|Edgar Online, Inc.|
Item 8.01 Other Events
ING Life Insurance and Annuity Company ("ILIAC") is filing this Current Report on Form 8-K to update the information included in its Annual Report on Form 10-K ("Form 10-K") for the year ended
"Financial Services - Insurance (ASC Topic 944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts" ("ASU 2010-26"), which clarifies what costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. Costs that should be capitalized include (1) incremental direct costs of successful contract acquisition and (2) certain costs related directly to successful acquisition activities (underwriting, policy issuance and processing, medical and inspection, and sales force contract selling) performed by the insurer for the contract. Advertising costs should be included in deferred acquisition costs only if the capitalization criteria in the U.S. GAAP direct-response advertising guidance are met. All other acquisition-related costs should be charged to expense as incurred.
Upon adoption, the financial statements for prior periods were adjusted to reflect the adoption of the new standard. The financial statements included in Exhibit 99.1 to this Form 8-K update the financial statements included in ILIAC's 2011 Form 10-K to reflect the impact of retrospective adoption. However, such adjusted financial statements do not represent a restatement of the 2011 Form 10-K.
January 1, 2012, ILIAC voluntarily changed its method of recognizing actuarial gains and losses related to its pension and post-retirement benefit plans. Previously, actuarial gains and losses were recognized in Accumulated other comprehensive income and, to the extent outside a corridor, amortized into operating results over the average remaining service period of active plan participants or the average remaining life expectancy of inactive plan participants, as applicable. ILIAC has elected to immediately recognize actuarial gains and losses in the Statements of Operations in the year in which the gains and losses occur. The new accounting method is preferable, as it eliminates the delay in recognition of actuarial gains and losses. These gains and losses are generally only measured annually as of December 31and, accordingly, will generally be recorded during the fourth quarter.
ILIAC's change in accounting methodology was applied retrospectively. The financial statements included in Exhibit 99.1 to this Form 8-K update the financial statements included in ILIAC's 2011 Form 10-K to reflect the impact of this accounting change. However, such adjusted financial statements do not represent a restatement of the 2011 Form 10-K.
January 1, 2012, ILIAC made certain reclassifications in order to align with the presentation of the Consolidated Financial Statements of ING U.S., Inc.These reclassifications include the reporting of embedded derivatives within fixed maturities with the host contract on the Balance Sheet and the reporting of changes in fair value of embedded derivatives within annuity products as Other net realized capital gains (losses) in the Statements of Operations. These changes in presentation resulted in reclassifications in the previously reported financial statements of the 2011 Form 10- K. Suchreclassifications had no effect on previously reported net income or shareholder's equity and do not represent a restatement of the 2011 Form 10-K.
The following items of the 2011 Form 10-K are being updated retrospectively to reflect the adoption of ASU No. 2010-26 and the implementation of the aforementioned accounting changes:
• Item 6 - Selected Financial Data
• Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations
• Item 8 - Financial Statements and Supplementary Data
• Item 15 - Exhibits and Financial Statement Schedules