownership and control of the related plan assets and the Company provides book value benefit responsiveness to qualified participant withdrawals, in the event withdrawals requested exceeds plan cash flows. In certain contracts, the Company agrees to make advances to meet benefit withdrawal needs and earns a market interest rate on these advances. A periodically adjusted contract-crediting rate is a means by which investment and benefit responsiveness experience is passed through to participants. In return for the book value benefit responsiveness guarantee, the Company receives a premium that varies based on such elements as benefit responsiveness exposure and contract size. The Company underwrites the plans for the possibility of having to make benefit payments and also must agree to the investment guidelines ensuring the appropriate credit quality and cash flow. Funding requirements to date have been minimal and management does not anticipate any future material funding requirements to have a material impact on the reported financial results. In compliance with statutory guidelines, related reserves of $2 and $10 were recorded at December 31, 2023 and 2022, respectively.

The Company is party to legal proceedings involving a variety of issues incidental to its business, including class action lawsuits. Lawsuits may be brought in any federal or state court in the United States or in an arbitral forum. In addition, there continues to be significant federal and state regulatory activity relating to financial services companies. The Company’s legal proceedings are subject to many variables, and given their complexity and scope, outcomes cannot be predicted with certainty. Although legal proceedings sometimes include substantial

 

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Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

demands for compensatory and punitive damages, and injunctive relief, damages arising from such demands are typically not material to the Company’s financial position.

The Company was named in two class actions relating to increases in monthly deduction rates (MDR) on universal life products in 2015 to 2016 and 2017 to 2018, respectively, as well as several individual lawsuits. The Company settled these two class actions, one in March 2019 and one in June 2021. In connection with the class actions, exposure existed related to opt out class members. The Company held provisions totaling $89 for the remaining exposure as of December 31, 2023.

The Company is subject to insurance guaranty laws in the states in which it writes business. These laws provide for assessments against insurance companies for the benefit of policyholders and claimants in the event of insolvency of other insurance companies. Assessments are charged to operations when received by the Company, except where right of offset against other taxes paid is allowed by law. Amounts available for future offsets are recorded as an asset on the Company’s Balance Sheets. The future obligation for known insolvencies has been accrued based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Associations. Potential future obligations for unknown insolvencies are not determinable by the Company and are not required to be accrued for financial reporting purposes. The Company has established a reserve of $8 and $8 and an offsetting premium tax benefit $6 and $6 at December 31, 2023 and 2022, respectively, for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. The guaranty fund (benefit) expense was $0, $3 and $3 for the years ended December 31, 2023, 2022 and 2021, respectively.

15. Sales, Transfers, and Servicing of Financial Assets and Extinguishments of Liabilities

The Company is party to municipal repurchase agreements which were established via bilateral trades and accounted for as secured borrowings. For municipal repurchase agreements, the Company rigorously manages asset/liability risks via an integrated risk management framework. The Company’s liquidity position is monitored constantly, and factors heavily in the management of the asset portfolio. Projections comparing liquidity needs to available resources in both adverse and routine scenarios are refreshed monthly. The results of these projections on time horizons ranging from 16 months to 24 months are the basis for the near-term liquidity planning. This liquidity model excludes new business (non applicable for the spread business), renewals and other sources of cash and assumes all liabilities are paid off on the earliest dates required. Interest rate risk is carefully managed, in part through rigorously defined and monitored derivatives programs.

 

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

The following tables provide information on the securities sold under the municipal repurchase agreements for four quarters of 2023 and 2022:

 

December 31, 2023                            
    

First

 Quarter 

     

Second

 Quarter 

     

Third

 Quarter 

     

Fourth

 Quarter 

  
  

 

 

  

Maximum Amount

            

BACV

      XXX        XXX        XXX      $ 685   

Fair Value

     $ 273      $ 249      $ 662      $ 623   

Ending Balance

            

BACV

      XXX        XXX        XXX      $ 156   

Fair Value

     $ 198      $ 249      $ 662      $ 157   
December 31, 2022                            
     First
Quarter		      Second
Quarter		      Third
Quarter		      Fourth
Quarter		  
  

 

 

  

Maximum Amount

            

BACV

      XXX        XXX        XXX      $ 256   

Fair Value

     $ 167      $ 245      $ 250      $ 252   

Ending Balance

                  

BACV

      XXX        XXX        XXX      $ 256   

Fair Value

     $ 167      $ 245      $ 250      $ 251   

 

     2023      2022  
  

 

 

     

 

 

  
      NAIC 1        NAIC 2         Total         NAIC 1        NAIC 2         Total    
  

 

 

     

 

 

  

Bonds - BACV

     $ 143      $ 13      $ 156       $ 217      $ 39      $ 256   

Bonds - FV

      144        13        157        211        40        251   

These securities have maturity dates that range from July 1, 2025 to May 15, 2033.

The following table provides information on the cash collateral received and liability to return collateral under the municipal repurchase agreements for four quarters of 2023 and 2022:

 

December 31, 2023                            
    

First

 Quarter 

     

Second

 Quarter 

     

Third

 Quarter 

     

Fourth

 Quarter 

  
  

 

 

  

Maximum Amount

            

Cash

     $ 147      $ 186      $ 536      $ 508   

Ending Balance (1)

            

Cash

     $ 147      $ 186      $ 536      $ 110   

(1) The remaining collateral held was greater than 90 days from contractual maturity.

 

101

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Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

December 31, 2022                            
    

First

 Quarter 

     

Second

 Quarter 

     

Third

 Quarter 

     

Fourth

 Quarter 

  
  

 

 

  

Maximum Amount

            

Cash

     $ 141      $ 177      $ 199      $ 106   

Ending Balance (1)

            

Cash

     $ 141      $ 177      $ 199      $ 106   

(1) The remaining collateral held was greater than 90 days from contractual maturity.

The Company enters into dollar repurchase agreements in which securities are delivered to the counterparty once adequate collateral has been received. At December 31, 2023 and 2022, the Company had dollar repurchase agreements outstanding in the amount of $11 and $95, respectively, which is included in borrowed money on the Balance Sheets. Those amounts include accrued interest of $0 and $1, at December 31, 2023 and 2022, respectively. At December 31, 2023, securities with a book value of $11 and a fair value of $11 were subject to dollar repurchase agreements. These securities have maturity dates that range from May 1, 2037 to September 1, 2053. At December 31, 2022, securities with a book value of $96 and a fair value of $88 were subject to dollar repurchase agreements. The Company does not have the legal right to recall or substitute the underlying assets prior to the transaction’s scheduled termination. Upon scheduled termination, the counterparty is obligated to return substantially similar assets.

The contractual maturities of the dollar repurchase agreement positions are as follows:

 

     Fair Value  
  

 

 

  
       2023          2022    
  

 

 

  

Open

     $ 11      $ 93   

Securities received

      —        —   
  

 

 

  

Total collateral received

     $ 11      $ 93   
  

 

 

  

In the course of the Company’s asset management, securities are sold and reacquired within 30 days of the sale date to enhance the Company’s yield on its investment portfolio. The Company did not sell or reacquire any securities with an NAIC designation of 3 or below during 2023.

16. Subsequent Events

The financial statements are adjusted to reflect events that occurred between the Balance Sheets date and the date when the financial statements are available to be issued, provided they give evidence of conditions that existed at the Balance Sheets date (Type I). The Company has not identified any Type 1 subsequent events for the year ended December 31, 2023 through April 11, 2024.

Events that are indicative of conditions that arose after the Balance Sheets date are disclosed, but do not result in an adjustment of the financial statements themselves (Type II). The Company has identified a Type II subsequent event for the year ended December 31, 2023. In January 2024, final settlement was reached on the remaining opt out class member exposure associated with the

 

102

Table of Contents

Transamerica Life Insurance Company

Notes to Financial Statements – Statutory Basis

(Dollars in Millions, Except per Share amounts)

 

MDR class action lawsuits discussed in Note 14, resulting in no further material exposure related to this matter.

 

103

Table of Contents

Transamerica Life Insurance Company

Appendix A – Listing of Affiliated Companies

 

Transamerica Corporation      
EIN: 42-1484983      
AFFILIATIONS SCHEDULE      

YEAR ENDED DECEMBER 31, 2023

 

      
Entity Name     FEIN 
   

Transamerica Corporation

     42-1484983 
   

AEGON Asset Management Services Inc

     39-1884868 
   

AEGON Direct Marketing Services Inc

     42-1470697 
   

AEGON Financial Services Group Inc

     41-1479568 
   

AEGON Institutional Markets Inc

     61-1085329 
   

AEGON Management Company

     35-1113520 
   

AEGON USA Real Estate Services Inc

     61-1098396 
   

AEGON USA Realty Advisors of CA

     20-5023693 
   

AUSA Properties Inc

     27-1275705 
   

Commonwealth General Corporation

     51-0108922 
   

Creditor Resources Inc

     42-1079584 
   

CRI Solutions Inc

     52-1363611 
   

Financial Planning Services Inc

     23-2130174 
   

Garnet Assurance Corporation

     11-3674132 
   

Garnet Assurance Corporation II

     14-1893533 
   

Garnet Assurance Corporation III

     01-0947856 
   

Ironwood Re Corp

     47-1703149 
   

LIICA RE II

     20-5927773 
   

Money Services Inc

     42-1079580 
   

Monumental General Administrators Inc

     52-1243288 
   

Pearl Holdings Inc I

     20-1063558 
   

Pearl Holdings Inc II

     20-1063571 
   

Real Estate Alternatives Portfolio 3A Inc

     20-1627078 
   

River Ridge Insurance Company

     20-0877184 
   

Stonebridge Benefit Services Inc

     75-2548428 
   

TLIC Oakbrook Reinsurance Inc.

     47-1026613 
   

TLIC Watertree Reinsurance, Inc.

     81-3715574 
   

Transamerica Affordable Housing Inc

     94-3252196 
   

Transamerica Asset Management

     59-3403585 
   

Transamerica Bermuda Re, Ltd

     98-1701849 
   

Transamerica Capital Inc

     95-3141953 
   

Transamerica Casualty Insurance Company

     31-4423946 
   

Transamerica Corporation (OREGON)

     98-6021219 

 

104

Table of Contents

Transamerica Life Insurance Company

Appendix A – Listing of Affiliated Companies

 

 

Transamerica Corporation      
EIN: 42-1484983      
AFFILIATIONS SCHEDULE      

YEAR ENDED DECEMBER 31, 2023

 

      
Entity Name     FEIN 
   

Transamerica Finance Corporation

     95-1077235 
   

Transamerica Financial Advisors

     59-2476008 
   

Transamerica Financial Life Insurance Company

     36-6071399 
   

Transamerica Fund Services Inc

     59-3403587 
   

Transamerica International Re (Bermuda) Ltd

     98-0199561 
   

Transamerica Investors Securities Corp

     13-3696753 
   

Transamerica Life Insurance Company

     39-0989781 
   

Transamerica Pacific Re, Inc.

     85-1028131 
   

Transamerica Resources Inc

     52-1525601 
   

Transamerica Stable Value Solutions Inc

     27-0648897 
   

Transamerica Trust Company

     42-0947998 
   

United Financial Services Inc

     52-1263786 
   

World Fin Group Ins Agency of Massachusetts Inc

     04-3182849 
   

World Financial Group Inc

     42-1518386 
   

World Financial Group Ins Agency of Hawaii Inc

     99-0277127 
   

World Financial Group Insurance Agency of WY Inc

     42-1519076 
   

Zahorik Company Inc

     95-2775959 
   

Zero Beta Fund LLC

     26-1298094 

 

105

Table of Contents

Statutory-Basis Financial

Statement Schedules

 

106

Table of Contents

Transamerica Life Insurance Company

Summary of Investments – Other Than

Investments in Related Parties

(Dollars in Millions)

December 31, 2023

SCHEDULE I

 

 Type of Investment       Cost (1)        

Fair

   Value   

     

Amount at 

Which Shown 

in the 

Balance Sheet (2) 

  

 

  

 Fixed maturities

         

 Bonds:

         

 United States government and government agencies and authorities

     $ 4,818       $ 4,598       $ 5,485   

 States, municipalities and political subdivisions

      2,453         2,090        2,453   

 Foreign governments

      721         652        721   

 Hybrid securities

      271         263        270   

 All other corporate bonds

      37,461         35,038        37,423   

 Preferred stocks

      60         59        59   
  

 

 

  

 Total fixed maturities

      45,784         42,700        46,411   

 Equity securities

         

 Common stocks:

         

 Industrial, miscellaneous and all other

      105         113        113   
  

 

 

  

 Total equity securities

      105         113        113   

 Mortgage loans on real estate

      9,409            9,409   

 Real estate

      41            41   

 Policy loans

      2,109            2,109   

 Other long-term investments

      1,381            1,381   

 Receivable for securities

      23            23   

 Receivable for derivative cash collateral posted to counterparty

      361            361   

 Securities lending

      2,292            2,292   

 Cash, cash equivalents and short-term investments

      3,055            3,055   
  

 

 

        

 

 

  

 Total investments

     $ 64,560           $ 65,195   
  

 

 

        

 

 

  

 

(1)

Equity securities are reported at original cost. Fixed maturities are reported at original cost reduced by repayments and adjusted for amortization of premiums and accrual of discounts.

 

(2)

Bonds of $29 are held at fair value rather than amortized cost. Preferred stock of $58 are held at fair value.

 

107

Table of Contents

Transamerica Life Insurance Company

Supplementary Insurance Information

(Dollars in Millions)

SCHEDULE III

 

    

 Future Policy 

Benefits and

Expenses

     

Unearned

  Premiums  

     

 Policy and 

Contract

Liabilities

     

  Premium  

Revenue

     

Net

 Investment 

Income*

     

Benefits,

Claims

Losses and

 Settlement 

Expenses

     

 Other   

 Operating   

 Expenses*   

  
  

 

 

  

Year ended December 31, 2023

                     

Individual life

     $ 29,961      $ —      $ 493      $ 2,410      $ 1,882      $ 2,870      $ 1,808    

Individual health

      6,083        105        317        665        382        807        221    

Group life and health

      2,455        19        124        788        134        520        370    

Annuity

      13,873        —        49        5,653        1,199        10,215        (4,060)   
  

 

 

  
    $ 52,372      $ 124      $ 983      $ 9,516      $ 3,597      $ 14,412      $ (1,661)   
  

 

 

  

Year ended December 31, 2022

                     

Individual life

     $ 30,960      $ —      $ 580      $ 8,576      $ 1,626      $ 9,716      $ 1,201    

Individual health

      5,993        112        327        710        406        822        226    

Group life and health

      2,469        21        128        806        170        509        360    

Annuity

      18,401        —        63        9,721        1,095        21,481        (10,034)   
  

 

 

  
    $ 57,823      $ 133      $ 1,098      $ 19,813      $ 3,297      $ 32,528      $ (8,247)   
  

 

 

  

Year ended December 31, 2021

                     

Individual life

     $ 25,206      $ —      $ 664      $ 1,673      $ 1,600      $ 4,243      $ 1,086    

Individual health

      5,871        115        342        737        441        703        220    

Group life and health

      2,480        22        134        801        166        530        320    

Annuity

      18,289        —        37        11,271        984        19,574        (7,757)   
  

 

 

  
    $ 51,846      $ 137      $ 1,177      $ 14,482      $ 3,191      $ 25,050      $ (6,131)   
  

 

 

  

*Allocations of net investment income and other operating expenses are based on a number of assumptions and estimates, and the results would change if different methods were applied.

 

108

Table of Contents

Transamerica Life Insurance Company

Reinsurance

(Dollars in Millions)

SCHEDULE IV

 

    

Gross

 Amount 

     

Ceded to

Other

 Companies 

     

Assumed

From Other

Companies

     

Net

 Amount 

     

Percentage of

Amount

 Assumed to Net 

  
  

 

 

  

Year ended December 31, 2023

                 

Life insurance in force

     $  798,119      $ 540,679      $ 262,185      $ 519,625        50       %   
  

 

 

  

Premiums:

                 

Individual life

     $ 4,598      $ 3,029      $ 841      $ 2,410        35       %   

Individual health

      717        58        6        665        1     

Group life and health

      898        112        2        788        0     

Annuity

      10,049        4,403        7        5,653        0     
  

 

 

  
    $ 16,262      $ 7,602      $ 856      $ 9,516        9        %   
  

 

 

  

Year ended December 31, 2022

                 

Life insurance in force

     $ 776,124      $ 616,800      $ 319,443      $ 478,767        67       %   
  

 

 

  

Premiums:

                 

Individual life

     $ 4,547      $ 2,316      $ 6,345      $ 8,576        74       %   

Individual health

      758        60        12        710        2     

Group life and health

      927        135        14        806        2     

Annuity

      9,725        16        12        9,721        0     
  

 

 

  
    $ 15,957      $ 2,527      $ 6,383      $ 19,813        32       %   
  

 

 

  

Year ended December 31, 2021

                 

Life insurance in force

     $ 760,949      $ 700,434      $ 367,342      $ 427,857        86       %   
  

 

 

  

Premiums:

                 

Individual life

     $ 4,460      $ 4,016      $ 1,229      $ 1,673        73       %   

Individual health

      787        62        12        737        2     

Group life and health

      920        136        17        801        2     

Annuity

      11,424        166        13        11,271        0     
  

 

 

  
    $ 17,591      $ 4,380      $ 1,271      $ 14,482        9        %   
  

 

 

  

 

109

Table of Contents

PART C

OTHER INFORMATION

 

Item 27.

      Exhibits
  Exhibit No:      Description
  (a)      Board of Directors Resolution
  (a)(1)      Resolution of the Board of Directors of Transamerica Financial Life Insurance Company authorizing establishment of the Separate Account. Note 1
  (b)      Custodian Agreements. Not applicable
  (c)      Underwriting Contracts
  (c)(1)      Amended and Restated Principal Underwriting Agreement - Transamerica Financial Life Insurance Company and Transamerica Capital, Inc. Note 6
  (d)      Contracts
  (d)(1)      Policy. Note 6
  (d)(2)      Policy Rider (Return of Premium). Note 6
  (d)(3)      Policy Rider (Annual Step-Up). Note 6
  (d)(4)      Policy Rider (GPS). Note 14
  (d)(5)      Policy Rider (Income Link). Note 14
  (d)(6)      Policy Rider (RIM). Note 14
  (d)(7)      Policy Rider (Retirement Income Choice 1.6). Note 6
  (d)(8)      Policy Rider (Transamerica Income Edge). Note 17
  (d)(9)      Policy Endorsement (Income Option Payment Endorsement). Note 20
  (e)      Applications
  (e)(1)      Application (Transamerica Variable Annuity Series and Partners Variable Annuity Series). Note 14
  (f)      Depositor’s Certificate of Incorporation and By-laws
  (f)(1)      Articles of Incorporation of Transamerica Financial Life Insurance Company. Note 2
  (f)(2)      Bylaws of Transamerica Financial Life Insurance Company. Note 2
  (g)      Reinsurance Contracts - Not applicable.
  (h)      Participation Agreements
  (h)(1)      Participation Agreement (AllianceBernstein). Note 3
  (h)(1)(i)      Amendment No. 2 to Participation Agreement (AllianceBernstein). Note 1

Table of Contents

   

   (h)(1)(ii)      Amendment No. 5 to Participation Agreement (AllianceBernstein). Note 1
  (h)(1)(iii)      Amendment No. 6 to Participation Agreement (AllianceBernstein). Note 1
  (h)(1)(iv)      Amended Schedule A to Participation Agreement dated May 1, 2015 (AllianceBernstein). Note 14
  (h)(1)(v)      Amended Schedule A to Participation Agreement dated May 1, 2017 (AllianceBernstein). Note 19
  (h)(1)(vi)      Amended Schedule A to Participation Agreement dated May 1, 2020 (AllianceBernstein). Note 22
  (h)(1)(vii)      Amendment No. 9 to Participation Agreement (AllianceBernstein). Note 24
  (h)(2)      Participation Agreement (American Funds). Note 4
  (h)(2)(i)      Amendment No. 2 to Participation Agreement (American Funds). Note 1
  (h)(2)(ii)      Amendment No. 4 to Participation Agreement (American Funds). Note 10
  (h)(2)(iii)      Amendment No. 5 to Participation Agreement (American Funds). Note 13
  (h)(2)(iv)      Amendment No. 7 to Participation Agreement (American Funds). Note 19
  (h)(2)(v)      Amendment No. 8 to Participation Agreement (American Funds). Note 22
  (h)(2)(vi)      Amendment No. 9 to Participation Agreement (American Funds). Note 24
  (h)(3)      Amended and Restated Participation Agreement (Fidelity). Note 11
  (h)(3)(i)      Amended Schedule A to Participation Agreement dated May 1, 2017 (Fidelity). Note 19
  (h)(3)(ii)      Amended Schedule A to Participation Agreement dated May 1, 2020 (Fidelity). Note 22
  (h)(3)(iii)      Amendment No. 1 to Participation Agreement (Fidelity). Note 24
  (h)(4)      Participation Agreement (GE). Note 4
  (h)(4)(i)      Amendment No. 1 to Participation Agreement (GE). Note 5
  (h)(4)(ii)      Amendment No. 2 to Participation Agreement (GE). Note 8
  (h)(4)(iii)      Amendment No. 3 to Participation Agreement (GE/SSGA). Note 20
  (h)(4)(iv)      Amendment No. 5 to Participation Agreement (GE/SSGA). Note 24
  (h)(5)      Amended and Restated Participation Agreement (TST). Note 6
  (h)(5)(i)      Amendment No. 1 to Participation Agreement (TST). Note 7
  (h)(5)(ii)      Amended Schedule A to Participation Agreement dated September 18, 2013 (TST). Note 9
  (h)(5)(iii)      Amended Schedule A to Participation Agreement dated October 31, 2013 (TST). Note 10
  (h)(5)(iv)      Amended Schedule A to Participation Agreement dated May 1, 2014 (TST). Note 11
  (h)(5)(v)      Amendment No. 2 to Participation Agreement (TST). Note 12
  (h)(5)(vi)      Amended Schedule A to Participation Agreement dated May 1, 2015 (TST). Note 14
  (h)(5)(vii)      Amended Schedule A to Participation Agreement dated July 1, 2015 (TST). Note 15
  (h)(5)(viii)      Amended Schedule A to Participation Agreement dated December 18, 2015 (TST). Note 16
  (h)(5)(ix)      Amended Schedule A to Participation Agreement dated March 21, 2016 (TST). Note 16

Table of Contents

   

   (h)(5)(x)      Amended Schedule A to Participation Agreement dated May 1, 2016 (TST). Note 16
  (h)(5)(xi)      Amended Schedule A to Participation Agreement dated December 16, 2016 (TST). Note 18
  (h)(5)(xii)      Amended Schedule A to Participation Agreement dated May 1, 2017 (TST). Note 19
  (h)(5)(xiii)      Amended Schedule A to Participation Agreement dated September 29, 2017 (TST). Note 20
  (h)(5)(xiv)      Amended Schedule A to Participation Agreement Dated May 1, 2018 (TST). Note 21
  (h)(5)(xv)      Amended Schedule A to Participation Agreement Dated November 1, 2018 (TST). Note 21
  (h)(5)(xvi)      Amended Schedule A to Participation Agreement dated May 1, 2020 (TST). Note 22
  (h)(5)(xvii)      Amended Schedule A to Participation Agreement dated May 1, 2023 (TST). Note 24
  (h)(5)(xviii)      Amendment No. 3 to Participation Agreement (TST). Note 24
  (h)(6)      Participation Agreement (VOYA). Note 16
  (h)(6)(i)      Additional Compensation Addendum to Participation Agreement (VOYA). Note 16
  (i)      Administrative Contracts. Not applicable.
  (j)      Other Material Contracts. Not applicable.
  (k)      Legal Opinion. Opinion and Consent of Counsel. Filed herewith.
  (l)      Other Opinions. Consent of Independent Registered Public Accounting Firm. Filed herewith.
  (m)      Omitted Financial Statements. Not applicable
  (n)      Initial Capital Agreements. Not applicable
  (o)      Form of Initial Summary Prospectuses. Not applicable
  (p)      Powers of Attorney. Filed herewith.

 

Note 1.    Incorporated herein by reference to the Initial Filing to Form N-4 Registration Statement (File No. 333-185574) filed on December 20, 2012.
Note 2.       Incorporated herein by reference to Pre-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-172715) filed on May 6, 2011.
Note 3.    Incorporated herein by reference to Pre-Effective Amendment No. 1 to Form N- 4 Registration Statement (File No. 333-147041) filed on May 22, 2008.
Note 4.    Incorporated herein by reference to Post-Effective Amendment No. 30 to Form N-4 Registration Statement (File No. 33-83560) filed on November 19, 2009.
Note 5.    Incorporated herein by reference to Pre-Effective Amendment No. 2 to Form N-4 Registration Statement (File No. 333-172715) filed on September 19, 2011.
Note 6.    Incorporated herein by reference to Pre-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-185574) filed on April 10, 2013.
Note 7.    Incorporated herein by reference to Post-Effective Amendment No. 59 to Form N-4 Registration Statement (File No. 33-33085) filed on August 16, 2013.

Table of Contents
Note 8.    Incorporated herein by reference to Pre-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-189436) filed on September 11, 2013.
Note 9.    Incorporated herein by reference to Pre-Effective Amendment No. 2 to Form N-4 Registration Statement (File No. 333-189436) filed on October 2, 2013.
Note 10.    Incorporated herein by reference to Post-Effective Amendment No. 2 to Form N-4 Registration Statement (File No. 333-186035) filed on February 21, 2014.
Note 11.    Incorporated herein by reference to Post-Effective Amendment No. 3 to Form N-4 Registration Statement (File No. 333-185574) filed on April 28, 2014.
Note 12.      Incorporated herein by reference to Post-Effective Amendment No. 67 to Form N-4 Registration Statement (File No. 33-56908) filed on December 30, 2014.
Note 13.    Incorporated herein by reference to Post-Effective Amendment No. 2 to Form N-4 Registration Statement (File No. 333-189436) filed on February 19, 2015.
Note 14.    Incorporated herein by reference to Post-Effective Amendment No. 6 to Form N-4 Registration Statement (File No. 333-185574) filed on April 29, 2015.
Note 15.    Incorporated herein by reference to Post-Effective Amendment No. 4 to Form N-4 Registration Statement (File No. 333-186033) filed on October 13, 2015.
Note 16.    Incorporated herein by reference to Post-Effective Amendment No. 7 to Form N-4 Registration Statement (File No. 333-185574) filed on April 27, 2016.
Note 17.    Incorporated herein by reference to Post-Effective Amendment No. 6 to Form N-4 Registration Statement (File No. 333-186036) filed on October 31, 2016.
Note 18.    Incorporated herein by reference to the Initial Filing of Form N-4 Registration Statement (File No. 333-215599) filed on January 18, 2017.
Note 19.    Incorporated herein by reference to Post-Effective Amendment No. 9 to Form N-4 Registration Statement (File No. 333-185574) filed on April 24, 2017.
Note 20.    Incorporated herein by reference to Post-Effective Amendment No. 10 to Form N-4 Registration Statement (File No. 333-185574) filed on April 30, 2018.
Note 21.    Incorporated herein by reference to Post-Effective Amendment No. 11 to Form N-4 Registration Statement (File No. 333-185574) filed on April 25, 2019.
Note 22.    Incorporated herein by reference to Post-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-233840) filed on July 31, 2020.
Note 23.    Incorporated herein by reference to Post-Effective Amendment No. 15 to Form N-4 Registration Statement (File No. 333-185574) filed on April 27, 2022.
Note 24.    Filed Herewith

Table of Contents

Item 28.  Directors and Officers of the Depositor (Transamerica Financial Life Insurance Company)

 

Name and Business Address    Principal Positions and Offices with Depositor

Jamie Ohl

1801 California St. Suite 5200

Denver, CO 80202

    President and Chief Executive Officer, Individual Solutions Division

Bonnie T. Gerst

6400 C Street SW

Cedar Rapids, Iowa 52499

    Director, President, Financial Assets and Chairman of the Board

Christopher S. Fleming

100 Light Street

Baltimore, MD 21202

    Director and Chief Operating Officer, Individual Solutions Division

Andrew S. Williams

100 Light Street

Baltimore, MD 21202

   

Director, General Counsel, Assistant Secretary and Senior Vice President

Matt Keppler

100 Light Street

Baltimore, MD 21202

    Chief Financial Officer, Executive Vice President and Treasurer

Zachary Harris

6400 C Street SW

Cedar Rapids, Iowa 52499

    Director, Chief Operating Officer, Workplace Solutions Division

Wendy E. Cooper

249 East 93rd Street

New York, NY 10128

    Director

Anne C. Kronenberg

187 Guard Hill Road

Bedford Corner, NY 10549

    Director

June Yuson

245 East 93rd Street

New York, NY 10128

    Director

Table of Contents

ITEM 29 LISTING

 

 

Item 29. Persons Controlled by or under Common Control with the Depositor or Registrant.

 
As of December 31, 2023, the following pages shows all corporations directly or indirectly controlled or under common control, with the Depositor, showing the state or other sovereign power under the laws of which each is organized and the percentage owner ship of voting securities giving rise to the control relationship.
       
Name  

  Jurisdiction of  

Incorporation 

  

Percent of Voting

Securities Owned

   Business
       
25 East 38th Street, LLC   Delaware  

 

Yarra Rapids, LLC, Sole Member (100%)

 

  

Real estate investments

       
239 West 20th Street, LLC   Delaware  

 

Yarra Rapids, LLC, Sole Member (100%)

 

  

Real estate investments

       
313 East 95th Street, LLC   Delaware  

 

Yarra Rapids, LLC, Sole Member (100%)

 

  

Real estate investments

       
319 East 95th Street, LLC   Delaware  

 

Yarra Rapids, LLC, Sole Member (100%)

 

  

Real estate investments

       
Administrative Group, LLC   Tennessee  

 

AUSA Holding, LLC, Sole Member (100%)

 

  

Retirement services

       
AEGON Affordable Housing Debt Fund I, LLC   Delaware  

 

AHDF Manager I, LLC, Member (0.01%);

Transamerica Life Insurance Company, Managing Member (5%);

Dominium Taxable Fund I, LLC, non-AEGON affiliates, Member (94.99%)

 

  

Affordable housing loans

       
AEGON AM Funds, LLC   Delaware  

 

AEGON USA Investment Management, LLC, Sole LLC Member (100%)

***Company is the Manager; equity will be owned by clients/Investors of AEGON USA Investment Management, LLC***

 

  

To serve as a fund for a client and offer flexibility to accommodate other similarly situated clients.

       
AEGON AM Private Equity Partners I, LLC   Delaware  

 

AEGON USA Investment Management, LLC, Sole Member (100%)

 

  

Investments

       
AEGON AM Private Equity Partners II, LLC   Delaware  

 

AEGON USA Investment Management, LLC, Sole Member (100%)

 

  

General Partner to FSBA AAM Strategic Fund II, LP

       
AEGON Asset Management Services, Inc.   Delaware  

AUSA Holding, LLC, Sole Shareholder (100%)

  

Registered investment advisor

       
Aegon Community Investments 50, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 51, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 52, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 53, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 54, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 55, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 56, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 57, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 58, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 59, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 60, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

Table of Contents

ITEM 29 LISTING

 

       
Aegon Community Investments 61, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 62, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 63, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 64, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 65, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 66, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
Aegon Community Investments 67, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       
AEGON Direct Marketing Services, Inc.   Maryland  

Transamerica Life Insurance Company, Sole Shareholder (100%)

  

Marketing company

       
AEGON Direct Marketing Services International, LLC   Maryland  

AUSA Holding, LLC, Sole Shareholder (100%)

  

Marketing arm for sale of mass marketed insurance coverage

       

AEGON Direct Marketing Services Mexico,

S.A. de C.V.

   Mexico  

AEGON Mexico Holding B.V., Managing Member (92.96%);

AEGON DMS Holding B.V., Member (5.82%)

  

Provide management advisory and technical consultancy services.

       
AEGON Direct Marketing Services Mexico Servicios, S.A. de C.V.   Mexico  

AEGON Mexico Holding B.V., Sole Member (100%)

  

 

Provide marketing, trading, telemarketing and advertising services in favor of any third party, particularly in favor of insurance and reinsurance companies.

 

       
AEGON Energy Management, LLC   Delaware  

AEGON USA Realty Advisors, LLC, Sole Member (100%)

  

Investments

       
AEGON Financial Services Group, Inc.   Minnesota  

 

Transamerica Life Insurance Company, Sole Shareholder (100%)

 

  

Marketing

       
AEGON Funding Company, LLC   Delaware  

 

Transamerica Corporation, Sole Member (100%)

 

  

 

Issue debt securities-net proceeds used to make loans to affiliates

 

       
Aegon Global Services, LLC   Iowa  

Commonwealth General Corporation, Sole Member (100%)

  

Holding company

       
AEGON Institutional Markets, Inc.   Delaware  

Commonwealth General Corporation, Sole Shareholder (100%)

  

 

Provider of investment, marketing and administrative services to insurance companies

 

       
Aegon LIHTC Fund 50, LLC   Delaware  

Aegon LIHTC Fund 63, LLC, Managing Member (51.01%);

Citibank, N.A., non-affiliate of AEGON,

Member (48.99%)

  

Investments

       
Aegon LIHTC Fund 51, LLC   Delaware  

Aegon Community Investments 51, LLC, Managing Member (.01%);

Citibank, N.A., non-affiliate of AEGON, Member (99.99%)

  

Investments

Table of Contents

ITEM 29 LISTING

 

       
Aegon LIHTC Fund 52, LLC   Delaware  

 

Aegon Community Investments 52, LLC, Member (0.01%);

Transamerica Financial Life Insurance Company, Member (10.18%);

Transamerica Life Insurance Company, Member (1%);

Ally Bank, non-affiliates of AEGON, Member (11.35%);

Bank of the West, non-affiliates of AEGON, Member (7.46%);

California Bank & Trust, non-affiliates of AEGON, Member (5.21%);

Citibank, N.A., non-affiliates of AEGON, Managing Member (49%);

Pacific West Bank, non-affiliates of AEGON, Member (7.58%);

US Bank, non-affiliates of AEGON, Member (7.58%)

 

  

Investments

       
Aegon LIHTC Fund 54, LLC   Delaware  

 

Aegon Community Investments 54, LLC, Non-Member Manager (0%);

FNBC Leasing Corporation, non-affiliate of Aegon, Sole Member (100%)

 

  

Investments

       
Aegon LIHTC Fund 55, LLC   Delaware  

 

Aegon Community Investments 55, LLC Managing Member (0.01%)

Transamerica Life Insurance Company, Member (2.82%);

Ally Bank, non-affiliates of AEGON, Member (8.21%);

Bank of Hope, non-affiliates of AEGON, Member (14.27%);

Citibank, N.A., non-affiliates of AEGON, Member (21.69%);

CMFG Life Insurance Company, non-affiliates of AEGON, Member (9.72%);

Lake City Bank, non-affiliates of AEGON, Member (1.47%);

Minnesota Life Insurance Company, non-affiliates of AEGON, Member (7.46%);

The Guardian Life Insurance Company of America, non-affiliates of AEGON, Member (10.44%);

U.S. Bancorp Community Development Corporation, non-affiliates of AEGON, Member (22.10%);

ZB National Association, non-affiliates of AEGON, Member (1.81%)

 

  

Investments

       
Aegon LIHTC Fund 57, LLC   Delaware  

 

Aegon Community Investments 57, LLC, Managing Member (.01%);

Bank of America, N.A., non-affiliate of AEGON, Investor Member (99.99%)

 

  

Investments

Table of Contents

ITEM 29 LISTING

 

       
Aegon LIHTC Fund 58, LLC   Delaware  

 

Aegon Community Investments 58, LLC, Managing Member (0.01%);

Transamerica Life Insurance Company, Member (2.92%);

Allstate Insurance Company, non- affiliates of AEGON, Member (23.89%);

Ally Bank, non-affiliates of AEGON, Member (17.31%);

CMFG Life Insurance Company, non- affiliates of AEGON, Member (8.20%);

Santander Bank, N.A., non-affiliates of AEGON, Member (21.37%);

U.S. Bancorp Community Development Corporation, non-affiliates of AEGON, Member (19.83%);

Zions Bancorporation, N.A., non-affiliates of AEGON, Member (6.47%)

 

  

Investments

       
Aegon LIHTC Fund 60, LLC   Delaware  

 

Aegon Community Investments 60, LLC, Non-Member Manager (0%);

FNBC Leasing Corporation, non-affiliate of Aegon, Sole Member (100%)

 

  

Investments

       
Aegon LIHTC Fund 61, LLC   Delaware  

Aegon Community Investments 61, LLC, Non-Member Manager (0%);

HSBC Bank, N.A., non-affiliate of Aegon,

Sole Member (100%)

  

Investments

       
Aegon LIHTC Fund 62, LLC   Delaware  

 

Aegon Community Investments 62, LLC, Managing Member? (0.01%);

Allstate Insurance Company, non- affiliates of AEGON, Member (20.48%);

Ally Bank, non-affiliates of AEGON, Member (10.11%);

Bank of the West, non-affiliates of AEGON, Member (6.57%);

Farm Bureau Property & Casualty, non- affiliates of AEGON, Member (6.74%);

Minnesota Life Insurance Company, non- affiliates of AEGON, Member (6.74%);

Santander Bank, N.A., non-affiliates of AEGON, Member (5.39%);

State Street Bank and Trust Company, non-affiliates of AEGON, Member (34.22%);

U.S. Bancorp Community Development Corporation, non-affiliates of AEGON, Member (6.57%);

Zions Bancorporation, N.A., non-affiliates of AEGON, non-affiliates of AEGON, Member (3.17%)

 

 

  

Investments

Table of Contents

ITEM 29 LISTING

 

       

Aegon LIHTC Fund 63, LLC

   Delaware  

 

Aegon Community Investments 63, LLC, non-Member Manager (0%);

FNBC Leasing Corporation, non-affiliate of Aegon, Sole Member (100%)

 

  

Investments

       

Aegon LIHTC Fund 64, LLC

   Delaware  

 

Aegon Community Investments 64, LLC, non-Member Manager (0%);

Bank of America, N.A., non-affiliate of AEGON, Investor Member (99.99%) KCIC Fund 5A, LLC (0.01%)

 

  

Investments

       

Aegon LIHTC Fund 65, LLC

   Delaware  

 

Aegon Community Investments 65, LLC, Managing Member (.01%);

Bank of America, N.A., non-affiliate of AEGON, Investor Member (99.99%)

 

  

Investments

       

Aegon LIHTC Fund 66, LLC

   Delaware  

 

Aegon Community Investments 66, LLC, Managing Member? (0.01%);

Bank of the West, non-affiliates of AEGON, Member (49.99%);

Cedar Rapids Bank & Trust, non-affiliates of AEGON, Member (49.99%);

 

  

Investments

       

Aegon LIHTC Fund 67, LLC

   Delaware  

 

Aegon Community Investments 67, LLC, Non-Member Manager (0%);

FNBC Leasing Corporation, non-affiliate of Aegon, Sole Member (100%)

 

  

Investments

       

AEGON Managed Enhanced Cash, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (79.20%);

Transamerica Life Insurance Company,

Sole Member (20.80%)

  

Investment vehicle for securities lending cash collateral

       

AEGON Management Company

   Indiana   Transamerica Corporation, Sole Shareholder (100%)  

Holding company

       

Aegon Multi-Family Equity Fund, LLC

   Delaware  

 

Transamerica Financial Life Insurance Company, Member (5%);

Transamerica Life Insurance Company, Member (20%);

Landmark Real Estate Partners VIII, L.P., non-affiliate of AEGON, Member (72.16%);

NCL Investments II, L.P. - RE Series, non-affiliates of AEGON, Member (2.84%)

 

  

Investments

       

Aegon Opportunity Zone Fund Joint Venture 1, LP

   Delaware  

Aegon OZF Investments 1, LLC, Member (0.25%);

United Insurance Company of America,

Member (99.75%)

  

Investments

       

Aegon OZF Investments 1, LLC

   Delaware   AEGON USA Realty Advisors, LLC, Sole Member 100%  

Investments

       

Aegon Upstream Energy Fund, LLC

   Delaware   AEGON Energy Management, LLC, Sole Member 100%  

Investments

       

AEGON USA Asset Management Holding, LLC

   Iowa   AUSA Holding, LLC, Sole Member 100%  

Holding company

       

AEGON USA Investment Management, LLC

   Iowa   AEGON USA Asset Management Holding, LLC, Sole Member 100%  

Investment advisor

       

AEGON USA Real Estate Services, Inc.

   Delaware   AEGON USA Realty Advisors, LLC, Sole Shareholder (100%)  

Real estate and mortgage holding company

       

AEGON USA Realty Advisors, LLC

   Iowa   AEGON USA Asset Management Holding, LLC, Sole Member (100%)  

Administrative and investment services

Table of Contents

ITEM 29 LISTING

 

       
AEGON USA Realty Advisors of California, Inc.   Iowa  

AEGON USA Realty Advisors, Inc., Sole Shareholder (100%)

  

Investments

       
Aegon Workforce Housing Boynton Place REIT, LLC   Delaware  

 

Aegon Workforce Housing Separate Account 1, LLC, Sole Member (100%)

 

  

Multifamily private equity structure with third-party Investor

       
Aegon Workforce Housing Fund 2 Holding Company, LLC   Delaware  

Aegon Workforce Housing Fund 2, LP, Sole Member (100%)

  

Holding company

       
Aegon Workforce Housing Fund 2 Holding Company B, LLC   Delaware  

Aegon Workforce Housing Fund 2, LP, Sole Member (100%)

  

Holding company

       
Aegon Workforce Housing Fund 2 Holding Company C, LLC   Delaware  

Aegon Workforce Housing Fund 2, LP, Sole Member (100%)

  

Holding Company

       
Aegon Workforce Housing Fund 2, L.P   Delaware  

 

AWHF2 General Partner, LLC, General Partner (0%);

Transamerica Financial Life Insurance Company, Fund Partners, Member (20%);

Transamerica Life Insurance Company, Fund Partners, Member (80%)

 

  

Investments

       
Aegon Workforce Housing Fund 3 Holding Company, LLC   Delaware  

Aegon Workforce Housing Fund 3, LP, Sole Member (100%)

  

Holding company

       
Aegon Workforce Housing Fund 3, L.P   Delaware  

 

Transamerica Financial Life Insurance Company, Limited Partners: (10%);

Transamerica Life Insurance Company, Limited Partners (60%);

Transamerica Life Insurance Company, Limited Partners (30%)

 

  

Investments

       
Aegon Workforce Housing JV 4A, LLC   Delaware  

Aegon Workforce Housing Fund 2 Holding Company, LLC, Member (44.5%);

Landmark Real Estate Partners VIII, L.P., non-affiliates of AEGON, Member (26.7%);

NCL Investments II, L.P. – RE Series, non-affiliates of AEGON, Member (1.05%);

Strategic Partners Real Estate VII Investments, L.P., non-affiliates of AEGON, Member (27.75%)

  

Investments

       
Aegon Workforce Housing JV 4B, LLC   Delaware  

Aegon Workforce Housing Fund 2 Holding Company, LLC, Member (25%);

Landmark Real Estate Partners VIII, L.P., non-affiliates of AEGON, Member (36.08%);

NCL Investments II, L.P. – RE Series, non-affiliates of AEGON, Member (1.42%);

Strategic Partners Real Estate VII Investments, L.P., non-affiliates of AEGON, Member (37.50%)

  

Investments

Table of Contents

ITEM 29 LISTING

 

       
Aegon Workforce Housing JV 4C, LLC   Delaware  

 

Aegon Workforce Housing Fund 2 Holding Company, LLC, Member (10%);

Landmark Real Estate Partners VIII, L.P., non-affiliates of AEGON, Member (43.30%);

NCL Investments II, L.P., non-affiliates of AEGON, Member (1.70%);

Strategic Partners Real Estate VII Investments, L.P., non-affiliates of AEGON, Member (45%)

 

  

Investments

       

Aegon Workforce Housing Park at Via Rosa REIT, LLC

   Delaware  

 

Aegon Workforce Housing Separate Account 1, LLC, Sole Member (100%)

 

  

Multifamily private equity structure with third-party Investor

       
Aegon Workforce Housing Separate Account 1, LLC   Delaware  

 

Transamerica Financial Life Insurance Company (4.17%);

Transamerica Life Insurance Company, Member (15.83%);

Transamerica Life Insurance Company, Member (4.25%)

AWHSA Manager 1, LLC, non-affiliates of AEGON, Member Manager (0%);

Lake Tahoe IV, L.P., non-affiliates of AEGON, non-affiliates of AEGON, Member (23.86%);

Townsend RE Global Special Solutions, L.P., non-affiliates of AEGON, Member (10.23%);

Townsend Real Estate Alpha Fund III, L.P., non-affiliates of AEGON, Member (40.91%)

 

  

Multifamily private equity structure with third-party Investor

       
AHDF Manager I, LLC   Delaware  

AEGON USA Realty Advisors, LLC, Sole Member (100%)

  

Investments

       
ALH Properties Eight LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
ALH Properties Eleven LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
ALH Properties Four LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
ALH Properties Nine LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
ALH Properties Seven LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
ALH Properties Seventeen LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
ALH Properties Sixteen LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
ALH Properties Ten LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
ALH Properties Twelve LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
ALH Properties Two LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
AMFETF Manager, LLC   Delaware  

AEGON USA Realty Advisors, LLC, Sole Member (100%)

  

Investments

       
AMTAX HOLDINGS 308, LLC   Ohio  

TAHP Fund II, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner

Manager (0%)

  

Affordable housing

Table of Contents

ITEM 29 LISTING

 

       
AMTAX HOLDINGS 388, LLC   Ohio  

TAHP Fund II, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner

Manager (0%)

  

Affordable housing

       
AMTAX HOLDINGS 483, LLC   Ohio  

 

TAHP Fund I, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner Manager (0%)

 

  

Affordable housing

       
AMTAX HOLDINGS 559, LLC   Ohio  

 

TAHP Fund I, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner Manager (0%)

 

  

Affordable housing

       
AMTAX HOLDINGS 561, LLC   Ohio  

TAHP Fund VII, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner

Manager (0%)

  

Affordable housing

       
AMTAX HOLDINGS 588, LLC   Ohio  

 

TAHP Fund I, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner Manager (0%)

 

  

Affordable housing

       
AMTAX HOLDINGS 613, LLC   Ohio  

Cupples State LIHTC Investors, LLC, Member (1%);

Garnet LIHTC Fund VII, LLC, Member (99%);

TAH Pentagon Funds LLC, non-owner Manager (0%)

  

Affordable housing

       
AMTAX HOLDINGS 639, LLC   Ohio  

 

TAHP Fund I, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner Manager (0%)

 

  

Affordable housing

       
AMTAX HOLDINGS 649, LLC   Ohio  

 

TAHP Fund I, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner Manager (0%)

 

  

Affordable housing

       
AMTAX HOLDINGS 672, LLC   Ohio  

 

TAHP Fund I, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner Manager (0%)

 

  

Affordable housing

       
AMTAX HOLDINGS 713, LLC   Ohio  

TAHP Fund II, LLC, Sole Member (100%);

TAH Pentagon Funds LLC, non-owner

Manager (0%)

  

Affordable housing

       
Apollo Housing Capital Arrowhead Gardens, LLC   Delaware  

 

Garnet LIHTC Fund XXXV, LLC, Sole Member (100%)

 

  

Affordable housing

       
APOP III, LLC   Delaware  

 

Transamerica Life Insurance Company, Limited Partner (88.59%);

Transamerica Financial Life Insurance Company, Limited Partner (9.84%)

 

  

Investments

       
AUSA Holding, LLC   Maryland  

Transamerica Corporation, Sole Member (100%)

  

Holding company

       
AUSA Properties, Inc.   Iowa  

AEGON USA Realty Advisors, LLC, Sole Shareholder (100%)

  

Own, operate and manage real estate

       
AWHF2 General Partner, LLC   Delaware  

AEGON USA Realty Advisors, LLC, Sole Member (100%)

  

Investments

       
AWHF2 Subsidiary Holding Company C, LLC   Delaware  

Aegon Workforce Housing Fund 2 Holding Company C, LLC, Sole Member (100%)

  

Holding Company

Table of Contents

ITEM 29 LISTING

 

       
AWHF3 General Partner, LLC   Delaware  

AEGON USA Realty Advisors, LLC, Sole Member (100%)

  

Investments

       
AWHJV4 Manager, LLC   Delaware  

AEGON USA Realty Advisors, LLC, Sole Member (100%)

  

Investments

       
AWHSA Manager 1, LLC   Delaware  

 

AEGON USA Realty Advisors, LLC, Sole Member (100%)

 

  

Multifamily private equity structure with third-party Investor

       
Barfield Ranch Associates, LLC   Florida  

 

Mitigation Manager, LLC, Member (50%); OBPFL-Barfield, LLC, non-affiliate of AEGON, Member (50%)

 

  

Investments

       
Bay State Community Investments II, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments in low income housing tax credit properties

       
Carle Place Leasehold SPE, LLC   Delaware  

 

Transamerica Financial Life Insurance Company, Sole Member (100%)

 

  

Lease holder

       
Commonwealth General Corporation   Delaware  

Transamerica Corporation, Sole Shareholder (100%)

  

Holding company

       
Creditor Resources, Inc.   Michigan  

AUSA Holding, LLC, Sole Shareholder (100%)

  

Credit insurance

       
CRI Solutions, Inc.   Maryland  

Creditor Resources, Inc., Sole Member (100%)

  

Sales of reinsurance and credit insurance

       
Cupples State LIHTC Investors, LLC   Delaware  

Transamerica Life Insurance Company, Sole Member (22%);

Transamerica Life Insurance Company, Sole Member (63%);

Transamerica Life Insurance Company, Sole Member (15%)

  

Investments

       
Equitable AgriFinance, LLC   Delaware  

 

AEGON USA Realty Advisors, LLC, Member (50%);

Equitable Financial Insurance Company, non-affiliate of AEGON, Member (50%)

 

  

Agriculturally-based real estate advisory services

       
FD TLIC Limited Liability Company   New York  

Transamerica Life Insurance Company, Sole Member (100%)

  

Broadway production

       
FGH Realty Credit LLC   Delaware  

 

FGH USA, LLC, Sole Member (100%)

 

  

Real estate

       
FGH USA LLC   Delaware  

RCC North America LLC, Sole Member (100%)

  

Real estate

       
Fifth FGP LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
Financial Planning Services, Inc.   District of Columbia  

 

Commonwealth General Corporation, Sole Shareholder(100%)

 

  

Management services

       
First FGP LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
Fourth FGP LLC   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

  

Real estate

       
FSBA AAM Strategic Fund I, LP   Delaware  

Aegon AM Private Equity Partners I, LLC, Sole Member (100%)

  

Investments

       
FSBA AAM Strategic Fund II, LP   Delaware  

 

APOP III, LLC, Member (2.5%)

State Board of Administration of Florida acting on behalf of the Florida Retirement System Trust Fund, Member (97.50%)

 

  

AUIM Sponsored Private Equity vehicle

       
Garnet Assurance Corporation   Kentucky  

 

Transamerica Life Insurance Company, Sole Shareholder (100%)

 

  

Investments

       
Garnet Assurance Corporation II   Iowa  

Commonwealth General Corporation, Sole Member (100%)

  

Business investments

Table of Contents

ITEM 29 LISTING

 

       

Garnet Assurance Corporation III

   Iowa  

 

Transamerica Life Insurance Company, Sole Shareholder (100%)

 

  

Business investments

       

Garnet Community Investments, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments IV, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments V, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments VI, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments VII, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments VIII, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments IX, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments X, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XI, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XII, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XVIII, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XX, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXIV, LLC

   Delaware  

Transamerica Life Insurance Company,

Sole Member (100%)

  

Investments

       

Garnet Community Investments XXV, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXVI, LLC

   Delaware  

Transamerica Life Insurance Company,

Sole Member (100%)

  

Investments

       

Garnet Community Investments XXVII, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investment XXVIII, LLC

   Delaware  

Transamerica Life Insurance Company,

Sole Member (100%)

  

Investments

       

Garnet Community Investments XXIX, LLC

   Delaware  

Transamerica Life Insurance Company,

Sole Member (100%)

  

Investments

       

Garnet Community Investments XXXI, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXXII, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXXIII, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXXIV, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXXV, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXXVI, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXXVII, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXXVIII, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XXXIX, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XL, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XLI, LLC

   Delaware  

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

Table of Contents

ITEM 29 LISTING

 

       

Garnet Community Investments XLII, LLC

   Delaware   

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XLIII, LLC

   Delaware   

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XLIV, LLC

   Delaware   

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XLVI, LLC

   Delaware   

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XLVII, LLC

   Delaware   

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XLVIII, LLC

   Delaware   

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet Community Investments XLIX, LLC

   Delaware   

Transamerica Life Insurance Company, Sole Member (100%)

  

Investments

       

Garnet LIHTC Fund IV, LLC

   Delaware   

Garnet Community Investments IV, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (.01%)

  

Investments

       

Garnet LIHTC Fund V, LLC

   Delaware   

Garnet Community Investments V, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (.01%)

  

Investments

       

Garnet LIHTC Fund VI, LLC

   Delaware   

Garnet Community Investments VI, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (0.01%)

  

Investments

       

Garnet LIHTC Fund VII, LLC

   Delaware   

Members: Investments VII, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (.01%)

  

Investments

       

Garnet LIHTC Fund VIII, LLC

   Delaware   

Garnet Community Investments VIII, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (0.01%)

  

Investments

       

Garnet LIHTC Fund IX, LLC

   Delaware   

Garnet Community Investments IX, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (0.01%)

  

Investments

       

Garnet LIHTC Fund X, LLC

   Delaware   

Garnet Community Investments X, LLC, Member (0.01%);

Goldenrod Asset Management, a non-AEGON affiliate, Member (99.99%)

  

Investments

       

Garnet LIHTC Fund XI, LLC

   Delaware   

Garnet Community Investments XI, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (0.01%)

  

Investments

       

Garnet LIHTC Fund XII, LLC

   Delaware   

Garnet Community Investments XII, LLC, Member (0.01%);

Garnet LIHTC Fund XII-A, LLC, Member (73.39%);

Garnet LIHTC Fund XII-B, LLC, Member (13.30%);

Garnet LIHTC Fund XII-C, LLC, Member (13.30%)

  

Investments

       

Garnet LIHTC Fund XII-A, LLC

   Delaware   

Garnet Community Investments XII, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (.01%)

  

Investments

Table of Contents

ITEM 29 LISTING

 

       
Garnet LIHTC Fund XII-B, LLC   Delaware  

Garnet Community Investments XII, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (.01%)

  

Investments

       
Garnet LIHTC Fund XII-C, LLC   Delaware  

Garnet Community Investments XII, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (.01%)

  

Investments

       
Garnet LIHTC Fund XIII, LLC   Delaware  

Garnet Community Investments, LLC, Member (.01%);

Garnet LIHTC Fund XIII-A, LLC, Member (68.10%);

Garnet LIHTC Fund XIII-B, LLC, Member (31.89%)

  

Investments

       
Garnet LIHTC Fund XIII-A, LLC   Delaware  

 

Garnet Community Investments, LLC, Managing Member? (99.99%);

Transamerica Life Insurance Company, Member (.01%)

 

  

Investments

       
Garnet LIHTC Fund XIII-B, LLC   Delaware  

Garnet Community Investments, LLC, Managing Member (99.99%);

Transamerica Life Insurance Company, Member (.01%)

  

Investments

       
Garnet LIHTC Fund XIV, LLC   Delaware  

Garnet Community Investments, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (0.01%)

  

Investments

       
Garnet LIHTC Fund XV, LLC   Delaware  

Garnet Community Investments, LLC (0.01%);

Transamerica Life Insurance Company (99.99%)

  

Investments

       
Garnet LIHTC Fund XVI, LLC   Delaware  

 

Garnet Community Investments, LLC, Member (0.01%);

FNBC Leasing Corporation, non-affiliates of AEGON, Member (99.99%)

 

  

Investments

       
Garnet LIHTC Fund XVII, LLC   Delaware  

Garnet Community Investments, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (0.01%)

  

Investments

       
Garnet LIHTC Fund XVIII, LLC   Delaware  

 

Garnet Community Investments XVIII, LLC, Member (0.01%);

Verizon Capital Corp., non-affiliates of AEGON, Member (99.99%)

 

  

Investments

       
Garnet LIHTC Fund XIX, LLC   Delaware  

Garnet Community Investments, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (0.01%)

  

Investments

       
Garnet LIHTC Fund XX, LLC   Delaware  

Garnet Community Investments, LLC, Member (100%);

  

Investments

       
Garnet LIHTC Fund XXII, LLC   Delaware  

Garnet Community Investments, LLC, Member (0.01%);

NorLease, Inc., non-affiliates of AEGON, Member (99.99%)

  

Investments

Table of Contents

ITEM 29 LISTING

 

       
Garnet LIHTC Fund XXIII, LLC   Delaware  

 

Garnet Community Investments, LLC, Member (99.99%);

Transamerica Life Insurance Company, Member (0.01%)

 

  

Investments

       
Garnet LIHTC Fund XXIV, LLC   Delaware  

 

Garnet Community Investments XXIV, LLC, Managing Member (0.01%);

Transamerica Life Insurance Company (21.26%);

New York Life Insurance and Annuity Corporation, non-affiliates of AEGON, Member (21.73%);

New York Life Insurance Company, non-affiliates of AEGON, Member (25.51%); Principal Life Insurance Company, non-affiliates of AEGON, Member (31.49%)

 

  

Investments

       
Garnet LIHTC Fund XXV, LLC   Delaware  

 

Garnet Community Investment XXV, LLC, Member (0.01%);

Garnet LIHTC Fund XXVIII, LLC, Member (1%);

Mt. Hamilton Fund, LLC, non-affiliates of AEGON, Member (97.99);

Google Affordable housing I LLC, non-affiliates of AEGON, Member (1%)

 

  

Investments

       
Garnet LIHTC Fund XXVI, LLC   Delaware  

Garnet Community Investments XXVI, LLC, Member (0.01%);

American Income Life Insurance Company, non-affiliate of AEGON, Member (99.99%)

  

Investments

       
Garnet LIHTC Fund XXVII, LLC   Delaware  

Garnet Community Investments XXVII, LLC, Member (0.01%);

Transamerica Life Insurance Company, Member (16.71%);

AETNA Life Insurance Company, non-affiliates of AEGON, Member (30.29%); New York Life Insurance Company, non-affiliates of AEGON, Member (22.71%); ProAssurance Casualty Company, non-affiliates of AEGON, Member (3.63%); ProAssurance Indemnity Company, non-affiliates of AEGON, Member (8.48%); State Street Bank and Trust Company, non-affiliates of AEGON, Member (18.17%)

  

Investments

Table of Contents

ITEM 29 LISTING

 

Garnet LIHTC Fund XXVIII, LLC   Delaware  

Garnet Community Investments XXVIII LLC, Member (0.01%);

United Services Automobile Association,

non-affiliates of AEGON, Member (57.99%);

  

Investments

       
Garnet LIHTC Fund XXIX, LLC   Delaware  

Garnet Community Investments XXIX, LLC, Member (.01%);

Bank of America, N.A., non-affiliates of AEGON, Member (99.99%)

  

Investments

       
Garnet LIHTC Fund XXXI, LLC   Delaware  

 

Garnet Community Investments XXXI, LLC, Member (0.1%);

Thunderbolt Peak Fund, LLC, non-affiliates of AEGON, Member (98.99%); Google Affordable Housing I, LLC, non-affiliates of AEGON, Member (1%)

 

  

Investments

       
Garnet LIHTC Fund XXXII, LLC   Delaware  

 

Garnet Community Investments XXXIII (0.01%);

New York Life Insurance and Annuity Corporation, non-affiliates of AEGON, Member (49.61%);

New York Life Insurance Company, non-affiliates of AEGON, Member (50.38%)

 

  

Investments

       
Garnet LIHTC Fund XXXIII, LLC   Delaware  

Members: Garnet Community Investment XXXIII, LLC, Member (0.01%);

NorLease, Inc., non-affiliates of AEGON, Member (99.99%)

  

Investments

       
Garnet LIHTC Fund XXXIV, LLC   Delaware  

Garnet Community Investments XXXIV, LLC, Member (99.99%);

Transamerica Life Insurance Company,

Member (0.01%)

  

Investments

       
Garnet LIHTC Fund XXXV, LLC   Delaware  

 

Garnet Community Investment XXXV, LLC, Member (0.01%);

AEGON, Microsoft Corporation, non-affiliates of AEGON, Member (99.99%)

 

  

Investments

       
Garnet LIHTC Fund XXXVI, LLC   Delaware  

Garnet Community Investments XXXVI, LLC, Managing Member (1%);

FNBC Leasing Corporation, non-affiliates of AEGON, Investor Member (99%)

  

Investments

       
Garnet LIHTC Fund XXXVII, LLC   Delaware  

Garnet Community Investments XXXVII, LLC, Member (0.01%);

Transamerica Life Insurance Company,

Member (99.99%)

  

Investments

       
Garnet LIHTC Fund XXXVIII, LLC   Delaware  

 

Garnet Community Investments XXXVIII, LLC, non-Member Manager (0%); Norlease, Inc., non-affiliates of AEGON, Member (100%)

 

  

Investments

       
Garnet LIHTC Fund XXXIX, LLC   Delaware  

 

Garnet Community Investments XXXIX, LLC, Managing Member (1%);

FNBC Leasing Corporation, non-affiliates of AEGON, Investor Member (99%)

 

  

Investments

Table of Contents

ITEM 29 LISTING

 

       
Garnet LIHTC Fund XL, LLC   Delaware  

Garnet Community Investments XL, LLC, Member (.01%);

Partner Reinsurance Company of the U.S., non-AEGON affiliate, Member (99.99%)

  

Investments

       
Garnet LIHTC Fund XLI, LLC   Delaware  

 

Garnet Community Investments XLI, LLC, Managing Member (.01%);

Transamerica Life Insurance Company, Member (10%);

BBCN Bank, non-AEGON affiliates, Member (1.25%);

East West Bank, non-AEGON affiliates, Member (12.50%),;

Mutual of Omaha, non-AEGON affiliates, Member (12.50%);

Pacific Premier Bank, non-AEGON affiliates, Member (12.50%); Pacific Western Bank, non-AEGON affiliates, Member (7.50%);

Principal Life Insurance Company, non-AEGON affiliates, Member (18.75%); Standard Insurance Company, non-AEGON affiliates, Member (25%)

 

  

Investments

       
Garnet LIHTC Fund XLII, LLC   Delaware  

 

Garnet Community Investments XLII, LLC, Managing Member (.01%);

Origin Bank, non-affiliates of AEGON, Investor Member (83.33%)

Renasant Bank, non-affiliates of AEGON, Investor Member (16.66%)

 

  

Investments

       
Garnet LIHTC Fund XLIV-A, LLC   Delaware  

 

ING Capital, LLC, Sole Member (100%); Garnet Community Investments XLIV, LLC, Asset Manager (0%)

 

  

Investments

       
Garnet LIHTC Fund XLIV-B, LLC   Delaware  

Lion Capital Delaware Inc, Sole Member (100%);

Garnet Community Investments XLIV,

LLC, Asset Manager (0%)

  

Investments

       
Garnet LIHTC Fund XLVI, LLC   Delaware  

Garnet Community Investments XLVI, LLC, Member (0.01%);

Standard Life Insurance Company, non-affiliate of AEGON, Managing & Investor Member (99.99%)

  

Investments

Table of Contents

ITEM 29 LISTING

 

       
Garnet LIHTC Fund XLVII, LLC   Delaware  

 

Garnet Community Investments XLVII, LLC, Managing Member (0.01%) & Investor Member (1.00%);

Transamerica Life Insurance Company, Investor Member (13.999%);

Citibank, N.A., non-affiliate of AEGON, Investor Member (48.995%);

New York Life Insurance and Annuity Corporation, non-affiliate of AEGON, Investor Member (15.478%);

New York Life Insurance Company, non-affiliate of AEGON, Investor Member (20.518%)

 

   Investments
       
Garnet LIHTC Fund XLVIII, LLC   Delaware  

 

Garnet Community Investments XXXLVIII, LLC, Member (.01%);

Transamerica Financial Life Insurance Company, Member (75.18%);

American Republic Insurance Company, non-affiliates of AEGON, Member (2.84%);

Bank of Hope, non-affiliates of AEGON, Member (.93%);

U.S. Bancorp Community Development Corporation, non-affiliates of AEGON, Member (21.04%)

 

   Investments
Horizons Acquisition 5, LLC   Florida   PSL Acquisitions Operating, LLC, Sole Member (100%)   Development company
Horizons St. Lucie Development, LLC   Florida   PSL Acquisitions Operating, LLC, Sole Member (100%)   Development company
       
Imani FE, L.P.   California  

 

ABS Imani Fe, Partner (0.00%); Garnet LIHTC Fund XIV, LLC, Partner (99.99%);

Grant Housing and Economic Development Corporation, Partner (0.00%);

TAH Imani Fe GP, LLC, Partner (0.00%)

 

   Affordable housing
Investors Warranty of America, LLC   Iowa   RCC North America LLC, Sole Member (100%)   Leases business equipment
Ironwood Re Corp.   Hawaii   Commonwealth General Corporation, Sole Member (100%)   Captive insurance company
LCS Associates, LLC   Delaware   RCC North America LLC, Sole Member (100%)   Investments
Life Investors Alliance LLC   Delaware   Transamerica Life Insurance Company, Sole Member (100%)   Purchase, own, and hold the equity interest of other entities
       
LIHTC Fund 53, LLC   Delaware  

 

AEGON Community Investments 53, LLC, non-Member Manager (0%);

Bank of America, N.A., non-affiliates of AEGON, Member (98%);

US Bank, N.A., non-affiliates of AEGON, Member (2%)

 

   Investments

Table of Contents

ITEM 29 LISTING

 

       
LIHTC Fund 56, LLC   Delaware  

 

AEGON Community Investments 56, LLC, non-Member Manager (0%);

Bank of America, N.A., non-affiliates of AEGON, Member (90%);

US Bank, N.A., non-affiliates of AEGON, Member (10%)

 

   Investments
       
LIHTC Fund 59, LLC   Delaware  

 

AEGON Community Investments 59, LLC, non-Member Manager (0%);

Bank of America, National Association, non-affiliates of AEGON, Member (99.99%);

Dominium Taxable Fund II, LLC, non-affiliates of AEGON, Member (0.01%)

 

   Investments
       
LIHTC Fund XLV, LLC   Delaware  

 

Garnet Community Investments XLIX, LLC, non-Member Manager (0.00%);

Bank of America, National Association, non-affiliates of AEGON, Sole Member (100%)

 

   Investments
       
LIHTC Fund XLIX, LLC   Delaware  

 

Garnet Community Investments XLIX, LLC, non-Member Manager (0.00%);

Bank of America, National Association, non-affiliates of AEGON, Sole Member (100%)

 

   Investments
       
LIICA Re II, Inc.   Vermont  

 

Transamerica Life Insurance Company, Sole Shareholder (100%)

 

   Captive insurance company
       
Mitigation Manager LLC   Delaware  

RCC North America LLC, Sole Member (100%)

   Investments
       
Money Services, Inc.   Delaware  

AUSA Holding, LLC, Sole Shareholder (100%)

  

 

Provides certain financial services for affiliates including, but not limited to, certain intellectual property, computer and computer-related software and hardware services, including procurement and contract services to some or all of the Members of the AEGON Group in the United States and Canada.

 

       
Monumental General Administrators, Inc.   Maryland  

 

AUSA Holding, LLC, Sole Shareholder (100%)

 

  

 

Provides management services to unaffiliated third party administrator

 

       
Natural Resources Alternatives Portfolio I, LLC   Delaware  

 

Transamerica Financial Life Insurance Company, Member (4%);

Transamerica Life Insurance Company, Member (64%);

Transamerica Life Insurance Company, Member (32%)

 

   Investment vehicle - to invest in Natural Resources

Table of Contents

ITEM 29 LISTING

 

       
Natural Resources Alternatives Portfolio II, LLC   Delaware  

 

Transamerica Financial Life Insurance Company, Member (5%);

Transamerica Life Insurance Company, Member (35%);

Transamerica Life Insurance Company, Member (60%)

 

   Investment vehicle
       
Natural Resources Alternatives Portfolio 3, LLC   Delaware  

 

Transamerica Financial Life Insurance Company, Member (10%);

Transamerica Life Insurance Company, Member (55%);

Transamerica Life Insurance Company, Member (35%)

 

   Investment vehicle
       
Nomagon Title Grandparent, LLC   Delaware  

 

AEGON USA Asset Management Holding, LLC, Sole Member (100%);

AEGON USA Realty Advisors, LLC, non-manager member (0%)

 

   Investment vehicle
       
Nomagon Title Holding 1, LLC   Delaware  

Nomagon Title Parent, LLC, Sole Member (100%);

AEGON USA Realty Advisors, LLC, non-manager member (0%)

   Investment vehicle
       
Nomagon Title Parent, LLC   Delaware  

Nomagon Title Grandparent, LLC, Sole Member (100%);

AEGON USA Realty Advisors, LLC, non-manager member (0%)

   Investment vehicle
       
Osceola Mitigation Partners, LLC   Florida  

 

Mitigation Manager, LLC, Member (50%);

OBPFL-MITBK, LLC, non-affiliate of AEGON, Member (50%)

 

   Investments
       
Pearl Holdings, Inc. I   Delaware   AEGON USA Asset Management Holding, LLC, Sole Member (100%)   Holding company
       
Pearl Holdings, Inc. II   Delaware  

 

AEGON USA Asset Management Holding, LLC, Sole Shareholder (100%)

 

   Holding company
Peoples Benefit Services, LLC   Pennsylvania   Transamerica Life Insurance Company, Sole Member (100%)   Marketing non-insurance products
       
Placer 400 Investors, LLC   California  

 

RCC North America LLC, Member (50%); AKT Placer 400 Investors, LLC, non-affiliate of AEGON, Member (50%)

 

   Investments
       
Primus Guaranty Ltd.   Bermuda  

 

Transamerica Life Insurance Company, Member (20%)

Public Interest Holders, non-affiliates of AEGON, Member (80%)

 

   Provides protection from default risk of investment grade corporate and sovereign issues of financial obligations.
PSL Acquisitions Operating, LLC   Iowa   RCC North America LLC, Sole Member (100%)   Owner of Core subsidiary entities
RCC North America LLC   Delaware   Transamerica Corporation, Sole Member (100%)   Real estate

Table of Contents

ITEM 29 LISTING

 

       

Real Estate Alternatives Portfolio 2, L.L.C.

   Delaware  

 

Transamerica Financial Life Insurance Company, Member (7.50%);

Transamerica Life Insurance Company, Member (37.25%);

Transamerica Life Insurance Company, Member (22.25%);

Transamerica Life Insurance Company, Member (30.75%);

Transamerica Life Insurance Company, Member (2.25%);

AEGON USA Realty Advisors, Inc., Manager (0%)

 

   Real estate alternatives investment
       

Real Estate Alternatives Portfolio 3, L.L.C.

   Delaware  

 

Transamerica Life Insurance Company, Member (73.40%);

Transamerica Life Insurance Company, Member (1.00%);

Transamerica Life Insurance Company, Member (25.60%);

AEGON USA Realty Advisors, Inc., Manager (0%)

 

   Real estate alternatives investment
       

Real Estate Alternatives Portfolio 3A, Inc.

   Delaware  

 

Transamerica Financial Life Insurance Company, Shareholder (9.4%);

Transamerica Life Insurance Company, Shareholder (90.6%)

 

   Real estate alternatives investment
       

Real Estate Alternatives Portfolio 4 HR, LLC

   Delaware  

 

Transamerica Financial Life Insurance Company, Member (4%);

Transamerica Life Insurance Company, Member (64%);

Transamerica Life Insurance Company, Member (32%);

AEGON USA Realty Advisors, Inc., Manager (0%)

 

   Investment vehicle for alternative real estate investments that are established annually for our affiliated companies common investment
       

Real Estate Alternatives Portfolio 4 MR, LLC

   Delaware  

 

Transamerica Financial Life Insurance Company, Member (4%);

Transamerica Life Insurance Company, Member (64%);

Transamerica Life Insurance Company, Member (32%);

AEGON USA Realty Advisors, Inc., Manager (0%)

 

   Investment vehicle for alternative real estate investments that are established annually for our affiliated companies common investment
       

River Ridge Insurance Company

   Vermont   AEGON Management Company, Sole Shareholder (100%)   Captive insurance company
       

Second FGP LLC

   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

   Real estate
       

Seventh FGP LLC

   Delaware  

 

FGH USA LLC, Sole Member (100%)

 

   Real estate
       

St. Lucie West Development Company, LLC

   Florida   PSL Acquisitions Operating, LLC, Sole Member (100%)   Development company
       

Stonebridge Benefit Services, Inc.

   Delaware  

 

Commonwealth General Corporation, Sole Shareholder (100%)

 

   Health discount plan
       

TA Private Equity Assets, LLC

   Delaware   Transamerica Life Insurance Company, Sole Member (100%)   Investments (private equity)
       

TA-APOP I, LLC

   Delaware   Transamerica Life Insurance Company, Sole Member (100%)   Private equity vehicle

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ITEM 29 LISTING

 

       

TA-APOP I-A, LLC

   Delaware  

 

Transamerica Financial Life Insurance Company, Member (10%);

Transamerica Life Insurance Company, Member (90%);

 

   Investments (private equity)
       

TA-APOP II, LLC

   Delaware  

 

Transamerica Life Insurance Company, Limited Partner (73.19%);

Transamerica Financial Life Insurance Company, Limited Partner (24.40%)

 

   Private equity vehicle
       

TABR Realty Services, LLC

   Delaware   AUSA Holding, LLC, Sole Member (100%)   Real estate investments
       

TAH-MCD IV, LLC

   Iowa  

 

Transamerica Affordable Housing, Inc., Sole Member (100%)

  

 

Serve as the general partner for McDonald Corporate Tax Credit Fund IV Limited Partnership.

 

       

TAH Pentagon Funds, LLC

   Iowa   Transamerica Affordable Housing, Inc., Sole Member (100%)   Serve as a general partner in a lower-tier tax credit entity
       

TAHP Fund 1, LLC

   Delaware   Garnet LIHTC Fund IX, LLC, Sole Member (100%)   Real estate investments
       

TAHP Fund 2, LLC

   Delaware   Garnet LIHTC Fund VIII, LLC, Sole Member (100%)   Low incoming housing tax credit
       

TAHP Fund VII, LLC

   Delaware   Garnet LIHTC Fund XIX, LLC, Investor Member (100%)   Real estate investments
       

THH Acquisitions, LLC

   Iowa   Transamerica Life Insurance Company, Sole Member (100%)  

 

Acquirer of Core South Carolina mortgage loans from Investors Warranty of America, LLC and holder of foreclosed real estate.

 

       

TLIC Oakbrook Reinsurance Inc.

   Iowa   Transamerica Life Insurance Company, Sole Member (100%)   Limited purpose subsidiary life insurance company
       

TLIC Watertree Reinsurance Inc.

   Iowa  

 

Transamerica Life Insurance Company, Sole Shareholder (100%)

 

   Limited purpose subsidiary life insurance company

Tradition Development Company, LLC

   Florida   PSL Acquisitions Operating, Sole Member (100%)   Development company
       

Tradition Land Company, LLC

   Iowa   RCC North America LLC, Sole Member (100%)  

 

Acquirer of Core Florida mortgage loans from Investors Warranty and holder of foreclosed real estate.

 

       

Transamerica Affordable Housing, Inc.

   California   TABR Realty Services, LLC, Sole Shareholder (100%)   General partner LHTC Partnership
       

Transamerica Agency Network, LLC

   Iowa   AUSA Holding, LLC, Sole Member (100%)   Special purpose subsidiary
       

Transamerica Asset Management, Inc.

   Florida  

 

Transamerica Life Insurance Company, Member (77%);

AUSA Holding, LLC, Shareholder (23%)

 

   Fund advisor
       

Transamerica Bermuda Re, Ltd.

   Bermuda   Transamerica Life Insurance Company, Sole Member (100%)   General
       

Transamerica Capital, Inc.

   California   AUSA Holding, LLC, Sole Shareholder (100%)   Broker/Dealer
       

Transamerica Casualty Insurance Company

   Iowa   Transamerica Corporation, Sole Shareholder (100%)   Insurance company
       

Transamerica Corporation (DE)

   Delaware   AEGON International B.V., Sole Shareholder (100%)   Major interest in insurance and finance
       

Transamerica Corporation (OR)

   Oregon   Transamerica Corporation, Sole Shareholder (100%)   Holding company

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ITEM 29 LISTING

 

       
Transamerica Finance Corporation   Delaware   Transamerica Corporation, Sole Shareholder (100%)   Commercial & Consumer Lending & equipment leasing
       
Transamerica Financial Advisors, Inc.   Delaware  

 

AUSA Holding, LLC, Shareholder (51.60%) (1,000 Shares);

AEGON Asset Management Services, Inc., Shareholder (37.62%) (729 Shares);

Commonwealth General Corporation, Shareholder (10.78%) (209 Shares)

 

   Broker/Dealer
Transamerica Financial Life Insurance Company   New York   Transamerica Corporation, Sole Shareholder (100%)   Insurance
       
Transamerica Fund Services, Inc.   Florida  

Transamerica Life Insurance Company, Shareholder (44.13%);

AUSA Holding, LLC, Shareholder

(55.87%)

   Mutual fund
       
Transamerica Health Savings Solutions, LLC   Iowa  

 

Transamerica Retirement Solutions, LLC, Sole Member (100%)

 

   Health Savings Solutions
       
Transamerica International Direct Marketing Consultants, LLC   Maryland  

 

AEGON Direct Marketing Services, Inc., Member (49%);

Curtis Sherwin Chen, Member (51%)

 

   Provide consulting services ancillary to the marketing of insurance products overseas.
       
Transamerica International RE (Bermuda) Ltd.   Bermuda   Transamerica Corporation, Sole Member (100%)   Reinsurance
       
Transamerica Investors Securities Corporation   Delaware  

 

Transamerica Retirement Solutions, LLC, Sole Shareholder (100%)

 

   Broker/Dealer
       
Transamerica Life Insurance Company   Iowa  

 

Commonwealth General Corporation, Sole Shareholder (100%)

 

   Insurance
       
Transamerica Life (Bermuda) Ltd.   Bermuda   Transamerica Life Insurance Company, Sole Member (100%)  

 

Long-term life insurer in Bermuda — - will primarily write fixed universal life and term insurance

 

       
Transamerica Pacific Re, Inc.   Vermont  

 

Transamerica Life Insurance Company, Sole Shareholder (100%)

 

   Captive insurance company
       
Transamerica Realty Investment Properties LLC   Delaware   Transamerica Life Insurance Company, Sole Member (100%)   Realty limited liability company
       
Transamerica Resources, Inc.   Maryland   Monumental General Administrators, Inc., Sole Shareholder (100%)  

 

Provides education and information regarding retirement and economic issues.

 

       
Transamerica Retirement Advisors, LLC   Delaware  

 

Transamerica Retirement Solutions, LLC, Sole Member (100%)

 

   Investment advisor
       
Transamerica Retirement Insurance Agency, LLC   Delaware  

 

Transamerica Retirement Solutions, LLC, Sole Member (100%)

 

   Conduct business as an insurance agency.
       
Transamerica Retirement Solutions, LLC   Delaware   AUSA Holding, LLC, Sole Member (100%)   Retirement plan services.
       
Transamerica Stable Value Solutions Inc.   Delaware   Commonwealth General Corporation, Sole Shareholder (100%)  

 

Principle Business: Provides management services to the stable value division of AEGON insurers who issue synthetic GIC contracts.

 

Transamerica Travel and Conference Services, LLC   Iowa   Money Services, Inc., Sole Member (100%)   Travel and conference services
       
Transamerica Trust Company   Iowa   AUSA Holding, LLC, Sole Shareholder (100%)   Trust company

Table of Contents

ITEM 29 LISTING

 

       
Transamerica Ventures Fund II, LLC   Delaware  

AUSA Holding, LLC, Sole Member (100%)

   Investments
       
ULI Funding, LLC   Iowa  

AUSA Holding, LLC, Sole Member (100%)

   Holding Company
       
United Financial Services, Inc.   Maryland  

Transamerica Corporation, Sole Shareholder (100%)

   General agency
       
WFG Insurance Agency of Puerto Rico, Inc.   Puerto Rico  

 

World Financial Group Insurance Agency, LLC, Sole Shareholder (100%)

 

   Insurance agency
       
WFG Properties Holdings, LLC   Georgia  

World Financial Group, Inc., Sole Member (100%)

   Marketing
       
WFG Securities Inc.   Canada  

World Financial Group Holding Company of Canada, Inc., Sole Shareholder (100%)

   Mutual fund dealer
       
World Financial Group Holding Company of Canada Inc.   Canada  

 

Commonwealth General Corporation, Sole Shareholder (100%)

 

   Holding company
       
World Financial Group, Inc.   Delaware  

 

AEGON Asset Management Services, Inc., Sole Shareholder (100%)

 

   Marketing
       
World Financial Group Insurance Agency of Canada Inc.   Ontario  

World Financial Group Holding Company of Canada Inc., Sole Shareholder (100.00%)

   Insurance agency
       
World Financial Group Insurance Agency of Hawaii, Inc.   Hawaii  

World Financial Group Insurance Agency, LLC, Sole Shareholder (100.00%)

   Insurance agency
       
World Financial Group Insurance Agency of Massachusetts, Inc.   Massachusetts  

World Financial Group Insurance Agency, LLC, Sole Shareholder (100.00%)

   Insurance agency
       
World Financial Group Insurance Agency of Wyoming, Inc.   Wyoming  

World Financial Group Insurance Agency, LLC, Sole Shareholder (100.00%)

   Insurance agency
       
World Financial Group Insurance Agency, LLC   Iowa  

AUSA Holding, LLC, Sole Member (100%)

   Insurance agency
Yarra Rapids, LLC   Delaware  

Real Estate Alternatives Portfolio 4MR, LLC, Member (49%)

New York Investment Trust, non-AEGON

affiliate, Member (51%)

   Real estate investments
       
Zahorik Company, Inc.   California  

AUSA Holding, LLC, Sole Shareholder (100%)

   Inactive
       
Zero Beta Fund, LLC   Delaware  

Transamerica Financial Life Insurance Company (16.58%);

Transamerica Life Insurance Company, Member (50.14%);

Transamerica Life Insurance Company, Member (33.28%)

   Aggregating vehicle formed to hold various fund investments.

Table of Contents

Item 30.  Indemnification

The New York Code (Sections 721 et. seq.) provides for permissive indemnification in certain situations, mandatory indemnification in other situations, and prohibits indemnification in certain situations. The Code also specifies procedures for determining when indemnification payments can be made.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Depositor pursuant to the foregoing provisions, or otherwise, the Depositor has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Depositor of expenses incurred or paid by a director, officer or controlling person in connection with the securities being registered), the Depositor will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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Item 31

Principal Underwriters

 

(a)

Transamerica Capital, Inc. serves as the principal underwriter for:

Transamerica Capital, Inc. serves as the principal underwriter for the Merrill Lynch Life Variable Annuity Separate Account, Merrill Lynch Life Variable Annuity Separate Account A, Merrill Lynch Life Variable Annuity Separate Account B, Merrill Lynch Life Variable Annuity Separate Account C, Merrill Lynch Life Variable Annuity Separate Account D, Merrill Lynch Variable Life Separate Account, and Merrill Lynch Variable Life Separate Account II, Retirement Builder Variable Annuity Account, Separate Account Fund B, Separate Account Fund C, Separate Account VA AA, Separate Account VA B, Separate Account VA BB, Separate Account VA CC, Separate Account VA DD, Separate Account VA FF, Separate Account VA HH, Separate Account VA Q, Separate Account VA U, Separate Account VA V, Separate Account VA-1, Separate Account VA-2L, Separate Account VA-5, Separate Account VA-6, Separate Account VA-7, Separate Account VA-8, Separate Account VL, Separate Account VL E, Separate Account VUL-A, Separate Account VUL-1; Separate Account VUL-2, Separate Account VUL-3, Separate Account VUL-4, Separate Account VUL-5, Separate Account VUL-6, Transamerica Corporate Separate Account Sixteen, Transamerica Separate Account R3, Variable Life Account A, WRL Series Annuity Account, WRL Series Annuity Account B, WRL Series Life Account, WRL Series Life Account G, and WRL Series Life Corporate Account. These accounts are separate accounts of Transamerica Life Insurance Company.

Transamerica Capital, Inc. serves as principal underwriter for ML of New York Variable Annuity Separate Account A, ML of New York Variable Annuity Separate Account B, ML of New York Variable Annuity Separate Account C, ML of New York Variable Annuity Separate Account D, ML of New York Variable Life Separate Account, ML of New York Variable Life Separate Account II, Separate Account VA BNY, Separate Account VA QNY, Separate Account VA-2LNY, Separate Account VA-5NLNY, Separate Account VA-6NY, TFLIC Separate Account B, TFLIC Separate Account C, TFLIC Separate Account VNY, TFLIC Pooled Account No. 44, TFLIC Series Annuity Account, TFLIC Series Life Account, and Transamerica Variable Funds. These accounts are separate accounts of Transamerica Financial Life Insurance Company.

Transamerica Capital, Inc. also serves as principal underwriter for Transamerica Series Trust and Transamerica Funds.

Table of Contents
(b)

Directors and Officers of Transamerica Capital, Inc.:

 

Name  

 Principal 

 Business Address 

   Position and Offices with Underwriter

Brian Beitzel

 

  

(2) 

 

  

Director, Treasurer and Chief Financial Officer

 

David Curry

   (3)   

Director, Chairman of the Board, Chief Executive

Officer and President

Doug Hellerman

   (3)    Chief Compliance Officer and Vice President

Timothy Ackerman

   (3)    Director and Vice President

Mark Halloran

   (3)   

Director, President, Chief Executive Officer and

Chairman of the Board

Jennifer Pearce

   (3)    Vice President

Gregory E. Miller-Breetz

   (1)    Secretary

 

  (1)

100 Light Street, Floor B1, Baltimore, MD 21202

  (2)

4333 Edgewood Road N.E., Cedar Rapids, IA 52499-0001

  (3)

1801 California Street, Suite 5200, Denver, CO 80202

Table of Contents

(c) Compensation to Principal Underwriter:

 

Name of Principal Underwriter     

Net Underwriting  

Discounts and

Commissions(1)

  

Compensation  

on Redemption

  

Brokerage   

Commissions

   Compensation 
Transamerica Capital, Inc.   $14,190,783   $0   $0   $0

(1) Fiscal Year 2023

Item 32.  Location of Accounts and Records

The records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder, are maintained by Manager Regulatory Filing Unit, Transamerica Financial Life Insurance Company at 6400 C Street SW, Cedar Rapids, Iowa 52499.

Item 33.  Management Services.

All management service policies, if any, are discussed in Part A or Part B.

Item 34.  Undertakings

The Depositor hereby represents that the fees and charges deducted under the contracts, in the aggregate, are reasonable in relation to

the services rendered, the expenses expected to be incurred, and the risks assumed by the Depositor.

SECTION 403(B) REPRESENTATIONS

Transamerica Financial Life Insurance Company represents that it is relying on a no-action letter dated November 28, 1988, to the American Council of Life Insurance (Ref. No. IP-6-88), regarding Sections 22(e), 27(c)(1), and 27(d) of the Investment Company Act of 1940, in connection with redeemability restrictions on Section 403(b) Policies, and that paragraphs numbered (1) through (4) of that letter will be complied with.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements for effectiveness of this Registration Statement under Rule 485(b) under the Securities Act and has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Denver and State of Colorado, on April 25, 2024.

 

 

SEPARATE ACCOUNT VA BNY

Registrant

 

TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY

Depositor

 

 

Jamie Ohl *

President and Chief Executive Officer, Individual Solutions Division

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on April 25, 2024.

 

Signatures        Title

                *

Jamie Ohl

      President and Chief Executive Officer, Individual Solutions Division (principal executive officer)

 

                *

Bonnie T. Gerst

      Director, President, Financial Assets and Chairman of the Board (principal accounting officer)

                *

Christopher S. Fleming

      Director and Chief Operating Officer, Individual Solutions Division

                *

Andrew S. Williams

      Director, Assistant Secretary, General Counsel and Senior Vice President

 

                *

Matt Keppler

      Chief Financial Officer, Executive Vice President and Treasurer (principal financial officer)

                *

Zachary Harris

      Director, Chief Operating Officer, Workplace Solutions Division

                *

Wendy E. Cooper*

      Director

                *

Anne C. Kronenberg*

      Director

                *

June Yuson*

      Director

/s/Brian Stallworth

Brian Stallworth

      Assistant Secretary

*By: Brian Stallworth – Attorney-in-Fact pursuant to Powers of Attorney filed previously and/or herewith.

ATTACHMENTS / EXHIBITS

ATTACHMENTS / EXHIBITS

EX-99.(H)(1)(VII)

EX-99.(H)(2)(VI)

EX-99.(H)(3)(III)

EX-99.(H)(4)(IV)

EX-99.(H)(5)(XVII)

EX-99.(H)(5)(XVIII)

EX-99.K

EX-99.L

EX-99.P