485BPOS 1 pea31rc485b70600.htm PEA 31 ROLLOVER CHOICE 485B 333-70600 pea31rc485b70600.htm - Generated by SEC Publisher for SEC Filing
As filed with the Securities and Exchange
Commission on April 16, 2013
      		Registration No. 333-70600
Registration No. 811-05626
  
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
    
FORM N-4
    
POST-EFFECTIVE AMENDMENT NO. [ 31 ]
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
        
and/or
     
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. [ ]
         
(Check appropriate box or boxes)
       
SEPARATE ACCOUNT B
(Exact name of Registrant)
       
ING USA ANNUITY AND LIFE INSURANCE COMPANY
(Name of Depositor)
      
1475 Dunwoody Drive
West Chester, Pennsylvania 19380-1478
(Address of Depositor’s Principal Executive Offices) (Zip Code)
Depositor’s Telephone Number, including Area Code (610) 425-3400
         
J. Neil McMurdie, Senior Counsel Nicholas Morinigo, Esq.
ING ING Americas (U.S. Legal Services)
One Orange Way, C2N 1475 Dunwoody Drive
Windsor, CT 06095-4774 West Chester, PA 19308-1478
(860) 580-2824 (610) 425-3447
 
     (Name and Address of Agent for Service)
       
 
Approximate Date of Proposed Public Offering:
As soon as practical after the effective date of the Registration Statement
         
It is proposed that this filing will become effective (check appropriate box):
      
  immediately upon filing pursuant to paragraph (b) of Rule 485
X on May 1, 2013 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(1) of Rule 485
  on ________ 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.
         
Title of Securities Being Registered: Group and Individual Deferred Variable Annuity Contract

 

 

PART A

 

 

Supplement Dated May 1, 2013
To The Current Prospectus For:
 
ING Rollover ChoiceSM Variable Annuity
 
Issued by ING USA Annuity and Life Insurance Company
Through Its Separate Account B
            
This supplement updates the prospectus for your variable annuity contract. Please read it carefully and keep it with
your copy of the prospectus for future reference. If you have any questions, please call our Customer Service Center
at 1-800-366-0066. The following information only affects you if you currently invest in the subaccount that
corresponds to the Fidelity® VIP Contrafund® Portfolio.
 
NOTICE OF AND IMPORTANT INFORMATION REGARDING A FUND SUBSTITUTION
 
The Securities and Exchange Commission issued an order to permit the ING USA Annuity and Life
Insurance Company and its Separate Account B to replace, effective on or about June 14, 2013 (the
“Substitution Effective Date”), the Fidelity® VIP Contrafund® Portfolio (“Replaced Fund”) with the
ING Large Cap Growth Portfolio (“Substitute Fund”).
 
The following lists important information regarding the upcoming fund substitution:
· Prior to the Substitution Effective Date, and for thirty days thereafter you may transfer amounts
allocated to the subaccount that invests in the Replaced Fund to any other available subaccount or any
available fixed account free of charge, and any such transfer will not count as a transfer when
imposing any applicable restrictions or limits on transfers (other than restrictions related to frequent
or disruptive transfers).
·   On the Substitution Effective Date, your investment in the subaccount that invests in the Replaced
Fund will automatically become an investment in the subaccount that invests in the Substitute Fund
with an equal total net asset value.
· You will not incur any fees or charges or any tax liability because of the substitution, and your
Contract value immediately before the substitution will equal your Contract value immediately after
the substitution.
· The overall expenses of the Substitute Fund are less than the overall expenses of the Replaced Fund.
The fees and expenses of the Substitute Fund are more fully described in the Substitute Fund’s
summary prospectus.
· The investment objective and policies of the Substitute Fund are similar to the investment objective
and policies of the Replaced Fund. The investment objective of the Substitute Fund, along with
information about the Substitute Fund’s investment adviser/subadviser, are more fully described in
the Substitute Fund’s summary prospectus. Prior to the Substitution Effective Date you will be sent a
fund summary prospectus for the Substitute Fund. Read this summary prospectus carefully before
deciding what to do with amounts allocated to the Subaccount that invests in the Substitute Fund. If
you have not received one, or if you need another copy, please contact our Customer Service Center
at 1-800-366-0066.
 
After the Substitution Effective Date, the subaccount investing in the Replaced Fund will no longer be
available through the Contract and there will be no further disclosure regarding it in any future Contract
prospectus or supplements to the Contract prospectus.
   
X.70600-13 May 2013

 


ING USA Annuity and Life Insurance Company
Separate Account B of ING USA Annuity and Life Insurance Company
 
Deferred Combination Variable and Fixed Annuity Prospectus
 
RETIREMENT SOLUTIONS – ING ROLLOVER CHOICESM
VARIABLE ANNUITY
  
May 1, 2013
 
The Contract. The contract described in this prospectus is a group and individual deferred variable annuity contract
(the “contract”) offered by ING USA Annuity and Life Insurance Company (the “Company,” “we” or “our”)
through our Separate Account B (the “separate account”). The contract is currently available in connection with
certain retirement plans that qualify for special federal income tax treatment (“qualified contracts”) as well as those
that do not qualify for such treatment (“nonqualified contracts”). The contract may be purchased with funds from
external sources or by a transfer or rollover from an existing contract (the “prior contract”) issued by us or one of
our affiliates (“internal transfer”). A qualified contract may be issued as a traditional Individual Retirement Annuity
(“IRA”) under section 408(b) of the Internal Revenue Code of 1986 as amended (the “Tax Code”) or a Roth IRA
under section 408A of the Tax Code. The contract is not currently available as a Simplified Employer Pension
(“SEP”) plan under Tax Code section 408(k) or as a Simple IRA under Tax Code section 408(p). Prior to
April 29, 2005, the contract was not available as a nonqualified contract and could not be purchased with funds from
external sources. Prior to September 17, 2007, the contract was available as a tax deferred annuity under Tax Code
section 403(b). As of March 15, 2010, we are no longer offering this contract for sale to new purchasers.
 
The contract provides a means for you to allocate your premium payments in one or more subaccounts, each of
which invests in one of the mutual funds (“funds”) listed on the next page. You may also allocate premium
payments to our Fixed Account with guaranteed interest periods. Your contract value will vary daily to reflect the
investment performance of the subaccount(s) you select and any interest credited to your allocations in the Fixed
Account. Some guaranteed interest periods or subaccounts may not be available in all states. The funds available
under the contract are listed on the back of this cover.
 
You have a right to return a contract within 10 days after you receive it for a refund of the adjusted contract value
(which may be more or less than the premium payments you paid). For IRAs, or if otherwise required by your state,
we will refund the original amount of your premium payment. Longer free look periods apply in some states and in
certain situations.
 
Replacing an existing annuity with the contract may not be beneficial to you. Your existing annuity may be
subject to fees or penalties on surrender, and the contract may have new charges.
 
Compensation. We pay compensation to broker-dealers whose registered representatives sell the contracts. See
“Contract Distribution” for further information about the amount of compensation we pay.
 
If you received a summary prospectus for any of the funds available through your contract, you may obtain a
full prospectus and other information free of charge by either accessing the internet address, calling the telephone
number or sending an email request to the email address shown on the front of the fund’s summary prospectus. This
prospectus provides information that you should know before investing and should be kept for future reference. A
Statement of Additional Information (“SAI”) dated May 1, 2013 has been filed with the Securities and Exchange
Commission (“SEC”), as well as a registration statement for the Fixed Account II, also dated April 30, 2012. They
are available without charge upon request. To obtain a copy of these documents, write to our Customer Service
Center at P.O. Box 9271, Des Moines, Iowa 50306-9271 or call 1-800-366-0066, or access the SEC’s website
(www.sec.gov). When looking for information regarding the contracts offered through this prospectus, you may find
it useful to use the number assigned to the registration statement under the Securities Act of 1933. This number is
333-70600. The number assigned to the registration statement for the Fixed Account II is 333-133156. The table of
contents of the SAI is on the last page of this prospectus and the SAI is made part of this prospectus by
reference.
  
PRO.70600-13

 

 

The funds available under your contract are*:
  
Fidelity® VIP Contrafund® Portfolio (Service Class 2)   ING MFS Utilities Portfolio (Class S)
Fidelity® VIP Equity-Income Portfolio (Service Class 2)   ING MidCap Opportunities Portfolio (Class S)
Franklin Small Cap Value Securities Fund (Class 2)   ING Multi-Manager Large Cap Core Portfolio (Class S)(3)
ING American Century Small-Mid Cap Value Portfolio   ING Oppenheimer Global Portfolio (Class S)(5)
  (Class S)   ING PIMCO High Yield Portfolio (Class S)
ING American Funds International Portfolio(1)   ING PIMCO Total Return Bond Portfolio (Class S)
ING Balanced Portfolio (Class S)   ING Pioneer Mid Cap Value Portfolio (Class S)
ING Baron Growth Portfolio (Class S)   ING RussellTM Large Cap Growth Index Portfolio (Class S)
ING BlackRock Inflation Protected Bond Portfolio   ING Small Company Portfolio (Class S)
  (Class S)   ING SmallCap Opportunities Portfolio (Class S)
ING BlackRock Large Cap Growth Portfolio (Class S)(2)   ING Solution 2015 Portfolio (Class S)(4)
ING Bond Portfolio(1)(3)   ING Solution 2025 Portfolio (Class S)(4)
ING Clarion Global Real Estate Portfolio (Class S)   ING Solution 2035 Portfolio (Class S)(4)
ING Columbia Contrarian Core Portfolio (Class S)(3)   ING Solution 2045 Portfolio (Class S)(4)
ING DFA World Equity Portfolio (Class S)(4)   ING Solution Income Portfolio (Class S)(4)
ING Franklin Templeton Founding Strategy Portfolio   ING Strategic Allocation Conservative Portfolio (Class S)(4)
  (Class S)   ING Strategic Allocation Growth Portfolio (Class S)(4)
ING Global Bond Portfolio (Class S)   ING Strategic Allocation Moderate Portfolio (Class S)(4)
ING Growth and Income Portfolio (Class ADV)   ING T. Rowe Price Capital Appreciation Portfolio (Class S)
ING Index Plus LargeCap Portfolio (Class S)   ING T. Rowe Price Diversified Mid Cap Growth Portfolio
ING Index Plus MidCap Portfolio (Class S) (Class S)
ING Index Plus SmallCap Portfolio (Class S)   ING T. Rowe Price Equity Income Portfolio (Class S)
ING Intermediate Bond Portfolio (Class S)   ING T. Rowe Price Growth Equity Portfolio (Class S)
ING International Index Portfolio (Class S)   ING T. Rowe Price International Stock Portfolio (Class S)
ING International Value Portfolio (Class S)   ING Templeton Foreign Equity Portfolio (Class S)
ING Invesco Comstock Portfolio (Class S)(3)   ING U.S. Bond Index Portfolio (Class S)
ING Invesco Equity and Income Portfolio (Class S)(3)(4)(5)   ING WisdomTreeSM Global High-Yielding Equity Index
ING JPMorgan Emerging Markets Equity Portfolio (Class S) Portfolio (Class S)(6)
ING JPMorgan Mid Cap Value Portfolio (Class S)   Oppenheimer Main Street Small Cap Fund®/VA
ING Large Cap Growth Portfolio (Class ADV) (Service Shares)(3)
ING Liquid Assets Portfolio (Class S)   PIMCO VIT Real Return Portfolio (Administrative Class)
ING MFS Total Return Portfolio (Class S)   Pioneer Equity Income VCT Portfolio (Class II)
 
* The ING Diversified International Fund was closed to new investments on April 26, 2007. The ING PIMCO Total Return Portfolio and
ING Van Kampen Capital Growth Portfolio were closed to new investments on May 1, 2009. There is no further information about these
funds in this prospectus.
(1) These portfolios are “Master-Feeder” funds. See “The Funds” for additional information.
(2) Class I shares of this fund are available only to those investors who were invested in the Initial Class shares of the ING American Century
Select Portfolio as of April 29, 2005. On April 27, 2007, the ING American Century Select Portfolio merged into the ING BlackRock Large
Cap Growth Portfolio.
(3) This fund has changed its name to the name listed above. See Appendix B–The Funds for a complete list of former and current fund names
since your last prospectus supplement.
(4) These portfolios are structured as fund of funds that invest directly in shares of underlying funds. See “The Funds” for additional
information.
(5) As of April 29, 2005, Initial Class shares of this fund were closed for further investment.
(6) WisdomTreeSM is a service mark of WisdomTree Investments.
The above funds are purchased and held by corresponding divisions of our separate account. We refer to the
divisions as “subaccounts” and the money you place in the Fixed Account’s guaranteed interest periods as “Fixed
Interest Allocations” in this prospectus.
 
Additional Disclosure Information. Neither the SEC, nor any state securities commission, has approved or
disapproved the securities offered through this prospectus or passed on the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense. We do not intend for this prospectus to be an offer to sell or
a solicitation of an offer to buy these securities in any state that does not permit their sale. We have not authorized
anyone to provide you with information that is different than that contained in this prospectus.
 
Allocations to a subaccount investing in a fund are not bank deposits and are not insured or guaranteed by
any bank or by the Federal Deposit Insurance Corporation or any other government agency.
  
PRO.70600-13

 

 

TABLE OF CONTENTS
 
Page   Page
    Statement of Additional Information  
Index of Special Terms ii Table of Contents 74
 
Fees and Expenses 1  Appendix A  
    Condensed Financial Information CFI 1
Condensed Financial Information 5    
    Appendix B  
ING USA Annuity and Life Insurance Company 6 The Funds B1
 
ING USA Separate Account B 7 Appendix C   
    Fixed Account II C1
The Funds 7    
    Appendix D  
Covered Funds, Special Funds and Excluded Funds 8 Fixed Interest Division D1
 
Charges and Fees 9 Appendix E   
    Surrender Charge for Excess Withdrawals  
The Annuity Contract 15 Example E1
 
Optional Living Benefit Riders 21 Appendix F   
    Pro-Rata Withdrawal Adjustment for 5% Roll-up Death
Withdrawals 43 Benefit Examples F1
 
Transfers Among Your Investments 46 Appendix G   
    Special Funds 5% Roll-up Death Benefit Examples G1
Death Benefit Choices 50    
    Appendix H  
The Income Phase 55 Examples of Minimum Guaranteed Income Benefit  
    Calculation H1
Other Contract Provisions 59    
    Appendix I  
Contract Distribution 60 ING LifePay Plus and ING Joint LifePay Plus Partial
    Withdrawal Amount Examples I1
Other Information 62    
    Appendix J  
Federal Tax Considerations 63 Examples of Fixed Allocation Funds Automatic  
    Rebalancing JI
 
    Appendix K  
    Information Regarding Previous Versions of the  
    ING LifePay Plus and ING Joint LifePay Plus  
    Riders KI
 
    Appendix L
    ING LifePay and ING Joint LifePay Riders L1


PRO.70600-13

 

INDEX OF SPECIAL TERMS
 
The following special terms are used throughout this prospectus. Refer to the page(s) listed for an explanation of
each term:
 
Special Term   Page
Accumulation Unit 5
Annual Ratchet 28
Annual Ratchet Enhanced Death Benefit 53
Annuitant 15  
Cash Surrender Value 20  
Contract Date 15  
Contract Owner 15  
Contract Value 19  
Contract Year 15  
Covered Fund 8  
Excluded Fund 8  
Free Withdrawal Amount 9  
Income Phase Start Date 15  
Net Investment Factor 5  
Net Rate of Return 5  
Quarterly Ratchet K-3  
Restricted Funds 8  
Rider Date 22  
5% Roll-up 52  
Special Funds 8  
Standard Death Benefit 52  
 
 
The following terms as used in this prospectus have the same or substituted meanings as the corresponding terms
currently used in the contract:
 
Term Used in This Prospectus Corresponding Term Used in the Contract
Accumulation Unit Value Index of Investment Experience
Income Phase Start Date Annuity Commencement Date
Contract Owner Owner or Certificate Owner
Contract Value Accumulation Value
Transfer Charge Excess Allocation Charge
Fixed Interest Allocation Fixed Allocation
Free Look Period Right to Examine Period
Guaranteed Interest Period Guarantee Period
Subaccount(s) Division(s)
Net Investment Factor Experience Factor
Regular Withdrawals Conventional Partial Withdrawals
Withdrawals Partial Withdrawals
 
 
PRO.70600-13 ii

 

 

FEES AND EXPENSES
 
The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering
account value from your contract. The first table describes the fees and expenses that you may pay at the
time that you buy the contract, surrender account value from the contract, or transfer contract value
between investment options. State premium taxes which currently range from 0% to 4% of premium
payments may also be deducted. Any premium tax is deducted from the contract value.
    
Contract Owner Transaction Expenses1
    
Surrender Charge
    
Complete Years Elapsed 0 1 2 3 4 5 6 7+
    Since Premium Payment*                   
Surrender Charge (as a percentage of
premium payment withdrawn)		 6% 6% 5% 4% 3% 2% 1% 0%
   
* For amounts transferred or rolled over into this contract as an internal transfer, see “Charges Deducted From
   Contract Value–Surrender Charge.”        
Transfer Charge2 ........................................................................................................................ $25
   (per transfer, if you make more than 12 transfers in a contract year)
            
1 If you are invested in a Fixed Interest Allocation, a Market Value Adjustment may apply to certain transactions. This may increase or decrease your contract value and/or your transfer or surrender amount.
2 We currently do not impose this charge, but may do so in the future.
           
The next table describes the fees and expenses that you will pay periodically during the time that you own
the contract, not including fund fees and expenses.
      
Annual Contract Administrative Charge3
                
Administrative Charge ............................................................................................................ $30
   (We waive this charge if the total of your premium payment is $50,000 or more or if your contract value at
   the end of a contract year is $50,000 or more.)
3 We deduct this charge on each contract anniversary and on surrender.
        
Separate Account Annual Charges4
   
The following charges apply to contracts established prior to August 7, 2003, and contracts issued in Oregon:
   
    Option
Package I		 Option
Package II		 Option
Package III
Mortality & Expense Risk Charge 0.60% 0.80% 0.95%
Asset-Based Administrative Charge 0.15% 0.15% 0.15%
Total 0.75% 0.95% 1.10%
 
4
 		As a percentage of average daily assets in each subaccount. The Separate Account Annual Charges are deducted daily.
    
PRO.70600-13                                                              1

The following charges apply to contracts established on or after August 7, 2003 (or upon state approval, if
later):

  Option
Package I		 Option
Package II		 Option
Package III
Mortality & Expense Risk Charge 0.85% 1.05% 1.20%
Asset-Based Administrative Charge 0.15% 0.15% 0.15%
Total 1.00% 1.20% 1.35%
 

 

Optional Rider Charges1
 
Minimum Guaranteed Income Benefit rider:
 
As an Annual Charge
  (Charge Deducted Quarterly)
0.60% of the MGIB Benefit Base2  
 
ING LifePay Plus Minimum Guaranteed Withdrawal Benefit rider3 :
 
As an Annual Charge–Currently
   (Charge Deducted Quarterly)		 Maximum Annual Charge  
0.80% of the ING LifePay Plus Base 1.50% of the ING LifePay Plus Base  
 
ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit rider4 :
 
As an Annual Charge–Currently
  (Charge Deducted Quarterly)		 Maximum Annual Charge  
1.05% of the ING Joint LifePay Plus Base 1.70% of the ING Joint LifePay Plus Base  
 
1 Optional rider charges are expressed as a percentage, rounded to the nearest hundredth of one percent. The basis
for an optional rider charge is sometimes a benefit base or contract value, as applicable. Optional rider charges
are deducted from the contract value in your subaccount allocations (and/or your Fixed Interest Allocations if
there is insufficient contract value in the subaccounts). These tables contain the charges for the current versions
of these riders. For information about previous versions of these riders, including charges, see Appendix K and
Appendix L.
2 For more information about how the MGIB Benefit Base is determined, please see “Optional Living Benefit
Riders–Minimum Guaranteed Income Benefit (MGIB) Rider–Determining the MGIB Annuity Income.”
3 The ING LifePay Plus Base is calculated based on premium if this rider is elected at contract issue. The ING
LifePay Plus Base is calculated based on contract value if this rider is added after contract issue. The charge for
this rider can increase upon an Annual Ratchet once the Lifetime Withdrawal Phase begins, subject to the
maximum charge. We promise not to increase the charge for your first five rider years. For more information
about the ING LifePay Plus Base and Annual Ratchet, please see “Charges and Fees–Optional Rider Charges–
ING LifePay Plus Minimum Guaranteed Withdrawal Benefit (ING LifePay Plus) Rider Charge” and “Optional
Living Benefit Riders–ING LifePay Plus Minimum Guaranteed Withdrawal Benefit (“ING LifePay Plus”)
Rider–Annual Ratchet.”
4 The ING Joint LifePay Plus Base is calculated based on premium if this rider is elected at contract issue. The
ING Joint LifePay Plus Base is calculated based on contract value if this rider is added after contract issue. The
charge for this rider can increase upon an Annual Ratchet once the Lifetime Withdrawal Phase begins, subject to
the maximum charge. We promise not to increase the charge for your first five rider years. For more information
about the ING Joint LifePay Plus Base and Annual Ratchet, please see “Charges and Fees–Optional Rider
Charges–ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit (ING Joint LifePay Plus) Rider
Charge” and “Optional Living Benefit Riders–ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit
(“ING Joint LifePay Plus”) Rider–Annual Ratchet.”
     
PRO.70600-13 2


The next item shows the minimum and maximum total operating expenses charged by a fund that you may
pay periodically during the time that you own the contract. More detail concerning each fund’s fees and
expenses is contained in the prospectus for each fund.

     
Total Annual Fund Operating Expenses Minimum Maximum
(expenses that are deducted from fund assets, including management    
fees, distribution and/or service (12b-1) fees, and other expenses): 0.53% 1.51%
 

Examples:

These Examples are intended to help you compare the cost of investing in the contract with the cost of investing in
other variable annuity contracts. These costs include contract owner transaction expenses, contract fees, separate
account annual expenses, and fund fees and expenses.

Premium taxes (which currently range from 0% to 4% of premium payments) may apply, but are not reflected in
the examples below.

A. This example assumes that you invest $10,000 in the contract for the time periods indicated. The example also
assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the
funds. Specifically, the example assumes election of Option Package III for contracts established on or after
August 7, 2003. The example reflects the deduction of a mortality and expense risk charge, an asset-based
administrative charge, and the annual contract administrative charge as an annual charge of 0.0068% of assets. The
example also assumes you elected the Minimum Guaranteed Income Benefit rider with an assumed annual charge
of 0.60% of the MGIB Benefit Base, and the rider charge is assessed each quarter on a base equal to the
hypothetical $10,000 premium increasing at 5% per year. If you elect different options, your expenses may be
lower. If some or all of the amounts held under the contract are transfer amounts or otherwise not subject to
surrender charge, the actual surrender charge will be lower than that represented in the example. Surrender charges
may apply if you choose to begin receiving income phase payments within the first contract year and, under certain
circumstances, within the first 7 contract years.

Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

1) If you surrender your contract at the end of the applicable time period:
1 year 3 years 5 years 10 years
$946 $1,562 $2,112 $3,847
2) If you annuitize at the end of the applicable time period:
1 year 3 years 5 years 10 years
$946 $1,562 $2,112 $3,847
3) If you do not surrender your contract:
1 year 3 years 5 years 10 years
$346 $1,062 $1,812 $3,847

 

B. This example assumes that you invest $10,000 in the contract for the time periods indicated. The example also
assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the
funds. Specifically, the example assumes election of Option Package III for contracts established on or after
August 7, 2003. The example reflects the deduction of a mortality and expense risk charge, an asset-based
administrative charge, and the annual contract administrative charge as an annual charge of 0.0068% of assets. The
example also assumes the election of the ING LifePay Plus rider, and reflects the maximum ING LifePay Plus rider
charge of 1.50% of the ING LifePay Plus Base. If you elect different options, your expenses may be lower. If some
or all of the amounts held under the contract are transfer amounts or otherwise not subject to surrender charge, the
actual surrender charge will be lower than that represented in the example. Surrender charges may apply if you
choose to begin receiving income phase payments within the first contract year and, under certain circumstances,
within the first 7 contract years.

PRO.70600-13                                                                         3

 

Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

1) If you surrender your contract at the end of the applicable time period:
  1 year 3 years 5 years 10 years
  $1,037 $1,842 $2,589 $4,826
  2) If you annuitize at the end of the applicable time period:
  1 year 3 years 5 years 10 years
  $1,037 $1,842 $2,589 $4,826
  3) If you do not surrender your contract:
  1 year 3 years 5 years 10 years
  $437 $1,342 $2,289 $4,826

  

C. This example assumes that you invest $10,000 in the contract for the time periods indicated. The example also
assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the
funds. Specifically, the example assumes election of Option Package III for contracts established on or after
August 7, 2003. The example reflects the deduction of a mortality and expense risk charge, an asset-based
administrative charge, and the annual contract administrative charge as an annual charge of 0.0068% of assets. The
example also assumes the election of the ING Joint LifePay Plus rider, and reflects the maximum ING Joint
LifePay Plus rider charge of 1.70% of the ING Joint LifePay Plus Base. If you elect different options, your
expenses may be lower. If some or all of the amounts held under the contract are transfer amounts or otherwise not
subject to surrender charge, the actual surrender charge will be lower than that represented in the example.
Surrender charges may apply if you choose to begin receiving income phase payments within the first contract year
and, under certain circumstances, within the first 7 contract years.

Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

 

1) If you surrender your contract at the end of the applicable time period:
  1 year 3 years 5 years 10 years
  $1,057 $1,904 $2,695 $5,048
  2) If you annuitize at the end of the applicable time period:
  1 year 3 years 5 years 10 years
  $1,057 $1,904 $2,695 $5,048
  3) If you do not surrender your contract:
  1 year 3 years 5 years 10 years
  $457 $1,404 $2,395 $5,048

 

Compensation is paid for the sale of the contracts. For information about this compensation, see “Contract
Distribution–Selling the Contract.”

Fees Deducted by the Funds

Using This Information. The fund prospectuses show the investment advisory fees, 12b-1 fees and other expenses
including service fees (if applicable) charged annually by each fund. See the “Charges and Fees” section of this
prospectus, and the fund prospectuses, for further information. Fund fees are one factor that impacts the value of a
fund share. To learn about additional factors, refer to the fund prospectuses.

The Company may receive compensation from each of the funds or the funds’ affiliates based on an annual
percentage of the average net assets held in that fund by the Company. The percentage paid may vary from one
fund company to another. For certain funds, some of this compensation may be paid out of 12b-1 fees or service
fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the fund
prospectuses. The Company may also receive additional compensation from certain funds for administrative,
recordkeeping or other services provided by the Company to the funds or the funds’ affiliates. These additional
payments may also be used by the Company to finance distribution. These additional payments are made by the
funds or the funds’ affiliates to the Company and do not increase, directly or indirectly, the fund fees and expenses.
See “Charges and Fees–Fund Expenses” for additional information.

PRO.70600-13                                                                             4

 

In the case of fund companies affiliated with the Company, where an affiliated investment adviser employs
subadvisers to manage the funds, no direct payments are made to the Company or the affiliated investment adviser
by the subadvisers. Subadvisers may provide reimbursement for employees of the Company or its affiliates to
attend business meetings or training conferences. Investment management fees are apportioned between the
affiliated investment adviser and subadviser. This apportionment varies by subadviser, resulting in varying amounts
of revenue retained by the affiliated investment adviser. This apportionment of the investment advisory fee does not
increase, directly or indirectly, fund fees and expenses. See “Charges and Fees–Fund Expenses” for additional
information.
 
How Fees are Deducted. Fees are deducted from the value of the fund shares on a daily basis, which in turn affects
the value of each subaccount that purchases fund shares.
 
CONDENSED FINANCIAL INFORMATION
 
Understanding Condensed Financial Information. In Appendix A, we provide condensed financial information
about the separate account subaccounts available under the contracts. The tables show the value of the subaccounts
over the past 10 years. For subaccounts that were not available 10 years ago, we give a history from the date of first
availability or the date purchase payments were first received in the subaccount under the contract.
 
Financial Statements. The statements of assets and liabilities, the statements of operations, the statements of
changes in net assets and the related notes to financial statements for Separate Account B and the financial
statements and the related notes to financial statements for ING USA Annuity and Life Insurance Company are
included in the Statement of Additional Information.
 
Accumulation Unit
We use accumulation units to calculate the value of a contract. Each subaccount of the separate account has its own
accumulation unit value. The accumulation units are valued each business day that the New York Stock Exchange
(“NYSE”) is open for trading. Their values may increase or decrease from day to day according to a Net Investment
Factor, which is primarily based on the investment performance of the applicable fund. Shares in the funds are
valued at their net asset value.
 
The Net Investment Factor
The Net Investment Factor is an index number which reflects certain charges under the contract and the investment
performance of the subaccount. The Net Investment Factor is calculated for each subaccount as follows:
1.   We take the net asset value of the subaccount at the end of each business day.
2. We add to 1) the amount of any dividend or capital gains distribution declared for the subaccount and
reinvested in such subaccount. We subtract from that amount a charge for our taxes, if any.
3. We divide 2) by the net asset value of the subaccount at the end of the preceding business day.
Calculations for the subaccounts are made on a per share basis.
 
The Net Rate of Return equals the Net Investment Factor minus one.
 
Performance Information
From time to time, we may advertise or include in reports to contract owners performance information for the
subaccounts of the separate account, including the average annual total return performance, yields and other
nonstandard measures of performance. Such performance data will be computed, or accompanied by performance
data computed, in accordance with standards defined by the SEC.
 
PRO.70600-13 5

 

 

Standard total average annual return performance will include average annual rates of total return for 1, 5 and 10
year periods, or lesser periods depending on how long the separate account has been investing in the fund. We may
show other total returns for periods of less than one year. Total return figures will be based on the actual historic
performance of the subaccounts of the separate account, assuming an investment at the beginning of the period
when the separate account first invested in the fund (or when the fund was first made available through the Separate
Account) and withdrawal of the investment at the end of the period, adjusted to reflect the deduction of all
applicable fund and current contract charges. We may also show rates of total return on amounts invested at the
beginning of the period with no withdrawal at the end of the period. Total return figures which assume no
withdrawals at the end of the period will reflect all recurring charges, but will not reflect the surrender charge. In
addition, we may present historic performance data for the funds since their inception reduced by some or all of the
fees and charges under the contract. Such adjusted historic performance includes data that precedes the inception
dates of the subaccounts of the separate account. This data is designed to show the performance that would have
resulted if the contract had been in existence before the separate account began investing in the funds.
 
Performance information reflects only the performance of a hypothetical contract and should be considered in light
of other factors, including the investment objective of the fund and market conditions. Please keep in mind that past
performance is not a guarantee of future results.
 
ING USA ANNUITY AND LIFE INSURANCE COMPANY
 
ING USA Annuity and Life Insurance Company (“the Company”) is an Iowa stock life insurance company,
which was originally incorporated in Minnesota on January 2, 1973. The Company is a wholly owned subsidiary of
Lion Connecticut Holdings Inc. (“Lion Connecticut”), which in turn is a wholly owned subsidiary of ING Groep
N.V. (“ING”), a global financial institution active in the fields of insurance, banking and asset management. All
guarantees and benefits provided under the contracts are subject to the claims paying ability of the Company and
our general account. The Company is authorized to sell insurance and annuities in all states, except the state of New
York, and the District of Columbia. The Company’s financial statements appear in the Statement of Additional
Information.
 
Directed Services LLC, the distributor of the Contracts and the investment manager of ING Investors Trust, is also
a wholly owned indirect subsidiary of ING. ING also indirectly owns ING Investments, LLC and ING Investment
Management Co. LLC, portfolio managers of the ING Investors Trust and the investment managers of the ING
Variable Insurance Trust, ING Variable Products Trust and ING Variable Product Portfolios, respectively.
 
Pursuant to an agreement with the European Commission (“EC”), ING has announced its intention to divest
itself of ING U.S., Inc. and its subsidiaries, including the Company (“ING U.S.”), which constitutes ING’s U.S.-
based retirement, investment management and insurance operations. Under the agreement with the EC, ING is
required to divest itself of at least 25% of ING U.S. by the end of 2013, more than 50% by the end of 2014 and
100% by the end of 2016. While all options for effecting the separation from ING remain open, ING has announced
that the base case for this separation includes an initial public offering (“IPO”) of ING U.S., and in connection with
the proposed IPO of its common stock ING U.S. filed a registration statement on Form S-1 with the SEC in
November 2012, which was amended in January, March and April 2013. While the base case for the separation is
an IPO, all options remain open and it is possible that ING’s divestment of ING U.S. may take place by means of a
sale to a single buyer or group of buyers
 
Our principal office is located at 1475 Dunwoody Drive, West Chester, Pennsylvania 19380.
 
PRO.70600-13 6

 

 

Product Regulation. Our products are subject to a complex and extensive array of state and federal tax, securities
and insurance laws, and regulations, which are administered and enforced by a number of governmental and self-
regulatory authorities, including state insurance regulators, state securities administrators, the SEC, the Financial
Industry Regulatory Authority (“FINRA”), the Department of Labor and the Internal Revenue Service (“IRS”). For
example, U.S. federal income tax law imposes requirements relating to product design, administration, and
investments that are conditions for beneficial tax treatment of such products under the Tax Code. See “Federal Tax
Considerations” for further discussion of some of these requirements. Failure to administer certain product
features could affect such beneficial tax treatment. In addition, state and federal securities and insurance laws
impose requirements relating to insurance product design, offering and distribution, and administration. Failure to
meet any of these complex tax, securities, or insurance requirements could subject the Company to administrative
penalties imposed by a particular governmental or self-regulatory authority and unanticipated claims and costs
associated with remedying such failure. Additionally, such failure could harm the Company’s reputation, interrupt
the Company’s operations or adversely impact profitability.
 
ING USA SEPARATE ACCOUNT B
 
The separate account was established as a separate account of the Company on July 14, 1988. It is registered with
the SEC as a unit investment trust under the Investment Company Act of 1940 as amended (the “1940 Act”). The
separate account is a separate investment account used for our variable annuity contracts. We own all the assets in
the separate account but such assets are kept separate from our other accounts.
 
The separate account is divided into subaccounts. Each subaccount invests exclusively in shares of one fund of a
fund. Each fund has its own distinct investment objectives and policies. Income, gains and losses, realized or
unrealized, of a portfolio are credited to or charged against the corresponding subaccount of the separate account
without regard to any other income, gains or losses of the Company. Assets equal to the reserves and other contract
liabilities with respect to each are not chargeable with liabilities arising out of any other business of the Company.
They may, however, be subject to liabilities arising from subaccounts whose assets we attribute to other variable
annuity contracts supported by the separate account. If the assets in the separate account exceed the required
reserves and other liabilities, we may transfer the excess to our general account. We are obligated to pay all benefits
and make all payments provided under the contracts. All guarantees and benefits provided under the contracts are
subject to the claims paying ability of the Company and our general account.
 
Note: Other variable annuity contracts invest in Separate Account B but are not discussed in this prospectus. The
separate account may also invest in other funds which are not available under your contract. Under certain
circumstances, we may make certain changes to the subaccounts. For more information, see “The Annuity
Contract–Addition, Deletion, or Substitution of Subaccounts and Other Changes.”
 
THE FUNDS
 
You will find information about the funds currently available under your contract in Appendix B–The
Funds. A prospectus containing more complete information on each fund may be obtained by calling our
Customer Service Center at 1-800-366-0066. You should read the prospectus carefully before investing.
 
Certain funds may be structured as “fund of funds” or “Master-Feeder” funds. The funds may have higher fees and
expenses than a fund that invests directly in debt and equity securities because they also incur the fees and expenses
of the underlying funds in which they invest. These funds are affiliated funds, and the underlying funds in which
they invest may be affiliated as well. The fund prospectuses disclose the aggregate annual operating expenses of
each fund and its corresponding underlying fund or funds. These funds are identified in the fund list in the front of
this prospectus.
 
If, due to differences in tax treatment or other considerations, the interests of the contract owners of various
contracts participating in the funds conflict, we, the Board of Trustees or Directors of the funds, and any other
insurance companies participating in the funds will monitor events to identify and resolve any material conflicts
that may arise.
  
PRO.70600-13 7

 

 

Restricted Funds
We may designate any investment option as a Restricted Fund and limit the amount you may allocate or transfer to
a Restricted Fund. We may establish any such limitation, at our discretion, as a percentage of premium or contract
value or as a specified dollar amount and change the limitation at any time. Currently, we have not designated any
investment option as a Restricted Fund. We may, with 30 days’ notice to you, designate any fund as a Restricted
Fund or change the limitations on existing contracts with respect to new premiums added to such fund and also
with respect to new transfers to such fund. If a change is made with regard to designation as a Restricted Fund or
applicable limitations, such change will apply only to transactions effected after such change.
 
We limit your investment in the Restricted Funds on both an aggregate basis for all Restricted Funds and for each
individual Restricted Fund. The aggregate limits for investment in all Restricted Funds are expressed as a
percentage of contract value, percentage of premium and maximum dollar amount. Currently, your investment in
two or more Restricted Funds would be subject to each of the following three limitations: no more than 30% of
contract value, up to 100% of each premium and no more than $9,999,999. We may change these limits, at our
discretion, for new contracts, premiums, transfers or withdrawals.
 
We also limit your investment in each individual Restricted Fund. The limits for investment in each Restricted
Fund are expressed as a percentage of contract value, percentage of premium and maximum dollar amount.
Currently, the limits for investment in an individual Restricted Fund are the same as the aggregate limits set forth
above. We may change these limits, in our discretion, for new contracts, premiums, transfers or withdrawals.
 
We monitor the aggregate and individual limits on investments in Restricted Funds for each transaction (e.g.
premium payments, reallocations, withdrawals, dollar cost averaging). If the contract value in the Restricted Fund
has increased beyond the applicable limit due to market growth, we will not require the reallocation or withdrawal
of contract value from the Restricted Fund. However, if an aggregate limit has been exceeded, withdrawals must be
taken either from the Restricted Funds or taken pro-rata from all investment options in which contract value is
allocated, so that the percentage of contract value in the Restricted Funds following the withdrawal is less than or
equal to the percentage of contract value in the Restricted Funds prior to the withdrawal.
 
We will allocate pro-rata the portion of any premium payment that exceeds the limits with a Restricted Fund to
your other investment option choices not designated as Restricted Funds, or to a specially designated subaccount if
there are none (currently, the ING Liquid Assets Portfolio), unless you instruct us otherwise.
 
We will not permit a transfer to the Restricted Funds to the extent that it would increase the contract value in the
Restricted Fund or in all Restricted Funds to more than the applicable limits set forth above. We will not limit
transfers from Restricted Funds. If the result of multiple reallocations is to lower the percentage of total contract
value in Restricted Funds, the reallocation will be permitted even if the percentage of contract value in a Restricted
Fund is greater than its limit.
 
Please see “Withdrawals” and “Transfers Among Your Investments” in this prospectus for more information on the
effect of Restricted Funds.
 
COVERED FUNDS, SPECIAL FUNDS AND EXCLUDED FUNDS
 
For purposes of determining death benefits, we assign the investment options to one of three categories of funds.
The categories are:
·   Covered Funds;
· Special Funds; and
· Excluded Funds.
 
Allocations to Covered Funds participate fully in all guaranteed benefits. Allocations to Special Funds could affect
the death benefit guarantee that may otherwise be provided. Allocations to Excluded Funds do not participate in
any guaranteed benefits due to their potential for volatility.
 
PRO.70600-13 8

 

 

Designation of investment options under these categories may vary by benefit. For example, we may designate
an investment option a Special Fund for purposes of calculating one death benefit and not another. We may, with
30 days’ notice to you, designate any investment option as a Special or Excluded Fund with respect to new
premiums added to such investment option, with respect to new transfers to such investment option and with
respect to the death benefits to which such designation applies. Selecting a Special or Excluded Fund may limit or
reduce the death benefit. See “Death Benefit Choices” in this prospectus for more information.
 
CHARGES AND FEES
 
We deduct the contract charges described below to compensate us for our cost and expenses, services provided and
risks assumed under the contracts. We incur certain costs and expenses for distributing and administering the
contracts, including compensation and expenses paid in connection with sales of the contracts, for paying the
benefits payable under the contracts, and for bearing various risks associated with the contracts. Some of the
charges are for optional riders, so they are only deducted if you elect to purchase the rider. The amount of a
contract charge will not always correspond to the actual costs associated with the charge. For example, the
surrender charge collected may not fully cover all of the distribution expenses incurred by us with the service or
benefits provided. In the event there are any profits from fees and charges deducted under the contract, including
the mortality and expense risk charge and rider and benefit charges, we may use such profits to finance the
distribution of contracts.
 
Charge Deduction Subaccount
You may elect to have all charges against your contract value (except daily charges) deducted directly from a single
subaccount designated by the Company. Currently, we use the ING Liquid Assets Portfolio subaccount for this
purpose. If you do not elect this option, or if the amount of the charges is greater than the amount in the designated
subaccount, the charges will be deducted as discussed below. You may cancel this option at any time by sending
notice to our Customer Service Center in a form satisfactory to us.
 
Charges Deducted from the Contract Value
We deduct the following charges from your contract value:
 
       Internal transfers when the prior contract or arrangement either imposed a front end load or had no
applicable surrender charge: There is no surrender charge under this contract on amounts transferred or rolled
over from a prior contract as an internal transfer when the prior contract imposed a front end load, there was no
applicable surrender charge under the prior contract, or if the prior contract would not have assessed a surrender
charge if the money had been transferred to a contract issued by a non-affiliated company.
 
       Transfers from external sources, internal transfers when the prior contract had an applicable surrender
charge and/or additional premium payments not part of an internal transfer: We deduct a surrender charge if
you surrender your contract or withdraw an amount exceeding the free withdrawal amount. The free withdrawal
amount for a contract year is the greater of: 1) 10% of contract value, based on the contract value on the date of
withdrawal, less any prior withdrawals in that contract year; or 2) your required minimum distribution (“RMD”)
attributable to amounts held under your contract. Under Option Package III, any unused free withdrawal amount
may carry forward to successive contract years, but in no event would the free withdrawal amount at any time
exceed 30% of contract value.
 
The following table shows the schedule of the surrender charge that will apply, based on the total premium
withdrawn. The surrender charge is deducted from the amount requested for withdrawal. The surrender charge is a
percent of each premium payment withdrawn. For internal transfers, the amount subject to surrender charge is the
lesser of premium payments paid under the prior contract or the initial contract value.
 
        Complete Years Elapsed 0  1  2  3  4  5  6  7+
               Since Premium Payment*                
        Surrender Charge 6%  6%  5%  4%  3%  2%  1%  0%
 
* For amounts transferred or rolled over into this contract as an internal transfer, the “Complete Years Elapsed” are
calculated from the date of the first premium payment made under the prior contract or, if earlier, the effective date of
the prior contract.
 
PRO.70600-13 9

 

 

Waiver of Surrender Charge for Extended Medical Care. We will waive the surrender charge in most states in
the following events: (i) you begin receiving qualified extended medical care on or after the first contract
anniversary for at least 45 days during a 60-day period and your request for the surrender or withdrawal, together
with all required documentation is received at our Customer Service Center during the term of your care or within
90 days after the last day of your care; or (ii) you are first diagnosed by a qualifying medical professional, on or
after the first contract anniversary, as having a qualifying terminal illness. We have the right to require an
examination by a physician of our choice. If we require such an examination, we will pay for it. You are required to
send us satisfactory written proof of illness. See your contract for more information. The waiver of surrender
charge may not be available in all states.
 
Free Withdrawal Amount. The Free Withdrawal Amount in any contract year is the greater of: 1) 10% of contract
value, based on the contract value on the date of the withdrawal; and 2) your RMD attributable to amounts held
under the contract. The Free Withdrawal Amount does not include your RMD for the tax year containing the
contract date of this contract. Under Option Package III, any unused percentage of the 10% Free Withdrawal
Amount from a contract year will carry forward into successive contract years, based on the percentage remaining
at the time of the last withdrawal in that contract year. In no event will the free withdrawal amount at any time
exceed 30% of contract value.
 
Surrender Charge for Excess Withdrawals. We will deduct a surrender charge for excess withdrawals, which
may include a withdrawal you make to satisfy required minimum distributions under the Tax Code. We consider a
withdrawal to be an “excess withdrawal” when the amount you withdraw in any contract year exceeds the Free
Withdrawal Amount. Where you are receiving systematic withdrawals, any combination of regular withdrawals
taken and any systematic withdrawals expected to be received in a contract year will be included in determining the
amount of the excess withdrawal. Such a withdrawal will be considered a partial surrender of the contract and we
will impose a surrender charge and any associated premium tax. We will deduct such charges from the contract
value in proportion to the contract value in each subaccount or Fixed Interest Allocation from which the excess
withdrawal was taken. In instances where the excess withdrawal equals the entire contract value in such
subaccounts or Fixed Interest Allocations, we will deduct charges proportionately from all other subaccounts and
Fixed Interest Allocations in which you are invested. Any withdrawal from a Fixed Interest Allocation more
than 30 days before its maturity date will trigger a Market Value Adjustment. See Appendix C and the Fixed
Account II prospectus for more information.
 
For the purpose of calculating the surrender charge for an excess withdrawal: a) we treat premiums as being
withdrawn on a first-in, first-out basis; and b) amounts withdrawn that are not considered an excess withdrawal are
not considered a withdrawal of any premium payments. We have included an example of how this works in
Appendix E. Although we treat premium payments as being withdrawn before earnings for purposes of calculating
the surrender charge for excess withdrawals, the federal tax law treats earnings as withdrawn first.
 
Surrender Charges and the ING LifePay Plus and ING Joint LifePay Plus Riders. If you elect the ING
LifePay Plus or ING Joint LifePay Plus rider, withdrawals up to the Maximum Annual Withdrawal taken during the
Lifetime Withdrawal Phase will not incur surrender charges. See “Optional Living Benefit Riders–ING LifePay
Plus Minimum Contract Withdrawal Benefit (“ING LifePay Plus”) Rider–Surrender Charges” and “Optional
Living Benefit Riders–ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit (“ING Joint LifePay
Plus”) Rider–Surrender Charges.”
 
Premium Taxes. We may make a charge for state and local premium taxes depending on your state of residence.
The tax can range from 0% to 4% of the premium payment. We have the right to change this amount to conform
with changes in the law or if you change your state of residence.
 
We deduct the premium tax from your contract value (or from the MGIB Benefit Base, if exercised) on the income
phase payment start date. However, some jurisdictions impose a premium tax at the time that initial and additional
premiums are paid, regardless of when the income phase payments begin. In those states we may defer collection of
the premium taxes from your contract value and deduct it when you surrender the contract, when you take an
excess withdrawal, or on the income phase start date.
 
 
PRO.70600-13 10

 

 

Administrative Charge. We deduct an annual administrative charge on each contract anniversary, or if you
surrender your contract prior to a contract anniversary, at the time we determine the cash surrender value payable to
you. The amount deducted is $30 per contract unless waived under conditions we establish. We deduct the charge
proportionately from all subaccounts in which you are invested. If there is no contract value in those subaccounts,
we will deduct the charge from your Fixed Interest Allocations starting with the guaranteed interest periods nearest
their maturity dates until the charge has been paid.

Transfer Charge. We currently do not deduct any charges for transfers made during a contract year. We have the
right, however, to assess up to $25 for each transfer after the twelfth transfer in a contract year. If such a charge is
assessed, we would deduct the charge from the subaccounts and the Fixed Interest Allocations from which each
such transfer is made in proportion to the amount being transferred from each such subaccount and Fixed Interest
Allocation unless you have chosen to have all charges deducted from a single subaccount. The charge will not
apply to any transfers due to the election of dollar cost averaging, automatic rebalancing and transfers we make to
and from any subaccount specially designated by the Company for such purpose.

Redemption Fees. Certain funds may deduct redemption fees as a result of withdrawals, transfers, or other fund
transactions you initiate. If applicable, we may deduct the amount of any redemption fees imposed by the
underlying mutual funds as a result of withdrawals, transfers or other fund transactions you initiate. Redemption
fees, if any, are separate and distinct from any transaction charges or other charges deducted from your contract
value. For a more complete description of the funds’ fees and expenses, review each fund’s prospectus.

Charges Deducted from the Subaccounts

Mortality and Expense Risk Charge. The amount of the mortality and expense risk charge depends on the option
package you have elected. The charge is deducted on each business day based on the assets you have in each
subaccount. In the event there is any profit from the mortality and expense risk charge, we may use such profit to
finance the distribution of contracts.

Option Packages

The following option packages apply to contracts established prior to August 7, 2003, and contracts issued in
Oregon:

Option Package I Option Package II Option Package III
Annual Charge Annual Charge Annual Charge
0.60% 0.80% 0.95%

            
The following option packages apply to contracts established on or after August 7, 2003 (or upon state approval, if
later):

Option Package I Option Package II Option Package III
Annual Charge Annual Charge Annual Charge
0.85% 1.05% 1.20%

      
Asset-Based Administrative Charge. The amount of the asset-based administrative charge, on an annual basis, is
equal to 0.15% of the assets you have in each subaccount. This charge is deducted daily from your assets in each
subaccount.

PRO.70600-13                                                              11

 

Optional Rider Charges. Subject to state availability, you may purchase one of three optional benefit riders for an
additional charge. Please check your contract application to determine which riders may be available to you. Once
elected, a rider cannot be canceled independently of the contract. So long as a rider is in effect, we will deduct a
separate quarterly charge for the optional benefit rider through a pro-rata reduction of the contract value of the
subaccounts in which you are invested. If there is insufficient contract value in the subaccounts, we will deduct the
charge from your Fixed Interest Allocations nearest their maturity date. We deduct each rider charge on the
quarterly contract anniversary in arrears, meaning we deduct the first charge on the first quarterly anniversary
following the rider date. If the rider is added to an existing contract, the first quarter’s charge will be reduced
proportionally for the portion of the quarter that the rider was not in effect. For a description of riders and the
defined terms used in connection with the riders, see “Optional Living Benefit Riders.”
 
A “quarterly anniversary date” is the date three months from the contract date that falls on the same date in the
month as the contract date. For example, if the contract date is February 12, the quarterly anniversary date is May
12. If there is no corresponding date in the month, the quarterly anniversary date will be the last date of such month.
If the quarterly anniversary date falls on a weekend or holiday, we will use the value as of the subsequent business
day.
 
Minimum Guaranteed Income Benefit (MGIB). The charge for the MGIB Rider, a living benefit, is deducted
quarterly as follows:
 
As an Annual Charge
0.60% of the
MGIB Benefit Base
  
Please see “Optional Living Benefit Riders–Minimum Guaranteed Income Benefit (MGIB) Rider” for a description
of the MGIB Benefit Base and the MGIB Rate.
 
       ING LifePay Plus Minimum Guaranteed Withdrawal Benefit (ING LifePay Plus) Rider Charge. The
charge for the ING LifePay Plus rider, a living benefit, is deducted quarterly from your contract value:
 
Maximum Annual Charge Current Annual Charge  
1.50%  0.80%  
 
This quarterly charge is a percentage of the ING LifePay Plus Base. We deduct the charge in arrears based on the
contract date (contract year versus calendar year). In arrears means the first charge is deducted at the end of the first
quarter from the contract date. If the rider is elected at contract issue, the rider effective date is the same as the
contract date. If the rider is added after contract issue, the rider and charges will begin on the next following
quarterly contract anniversary. A quarterly contract anniversary occurs each quarter of a contract year from the
contract date. The charge will be pro-rated when the rider is terminated. Charges will no longer be deducted once
your rider enters Lifetime Automatic Periodic Benefit Status. Lifetime Automatic Periodic Benefit Status occurs if
your contract value is reduced to zero and other conditions are met. We reserve the right to increase the charge for
the ING LifePay Plus rider upon an Annual Ratchet once the Lifetime Withdrawal Phase begins. You will never
pay more than new issues of this rider, subject to the maximum annual charge. We will not increase the charge for
your first five years after the effective date of the rider. For more information about how this rider works, including
when Lifetime Automatic Periodic Benefit Status begins, please see “Optional Living Benefit Riders–ING LifePay
Plus Minimum Guaranteed Withdrawal Benefit (“ING LifePay Plus”) Rider.”
 
If the contract value in the subaccounts is insufficient for the charge, then we deduct it from any Fixed Interest
Allocations, in which case a Market Value Adjustment may apply. Currently, a Market Value Adjustment would
not apply when this charge is deducted from a Fixed Interest Allocation. With Fixed Interest Allocations, we deduct
the charge from the Fixed Interest Allocation having the nearest maturity. For more information about the Fixed
Interest Allocation, including the Market Value Adjustment, please see Appendix C. We reserve the right to change
the charge for this rider, subject to the maximum annual charge. If changed, the new charge will only apply to
riders issued after the change.
 
Please Note: The above information pertains to the form of ING LifePay Plus rider which was available for sale
from May 1, 2009 until March 15, 2010. If you purchased a prior version of the ING LifePay Plus rider, please see
Appendix K for more information. If you purchased the ING LifePay rider, please see Appendix L for more
information.
 
PRO.70600-13 12

 

 

ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit (ING Joint LifePay Plus) Rider Charge.
The charge for the ING Joint LifePay Plus rider, a living benefit, is deducted quarterly from your contract value:

Maximum Annual Charge Current Annual Charge
1.70% 1.05%

           
This quarterly charge is a percentage of the ING Joint LifePay Plus Base. We deduct the charge in arrears based on
the contract date (contract year versus calendar year). In arrears means the first charge is deducted at the end of the
first quarter from the contract date. If the rider is elected at contract issue, the rider effective date is the same as the
contract date. If the rider is added after contract issue, the rider and charges will begin on the next following
quarterly contract anniversary. A quarterly contract anniversary occurs each quarter of a contract year from the
contract date. The charge will be pro-rated when the rider is terminated. Charges will no longer be deducted once
your rider enters Lifetime Automatic Periodic Benefit Status. Lifetime Automatic Periodic Benefit Status occurs if
your contract value is reduced to zero and other conditions are met.

We reserve the right to increase the charge for the ING LifePay Plus rider upon an Annual Ratchet once the
Lifetime Withdrawal Phase begins. You will never pay more than new issues of this rider, subject to the maximum
annual charge. We will not increase the charge for the first five years after the effective date of the rider. You will
never pay more than new issues of this rider, subject to the maximum annual charge. For more information about
how this rider works, including when Lifetime Automatic Periodic Benefit Status begins, please see “Optional
Living Benefit Riders–ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit (“ING Joint LifePay
Plus”) Rider.”

If the contract value in the subaccounts is insufficient for the charge, then we deduct it from any Fixed Interest
Allocations, in which case a Market Value Adjustment may apply. Currently, a Market Value Adjustment would
not apply when this charge is deducted from a Fixed Interest Allocation. With Fixed Interest Allocations, we deduct
the charge from the Fixed Interest Allocation having the nearest maturity. For more information about the Fixed
Interest Allocation, including the Market Value Adjustment, please see Appendix C. We reserve the right to change
the charge for this rider, subject to the maximum annual charge. If changed, the new charge will only apply to
riders issued after the change.

Please Note: The above information pertains to the form of ING Joint LifePay Plus rider which was available for
sale from May 1, 2009 until March 15, 2010. If you purchased a prior version of the ING Joint LifePay Plus rider,
please see Appendix K for more information. If you purchased the ING Joint LifePay rider, please see Appendix L
for more information.

Fund Expenses
As shown in the fund prospectuses, each fund deducts management fees from the amounts allocated to the fund. In
addition, each fund deducts other expenses, which may include service fees that may be used to compensate service
providers, including the Company and its affiliates, for administrative and contract owner services provided on
behalf of the fund. Furthermore, certain funds deduct a distribution or 12b-1 fee, which is used to finance any
activity that is primarily intended to result in the sale of fund shares. For a more complete description of the
funds’ fees and expenses, review each fund’s prospectus.

Less expensive share classes of the funds offered through this contract may be available for investment outside of
this contract. You should evaluate the expenses associated with the funds available through this contract before
making a decision to invest.

The Company may receive substantial revenue from each of the funds or from the funds’ affiliates, although the
amount and types of revenue vary with respect to each of the funds offered through the contract. This revenue is
one of several factors we consider when determining contract fees and charges and whether to offer a fund through
our contracts. Fund revenue is important to the Company’s profitability, and it is generally more profitable
for us to offer affiliated funds than to offer unaffiliated funds.
            

PRO.70600-13                                                                        13

 

Assets allocated to affiliated fund, meaning funds managed by Directed Services LLC, ING Investments, LLC or
another Company affiliate, generate the largest dollar amount of revenue for the Company. Affiliated funds may
also be subadvised by a Company affiliate or by an unaffiliated third party. Assets allocated to unaffiliated funds,
meaning funds managed by an unaffiliated third party, generate lesser, but still substantial dollar amounts of
revenue for the Company. The Company expects to earn a profit from this revenue to the extent it exceeds the
Company’s expenses, including the payment of sales compensation to our distributors.
 
Revenue Received from Affiliated Funds
 
The revenue received by the Company from affiliated funds may be deducted from fund assets and may include:
· A share of the management fee;
· Service fees;
· For certain share classes, compensation paid from 12b-1 fees; and
· Other revenues that may be based either on an annual percentage of average net assets held in the fund by the
Company or a percentage of the fund’s management fees.
 
In the case of affiliated funds subadvised by unaffiliated third parties, any sharing of the management fee between
the Company and the affiliated investment adviser is based on the amount of such fee remaining after the
subadvisory fee has been paid to the unaffiliated subadviser. Because subadvisory fees vary by subadviser, varying
amounts of revenue are retained by the affiliated investment adviser and ultimately shared with the Company. The
Company may also receive additional compensation in the form of intercompany payments from an affiliated
fund’s investment advisor or the investment advisor's parent in order to allocate revenue and profits across the
organization. The intercompany payments and other revenue received from affiliated funds provide the Company
with a financial incentive to offer affiliated funds through the contract rather than unaffiliated funds.
 
Revenue Received from Unaffiliated Funds
Revenue received from each of the unaffiliated funds or their affiliates is based on an annual percentage of the
average net assets held in that fund by the Company. Some unaffiliated funds or their affiliates pay us more than
others and some of the amounts we receive may be significant.
 
The revenue received by the Company or its affiliates from unaffiliated funds may be deducted from fund assets
and may include:
· Service fees;
· For certain share classes, compensation paid from 12b-1 fees; and
· Additional payments for administrative, recordkeeping or other services that we provide to the funds or their
affiliates, such as processing purchase and redemption requests, and mailing fund prospectuses, periodic
reports and proxy materials. These additional payments do not increase directly or indirectly the fees and
expenses shown in each fund’s prospectus. These additional payments may be used by us to finance
distribution of the contract.
 
If the unaffiliated fund families currently offered through the contract that made payments to us were
individually ranked according to the total amount they paid to the Company or its affiliates in 2012, in connection
with the registered variable annuity contracts issued by the Company, that ranking would be as follows:
1) Fidelity Investments® 4)    Franklin® Templeton® Investments
2) PIMCO Funds 5)    OppenheimerFunds, Inc.
3) Pioneer Funds    
 
If the revenues received from the affiliated funds were taken into account when ranking the funds according to the
total dollar amount they paid to the Company or its affiliates in 2012, the affiliated funds would be first on the
list.
 
PRO.70600-13 14

 

 

In addition to the types of revenue received from affiliated and unaffiliated funds described above, affiliated and
unaffiliated funds and their investment advisers, subadvisers or affiliates may participate at their own expense in
Company sales conferences or educational and training meetings. In relation to such participation, a fund’s
investment adviser, subadviser or affiliate may help offset the cost of the meetings or sponsor events associated
with the meetings. In exchange for these expense offset or sponsorship arrangements, the investment adviser,
subadviser or affiliate may receive certain benefits and access opportunities to Company sales representatives and
wholesalers rather than monetary benefits. These benefits and opportunities include, but are not limited to co-
branded marketing materials, targeted marketing sales opportunities, training opportunities at meetings, training
modules for sales personnel, and opportunities to host due diligence meetings for representatives and wholesalers.
 
Please note certain management personnel and other employees of the Company or its affiliates may receive a
portion of their total employment compensation based on the amount of net assets allocated to affiliated funds. (See
also “Contract Distribution–Selling the Contract.”)
 
THE ANNUITY CONTRACT
 
The contract described in this prospectus is a deferred combination variable and fixed annuity contract. The
contract provides a means for you to invest in one or more of the available funds through the separate account. It
also provides a means for you to invest in a Fixed Interest Allocation through the Fixed Account. See Appendix C
and the Fixed Account II prospectus for more information on the Fixed Interest Allocation and Fixed Account.
 
When considering whether to purchase or participate in the contract, you should consult with your financial
representative about your financial goals, investment time horizon and risk tolerance.
 
Contract Date and Contract Year
The date the contract became effective is the contract date. Each 12-month period following the contract date is a
contract year.
 
Contract Owner
You are the contract owner. You are also the annuitant unless another annuitant is named in the application. You
have the rights and options described in the contract.
 
The death benefit becomes payable when you die. In the case of a sole contract owner who dies before the income
phase begins, we will pay the beneficiary the death benefit then due. The sole contract owner’s estate will be the
beneficiary if no beneficiary has been designated or the beneficiary has predeceased the contract owner. If the
contract owner is a trust and a beneficial owner of the trust has been designated, the beneficial owner will be treated
as the contract owner for determining the death benefit. If a beneficial owner is changed or added after the contract
date, this will be treated as a change of contract owner for determining the death benefit (likely a taxable event). If
no beneficial owner of the trust has been designated, the availability of Option II or Option III will be based on the
age of the annuitant at the time you purchase the contract. In the event a selected death benefit is not available, the
Standard Death Benefit will apply.
 
Income Phase Start Date
The income phase start date is the date you start receiving income phase payments under your contract. The
contract, like all deferred variable annuity contracts, has two phases: the accumulation phase and the income phase.
The accumulation phase is the period between the contract date and the income phase start date. The income phase
begins when you start receiving regular income phase payments from your contract on the income phase start date.
 
Annuitant
The annuitant is the person designated by you to be the measuring life in determining income phase payments. The
annuitant’s age determines when the income phase must begin and the amount of the income phase payments to be
paid. You are the annuitant unless you choose to name another person. The annuitant may not be changed after the
contract is in effect.
 
The contract owner will receive the income phase benefits of the contract if the annuitant is living on the income
phase start date. If the annuitant dies before the income phase start date and a contingent annuitant has been named,
the contingent annuitant becomes the annuitant (unless the contract owner is not an individual, in which case the
death benefit becomes payable).
 
PRO.70600-13 15

 

 

When the annuitant dies before the income phase start date, the contract owner will become the annuitant. The
contract owner may designate a new annuitant within 60 days of the death of the annuitant.

When the annuitant dies before the income phase start date and the contract owner is not an individual, we will pay
the designated beneficiary the death benefit then due. If a beneficiary has not been designated, or if there is no
designated beneficiary living, the contract owner will be the beneficiary. If the annuitant was the sole contract
owner and there is no beneficiary designation, the annuitant’s estate will be the beneficiary.

Regardless of whether a death benefit is payable, if the annuitant dies and any contract owner is not an individual,
distribution rules under federal tax law will apply. You should consult your tax adviser for more information if the
contract owner is not an individual.

Beneficiary
The beneficiary is named by you in a written request. The beneficiary is the person who receives any death benefit
proceeds. The beneficiary may become the successor contract owner if the contract owner who is a spouse (or the
annuitant if the contract owner is other than an individual) dies before the income phase start date. We pay death
benefits to the primary beneficiary.

If the beneficiary dies before the annuitant or the contract owner, the death benefit proceeds are paid to the
contingent beneficiary, if any. If there is no surviving beneficiary, we pay the death benefit proceeds to the contract
owner’s estate.

One or more persons may be a beneficiary or contingent beneficiary. In the case of more than one beneficiary, we
will assume any death benefit proceeds are to be paid in equal shares to the surviving beneficiaries.

All requests for changes must be in writing and submitted to our Customer Service Center in good order. The
change will be effective as of the day you sign the request. The change will not affect any payment made or action
taken by us before recording the change.

Change of Contract Owner or Beneficiary. During the annuitant’s lifetime, you may transfer ownership of a
nonqualified contract. A change in ownership may affect the amount of the death benefit, the guaranteed minimum
death benefit and/or the death benefit option applied to the contract. The new owner’s age, as of the date of the
change, will be used as the basis for determining the applicable benefits and charges. See “Purchase and
Availability of the Contract.” The new owner’s death will determine when a death benefit is payable. A change in
owner or beneficiary may also impact any optional riders that have been elected.

A change of owner likely has tax consequences. See “Federal Tax Considerations” in this prospectus.

You have the right to change beneficiaries during the annuitant’s lifetime unless you have designated an irrevocable
beneficiary. If you have designated an irrevocable beneficiary, you and the irrevocable beneficiary may have to act
together to exercise some of the rights and options under the contract. In the event of a death claim, we will honor
the form of payment of the death benefit specified by the beneficiary to the extent permitted under Section 72(s) of
the Tax Code. You may also restrict a beneficiary’s right to elect an annuity option or receive a lump-sum payment.
If so, such rights or options will not be available to the beneficiary.

All requests for changes must be in writing and submitted to our Customer Service Center. Please date your
request. The change will be effective as of the day we receive the request. The change will not affect any payment
made or action taken by us before recording the change.

Purchase and Availability of the Contract

We are no longer offering the contract for sale to new purchasers.

The minimum initial payment to purchase the contract is $5,000. Currently, this payment may be made either by
funds from qualified or nonqualified external sources (“external sources”) or by a transfer or rollover from an
existing qualified or nonqualified contract or arrangement (the “prior contract”) issued by us or one of our affiliates
(“internal transfer”). Prior to April 29, 2005, the initial payment was required to be made as an internal transfer and
the contract was not available as a nonqualified contract.

PRO.70600-13                                                                  16

 

There are three option packages available under the contract. You select an option package at time of application.
Each option package is unique. The maximum age at which you may purchase the contract is age 80, unless you
elect to purchase Option Package III, in which case the maximum issue age is age 69. For Option Package I, we
may allow you to purchase the contract up to age 85, provided you are purchasing the contract as an internal
transfer where you will receive credit for the surrender charge period accrued under the prior contract, or where
there will be no surrender charge under this contract because your prior contract has no surrender charge. See
“Charges and Fees–Charges Deducted from the Contract Value.” We reserve the right to modify these issue age
limitations in a nondiscriminatory manner.

Option Package III is not available for purchase with any living benefit rider. Prior to May 1, 2009, the living
benefit riders were available with Option Package III, and the maximum issue age for Option Package III was age
80.

You may make additional premium payments up to the contract anniversary after your 86th birthday. The minimum
additional premium payment we will accept is $50 regardless of the option package you select. Under certain
circumstances, we may waive the minimum premium payment requirement. We may also change the minimum
initial or additional premium requirements for certain group or sponsored arrangements. Any initial or additional
premium payment that would cause the contract value of all annuities that you maintain with us to exceed
$1,000,000 requires our prior approval.

The contract may currently be purchased by individuals as a nonqualified contract, as a traditional Individual
Retirement Annuity (“IRA”) under Section 408(b) of the Tax Code or as a Roth IRA under Section 408A of the
Tax Code. The contract is not currently available as a Simplified Employer Pension (SEP) Plan under 408(k), a
Simple IRA under Section 408(P), or a tax deferred annuity under Section 403(b) of the Tax Code.

Factors to Consider in the Purchase Decision
The contract is designed for people seeking long-term tax-deferred accumulation of assets, generally for retirement
or other long-term purposes. The tax-deferred feature is more attractive to people in high federal and state tax
brackets. You should not buy this contract: (1) if you are looking for a short-term investment; (2) if you
cannot risk getting back less money than you put in; or (3) if your assets are in a plan which provides for
tax-deferral and you see no other reason to purchase this contract. The decision to purchase or participate in a
contract should be discussed with your financial representative. Make sure that you understand the investment
options it provides, its other features, the risks and potential benefits you will face, and the fees and expenses you
will incur when, together with your financial representative, you consider an investment in the contract. You should
pay attention to the following issues, among others:

1) Long-Term Investment – This contract is a long-term investment, and is typically most useful as part of a
personal retirement plan. Early withdrawals may be restricted by the Tax Code or your plan or may expose
you to early withdrawal charges or tax penalties. The value of deferred taxation on earnings grows with the
amount of time funds are left in the contract. You should not participate in this contract if you are looking for
a short-term investment or expect to need to make withdrawals before you are 59½.
2) Investment Risk – The value of investment options available under this contract may fluctuate with the
markets and interest rates. You should not participate in this contract in order to invest in these options if you
cannot risk getting back less money than you put in.
3) Features and Fees – The fees for this contract reflect costs associated with the features and benefits it
provides. As you consider this contract, you should determine the value that these various benefits and
features have for you, given your particular circumstances, and consider the charges for those features.
4) Exchanges – Replacing an existing insurance contract with this contract may not be beneficial to you. If this
contract will be a replacement for another annuity contract or mutual fund option under the plan, you should
compare the two options carefully, compare the costs associated with each, and identify additional benefits
available under this contract. You should consider whether these additional benefits justify incurring a new
schedule of early withdrawal charges or any increased charges that might apply under this contract. Also, be
sure to talk to your financial professional or tax adviser to make sure that the exchange will be handled so that
it is tax-free.

 

PRO.70600-13                                                                  17

 

IRAs and other qualified plans already have the tax-deferral feature found in this contract. For an additional cost,
the contract provides other features and benefits including death benefits and the ability to receive a lifetime
income. You should not purchase a qualified contract unless you want these other features and benefits, taking into
account their cost. See “Fees and Expenses” in this prospectus. If you are considering Option II or Option III
and your contract will be an IRA, see “Federal Tax Considerations–Taxation of Qualified Contracts–
Individual Retirement Annuities” and “Federal Tax Considerations–Tax Consequences of Living Benefits
and Death Benefits” in this prospectus.

Crediting of Premium Payments
We will process your initial premium within 2 business days after receipt and allocate the payment according to the
instructions you specify at the accumulation unit value next determined, if the application and all information
necessary for processing the contract are complete. Subsequent premium payments will be processed within 1
business day if we receive all information necessary. In certain states we also accept additional premium payments
by wire order. Wire transmittals must be accompanied by sufficient electronically transmitted data. We may retain
your initial premium payment for up to 5 business days while attempting to complete an incomplete application. If
the application cannot be completed within this period, we will inform you of the reasons for the delay. We will
also return the premium payment immediately unless you direct us to hold the premium payment until the
application is completed. If you choose to have us hold the premium payment, it will be held in a non-interest
bearing account.

If a subaccount is not available or requested in error, we will make inquiry about a replacement subaccount. If we
are unable to reach you or your representative within 5 days, we will consider the application incomplete. Once the
completed application is received, we will allocate the payment to the subaccounts and/or Fixed Interest Allocation
of the separate account specified by you within 2 business days.

If your premium payment was transmitted by wire order from your broker-dealer, we will follow one of the
following two procedures after we receive and accept the wire order and investment instructions. The procedure we
follow depends on state availability and the procedures of your broker-dealer.

1) If either your state or broker-dealer do not permit us to issue a contract without an application, we reserve the
right to rescind the contract if we do not receive and accept a properly completed application or enrollment
form within 5 days of the premium payment. If we do not receive the application or form within 5 days of the
premium payment, we will refund the contract value plus any charges we deducted, and the contract will be
voided. Some states require that we return the premium paid.
2)   If your state and broker-dealer allow us to issue a contract without an application, we will issue and mail the
contract to you or your representative, together with a Contract Acknowledgement and Delivery Statement for
your execution. Until our Customer Service Center receives the executed Contract Acknowledgement and
Delivery Statement, neither you nor the broker-dealer may execute any financial transactions on your contract
unless they are requested in writing by you. We may require additional information before complying with
your request (e.g., signature guarantee).

We will ask about any missing information related to subsequent payments. We will allocate the subsequent
payment(s) pro-rata according to the current variable subaccount allocation unless you specify otherwise. Any fixed
allocation(s) will not be considered in the pro-rata calculations. If a subaccount is no longer available (including
due to a fund purchase restriction) or requested in error, we will allocate the subsequent payments proportionally
among the other subaccounts in your contract allocations. For any subsequent premium payments, the payment
designated for a subaccount of the separate account will be credited at the accumulation unit value next determined
after receipt of your premium payment and instructions.

Once we allocate your premium payment if applicable, to the subaccounts selected by you, we convert the premium
payment into accumulation units. We divide the amount of the premium payment allocated to a particular
subaccount by the value of an accumulation unit for the subaccount to determine the number of accumulation units
of the subaccount to be held in the separate account with respect to your contract. The net investment results of
each subaccount vary with its investment performance.

PRO.70600-13                                                                          18

 

In some states, we may require that an initial premium designated for a subaccount of the separate account or the
Fixed Account be allocated to a subaccount specially designated by the Company (currently, the ING Liquid Assets
Portfolio subaccount) during the free look period. After the free look period, we will convert your contract value
(your initial premium plus any earnings less any expenses) into accumulation units of the subaccounts you
previously selected. The accumulation units will be allocated based on the accumulation unit value next computed
for each subaccount. Initial premiums designated for Fixed Interest Allocations will be allocated to a Fixed Interest
Allocation with the guaranteed interest period you have chosen; however, in the future we may allocate the
premiums to the specially designated subaccount during the free look period.

Anti-Money Laundering
In order to protect against the possible misuse of our products in money laundering or terrorist financing, we have
adopted an anti-money laundering program satisfying the requirements of the USA PATRIOT Act and other
current anti-money laundering laws. Among other things, this program requires us, our agents and customers to
comply with certain procedures and standards that serve to assure that our customers’ identities are properly
verified and that premiums and loan repayments are not derived from improper sources.

Under our anti-money laundering program, we may require policy owners, insured persons and/or beneficiaries to
provide sufficient evidence of identification, and we reserve the right to verify any information provided to us by
accessing information databases maintained internally or by outside firms.

We may also refuse to accept certain forms of premium payments or loan repayments (traveler’s cheques, cashier's
checks, bank drafts, bank checks and treasurer's checks, for example) or restrict the amount of certain forms of
premium payments or loan repayments (money orders totaling more than $5,000.00, for example). In addition, we
may require information as to why a particular form of payment was used (third party checks, for example) and the
source of the funds of such payment in order to determine whether or not we will accept it. Use of an unacceptable
form of payment may result in us returning the payment and not issuing the Contract.

Applicable laws designed to prevent terrorist financing and money laundering might, in certain
circumstances, require us to block certain transactions until authorization is received from the appropriate
regulator. We may also be required to provide additional information about you and your policy to
government regulators.

Our anti-money laundering program is subject to change without notice to take account of changes in applicable
laws or regulations and our ongoing assessment of our exposure to illegal activity.

Administrative Procedures
We may accept a request for contract service in writing, by telephone, or other approved electronic means, subject
to our administrative procedures, which vary depending on the type of service requested and may include proper
completion of certain forms, providing appropriate identifying information, and/or other administrative
requirements. We will process your request at the contract value next determined only after you have met all
administrative requirements. Please be advised that the risk of a fraudulent transaction is increased with telephonic
or electronic instructions (for example, a facsimile withdrawal request form), even if appropriate identifying
information is provided.

Sending Forms and Written Requests in Good Order
If you are writing to change your beneficiary, request a withdrawal, or for any other purpose, contact your local
representative or the Customer Service Center to learn what information is required in order for the request to be in
“good order.” By contacting us, we can provide you with the appropriate administrative form for your requested
transaction.

Contract Value
We determine your contract value on a daily basis beginning on the contract date. Your contract value is the sum of
(a) the contract value in the Fixed Interest Allocations, and (b) the contract value in each subaccount in which you
are invested.

PRO.70600-13                                                                    19

 

Contract Value in the Subaccounts. On the contract date, the contract value in the subaccount in which you are
invested is equal to the initial premium paid that was designated to be allocated to the subaccount. On the contract
date, we allocate your contract value to each subaccount and/or a Fixed Interest Allocation specified by you, unless
the contract is issued in a state that requires the return of premium payments during the free look period, in which
case, the portion of your initial premium not allocated to a Fixed Interest Allocation may be allocated to a
subaccount specially designated by the Company during the free look period for this purpose (currently, the ING
Liquid Assets Portfolio subaccount).

On each business day after the contract date, we calculate the amount of contract value in each subaccount as
follows:

1.      We take the contract value in the subaccount at the end of the preceding business day.
2.      We multiply (1) by the subaccount’s Net Rate of Return since the preceding business day.
3.      We add (1) and (2).
4.      We add to (3) any additional premium payments and then add or subtract any transfers to or from that
subaccount.
5.      We subtract from (4) any withdrawals and any related charges, and then subtract any contract fees (including
any optional rider charges) and premium taxes.

Cash Surrender Value
The cash surrender value is the amount you receive when you surrender the contract. The cash surrender value will
fluctuate daily based on the investment results of the subaccounts in which you are invested and interest credited to
Fixed Interest Allocations and any Market Value Adjustment. See the Fixed Account II prospectus for a description
of the calculation of values under any Fixed Interest Allocation. We do not guarantee any minimum cash surrender
value. On any date during the accumulation phase, we calculate the cash surrender value as follows: we start with
your contract value, then we adjust for any Market Value Adjustment, then we deduct any surrender charge, any
charge for premium taxes, the annual contract administrative fee, and any other charges incurred but not yet
deducted.

Surrendering to Receive the Cash Surrender Value
You may surrender the contract at any time while the annuitant is living and before the income phase start date. A
surrender will be effective on the date your written request and the contract are received at our Customer Service
Center. We will determine and pay the cash surrender value at the price next determined after receipt of all
paperwork required in order for us to process your surrender. Once paid, all benefits under the contract will be
terminated. For administrative purposes, we will transfer your money to a specially designated subaccount
(currently, the ING Liquid Assets Portfolio subaccount) prior to processing the surrender. This transfer will have no
effect on your cash surrender value. You may receive the cash surrender value in a single sum payment or apply it
under one or more annuity options. We will usually pay the cash surrender value within 7 days.

Consult your tax adviser regarding the tax consequences associated with surrendering your contract. A surrender
made before you reach age 59½ may result in a 10% tax penalty. See “Federal Tax Considerations” for more
details.

The Subaccounts
Each of the subaccounts of the separate account offered under this prospectus invests in a fund with its own distinct
investment objectives and policies.

Addition, Deletion or Substitution of Subaccounts and Other Changes
We may make additional subaccounts available to you under the contract. These subaccounts will invest in funds
we find suitable for your contract. We may also withdraw or substitute funds, subject to the conditions in your
contract and compliance with regulatory requirements.

PRO.70600-13                                                                   20

 

We may amend the contract to conform to applicable laws or governmental regulations. If we feel that investment
in any of the funds has become inappropriate to the purposes of the contract, we may, with approval of the SEC
(and any other regulatory agency, if required) combine two or more subaccounts or substitute another portfolio for
existing and future investments. If you have elected the dollar cost averaging, systematic withdrawals, or automatic
rebalancing programs or if you have other outstanding instructions, and we substitute or otherwise eliminate a
portfolio which is subject to those instructions, we will execute your instructions using the substitute or proposed
replacement portfolio unless you request otherwise. The substitute or proposed replacement portfolio may have
higher fees and charges than any portfolio it replaces.
 
We also reserve the right to: (i) deregister the separate account under the 1940 Act; (ii) operate the separate account
as a management company under the 1940 Act if it is operating as a unit investment trust; (iii) operate the separate
account as a unit investment trust under the 1940 Act if it is operating as a managed separate account; (iv) restrict
or eliminate any voting rights as to the separate account; and (v) combine the separate account with other accounts.
 
We will, of course, provide you with written notice before any of these changes are effected.
 
The Fixed Account
The Fixed Account is a segregated asset account which contains the assets that support a contract owner’s Fixed
Interest Allocations. See Appendix C and the Fixed Account II prospectus for more information. To obtain a copy
of the Fixed Account II prospectus, write to our Customer Service Center at P.O. Box 9271, Des Moines, Iowa
50306-9271 or call 1-800-366-0066, or access the SEC’s website (www.sec.gov).
 
State Variations
Contracts issued in your state may provide different features and benefits from, and impose different costs than,
those described in this prospectus. This prospectus provides a general description of the contract. Your actual
contract, any endorsements and riders are the controlling documents.
 
Other Products
We and our affiliates offer various other products with different features and terms than the contracts, and that may
offer some or all of the same funds. These products have different benefits, fees and charges, and may or may not
better match your needs. Please note that some of the Company’s management personnel and certain other
employees may receive a portion of their employment compensation based on the amount of contract values
allocated to funds affiliated with ING. You should be aware that there are alternative options available, and, if you
are interested in learning more about these other products, contact our Customer Service Center or your registered
representative. Also, broker-dealers selling the contract may limit its availability or the availability of an optional
feature (for example, by imposing restrictions on eligibility), or decline to make an optional feature available.
Please talk to your registered representative for further details.
 
OPTIONAL LIVING BENEFIT RIDERS
 
Some features and benefits of the contract, if available, were available by rider for an additional charge. Once
elected, the riders generally may not be cancelled. You may not remove a rider and charges will be assessed
regardless of the performance of your contract. Please see “Charges and Fees–Optional Rider Charges” for more
information on rider charges. No optional living benefit riders are currently available for purchase.
 
Subject to state availability and the conditions noted below, the contract has three living benefit riders offering
protection against the investment risks with your contract:
· The Minimum Guaranteed Income Benefit rider, which you may wish to purchase if you are concerned about
having a minimum amount of income during the income phase of your contract;
· The ING LifePay Plus Minimum Guaranteed Withdrawal Benefit rider, which you may wish to purchase if you
are concerned that you may outlive your income; and
· The ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit rider, which you may wish to purchase
if you are married and concerned that you and your spouse may outlive your income.
   
PRO.70600-13 21

 

 

These living benefit riders are described further below. You may add only one of these three riders to your
contract. Each rider has a separate charge. We do, however, reserve the right to allow the purchase of more than
one optional living benefit rider in the future, as well as the right to allow contract owners to replace the ING
LifePay Plus rider with the ING Joint LifePay Plus rider. Once elected, the riders generally may not be cancelled.
You may not remove the rider and charges will be assessed regardless of the performance of your contract. Please
see “Charges and Fees–Optional Rider Charges” for information on rider charges.

The optional riders may not be available for all investors. Please check your contract application to
determine if any are available to you. You should analyze each rider thoroughly and understand it
completely before you elect to purchase one. The optional riders do not guarantee any return of principal or
premium payments and do not guarantee performance of any specific fund under the contract. You should
not purchase the ING LifePay Plus rider with multiple owners, unless the owners are spouses. You should
consult a qualified financial adviser in evaluating the riders. Our Customer Service Center may be able to
answer your questions. The telephone number is 1-800-366-0066.

No Cancellation. Once you purchase a rider, you may not cancel it unless you: a) cancel the contract during the
contract’s free look period; b) surrender; c) begin income phase payments; or d) otherwise terminate the contract
pursuant to its terms. These events automatically cancel any rider. Once the contract continues beyond the free look
period, you may not cancel the rider. The Company may, at its discretion, cancel and/or replace a rider at your
request in order to renew or reset a rider.

Termination. The optional riders are “living benefits,” which means the guaranteed benefits offered by the riders
are intended to be available to you while you are living and while your contract is in the accumulation phase.
Generally, the optional riders automatically terminate if you:

1. Terminate your contract pursuant to its terms during the accumulation phase, surrender, or begin receiving
income phase payments in lieu of payments under the rider;
2.    Die during the accumulation phase (first owner to die in the case of joint owners, or death of annuitant if the
contract is a custodial IRA), unless your spouse elects to continue the contract or if you have selected the ING
Joint LifePay Plus rider; or
3. Change the owner of the contract.

Other circumstances that may cause a rider to terminate automatically are discussed below with each rider.

Rider Date. The rider date is the date the rider becomes effective. If you purchase a rider when the contract is
issued, the rider date is also the contract date. Under some riders, we may also refer to this as the rider effective
date.

Minimum Guaranteed Income Benefit (MGIB) Rider. The MGIB rider is an optional benefit which guarantees
a minimum amount of income phase income will be available to you if you initiate income phase payments on the
MGIB Date (defined below), regardless of fluctuating market conditions. The minimum guaranteed amount of
income phase income will depend on the amount of premiums you pay during the first rider year, the amount of
contract value you allocate or transfer to Special Funds or Excluded Funds, and any withdrawals you take while the
rider is in effect. Thus, investing in Special Funds or Excluded Funds may limit the MGIB benefit.

Purchase. To purchase the MGIB rider, you must be age 70 or younger on the rider date and the ten-year
waiting period must end at or prior to the latest income phase start date. Some broker-dealers may limit availability
of the rider to younger ages. The MGIB rider must be purchased on the contract date. The Company in its
discretion may allow the purchase of this rider after the contract date. The MGIB rider is not available for purchase
with Option Package III. There is a ten-year waiting period before you can elect income phase payments
under the MGIB rider. Please note that the MGIB rider was closed for purchase by new contract holders on or
after July 20, 2009. Effective March 15, 2010, the MGIB was closed for purchase by owners of existing contracts,
to the extent this rider was otherwise available for purchase under these contracts.

The MGIB Date. If you purchased the MGIB rider on the contract date or added the MGIB rider within 30
days following the contract date, the MGIB Date is the contract anniversary on or after the tenth contract
anniversary when you decide to exercise your right to begin income phase payments under the MGIB rider. If you
added the MGIB rider at any other time, your MGIB Date is the contract anniversary at least 10 years after the rider
date when you decide to exercise your right to begin income phase payments under the MGIB rider.

PRO.70600-13                                                                                 22

 

        Special Funds. The following investment options are designated as Special Funds for purposes of calculating
the MGIB Benefit Base:
 
Fixed Account
Fixed Interest Division
ING Global Bond Portfolio
ING Liquid Assets Portfolio
ING PIMCO Total Return Bond Portfolio
ING PIMCO Total Return Portfolio
 
Please note that the ING PIMCO Total Return Portfolio is also a Special Fund, but closed to new allocations,
effective May 1, 2009.
 
Please see “Covered Funds, Special Funds, and Excluded Funds.” No investment options are currently designated
as Excluded Funds.
 
For contracts issued before September 8, 2008, the following funds are also designated as Special Funds for
purposes of calculating the MGIB Benefit Base:
    
ING Intermediate Bond Portfolio
ING Solution Income Portfolio
PIMCO VIT Real Return Portfolio
 
All amounts invested in these funds through contracts issued before September 8, 2008 are treated as Special
Funds. Amounts invested in these funds through contracts issued on or after September 8, 2008 will be treated as
Covered Funds.
 
        Charges. The charge we deduct under the MGIB Rider is 0.60% annually of the MGIB Benefit Base. The
calculation of the MGIB Benefit Base is described in “Determining the MGIB Annuity Income,” below.
 
How the MGIB Rider Works. Ordinarily, the amount of income that will be available to you on the income phase
start date is based on your contract value, the income phase option you selected and the guaranteed income factors
in effect on the date you start receiving income phase payments. If you purchase the MGIB rider, the amount of
income that will be available to you upon starting income phase payments on the MGIB Date is the greatest of:
1.   Your income phase income based on your contract value on the MGIB Date adjusted for any Market Value
Adjustment (see Appendix C and the Fixed Account II prospectus) applied to the guaranteed income factors
specified in your contract for the income phase option you selected;
2. Your income phase income based on your contract value on the MGIB Date adjusted for any Market Value
Adjustment (see Appendix C and the Fixed Account II prospectus) applied to the then-current income factors
in effect for the income phase option you selected; or
3. The MGIB annuity income based on your MGIB Benefit Base on the MGIB Date applied to the MGIB income
factors specified in your rider for the MGIB annuity option you selected. Prior to applying the MGIB income
factors, we will adjust the MGIB Benefit Base for any surrender charge, premium tax recovery and Market
Value Adjustment (see Appendix C and the Fixed Account II prospectus) that would otherwise apply when
starting the income phase.
 
The guaranteed factors contained in the MGIB rider generally provide lower payout per $1,000 of value applied
than the guaranteed factors found in your contract. Appendix H provides examples of minimum income
calculations. The contract value in the future is unknown, so the income provided under a contract with the MGIB
rider attached may be greater or less than the income that would be provided under the contract without the rider.
Generally, the income calculated under the rider will be greater than the income provided under the contract
whenever the MGIB Benefit Base (greater of the Rollup and Ratchet Bases) is sufficiently in excess of the contract
value to offset the additional conservatism reflected in the rider’s income factors compared to those in the contract.
The income factors in the MGIB rider generally reflect a lower interest rate and more conservative mortality than
the income factors in the contract. The degree of relative excess that the income factors require to produce more
income will vary for each individual circumstance. If the contract value exceeds the MGIB Benefit Base at the time
the income phase starts, the contract will generally produce greater income than the rider. Please see Appendix H–
Examples of Minimum Guaranteed Income Benefit Calculation.
 
PRO.70600-13 23

 

 

The MGIB Benefit Base is only a calculation used to determine the MGIB annuity income. The MGIB Benefit
Base does not represent a contract value, nor does it guarantee performance of the subaccounts in which you are
invested. It is also not used in determining the amount of your cash surrender value and death benefits. The MGIB
Benefit Base is tracked separately for Covered, Special and Excluded Funds, based on initial allocation of eligible
premium (or contract value, if applicable) and subsequently allocated eligible premiums, withdrawals and transfers.
Contract value, rather than eligible premium is used as the initial value if the rider is added after the contract date.
 
Prior to your latest income phase start date, you may choose to exercise your right to receive payments under the
MGIB rider. Payments under the rider begin on the MGIB Date. We require a 10-year waiting period before you
can elect to receive payments under the MGIB rider benefit. The MGIB must be exercised in the 30-day period
prior to the end of the waiting period or any subsequent contract anniversary. At your request, the Company may in
its discretion extend the latest contract income phase start date without extending the MGIB Date.
 
Determining the MGIB Annuity Income. On the MGIB Date, we calculate your MGIB annuity income as
follows:
 
1)  We first determine your MGIB Benefit Base: The MGIB Benefit Base is equal to the greater of the
MGIB Rollup Base and the MGIB Ratchet Base, which may be reduced by an amount equal to the ratio of
any outstanding loan balance (where applicable) to the contract value multiplied by the MGIB Base.
 
a)   Calculation of MGIB Rollup Base
   
The MGIB Rollup Base is equal to the lesser of the Maximum MGIB Base and the sum of (a), (b),
and (c) where:
(a)     is the MGIB Rollup Base for Covered Funds;
(b)     is the MGIB Rollup Base for Special Funds; and
(c)     is the contract value of Excluded Funds.
 
The Maximum MGIB Base applicable to the MGIB Rollup Base is 300% of eligible premiums
adjusted pro-rata for withdrawals. This means that the Maximum MGIB Base is reduced for
withdrawals by the same proportion that the withdrawal reduces the contract value. The Maximum
MGIB Base is not allocated by fund category.
The MGIB Rollup Base allocated to Covered Funds equals the eligible premiums allocated to
Covered Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB
rider is in effect, accumulated at the MGIB Rate to the earlier of the oldest owner reaching age 80 and
the MGIB Rollup Base reaching the Maximum MGIB Base. The MGIB Rollup Base accumulates at
0% thereafter. The MGIB Rate is currently 5%. The MGIB Rate is an annual effective rate. We may,
at our discretion, discontinue offering this rate. The MGIB Rate will not change for those contracts
that have already purchased the MGIB rider.
The MGIB Rollup Base allocated to Special Funds equals the eligible premiums allocated to
Special Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB rider
is in effect. The MGIB Rate does not apply to the MGIB Rollup Base allocated to Special Funds, so
the MGIB Rollup Base allocated to Special Funds does not accumulate.
The MGIB Rollup Base allocated to Excluded Funds equals the eligible premiums allocated to
Excluded Funds, adjusted for subsequent withdrawals and transfers taken or made while the MGIB
rider is in effect, accumulated at the MGIB rate to the earlier of the oldest owner reaching age 80 and
the MGIB Rollup Base reaching the Maximum MGIB Base, and at 0% thereafter. The MGIB Rollup
Base allocated to Excluded Funds is used only for transfer adjustments and rider charges. It is
not included in the MGIB Rollup Base used to determine benefits.
Eligible premiums are those premiums paid within one year of purchasing the MGIB rider.
Premiums paid after that date are excluded from the MGIB Rollup Base.
 
PRO.70600-13                                                                                        24

 

 

Withdrawals reduce the MGIB Rollup Base on a pro-rata basis. The percentage reduction in the
MGIB Rollup Base for each fund category (i.e. Covered, Special or Excluded) equals the percentage
reduction in contract value in that fund category resulting from the withdrawal. This means that the
MGIB Rollup Base for Covered Funds, Special Funds or Excluded Funds is reduced for withdrawals
by the same proportion that the withdrawal reduces the contract value allocated to Covered Funds,
Special Funds or Excluded Funds. For example, if the contract value in Covered Funds is reduced by
25% as the result of a withdrawal, the MGIB Rollup Base allocated to Covered Funds is also reduced
by 25% (rather than by the amount of the withdrawal).
 
Because the MGIB Rollup Base is tracked separately for Covered, Special and Excluded Funds, when
you make transfers between Covered, Special Funds and Excluded Funds, there is an impact on the
MGIB Rollup Base. Net transfers between Covered Funds and Special Funds will reduce the MGIB
Rollup Base allocated to Covered Funds or Special Funds, as applicable, on a pro-rata basis. This
means that the MGIB Rollup Base allocated to Covered Funds or Special Funds will be reduced by
the same percentage as the transfer bears to the contract value allocated to Covered Funds or Special
Funds.For example, if the contract value in Covered Funds is reduced by 25% as the result of the
transfer, the MGIB Rollup Base allocated to Covered Funds is also reduced by 25% (rather than by
the amount of the transfer). The resulting increase in the MGIB Rollup Base allocated to Special or
Excluded Funds, as applicable, will equal the reduction in the MGIB Rollup Base allocated to
Covered Funds. Transfers from Special Funds to Covered Funds are treated in the same way.
 
Net transfers from Excluded Funds will reduce the MGIB Rollup Base allocated to Excluded Funds
on a pro-rata basis. The resulting increase in the MGIB Rollup Base allocated to Covered or Special
Funds, as applicable, will equal the lesser of the contract value transferred and the reduction in the
MGIB Rollup Base allocated to Excluded Funds.
 
b) Calculation of MGIB Ratchet Benefit Base
   
The MGIB Ratchet Benefit Base is equal to the sum of (a) and (b) where:
(a)     is the MGIB Ratchet Base for Covered Funds and Special Funds; and
(b)    is the contract value for Excluded Funds.
 
The MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds equals:
· On the rider date, eligible premiums or the contract value (if the rider is added after the contract date) allocated to Covered Funds, Special Funds and Excluded Funds;
· On each contract anniversary date prior to attainment of age 90, the MGIB Ratchet Base for
Covered Funds, Special Funds and Excluded Funds is set equal to the greater of:
1) the current contract value allocated to Covered Funds, Special Funds and Excluded Funds (after any deductions occurring on that date); and
2) the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds from the
prior contract anniversary date, adjusted for any new eligible premiums and withdrawals
attributable to Covered Funds, Special Funds or Excluded Funds and transfers.
· At other times, the MGIB Ratchet Base for Covered Funds, Special Funds and Excluded Funds is
the MGIB Ratchet Base from the prior contract anniversary date, adjusted for subsequent eligible
premiums and withdrawals attributable to Covered Funds, Special Funds or Excluded Funds and
transfers.
The MGIB Ratchet Base allocated to Excluded Funds is used only for transfer adjustments and
rider charges. It is not included in the MGIB Ratchet Benefit Base used to determine benefits.
2) Then we determine the MGIB income phase income by multiplying your MGIB Benefit Base
(adjusted for any Market Value Adjustment (see Appendix C and the Fixed Account II prospectus),
surrender charge and premium taxes) by the income factor, and then divide by $1,000.
 
PRO.70600-13                                                                                      25
 

 

 

MGIB Income Options
The following are the MGIB Income Options available under the MGIB Rider:
(i) Income for Life (Single Life or Joint with 100% Survivor) and 10-20 years certain;
(ii) Income for 20-30 years certain; and
(iii) Any other income option offered by the Company in conjunction with the MGIB rider on the MGIB Date.
 
Once during the life of the contract, you have the option to elect to apply up to 50% of the MGIB Benefit Base to
one of the MGIB Income Options available under the rider. This option may only be exercised on a contract
anniversary at or after the end of the waiting period. The portion of the MGIB Benefit Base so applied will be used
to determine the MGIB income, as is otherwise described in the prospectus. The contract value will be reduced on a
pro-rata basis. Any subsequent exercise of your right to receive payments under the MGIB rider must be for 100%
of the remaining value. The election of partial payments under the MGIB Benefit Base does not affect your right to
initiate the income phase under the contract without regard to the rider. The amount applied to these partial
payments will be treated as a withdrawal for purposes of adjusting contract and rider values.
 
Please note that if you elect partial income payments, they will be tax reported as withdrawals. Please
consult your tax adviser before making this election, as the taxation of this election is uncertain.
 
        Early MGIB. Prior to the MGIB Date, you may elect to receive Early MGIB benefits by providing a written
request to our Customer Service Center within 30 days prior to an Early MGIB Exercise Date, which is a contract
anniversary prior to the MGIB Date. Your election to receive Early MGIB benefits will become effective as of the
Early MGIB Exercise Date following receipt of this request in good order. The first Early MGIB Exercise Date is
specified in your rider and is currently the first contract anniversary which is at least 5 years after the rider
date.
 
If you elect to receive Early MGIB benefits, the MGIB annuity income will be determined as noted above in
“Determining the MGIB Annuity Income,” but will be adjusted by using an Age Setback formula. Under this
formula, the MGIB annuity income will equal the MGIB Benefit Base multiplied by the adjusted MGIB income
factors, which are equal to the MGIB income factors defined in “Determining the MGIB Annuity Income” above,
adjusted using age setbacks to compensate for the early entry into the income phase. The adjusted MGIB income
factors are determined by adjusting the contract owner’s age for each whole or partial rider year between the Early
MGIB Exercise Date and the 10th contract anniversary after the rider date.
 
For example, if a 65 year-old contract owner is in the 6th year of the MGIB rider and elects to receive Early MGIB
benefits, the MGIB income factors used to determine the MGIB annuity income would be adjusted by using the
MGIB income factors for a 61 year-old contract owner, because the contract owner’s age (65) is adjusted by
subtracting the four years remaining until the 10th contract anniversary occurring after the rider date.
         
        No Change of Annuitant. Once you purchase the MGIB rider, the annuitant may not be changed except for the
following exception. If an annuitant who is not a contract owner dies prior to entry into the income phase, a new
annuitant may be named in accordance with the provisions of your contract. The MGIB Benefit Base is unaffected
and continues to accumulate.
 
        Notification. On or about 30 days prior to the MGIB Date, we will provide you with notification which will
include an estimate of the amount of MGIB annuity income available if you choose to exercise it. We will
determine the actual amount of the MGIB annuity income as of the MGIB Date.
 
The MGIB rider does not restrict or limit your right to enter the income phase at any time permitted under
the contract. The MGIB rider does not restrict your right to enter the income phase using contract values
that may be higher than the MGIB annuity benefit.
 
The benefits associated with the MGIB rider are available only if you enter the income phase under the rider
and in accordance with the provisions set forth above. Election of Early MGIB Benefits may result in a lesser
stream of income payments than waiting the entire 10 year waiting period. Initiating the income phase using
the MGIB rider may result in a more favorable stream of income payments, and different tax consequences,
under your contract. Because the MGIB rider is based on conservative actuarial factors, the level of lifetime
income that it guarantees may be less than the level that might be provided by the application of your
contract value to the contract’s applicable income phase factors. You should consider all of your options at
the time you begin the income phase of your contract.
 
PRO.70600-13 26

 

 

ING LifePay Plus Minimum Guaranteed Withdrawal Benefit (“ING LifePay Plus”) Rider. The ING LifePay
Plus rider generally provides, subject to the restrictions and limitations below, that we will guarantee a minimum
level of annual withdrawals from the contract for the lifetime of the annuitant, even if these withdrawals deplete
your contract value to zero. You may wish to purchase this rider if you are concerned that you may outlive your
income.

Important Note: We introduced the ING LifePay Plus rider on August 20, 2007, and launched changes to it on
April 28, 2008 and January 12, 2009, subject to state approval where applicable. The form of ING LifePay Plus
rider available to you depends on state availability.

The information below pertains to the form of ING LifePay Plus rider, which was available for sale beginning from
May 1, 2009 through March 15, 2010. If you purchased a prior version of the ING LifePay Plus rider, please see
Appendix K. If you purchased the ING LifePay rider, please see Appendix L for more information.

Purchase. In order to elect the ING LifePay Plus rider, the annuitant must be the owner or one of the owners,
unless the owner is a non-natural owner. Joint annuitants are not allowed. The maximum issue age is 80 (owner
and annuitant must age qualify). The issue age is the age of the owner (or the annuitant if there are joint owners or
the owner is non-natural) on the rider effective date. The ING LifePay Plus rider is not available for purchase with
Option Package III. The ING LifePay Plus rider is subject to broker-dealer availability. The ING LifePay Plus
rider will not be issued until your contract value is allocated in accordance with the investment option
restrictions described in “Investment Option Restrictions,” below.

The ING LifePay Plus rider is no longer available for purchase, including purchase by owners of existing contracts.
Previously, contracts issued on and after January 1, 2007 were eligible for the ING LifePay Plus rider, subject to
the conditions, requirements and limitations of the prior paragraph, provided a living benefit rider has not been
issued under such contracts. There is an election form for this purpose. Please contact the Customer Service Center
for more information.

Rider Effective Date. The rider effective date is the date coverage under the ING LifePay Plus rider begins. If
you purchase the ING LifePay Plus rider when the contract is issued, the rider effective date is also the contract
date. If you purchase the ING LifePay Plus rider after contract issue, the rider effective date will be the date of
the contract’s next following quarterly contract anniversary. A quarterly contract anniversary occurs each quarter
of a contract year from the contract date.

Highlights. This paragraph introduces the terminology used with the ING LifePay Plus rider and how its
components generally work together. Benefits and guarantees are subject to the terms, conditions and limitations of
the ING LifePay Plus rider. More detailed information follows below, with capitalized words that are underlined
indicating headings for ease of reference. The ING LifePay Plus rider guarantees an amount available for
withdrawal from the contract in any contract year once the Lifetime Withdrawal Phase begins -- we use the ING
LifePay Plus Base as part of the calculation of the Maximum Annual Withdrawal. The Maximum Annual
Withdrawal is available for withdrawals at your discretion or systematic withdrawals pursuant to the terms of the
contract. Also, the ING LifePay Plus rider offers the Income Optimizer. The guarantee continues when the ING
LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status, at which time we will pay you periodic
payments in an annual amount equal to the Maximum Annual Withdrawal (since contract value would be zero)
until the annuitant’s death. The ING LifePay Plus Base is eligible for Annual Ratchets and Step-ups, subject to
adjustment for any Excess Withdrawals. The ING LifePay Plus rider has an allowance for withdrawals from a
contract subject to the Required Minimum Distribution rules of the Tax Code that would otherwise be Excess
Withdrawals. The ING LifePay Plus rider has a death benefit that is payable upon the contract owner’s death only
when the ING LifePay Plus Death Benefit Base is greater than the contract’s death benefit. The ING LifePay Plus
rider allows for spousal continuation.

ING LifePay Plus Base. The ING LifePay Plus Base is first calculated when you purchase the ING LifePay Plus
rider: (a) On the contract date, it is equal to the initial premium; and (b) After the contract date, it is equal to the
contract value on the effective date of the rider.

The ING LifePay Plus Base is increased, dollar for dollar, by any subsequent premiums. We refer to the ING
LifePay Plus Base as the MGWB Base in the ING LifePay Plus rider.

PRO.70600-13                                                                               27

 

Withdrawals and Excess Withdrawals. Once the Lifetime Withdrawal Phase begins, withdrawals within a
contract year up to the Maximum Annual Withdrawal, including for payment of third-party investment advisory
fees, have no impact on the ING LifePay Plus Base. These withdrawals will not incur surrender charges or a
negative Market Value Adjustment associated with any Fixed Account allocations. For example, assume the current
contract value is $90,000 on a contract with the ING LifePay Plus rider in the Lifetime Withdrawal Phase. The ING
LifePay Plus Base is $100,000, and the Maximum Annual Withdrawal is $5,000. Even though a withdrawal of
$5,000 would reduce the contract value to $85,000, the ING LifePay Plus Base would remain at its current level (as
would the Maximum Annual Withdrawal as well) since the withdrawal did not exceed the Maximum Annual
Withdrawal. See below for more information about the Maximum Annual Withdrawal.

An Excess Withdrawal is either a) a withdrawal before the Lifetime Withdrawal Phase begins (except for payment
of third-party investment advisory fees); or b) once the Lifetime Withdrawal Phase begins, any portion of a
withdrawal during a contract year that exceeds the Maximum Annual Withdrawal. An Excess Withdrawal is also a
withdrawal after continuation of the contract but before the ING LifePay Plus rider’s guarantees resume, which
occurs on the next quarterly contract anniversary following spousal continuation. An Excess Withdrawal will cause
a pro-rata reduction of the ING LifePay Plus Base -- in the same proportion as contract value is reduced by the
portion of the withdrawal that is considered excess, inclusive of surrender charges or Market Value Adjustment
associated with any Fixed Account allocations (rather than the total amount of the withdrawal). An Excess
Withdrawal will also cause the Maximum Annual Withdrawal to be recalculated. See Appendix I, Illustration 1, 2,
and 6 for examples of the consequences of an excess withdrawal.

Please note that any withdrawals before the rider effective date in the same contract year when the ING LifePay
Plus rider is added after contract issue are counted in calculating your withdrawals in that contract year to
determine whether the Maximum Annual Withdrawal has been exceeded.

Annual Ratchet. The ING LifePay Plus Base is recalculated on each contract anniversary to equal the greater of:
a) the current ING LifePay Plus Base; or b) the current contract value. We call this recalculation an Annual
Ratchet.

Once the Lifetime Withdrawal Phase begins, we reserve the right to increase the charge for the ING LifePay Plus
rider upon an Annual Ratchet. You will never pay more than new issues of the ING LifePay Plus rider, subject to
the maximum annual charge, and we will not increase this charge for your first five years after the rider effective
date. We will notify you in writing not less than 30 days before a charge increase. You may avoid the charge
increase by canceling the forthcoming Annual Ratchet. Our written notices will outline the procedure you will need
to follow to do so. Please note, however, that from then on the ING LifePay Plus Base would no longer be eligible
for any Annual Ratchets, so the Maximum Annual Withdrawal percentage would not be eligible to increase. More
information about the Maximum Annual Withdrawal Percentage is below under “Maximum Annual Withdrawal.”
Our written notice will also remind you of the consequences of canceling the forthcoming Annual Ratchet.

Step-up. The ING LifePay Plus Base is recalculated on each of the first ten contract anniversaries after the rider
effective date SO LONG AS no withdrawals were taken during the preceding contract year. The recalculated ING
LifePay Plus Base will equal the greatest of: a) the current ING LifePay Plus Base; b) the current contract value;
and c) the ING LifePay Plus Base on the previous contract anniversary, increased by the Step-up.

The amount of the Step-up is the product of the Step-up Tracker on the previous contract anniversary times the
Step-up percent, currently 6%. The Step-up Tracker is only used to calculate the amount of the Step-up. Initially, it
equals the ING LifePay Plus Base. Any premiums received during a contract year are added to the Step-up Tracker
and eligible for a partial Step-up. Any withdrawals for payment of third-party investment advisory fees are
subtracted from the Step-up. Like the ING LifePay Plus Base, the Step-up Tracker is eligible for Annual Ratchets
and subject to a pro-rata adjustment for any withdrawals prior to the Lifetime Withdrawal Phase and any Excess
Withdrawals while in the Lifetime Withdrawal Phase.

Please note no Step-ups are available in the first year after you purchase this rider, post-issue of the contract. Your
first opportunity for a Step-up will not be until the first contract anniversary after a full contract year has elapsed
since the rider effective date.

PRO.70600-13                                                                       28

 

For example, assume a contract owner decides to add the ING LifePay Plus rider on March 15, 2009 to a contract
that was purchased on January 1, 2009. The rider effective date is April 1, 2009, which is the date of the contract’s
next following quarterly contract anniversary. Because on January 1, 2010 a full contract year will not have elapsed
since the rider effective date, the ING LifePay Plus Base will not be eligible for a Step-up. Rather, the first
opportunity for a Step-up with this contract will be on January 1, 2011.

Lifetime Withdrawal Phase. The Lifetime Withdrawal Phase begins on the date of your first withdrawal
(except those for payment of third-party investment advisory fees), SO LONG AS the annuitant is age 59½. On this
date, the ING LifePay Plus Base is recalculated to equal the greater of the current ING LifePay Plus Base or the
contract value on the previous business day. The Lifetime Withdrawal Phase will continue until the earliest of:

1.      The date income phase payments begin (see “The Income Phase”);
2.      Reduction of the contract value to zero by an Excess Withdrawal;
3.      Reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual
Withdrawal;
4.      The surrender of the contract; or
5.      The death of the owner (first owner, in the case of joint owners; annuitant, in the case of a non-natural
person owner), unless your spouse beneficiary elects to continue the contract.

The ING LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status in the event contract value is
reduced to zero other than by an Excess Withdrawal. Please see “Lifetime Automatic Periodic Benefit Status”
below for more information.

Maximum Annual Withdrawal. The Maximum Annual Withdrawal is the amount that the ING LifePay Plus
rider guarantees to be available for withdrawal from the contract in any contract year. The Maximum Annual
Withdrawal is first calculated when the Lifetime Withdrawal Phase begins and equals the Maximum Annual
Withdrawal Percentage, based on the annuitant’s age, multiplied by the ING LifePay Plus Base.

The Maximum Annual Withdrawal Percentages are:
 
Maximum Annual Withdrawal Percentage  Annuitant’s Age
4% 59½ – 64
5% 65+

               
The Maximum Annual Withdrawal is thereafter recalculated whenever the ING LifePay Plus Base is recalculated
(for example, upon an Annual Ratchet or Step-up). In addition, the Maximum Annual Withdrawal Percentage can
increase with the Annual Ratchet as the annuitant grows older.

In the event that on the date the Lifetime Withdrawal Phase begins the contract value on the previous business day
was greater than the ING LifePay Plus Base, then before the Maximum Annual Withdrawal is first calculated, the
ING LifePay Plus Base will be set equal to that contract value. The greater the ING LifePay Plus Base, the greater
the amount will be available to you for withdrawal under the ING LifePay Plus rider in calculating the Maximum
Annual Withdrawal for the first time.

Income Optimizer. The ING LifePay Plus rider offers the option to elect to receive the Maximum Annual
Withdrawal in systematic installments over the annuitant’s life. We call this option the Income Optimizer. You may
elect the Income Optimizer during the Lifetime Withdrawal Phase. This election is in lieu of the contract’s other
income phase options, and these payments will be subject to the same tax treatment as an income phase payment.
Please see “Federal Tax Considerations” for more information. The Income Optimizer is only available on
nonqualified contracts.

The frequency of payments under the Income Optimizer may be annual, quarterly or monthly. While you are
receiving payments under the Income Optimizer, the ING LifePay Plus Base remains eligible for Annual Ratchets.
Your contract may still have a contract value and death benefit. Spousal continuation of payments under the Income
Optimizer is permitted. Any withdrawals in excess of the Maximum Annual Withdrawal are Excess Withdrawals
that would cause a pro-rata reduction of the ING LifePay Plus Base, as well as a reduction of the Maximum Annual
Withdrawal.

PRO.70600-13                                                                           29

 

Your election is subject to restrictions – you may not: (a) revoke your election; (b) add on premiums; (c) exchange
the contract; (d) initiate income phase payments under the contract; or (e) change ownership (except as permitted
under “Change of Owner or Annuitant” below). Once you choose the frequency of payments, you may not change
it. Also, the specified percentage of your contract value required to be allocated to Fixed Allocation Funds is
higher, and the investment options available for this purpose are limited. Please see “Investment Option
Restrictions” below for the details. You may surrender your contract at any time.

Payments under the Income Optimizer will continue until the Terminal Date, at which time you waive any
remaining contract value and death benefit and the ING LifePay Plus rider enters Lifetime Automatic Periodic
Benefit Status. The Terminal Date is the contract anniversary following the annuitant’s 95th birthday. Alternatively,
you may wish to extend the Terminal Date to the contract anniversary following the annuitant’s 115th birthday in
order to liquidate your contract value that may remain before the ING LifePay Plus rider enters Lifetime Automatic
Periodic Benefit Status. Regardless, your payments of the Maximum Annual Withdrawal will continue during the
Lifetime Automatic Periodic Benefit Status until the death of the annuitant. We will notify you in writing in
advance of the Terminal Date to remind you of this alternative and how to extend the Terminal Date.

Lifetime Income Annuity Option. In the event the contract’s income phase commencement date is reached
while the ING LifePay Plus rider is in the Lifetime Withdrawal Phase, you may elect a life only income phase
option, in lieu of the contract’s other income phase options. Payments under this option are based on the minimum
annual payment factors for each $1,000 reflected in the rider data table and will never be less than the same
frequency of payments of the Maximum Annual Withdrawal at that time. For more information about the contract’s
income phase options, see “The Income Phase.”

Required Minimum Distributions. The ING LifePay Plus rider allows for withdrawals from a contract subject
to the Required Minimum Distribution rules of the Tax Code that exceed the Maximum Annual Withdrawal
without causing a pro-rata reduction of the ING LifePay Plus Base and recalculation of the Maximum Annual
Withdrawal. If your Required Minimum Distribution for a calendar year (determined on a date on or before January
31 of that year), applicable to this contract, is greater than the Maximum Annual Withdrawal on that date, then an
Additional Withdrawal Amount will be set equal to that portion of the Required Minimum Distribution that exceeds
the Maximum Annual Withdrawal. Once you have taken the Maximum Annual Withdrawal for the then current
contract year, the dollar amount of any additional withdrawals will count first against and reduce any unused
Additional Withdrawal Amount for the previous calendar year followed by any Additional Withdrawal Amount for
the current calendar year -- without constituting an Excess Withdrawal. See Appendix I, Illustration 3.

Withdrawals that exceed the Maximum Annual Withdrawal and all available Additional Withdrawal Amounts are
Excess Withdrawals that will cause a pro-rata reduction of the ING LifePay Plus Base and the Maximum Annual
Withdrawal to be recalculated. See Appendix I, Illustration 5 for an example of the consequences of an Excess
Withdrawal with an Additional Withdrawal Amount. The Additional Withdrawal Amount is available on a calendar
year basis and recalculated every January, reset to equal that portion of the Required Minimum Distribution for that
calendar year that exceeds the Maximum Annual Withdrawal on that date. Any unused amount of the Additional
Withdrawal Amount carries over into the next calendar year and is available through the end of that year, at which
time any amount remaining will expire. See Appendix I, Illustration 4 for an example of the Additional Withdrawal
Amount being carried over. Please note that there is no adjustment to the Additional Withdrawal Amount for
Annual Ratchets or upon spousal continuation of the ING LifePay Plus Rider.

Lifetime Automatic Periodic Benefit Status. The ING LifePay Plus rider enters Lifetime Automatic Periodic
Benefit Status when your contract value is reduced to zero other than by an Excess Withdrawal (a withdrawal in
excess of the Maximum Annual Withdrawal that causes your contract value to be reduced to zero will terminate the
ING LifePay Plus rider). You will no longer be entitled to make withdrawals, but instead will begin to receive
periodic payments in an annual amount equal to the Maximum Annual Withdrawal. When the rider enters Lifetime
Automatic Periodic Benefit Status:
1.      The contract will provide no further benefits (including death benefits) other than as provided under the ING
LifePay Plus rider;
2.      No further premium payments will be accepted; and
3.      Any other riders issued with the contract will terminate, unless otherwise specified in that rider.

PRO.70600-13                                                                    30

 

During Lifetime Automatic Periodic Benefit Status, we will pay you periodic payments in an annual amount that is
equal to the Maximum Annual Withdrawal. These payments will cease upon the death of the annuitant at which
time both the rider and the contract will terminate. The rider will remain in Lifetime Automatic Periodic Benefit
Status until it terminates without value upon the annuitant’s death.

If, when the ING LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status, your net withdrawals to
date are less than the Maximum Annual Withdrawal for that contract year, then we will pay you the difference
immediately. The periodic payments will begin on the first contract anniversary following the date the rider enters
Lifetime Automatic Periodic Benefit Status and will continue to be paid annually thereafter.

In the event contract value is reduced to zero before the Lifetime Withdrawal Phase begins, Lifetime Automatic
Periodic Benefit Status is deferred until the contract anniversary on or after the annuitant is age 59½. During this
time, the ING LifePay Plus rider’s death benefit remains payable upon the annuitant’s death, and the ING LifePay
Plus rider remains eligible for Step-ups. Once the ING LifePay Plus rider enters the Lifetime Automatic Periodic
Benefit Status, periodic payments will begin in an annual amount equal to the Maximum Annual Withdrawal
Percentage multiplied by the ING LifePay Plus Base.

You may elect to receive systematic withdrawals pursuant to the terms of the contract. Under a systematic
withdrawal, either a fixed amount or an amount based upon a percentage of the contract value will be withdrawn
from your contract and paid to you on a scheduled basis, either monthly, quarterly, or annually. If, at the time the
rider enters Lifetime Automatic Periodic Benefit Status, you are receiving systematic withdrawals under the
contract more frequently than annually, the periodic payments will be made at the same frequency in equal amounts
such that the sum of the payments in each contract year will equal the annual Maximum Annual Withdrawal. Such
payments will be made on the same payment dates as previously set up, if the payments were being made monthly
or quarterly. If the payments were being made annually, then the payments will be made on each following contract
anniversary.

Investment Option Restrictions. While the ING LifePay Plus rider is in effect, there are limits on the portfolios
to which your contract value may be allocated. Contract value allocated to portfolios other than Accepted Funds
will be rebalanced so as to maintain at least the required specified percentage of such contract value in the Fixed
Allocation Funds. Currently, this required specified percentage is 30%, and is 40% if you have elected the Income
Optimizer. See “Fixed Allocation Funds Automatic Rebalancing,” below. We impose these investment option
restrictions in order to lessen the likelihood we would have to make payments under this rider. We require these
allocations regardless of your investment instructions under the contract. The ING LifePay Plus rider will not be
issued until your contract value is allocated in accordance with these investment option restrictions. The timing of
when and how we apply these investment option restrictions is discussed further below.

Accepted Funds. Currently, the Accepted Funds are:  
· Fixed Account II  
· Fixed Interest Division  
· ING Liquid Assets Portfolio  
· ING Solution 2015 Portfolio  
· ING Solution 2025 Portfolio  
· ING Solution 2035 Portfolio  
· ING Solution Income Portfolio  
· ING T. Rowe Price Capital Appreciation Portfolio
 
No rebalancing is necessary if the contract value is allocated entirely to Accepted Funds. We may change
these designations at any time upon 30 days’ notice to you. If a change is made, the change will apply to
contract value allocated to such portfolios after the date of the change.
 
If you have selected the Income Optimizer, the Accepted Funds are:
· Fixed Account II  
· Fixed Interest Division  
· ING Liquid Assets Portfolio  
· ING Solution 2015 Portfolio  
· ING Solution Income Portfolio  
 
PRO.70600-13 31

 

 

Fixed Allocation Funds. Currently, the Fixed Allocation Funds are:
·    ING BlackRock Inflation Protected Bond Portfolio
· ING Bond Portfolio
· ING Intermediate Bond Portfolio
· ING U.S. Bond Index Portfolio

     

You may allocate your contract value to one or more Fixed Allocated Funds. We consider the ING Intermediate
Bond Portfolio to be the default Fixed Allocation Fund in connection with Fixed Allocation Funds Automatic
Rebalancing.

If the rider is not continued under the spousal continuation right when available, a Fixed Allocation Fund may be
reclassified as a Special Fund as of the contract continuation date if it would otherwise be designated as a Special
Fund for purposes of the contract’s death benefits. For purposes of calculating any applicable death benefit
guaranteed under the contract, any allocation of contract value to the Fixed Allocation Funds will be considered a
Covered Fund allocation while the rider is in effect.

Other Funds. All portfolios available under the contract other than Accepted Funds or the Fixed Allocation
Funds are considered Other Funds.

Fixed Allocation Funds Automatic Rebalancing. If the contract value in the Fixed Allocation Funds is
less than the required specified percentage of the total contract value allocated to the Fixed Allocation Funds and
Other Funds on any ING LifePay Plus Rebalancing Date, we will automatically rebalance the contract value
allocated to the Fixed Allocation Funds and Other Funds so that 20% of this amount is allocated to the Fixed
Allocation Funds. The current specified percentage is 30%, and is 40% if you have selected the Income
Optimizer. Accepted Funds are excluded from Fixed Allocation Funds Automatic Rebalancing. Any rebalancing
is done on a pro-rata basis among the Other Funds and will be the last transaction processed on that date. The
ING LifePay Plus Rebalancing Dates occur on the rider effective date, on each quarterly contract anniversary,
and after the following transactions:

   1. Receipt of additional premiums;
   2.    Transfer or reallocation among the Fixed Allocation Funds or Other Funds, whether automatic or
specifically directed by you;
   3. Withdrawals from the Fixed Allocation Funds or Other Funds.

            
Fixed Allocation Funds Automatic Rebalancing is separate from any other automatic rebalancing under the
contract. However, if the other automatic rebalancing under the contract causes the allocations to be out of
compliance with the investment option restrictions noted above, Fixed Allocation Funds Automatic Rebalancing
will occur immediately after the automatic rebalancing to restore the required allocations. See “Appendix J–
Examples of Fixed Allocation Funds Automatic Rebalancing.” You will be notified that Fixed Allocation Funds
Automatic Rebalancing has occurred, along with your new allocations, by a confirmation statement that will be
mailed to you after Fixed Allocation Funds Automatic Rebalancing has occurred.

In certain circumstances, Fixed Allocation Funds Automatic Rebalancing may result in a reallocation into a
Fixed Allocation Fund even if you have not previously been invested in it. See “Appendix J–Examples of Fixed
Allocation Funds Automatic Rebalancing, Example I.” By electing to purchase the ING LifePay Plus rider,
you are providing the Company with direction and authorization to process these transactions, including
reallocations into the Fixed Allocation Funds. You should not purchase the ING LifePay Plus rider if you
do not wish to have your contract value reallocated in this manner.

Death of Owner or Annuitant. The ING LifePay Plus rider terminates (with the rider’s charges pro-rated)
on the date of death of the owner (or in the case of joint owners, the first owner), or the annuitant if there is a
non-natural owner. Also, an ING LifePay Plus rider that is in Lifetime Automatic Periodic Benefit Status
terminates on the date of the annuitant’s death.

PRO.70600-13                                                              32

 

ING LifePay Plus Death Benefit Base. The ING LifePay Plus rider has a death benefit that is payable upon
the owner’s death only when the ING LifePay Plus Death Benefit Base is greater than the contract’s death
benefit. The ING LifePay Plus Death Benefit Base is first calculated when you purchase the ING LifePay Plus
rider. If the ING LifePay Plus rider is purchased on the contract date, the initial ING LifePay Plus Death Benefit
Base is equal to the initial premium. If the ING LifePay Plus rider is purchased after the contract date, the initial
ING LifePay Plus Death Benefit Base is equal to the contract value on the rider effective date.

The ING LifePay Plus Death Benefit Base is increased by the dollar amount of any subsequent premiums and
subject to any withdrawal adjustments. The ING LifePay Plus Death Benefit Base is reduced by the dollar
amount of any withdrawals for the payment of third-party investment advisory fees before the Lifetime
Withdrawal Phase beings, and for any withdrawals once the Lifetime Withdrawal Phase begins that are not
Excess Withdrawals, including withdrawals for payment of third-party investment advisory fees. The ING
LifePay Plus Death Benefit Base is subject to a pro-rata reduction for an Excess Withdrawal. Please see
“Withdrawals and Excess Withdrawals” for more information.

There is no additional charge for the death benefit associated with the ING LifePay Plus rider. Please note that
the ING LifePay Plus Death Benefit Base is not eligible to participate in Annual Ratchets or Step-ups.

In the event the ING LifePay Plus Death Benefit Base is greater than zero when the ING LifePay Plus rider
enters Lifetime Automatic Periodic Benefit Status, each periodic payment reduces the ING LifePay Plus Death
Benefit Base dollar for dollar until the earlier of the ING LifePay Plus Death Benefit Base being reduced to zero
or the annuitant’s death. Upon the annuitant’s death, any remaining ING LifePay Plus death benefit is payable to
the beneficiary in a lump-sum.

Spousal Continuation. If the surviving spouse of the deceased owner continues the contract (see “Death
Benefit Choices–Continuation After Death–Spouse”), the rider will also continue, provided the spouse becomes
the annuitant and sole owner. At the time the contract is continued, the ING LifePay Plus Base is recalculated to
equal the contract value, inclusive of the guaranteed death benefit -- UNLESS the continuing spouse is a joint
owner and the original annuitant, OR the Lifetime Withdrawal Phase has not yet begun. In these cases, the ING
LifePay Plus Base is recalculated to equal the greater of a) the contract value, inclusive of the guaranteed death
benefit; and b) the last-calculated ING LifePay Plus Base, subject to pro-rata adjustment for any withdrawals
before spousal continuation. Regardless, the ING LifePay Plus rider’s guarantees resume on the next quarterly
contract anniversary following spousal continuation. Any withdrawals after spousal continuation of the contract
but before the ING LifePay Plus rider’s guarantees resume are Excess Withdrawals. The ING LifePay Plus rider
remains eligible for the Annual Ratchet upon recalculation of the ING LifePay Plus Base.

The Maximum Annual Withdrawal is also recalculated at the same time as the ING LifePay Plus Base; however,
there is no Maximum Annual Withdrawal upon spousal continuation until the Lifetime Withdrawal Phase begins
on the date of the first withdrawal after spousal continuation, SO LONG AS the annuitant is age 59½. The
Maximum Annual Withdrawal is recalculated to equal the Maximum Annual Withdrawal Percentage multiplied
by the ING LifePay Plus Base. There is no adjustment to the Additional Withdrawal Amount upon spousal
continuation of the ING LifePay Plus rider for a contract subject to the Required Minimum Distribution rules of
the Tax Code. Any withdrawals before the contract owner’s death and spousal continuation are counted in
calculating you withdrawals in that contract year to determine whether the Maximum Annual Withdrawal has
been exceeded.

Please note, if the contract value on the previous business day is greater than the ING LifePay Plus Base on the
date the Lifetime Withdrawal Phase begins, then the ING LifePay Plus Base will be set equal to that contract
value before the Maximum Annual Withdrawal is first calculated. The rider will be eligible for any Step-ups that
may remain, and the Step-up Tracker will be recalculated at the same time as the ING LifePay Plus Base. Also,
upon spousal continuation, the ING LifePay Plus Death Benefit Base equals the ING LifePay Plus Death Benefit
Base before the contract owner’s death, subject to any pro-rata adjustment for withdrawals before spousal
continuation of the rider.

PRO.70600-13                                                              33

 

If you have selected the Income Optimizer, systematic installments of the Maximum Annual Withdrawal will
continue, SO LONG AS the surviving spouse as annuitant is age 59½. The amount of these continuing payments
may change since both the ING LifePay Plus Base and the Maximum Annual Withdrawal are recalculated based
on the new annuitant’s age. Once the Income Optimizer has been selected, the rider will remain subject to the
higher required specified percentage for allocations to the Fixed Allocation Funds, even if upon spousal
continuation the Lifetime Withdrawal Phase has not yet begun, and there is no Maximum Annual Withdrawal,
because the annuitant is not yet age 59½.

Contrary to the ING Joint LifePay Plus rider, spousal continuation of the ING LifePay Plus rider would likely
NOT take effect at the same time as the contract is continued. As noted above, the ING LifePay Plus rider
provides for spousal continuation only on a quarterly contract anniversary (subject to the spouse becoming the
annuitant and sole owner). If you are concerned about the availability of benefits being interrupted with spousal
continuation of the ING LifePay Plus rider, you might instead want to purchase the ING Joint LifePay Plus rider.

Change of Owner or Annuitant. The ING LifePay Plus rider terminates (with the rider’s charge pro-rated)
upon an ownership change or change of annuitant, except for:

1.      spousal continuation as described above;
2.      change of owner from one custodian to another custodian;
3.      change of owner from a custodian for the benefit of an individual to the same individual;
4.      change of owner from an individual to a custodian for the benefit of the same individual;
5.      collateral assignments;
6.      change in trust as owner where the individual owner and the grantor of the trust are the same individual;
7.      change of owner from an individual to a trust where the individual owner and the grantor of the trust are the
same individual;
8.      change of owner from a trust to an individual where the individual owner and the grantor of the trust are the
same individual;
9.      change of owner pursuant to a court order; and
10.      change of qualified plan ownership to the beneficial owner.

Surrender Charges. Once the Lifetime Withdrawal Phase begins, your withdrawals within a contract year up
to the Maximum Annual Withdrawal (and any applicable Additional Withdrawal Amount) are not subject to
surrender charges. We waive any surrender charges otherwise applicable to your withdrawal in a contract year that
are less than or equal to the Maximum Annual Withdrawal. Excess Withdrawals are subject to surrender charges,
whether or not the Lifetime Withdrawal Phase has begun. Once your contract value is reduced to zero, any periodic
payments under the ING LifePay Plus rider are not subject to surrender charges. Moreover, with no contract value,
none of your contract level recurring charges (e.g., the Mortality and Expense Risk Charge) would be deducted.

Loans. No loans are permitted on contracts with the ING LifePay Plus rider.

Taxation. For more information about the tax treatment of amounts paid to you under the ING LifePay Plus
Rider, see “Federal Tax Considerations–Tax Consequences of Living Benefits and Death Benefit.”

ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit (“ING Joint LifePay Plus”) Rider. The
ING Joint LifePay Plus rider generally provides, subject to the restrictions and limitations below, that we will
guarantee a minimum level of annual withdrawals from the contract for the lifetime of both you and your spouse,
even if these withdrawals deplete your contract value to zero. You may wish to purchase this rider if you are
married and are concerned that you and your spouse may outlive your income.

Important Note: We introduced the ING Joint LifePay Plus rider on August 20, 2007 and launched changes to it
on April 28, 2008 and January 12, 2009, subject to state approval where applicable. Some versions of the ING
Joint LifePay Plus rider were not available in New Jersey or Oregon. The form of the ING Joint LifePay Plus rider
available to you depends on state availability.

The information below pertains to the form of ING Joint LifePay Plus rider which was available for sale from
May 1, 2009 through March 15, 2010. If you purchased a previous version of the ING Joint LifePay Plus rider,
please see Appendix K. If you purchased the ING Joint LifePay rider, please see Appendix L for more information.

PRO.70600-13                                                               34

 

Purchase. The ING Joint LifePay Plus rider is only available for purchase by individuals who are married at the
time of purchase (spouses) and eligible to elect spousal continuation (as defined by the Tax Code) of the contract
when the death benefit becomes payable, subject to the owner, annuitant, and beneficiary requirements below. The
maximum issue age is 80. Both spouses must meet these issue age requirements. The issue age is the age of the
owners on the rider effective date. The ING Joint LifePay Plus rider is not available for purchase with Option
Package III. The ING Joint LifePay Plus rider is subject to broker-dealer availability. Please note that the ING
Joint LifePay Plus rider will not be issued unless the required owner, annuitant, and beneficiary
designations are met, and until your contract value is allocated in accordance with the investment option
restrictions described in “Investment Option Restrictions,” below.

The ING Joint LifePay Plus rider is no longer available for purchase, including purchase by owners of existing
contracts. Previously, contracts issued on or after August 20, 2007 were eligible for the ING Joint LifePay Plus
rider, subject to the conditions, requirements, and limitations of the prior paragraph, provided a living benefit rider
has not been issued under such contracts. There is an election form for this purpose. Please contact the Customer
Service Center for more information. Such election must be received in good order, including owner, annuitant, and
beneficiary designations and compliance with the investment restrictions described below.

Ownership, Annuitant, and Beneficiary Designation Requirements. Certain ownership, annuitant, and
beneficiary designations are required in order to purchase the ING Joint LifePay Plus rider. These designations
depend upon whether the contract is issued as a nonqualified contract, an IRA or a custodial IRA. In all cases, the
ownership, annuitant, and beneficiary designations must allow for the surviving spouse to continue the contract
when the death benefit becomes payable, as provided by the Tax Code. Non-natural, custodial owners are only
allowed with IRAs (“custodial IRAs”). The necessary ownership, annuitant, and/or beneficiary designations are
described below. Applications that do not meet the requirements below will be rejected. We reserve the right to
verify the date of birth and social security number of both spouses.

Nonqualified Contracts. For a jointly owned contract, the owners must be spouses, and the annuitant must be
one of the owners. For a contract with only one owner, the owner’s spouse must be the sole primary
beneficiary, and the annuitant must be one of the spouses.

IRAs. There may only be one owner, who must also be the annuitant. The owner’s spouse must be the sole
primary beneficiary.

Custodial IRAs. While we do not maintain individual owner and beneficiary designations for IRAs held by
an outside custodian, the ownership and beneficiary designations with the custodian must comply with the
requirements listed in “IRAs,” above. The annuitant must be the beneficial owner of the custodial IRA. We
require the custodian to provide us the name and date of birth of both the owner and the owner’s spouse.

Rider Effective Date. The rider effective date is the date coverage under the ING Joint LifePay Plus rider
begins. If you purchase the ING Joint LifePay Plus rider when the contract is issued, the ING Joint LifePay Plus
rider effective date is also the contract date. If the ING Joint LifePay Plus rider is added after contract issue, the
rider effective date is the date of the contract’s next following quarterly contract anniversary. A quarterly contract
anniversary occurs each quarter of a contract year from the contract date.

PRO.70600-13                                                                       35

 

          Active Spouse. An Active Spouse is the person (people) upon whose life and age the guarantees are calculated
under the ING Joint LifePay Plus rider. There must be two Active Spouses when you purchase the ING Joint
LifePay Plus rider, who are married to each other and are joint owners. For a contract with only one owner, the
spouse must be the sole primary beneficiary. You cannot add an Active Spouse after the rider effective date. In
general, changes to the ownership of the contract, or changes to the annuitant and/or beneficiary designations, will
result in one spouse being deactivated (the spouse is thereafter “inactive”). An inactive spouse is not eligible to
exercise any rights or receive any benefits under the ING Joint LifePay Plus rider, including continuing the ING
Joint LifePay Plus rider upon spousal continuation of the contract. Once an Active Spouse is deactivated, the
spouse may not become an Active Spouse again. Specific situations that will result in an Active Spouse being
deactivated include:
1.    For nonqualified contracts where the spouses are joint owners, the removal of a joint owner (if that spouse
does not automatically become sole primary beneficiary pursuant to the terms of the contract), or the change
of one joint owner to a person other than an Active Spouse;
2. For nonqualified contracts where one spouse is the owner and the other spouse is the sole primary
beneficiary, as well as for IRA contracts (including custodial IRAs), the addition of a joint owner who is not
also an Active Spouse or any change of beneficiary (including the addition of primary beneficiaries); and
3. A spouse’s death.

           
An owner may also request that one spouse be treated as inactive. Both contract owners must agree to such a
request when there are joint owners. However, all charges for the ING Joint LifePay Plus rider will continue to
apply, even after a spouse is deactivated, regardless of the reason. You should make sure you understand the
impact of beneficiary and owner changes on the ING Joint LifePay Plus rider prior to requesting any such
changes.

Please note that a divorce will terminate the ability of an ex-spouse to continue the contract. See “Divorce,” below.

Highlights. This paragraph introduces the terminology used with the ING Joint LifePay Plus rider and how its
components generally work together. Benefits and guarantees are subject to the terms, conditions and limitations of
the ING Joint LifePay Plus rider. More detailed information follows below, with capitalized words that are
underlined indicating headings for ease of reference. The ING Joint LifePay Plus rider guarantees an amount
available for withdrawal from the contract in any contract year once the Lifetime Withdrawal Phase begins -- we
use the ING Joint LifePay Plus Base as part of the calculation of the Maximum Annual Withdrawal. The Maximum
Annual Withdrawal is available for withdrawals at your discretion or systematic withdrawals pursuant to the terms
of the contract. The ING Joint LifePay Plus rider also offers the Income Optimizer, which is the option to elect to
receive systematic installments of the Maximum Annual Withdrawal over the lives of both Active Spouses. The
guarantee continues when the ING Joint LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status, at
which time we will pay you periodic payments in an annual amount equal to the Maximum Annual Withdrawal
(since contract value would be zero) until the last Active Spouse’s death. The ING Joint LifePay Plus Base is
eligible for Annual Ratchets and Step-ups, and subject to adjustment for any Excess Withdrawals. The ING Joint
LifePay Plus rider has an allowance for withdrawals from a contract subject to the Required Minimum Distribution
rules of the Tax Code that would otherwise be Excess Withdrawals. The ING Joint LifePay Plus rider has a death
benefit that is payable upon the contract owner’s death only when the ING Joint LifePay Plus Death Benefit Base is
greater than the contract’s death benefit. The ING Joint LifePay Plus rider allows for spousal continuation.

ING Joint LifePay Plus Base. The ING Joint LifePay Plus Base is first calculated when you purchase the ING
Joint LifePay Plus rider: (a) On the contract date, it is equal to the initial premium; and (b) After the contract date, it
is equal to the contract value on the effective date of the rider.

The ING Joint LifePay Plus Base is increased, dollar for dollar, by any subsequent premiums. We refer to the ING
Joint LifePay Plus Base as the MGWB Base in the ING Joint LifePay Plus rider.

PRO.70600-13 36

 

 

Withdrawals and Excess Withdrawals. Once the Lifetime Withdrawal Phase begins, withdrawals within a
contract year up to the Maximum Annual Withdrawal, including for payment of third-party investment advisory
fees, have no impact on the ING Joint LifePay Plus Base. These withdrawals will not incur surrender charges or a
negative Market Value Adjustment associated with any Fixed Account allocations. For example, assume the current
contract value is $90,000 on a contract with the ING Joint LifePay Plus rider in the Lifetime Withdrawal Phase.
The ING Joint LifePay Plus Base is $100,000, and the Maximum Annual Withdrawal is $5,000. Even though a
withdrawal of $5,000 would reduce the contract value to $85,000, the ING Joint LifePay Plus Base would remain at
its current level (as would the Maximum Annual Withdrawal as well) since the withdrawal did not exceed the
Maximum Annual Withdrawal. See below for more information about the Maximum Annual Withdrawal.

An Excess Withdrawal is a withdrawal either before the Lifetime Withdrawal Phase begins (except for payment of
third-party investment advisory fees), or once the Lifetime Withdrawal Phase begins, any portion of a withdrawal
during a contract year that exceeds the Maximum Annual Withdrawal. An Excess Withdrawal will cause a pro-rate
reduction of the ING Joint LifePay Plus Base -- in the same proportion as contract value is reduced by the portion
of the withdrawal that is considered excess, inclusive of surrender charges, or Market Value Adjustment associated
with any Fixed Account allocations (rather than the total amount of the withdrawal). An Excess Withdrawal will
also cause the Maximum Annual Withdrawal to be recalculated. See Appendix I, Illustration 1, 2, and 6 for
examples of the consequences of an Excess Withdrawal.

Please note that any withdrawals before the rider effective date in the same contract year when the ING Joint
LifePay Plus rider is added after contract issue are counted in calculating your withdrawals in that contract year to
determine whether the Maximum Annual Withdrawal has been exceeded.

Annual Ratchet. The ING Joint LifePay Plus Base is recalculated on each contract anniversary to equal the
greater of: a) the current ING Joint LifePay Plus Base; or b) the current contract value. We call this recalculation an
Annual Ratchet.

Once the Lifetime Withdrawal Phase begins, we reserve the right to increase the charge for the ING Joint LifePay
Plus rider upon an Annual Ratchet. You will never pay more than new issues of the ING Joint LifePay Plus rider,
subject to the maximum annual charge, and we will not increase this charge for your first five years after the rider
effective date. We will notify you in writing not less than 30 days before a charge increase. Our written notice will
outline the procedure you will need to follow to do so. You may avoid the charge increase by canceling the
forthcoming Annual Ratchet. Please note, however, that from then on the ING Joint LifePay Plus Base would no
longer be eligible for any Annual Ratchets, so the Maximum Annual Withdrawal percentage would not be eligible
to increase. More information about the Maximum Annual Percentage is below under “Maximum Annual
Withdrawal.” Our written notice will also remind you of the consequences of canceling the forthcoming Annual
Ratchet.

Step-up. The ING Joint LifePay Plus Base is recalculated on each of the first ten contract anniversaries after the
rider effective date, SO LONG AS no withdrawals were taken during the preceding contract year. The recalculated
ING Joint LifePay Plus Base will equal the greatest of a) The current ING Joint LifePay Plus Base; b) The current
contract value; and c) The ING Joint LifePay Plus Base on the previous contract anniversary, increased by the Step-
up.

The amount of the Step-up is the product of the Step-up Tracker on the previous contract anniversary times the
Step-up percent, currently 6%. The Step-up Tracker is only used to calculate the amount of the Step-up. Initially, it
equals the ING Joint LifePay Plus Base. Any premiums received during a contract year are added to the Step-up
Tracker and eligible for a partial Step-up. Any withdrawals for payment of third-party investment advisory fees are
subtracted from the Step-up. Like the ING Joint LifePay Plus Base, the Step-up Tracker is eligible for Annual
Ratchets and subject to a pro-rata adjustment for any Excess Withdrawals.

PRO.70600-13                                                                     37

 

Please note that no partial Step-up is available in the first year after you purchase this rider post issue of the
contract. Your first opportunity for a Step-up will not be until the first contract anniversary after a full contract year
has elapsed since the rider effective date. Say for example that with a contract purchased on January 1, 2009, the
contract owner decided to add the ING Joint LifePay Plus rider on March 15, 2009. The rider effective date is
April 1, 2009, which is the date the contract’s next following quarterly contract anniversary. Because on
January 1, 2010 a full contract year will not have elapsed since the rider effective date, the ING Joint LifePay Plus
Base will not be eligible for a step-up. Rather, the first opportunity for a step-up with this contract is on
January 1, 2011.
   
Lifetime Withdrawal Phase. The Lifetime Withdrawal Phase begins on the date of your first withdrawal
(except those for payment of third-party investment advisory fees), SO LONG AS the youngest Active Spouse is
age 65. On this date, the ING Joint LifePay Plus Base is recalculated to equal the greater of the current ING Joint
LifePay Plus Base or the contract value on the previous business day. The Lifetime Withdrawal Phase will continue
until the earliest of:
1.   The date income phase payments begin (see “The Income Phase);
2. Reduction of the contract value to zero by an Excess Withdrawal;
3. Reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual
Withdrawal;
4. The surrender of the contract; or
5. The death of the owner (first owner, in the case of joint owners; annuitant, in the case of a non-natural
person owner), unless your spouse beneficiary is an Active Spouse who elects to continue the contract; or
6. The last Active Spouse dies.

         
The ING Joint LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status in the event contract value is
reduced to zero other than by an Excess Withdrawal. Please see “Lifetime Automatic Periodic Benefit Status”
below for more information.

Maximum Annual Withdrawal. The Maximum Annual Withdrawal is the amount that the ING Joint LifePay
Plus rider guarantees to be available for withdrawal from the contract in any contract year. The Maximum Annual
Withdrawal is first calculated when the Lifetime Withdrawal Phase begins and equals the Maximum Annual
Withdrawal percentage of 5% multiplied by the ING Joint LifePay Plus Base. The Maximum Annual Withdrawal is
thereafter recalculated whenever the ING Joint LifePay Plus Base is recalculated (for example, upon an Annual
Ratchet or Step-up).

In the event on the date the Lifetime Withdrawal Phase begins the contract value on the previous business day is
greater than the ING Joint LifePay Plus Base, then before the Maximum Annual Withdrawal is first calculated, the
ING Joint LifePay Plus Base will be set equal to that contract value. The greater the ING Joint LifePay Plus Base,
the greater the amount will be available to you for withdrawal under the ING Joint LifePay Plus rider in calculating
the Maximum Annual Withdrawal for the first time.

Income Optimizer. The ING Joint LifePay Plus rider offers the option to elect to receive the Maximum Annual
Withdrawal in systematic installments over the lives of both Active Spouses. We call this option the Income
Optimizer. You may elect the Income Optimizer during the Lifetime Withdrawal Phase. This election is in lieu of
the contract’s other annuity options, and these payments will be subject to the same tax treatment as an annuity
payment. The Income Optimizer is only available on nonqualified contracts.

The frequency of payments under the Income Optimizer may be annual, quarterly or monthly. While you are
receiving payments under the Income Optimizer, the ING Joint LifePay Plus Base remains eligible for Annual
Ratchets. Your contract may still have a contract value and death benefit. Spousal continuation of payments under
the Income Optimizer is permitted. Any withdrawals in excess of the Maximum Annual Withdrawal are Excess
Withdrawals that would cause a pro-rata reduction of the ING Joint LifePay Plus Base, as well as a reduction of the
Maximum Annual Withdrawal.

Your election is subject to restrictions – you may not: a) revoke your election; b) add on premiums; c) exchange the
contract; d) annuitize the contract; or e) change ownership (except as permitted under “Change of Owner or
Annuitant” below). Once you choose the frequency of payments, you may not change it. Also, the specified
percentage of your contract value required to be allocated to Fixed Allocation Funds is higher, and the investment
options available for this purpose are limited. Please see “Investment Option Restrictions” below for the details.
You may surrender your contract at any time.

PRO.70600-13 38

 

 

Payments under the Income Optimizer will continue until the Terminal Date, at which time you waive any
remaining contract value and death benefit and the ING Joint LifePay Plus rider enters Lifetime Automatic Periodic
Benefit Status. The Terminal Date is the contract anniversary following the youngest Active Spouse’s 95th birthday.
Alternatively, you may wish to extend the Terminal Date to the contract anniversary following the youngest Active
Spouse’s 115th birthday in order to liquidate your contract value that may remain before the ING Joint LifePay Plus
rider enters Lifetime Automatic Periodic Benefit Status. Regardless, your payments of the Maximum Annual
Withdrawal will continue during the Lifetime Automatic Periodic Benefit Status until the death of the last Active
Spouse. We will notify you in writing in advance of the Terminal Date to remind you of this alternative and how to
extend the Terminal Date.

Lifetime Income Annuity Option. In the event the contract’s income phase commencement date is reached while
the ING Joint LifePay Plus rider is in the Lifetime Withdrawal Phase, you may elect a life only income phase
option, in lieu of the contract’s other income phase options. Payments under this option will be joint life if both
Active Spouses are living, or for the life of the only Active Spouse, and are based on the minimum annual payment
factors for purchase $1,000 reflected in the rider data table. These payments will never be less than the frequency of
payments of the Maximum Annual Withdrawal at that time. For more information about the contract’s income
phase options, see “The Income Phase.”

Required Minimum Distributions. The ING Joint LifePay Plus rider allows for withdrawals from a contract
subject to the Required Minimum Distribution rules of the Tax Code that exceed the Maximum Annual Withdrawal
without causing a pro-rata reduction of the ING Joint LifePay Plus Base and recalculation of the Maximum Annual
Withdrawal. If your Required Minimum Distribution for a calendar year (determined on a date on or before January
31 of that year), applicable to this contract, is greater than the Maximum Annual Withdrawal on that date, then an
Additional Withdrawal Amount will be set equal to that portion of the Required Minimum Distribution that exceeds
the Maximum Annual Withdrawal. Once you have taken the Maximum Annual Withdrawal for the then current
contract year, the dollar amount of any additional withdrawals will count first against and reduce any unused
Additional Withdrawal Amount for the previous calendar year followed by any Additional Withdrawal Amount for
the current calendar year -- without constituting an Excess Withdrawal.

See Appendix I, Illustration 3 for an example.

Withdrawals that exceed the Maximum Annual Withdrawal and all available Additional Withdrawal Amounts are
Excess Withdrawals that will cause a pro-rata reduction of the ING Joint LifePay Plus Base and the Maximum
Annual Withdrawal to be recalculated. See Appendix I, Illustration 5 for an example of the consequences of an
Excess Withdrawal with an Additional Withdrawal Amount. The Additional Withdrawal Amount is available on a
calendar year basis and recalculated every January, reset to equal that portion of the Required Minimum
Distribution for that calendar year that exceeds the Maximum Annual Withdrawal on that date. Any unused amount
of the Additional Withdrawal Amount carries over into the next calendar year and is available through the end of
that year, at which time any amount remaining will expire. See Appendix I, Illustration 4 for an example of the
Additional Withdrawal Amount being carried over. Please note that there is no adjustment to the Additional
Withdrawal Amount for Annual Ratchets or upon spousal continuation of the ING Joint LifePay Plus Rider.

Lifetime Automatic Periodic Benefit Status. The ING Joint LifePay Plus rider enters Lifetime Automatic
Periodic Benefit Status when your contract value is reduced to zero other than by an Excess Withdrawal (a
withdrawal in excess of the Maximum Annual Withdrawal that causes your contract value to be reduced to zero
will terminate the ING Joint LifePay Plus rider). You will no longer be entitled to make withdrawals, but instead
will begin to receive periodic payments in an annual amount equal to the Maximum Annual Withdrawal. When the
rider enters Lifetime Automatic Periodic Benefit Status:

1.   The contract will provide no further benefits (including death benefits) other than as provided under the ING
Joint LifePay Plus rider;
2. No further premium payments will be accepted; and
3. Any other riders issued with the contract will terminate, unless otherwise specified in that rider.
 
During Lifetime Automatic Periodic Benefit Status, we will pay you periodic payments in an annual amount that is
equal to the Maximum Annual Withdrawal. These payments will cease upon the death of the annuitant at which
time both the rider and the contract will terminate. The rider will remain in Lifetime Automatic Periodic Benefit
Status until it terminates without value upon the last Active Spouse’s death.
 
PRO.70600-13 39

 

 

If, when the ING Joint LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status, your net withdrawals
to date are less than the Maximum Annual Withdrawal for that contract year, then we will pay you the difference
immediately. The periodic payments will begin on the first contract anniversary following the date the rider enters
Lifetime Automatic Periodic Benefit Status and will continue to be paid annually thereafter.

In the event contract value is reduced to zero before the Lifetime Withdrawal Phase begins, Lifetime Automatic
Periodic Benefit Status is deferred until the contract anniversary on or after the youngest Active Spouse is age 65.
During this time, the ING Joint LifePay Plus rider’s death benefit remains payable upon the last Active Spouse’s
death, and the ING Joint LifePay Plus rider remains eligible for Step-ups. Once the ING Joint LifePay Plus rider
enters the Lifetime Automatic Periodic Benefit Status, periodic payments will begin in an annual amount equal to
5% (the Maximum Annual Withdrawal percentage) multiplied by the ING Joint LifePay Plus Base.

You may elect to receive systematic withdrawals pursuant to the terms of the contract. Under a systematic
withdrawal, either a fixed amount or an amount based upon a percentage of the contract value will be withdrawn
from your contract and paid to you on a scheduled basis, either monthly, quarterly, or annually. If, at the time the
rider enters Lifetime Automatic Periodic Benefit Status, you are receiving systematic withdrawals under the
contract more frequently than annually, the periodic payments will be made at the same frequency in equal amounts
such that the sum of the payments in each contract year will equal the annual Maximum Annual Withdrawal. Such
payments will be made on the same payment dates as previously set up, if the payments were being made monthly
or quarterly. If the payments were being made annually, then the payments will be made on each following contract
anniversary.

Investment Option Restrictions. While the ING Joint LifePay Plus rider is in effect, there are limits on the
portfolios to which your contract value may be allocated. Contract value allocated to portfolios other than Accepted
Funds will be rebalanced so as to maintain at least the required specified percentage of such contract value in the
Fixed Allocation Funds. Currently, the required specified percentage is 30%, and is 40% if you have selected the
Income Optimizer. See “Fixed Allocation Funds Automatic Rebalancing,” below. We impose these investment
option restrictions in order to lessen the likelihood we would have to make payments under this rider. We require
these allocations regardless of your investment instructions to the contract. The ING Joint LifePay Plus rider will
not be issued until your contract value is allocated in accordance with these investment options restrictions. The
timing of when and how we apply these restrictions is discussed further below.

Accepted Funds. Currently, the Accepted Funds are:
· Fixed Account II  
· Fixed Interest Division  
· ING Liquid Assets Portfolio  
· ING Solution 2015 Portfolio  
· ING Solution 2025 Portfolio  
· ING Solution 2035 Portfolio  
· ING Solution Income Portfolio  
· ING T. Rowe Price Capital Appreciation Portfolio
       
No rebalancing is necessary if the contract value is allocated entirely to Accepted Funds. We may change
these designations at any time upon 30 days’ notice to you. If a change is made, the change will apply to
contract value allocated to such portfolios after the date of the change.
        
If you have selected the Income Optimizer, the Accepted Funds are:
· Fixed Account II  
· Fixed Interest Division  
· ING Liquid Assets Portfolio  
· ING Solution 2015 Portfolio  
· ING Solution Income Portfolio  
           
Fixed Allocation Funds. Currently, the Fixed Allocation Funds are:
· ING BlackRock Inflation Protected Bond Portfolio
· ING Bond Portfolio  
· ING Intermediate Bond Portfolio  
· ING U.S. Bond Index Portfolio  
 
PRO.70600-13 40

 

 

You may allocate your contract value to one or more Fixed Allocation Funds. We consider the ING Intermediate
Bond Portfolio to be the default Fixed Allocation Fund in connection with Fixed Allocation Funds Automatic
Rebalancing.
     
Other Funds. All portfolios available under the contract other than Accepted Funds or the Fixed Allocation
Funds are considered Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing. If the contract value in the Fixed Allocation Funds is less
than the required specified percentage of the total contract value allocated to the Fixed Allocation Funds and
Other Funds on any ING Joint LifePay Plus Rebalancing Date, we will automatically rebalance the contract value
allocated to the Fixed Allocation Funds and Other Funds so that the required specified percentage of this amount
is allocated to the Fixed Allocation Funds. The current specified percentage is 30%, and 40% if you have
selected the Income Optimizer. Accepted Funds are excluded from Fixed Allocation Funds Automatic
Rebalancing. Any rebalancing is done on a pro-rata basis among the Other Funds and will be the last transaction
processed on that date. The ING Joint LifePay Plus Rebalancing Dates occur on the rider effective date, each
quarterly contract anniversary, and after the following transactions:
1. Receipt of additional premiums;
2. Transfer or reallocation among the Fixed Allocation Funds or Other Funds, whether automatic or specifically
  directed by you; and
3. Withdrawals from the Fixed Allocation Funds or Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing is separate from any other automatic rebalancing under the
contract. However, if the other automatic rebalancing under the contract causes the allocations to be out of
compliance with the investment option restrictions noted above, Fixed Allocation Funds Automatic Rebalancing
will occur immediately after the automatic rebalancing to restore the required allocations. See “Appendix J–
Examples of Fixed Allocation Funds Automatic Rebalancing.” You will be notified that Fixed Allocation Funds
Automatic Rebalancing has occurred, along with your new allocations, by a confirmation statement that will be
mailed to you after Fixed Allocation Funds Automatic Rebalancing has occurred.
          
In certain circumstances, Fixed Allocation Funds Automatic Rebalancing may result in a reallocation into a
Fixed Allocation Fund even if you have not previously been invested in it. See “Appendix J–Examples of Fixed
Allocation Funds Automatic Rebalancing, Example I.” By electing to purchase the ING Joint LifePay Plus
rider, you are providing the Company with direction and authorization to process these transactions,
including reallocations into the Fixed Allocation Funds. You should not purchase the ING Joint LifePay
Plus rider if you do not wish to have your contract value reallocated in this manner.
 
Divorce. Generally, in the event of a divorce, the spouse who retains ownership of the contract will continue to be
entitled to all rights and benefits of the ING Joint LifePay Plus rider, while the ex-spouse will no longer have any
such rights or be entitled to any such benefits. In the event of a divorce during the Lifetime Withdrawal Phase, the
ING Joint LifePay Plus rider will continue until the owner’s death (first owner in the case of joint owners, or the
annuitant in the case of a custodial IRA). Although spousal continuation may be available under the Tax Code for a
subsequent spouse, the ING Joint LifePay Plus rider cannot be continued by the new spouse. As the result of the
divorce, we may be required to withdraw assets for the benefit of an ex-spouse. Any such withdrawal will be
considered a withdrawal for purposes of the ING Joint LifePay Plus Base. See “Withdrawals” and “Excess
Withdrawal,” above. In the event of a divorce during Lifetime Automatic Periodic Benefit Status, there will be no
change in the amount of your periodic payments. Payments will continue until both spouses are deceased.
 
  Death of Owner or Annuitant. The ING Joint LifePay Plus rider terminates (with the rider’s charges pro-
rated) on the earlier of the date of death of the last Active Spouse, or when the surviving spouse decides not to
continue the contract.
 
  ING Joint LifePay Plus Death Benefit Base. The ING Joint LifePay Plus rider has a death benefit that is
payable upon the owner’s death only when the ING Joint LifePay Plus Death Benefit Base is greater than the
contract’s death benefit. The ING Joint LifePay Plus Death Benefit Base is first calculated when you purchase the
ING Joint LifePay Plus rider. If the ING Joint LifePay Plus rider is purchased on the contract date, the initial ING
Joint LifePay Plus Death Benefit Base is equal to the initial premium. If the ING Joint LifePay Plus rider as
purchased after the contract date, the initial ING Joint LifePay Plus Death Benefit Base is equal to the contract
value on the rider effective date.
 
 
PRO.70600-13 41

 

 

The ING Joint LifePay Plus Death Benefit Base is increased by the dollar amount of any subsequent premiums and
subject to any withdrawal adjustments. The ING Joint LifePay Plus Death Benefit Base is reduced by the dollar
amount of any withdrawals for the payment of third-party investment advisory fees before the Lifetime Withdrawal
Phase beings, and for any withdrawals once the Lifetime Withdrawal Phase begins that are not Excess
Withdrawals, including withdrawals for payment of third-party investment advisory fees. The ING Joint LifePay
Plus Death Benefit Base is subject to a pro-rata reduction for an Excess Withdrawal. Please see “Withdrawals and
Excess Withdrawals” for more information.

There is no additional charge for the death benefit associated with the ING Joint LifePay Plus rider. Please note that
the ING Joint LifePay Plus Death Benefit Base is not eligible to participate in Annual Ratchets or Step-ups.

In the event the ING Joint LifePay Plus Death Benefit Base is greater than zero when the ING Joint LifePay Plus
rider enters Lifetime Automatic Periodic Benefit Status, each periodic payment reduces the ING Joint LifePay Plus
Death Benefit Base dollar for dollar until the earlier of the ING Joint LifePay Plus Death Benefit Base being
reduced to zero or the last Active Spouse’s death. Upon the last Active Spouse’s death, any remaining ING Joint
LifePay Plus death benefit is payable to the beneficiary in a lump-sum.

Spousal Continuation. If the surviving spouse of the deceased owner continues the contract (see “Death
Benefit Choices–Continuation After Death–Spouse”), the rider will continue, SO LONG AS the surviving spouse is
an Active Spouse. At that time, the ING Joint LifePay Plus Base is recalculated to equal the greater of a) the
contract value, inclusive of the guaranteed death benefit; and b) the last-calculated ING Joint LifePay Plus Base,
subject to pro-rata adjustment for any withdrawals before spousal continuation.

The Maximum Annual Withdrawal is also recalculated; however, there is no Maximum Annual Withdrawal upon
spousal continuation until the Lifetime Withdrawal Phase begins on the date of the first withdrawal after spousal
continuation, SO LONG AS the last Active Spouse is age 65. The Maximum Annual Withdrawal is recalculated to
equal 5% (the Maximum Annual Withdrawal percentage) multiplied by the ING Joint LifePay Plus Base. There is
no adjustment to the Additional Withdrawal Amount upon spousal continuation of the ING Joint LifePay Plus rider
for a contract subject to the Required Minimum Distribution rules of the Tax Code. Any withdrawals before the
contract owner’s death and spousal continuation are counted in calculating you withdrawals in that contract year to
determine whether the Maximum Annual Withdrawal has been exceeded.

Please note, if the contract value on the previous business day is greater than the ING Joint LifePay Plus Base on
the date the Lifetime Withdrawal Phase begins, then the ING Joint LifePay Plus Base will be set equal to the
contract value before the Maximum Annual Withdrawal is first calculated. The rider will be eligible for any Step-
ups that may remain, and the Step-up Tracker will be recalculated at the same time as the ING Joint LifePay Plus
Base. Also, upon spousal continuation, the ING Joint LifePay Plus Death Benefit Base equals the ING Joint
LifePay Plus Death Benefit Base before the contract owner’s death, subject to any pro-rata adjustment for
withdrawals before spousal continuation of the rider.

Change of Owner or Annuitant. The ING Joint LifePay Plus rider terminates (with the rider’s charge pro-
rated) upon an ownership change or change of annuitant, except for:
1.      spousal continuation by an Active Spouse, as described above;
2.      change of owner from one custodian to another custodian;
3.      change of owner from a custodian for the benefit of an individual to the same individual (the owner’s
spouse must be named sole beneficiary under the contract to remain an Active Spouse);
4.      change of owner from an individual to a custodian for the benefit of the same individual;
5.      collateral assignments;
6.      for nonqualified contracts only, the addition of a joint owner, provided that the additional joint owner is
the original owner’s spouse and is an Active Spouse when added as joint owner;
7.      for nonqualified contracts only, the removal of a joint owner, provided the removed joint owner is an
Active Spouse and becomes the sole primary beneficiary; and
8.      change of owner where the owner becomes the sole primary beneficiary and the sole primary beneficiary
becomes the owner, provided both spouses are Active Spouses at the time of the change.

PRO.70600-13                                                                 42

 

          Surrender Charges. Once the Lifetime Withdrawal Phase begins, your withdrawals within a contract year up
to the Maximum Annual Withdrawal (and any applicable Additional Withdrawal Amount) are not subject to
surrender charges. We waive any surrender charges otherwise applicable to your withdrawal in a contract year that
are less than or equal to the Maximum Annual Withdrawal. Excess Withdrawals are subject to surrender charges,
whether or not the Lifetime Withdrawal Phase has begun. Once your contract value is reduced to zero, any periodic
payments under the ING Joint LifePay Plus rider are not subject to surrender charges. Moreover, with no contract
value, none of your contract level recurring charges (e.g., the Mortality and Expense Risk Charge) would be
deducted.
 
          Federal Tax Considerations. For more information about the tax treatment of amounts paid to you under the
ING Joint LifePay Plus rider, see “Federal Tax Considerations–Tax Consequences of Living Benefits and Death
Benefits.”
 
WITHDRAWALS
 
You may withdraw all or part of your money at any time during the accumulation phase and before the death of the
contract owner, except under certain qualified contracts. If you request a withdrawal for more than 90% of the cash
surrender value, and the remaining cash surrender value after the withdrawal is less than $100, we may treat it as a
request to surrender the contract. If any single withdrawal or the sum of withdrawals exceeds the Free Withdrawal
Amount, you may incur a surrender charge. There is no surrender charge if, during each contract year, the amount
withdrawn is equal to or less than the greater of: 1) 10% or less of your contract value on the date of the
withdrawal, less prior withdrawals during that contract year; or 2) your RMD attributable to amounts held under the
contract. The Free Withdrawal Amount does not include your RMD for the tax year containing the contract date of
this contract. Under Option Package III, any unused percentage of the 10% Free Withdrawal Amount from a
contract year will carry forward into successive contract years, based on the percentage remaining at the time of the
last withdrawal in that contract year. In no event will the Free Withdrawal Amount at any time exceed 30% of
contract value, subject to state approval.
 
You need to submit to us a request specifying the Fixed Interest Allocations or subaccounts from which to
withdraw amounts, otherwise we will make the withdrawal on a pro-rata basis from all of the subaccounts in which
you are invested. If there is not enough contract value in the subaccounts, we will deduct the balance of the
withdrawal from your Fixed Interest Allocations starting with the guaranteed interest periods nearest their maturity
dates until we have honored your request. We will determine the contract value as of the close of business on the
day we receive your withdrawal request at our Customer Service Center. The contract value may be more or less
than the premium payments made.
 
We will apply a Market Value Adjustment to any withdrawal from your Fixed Interest Allocation taken more than
30 days before its maturity date. Definitive guidance on the proper federal tax treatment of the Market Value
Adjustment has not been issued. You may want to discuss the potential tax consequences of a Market Value
Adjustment with your tax adviser. If any limitation on allocations to the Restricted Funds has been exceeded,
subsequent withdrawals must be taken so that the percentage of contract value in the Restricted Funds following the
withdrawal would not be greater than the percentage of contract value in the Restricted Funds prior to the
withdrawal. In this event, the subsequent withdrawals must be taken from the Restricted Funds or taken pro-rata
from all variable subaccounts.
 
Please be aware that benefit we pay under certain optional benefit riders may be reduced by any withdrawals you
take while the optional benefit rider is in effect. See “Optional Living Benefit Riders.” Withdrawals may be subject
to taxation and tax penalties.
 
Other than surrender charges and market value adjustment, if applicable, there is no additional charge for these
features.
 
We offer the following three withdrawal options:
 
Regular Withdrawals
After the free look period, you may make regular withdrawals. Each withdrawal must be a minimum of $100. We
will apply a Market Value Adjustment to any regular withdrawal from a Fixed Interest Allocation that is taken
more than 30 days before its maturity date. See Appendix C and the Fixed Account II prospectus for more
information on the application of Market Value adjustment.
 
PRO.70600-13 43

 

 

Systematic Withdrawals
You may choose to receive automatic systematic withdrawal payments (1) from the contract value in the
subaccounts in which you are invested, or (2) from the interest earned in your Fixed Interest Allocations.
Systematic withdrawals may be taken monthly, quarterly or annually. If you have contract value allocated to one or
more Restricted Funds and you elect to receive systematic withdrawals from the subaccounts in which you are
invested, the systematic withdrawals must be taken pro-rata from all subaccounts in which contract value is
invested. If you do not have contract value allocated to a Restricted Fund and choose systematic withdrawals on a
non pro-rata basis, we will monitor the withdrawals annually. If you subsequently allocate contract value to one or
more Restricted Funds, we will require you to take your systematic withdrawals on a pro-rata basis from all
subaccounts in which contract value is invested.

You decide the date on which you would like your systematic withdrawals to start. This date must be at least 30
days after the contract date and no later than the 28th day of the month. Subject to these rules, if you have not
indicated the date, your systematic withdrawals will occur on the next business day after your contract date (or the
monthly or quarterly anniversary thereof) for your desired frequency.

Each systematic withdrawal amount must be a minimum of $100. The amount of your systematic withdrawal can
either be (1) a fixed dollar amount, or (2) an amount based on a percentage of the contract value. Both forms of
systematic withdrawals are subject to the following maximum percentage, which is calculated on each withdrawal
date:

Frequency Maximum Percentage
of Contract Value
Monthly 0.83%
Quarterly 2.50%
Annually 10.00%

          
A fixed dollar systematic withdrawal of less than $100 on any withdrawal date will terminate your systematic
withdrawal. If the amount to be withdrawn would exceed the applicable maximum percentage of your contract
value on any withdrawal date, we will automatically reduce the amount withdrawn so that it equals such
percentage. Thus, your fixed dollar systematic withdrawals will never exceed the maximum percentage. If you want
fixed dollar systematic withdrawals to exceed the maximum percentage and are willing to incur associated
surrender charges, consider the Fixed Dollar Systematic Withdrawal Feature which you may add to your regular
systematic withdrawal program.

If your systematic withdrawal is based on a percentage of contract value and the amount to be withdrawn based on
that percentage would be less than $100, we will automatically increase the amount to $100 as long as it does not
exceed the maximum percentage. If the systematic withdrawal would exceed the maximum percentage, we will
send the amount, and then automatically cancel your systematic withdrawal option.

Systematic withdrawals from Fixed Interest Allocations are limited to interest earnings during the prior month,
quarter, or year, depending on the frequency you chose. Systematic withdrawals are not subject to a Market Value
Adjustment, unless you have added the Fixed Dollar Systematic Withdrawal Feature discussed below and the
payments exceed interest earnings. Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar
Systematic Withdrawal Feature are available only in connection with Section 72(t) or Section 72(q) distributions. A
Fixed Interest Allocation may not participate in both the systematic withdrawal option and the dollar cost averaging
program at the same time.

You may change the amount or percentage of your systematic withdrawals once each contract year or cancel this
option at any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next
scheduled withdrawal date. If you submit a subsequent premium payment after you have applied for systematic
withdrawals, we will not adjust future withdrawals under the systematic withdrawal program unless you
specifically request we do so.

The systematic withdrawal option may commence in a contract year where a regular withdrawal has been taken but
you may not change the amount or percentage of your withdrawals in any contract year during which you have
previously taken a regular withdrawal. You may not elect the systematic withdrawal option if you are taking IRA
withdrawals.

PRO.70600-13                                                                       44

 

Subject to availability, a spousal or non-spousal beneficiary may elect to receive death benefits as payments over
the beneficiary’s lifetime (“stretch”). “Stretch” payments will be subject to the same limitations as systematic
withdrawals, and nonqualified “stretch” payments will be reported on the same basis as other systematic
withdrawals.

Fixed Dollar Systematic Withdrawal Feature. You may add the Fixed Dollar Systematic Withdrawal Feature to
your regular fixed dollar systematic withdrawal program. This feature allows you to receive a systematic
withdrawal in a fixed dollar amount regardless of any surrender charges or Market Value Adjustments. Systematic
withdrawals from Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature are available
only in connection with Section 72(t) or Section 72(q) distributions. You choose the amount of the fixed systematic
withdrawals, which may total up to an annual maximum of 10% of your contract value as determined on the day we
receive your election of this feature. The maximum limit will not be recalculated when you make additional
premium payments, unless you instruct us to do so. We will assess a surrender charge on the withdrawal date if the
withdrawal exceeds the maximum limit as calculated on the withdrawal date. We will assess a Market Value
Adjustment on the withdrawal date if the withdrawal from a Fixed Interest Allocation exceeds your interest
earnings on the withdrawal date. We will apply the surrender charge and any Market Value Adjustment directly to
your contract value (rather than to the systematic withdrawal) so that the amount of each systematic withdrawal
remains fixed.

Flat dollar systematic withdrawals which are intended to satisfy the requirements of Section 72(t) of the Tax Code
may exceed the maximum. Such withdrawals are subject to surrender charges and Market Value Adjustment when
they exceed the applicable maximum percentage.

IRA Withdrawals
If you have a traditional IRA contract and will be at least age 70½ during the current calendar year, you may elect
to have distributions made to you to satisfy requirements imposed by federal tax law. IRA withdrawals provide
payout of amounts required to be distributed by the IRS rules governing mandatory distributions under qualified
plans. We will send you a notice before your distributions commence. You may elect to take IRA withdrawals at
that time, or at a later date. You may not elect IRA withdrawals and participate in systematic withdrawals at the
same time. If you do not elect to take IRA withdrawals, and distributions are required by federal tax law,
distributions adequate to satisfy the requirements imposed by federal tax law may be made. Thus, if you are
participating in systematic withdrawals, distributions under that option must be adequate to satisfy the mandatory
distribution rules imposed by federal tax law.

You choose the frequency of your IRA withdrawals (monthly, quarterly or annually) and the start date. This date
must be at least 30 days after the contract date and no later than the 28th day of the month. Subject to these rules, if
you have not indicated the date, your IRA withdrawals will occur on the next business day after your contract date
for your desired frequency.

You may request that we calculate for you the amount that is required to be withdrawn from your contract each
year based on the information you give us and various choices you make. For information regarding the calculation
and choices you have to make, see the SAI. We will also accept your written instructions regarding the calculated
amount required to be withdrawn from your contract each year. The minimum dollar amount you can withdraw is
$100. When we determine the required IRA withdrawal amount for a taxable year based on the frequency you
select, if that amount is less than $100, we will pay $100. At any time where the IRA withdrawal amount is greater
than the contract value, we will cancel the contract and send you the amount of the cash surrender value.

You may change the payment frequency of your IRA withdrawals once each contract year or cancel this option at
any time by sending satisfactory notice to our Customer Service Center at least 7 days before the next scheduled
withdrawal date.

An IRA withdrawal from a Fixed Interest Allocation in excess of the amount allowed under systematic withdrawals
will be subject to a Market Value Adjustment.

Consult your tax adviser regarding the tax consequences associated with taking withdrawals. You are
responsible for determining that withdrawals comply with applicable law. A withdrawal made before the taxpayer
reaches age 59½ may result in a 10% penalty tax. See “Federal Tax Considerations” for more details.

PRO.70600-13                                                               45

 

TRANSFERS AMONG YOUR INVESTMENTS
 
Between the end of the free look period and the income phase start date, you may transfer your contract value
among the subaccounts in which you are invested and your Fixed Interest Allocations. We currently do not charge
you for transfers made during a contract year, but reserve the right to charge $25 for each transfer after the twelfth
transfer in a contract year. We also reserve the right to limit the number of transfers you may make and may
otherwise modify or terminate transfer privileges if required by our business judgment or in accordance
with applicable law. We will apply a Market Value Adjustment to transfers from a Fixed Interest Allocation taken
more than 30 days before its maturity date, unless the transfer is made under the dollar cost averaging program.
Keep in mind that transfers between Special or Excluded Funds and other funds may negatively impact your death
benefit or optional rider benefits.
 
If you allocate contract value to an investment option that has been designated as a Restricted Fund, your ability to
transfer contract value to the Restricted Fund may be limited. A transfer to the Restricted Funds will not be
permitted to the extent that it would increase the contract value in the Restricted Fund to more than the applicable
limits following the transfer. We do not limit transfers from Restricted Funds. If the result of multiple reallocations
is to lower the percentage of total contract value in the Restricted Fund, the reallocation will be permitted even if
the percentage of contract value in the Restricted Fund is greater than the limit.
 
Please be aware that the benefits we pay under an optional benefit rider may be affected by certain transfers you
may make while the rider is in effect. Transfers, including those involving Special Funds or Excluded Funds, may
also affect your optional rider base. See “Optional Living Benefit Riders.”
 
The minimum amount that you may transfer is $100 or, if less, your entire contract value held in a subaccount or a
Fixed Interest Allocation. To make a transfer, you must notify our Customer Service Center and all other
administrative requirements must be met. Transfers will be based on values at the end of the business day in which
the transfer request is received at our Customer Service Center. Any transfer request received after 4:00 p.m.
eastern time or the close of regular trading of the NYSE will be effected on the next business day.
 
The separate account and the Company will not be liable for following instructions communicated by telephone or
other approved electronic means that we reasonably believe to be genuine. We may require personal identifying
information to process a request for transfer made over the telephone, over the Internet or other approved electronic
means. Please be advised that the risk of a fraudulent transaction is increased with telephonic or electronic
instructions, even if appropriate identifying information is provided.
 
Limits on Frequent or Disruptive Transfers
 
The contract is not designed to serve as a vehicle for frequent transfers. Frequent transfer activity can disrupt
management of a fund and raise its expenses through:
· Increased trading and transaction costs;  
· Forced and unplanned portfolio turnover;  
· Lost opportunity costs; and  
· Large asset swings that decrease the fund’s ability to provide maximum investment return to all contract
owners.
 
This in turn can have an adverse effect on fund performance. Accordingly, individuals or organizations that use
market-timing investment strategies or make frequent transfers should not purchase the contract.
 
Excessive Trading Policy. We and the other members of the ING family of companies that provide multi-fund
variable insurance and retirement products have adopted a common Excessive Trading Policy to respond to the
demands of the various fund families that make their funds available through our products to restrict excessive fund
trading activity and to ensure compliance with Rule 22c-2 of the 1940 Act.
   
PRO.70600-13 46

 

 

We actively monitor fund transfer and reallocation activity within our variable insurance products to identify
violations of our Excessive Trading Policy. Our Excessive Trading Policy is violated if fund transfer and
reallocation activity:
·      Meets or exceeds our current definition of Excessive Trading, as defined below; or
·   Is determined, in our sole discretion, to be disruptive or not in the best interests of other owners of our variable
insurance and retirement products.
 
We currently define “Excessive Trading” as:
· More than one purchase and sale of the same fund (including money market funds) within a 60 calendar day
period (hereinafter, a purchase and sale of the same fund is referred to as a “round-trip”). This means two or
more round-trips involving the same fund within a 60 calendar day period would meet our definition of
Excessive Trading; or
· Six round-trips involving the same fund within a rolling twelve month period.
 
The following transactions are excluded when determining whether trading activity is excessive:
· Purchases or sales of shares related to non-fund transfers (for example, new purchase payments, withdrawals
and loans);
· Transfers associated with scheduled dollar cost averaging, scheduled rebalancing, or scheduled asset allocation
programs;
· Purchases and sales of fund shares in the amount of $5,000 or less;
· Purchases and sales of funds that affirmatively permit short-term trading in their fund shares, and movement
between such funds and a money market fund; and
· Transactions initiated by us, another member of the ING family of companies, or a fund.

       
If we determine that an individual or entity has made a purchase of a fund within 60 days of a prior round-trip
involving the same fund, we will send them a letter warning that another sale of that same fund within 60 days of
the beginning of the prior round-trip will be deemed to be Excessive Trading and result in a six month suspension
of their ability to initiate fund transfers or reallocations through the Internet, facsimile, Voice Response Unit
(VRU), telephone calls to the ING Customer Service Center, or other electronic trading medium that we may make
available from time to time (“Electronic Trading Privileges”). Likewise, if we determine that an individual or entity
has made five round-trips involving the same fund within a rolling twelve month period, we will send them a letter
warning that another purchase and sale of that same fund within twelve months of the initial purchase in the first
round-trip will be deemed to be Excessive Trading and result in a suspension of their Electronic Trading Privileges.
According to the needs of the various business units, a copy of any warning letters may also be sent, as applicable,
to the person(s) or entity authorized to initiate fund transfers or reallocations, the agent/registered representative, or
the investment adviser for that individual or entity. A copy of the warning letters and details of the individual’s or
entity’s trading activity may also be sent to the fund whose shares were involved in the trading activity.

If we determine that an individual or entity has violated our Excessive Trading Policy, we will send them a letter
stating that their Electronic Trading Privileges have been suspended for a period of six months. Consequently, all
fund transfers or reallocations, not just those that involve the fund whose shares were involved in the activity that
violated our Excessive Trading Policy, will then have to be initiated by providing written instructions to us via
regular U.S. mail. Suspension of Electronic Trading Privileges may also extend to products other than the product
through which the Excessive Trading activity occurred. During the six month suspension period, electronic “inquiry
only” privileges will be permitted where and when possible. A copy of the letter restricting future transfer and
reallocation activity to regular U.S. mail and details of the individual’s or entity’s trading activity may also be sent,
as applicable, to the person(s) or entity authorized to initiate fund transfers or reallocations, the agent/registered
representative or investment adviser for that individual or entity, and the fund whose shares were involved in the
activity that violated our Excessive Trading Policy.

Following the six month suspension period during which no additional violations of our Excessive Trading Policy
are identified, Electronic Trading Privileges may again be restored. We will continue to monitor the fund transfer
and reallocation activity, and any future violations of our Excessive Trading Policy will result in an indefinite
suspension of Electronic Trading Privileges. A violation of our Excessive Trading Policy during the six month
suspension period will also result in an indefinite suspension of Electronic Trading Privileges.

PRO.70600-13 47

 

 

We reserve the right to suspend Electronic Trading Privileges with respect to any individual or entity, with or
without prior notice, if we determine, in our sole discretion, that the individual’s or entity’s trading activity is
disruptive or not in the best interests of other owners of our variable insurance and retirement products, regardless
of whether the individual’s or entity’s trading activity falls within the definition of Excessive Trading set forth
above.

Our failure to send or an individual’s or entity’s failure to receive any warning letter or other notice contemplated
under our Excessive Trading Policy will not prevent us from suspending that individual’s or entity’s Electronic
Trading Privileges or taking any other action provided for in our Excessive Trading Policy.

The Company does not allow exceptions to our Excessive Trading Policy. We reserve the right to modify our
Excessive Trading Policy, or the policy as it relates to a particular fund, at any time without prior notice, depending
on, among other factors, the needs of the underlying fund(s), the best interests of contract owners and fund
investors, and/or state or federal regulatory requirements. If we modify our policy, it will be applied uniformly to
all contract owners or, as applicable, to all contract owners investing in the underlying fund.

Our Excessive Trading Policy may not be completely successful in preventing market-timing or excessive trading
activity. If it is not completely successful, fund performance and management may be adversely affected, as noted
above.

Limits Imposed by the Funds. Each underlying fund available through the variable insurance and retirement
products offered by us and/or the other members of the ING family of companies, either by prospectus or stated
policy, has adopted or may adopt its own excessive/frequent trading policy, and orders for the purchase of fund
shares are subject to acceptance or rejection by the underlying fund. We reserve the right, without prior notice, to
implement fund purchase restrictions and/or limitations on an individual or entity that the fund has identified as
violating its excessive/frequent trading policy and to reject any allocation or transfer request to a subaccount if the
corresponding fund will not accept the allocation or transfer for any reason. All such restrictions and/or limitations
(which may include, but are not limited to, suspension of Electronic Trading Privileges and/or blocking of future
purchases of a fund or all funds within a fund family) will be done in accordance with the directions we receive
from the fund.

Agreements to Share Information with Fund Companies. As required by Rule 22c-2 under the 1940 Act, we
have entered into information sharing agreements with each of the fund companies whose funds are offered through
the contract. Contract owner trading information is shared under these agreements as necessary for the fund
companies to monitor fund trading and our implementation of our Excessive Trading Policy. Under these
agreements, the Company is required to share information regarding contract owner transactions, including but not
limited to information regarding fund transfers initiated by you. In addition to information about contract owner
transactions, this information may include personal contract owner information, including names and social
security numbers or other tax identification numbers.

As a result of this information sharing, a fund company may direct us to restrict a contract owner’s transactions if
the fund determines that the contract owner has violated the fund’s excessive/frequent trading policy. This could
include the fund directing us to reject any allocations of purchase payments or contract value to the fund or all
funds within the fund family.

Dollar Cost Averaging
You may elect to participate in our dollar cost averaging (“DCA”) program through either the ING Liquid Assets
Portfolio subaccount, or a Fixed Interest Allocation, subject to availability, starting 30 days after the contract date.
These investment options serve as the source accounts from which we will, on a monthly basis, automatically
transfer a set dollar amount of money to the subaccounts you specify. There is no additional charge for dollar cost
averaging. Dollar cost averaging is not available with automatic rebalancing and may be subject to limited
availability with systematic withdrawals.

We may also offer DCA Fixed Interest Allocations for durations of 6 months and 1 year, subject to state
availability, exclusively for use with the dollar cost averaging program.

PRO.70600-13                                                                48

 

The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since
we transfer the same dollar amount to other subaccounts each month, more units of a subaccount are purchased if
the value of its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than
average value per unit may be achieved over the long term. However, we cannot guarantee this. When you elect the
dollar cost averaging program, you are continuously investing in securities regardless of fluctuating price levels.
You should consider your tolerance for investing through periods of fluctuating price levels.
 
Dollar cost averaging requires a minimum monthly transfer amount of $100. We will transfer all your money
allocated to that source account into the subaccount(s) you specify in equal payments over the relevant duration.
The last payment will include earnings accrued over the duration. If you make an additional premium payment into
a Fixed Interest Allocation subject to dollar cost averaging, the amount of your transfers under the dollar cost
averaging program remains the same, unless you instruct us to increase the transfer amount.
 
Transfers under the dollar cost averaging program are not subject to a Market Value Adjustment. However, if you
terminate the dollar cost averaging program for a DCA Fixed Interest Allocation and there is money remaining in
the DCA Fixed Interest Allocation, we will transfer the remaining money to the ING Liquid Assets Portfolio
subaccount. Such transfer will trigger a Market Value Adjustment if the transfer is made more than 30 days before
the maturity date of the DCA Fixed Interest Allocation.
 
If you do not specify the subaccounts to which the dollar amount of the source account is to be transferred, we will
transfer the money to the subaccounts in which you are invested on a proportional basis. The transfer date is the
same day each month as your contract date. If, on any transfer date, your contract value in a source account is equal
to or less than the amount you have elected to have transferred, the entire amount will be transferred and the
program will end. You may terminate the dollar cost averaging program at any time by sending satisfactory notice
to our Customer Service Center at least 7 days before the next transfer date. A Fixed Interest Allocation or DCA
Fixed Interest Allocation may not participate in the dollar cost averaging program and in systematic withdrawals at
the same time.
 
You are permitted to transfer contract value to a Restricted Fund, subject to the limitations described above in this
section and in “Appendix B–The Funds.” Compliance with the individual and aggregate Restricted Fund limits will
be reviewed when the dollar cost averaging program is established. Transfers under the dollar cost averaging
program must be within those limits. We will not review again your dollar cost averaging election for compliance
with the individual and aggregate limits for investment in the Restricted Funds except in the case of the transactions
described below.
·     Amount added to source account: If you add amounts to the source account which would increase the amount
to be transferred under the dollar cost averaging program, we will review the amounts to be transferred to
ensure that the individual and aggregate limits are not being exceeded. If such limits would be exceeded, we
will require that the dollar cost averaging transfer amounts be changed to ensure that the transfers are within
the limits based on the then current allocation of contract value to the Restricted Fund(s) and the then current
value of the amount designated to be transferred to that Restricted Fund(s).
· Additional premium paid: Up to the individual Restricted Fund percentage limit may be allocated to a
Restricted Fund. If more than the individual limit has been requested to be allocated to a Restricted Fund, we
will look at the aggregate limit, subtract the current allocation to Restricted Funds, and subtract the current
value of amounts to be transferred under the dollar cost averaging program to Restricted Funds. The excess,
if any, is the maximum that may be allocated pro-rata to Restricted Funds.
· Reallocation request is made while the dollar cost averaging program is active: If the reallocation would
increase the amount allocated to Restricted Funds, the maximum that may be so allocated is the individual
Restricted Fund percentage limit, less the current allocation to Restricted Funds and less the current value of
any remaining amounts to be transferred under the dollar cost averaging program to the Restricted Funds.
 
We may in the future offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or
from the dollar cost averaging program, stop offering DCA Fixed Interest Allocations or otherwise modify, suspend
or terminate this program. Of course, such changes will not affect any dollar cost averaging programs in operation
at the time.
 
PRO.70600-13 49

 

 

Automatic Rebalancing
If you have at least $10,000 of contract value invested in the subaccounts of the separate account, you may elect to
have your investments in the subaccounts automatically rebalanced. Transfers made pursuant to automatic
rebalancing do not count toward the 12 transfer limit on free transfers. Automatic rebalancing is not available if you
participate in dollar cost averaging. Automatic rebalancing will not take place during the free look period.
 
You are permitted to reallocate between Restricted and non-Restricted Funds, subject to the limitations described
above in this section and in “Appendix B–The Funds.” If the reallocation would increase the amount allocated to
the Restricted Funds, the maximum that may be so allocated is the individual Restricted Fund percentage limit, less
the current allocation to all Restricted Funds.
 
We will transfer funds under your contract on a quarterly, semi-annual, or annual calendar basis among the
subaccounts to maintain the investment blend of your selected subaccounts. The minimum size of any allocation
must be in full percentage points. Rebalancing does not affect any amounts that you have allocated to the Fixed
Account. The program may be used in conjunction with the systematic withdrawal option only if withdrawals are
taken pro-rata.
 
To participate in automatic rebalancing, send satisfactory notice to our Customer Service Center. We will begin the
program on the last business day of the period in which we receive the notice. You may cancel the program at any
time. The program will automatically terminate if you choose to reallocate your contract value among the
subaccounts or if you make an additional premium payment or partial withdrawal on other than a pro-rata basis.
Additional premium payments and partial withdrawals made on a pro-rata basis will not cause the automatic
rebalancing program to terminate.
 
DEATH BENEFIT CHOICES
 
Death Benefit during the Accumulation Phase
During the accumulation phase, a death benefit is payable when either the contract owner or the annuitant (when a
contract owner is not an individual) dies before the income phase start date. Assuming you are the contract owner,
your beneficiary will receive a death benefit unless the beneficiary is your surviving spouse and elects to continue
the contract. If there are joint owners and any owner dies, we will pay the surviving owner(s) the death benefit.
Upon receipt of due proof of the owner’s death in writing (i.e. a certified copy of the death certificate), we will
calculate the guaranteed death benefit based on the Benefit Option Package elected and in effect on the date of
death. If the guaranteed death benefit as of the date we receive due proof of death, minus the contract value, also as
of that date, is greater than zero, we will add such difference to the contract value. Such addition will be allocated
to the funds then available in the same proportion as the contract value in each available fund bears to the contract
value in all such funds. If there is no contract value in any fund then available, the addition will be allocated to the
ING Liquid Assets Portfolio subaccount, or its successor. Such addition will fulfill our obligations under the
Benefit Option Package, and all amounts will remain invested in the contract until we receive a request for payment
of the death benefit in good order.
 
We will pay the death benefit upon receipt at our Customer Service Center of due proof of the owner’s death and
any other information required by us to pay the death benefit or otherwise administer the claim, including election
of the manner in which the death benefit is to be paid.
 
If we do not receive a request to apply the death benefit proceeds to an income phase option, we will make a
single sum distribution. Subject to the conditions and requirements of state law, unless your beneficiary elects
otherwise, the distribution will generally be made into an interest bearing account backed by our general account.
This account is not FDIC insured and can be accessed by the beneficiary through a draftbook feature. The
beneficiary may access death benefit proceeds at any time without penalty. Interest paid on this account may be less
than interest paid on other settlement options, and the Company seeks to earn a profit on these accounts.
Beneficiaries should carefully review all settlement and payment options available under the contract and are
encouraged to consult with a financial professional or tax advisor before choosing a settlement or payment option.
We will generally distribute death benefit proceeds within 7 calendar days after our Customer Service Center has
received sufficient information to make the payment. For information on required distributions under federal
income tax laws, you should see “Required Distributions upon Death.” At the time of death benefit election, the
beneficiary may elect to receive the death benefit proceeds directly by check rather than through the draftbook
feature of the interest bearing account by notifying the Customer Service Center.
 
PRO.70600-13 50

 

 

You may select one of the option packages described below, which will determine the death benefit payable.
Option Packages I and II are available only if the contract owner and the annuitant are not more than 80 years old at
the time of purchase. Option Package III is only available if the contract owner and the annuitant are not more than
69 years old at the time of purchase. Option Package III is not available if you have selected a living benefit rider.
Prior to May 1, 2009, Option Package III was available if the contract owner and annuitant were not more than 80
years old, and was available even if a living benefit rider had been selected. A change in ownership of the contract
may affect the amount of the death benefit payable. Option Package II and III are not available with joint owners.

The death benefit may be subject to certain mandatory distribution rules required by federal tax law.

The death benefit depends upon the option package in effect on the date the contract owner dies.

The differences are summarized as follows:
  
    Option Package I Option Package II Option Package III
  Death Benefit on    
 Death of the
Owner:		 The greater of:
(1)  the Standard Death  
       Benefit; and
(2)  the contract value.		 The greatest of:
(1)  the Standard Death
       Benefit; and
(2)   the contract value;
        and
(3)   the Annual Ratchet
        death benefit.		 The greatest of:
(1) the Standard Death
       Benefit; and
(2) the contract value; 
      and
(3) the Annual Ratchet
      death benefit; and
(4) the 5% Roll-Up death
      benefit.

 

For purposes of calculating the 5% Rollup Death Benefit, the following investment options are designated as
“Special Funds”:
· Fixed Account
· Fixed Interest Division
· ING Global Bond Portfolio
· ING Liquid Assets Portfolio
· ING PIMCO Total Return Bond Portfolio
· ING PIMCO Total Return Portfolio

        
Please note that the ING PIMCO Total Return Portfolio is also a Special Fund, but closed to new allocations,
effective May 1, 2009.

For contracts issued before September 8, 2008, the following funds are also designated as Special Funds for
purposes of calculating the 5% Rollup Death Benefit:

ING Intermediate Bond Portfolio
ING Solution Income Portfolio
PIMCO VIT Real Return Portfolio

However, the ING Intermediate Bond Portfolio is not designated as a Special Fund for purposes of calculating the
5% Rollup Death Benefit if the ING LifePay Plus or ING Joint LifePay Plus rider has been selected. All amounts
invested in these funds through contracts issued before September 8, 2008 will be treated as Special Funds. All
amounts invested in these funds through contracts issued on or after September 8, 2008 will be treated as Covered
Funds.

No investment options are currently designated as Excluded Funds. The death benefit for Excluded Funds is the
contract value allocated to Excluded Funds and is tracked for transfer purposes only.

We may, with 30 days’ notice to you, designate any fund as a Special or Excluded Fund on existing contracts with
respect to new premiums added to such fund, with respect to new transfers to such fund and with respect to the
death benefits to which such designation applies. Selecting a Special or Excluded Fund may limit or reduce the
death benefit.

PRO.70600-13                                                                    51


For the period during which a portion of the contract value is allocated to a Special or Excluded Fund, we may at
our discretion reduce the mortality and expense risk charge attributable to that portion of the contract value. The
reduced mortality and expense risk charge will be applicable only during that period.
 
We use the Base Death Benefit to help determine the minimum death benefit payable under each of the death
benefits described below. You do not elect the Base Death Benefit. The Base Death Benefit is equal to the greater
of:
1. the contract value; or
2. the cash surrender value.
 
The Standard Death Benefit equals the greater of the Base Death Benefit or the sum of 1) and 2):
1. the contract value allocated to Excluded Funds; and
2. the Standard Minimum Guaranteed Death Benefit for amounts allocated to Covered or Special Funds.
 
The Standard Minimum Guaranteed Death Benefit equals:
1. premium payments allocated to Covered, Special and Excluded Funds, respectively;
2. reduced by a pro-rata adjustment for any withdrawal or transfer taken from Covered, Special and Excluded
Funds, respectively.
 
In the event of transfers from Excluded to Covered or Special Funds, the increase in the Minimum Guaranteed
Death Benefit for Covered Funds and/or Special Funds will equal the lesser of the reduction in the Minimum
Guaranteed Death Benefit for Excluded Funds and the contract value transferred. In the event of transfers from
Covered or Special Funds to Excluded Funds, the increase in the Minimum Guaranteed Death Benefit for Excluded
Funds will equal the reduction in the Minimum Guaranteed Death Benefit for Covered or Special Funds.
 
Currently, no investment options are designated as Special Funds for purposes of calculating the Standard Death
Benefit.
 
The 5% Roll-Up Death Benefit, equals the greater of:
1. the Standard Death Benefit; or
2. the sum of the contract value allocated to Excluded Funds and the 5% Roll-Up Minimum Guaranteed Death
Benefit for Covered Funds and Special Funds.
 
The 5% Roll-Up Minimum Guaranteed Death Benefit for Covered Funds, Special Funds and Excluded Funds
equals the lesser of:
1. premiums, adjusted for withdrawals and transfers, accumulated at 5% on a daily basis for Covered Funds or
Excluded Funds and 0% for Special Funds until the earlier of attainment of age 90 or reaching the cap (equal
to 3 times all premium payments, as reduced by adjustments for withdrawals) and thereafter at 0%, or
2. the cap.
 
A pro-rata adjustment to the 5% Roll-Up Minimum Guaranteed Death Benefit is made for any withdrawals. The
amount of the pro-rata adjustment for withdrawals will equal (a) divided by (b) times (c): where (a) is the contract
value of the withdrawal; (b) is the contract value immediately prior to the withdrawal; and (c) is the 5% Roll-Up
Minimum Guaranteed Death Benefit for Covered, Special and Excluded Funds, respectively, immediately prior to
the withdrawal.
 
Transfers from Excluded to Covered or Special Funds will reduce the 5% Roll-Up Minimum Guaranteed Death
Benefit for Excluded Funds on a pro-rata basis. The resulting increase in the 5% Roll-Up Minimum Guaranteed
Death Benefit for Covered or Special Funds will equal the lesser of the reduction in the 5% Roll-Up Minimum
Guaranteed Death Benefit for Excluded Funds and the contract value transferred. Transfers from Covered or
Special Funds to Excluded Funds will reduce the 5% Roll-Up Minimum Guaranteed Death Benefit for Covered or
Special Funds on a pro-rata basis. The resulting increase in the 5% Roll-Up Minimum Guaranteed Death Benefit
for Excluded Funds will equal the reduction in the 5% Roll-Up Minimum Guaranteed Death Benefit for Covered or
Special Funds, respectively.
 
Transfers from Special to Covered Funds will reduce the 5% Roll-Up Minimum Guaranteed Death Benefit for
Special Funds on a pro-rata basis. The resulting increase in the 5% Roll-Up Minimum Guaranteed Death Benefit
for Covered Funds will equal the reduction in the 5% Roll-Up Minimum Guaranteed Death Benefit for Special
Funds.
 
PRO.70600-13 52

 

 

Transfers from Covered to Special Funds will reduce the 5% Roll-Up Minimum Guaranteed Death Benefit for
Covered Funds on a pro-rata basis. The resulting increase in the 5% Roll-Up Minimum Guaranteed Death Benefit
for Special Funds will equal the reduction in the 5% Roll-Up Minimum Guaranteed Death Benefit for Covered
Funds.
 
The calculation of the cap is not affected by allocation to Covered, Special or Excluded Funds.
 
The Annual Ratchet Enhanced Death Benefit equals the greater of:
1. the Standard Death Benefit; or
2.
 the sum of the contract value allocated to Excluded Funds and the Annual Ratchet Minimum Guaranteed
Death Benefit allocated to Covered or Special Funds.
 
The Annual Ratchet Minimum Guaranteed Death Benefit equals:
1. the initial premium allocated at issue to Covered, Special or Excluded Funds, respectively;
2.
 increased dollar for dollar by any premium allocated after issue to Covered, Special or Excluded Funds,
respectively;
3. adjusted on each anniversary that occurs on or prior to attainment of age 90 to the greater of the Annual
Ratchet Minimum Guaranteed Death Benefit for Covered, Special or Excluded Funds from the prior
anniversary (adjusted for new premiums, partial withdrawals and transfers between Covered, Special and
Excluded Funds) and the current contract value. A pro-rata adjustment to the Annual Ratchet Minimum
Guaranteed Death Benefit is made for any withdrawals. The amount of the pro-rata adjustment for
withdrawals will equal (a) divided by (b) times (c): where (a) is the contract value of the withdrawal; (b) is
the contract value immediately prior to the withdrawal; and (c) is the Annual Ratchet Minimum Guaranteed
Death Benefit for Covered, Special and Excluded Funds, respectively, immediately prior to the withdrawal.
Please see Appendix F for examples of the pro-rata withdrawal adjustment for withdrawals.
 
Transfers from Excluded to Covered or Special Funds will reduce the Annual Ratchet Minimum Guaranteed Death
Benefit for Excluded Funds on a pro-rata basis. The resulting increase in the Annual Ratchet Minimum Guaranteed
Death Benefit for Covered or Special Funds will equal the lesser of the reduction in the Annual Ratchet Minimum
Guaranteed Death Benefit for Excluded Funds and the contract value transferred.
 
Transfers from Covered or Special Funds to Excluded Funds will reduce the Annual Ratchet Minimum Guaranteed
Death Benefit for Covered or Special Funds on a pro-rata basis. The resulting increase in the Annual Ratchet
Minimum Guaranteed Death Benefit for Excluded Funds will equal the reduction in the Annual Ratchet Minimum
Guaranteed Death Benefit for Covered or Special Funds, respectively.
 
Currently, no investment options are designated as Special Funds for purposes of calculating the Annual Ratchet
Death Benefit.
 
Examples of how the designation of certain funds as Special Funds affects the calculation of the 5% Roll-up Death
Benefit is included in Appendix G to this prospectus.
 
Transfers Between Option Packages. You may transfer from one option package to another on each contract
anniversary. A written request for such transfer must be received at our Customer Service Center within 60 days
prior to the contract anniversary. Transfers to Option Packages I and II are not permitted after you attain age 80.
Transfers to Option Package III are not permitted if the contract owner or annuitant have attained age 69, or if an
optional living benefit rider has been purchased.
 
If you transfer from Option I to Option II or Option III, the minimum guaranteed death benefit for Special and Non-
Special Funds will equal the contract value for Special and Non-Special Funds, respectively, on the effective date
of the transfer. On a transfer to Option Package III, the then current roll-up cap will be allocated to Special and
Non-Special Funds in the same percentage as the allocation of contract value on the effective date of the transfer.
A change of owner may cause an option package transfer on other than a contract anniversary.
 
Death Benefit During the Income Phase
If any contract owner or the annuitant dies after the income phase start date, we will pay the beneficiary any certain
benefit remaining under the annuity in effect at the time.
 
PRO.70600-13 53

 

 

Continuation After Death–Spouse
If at the contract owner’s death, the surviving spouse of the deceased contract owner is the beneficiary and such
surviving spouse elects to continue the contract as his or her own the following will apply:

If the guaranteed death benefit as of the date we receive due proof of death, minus the contract value also on that
date, is greater than zero, we will add such difference to the contract value. We will allocate such addition to the
variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is
no contract value in any subaccount, the addition will be allocated to the ING Liquid Assets Portfolio subaccount,
or its successor. Such addition to the contract value will not affect the guaranteed death benefit. If the guaranteed
death benefit is less than or equal to the contract value, the contract value will not change.

The death benefits under each of the available options will continue based on the surviving spouse’s age on the date
that ownership changes. At subsequent surrender, any surrender charge applicable to premiums paid prior to the
date we receive due proof of death of the contract owner will be waived. Any premiums paid later will be subject to
any applicable surrender charge.

Any addition to contract value, as described above, is available only to the spouse of the owner as of the date of
death of the owner if such spouse under the provisions of the contract elects to continue the contract as his or her
own.

Continuation After Death–Non Spouse
If the beneficiary is not the spouse of the owner, the contract may continue in force subject to the required
distribution rules of the Tax Code.

If the guaranteed death benefit as of the date we receive due proof of death, minus the contract value also on that
date, is greater than zero, we will add such difference to the contract value. We will allocate such addition to the
variable subaccounts in proportion to the contract value in the subaccounts, unless you direct otherwise. If there is
no contract value in any subaccount, the addition will be allocated to the ING Liquid Assets Portfolio subaccount,
or its successor.

The death benefit will then terminate. At subsequent surrender, any surrender charge applicable to premiums paid
prior to the date we receive due proof of death of the contract owner will be waived. No additional premium
payments may be made.

Required Distributions Upon Contract Owner’s Death
We will not allow any payment of benefits provided under a nonqualified contract which do not satisfy the
requirements of Section 72(s) of the Tax Code.

If any contract owner of a nonqualified contract dies before the income phase payment start date, the death
benefit payable to the beneficiary (calculated as described under “Death Benefit Choices” in this prospectus) will
be distributed as follows: (a) the death benefit must be completely distributed within 5 years of the contract owner’s
date of death; or (b) the beneficiary may elect, within the 1-year period after the contract owner’s date of death, to
receive the death benefit in the form of an annuity from us, provided that (i) such annuity is distributed in
substantially equal installments over the life of such beneficiary or over a period not extending beyond the life
expectancy of such beneficiary; and (ii) such distributions begin no later than 1 year after the contract owner’s date
of death.

Notwithstanding (a) and (b) above, if the sole contract owner’s beneficiary is the deceased owner’s surviving
spouse, then such spouse may elect to continue the contract under the same terms as before the contract owner’s
death. Upon receipt of such election from the spouse at our Customer Service Center: (1) all rights of the spouse as
contract owner’s beneficiary under the contract in effect prior to such election will cease; (2) the spouse will
become the owner of the contract and will also be treated as the contingent annuitant, if none has been named and
only if the deceased owner was the annuitant; and (3) all rights and privileges granted by the contract or allowed by
the Company will belong to the spouse as contract owner of the contract. This election will be deemed to have
been made by the spouse if such spouse makes a premium payment to the contract or fails to make a timely election
as described in this paragraph. If the owner’s beneficiary is a non-spouse, the distribution provisions described in
subparagraphs (a) and (b) above, will apply even if the annuitant and/or contingent annuitant are alive at the time of
the contract owner’s death.

PRO.70600-13                                                                        54

 

Subject to availability, and our then current rules, a spousal or non-spousal beneficiary may elect to receive death
benefits as payments over the life expectancy of the beneficiary (“stretch”). “Stretch” payments will be subject to
the same limitations as systematic withdrawals, and nonqualified “stretch” payments will be reported on the same
basis as other systematic withdrawals.
 
If we do not receive an election from a non-spouse owner’s beneficiary within the 1-year period after the contract
owner’s date of death, then we will pay the death benefit to the owner’s beneficiary in a cash payment within five
years from date of death. We will determine the death benefit as of the date we receive proof of death. We will
make payment of the proceeds on or before the end of the 5-year period starting on the owner’s date of death. Such
cash payment will be in full settlement of all our liability under the contract.
 
If a contract owner dies after the income phase payment start date, we will continue to distribute any benefit
payable at least as rapidly as under the annuity option then in effect. All of the contract owner’s rights granted
under the contract or allowed by us will pass to the contract owner’s beneficiary.
 
If a contract has joint owners we will consider the date of death of the first joint owner as the death of the contract
owner and the surviving joint owner will become the beneficiary of the contract. If any contract owner is not an
individual, the death of an annuitant shall be treated as the death of the owner.
 
Effect of ING LifePay Plus and ING Joint LifePay Plus Riders on Death Benefit. Please see “ING LifePay
Plus Minimum Guaranteed Withdrawal Benefit Rider–Death of Owner or Annuitant,” “ING Joint LifePay Plus
Minimum Guaranteed Withdrawal Benefit Rider–Death of Owner or Annuitant,” “ING LifePay Plus Minimum
Guaranteed Withdrawal Benefit Rider–Effect of ING LifePay Plus Rider on Death Benefit” and “ING Joint
LifePay Plus Minimum Guaranteed Withdrawal Benefit Rider–Effect of ING Joint LifePay Plus Rider on Death
Benefit” for information about the effect of the ING LifePay Plus or the ING Joint LifePay Plus rider on the death
benefit under your contract and a description of the impact of the owner’s or annuitant’s death on the ING LifePay
Plus or the ING Joint LifePay Plus rider.
 
THE INCOME PHASE
 
During the income phase, you stop contributing dollars to your contract and start receiving payments from your
accumulated contract value. Living benefit riders automatically terminate when the income phase of your contract
begins.
 
Initiating Payments. At least 30 days prior to the date you want to start receiving payments, you must notify us in
writing of all of the following:
· Payment start date;
· Income phase payment option (see the income phase payment options table in this section);
· Payment frequency (i.e., monthly, quarterly, semi-annually or annually);
·    Choice of fixed, and, if available at the time an income phase payment option is selected, variable or a
combination of both fixed and variable payments; and
· Selection of an assumed net investment rate (only if variable payments are elected).
 
Your contract will continue in the accumulation phase until you properly start income phase payments. Once an
income phase payment option is selected, it may not be changed. Our current income phase payment options
provide only for fixed payments.
 
What Affects Payment Amounts? Some of the factors that may affect the amount of your income phase payments
include: your age; gender; contract value; the income phase payment option selected; the number of guaranteed
payments (if any) selected; whether you select fixed, variable or a combination of both fixed and variable
payments; and, for variable payments, the assumed net investment rate selected. Variable payments are not
currently available.
 
Fixed Payments. Amounts funding fixed income phase payments will be held in the Company’s general account.
The amount of fixed payments does not vary with investment performance over time.
 
PRO.70600-13 55

 

 

Variable Payments. Amounts funding your variable income phase payments will be held in the subaccount(s) you
select. Not all subaccounts available during the accumulation phase may be available during the income phase.
Payment amounts will vary depending upon the performance of the subaccounts you select. For variable income
phase payments, you must select an assumed net investment rate. Variable payments are not currently available.
 
Assumed Net Investment Rate. If you select variable income phase payments, you must also select an assumed
net investment rate of either 6%, 5% or 3.5%. If you select a 6% rate, for example, your first income phase payment
will be higher, but subsequent payments will increase only if the investment performance of the subaccounts you
selected is greater than 6% annually, after deduction of fees. Payment amounts will decline if the investment
performance is less than 6%, after deduction of fees.
 
If you select a 3.5% rate, for example, your first income phase payment will be lower and subsequent payments will
increase more rapidly or decline more slowly depending upon changes to the net investment rate of the subaccounts
you selected. For more information about selecting an assumed net investment rate, call us for a copy of the SAI.
 
Minimum Payment Amounts. The income phase payment option you select must result in:
·      A first income phase payment of at least $50; and  
· Total yearly income phase payments of at least $250.  
 
If your contract value is too low to meet these minimum payment amounts, you will receive one lump-sum
payment. Unless prohibited by law, we reserve the right to increase the minimum payment amount based on
increases reflected in the Consumer Price Index-Urban (CPI-U) since July 1, 1993.
 
Restrictions on Start Dates and the Duration of Payments. Income phase payments may not begin during the
first contract year, or, unless we consent, later than the first day of the month following the annuitant’s 90th
birthday.
 
Income phase payments will not begin until you have selected an income phase payment option. Surrender charges
may apply if income phase payments begin within the first five contract years. Failure to select an income phase
payment option by the annuitant’s 90th birthday may have adverse tax consequences. You should consult with a
qualified tax adviser if you are considering delaying the selection of an income phase payment option before the
later of these dates.
 
Income phase payments may not extend beyond:  
1. The life of the annuitant;  
2. The joint lives of the annuitant and beneficiary;  
3. A guaranteed period greater than the annuitant’s life expectancy; or
4. A guaranteed period greater than the joint life expectancies of the annuitant and beneficiary.
 
When income phase payments start, the age of the annuitant plus the number of years for which payments are
guaranteed may not exceed 100.
 
If income phase payments start when the annuitant is at an advanced age, such as over 90, it is possible that the
contract will not be considered an annuity for federal tax purposes.
 
See “Federal Tax Considerations” for further discussion of rules relating to income phase payments.
 
Charges Deducted  
 
· If variable income phase payments are selected, we make a daily deduction for mortality and expense risks
from amounts held in the subaccounts. Therefore, if you choose variable income phase payments and a
nonlifetime income phase payment option, we still make this deduction from the subaccounts you select, even
though we no longer assume any mortality risks. The amount of this charge, on an annual basis, is equal to
1.50% of amounts invested in the subaccounts. See “Fees and Expenses.”
· There is currently no administrative expense charge during the income phase. We reserve the right, however, to
charge an administrative expense charge of up to 0.15% during the income phase. If imposed, we deduct this
charge daily from the subaccounts corresponding to the funds you select. If we are imposing this charge when
you enter the income phase, the charge will apply to you during the entire income phase. See “Fees and
Expenses.”
 
 
PRO.70600-13 56

 

 

Death Benefit during the Income Phase. The death benefits that may be available to a beneficiary are outlined in
the income phase payment options table below. If we do not receive a request to apply the death benefit proceeds to
an annuity option, we will make a single sum distribution. Unless you elect otherwise, the distribution will
generally be made into an interest bearing account, backed by our general account. This account is not FDIC
insured and can be accessed by the beneficiary through a draftbook feature. The beneficiary may access death
benefit proceeds at any time without penalty. We will generally distribute death benefit proceeds within 7 days after
our Customer Service Center has received sufficient information to make the payment. At the time of death benefit
election, the beneficiary may elect to receive the death benefit proceeds directly by check rather than through the
draftbook feature of the interest bearing account by notifying the Customer Service Center.

If continuing income phase payments are elected, the beneficiary may not elect to receive a lump-sum at a future
date unless the income phase payment option specifically allows a withdrawal right. We will calculate the value of
any death benefit at the next valuation after we receive proof of death and a request for payment. Such value will be
reduced by any payments made after the date of death.

Beneficiary Rights. A beneficiary’s right to elect an income phase payment option or receive a lump-sum payment
may have been restricted by the contract owner. If so, such rights or options will not be available to the beneficiary.

Partial Entry into the Income Phase. You may elect an income phase payment option for a portion of your
contract value, while leaving the remaining portion invested in the accumulation phase. Whether the Tax Code
considers such payments taxable as income phase payments or as withdrawals is currently unclear; therefore, you
should consult with a qualified tax adviser before electing this option. The same or different income phase payment
option may be selected for the portion left invested in the accumulation phase.

Taxation. To avoid certain tax penalties, you or your beneficiary must meet the distribution rules imposed by the
Tax Code. Additionally, when selecting an income phase payment option, the Tax Code requires that your expected
payments will not exceed certain durations. See “Federal Tax Considerations”.

Payment Options
The following table lists the income phase payment options and accompanying death benefits available during the
income phase. We may offer additional income phase payment options under the contract from time to time. Once
income phase payments begin, the income phase payment option selected may not be changed.

PRO.70600-13                                                                        57

 

Terms to understand:
 
Annuitant(s): The person(s) on whose life expectancy(ies) the income phase payments are based.
 
Beneficiary(ies): The person(s) or entity(ies) entitled to receive a death benefit, if any, under the income phase
payment option selected.
 
Lifetime Income Phase Payment Options
Life Income Length of Payments: For as long as the annuitant lives. It is possible that only one
payment will be made if the annuitant dies prior to the second payment’s due date.
Death Benefit-None: All payments end upon the annuitant’s death. 
Life Income-
Guaranteed
Payments*		 Length of Payments: For as long as the annuitant lives, with payments guaranteed for
your choice of 5 to 30 years or as otherwise specified in the contract.
Death Benefit-Payment to the Beneficiary: If the annuitant dies before we have made
all the guaranteed payments, we will continue to pay the beneficiary the remaining
payments.
Life Income-
Two Lives		 Length of Payments: For as long as either annuitant lives. It is possible that only one
payment will be made if both annuitants die before the second payment’s due date.
Continuing Payments: When you select this option you choose for:
a) 100%, 66⅔% or 50% of the payment to continue to the surviving annuitant after the
first death; or
b) 100% of the payment to continue to the annuitant on the second annuitant’s death, and
50% of the payment to continue to the second annuitant on the annuitant’s death.
Death Benefit-None: All payments end upon the death of both annuitants.
Life Income-
Two Lives
Guaranteed
Payments*		 Length of Payments: For as long as either annuitant lives, with payments guaranteed
from 5 to 30 years or as otherwise specified in the contract.
Continuing Payments: 100% of the payment to continue to the surviving annuitant after
the first death.
Death Benefit-Payment to the Beneficiary: If both annuitants die before we have made
all the guaranteed payments, we will continue to pay the beneficiary the remaining
payments.
Life Income- Cash
Refund Option
(limited availability-
fixed payments
only)		 Length of Payments: For as long as the annuitant lives.
Death Benefit-Payment to the Beneficiary: Following the annuitant’s death, we will pay
a lump-sum payment equal to the amount originally applied to the income phase payment
option (less any applicable premium tax) and less the total amount of income payments
paid.
Life Income-Two
Lives-Cash Refund
Option (limited
availability-fixed
payments only)		 Length of Payments: For as long as either annuitant lives.
Continuing Payments: 100% of the payment to continue after the first death.
Death Benefit-Payment to the Beneficiary: When both annuitants die we will pay a
lump-sum payment equal to the amount applied to the income phase payment option (less
any applicable premium tax) and less the total amount of income payments paid.
Nonlifetime Income Phase Payment Option
Nonlifetime-
Guaranteed
Payments*		 Length of Payments: You may select payments for 5 to 30 years. In certain cases a lump-
sum payment may be requested at any time (see below).
Death Benefit-Payment to the Beneficiary: If the annuitant dies before we make all the
guaranteed payments, we will continue to pay the beneficiary the remaining payments.
 
Lump-Sum Payment: If the “Nonlifetime-Guaranteed Payments” option is elected with variable payments, you
may request at any time that all or a portion of the present value of the remaining payments be paid in one lump-
sum. A lump-sum elected before three or five years of income phase payments have been completed (as specified
by the contract) will be treated as a withdrawal during the accumulation phase and if the election is made during
an early withdrawal charge period, we will charge the applicable early withdrawal charge. Lump-sum payments
will be sent within seven calendar days after we receive the request for payment in good order at our Customer
Service Center. We do not currently offer variable payouts.
 
*Guaranteed period payments may not extend beyond the shorter of your life expectancy or until your age 95.
           
PRO.70600-13                                                       58

 


OTHER CONTRACT PROVISIONS
 
Reports to Contract Owners
We confirm purchase, transfer and withdrawal transactions usually within 5 business days of processing. We may
also send you a quarterly report within 31 days after the end of each calendar quarter. The report will show the
contract value, cash surrender value, and the death benefit as of the end of the calendar quarter. The report will also
show the allocation of your contract value and reflects the amounts deducted from or added to the contract value.
You have 30 days to notify our Customer Service Center of any errors or discrepancies. We will notify you when
shareholder reports of the investment portfolios in which the separate account invests are available. We will also
send any other reports, notices or documents we are required by law to furnish to you.
 
Suspension of Payments
The Company reserves the right to suspend or postpone the date of any payment or determination of values, beyond
the 7 permitted days, on any business day; (1) when the NYSE is closed; (2) when trading on the NYSE is
restricted; (3) when an emergency exists as determined by the SEC so that the sale of securities held in the separate
account may not reasonably occur or so that the Company may not reasonably determine the value of the separate
account’s net assets; or (4) during any other period when the SEC so permits for the protection of security holders.
We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months.
 
In Case of Errors in Your Application
If an age or gender given in the application or enrollment form is misstated, the amounts payable or benefits
provided by the contract shall be those that the premium payment would have bought at the correct age or sex.
 
Assigning the Contract as Collateral
You may assign a non-qualified contract as collateral security for a loan but you should understand that your rights
and any beneficiary’s rights may be subject to the terms of the assignment. An assignment likely has federal tax
consequences. You should consult a tax adviser for tax advice. You must give us satisfactory written notice at our
Customer Service Center in order to make or release an assignment. We are not responsible for the validity of any
assignment.
 
Contract Changes–Applicable Tax Law
We have the right to make changes in the contract to continue to qualify the contract as an annuity under applicable
federal tax law. You will be given advance notice of such changes.
 
Free Look
You may cancel your contract within your 10-day free look period. We deem the free look period to expire 15 days
after we mail the contract to you. Some states may require a longer free look period. To cancel, you need to send
your contract to our Customer Service Center or to the agent from whom you purchased it. We will refund the
contract value. For purposes of the refund during the free look period, (i) we adjust your contract value for any
Market Value Adjustment (if you have invested in the Fixed Account), and (ii) then we include a refund of any
charges deducted from your contract value. Because of the market risks associated with investing in the funds and
the potential positive or negative effect of the market value adjustment, the contract value returned may be greater
or less than the premium payment you paid. In the case of IRA’s cancelled within 7 days of receipt of the contract
and in some states, we are required to return to you the amount of the paid premium (rather than the contract value)
in which case you will not be subject to investment risk during the free look period. In these circumstances, your
premiums designated for investment in the subaccounts may be allocated during the free look period to a
subaccount specially designated by the Company for this purpose (currently, the ING Liquid Assets Portfolio
subaccount). We may, in our discretion, require that premiums designated for investment in the subaccounts from
all other states as well as premiums designated for a Fixed Interest Allocation be allocated to the specially
designated subaccount during the free look period. Your free look rights depend on the laws of the state in which
you purchase your contract. Your contract is void as of the day we receive your contract and cancellation request.
We determine your contract value at the close of business on the day we receive your written request. If you keep
your contract after the free look period and the investment is allocated to a subaccount specially designated by the
Company, we will put your money in the subaccount(s) chosen by you, based on the accumulation unit value next
computed for each subaccount, and/or in the Fixed Interest Allocation chosen by you.
 
PRO.70600-13 59

 

 

Special Arrangements
We may reduce or waive any contract, rider, or benefit fees or charges for certain group or sponsored arrangements,
under special programs, and for certain employees, agents, and related persons of our parent corporation and its
affiliates. We reduce or waive these items based on expected economies, and the variations are based on differences
in costs or services.
 
CONTRACT DISTRIBUTION
 
Selling the Contract
Our affiliate, Directed Services LLC, 1475 Dunwoody Drive, West Chester, PA 19380 is the principal underwriter
and distributor of the contract as well as for other Company contracts. Directed Services LLC, a Delaware limited
liability company, is registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934, and is a
member of the Financial Industry Regulatory Authority (“FINRA”).
 
Directed Services LLC does not retain any commissions or compensation paid to it by the Company for contract
sales. Directed Services LLC enters into selling agreements with affiliated and unaffiliated broker-dealers to sell the
contracts through their registered representatives who are licensed to sell securities and variable insurance products
(“selling firms”). Selling firms are also registered with the SEC and are FINRA member firms.
 
ING Financial Partners, Inc. is affiliated with the Company and has entered into a selling agreement with
Directed Services LLC for the sale of our variable annuity contracts:
 
Directed Services LLC pays selling firms compensation for the promotion and sale of the contracts. Registered
representatives of the selling firms who solicit sales of the contracts typically receive a portion of the compensation
paid by Directed Services LLC to the selling firm in the form of commissions or other compensation, depending on
the agreement between the selling firm and the registered representative. This compensation, as well as other
incentives or payments, is not paid directly by contract owners or the Separate Account. We intend to recoup this
compensation and other sales expenses paid to selling firms through fees and charges imposed under the contracts.
 
Directed Services LLC pays selling firms for contract sales according to one or more schedules. This
compensation is generally based on a percentage of premium payments. Selling firms may receive commissions of
up to 3.50% of premium payments. In addition, selling firms may receive ongoing annual compensation of up to
1.00% of all, or a portion, of values of contracts sold through the firm. Individual representatives may receive all or
a portion of compensation paid to their selling firm, depending on the firm’s practices. Commissions and annual
compensation, when combined, could exceed 3.50% of total premium payments. These other promotional
incentives or payments may not be offered to all distributors, and may be limited only to ING Financial Advisers,
LLC and other distributors affiliated with the Company.
 
Directed Services LLC has special compensation arrangements with certain selling firms based on those firms’
aggregate or anticipated sales of the contracts or other criteria. These arrangements may include commission
specials, in which additional commissions may be paid in connection with premium payments received for a
limited time period, within the maximum 3.50% commission rate noted above. These special compensation
arrangements will not be offered to all selling firms, and the terms of such arrangements may differ among selling
firms based on various factors. These special compensation arrangements may be limited only to ING Financial
Advisers, LLC and other distributors affiliated with the Company. Any such compensation payable to a selling firm
will not result in any additional direct charge to you by us.
 
PRO.70600-13 60

 

 

In addition to the direct cash compensation for sales of contracts described above, Directed Services LLC may also
pay selling firms additional compensation or reimbursement of expenses for their efforts in selling the contracts to
you and other customers. These amounts may include:
· Marketing/distribution allowances which may be based on the percentages of premium received, the aggregate
commissions paid and/or the aggregate assets held in relation to certain types of designated insurance products
issued by the Company and/or its affiliates during the year;
· Loans or advances of commissions in anticipation of future receipt of premiums (a form of lending to
agents/registered representatives). These loans may have advantageous terms such as reduction or elimination
of the interest charged on the loan and/or forgiveness of the principal amount of the loan, which terms may be
conditioned on sales;
· Education and training allowances to facilitate our attendance at certain educational and training meetings to
provide information and training about our products. We also hold training programs from time to time at our
expense;
· Sponsorship payments or reimbursements for broker-dealers to use in sales contests and/or meetings for their
agents/registered representatives who sell our products. We do not hold contests based solely on the sales of
this product;
· Certain overrides and other benefits that may include cash compensation based on the amount of earned
commissions, agent/representative recruiting or other activities that promote the sale of policies; and
· Additional cash or noncash compensation and reimbursements permissible under existing law. This may
include, but is not limited to, cash incentives, merchandise, trips, occasional entertainment, meals and tickets to
sporting events, client appreciation events, business and educational enhancement items, payment for travel
expenses (including meals and lodging) to pre-approved training and education seminars, and payment for
advertising and sales campaigns.
 
We may pay commissions, dealer concessions, wholesaling fees, overrides, bonuses, other allowances and benefits
and the costs of all other incentives or training programs from our resources, which include the fees and charges
imposed under the Contract.
 
The following is a list of the top 25 selling firms that, during 2012 received the most compensation, in the
aggregate, from us in connection with the sale of registered annuity contracts issued by us, ranked by total dollars
received:
 
1. Morgan Stanley Smith Barney LLC 14. First Allied Securities Inc.
2. LPL Financial Corporation 15. Woodbury Financial Services Inc.
3. Merrill Lynch, Pierce, Fenner & Smith Incorporated 16. Commonwealth Financial Network Inc.
4. ING Financial Partners Inc. 17. SII Investments Inc. WI
5. Wells Fargo Advisors, LLC 18. ING Financial Partners, Inc. – CAREER
6. Wells Fargo Advisors, LLC (Bank Channel) 19. Wells Fargo Advisors Financial Network, LLC
7. UBS Financial Services Inc. 20. Ameriprise Financial Services Inc.
8. Raymond James Financial Services Inc. 21. Centaurus Financial Inc.
9. ING Financial Partners, Inc. – Retirement Channels 22. Cetera Investment Services, LLC
10. National Planning Corporation 23. Raymond James and Associates Inc.
11. Cetera Advisors LLC 24. Wells Fargo SEC, LLC
12. Cetera Advisor Networks LLC 25. Cambridge Investment Research Inc.
13. Securities America Inc.    
   
Directed Services LLC may also compensate wholesalers/distributors, and their sales management personnel, for
contract sales within the wholesale/distribution channel. This compensation may be based on a percentage of
premium payments and/or a percentage of contract values. Directed Services LLC may, at its discretion, pay
additional cash compensation to wholesalers/distributors for sales by certain broker-dealers or “focus firms.”
We do not pay any additional compensation on the sale or exercise of any of the contract’s optional benefit riders
offered in this prospectus.
 
PRO.70600-13 61

 

 

This is a general discussion of the types and levels of compensation paid by us for sales of our variable annuity
contracts. It is important for you to know that the payment of volume- or sales-based compensation to a selling firm
or registered representative may provide that registered representative a financial incentive to promote our contracts
over those of another company, and may also provide a financial incentive to promote one of our contracts over
another.
 
OTHER INFORMATION
 
Loans. We do not currently permit loans under Section 403(b) contracts that are subject to the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”). Loans may be available if you purchased your
contract in connection with a non-ERISA 403(b) plan. If your contract was issued in connection with a 403(b) plan
and the terms of your plan permit, you may take a loan, using your surrender value as collateral for the loan. Loans
are subject to the terms of the contract, your 403(b) plan, the Tax Code and other federal and state regulations. The
amount and number of loans outstanding at any one time under your tax-deferred annuity are limited, whether
under our contracts or those of other carriers. Tax-deferred annuity loans are not available for contracts issued in
the Commonwealth of Massachusetts. We may modify the terms of a loan to comply with changes in applicable
law. Various mandatory repayment requirements apply to loans, and failure to repay generally will result in income
to you and the potential application of tax penalties. We urge you to consult with a qualified tax adviser prior to
effecting a loan transaction under your contract. We may apply additional restrictions or limitations on loans, and
you must make loan requests in accordance with our administrative practices and loan requests procedures in effect
at the time you submit your request. Read the terms of the loan agreement before submitting any request. We
reserve the right not to grant a loan request if the participant has an outstanding loan in default.
 
Any outstanding loan balance impacts the following:
·    Withdrawal and Charges: We determine amounts available for maximum withdrawal amounts, free partial
withdrawals, systematic withdrawals and waiver of administrative charges by reducing the otherwise
applicable amounts by the amount of any outstanding loan balance.
· Death Benefits, Annuitization and Surrenders: We deduct the outstanding loan balance from any amounts
otherwise payable and in determining the amount available for annuitization.
 
The portion of any contract value used to pay off an outstanding loan balance will reduce the ING LifePay Plus
Base, ING Joint LifePay Plus Base or Maximum Annual Withdrawal as applicable. We do not recommend the ING
LifePay Plus or ING Joint LifePay Plus rider if loans are contemplated.
 
Voting Rights
We will vote the shares of a fund owned by the separate account according to your instructions. However, if the
1940 Act or any related regulations should change, or if interpretations of it or related regulations should change,
and we decide that we are permitted to vote the shares of a fund in our own right, we may decide to do so.
 
We determine the number of shares that you have in a subaccount by dividing the contract’s contract value in that
subaccount by the net asset value of one share of the fund in which a subaccount invests. We count fractional votes.
We will determine the number of shares you can instruct us to vote 180 days or less before a fund shareholder
meeting. We will ask you for voting instructions by mail at least 10 days before the meeting. If we do not receive
your instructions in time, we will vote the shares in the same proportion as the instructions received from all
contracts in that subaccount. We will also vote shares we hold in the separate account which are not attributable to
contract owners in the same proportion.
 
State Regulation
We are regulated by the Insurance Department of the State of Iowa. We are also subject to the insurance laws and
regulations of all jurisdictions where we do business. The variable contract offered by this prospectus has been
approved where required by those jurisdictions. We are required to submit annual statements of our operations,
including financial statements, to the Insurance Departments of the various jurisdictions in which we do business to
determine solvency and compliance with state insurance laws and regulations.
 
PRO.70600-13 62

 

 

Legal Proceedings
 
We are not aware of any pending legal proceedings that are likely to have a material adverse effect upon the
Company’s ability to meet its obligations under the contract, Directed Services LLC ability to distribute the
contract or upon the separate account.
 
·    Litigation. Notwithstanding the foregoing, the Company and/or Directed Services LLC, is a defendant in a
number of litigation matters arising from the conduct of its business, both in the ordinary course and otherwise.
In some of these matters, claimants seek to recover very large or indeterminate amounts, including
compensatory, punitive, treble and exemplary damages. Certain claims are asserted as class actions. Modern
pleading practice in the U.S. permits considerable variation in the assertion of monetary damages and other
relief. The variability in pleading requirements and past experience demonstrates that the monetary and other
relief that may be requested in a lawsuit or claim oftentimes bears little relevance to the merits or potential
value of a claim. Due to the uncertainties of litigation, the outcome of a litigation matter and the amount or
range of potential loss is difficult to forecast and a determination of potential losses requires significant
management judgment.
 
· Regulatory Matters. As with other financial services companies, the Company and its affiliates, including
Directed Services LLC, periodically receive informal and formal requests for information from various state
and federal governmental agencies and self-regulatory organizations in connection with inquiries and
investigations of the products and practices of the Company or the financial services industry. It is the practice
of the Company to cooperate fully in these matters. Regulatory investigations, exams, inquiries and audits
could result in regulatory action against the Company or subject the Company to settlement payments, fines,
penalties and other financial consequences, as well as changes to the Company’s policies and procedures.
 
It is not possible to predict the ultimate outcome for all pending litigation and regulatory matters and given the
large and indeterminate amounts sought and the inherent unpredictability of such matters, it is possible that an
adverse outcome in certain litigation or regulatory matters could, from time to time, have a material adverse effect
upon the Company’s results of operations or cash flows in a particular quarterly or annual period.
  
FEDERAL TAX CONSIDERATIONS
 
Introduction
The contract described in this prospectus is designed to be treated as an annuity for U.S. federal income tax
purposes. This section discusses our understanding of current federal income tax laws affecting the contract. The
U.S. federal income tax treatment of the contract is complex and sometimes uncertain. You should keep the
following in mind when reading it:
· Your tax position (or the tax position of the designated beneficiary, as applicable) may influence the federal
taxation of amounts held or paid out under the contract;
· Tax laws change. It is possible that a change in the future could affect contracts issued in the past, including
the contract described in this prospectus;
· This section addresses some, but not all, applicable federal income tax rules and does not discuss federal estate
and gift tax implications, state and local taxes, or any other tax provisions; and
· No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary
to any of those set forth below.
 
We do not intend this information to be tax advice. For advice about the effect of federal income tax laws affecting
the contract, state tax laws or any other tax laws affecting the contract or any transactions involving the contract,
consult a qualified tax adviser. No attempt is made to provide more than general information about the use of the
contract with tax-qualified retirement arrangements.
 
Types of Contracts: Nonqualified or Qualified
The contract described in this prospectus is available for purchase on a non-tax-qualified basis (“nonqualified
contracts”) or purchased on a tax-qualified basis (“qualified contracts”).
 
PRO.70600-13 63

 

 

Nonqualified contracts are purchased with after tax contributions and are not related to retirement plans or
programs that receive special income tax treatment under the Tax Code.

Qualified contracts are designed for use by individuals and/or employers whose premium payments are comprised
solely of proceeds from and/or contributions under retirement plans or programs that are intended to qualify as
plans or programs entitled to special favorable income tax treatment under Tax Code Sections 403(b), 408, or
408A.

Effective January 1, 2009, except in the case of a rollover contribution as permitted under the Tax Code or as a
result of an intra-plan exchange or plan-to-plan transfer described under the Final Regulations, contributions to a
section 403(b) tax sheltered annuity contract may only be made by the employer sponsoring the plan under which
the assets in your contract are covered subject to the applicable Treasury Regulations and only if the Company, in
its sole discretion, agrees to be an approved provider.

Taxation of Nonqualified Contracts

Premiums.

You may not deduct the amount of your premiums to a nonqualified contract.

Taxation of Gains Prior to Distribution. Tax Code section 72 governs the general federal income taxation of
annuity contracts. We believe that if the contract owner is a natural person (in other words, an individual), the
contract owner will generally not be taxed on increases in the value of his or her nonqualified contract until a
distribution occurs or until income phase payments begin. This assumes that the contract will qualify as an annuity
contract for federal income tax purposes. An agreement to assign or pledge any portion of the contract’s account
value generally will be treated as a distribution. In order to be eligible to defer federal income taxation on increases
in the account value, each of the following requirements must be satisfied:

Investor Control. Although earnings under nonqualified contracts generally are not taxed until withdrawn, the
IRS has stated in published rulings that a variable contract owner will be considered the owner of separate account
assets if the contract owner possesses incidents of investment control over such assets. In these circumstances,
income and gains from the separate account assets would be currently includible in the variable contract owner’s
gross income. Future guidance regarding the extent to which contract owners could direct their investments among
subaccounts without being treated as owners of the underlying assets of the separate account may adversely affect
the tax treatment of existing contracts, such as the contract described in this prospectus. The Company therefore
reserves the right to modify the contract as necessary to attempt to prevent the contract holder from being
considered the owner of a pro-rata share of the assets of the separate account for federal income tax purposes.

Required Distributions. In order to be treated as an annuity contract for federal income tax purposes, the Tax
Code requires any nonqualified contract to contain certain provisions specifying how your interest in the contract
will be distributed in the event of your death. The nonqualified contracts contain provisions that are intended to
comply with these Tax Code requirements.

There are currently no regulations interpreting these Tax Code requirements. When such requirements are clarified
by regulation or otherwise, the Company intends to review such distribution provisions and modify them if
necessary to assure that they comply with the applicable requirements.

Non-Natural Holders of a Nonqualified Contract. If the contract owner of a nonqualified contract is not a
natural person, the contract generally is not treated as an annuity for federal income tax purposes and any such
income on such contract during the applicable taxable year is taxable as ordinary income. Income on the contract
during the applicable taxable year is equal to any increase in the account value over the “investment in the contract”
(generally, the premiums or other consideration you paid for such contract less any nontaxable withdrawals) during
such taxable year. There are certain exceptions to this rule, and a non-natural person considering an investment in
the contract should consult with a qualified tax adviser prior to purchasing the contract. If the contract owner is not
a natural person and the primary annuitant dies, the same rules apply on the death of the primary annuitant as
outlined above for the death of a contract owner. When the contract owner is a non-natural person, a change in the
annuitant is treated as the death of the contract owner.

PRO.70600-13                                                                          64

 

   Delayed Income Phase Starting Date. If the contract’s income phase start date occurs (or is scheduled to
occur) at a time when the annuitant has reached, or will have reached, an advanced age (for example, age 85), it is
possible that such contract could be treated as an annuity for federal income tax purposes. In that event, the income
and gains under such contract could be currently includible in your taxable income.
 
   Diversification. Tax Code section 817(h) requires that the investments of the funds available through a separate
account that supports a variable annuity contract be “adequately diversified” in order for the nonqualified contract
to qualify as an annuity contract under federal tax law. The separate account, through its funds, intends to comply
with the diversification requirements prescribed by Tax Code section 817(h) and by the Treasury in Reg. Sec.
1.817-5, and any ruling made thereunder, which affect how the funds’ assets may be invested. If it is determined,
however, that your contract does not satisfy the applicable diversification regulations and rulings because a
subaccount’s corresponding fund fails to be adequately diversified for whatever reason, we will take appropriate
and reasonable steps to bring your contract into compliance with such regulations and rulings. We reserve the right
to modify your contract as necessary in order to do so.
 
Taxation of Distributions
   General. When a withdrawal from a nonqualified annuity contract occurs, the amount received will be treated as
ordinary income subject to federal income tax up to an amount equal to the excess (if any) of the contract value
(unreduced by the amount of any early withdrawal charge) immediately before the distribution over the contract
owner’s investment in the contract at such time. Investment in the contract is generally equal to the amount of all
premiums to the contract, plus amounts previously included in your taxable income as the result of certain pledges,
assignments or gifts, less the aggregate amount of non-taxable distributions previously made under such contract.
 
In the case of a full withdrawal from a nonqualified contract, the amount received generally will be taxable only to
the extent it exceeds the contract owner’s investment in such contract (for example, the cost basis).
 
   10% Penalty. A 10% federal tax penalty applies to the taxable portion of a distribution from a nonqualified
deferred annuity contract unless certain exceptions apply, including one or more of the following:
  (a) You have attained age 59½;
  (b) You (or the annuitant if the contract owner is a non-natural person) have died;
  (c) You have become disabled as defined in the Tax Code;
(d) The distribution is made in substantially equal periodic payments (at least annually)over your life or life
expectancy or the joint lives or joint life expectancies of you and your designated beneficiary; or
  (e) The distribution is allocable to investment in the contract before August 14, 1982.
        
The 10% penalty does not apply to distributions from an immediate annuity as defined in the Tax Code. Other
exceptions may be applicable under certain circumstances and special rules may be applicable in connection with
the exceptions enumerated above. A qualified tax adviser should be consulted with regard to exceptions from the
penalty tax.
 
  Tax-Free Exchanges. Section 1035 of the Tax Code permits the exchange of a life insurance, endowment or
annuity contract for an annuity contract on a tax-free basis. In such an instance the “investment in the contract” in
the old contract will carry over to the new contract. You should consult with a qualified tax adviser regarding
procedures for making 1035 exchanges.
 
If your contract is purchased through a tax-free exchange of a life insurance, endowment or annuity contract that
was purchased prior to August 14, 1982, any distributions from the contract, other than income phase payments,
will be treated, for tax purposes, as coming:
·      First, from any remaining “investment in the contract” made prior to August 14, 1982 and exchanged into the
contract;
· Next, from any “income on the contract” attributable to the investment made prior to August 14, 1982;
· Then, from any remaining “income on the contract;” and
· Lastly, from any remaining “investment in the contract.”
 
PRO.70600-13 65

 

 

The IRS has concluded that in certain instances the partial exchange of a portion of one annuity contract for another
contract will be tax-free. Pursuant to IRS guidance, receipt of withdrawals or surrenders from either the original
contract or the new contract during the 180 day period beginning on the date of the partial exchange may
retroactively negate the tax-free treatment of the partial exchange. If this occurs, the partial exchange or surrender
of the original contract will be treated as a withdrawal, taxable as ordinary income to the extent of gain in the
original contract. Furthermore, if the partial exchange occurred prior to the contract owner reaching age 59½, the
contract owner may be subject to an additional 10% penalty tax. We are not responsible for the manner in which
any other insurance companies administer, recognize or report, for federal income tax-reporting purposes, Section
1035 exchanges and partial exchanges and what the ultimate tax treatment may be by the IRS. You should consult
with your tax adviser with respect to any proposed Section 1035 exchange or partial exchange prior to proceeding
with any such transaction with respect to your Contract.
 
Taxation of Income Phase Payments. Although the federal tax consequences may vary depending upon the
payment option elected under an annuity contract, a portion of each income phase payment is generally not taxed as
ordinary income, while the remainder is taxed as ordinary income. The non-taxable portion of an income phase
payment is generally determined in a manner that is designed to allow you to recover your investment in the
annuity contract ratably on a tax-free basis over the expected stream of income phase payments when income phase
payments begin. Once your investment in the contract has been fully recovered, however, the full amount of each
subsequent income phase payment is subject to tax as ordinary income. On September 27, 2010, President Obama
signed into law the Small Business Jobs Act of 2010, which included language that permits the partial annuitization
of non-qualified annuities, effective for amounts received in taxable years beginning after December 31, 2010. The
provision applies an exclusion ratio to any amount received as an annuity under a portion of an annuity provided
that the annuity payments are made for a period of 10 years or more or for life. Please consult your tax adviser
before electing a partial annuitization.
 
     Death Benefits. Amounts may be distributed from an annuity contract, such as the contract described in this
prospectus, because of your death or the death of the annuitant. Generally, such amounts are includible in the
income of the recipient as follows: (i) if distributed in a lump-sum, such amounts are taxed in the same manner as a
full withdrawal of the contract; or (ii) if distributed under a payment option, such amounts are taxed in the same
way as income phase payments. As discussed above, the Tax Code contains special rules that specify how the
contract owner’s interest in a nonqualified contract will be distributed and taxed in the event of the contract owner’s
death.
        
The contract offers a death benefit that may exceed the greater of the premium payments and the contract value.
Certain charges are imposed with respect to the death benefit. It is possible that these charges (or some portion
thereof) could be treated for federal income tax purposes as a distribution from the contract.
 
Different distribution requirements apply if your death occurs:
· After you begin receiving income phase payments under the contract; or
· Before you begin receiving such income phase payments.
 
If your death occurs after you begin receiving income phase payments, distributions must be made at least as
rapidly as under the method in effect at the time of your death.
 
If your death occurs before you begin receiving income phase payments, your entire balance must be distributed
within five years after the date of your death. For example, if you died on September 1, 2011, your entire balance
must be distributed by August 31, 2016. However, if distributions begin within one year of your death, then
payments may be made over one of the following two timeframes:
· Over the life of the designated beneficiary; or
· Over a period not extending beyond the life expectancy of the designated beneficiary.
           
If the designated beneficiary is your spouse, the contract may be continued with the surviving spouse as the new
contract owner. If the contract owner is a non-natural person and the primary annuitant dies, the same rules apply
on the death of the primary annuitant as outlined above for death of a contract owner.
 
The contract offers a death benefit that may exceed the greater of the premium payments and the contract value.
Certain charges are imposed with respect to the death benefit. It is possible that these charges (or some portion
thereof) could be treated for federal tax purposes as a distribution from the contract.
 
PRO.70600-13 66

 

 

Assignment and Other Transfers. A transfer, pledge or assignment of ownership of a nonqualified contract, the
selection of certain annuity dates or the designation of an annuitant or payee other than a contract owner may result
in certain tax consequences to you that are not discussed herein. The assignment, pledge or agreement to assign or
pledge any portion of the contract value generally will be treated as a distribution. Anyone contemplating any such
designation, transfer, assignment, selection or exchange should contact a qualified tax adviser regarding the
potential tax effects of such a transaction.

Immediate Annuities. Under Section 72 of the Tax Code, an immediate annuity means an annuity (i) that is
purchased with a single premium; (ii) with income phase payments starting within one year of the date of purchase;
and (iii) that provides a series of substantially equal periodic payments made at least annually. This contract is not
designed as an immediate annuity. If the contract were treated as an immediate annuity, it could affect the federal
income treatment of the contract with respect to: (i) the application of certain exceptions from the 10% early
withdrawal penalty tax; ownership, if the contract owner is not a natural person; and (iii) certain exchanges.

Multiple Contracts. Federal income tax laws require that all deferred nonqualified annuity contracts that are issued
by a company or its affiliates to the same contract owner during any calendar year be treated as one annuity
contract for purposes of determining the amount includible in gross income under Tax Code section 72(e). In
addition, the Treasury Department has specific authority to issue regulations that prevent the avoidance of Tax
Code section 72(e) through the serial purchase of annuity contracts or otherwise.

Withholding. We will withhold and remit to the IRS a part of the taxable portion of each distribution made under a
contract unless the intended recipient of the distribution notifies us at or before the time of such distribution that the
recipient elects not to have any amounts withheld. Withholding is mandatory, however, if the intended recipient of
such distribution fails to provide a valid taxpayer identification number or if we are notified by the IRS that the
taxpayer identification number we have on file is incorrect. The withholding rates applicable to the taxable portion
of periodic income phase payments are the same as the withholding rates generally applicable to payments of
wages. In addition, 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.

Certain states have indicated that state income tax withholding will also apply to payments from the contracts made
to their residents. Generally, an election out of federal withholding will also be considered an election out of state
withholding. In some states, the contract owner may elect out of state withholding even if federal withholding
applies. For more information concerning a particular state or any required forms, please contact your sales
representative or call our Customer Service Center at the number listed on the front of this prospectus.

If you or your designated beneficiary is a non-resident alien, then any withholding is governed by Tax Code section
1441 based on the individual’s or the designated beneficiary’s citizenship, country of domicile and treaty status,
and we may require additional documentation prior to processing any requested distribution.

Same-Sex Marriages. Pursuant to Section 3 of the federal Defense of Marriage Act (“DOMA”), same-sex
marriages currently are not recognized for purposes of federal law. Therefore, the favorable income-deferral
options afforded by federal tax law to an opposite-sex spouse under Tax Code sections 72(s) and 401(a)(9) are
currently NOT available to a same-sex spouse. Same-sex spouses who own or are considering the purchase of
annuity products that provide benefits based upon status as a spouse should consult a tax adviser. In some states, to
the extent that an annuity contract accords to spouses other rights or benefits that are not affected by DOMA, same-
sex spouses remain entitled to such rights or benefits to the same extent as any contract holder’s spouse.

PRO.70600-13                                                                              67

 

Taxation of Qualified Contracts

General. The tax rules applicable to owners of qualified contracts vary according to the type of qualified contract
and the specific terms and conditions of the qualified contract. Qualified contracts are designed for use with Tax
Code section 403(b) and 457(b) plans and as IRAs under Tax Code sections 408 and 408A (“qualified contracts”).
They may also be issued as nonqualified contracts for use with Tax Code section 401(a) or 401(k) plans. (We refer
to all of these as “qualified plans”). The tax rules applicable to participants in these qualified plans vary according
to the type of plan and the terms and conditions of the plan itself. The ultimate effect of federal income taxes on the
amounts held under a qualified contract, or on income phase payments from a qualified contract, depends on the
type of retirement plan and as well as your particular facts and circumstances. Special favorable tax treatment may
be available for certain types of contributions and distributions. In addition, certain requirements must be satisfied
in purchasing a qualified contract with proceeds from a tax-qualified plan or program in order to continue receiving
favorable tax treatment.

Adverse tax consequences may result from: (i) contributions in excess of specified limits; (ii) distributions before
age 59½ (subject to certain exceptions); (iii) distributions that do not conform to specified commencement and
minimum distribution rules; and (iv) other specified circumstances. Some qualified plans are subject to additional
distribution or other requirements that are not incorporated into the contract described in this prospectus. No
attempt is made to provide more than general information about the use of the contract with qualified plans.
Contract owners, participants, annuitants and beneficiaries are cautioned that the rights of any person to any
benefits under these qualified plans may be subject to the terms and conditions of the plan themselves, regardless of
the terms and conditions of the contract. The Company is not bound by the terms and conditions of such plans to
the extent such terms contradict the language of the contract, unless we consent to be so bound.

Generally, contract owners, participants and beneficiaries are responsible for determining that contributions,
distributions and other transactions with respect to the contract comply with applicable law. Therefore, you should
seek qualified legal and tax advice regarding the suitability of a contract for your particular situation. The following
discussion assumes that qualified contracts are purchased with proceeds from and/or contributions under retirement
plans or programs that qualify for the intended special federal tax treatment.

Tax Deferral. Under federal tax laws, earnings on amounts held in annuity contracts are generally not taxed until
they are withdrawn. However, in the case of a qualified plan (as defined in this prospectus), an annuity contract is
not necessary to obtain this favorable tax treatment and does not provide any tax benefits beyond the deferral
already available to the qualified plan itself. Annuities do provide other features and benefits (such as guaranteed
living benefits and/or death benefits or the option of lifetime income phase options at established rates) that may be
valuable to you. You should discuss your alternatives with a qualified financial representative taking into account
the additional fees and expenses you may incur in an annuity.

Section 403(b) Tax-Deferred Annuities. Prior to September 17, 2007, the contracts were available as Tax Code
section 403(b) tax-deferred annuities. Existing contracts issued as Tax Code Section 403(b) tax-deferred annuities
will continue to be maintained as such under the applicable rules and regulations. Section 403(b) of the Tax Code
allows employees of certain Tax Code section 501(c)(3) organizations and public schools to exclude from their
gross income the premium payments made, within certain limits, to a contract that will provide an annuity for the
employee’s retirement.

In July 2007, the Treasury Department issued final regulations that were generally effective January 1, 2009. The
final regulations include: (i) a written plan requirement; (ii) the ability to terminate a 403(b) plan, which would
entitle a participant to a distribution; (iii) the replacement of IRS Revenue Ruling 90-24 with new exchange rules
effective September 25, 2007, and requiring information sharing between the 403(b) plan sponsor and/or its
delegate and the product provider as well as new plan-to-plan transfer rules (under these new exchange and transfer
rules, the 403(b) plan sponsor can elect not to permit exchanges or transfers); and (iv) new distribution rules for
403(b)(1) annuities that impose withdrawal restrictions on non-salary reduction contribution amounts in addition to
salary reduction contribution amounts, as well as other changes.

PRO.70600-13                                                                                  68

 

Individual Retirement Annuities. Section 408 of the Tax Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity (“IRA”). IRAs are subject to limits on
the amounts that can be contributed, the deductible amount of the contribution, the persons who may be eligible and
the time when distributions can begin. Contributions to IRAs must be made in cash or as a rollover or a transfer
from another eligible plan. Also, distributions from IRAs, individual retirement accounts and other types of
retirement plans may be “rolled over” on a tax-deferred basis into an IRA. Employers may establish Simplified
Employee Pension (“SEP”) or Savings Incentive Match Plan for Employees (“SIMPLE”) plans to provide IRA
contributions on behalf of their employees. If you make a tax-free rollover of a distribution from an IRA, you may
not make another tax-free rollover from the IRA within a one-year period. Sales of the contract for use with IRAs
may be subject to special requirements imposed by the IRS.
 
The IRS has not reviewed the contracts described in this prospectus for qualification as IRAs and has not
addressed, in a ruling of general applicability, whether the contract’s death benefit provisions comply with IRS
qualification requirements. You should consult with a qualified tax adviser in connection with purchasing the
contract as an IRA.
          
Roth IRAs. Section 408A of the Tax Code permits certain eligible individuals to contribute to a Roth IRA
Contributions to a Roth IRA are not deductible, are subject to certain limitations and must be made in cash or as
rollover or transfer from an eligible retirement plan, another Roth IRA or other IRA. Certain qualifying individuals
may convert an IRA, SEP, or SIMPLE to a Roth IRA. Such rollovers and conversions are subject to tax, and other
special rules may apply. If you make a tax-free rollover of a distribution from a Roth IRA to another Roth IRA, you
may not make another tax-free rollover from the Roth IRA from which the rollover was made within a one-year
period. A 10% penalty may apply to amounts attributable to a conversion to a Roth IRA if the amounts are
distributed during the five taxable years beginning with the year in which the conversion was made. You should
consult with a qualified tax adviser in connection with purchasing the contract as a Roth IRA.
 
Sales of a contract for use with a Roth IRA may be subject to special requirements of the IRS. The IRS has not
reviewed the contracts described in this prospectus for qualification as IRAs and has not addressed, in a ruling of
general applicability, whether the contract’s death benefit provisions comply with IRS qualification requirements.
 
Contributions. In order to be excludable from gross income for federal income tax purposes, total annual
contributions to certain qualified plans are limited by the Tax Code. We provide general information on these
requirements for certain plans below. You should consult with a qualified tax adviser in connection with
contributions to a qualified contract.
 
Distributions–General.
Certain tax rules apply to distributions from the contract. A distribution is any amount taken from a contract
including withdrawals, income phase payments, rollovers, exchanges and death benefit proceeds. We report the
taxable portion of all distributions to the IRS.
 
403(b) Plans. All distributions from these plans are taxed as received unless one of the following is true:
·       The distribution is an eligible rollover distribution and is rolled over to another plan eligible to receive
rollovers or to a traditional or Roth IRA in accordance with the Tax Code;
· You made after-tax contributions to the plan. In this case, depending upon the type of distribution, the
amount will be taxed according to the rules detailed in the Tax Code; or
· The distribution is a qualified health insurance premium of a retired public safety officer as defined in the
Pension Protection Act of 2006.
 
A payment is an eligible rollover distribution unless it is:
· Part of a series of substantially equal periodic payments (at least one per year) made over the life expectancy
of the participant or the joint life expectancy of the participant and his designated beneficiary or for
specified period of 10 years or more;
· A required minimum distribution under Tax Code section 401(a)(9);
· A hardship withdrawal;
· Otherwise excludable from income; or
· Not recognized under applicable regulations as eligible for rollover.
 
PRO.70600-13 69

 

 

The Tax Code imposes a 10% penalty tax on the taxable portion of any distribution from a contract used with a
403(b) plan, unless certain exceptions, including one or more of the following, have occurred.
 
a)       You have attained age 59½;
b) You have become disabled, as defined in the Tax Code;
c) You have died and the distribution is to your beneficiary;
d) You have separated from service with the sponsor at or after age 55;
e) The distribution amount is rolled over into another eligible retirement plan or to a traditional IRA or Roth IRA
in accordance with the terms of the Tax Code;
f) You have separated from service with the plan sponsor and the distribution amount is made in substantially
equal periodic payments (at least annually) over your life or the life expectancy or the joint lives or joint life
expectancies of you and your designated beneficiary;
g) The distribution is made due to an IRS levy upon your plan;
h) The withdrawal amount is paid to an alternate payee under a Qualified Domestic Relations Order (QDRO); or
i) The distribution is a qualified reservist distribution as defined under the Pension Protection Act of 2006
(403(b) plans only).
 
In addition, the 10% penalty tax does not apply to the amount of a distribution equal to unreimbursed medical
expenses incurred by you during the taxable year that qualify for deduction as specified in the Tax Code. The Tax
Code may provide other exceptions or impose other penalty taxes in other circumstances.
 
Effective January 1, 2009, and for any contracts or participant accounts established on or after that date, 403(b)
regulations prohibit the distribution of amounts attributable to employer contributions before the earlier of your
severance from employment or prior to the occurrence of some event, such as after a fixed number of years, the
attainment of a stated age, or disability.
 
Distribution of amounts restricted under Tax Code section 403(b)(11) may only occur upon your death, attainment
of age 59½, severance from employment, disability or financial hardship, or under other exceptions as provided for
by the Tax Code or regulations. Such distributions remain subject to other applicable restrictions under the Tax
Code.
 
If the Company agrees to accept amounts exchanged from a Tax Code section 403(b)(7) custodial account, such
amounts will be subject to the withdrawal restrictions set forth in Tax Code section 403(b)(7)(A)(ii).
 
     Individual Retirement Annuities. All distributions from an IRA are taxed as received unless either one of the
following is true:
·
 The distribution is rolled over to another IRA, Roth IRA, or to a plan eligible to receive rollovers as permitted
under the Tax Code; or
· You made after-tax contributions to the IRA. In this case, the distribution will be taxed according to rules
detailed in the Tax Code.
            
The Tax Code imposes a 10% penalty tax on the taxable portion of any distribution from an IRA unless an
exception applies. In general, except for the exception for separation from service, the exceptions for 403(b) plans
listed above also apply to distributions from an IRA including the qualified reservist distribution. The 10% penalty
tax does not apply to a distribution made from an IRA to pay for health insurance premiums for certain unemployed
individuals, a qualified first-time home purchase or for higher education expenses.
          
     Roth IRAs. A qualified distribution from a Roth IRA is not taxed when it is received. A qualified distribution is
a distribution:
· Made after the five-taxable year period beginning with the first taxable year for which a contribution was made
to a Roth IRA of the owner; and
· Made after you attain age 59½, die, become disabled as defined in the Tax Code, or for a qualified first-time
home purchase.
 
If a distribution is not qualified, generally it will be taxable to the extent of the accumulated earnings. A partial
distribution will first be treated as a return of contributions which is not taxable and then as taxable accumulated
earnings.
 
PRO.70600-13 70

 

 

The Tax Code imposes a 10% penalty tax on the taxable portion of any distribution from a Roth IRA that is not a
qualified distribution unless certain exceptions have occurred. In general, the exceptions for an IRA described
above also apply to a distribution from a Roth IRA that is not a qualified distribution or a rollover to a Roth IRA
that is not a qualified rollover contribution. The 10% penalty tax is also waived on a distribution made from a Roth
IRA to pay for health insurance premiums for certain unemployed individuals, used for a qualified first-time home
purchase, or for higher education expenses.
 
Lifetime Required Minimum Distributions (IRA and 403(b) only). To avoid certain tax penalties, you and
any designated beneficiary must also meet the minimum distribution requirements imposed by the Tax Code. The
requirements do not apply to Roth IRA contracts while the owner is living. These rules may dictate the following:
· Start date for distributions;
· The time period in which all amounts in your contract(s) must be distributed; and
· Distribution amounts.
 
Start Date and Time Period. Generally, you must begin receiving distributions from a traditional IRA by April
1 of the calendar year following the calendar year in which you attain age 70½. We must pay out distributions from
the contract over a period not extending beyond one of the following time periods:
· Over your life or the joint lives of you and your designated beneficiary; or
· Over a period not greater than your life expectancy or the joint life expectancies of you and your designated
  beneficiary.
 
Distribution Amounts. The amount of each required distribution must be calculated in accordance with Tax
Code section 401(a)(9). The entire interest in the account includes the amount of any outstanding rollover, transfer,
recharacterization, if applicable, and the actuarial present value of other benefits provided under the account, such
as guaranteed death benefits.
 
50% Excise Tax. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax
may be imposed on the required amount that was not distributed.
 
Lifetime Required Minimum Distributions are not applicable to Roth IRAs during your lifetime. Further
information regarding required minimum distributions may be found in your contract.
Required Distributions Upon Death (Section 403(b), IRAs and Roth IRAs Only). Different distribution
requirements apply after your death, depending upon if you have been receiving required minimum distributions.
Further information regarding required distributions upon death may be found in your contract.
 
If your death occurs on or after the date you begin receiving minimum distributions under the contract, distributions
generally must be made at least as rapidly as under the method in effect at the time of your death. Tax Code section
401(a)(9) provides specific rules for calculating the required minimum distributions after your death.
 
If your death occurs before the date you begin receiving minimum distributions under the contract, your entire
balance must be distributed by December 31 of the calendar year containing the fifth anniversary of the date of
your death. For example, if you died on September 1, 2011, your entire balance must be distributed to the
designated beneficiary by December 31, 2016. However, if distributions begin by December 31 of the calendar year
following the calendar year of your death, and you have named a designated beneficiary, then payments may be
made within one of the following timeframes:
· Over the life of the designated beneficiary; or
· Over a period not extending beyond the life expectancy of the designated beneficiary.
 
Start Dates for Spousal Beneficiaries. If the designated beneficiary is your spouse, distributions must begin on
or before the later of the following:
· December 31 of the calendar year following the calendar year of your death; or
· December 31 of the calendar year in which you would have attained age 70½.
 
No Designated Beneficiary. If there is no designated beneficiary, the entire interest generally must be distributed
by the end of the calendar containing the fifth anniversary of the contract owner’s death.
 
PRO.70600-13 71

 

 

Special Rule for IRA Spousal Beneficiaries (IRAs and Roth IRAs Only). In lieu of taking a distribution under
these rules, if the sole designated beneficiary is the contract owner’s surviving spouse, the spousal beneficiary may
elect to treat the contract as his or her own IRA and defer taking a distribution until his or her own start date. The
surviving spouse is deemed to have made such an election if the surviving spouse makes a rollover to or from the
contract or fails to take a distribution within the required time period.
 
Withholding.
Any taxable distributions under the contract are generally subject to withholding. Federal income tax withholding
rates vary according to the type of distribution and the recipient’s tax status.
 
403(b) Plans. Generally, distributions from these plans are subject to a mandatory 20% federal income tax
withholding. However, mandatory withholding will not be required if you elect a direct rollover of the distributions
to an eligible retirement plan or in the case of certain distributions described in the Tax Code.
 
IRAs and Roth IRAs. Generally, you or, if applicable, a designated beneficiary may elect not to have tax
withheld from distributions.
 
Non-resident Aliens. If you or your designated beneficiary is a non-resident alien, any withholding is governed
by Tax Code section 1441 based on the individual’s citizenship, the country of domicile and treaty status, and we
may require additional documentation prior to processing any requested distribution.
 
Assignment and Other Transfers
         
Section 403(b) Plans. Adverse tax consequences to the plan and/or to you may result if your beneficial interest
in the contract is assigned or transferred to persons other than:
· A plan participant as a means to provide benefit payments;
· An alternate payee under a QDRO in accordance with Tax Code section 414(p); or
· The Company as collateral for a loan.
                
IRAS and Roth IRAs. The Tax Code does not allow a transfer or assignment of your rights under these contracts
except in limited circumstances. Adverse tax consequences may result if you assign or transfer your interest in
such contract to persons other than your spouse incident to a divorce. Anyone contemplating such an assignment or
transfer should contact a qualified tax adviser regarding the potential tax effects of such a transaction.
Same-Sex Marriages. Pursuant to Section 3 of the federal Defense of Marriage Act (“DOMA”), same-sex
marriages currently are not recognized for purposes of federal law. Therefore, the favorable income-deferral
options afforded by federal tax law to an opposite-sex spouse under Tax Code sections 72(s) and 401(a)(9) are
currently NOT available to a same-sex spouse. Same-sex spouses who own or are considering the purchase of
annuity products that provide benefits based upon status as a spouse should consult a tax adviser. In some states, to
the extent that an annuity contract accords to spouses other rights or benefits that are not affected by DOMA, same-
sex spouses remain entitled to such rights or benefits to the same extent as any contract holder’s spouse.
 
Tax Consequences of Living Benefits and Death Benefits
      
Living Benefits. Except as otherwise noted below, when a withdrawal from a nonqualified contract occurs
under a minimum guaranteed withdrawal benefit rider (including the ING LifePay/ING Joint LifePay riders or the
ING LifePay Plus/ING Joint LifePay Plus riders), the amount received will be treated as ordinary income subject to
tax up to an amount equal to the excess (if any) of the contract value (unreduced by the amount of any deferred
sales charge) immediately before the distribution over the contract owner’s investment in the contract at that time.
 
Investment in the contract is generally equal to the amount of all contributions to the contract, plus amounts
previously included in your gross income as the result of certain loans, assignments, or gifts, less the aggregate
amount of non-taxable distributions previously made. For nonqualified contracts, the income on the contract for
purposes of calculating the taxable amount of a distribution may be unclear. For example, the living benefits
provided under a MGWB rider (including the ING LifePay/ING Joint Life Pay riders or the ING LifePay Plus/ING
Joint LifePay Plus riders), or the MGIB rider, as well as the market value adjustment, could increase the contract
value that applies. Thus, the income on the contract could be higher than the amount of income that would be
determined without regard to such a benefit. As a result, you could have higher amounts of income than will be
reported to you. In addition, payments under any guaranteed payment phase of such riders after the contract value
has been reduced to zero may be subject to the exclusion ratio rules under Tax Code section 72(b) for tax purposes.
 
PRO.70600-13 72

 

 

Payments of the Maximum Annual Withdrawal pursuant to the Income Optimizer under the ING LifePay Plus or
ING Joint LifePay Plus rider are designed to be treated as income phase payments for withholding and tax reporting
purposes. A portion of each income phase payment is generally not taxed and the remainder is taxed as ordinary
income. The non-taxable portion of an income phase payment is generally determined in a manner that is
designated to allow you to recover your investment in the contract ratably on a tax-free basis over the expected
stream of income phase payments, as determined when your payments of the Maximum Annual Withdrawal
pursuant to the Income Optimizer start. Any withdrawals in addition to the Maximum Annual Withdrawal
payments you are receiving pursuant to the Income Optimizer constitute Excess Withdrawals under the ING
LifePay Plus or ING Joint LifePay Plus rider, causing a pro-rata reduction of the ING LifePay Plus Base and
Maximum Annual Withdrawal. This reduction will result in a proportional reduction of the non-taxable portion of
your future Maximum Annual Withdrawal payments. Once your investment in the contract has been fully
recovered, the full amount of each of your future Maximum Annual Withdrawal payments would be subject to tax
as ordinary income.

Enhanced Death Benefits. The contract offers a death benefit that may exceed the greater of premium payments
and the contract value. It is possible that the IRS could characterize such a death benefit as other than an incidental
death benefit. There are limitations on the amount of incidental benefits that may be provided under pension and
profit sharing plans. In addition, the provision of such benefits may result in currently taxable income to contract
holders, and could affect the amount of required minimum distributions. Additionally, because certain charges may
be imposed with respect to some of the available death benefits it is possible these charges (or some portion
thereof) could be treated for federal tax purposes as a distribution from the contract.

Possible Changes in Taxation

Although the likelihood of changes in tax legislation, regulation, rulings and other interpretation thereof is
uncertain, there is always the possibility that the tax treatment of the contracts could change by legislation or other
means. It is also possible that any change could be retroactive (that is, effective before the date of the change). You
should consult a qualified tax adviser with respect to legislative developments and their effect on the contract.

Taxation of the Company

We are taxed as a life insurance company under the Tax Code. The separate account is not a separate entity from
us. Therefore, it is not taxed separately as a “regulated investment company,” but is taxed as part of the Company.

We automatically apply investment income and capital gains attributable to the separate account to increase
reserves under the contracts. Because of this, under existing federal tax law we believe that any such income and
gains will not be taxed to the extent that such income and gains are applied to increase reserves under the contracts.
In addition, any foreign tax credits attributable to the separate account will be first used to reduce any income taxes
imposed on the separate account before being used by the Company.

In summary, we do not expect that we will incur any federal income tax liability attributable to the separate
account, and we do not intend to make any provision for such taxes. However, changes in federal tax laws and/or
their interpretation thereof may result in our being taxed on income or gains attributable to the separate account. In
this case, we may impose a charge against the separate account (with respect to some or all of the contracts) to set
aside provisions to pay such taxes. We may deduct this amount from the separate account, including from your
contract value invested in the subaccounts.

PRO.70600-13                                                                            73

 

STATEMENT OF ADDITIONAL INFORMATION
             
Table of Contents
Introduction
Description of ING USA Annuity and Life Insurance Company
Separate Account B
Safekeeping of Assets
Experts
Distribution of Contracts
IRA Partial Withdrawal Option
Other Information
Financial Statements of Separate Account B
Financial Statements of ING USA Annuity and Life Insurance Company
                
        
Please tear off, complete and return the form below to order a free Statement of Additional
Information for the contracts offered under the prospectus, free of charge. Address the form to our
Customer Service Center; the address is shown on the prospectus cover. 
         
 
PLEASE SEND ME:
 
q A FREE COPY OF THE STATEMENT OF ADDITIONAL INFORMATION FOR
       SEPARATE ACCOUNT B.
 
 
q THE MOST RECENT ANNUAL AND/OR QUARTERLY REPORT OF ING USA
                                        ANNUITY AND LIFE INSURANCE COMPANY.
 
 
Please Print or Type:
 
                                    _______________________________________________
Name
                                    _______________________________________________ 
Social Security Number
                                    _______________________________________________ 
Street Address
                                                _______________________________________________
City, State, Zip
 
  05/01/13
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _
 
PRO.70600-13                                                                  74

 


APPENDIX A
CONDENSED FINANCIAL INFORMATION
 
Except for subaccounts which did not commence operations as of December 31, 2012, the following tables give (1) the accumulation unit value ("AUV") at the beginning of the period, (2) the AUV at the end of the period and (3) the total number of accumulation units outstanding at the end of the period for each subaccount of ING USA Separate Account B available under the Contract for the indicated periods. For those subaccounts that commenced operations during the period ended December 31, 2012, the "Value at beginning of period" shown is the value at first date of investment. Fund name changes after December 31, 2012 are not reflected in the following information.
 
Separate Account Annual Charges of 0.75%
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
FIDELITY® VIP CONTRAFUND® PORTFOLIO                    
Value at beginning of period $16.22 $16.81 $14.48 $10.77 $18.94 $16.27 $14.71 $12.70 $11.11 $8.73
Value at end of period $18.69 $16.22 $16.81 $14.48 $10.77 $18.94 $16.27 $14.71 $12.70 $11.11
Number of accumulation units outstanding at end of period 325,948 378,988 489,750 588,421 687,567 754,188 913,687 599,653 337,248 234,386
FIDELITY® VIP EQUITY-INCOME PORTFOLIO                    
Value at beginning of period $11.78 $11.79 $10.34 $8.02 $14.13 $14.06 $11.81 $11.27 $10.21 $7.91
Value at end of period $13.68 $11.78 $11.79 $10.34 $8.02 $14.13 $14.06 $11.81 $11.27 $10.21
Number of accumulation units outstanding at end of period 100,849 136,056 171,552 237,955 289,513 344,699 382,560 339,023 351,282 321,037
FRANKLIN SMALL CAP VALUE SECURITIES FUND                    
Value at beginning of period $18.21 $19.07 $14.98 $11.69 $17.58 $18.15 $15.63 $14.48 $11.79 $8.99
Value at end of period $21.40 $18.21 $19.07 $14.98 $11.69 $17.58 $18.15 $15.63 $14.48 $11.79
Number of accumulation units outstanding at end of period 26,990 33,464 39,346 57,030 65,436 87,893 115,207 65,724 19,788 11,105
ING AMERICAN CENTURY SMALL-MID CAP VALUE PORTFOLIO                    
Value at beginning of period $17.74 $18.45 $15.24 $11.32 $15.53 $16.11 $14.06 $13.14 $10.91 $8.11
Value at end of period $20.48 $17.74 $18.45 $15.24 $11.32 $15.53 $16.11 $14.06 $13.14 $10.91
Number of accumulation units outstanding at end of period 5,792 7,426 8,960 6,584 3,223 3,944 11,558 10,939 12,505 11,451
ING AMERICAN FUNDS INTERNATIONAL PORTFOLIO                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $11.13 $13.10 $12.37 $8.75 $15.33 $12.94 $11.01 $10.14    
Value at end of period $12.95 $11.13 $13.10 $12.37 $8.75 $15.33 $12.94 $11.01    
Number of accumulation units outstanding at end of period 130,794 163,164 222,511 266,550 323,097 271,710 214,094 64,347    
ING BALANCED PORTFOLIO                    
Value at beginning of period $13.35 $13.67 $12.11 $10.25 $14.41 $13.78 $12.67 $12.27 $11.34 $10.00
Value at end of period $15.04 $13.35 $13.67 $12.11 $10.25 $14.41 $13.78 $12.67 $12.27 $11.34
Number of accumulation units outstanding at end of period 26,937 38,523 46,496 52,052 54,572 71,174 112,784 103,794 104,648 71,914
ING BARON GROWTH PORTFOLIO                    
Value at beginning of period $18.76 $18.49 $14.72 $10.97 $18.82 $17.87 $15.62 $14.66 $11.54 $8.72
Value at end of period $22.28 $18.76 $18.49 $14.72 $10.97 $18.82 $17.87 $15.62 $14.66 $11.54
Number of accumulation units outstanding at end of period 37,076 41,598 56,814 69,799 79,256 109,066 136,753 86,471 38,600 53,076
ING BLACKROCK INFLATION PROTECTED BOND PORTFOLIO                    
(Funds were first received in this option during May 2009)                    
Value at beginning of period $12.38 $11.14 $10.64 $10.08            
Value at end of period $13.07 $12.38 $11.14 $10.64            
Number of accumulation units outstanding at end of period 98,373 105,289 83,885 14,951            
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2007)                    
Value at beginning of period $8.51 $8.69 $7.71 $5.95 $9.81 $10.03        
Value at end of period $9.70 $8.51 $8.69 $7.71 $5.95 $9.81        
Number of accumulation units outstanding at end of period 4,286 8,920 10,646 12,233 14,973 15,122        
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during December 2006)                    
Value at beginning of period $9.45 $9.68 $8.60 $6.65 $11.00 $10.38 $10.49      
Value at end of period $10.74 $9.45 $9.68 $8.60 $6.65 $11.00 $10.38      
Number of accumulation units outstanding at end of period 6,251 6,463 6,685 6,582 7,515 8,339 2,667      
 
CFI 1

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING BLACKROCK SCIENCE AND TECHNOLOGY OPPORTUNITIES                    
PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $15.10 $17.01 $14.51 $9.58 $16.09 $13.64 $12.87 $11.70    
Value at end of period $16.13 $15.10 $17.01 $14.51 $9.58 $16.09 $13.64 $12.87    
Number of accumulation units outstanding at end of period 12,868 18,853 19,660 15,671 7,915 10,631 11,674 3,984    
ING BOND PORTFOLIO                    
(Funds were first received in this option during February 2008)                    
Value at beginning of period $10.95 $10.43 $9.91 $8.90 $9.93          
Value at end of period $11.57 $10.95 $10.43 $9.91 $8.90          
Number of accumulation units outstanding at end of period 95,184 106,191 114,696 126,736 104,979          
ING CLARION GLOBAL REAL ESTATE PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $8.19 $8.72 $7.57 $5.72 $9.90          
Value at end of period $10.22 $8.19 $8.72 $7.57 $5.72          
Number of accumulation units outstanding at end of period 81,450 96,953 132,218 142,598 160,122          
ING DAVIS NEW YORK VENTURE PORTFOLIO                    
Value at beginning of period $11.12 $11.76 $10.57 $8.09 $13.41 $12.98 $11.48 $11.14 $10.35 $7.41
Value at end of period $12.39 $11.12 $11.76 $10.57 $8.09 $13.41 $12.98 $11.48 $11.14 $10.35
Number of accumulation units outstanding at end of period 3,600 4,098 5,617 18,048 24,864 22,458 32,878 30,426 40,561 44,075
ING DFA WORLD EQUITY PORTFOLIO                    
(Funds were first received in this option during December 2008)                    
Value at beginning of period $8.68 $9.62 $7.77 $6.42 $6.42          
Value at end of period $10.16 $8.68 $9.62 $7.77 $6.42          
Number of accumulation units outstanding at end of period 4,221 2,839 2,939 2,923 1,522          
ING FRANKLIN TEMPLETON FOUNDING STRATEGY PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $9.49 $9.68 $8.81 $6.81 $10.42          
Value at end of period $10.91 $9.49 $9.68 $8.81 $6.81          
Number of accumulation units outstanding at end of period 39,761 40,454 41,053 43,368 39,491          
ING GLOBAL BOND PORTFOLIO                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $13.90 $13.53 $11.80 $9.80 $11.72 $10.87 $10.12 $10.01    
Value at end of period $14.85 $13.90 $13.53 $11.80 $9.80 $11.72 $10.87 $10.12    
Number of accumulation units outstanding at end of period 140,638 162,288 174,637 210,339 279,774 256,666 158,225 129,252    
ING GROWTH AND INCOME CORE PORTFOLIO                    
Value at beginning of period $9.73 $11.30 $10.25 $7.15 $11.99 $11.29 $9.76 $9.71 $8.69 $6.85
Value at end of period $10.52 $9.73 $11.30 $10.25 $7.15 $11.99 $11.29 $9.76 $9.71 $8.69
Number of accumulation units outstanding at end of period 27,509 32,198 36,920 45,639 35,199 52,491 59,105 22,881 31,110 35,846
ING GROWTH AND INCOME PORTFOLIO (CLASS ADV)                    
(Funds were first received in this option during January 2011)                    
Value at beginning of period $9.63 $9.99                
Value at end of period $11.01 $9.63                
Number of accumulation units outstanding at end of period 115,512 125,835                
ING GROWTH AND INCOME PORTFOLIO (CLASS S)                    
Value at beginning of period $14.88 $15.07 $13.34 $10.33 $16.75 $15.75 $13.95 $13.02 $12.14 $10.00
Value at end of period $17.05 $14.88 $15.07 $13.34 $10.33 $16.75 $15.75 $13.95 $13.02 $12.14
Number of accumulation units outstanding at end of period 134,881 155,077 219,594 255,790 251,002 145,542 150,140 110,132 93,560 124,019
ING INDEX PLUS LARGECAP PORTFOLIO                    
Value at beginning of period $10.40 $10.51 $9.32 $7.64 $12.29 $11.82 $10.42 $9.99 $9.13 $7.31
Value at end of period $11.78 $10.40 $10.51 $9.32 $7.64 $12.29 $11.82 $10.42 $9.99 $9.13
Number of accumulation units outstanding at end of period 190,938 229,366 288,640 342,764 441,507 589,242 706,796 699,498 642,836 714,143
ING INDEX PLUS MIDCAP PORTFOLIO                    
Value at beginning of period $15.50 $15.84 $13.12 $10.06 $16.28 $15.58 $14.39 $13.08 $11.32 $8.64
Value at end of period $18.06 $15.50 $15.84 $13.12 $10.06 $16.28 $15.58 $14.39 $13.08 $11.32
Number of accumulation units outstanding at end of period 94,329 113,984 171,023 203,064 233,142 296,035 390,173 317,559 264,296 258,278
 
CFI 2

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING INDEX PLUS SMALLCAP PORTFOLIO                    
Value at beginning of period $15.34 $15.61 $12.84 $10.39 $15.79 $17.01 $15.10 $14.17 $11.73 $8.70
Value at end of period $17.08 $15.34 $15.61 $12.84 $10.39 $15.79 $17.01 $15.10 $14.17 $11.73
Number of accumulation units outstanding at end of period 59,960 72,275 86,983 98,259 112,142 142,060 190,380 158,913 125,338 128,985
ING INTERMEDIATE BOND PORTFOLIO                    
Value at beginning of period $14.94 $14.03 $12.91 $11.69 $12.89 $12.29 $11.93 $11.68 $11.25 $10.00
Value at end of period $16.18 $14.94 $14.03 $12.91 $11.69 $12.89 $12.29 $11.93 $11.68 $11.25
Number of accumulation units outstanding at end of period 317,834 331,651 336,344 398,903 451,149 423,111 453,380 207,458 102,679 113,933
ING INTERNATIONAL INDEX PORTFOLIO                    
(Funds were first received in this option during August 2009)                    
Value at beginning of period $12.98 $14.94 $13.99 $12.88            
Value at end of period $15.27 $12.98 $14.94 $13.99            
Number of accumulation units outstanding at end of period 16,079 24,072 27,912 39,192            
ING INTERNATIONAL VALUE PORTFOLIO                    
Value at beginning of period $12.09 $14.32 $14.10 $11.26 $19.67 $17.53 $13.71 $12.67 $10.91 $8.47
Value at end of period $14.28 $12.09 $14.32 $14.10 $11.26 $19.67 $17.53 $13.71 $12.67 $10.91
Number of accumulation units outstanding at end of period 52,274 62,901 86,396 110,733 132,343 164,410 147,019 92,086 51,621 38,096
ING INVESCO VAN KAMPEN COMSTOCK PORTFOLIO                    
Value at beginning of period $12.72 $13.08 $11.45 $8.98 $14.24 $14.68 $12.77 $12.43 $10.73 $8.34
Value at end of period $14.97 $12.72 $13.08 $11.45 $8.98 $14.24 $14.68 $12.77 $12.43 $10.73
Number of accumulation units outstanding at end of period 18,979 27,320 40,150 54,755 65,309 128,460 166,991 180,683 142,628 89,527
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS I)
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.73 $12.97 $11.63 $9.55 $12.56 $12.22 $10.93 $10.06    
Value at end of period $14.25 $12.73 $12.97 $11.63 $9.55 $12.56 $12.22 $10.93    
Number of accumulation units outstanding at end of period 92,133 107,530 137,766 169,379 182,051 230,012 249,753 305,069    
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS S)
Value at beginning of period $12.81 $13.08 $11.76 $9.68 $12.76 $12.45 $11.16 $10.43 $9.50 $7.54
Value at end of period $14.30 $12.81 $13.08 $11.76 $9.68 $12.76 $12.45 $11.16 $10.43 $9.50
Number of accumulation units outstanding at end of period 120,800 132,397 165,838 211,728 273,912 356,547 365,656 132,381 10,731 7,594
ING JPMORGAN EMERGING MARKETS EQUITY PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $8.67 $10.69 $8.95 $5.26 $10.39          
Value at end of period $10.25 $8.67 $10.69 $8.95 $5.26          
Number of accumulation units outstanding at end of period 98,850 101,176 143,020 84,690 43,852          
ING JPMORGAN MID CAP VALUE PORTFOLIO                    
Value at beginning of period $18.38 $18.18 $14.90 $11.95 $17.98 $17.70 $15.31 $14.21 $11.88 $9.20
Value at end of period $21.89 $18.38 $18.18 $14.90 $11.95 $17.98 $17.70 $15.31 $14.21 $11.88
Number of accumulation units outstanding at end of period 32,476 32,271 43,617 56,417 65,535 84,163 87,571 50,519 19,960 13,543
ING LARGE CAP GROWTH PORTFOLIO                    
(Funds were first received in this option during June 2012)                    
Value at beginning of period $9.64                  
Value at end of period $10.37                  
Number of accumulation units outstanding at end of period 166,260                  
ING LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $15.41 $15.18 $13.39 $9.47 $13.17 $11.89 $11.34 $11.05    
Value at end of period $18.02 $15.41 $15.18 $13.39 $9.47 $13.17 $11.89 $11.34    
Number of accumulation units outstanding at end of period 12,140 14,773 13,527 6,599 1,056 1,063 3,613 4,478    
ING LIQUID ASSETS PORTFOLIO                    
Value at beginning of period $19.12 $19.26 $19.41 $19.49 $19.17 $18.40 $17.72 $17.37 $17.34 $17.34
Value at end of period $18.98 $19.12 $19.26 $19.41 $19.49 $19.17 $18.40 $17.72 $17.37 $17.34
Number of accumulation units outstanding at end of period 57,604 81,828 94,945 162,062 269,683 298,024 153,120 34,025 31,348 23,815
 
 
 
 
CFI 3

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING MFS TOTAL RETURN PORTFOLIO                    
Value at beginning of period $30.12 $29.87 $27.40 $23.41 $30.38 $29.43 $26.49 $25.94 $23.52 $20.30
Value at end of period $33.23 $30.12 $29.87 $27.40 $23.41 $30.38 $29.43 $26.49 $25.94 $23.52
Number of accumulation units outstanding at end of period 25,592 30,741 42,562 57,661 72,737 76,172 104,135 139,054 101,092 66,352
ING MFS UTILITIES PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $10.35 $9.80 $8.69 $6.59 $10.72          
Value at end of period $11.64 $10.35 $9.80 $8.69 $6.59          
Number of accumulation units outstanding at end of period 38,336 42,015 42,571 24,148 30,849          
ING MIDCAP OPPORTUNITIES PORTFOLIO                    
Value at beginning of period $17.31 $17.58 $13.63 $9.73 $15.75 $12.65 $11.84 $10.83 $9.82 $7.24
Value at end of period $19.57 $17.31 $17.58 $13.63 $9.73 $15.75 $12.65 $11.84 $10.83 $9.82
Number of accumulation units outstanding at end of period 58,866 59,372 54,180 54,439 56,383 35,218 38,945 34,310 33,260 28,402
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.88 $14.12 $12.26 $8.85 $14.94 $14.12 $12.06 $10.06    
Value at end of period $15.55 $12.88 $14.12 $12.26 $8.85 $14.94 $14.12 $12.06    
Number of accumulation units outstanding at end of period 44,347 53,124 79,991 107,025 116,365 158,013 231,483 335,304    
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS S)                    
Value at beginning of period $14.74 $16.22 $14.11 $10.20 $17.27 $16.36 $14.02 $12.47 $10.92 $8.35
Value at end of period $17.76 $14.74 $16.22 $14.11 $10.20 $17.27 $16.36 $14.02 $12.47 $10.92
Number of accumulation units outstanding at end of period 95,189 113,912 135,698 160,556 176,964 200,451 271,980 125,557 11,617 3,128
ING PIMCO HIGH YIELD PORTFOLIO                    
(Funds were first received in this option during May 2005)                    
Value at beginning of period $15.61 $15.06 $13.28 $8.96 $11.65 $11.41 $10.56 $10.20    
Value at end of period $17.67 $15.61 $15.06 $13.28 $8.96 $11.65 $11.41 $10.56    
Number of accumulation units outstanding at end of period 69,121 77,752 90,231 112,327 113,336 177,314 195,700 67,117    
ING PIMCO TOTAL RETURN BOND PORTFOLIO                    
Value at beginning of period $21.31 $20.76 $19.42 $17.10 $16.53 $15.28 $14.76 $14.51 $13.94 $13.41
Value at end of period $23.01 $21.31 $20.76 $19.42 $17.10 $16.53 $15.28 $14.76 $14.51 $13.94
Number of accumulation units outstanding at end of period 64,498 70,590 86,796 115,189 60,562 32,054 18,781 19,134 15,494 22,526
ING PIMCO TOTAL RETURN PORTFOLIO                    
Value at beginning of period $15.82 $15.44 $14.46 $12.94 $13.06 $12.03 $11.65 $11.50 $11.11 $10.75
Value at end of period $16.94 $15.82 $15.44 $14.46 $12.94 $13.06 $12.03 $11.65 $11.50 $11.11
Number of accumulation units outstanding at end of period 59,673 76,398 111,400 153,921 178,495 130,180 126,334 135,399 102,583 131,991
ING PIONEER FUND PORTFOLIO                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $11.59 $12.23 $10.64 $8.63 $13.33 $12.78 $11.03 $10.74    
Value at end of period $12.69 $11.59 $12.23 $10.64 $8.63 $13.33 $12.78 $11.03    
Number of accumulation units outstanding at end of period 9,335 19,347 21,714 28,870 30,070 38,535 47,686 40,290    
ING PIONEER MID CAP VALUE PORTFOLIO                    
(Funds were first received in this option during May 2005)                    
Value at beginning of period $11.63 $12.33 $10.54 $8.48 $12.78 $12.20 $10.94 $10.27    
Value at end of period $12.82 $11.63 $12.33 $10.54 $8.48 $12.78 $12.20 $10.94    
Number of accumulation units outstanding at end of period 38,935 54,971 73,596 84,778 85,884 103,549 139,643 118,868    
ING RUSSELLTM LARGE CAP GROWTH INDEX PORTFOLIO                    
(Funds were first received in this option during July 2009)                    
Value at beginning of period $14.68 $14.23 $12.75 $10.86            
Value at end of period $16.65 $14.68 $14.23 $12.75            
Number of accumulation units outstanding at end of period 71,337 79,060 85,980 86,925            
ING SMALLCAP OPPORTUNITIES PORTFOLIO                    
Value at beginning of period $10.13 $10.15 $7.74 $5.97 $9.20 $8.44 $7.57 $7.00 $6.42 $4.67
Value at end of period $11.55 $10.13 $10.15 $7.74 $5.97 $9.20 $8.44 $7.57 $7.00 $6.42
Number of accumulation units outstanding at end of period 53,719 51,357 38,934 44,210 32,671 27,152 33,355 25,336 16,344 19,261
 
 
 
CFI 4

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING SMALL COMPANY PORTFOLIO                    
Value at beginning of period $15.82 $16.38 $13.31 $10.54 $15.44 $14.72 $12.78 $11.70 $10.33 $7.56
Value at end of period $17.94 $15.82 $16.38 $13.31 $10.54 $15.44 $14.72 $12.78 $11.70 $10.33
Number of accumulation units outstanding at end of period 24,670 27,837 38,261 42,897 38,103 37,156 43,693 39,462 48,702 52,291
ING SOLUTION 2015 PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $11.73 $11.90 $10.78 $8.88 $12.23 $11.78 $10.72 $10.51    
Value at end of period $12.97 $11.73 $11.90 $10.78 $8.88 $12.23 $11.78 $10.72    
Number of accumulation units outstanding at end of period 38,971 42,405 49,976 52,848 50,657 53,038 82,464 3,654    
ING SOLUTION 2025 PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $11.30 $11.75 $10.41 $8.34 $12.70 $12.23 $10.94 $10.61    
Value at end of period $12.73 $11.30 $11.75 $10.41 $8.34 $12.70 $12.23 $10.94    
Number of accumulation units outstanding at end of period 9,855 34,943 78,104 91,149 76,492 64,247 52,414 4,318    
ING SOLUTION 2035 PORTFOLIO                    
(Funds were first received in this option during July 2005)                    
Value at beginning of period $11.27 $11.90 $10.47 $8.22 $13.14 $12.58 $11.10 $10.75    
Value at end of period $12.87 $11.27 $11.90 $10.47 $8.22 $13.14 $12.58 $11.10    
Number of accumulation units outstanding at end of period 18,350 6,919 7,842 7,998 7,966 9,762 24,237 1,474    
ING SOLUTION 2045 PORTFOLIO                    
(Funds were first received in this option during May 2006)                    
Value at beginning of period $11.23 $11.92 $10.43 $8.10 $13.56 $12.92 $12.16      
Value at end of period $12.86 $11.23 $11.92 $10.43 $8.10 $13.56 $12.92      
Number of accumulation units outstanding at end of period 1,855 2,128 2,447 8,777 8,597 8,606 1,606      
ING SOLUTION INCOME PORTFOLIO                    
(Funds were first received in this option during February 2006)                    
Value at beginning of period $11.99 $12.04 $11.07 $9.52 $11.50 $11.02 $10.39      
Value at end of period $13.07 $11.99 $12.04 $11.07 $9.52 $11.50 $11.02      
Number of accumulation units outstanding at end of period 11,635 10,407 12,960 19,233 25,260 52,437 16,951      
ING STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO                    
(Funds were first received in this option during November 2005)                    
Value at beginning of period $14.81 $14.69 $13.35 $11.42 $15.12 $14.44 $13.45 $13.27    
Value at end of period $16.46 $14.81 $14.69 $13.35 $11.42 $15.12 $14.44 $13.45    
Number of accumulation units outstanding at end of period 5,205 6,083 10,613 14,295 23,209 28,152 20,424 3,111    
ING STRATEGIC ALLOCATION GROWTH PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $15.33 $15.95 $14.25 $11.49 $18.15 $17.46 $15.58 $14.79    
Value at end of period $17.46 $15.33 $15.95 $14.25 $11.49 $18.15 $17.46 $15.58    
Number of accumulation units outstanding at end of period 3,524 3,671 4,460 5,210 9,650 10,802 10,153 883    
ING STRATEGIC ALLOCATION MODERATE PORTFOLIO                    
(Funds were first received in this option during November 2005)                    
Value at beginning of period $15.07 $15.32 $13.81 $11.46 $16.63 $15.92 $14.48 $14.24    
Value at end of period $16.96 $15.07 $15.32 $13.81 $11.46 $16.63 $15.92 $14.48    
Number of accumulation units outstanding at end of period 5,834 7,192 7,584 9,881 14,697 16,838 14,341 351    
ING T. ROWE PRICE CAPITAL APPRECIATION PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $11.16 $10.93 $9.66 $7.30 $10.17          
Value at end of period $12.68 $11.16 $10.93 $9.66 $7.30          
Number of accumulation units outstanding at end of period 268,848 318,305 340,928 274,001 190,714          
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO                    
Value at beginning of period $13.78 $14.45 $11.36 $7.84 $13.92 $12.41 $11.48 $10.61 $9.85 $6.86
Value at end of period $15.85 $13.78 $14.45 $11.36 $7.84 $13.92 $12.41 $11.48 $10.61 $9.85
Number of accumulation units outstanding at end of period 35,116 38,795 41,283 53,995 52,948 56,820 74,242 37,655 27,168 32,473
 
 
 
 
CFI 5

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING T. ROWE PRICE EQUITY INCOME PORTFOLIO                    
(Funds were first received in this option during May 2005)                    
Value at beginning of period $11.50 $11.69 $10.25 $8.26 $12.94 $12.65 $10.70 $10.33    
Value at end of period $13.38 $11.50 $11.69 $10.25 $8.26 $12.94 $12.65 $10.70    
Number of accumulation units outstanding at end of period 20,173 20,907 25,351 34,506 25,752 38,381 29,680 10,509    
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO                    
Value at beginning of period $12.50 $12.77 $11.03 $7.80 $13.62 $12.52 $11.16 $10.62 $9.75 $7.52
Value at end of period $14.72 $12.50 $12.77 $11.03 $7.80 $13.62 $12.52 $11.16 $10.62 $9.75
Number of accumulation units outstanding at end of period 54,282 64,599 77,791 91,393 107,501 133,890 153,128 174,765 166,665 173,019
ING T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
(Funds were first received in this option during July 2008)                    
Value at beginning of period $7.22 $8.30 $7.35 $5.38 $9.01          
Value at end of period $8.51 $7.22 $8.30 $7.35 $5.38          
Number of accumulation units outstanding at end of period 5,478 5,434 6,839 17,172 14,482          
ING TEMPLETON FOREIGN EQUITY PORTFOLIO                    
(Funds were first received in this option during April 2008)                    
Value at beginning of period $7.73 $8.88 $8.24 $6.29 $10.21          
Value at end of period $9.11 $7.73 $8.88 $8.24 $6.29          
Number of accumulation units outstanding at end of period 37,012 39,688 45,925 55,312 51,256          
ING U.S. BOND INDEX PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $11.98 $11.29 $10.74 $10.25 $10.02          
Value at end of period $12.32 $11.98 $11.29 $10.74 $10.25          
Number of accumulation units outstanding at end of period 23,881 42,397 38,596 34,189 13,014          
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO                    
Value at beginning of period $10.70 $11.08 $9.88 $7.56 $12.70 $12.68 $11.18 $10.33 $9.08 $7.35
Value at end of period $12.01 $10.70 $11.08 $9.88 $7.56 $12.70 $12.68 $11.18 $10.33 $9.08
Number of accumulation units outstanding at end of period 12,272 14,243 17,253 17,623 19,728 29,474 33,090 13,249 9,007 7,245
ING WISDOM TREESM GLOBAL HIGH-YIELDING EQUITY INDEX                    
PORTFOLIO                    
(Funds were first received in this option during February 2008)                    
Value at beginning of period $7.91 $8.29 $7.89 $6.12 $9.74          
Value at end of period $9.03 $7.91 $8.29 $7.89 $6.12          
Number of accumulation units outstanding at end of period 16,236 12,793 25,923 30,957 39,611          
OPPENHEIMER MAIN STREET SMALL- & MID-CAP FUND®/VA                    
(Funds were first received in this option during July 2005)                    
Value at beginning of period $18.70 $19.30 $15.80 $11.63 $18.90 $19.32 $16.97 $16.32    
Value at end of period $21.84 $18.70 $19.30 $15.80 $11.63 $18.90 $19.32 $16.97    
Number of accumulation units outstanding at end of period 16,293 21,876 29,817 28,556 26,846 25,199 20,003 2,471    
PIMCO VIT REAL RETURN PORTFOLIO                    
(Funds were first received in this option during July 2005)                    
Value at beginning of period $14.22 $12.83 $11.96 $10.18 $11.03 $10.06 $10.05 $10.01    
Value at end of period $15.35 $14.22 $12.83 $11.96 $10.18 $11.03 $10.06 $10.05    
Number of accumulation units outstanding at end of period 130,921 143,636 192,949 176,124 179,788 64,973 52,652 18,256    
PIONEER EQUITY INCOME VCT PORTFOLIO                    
Value at beginning of period $14.21 $13.53 $11.44 $10.12 $14.66 $14.69 $12.12 $11.58 $10.05 $8.28
Value at end of period $15.51 $14.21 $13.53 $11.44 $10.12 $14.66 $14.69 $12.12 $11.58 $10.05
Number of accumulation units outstanding at end of period 89,009 99,762 114,858 148,657 216,782 232,135 216,456 134,598 70,739 55,947
 
 
CFI 6

 

 

Condensed Financial Information (continued)
 
Separate Account Annual Charges of 0.95%
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
FIDELITY® VIP CONTRAFUND® PORTFOLIO                    
Value at beginning of period $15.88 $16.49 $14.24 $10.61 $18.69 $16.09 $14.57 $12.61 $11.06 $8.71
Value at end of period $18.26 $15.88 $16.49 $14.24 $10.61 $18.69 $16.09 $14.57 $12.61 $11.06
Number of accumulation units outstanding at end of period 95,973 99,326 109,249 135,870 151,254 173,521 196,871 801,875 551,666 40,201
FIDELITY® VIP EQUITY-INCOME PORTFOLIO                    
Value at beginning of period $11.53 $11.57 $10.16 $7.90 $13.94 $13.90 $11.70 $11.19 $10.16 $7.89
Value at end of period $13.37 $11.53 $11.57 $10.16 $7.90 $13.94 $13.90 $11.70 $11.19 $10.16
Number of accumulation units outstanding at end of period 15,266 15,740 21,686 25,217 25,505 29,443 33,797 537,653 519,515 6,929
FRANKLIN SMALL CAP VALUE SECURITIES FUND                    
Value at beginning of period $17.85 $18.72 $14.74 $11.52 $17.37 $17.96 $15.50 $14.39 $11.74 $8.97
Value at end of period $20.93 $17.85 $18.72 $14.74 $11.52 $17.37 $17.96 $15.50 $14.39 $11.74
Number of accumulation units outstanding at end of period 13,386 14,330 15,105 15,862 16,718 19,781 24,704 12,027 10,156 8,955
ING AMERICAN CENTURY SMALL-MID CAP VALUE PORTFOLIO                    
Value at beginning of period $17.40 $18.14 $15.00 $11.17 $15.35 $15.96 $13.96 $13.07 $10.87 $8.10
Value at end of period $20.05 $17.40 $18.14 $15.00 $11.17 $15.35 $15.96 $13.96 $13.07 $10.87
Number of accumulation units outstanding at end of period 9,180 9,354 10,662 2,950 2,690 3,080 3,124 3,737 2,297 864
ING AMERICAN FUNDS INTERNATIONAL PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $10.99 $12.95 $12.26 $8.70 $15.26 $12.90 $11.00 $9.76    
Value at end of period $12.76 $10.99 $12.95 $12.26 $8.70 $15.26 $12.90 $11.00    
Number of accumulation units outstanding at end of period 23,437 28,977 35,706 48,418 51,578 46,621 49,871 543,376    
ING BALANCED PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $13.12 $13.46 $11.94 $10.14 $14.27 $13.68 $12.60      
Value at end of period $14.75 $13.12 $13.46 $11.94 $10.14 $14.27 $13.68      
Number of accumulation units outstanding at end of period 1,917 1,918 1,917 6,873 7,381 6,915 6,892      
ING BARON GROWTH PORTFOLIO                    
Value at beginning of period $18.39 $18.17 $14.50 $10.83 $18.61 $17.70 $15.51 $14.58 $11.51 $8.70
Value at end of period $21.80 $18.39 $18.17 $14.50 $10.83 $18.61 $17.70 $15.51 $14.58 $11.51
Number of accumulation units outstanding at end of period 9,031 9,920 11,925 15,558 15,163 25,122 40,577 92,016 11,022 12,488
ING BLACKROCK INFLATION PROTECTED BOND PORTFOLIO                    
(Funds were first received in this option during November 2009)                    
Value at beginning of period $12.31 $11.10 $10.62 $10.75            
Value at end of period $12.97 $12.31 $11.10 $10.62            
Number of accumulation units outstanding at end of period 5,027 6,515 9,750 5,961            
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during December 2006)                    
Value at beginning of period $9.36 $9.60 $8.54 $6.62 $10.98 $10.38 $10.49      
Value at end of period $10.61 $9.36 $9.60 $8.54 $6.62 $10.98 $10.38      
Number of accumulation units outstanding at end of period 3,006 2,989 5,098 5,196 5,213 6,933 3,023      
ING BLACKROCK SCIENCE AND TECHNOLOGY OPPORTUNITIES                    
PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $14.90 $16.82 $14.37 $9.51 $16.01 $13.60 $12.85 $11.98    
Value at end of period $15.88 $14.90 $16.82 $14.37 $9.51 $16.01 $13.60 $12.85    
Number of accumulation units outstanding at end of period 3,376 3,297 3,220 4,788 4,010 4,787 3,893 519    
ING BOND PORTFOLIO                    
(Funds were first received in this option during March 2008)                    
Value at beginning of period $10.86 $10.37 $9.87 $8.89 $9.84          
Value at end of period $11.45 $10.86 $10.37 $9.87 $8.89          
Number of accumulation units outstanding at end of period 15,802 17,580 18,404 29,743 18,380          
 
CFI 7

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING CLARION GLOBAL REAL ESTATE PORTFOLIO                    
(Funds were first received in this option during September 2008)                    
Value at beginning of period $8.13 $8.67 $7.54 $5.71 $8.31          
Value at end of period $10.12 $8.13 $8.67 $7.54 $5.71          
Number of accumulation units outstanding at end of period 15,337 14,987 14,880 16,547 21,518          
ING DAVIS NEW YORK VENTURE PORTFOLIO                    
Value at beginning of period $10.90 $11.54 $10.40 $7.98 $13.25 $12.85 $11.39 $11.07 $10.31 $7.40
Value at end of period $12.12 $10.90 $11.54 $10.40 $7.98 $13.25 $12.85 $11.39 $11.07 $10.31
Number of accumulation units outstanding at end of period 4,004 4,004 4,006 6,061 4,426 4,853 5,327 3,442 13 124
ING DFA WORLD EQUITY PORTFOLIO                    
(Funds were first received in this option during September 2008)                    
Value at beginning of period $9.40 $9.58 $7.74 $6.42 $8.99          
Value at end of period $10.07 $8.62 $9.58 $7.74 $6.42          
Number of accumulation units outstanding at end of period 880 0 0 8,959 10,043          
ING FRANKLIN TEMPLETON FOUNDING STRATEGY PORTFOLIO                  
(Funds were first received in this option during February 2009)                    
Value at beginning of period $9.41 $9.63 $8.77 $6.61            
Value at end of period $10.81 $9.41 $9.63 $8.77            
Number of accumulation units outstanding at end of period 1,186 2,673 2,689 3,205            
ING GLOBAL BOND PORTFOLIO                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $13.72 $13.38 $11.69 $9.73 $11.65 $10.83 $10.11 $10.01    
Value at end of period $14.62 $13.72 $13.38 $11.69 $9.73 $11.65 $10.83 $10.11    
Number of accumulation units outstanding at end of period 24,231 29,157 37,912 33,043 45,969 44,914 24,203 13,963    
ING GROWTH AND INCOME CORE PORTFOLIO                    
(Funds were first received in this option during February 2006)                    
Value at beginning of period $9.53 $11.10 $10.08 $7.05 $11.85 $11.18 $9.83      
Value at end of period $10.29 $9.53 $11.10 $10.08 $7.05 $11.85 $11.18      
Number of accumulation units outstanding at end of period 4,496 4,498 4,546 4,596 5,675 6,625 5,538      
ING GROWTH AND INCOME PORTFOLIO (CLASS ADV)                    
(Funds were first received in this option during January 2011)                    
Value at beginning of period $9.61 $9.99                
Value at end of period $10.96 $9.61                
Number of accumulation units outstanding at end of period 23,741 24,255                
ING GROWTH AND INCOME PORTFOLIO (CLASS S)                    
(Funds were first received in this option during November 2005)                    
Value at beginning of period $14.62 $14.84 $13.16 $10.22 $16.59 $15.63 $13.88 $14.06    
Value at end of period $16.72 $14.62 $14.84 $13.16 $10.22 $16.59 $15.63 $13.88    
Number of accumulation units outstanding at end of period 9,085 11,101 14,247 17,392 13,788 10,818 12,489 9,277    
ING INDEX PLUS LARGECAP PORTFOLIO                    
Value at beginning of period $10.18 $10.32 $9.17 $7.52 $12.13 $11.69 $10.33 $9.92 $9.08 $7.28
Value at end of period $11.51 $10.18 $10.32 $9.17 $7.52 $12.13 $11.69 $10.33 $9.92 $9.08
Number of accumulation units outstanding at end of period 25,441 26,026 27,045 46,838 48,227 59,345 54,908 450,474 418,924 31,451
ING INDEX PLUS MIDCAP PORTFOLIO                    
Value at beginning of period $15.18 $15.54 $12.90 $9.91 $16.07 $15.41 $14.26 $12.99 $11.27 $8.61
Value at end of period $17.64 $15.18 $15.54 $12.90 $9.91 $16.07 $15.41 $14.26 $12.99 $11.27
Number of accumulation units outstanding at end of period 17,558 18,324 24,243 35,038 37,692 53,690 67,317 553,807 517,452 32,539
ING INDEX PLUS SMALLCAP PORTFOLIO                    
Value at beginning of period $15.02 $15.32 $12.63 $10.24 $15.58 $16.82 $14.97 $14.07 $11.67 $8.68
Value at end of period $16.69 $15.02 $15.32 $12.63 $10.24 $15.58 $16.82 $14.97 $14.07 $11.67
Number of accumulation units outstanding at end of period 4,699 4,805 5,097 7,266 8,670 13,654 22,702 397,971 336,053 3,911
ING INTERMEDIATE BOND PORTFOLIO                    
Value at beginning of period $14.66 $13.79 $12.71 $11.53 $12.75 $12.18 $11.84 $11.62 $11.21 $10.00
Value at end of period $15.83 $14.66 $13.79 $12.71 $11.53 $12.75 $12.18 $11.84 $11.62 $11.21
Number of accumulation units outstanding at end of period 82,535 85,900 81,977 90,166 83,654 103,753 134,575 147,290 3,636 3,638
 
CFI 8

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING INTERNATIONAL INDEX PORTFOLIO                    
(Funds were first received in this option during August 2009)                    
Value at beginning of period $12.91 $14.89 $13.96 $12.87            
Value at end of period $15.16 $12.91 $14.89 $13.96            
Number of accumulation units outstanding at end of period 1,892 1,944 2,333 3,310            
ING INTERNATIONAL VALUE PORTFOLIO                    
Value at beginning of period $11.84 $14.07 $13.87 $11.10 $19.43 $17.35 $13.60 $12.59 $10.86 $8.45
Value at end of period $13.96 $11.84 $14.07 $13.87 $11.10 $19.43 $17.35 $13.60 $12.59 $10.86
Number of accumulation units outstanding at end of period 14,872 15,748 16,206 17,293 22,384 27,043 32,902 18,570 917 1,154
ING INVESCO VAN KAMPEN COMSTOCK PORTFOLIO                    
Value at beginning of period $12.47 $12.86 $11.27 $8.86 $14.08 $14.54 $12.67 $12.36 $10.69 $8.32
Value at end of period $14.66 $12.47 $12.86 $11.27 $8.86 $14.08 $14.54 $12.67 $12.36 $10.69
Number of accumulation units outstanding at end of period 12,177 12,507 14,585 20,559 23,950 38,905 45,434 238,674 160,272 7,937
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.56 $12.82 $11.52 $9.48 $12.49 $12.18 $10.91 $10.06    
Value at end of period $14.03 $12.56 $12.82 $11.52 $9.48 $12.49 $12.18 $10.91    
Number of accumulation units outstanding at end of period 3,841 4,112 4,451 7,451 7,451 15,409 21,170 21,519    
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS S)                    
Value at beginning of period $12.55 $12.84 $11.57 $9.55 $12.61 $12.33 $11.07 $10.37 $9.83 $9.88
Value at end of period $13.99 $12.55 $12.84 $11.57 $9.55 $12.61 $12.33 $11.07 $10.37 $9.83
Number of accumulation units outstanding at end of period 30,738 33,237 36,631 46,753 45,620 53,428 56,264 66,380 3,976 0
ING JPMORGAN EMERGING MARKETS EQUITY PORTFOLIO                    
(Funds were first received in this option during June 2008)                    
Value at beginning of period $8.61 $10.63 $8.92 $5.25 $9.95          
Value at end of period $10.15 $8.61 $10.63 $8.92 $5.25          
Number of accumulation units outstanding at end of period 24,008 28,933 29,609 31,324 18,304          
ING JPMORGAN MID CAP VALUE PORTFOLIO                    
Value at beginning of period $18.02 $17.87 $14.67 $11.79 $17.77 $17.53 $15.19 $14.14 $11.84 $9.19
Value at end of period $21.42 $18.02 $17.87 $14.67 $11.79 $17.77 $17.53 $15.19 $14.14 $11.84
Number of accumulation units outstanding at end of period 21,250 21,703 23,050 23,662 22,483 27,472 34,281 155,270 110,487 1,977
ING LARGE CAP GROWTH PORTFOLIO                    
(Funds were first received in this option during July 2012)                    
Value at beginning of period $9.86                  
Value at end of period $10.35                  
Number of accumulation units outstanding at end of period 32,339                  
ING LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $15.20 $15.01 $13.26 $9.40 $13.10 $11.85 $11.33      
Value at end of period $17.74 $15.20 $15.01 $13.26 $9.40 $13.10 $11.85      
Number of accumulation units outstanding at end of period 3,369 8,467 5,937 6,840 602 711 722      
ING LIQUID ASSETS PORTFOLIO                    
Value at beginning of period $18.26 $18.43 $18.60 $18.72 $18.45 $17.75 $17.12 $16.82 $16.82 $16.86
Value at end of period $18.09 $18.26 $18.43 $18.60 $18.72 $18.45 $17.75 $17.12 $16.82 $16.82
Number of accumulation units outstanding at end of period 8,171 13,722 11,204 33,940 62,017 64,781 25,110 392,748 298,469 1,754
ING MFS TOTAL RETURN PORTFOLIO                    
Value at beginning of period $29.09 $28.91 $26.57 $22.75 $29.58 $28.71 $25.90 $25.41 $23.09 $19.96
Value at end of period $32.03 $29.09 $28.91 $26.57 $22.75 $29.58 $28.71 $25.90 $25.41 $23.09
Number of accumulation units outstanding at end of period 4,936 5,236 5,427 9,220 11,141 19,038 19,950 449,947 288,602 231
ING MFS UTILITIES PORTFOLIO                    
(Funds were first received in this option during August 2008)                    
Value at beginning of period $10.27 $9.75 $8.66 $6.58 $9.49          
Value at end of period $11.52 $10.27 $9.75 $8.66 $6.58          
Number of accumulation units outstanding at end of period 13,956 21,549 12,297 1,533 1,534          
 
 
 
CFI 9

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING MIDCAP OPPORTUNITIES PORTFOLIO                    
(Funds were first received in this option during May 2006)                    
Value at beginning of period $16.96 $17.26 $13.41 $9.60 $15.56 $12.52 $12.19      
Value at end of period $19.14 $16.96 $17.26 $13.41 $9.60 $15.56 $12.52      
Number of accumulation units outstanding at end of period 5,156 5,212 5,283 11,876 11,131 1,331 409      
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.70 $13.96 $12.14 $8.78 $14.86 $14.07 $12.04 $10.06    
Value at end of period $15.31 $12.70 $13.96 $12.14 $8.78 $14.86 $14.07 $12.04    
Number of accumulation units outstanding at end of period 2,973 3,726 6,914 6,986 7,172 8,236 13,180 161,425    
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS S)                    
Value at beginning of period $14.46 $15.93 $13.89 $10.06 $17.07 $16.21 $13.91 $12.40 $10.89 $8.34
Value at end of period $17.38 $14.46 $15.93 $13.89 $10.06 $17.07 $16.21 $13.91 $12.40 $10.89
Number of accumulation units outstanding at end of period 26,724 28,808 30,548 36,970 43,121 53,750 67,695 80,754 46,615 1,761
ING PIMCO HIGH YIELD PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $15.40 $14.89 $13.16 $8.89 $11.59 $11.37 $10.54 $10.36    
Value at end of period $17.40 $15.40 $14.89 $13.16 $8.89 $11.59 $11.37 $10.54    
Number of accumulation units outstanding at end of period 18,808 23,221 29,261 17,364 10,079 19,241 18,123 449,879    
ING PIMCO TOTAL RETURN BOND PORTFOLIO                    
Value at beginning of period $20.59 $20.09 $18.83 $16.61 $16.09 $14.91 $14.43 $14.22 $13.68 $13.19
Value at end of period $22.18 $20.59 $20.09 $18.83 $16.61 $16.09 $14.91 $14.43 $14.22 $13.68
Number of accumulation units outstanding at end of period 39,131 29,919 25,845 19,579 16,667 3,208 3,510 677,488 530,901 4,579
ING PIMCO TOTAL RETURN PORTFOLIO                    
Value at beginning of period $15.51 $15.17 $14.24 $12.76 $12.91 $11.91 $11.57 $11.44 $11.07 $10.74
Value at end of period $16.58 $15.51 $15.17 $14.24 $12.76 $12.91 $11.91 $11.57 $11.44 $11.07
Number of accumulation units outstanding at end of period 9,121 9,168 9,255 18,210 12,404 3,723 3,891 3,981 2,727 3,443
ING PIONEER FUND PORTFOLIO                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $11.43 $12.09 $10.54 $8.57 $13.26 $12.74 $11.01 $10.68    
Value at end of period $12.49 $11.43 $12.09 $10.54 $8.57 $13.26 $12.74 $11.01    
Number of accumulation units outstanding at end of period 2,151 2,273 2,367 4,056 4,292 4,644 4,976 46,834    
ING PIONEER MID CAP VALUE PORTFOLIO                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $11.47 $12.19 $10.44 $8.42 $12.71 $12.16 $10.93 $10.63    
Value at end of period $12.62 $11.47 $12.19 $10.44 $8.42 $12.71 $12.16 $10.93    
Number of accumulation units outstanding at end of period 15,685 16,408 18,581 21,279 23,770 25,787 26,439 50,406    
ING RUSSELLTM LARGE CAP GROWTH INDEX PORTFOLIO                    
(Funds were first received in this option during July 2009)                    
Value at beginning of period $14.60 $14.18 $12.73 $10.86            
Value at end of period $16.52 $14.60 $14.18 $12.73            
Number of accumulation units outstanding at end of period 1,305 1,305 1,894 2,370            
ING SMALLCAP OPPORTUNITIES PORTFOLIO                    
Value at beginning of period $9.91 $9.95 $7.61 $5.88 $9.07 $8.34 $7.49 $6.95 $5.82 $4.66
Value at end of period $11.28 $9.91 $9.95 $7.61 $5.88 $9.07 $8.34 $7.49 $6.95 $5.82
Number of accumulation units outstanding at end of period 7,473 9,514 9,586 10,719 5,247 5,858 6,013 0 94 0
ING SMALL COMPANY PORTFOLIO                    
Value at beginning of period $15.50 $16.08 $13.09 $10.39 $15.25 $14.57 $12.68 $11.63 $10.29 $7.54
Value at end of period $17.55 $15.50 $16.08 $13.09 $10.39 $15.25 $14.57 $12.68 $11.63 $10.29
Number of accumulation units outstanding at end of period 7,935 8,411 8,505 14,533 15,959 6,268 6,377 1,625 543 4,207
ING SOLUTION 2015 PORTFOLIO                    
(Funds were first received in this option during March 2006)                    
Value at beginning of period $11.57 $11.77 $10.68 $8.81 $12.17 $11.74 $11.00      
Value at end of period $12.78 $11.57 $11.77 $10.68 $8.81 $12.17 $11.74      
Number of accumulation units outstanding at end of period 2,721 2,846 2,973 3,105 4,065 10,544 7,325      
 
 
CFI 10

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING SOLUTION 2025 PORTFOLIO                    
(Funds were first received in this option during May 2006)                    
Value at beginning of period $11.15 $11.62 $10.31 $8.27 $12.63 $12.19 $11.63      
Value at end of period $12.53 $11.15 $11.62 $10.31 $8.27 $12.63 $12.19      
Number of accumulation units outstanding at end of period 0 2,902 2,901 3,398 3,406 6,311 11,103      
ING SOLUTION 2035 PORTFOLIO                    
(Funds were first received in this option during May 2006)                    
Value at beginning of period $11.12 $11.77 $10.37 $8.16 $13.07 $12.54 $11.45      
Value at end of period $12.67 $11.12 $11.77 $10.37 $8.16 $13.07 $12.54      
Number of accumulation units outstanding at end of period 3,363 22,540 22,693 23,352 23,538 20,767 29,966      
ING SOLUTION INCOME PORTFOLIO                    
(Funds were first received in this option during June 2006)                    
Value at beginning of period $11.83 $11.90 $10.97 $9.45 $11.44 $10.98 $10.27      
Value at end of period $12.87 $11.83 $11.90 $10.97 $9.45 $11.44 $10.98      
Number of accumulation units outstanding at end of period 10,490 4,834 5,068 5,285 5,285 10,639 6,916      
ING STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO                    
(Funds were first received in this option during November 2005)                    
Value at beginning of period $14.61 $14.53 $13.22 $11.33 $15.04 $14.39 $13.43 $13.28    
Value at end of period $16.21 $14.61 $14.53 $13.22 $11.33 $15.04 $14.39 $13.43    
Number of accumulation units outstanding at end of period 22,213 16,105 16,346 16,593 17,331 19,112 6,577 4,946    
ING STRATEGIC ALLOCATION MODERATE PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $14.87 $15.15 $13.68 $11.37 $16.54 $15.87 $14.46 $14.37    
Value at end of period $16.70 $14.87 $15.15 $13.68 $11.37 $16.54 $15.87 $14.46    
Number of accumulation units outstanding at end of period 3,081 3,343 3,997 3,955 4,079 985 1,120 1,272    
ING T. ROWE PRICE CAPITAL APPRECIATION PORTFOLIO                    
(Funds were first received in this option during June 2008)                    
Value at beginning of period $11.08 $10.87 $9.62 $7.29 $10.35          
Value at end of period $12.56 $11.08 $10.87 $9.62 $7.29          
Number of accumulation units outstanding at end of period 58,933 65,142 64,708 53,435 34,010          
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO                    
Value at beginning of period $13.50 $14.19 $11.18 $7.73 $13.76 $12.29 $11.39 $10.76 $9.81 $6.85
Value at end of period $15.50 $13.50 $14.19 $11.18 $7.73 $13.76 $12.29 $11.39 $9.81 $9.81
Number of accumulation units outstanding at end of period 6,345 7,329 7,679 9,367 10,562 11,373 15,576 841 0 1,721
ING T. ROWE PRICE EQUITY INCOME PORTFOLIO                    
(Funds were first received in this option during July 2005)                    
Value at beginning of period $11.34 $11.55 $10.15 $8.20 $12.87 $12.61 $10.69 $10.34    
Value at end of period $13.17 $11.34 $11.55 $10.15 $8.20 $12.87 $12.61 $10.69    
Number of accumulation units outstanding at end of period 8,683 8,902 14,383 15,718 16,030 16,404 17,474 262,026    
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO                    
Value at beginning of period $12.25 $12.54 $10.86 $7.69 $13.46 $12.40 $11.07 $10.55 $9.71 $7.51
Value at end of period $14.40 $12.25 $12.54 $10.86 $7.69 $13.46 $12.40 $11.07 $10.55 $9.71
Number of accumulation units outstanding at end of period 11,347 11,669 11,162 16,647 20,821 22,932 19,402 19,420 23,973 20,178
ING T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO                    
(Funds were first received in this option during May 2012)                    
Value at beginning of period $7.38                  
Value at end of period $8.43                  
Number of accumulation units outstanding at end of period 426                  
ING TEMPLETON FOREIGN EQUITY PORTFOLIO                    
(Funds were first received in this option during April 2008)                    
Value at beginning of period $7.68 $8.83 $8.21 $6.29 $10.20          
Value at end of period $9.02 $7.68 $8.83 $8.21 $6.29          
Number of accumulation units outstanding at end of period 1,051 1,050 1,050 1,050 1,050          
 
CFI 11

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING U.S. BOND INDEX PORTFOLIO                    
(Funds were first received in this option during June 2008)                    
Value at beginning of period $11.89 $11.22 $10.70 $10.24 $9.92          
Value at end of period $12.20 $11.89 $11.22 $10.70 $10.24          
Number of accumulation units outstanding at end of period 9,676 19,217 20,949 3,999 3,535          
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO                    
(Funds were first received in this option during January 2005)                    
Value at beginning of period $10.48 $10.88 $9.72 $7.46 $12.55 $12.55 $11.09 $10.12    
Value at end of period $11.75 $10.48 $10.88 $9.72 $7.46 $12.55 $12.55 $11.09    
Number of accumulation units outstanding at end of period 0 0 0 0 0 141 4,012 142    
ING WISDOM TREESM GLOBAL HIGH-YIELDING EQUITY INDEX                    
PORTFOLIO                    
(Funds were first received in this option during March 2008)                    
Value at beginning of period $7.84 $8.24 $7.86 $6.10 $9.68          
Value at end of period $8.94 $7.84 $8.24 $7.86 $6.10          
Number of accumulation units outstanding at end of period 10,947 12,612 8,219 8,478 8,488          
OPPENHEIMER MAIN STREET SMALL- & MID-CAP FUND®/VA                    
Funds were first received in this option during November 2005)                    
Value at beginning of period $18.45 $19.08 $15.65 $11.55 $18.80 $19.25 $16.95 $16.71    
Value at end of period $21.50 $18.45 $19.08 $15.65 $11.55 $18.80 $19.25 $16.95    
Number of accumulation units outstanding at end of period 597 630 887 3,025 3,029 4,585 5,385 1,918    
PIMCO VIT REAL RETURN PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $14.03 $12.68 $11.84 $10.10 $10.97 $10.02 $10.04 $9.98    
Value at end of period $15.11 $14.03 $12.68 $11.84 $10.10 $10.97 $10.02 $10.04    
Number of accumulation units outstanding at end of period 28,190 30,700 33,527 40,964 50,391 18,399 24,624 7,579    
PIONEER EQUITY INCOME VCT PORTFOLIO                    
Value at beginning of period $13.92 $13.29 $11.25 $9.98 $14.49 $14.55 $12.03 $11.51 $10.01 $8.27
Value at end of period $15.17 $13.92 $13.29 $11.25 $9.98 $14.49 $14.55 $12.03 $11.51 $10.01
Number of accumulation units outstanding at end of period 13,509 13,935 14,511 29,085 30,144 37,918 36,105 30,986 31,860 27,693
 
 
Separate Account Annual Charges of 1.00%
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
FIDELITY® VIP CONTRAFUND® PORTFOLIO                    
Value at beginning of period $16.61 $17.26 $14.91 $11.12 $19.59 $16.87 $15.29 $13.24 $11.62 $10.00
Value at end of period $19.10 $16.61 $17.26 $14.91 $11.12 $19.59 $16.87 $15.29 $13.24 $11.62
Number of accumulation units outstanding at end of period 2,005,422 2,348,849 2,620,333 2,759,642 2,609,647 1,738,553 846,179 385,118 271,256 56,254
FIDELITY® VIP EQUITY-INCOME PORTFOLIO                    
Value at beginning of period $13.27 $13.31 $11.70 $9.10 $16.08 $16.03 $13.50 $12.92 $11.73 $10.00
Value at end of period $15.37 $13.27 $13.31 $11.70 $9.10 $16.08 $16.03 $13.50 $12.92 $11.73
Number of accumulation units outstanding at end of period 486,528 538,767 613,588 653,883 622,078 527,371 306,045 189,793 212,082 33,633
FRANKLIN SMALL CAP VALUE SECURITIES FUND                    
(Funds were first received in this option during January 2004)                    
Value at beginning of period $18.46 $19.38 $15.26 $11.94 $18.00 $18.63 $16.08 $14.94 $12.29  
Value at end of period $21.64 $18.46 $19.38 $15.26 $11.94 $18.00 $18.63 $16.08 $14.94  
Number of accumulation units outstanding at end of period 256,504 359,396 439,366 472,729 335,195 227,462 82,464 36,876 23,539  
ING AMERICAN CENTURY SMALL-MID CAP VALUE PORTFOLIO                    
Value at beginning of period $18.85 $19.66 $16.27 $12.12 $16.66 $17.34 $15.17 $14.21 $11.83 $10.00
Value at end of period $21.71 $18.85 $19.66 $16.27 $12.12 $16.66 $17.34 $15.17 $14.21 $11.83
Number of accumulation units outstanding at end of period 59,116 77,473 124,400 109,588 23,647 22,503 19,910 15,825 12,366 1,839
  
CFI 12

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING AMERICAN FUNDS INTERNATIONAL PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $10.95 $12.92 $12.23 $8.68 $15.24 $12.89 $11.00 $10.15    
Value at end of period $12.71 $10.95 $12.92 $12.23 $8.68 $15.24 $12.89 $11.00    
Number of accumulation units outstanding at end of period 2,049,243 2,290,805 2,510,977 2,576,116 2,416,919 1,464,666 459,465 59,588    
ING BALANCED PORTFOLIO                    
Value at beginning of period $12.75 $13.09 $11.62 $9.87 $13.89 $13.33 $12.28 $11.93 $11.05 $10.00
Value at end of period $14.33 $12.75 $13.09 $11.62 $9.87 $13.89 $13.33 $12.28 $11.93 $11.05
Number of accumulation units outstanding at end of period 139,208 183,543 207,014 233,545 230,199 191,757 123,350 119,146 136,377 33,289
ING BARON GROWTH PORTFOLIO                    
Value at beginning of period $18.30 $18.08 $14.44 $10.79 $18.55 $17.66 $15.48 $14.56 $11.49 $10.00
Value at end of period $21.68 $18.30 $18.08 $14.44 $10.79 $18.55 $17.66 $15.48 $14.56 $11.49
Number of accumulation units outstanding at end of period 437,586 554,249 630,093 667,438 501,751 341,743 111,461 48,843 37,769 15,936
ING BLACKROCK INFLATION PROTECTED BOND PORTFOLIO                    
(Funds were first received in this option during May 2009)                    
Value at beginning of period $12.30 $11.09 $10.62 $10.00            
Value at end of period $12.95 $12.30 $11.09 $10.62            
Number of accumulation units outstanding at end of period 642,934 714,352 564,388 289,877            
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2007)                    
Value at beginning of period $8.41 $8.61 $7.66 $5.92 $9.80 $10.03        
Value at end of period $9.56 $8.41 $8.61 $7.66 $5.92 $9.80        
Number of accumulation units outstanding at end of period 1,816 5,754 5,751 5,748 5,753 7,756        
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during December 2006)                    
Value at beginning of period $9.93 $10.19 $9.08 $7.04 $11.68 $11.05 $11.17      
Value at end of period $11.26 $9.93 $10.19 $9.08 $7.04 $11.68 $11.05      
Number of accumulation units outstanding at end of period 147,295 161,639 139,755 129,476 105,789 73,825 223      
ING BLACKROCK SCIENCE AND TECHNOLOGY OPPORTUNITIES                    
PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $14.85 $16.77 $14.34 $9.49 $15.98 $13.58 $12.85 $11.72    
Value at end of period $15.82 $14.85 $16.77 $14.34 $9.49 $15.98 $13.58 $12.85    
Number of accumulation units outstanding at end of period 231,200 264,183 298,014 198,180 95,314 35,920 3,233 495    
ING BOND PORTFOLIO                    
(Funds were first received in this option during February 2008)                    
Value at beginning of period $10.84 $10.35 $9.86 $8.88 $10.04          
Value at end of period $11.43 $10.84 $10.35 $9.86 $8.88          
Number of accumulation units outstanding at end of period 1,795,194 2,028,796 2,302,830 2,042,636 797,010          
ING CLARION GLOBAL REAL ESTATE PORTFOLIO                    
(Funds were first received in this option during October 2006)                    
Value at beginning of period $9.82 $10.48 $9.12 $6.91 $11.88 $12.94 $11.95      
Value at end of period $12.22 $9.82 $10.48 $9.12 $6.91 $11.88 $12.94      
Number of accumulation units outstanding at end of period 600,543 750,108 901,399 982,596 743,467 86,261 3,410      
ING DAVIS NEW YORK VENTURE PORTFOLIO                    
Value at beginning of period $12.49 $13.23 $11.93 $9.15 $15.21 $14.75 $13.09 $12.72 $11.85 $10.00
Value at end of period $13.88 $12.49 $13.23 $11.93 $9.15 $15.21 $14.75 $13.09 $12.72 $11.85
Number of accumulation units outstanding at end of period 213,119 224,022 235,957 240,887 218,068 154,471 24,882 24,007 25,625 11,591
ING DFA WORLD EQUITY PORTFOLIO                    
(Funds were first received in this option during August 2007)                    
Value at beginning of period $7.87 $8.75 $7.08 $5.87 $10.42 $10.26        
Value at end of period $9.20 $7.87 $8.75 $7.08 $5.87 $10.42        
Number of accumulation units outstanding at end of period 229,267 282,215 294,891 258,034 223,236 138,095        
 
CFI 13

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING FRANKLIN TEMPLETON FOUNDING STRATEGY PORTFOLIO                  
(Funds were first received in this option during May 2007)                    
Value at beginning of period $8.48 $8.68 $7.91 $6.13 $9.63 $10.10        
Value at end of period $9.73 $8.48 $8.68 $7.91 $6.13 $9.63        
Number of accumulation units outstanding at end of period 3,244,923 3,649,352 3,997,735 4,721,292 5,108,651 3,804,095        
ING GLOBAL BOND PORTFOLIO                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $13.67 $13.34 $11.66 $9.71 $11.64 $10.83 $10.10 $10.01    
Value at end of period $14.57 $13.67 $13.34 $11.66 $9.71 $11.64 $10.83 $10.10    
Number of accumulation units outstanding at end of period 335,959 364,022 405,010 379,502 462,364 459,240 142,071 111,177    
ING GROWTH AND INCOME CORE PORTFOLIO                    
Value at beginning of period $12.38 $14.43 $13.11 $9.18 $15.42 $14.56 $12.62 $12.59 $11.29 $10.00
Value at end of period $13.36 $12.38 $14.43 $13.11 $9.18 $15.42 $14.56 $12.62 $12.59 $11.29
Number of accumulation units outstanding at end of period 124,096 156,129 170,557 132,961 46,149 42,012 10,044 3,259 10,060 7,006
ING GROWTH AND INCOME PORTFOLIO (CLASS ADV)                    
(Funds were first received in this option during January 2011)                    
Value at beginning of period $9.60 $9.99                
Value at end of period $10.95 $9.60                
Number of accumulation units outstanding at end of period 1,861,059 2,034,219                
ING GROWTH AND INCOME PORTFOLIO (CLASS S)                    
Value at beginning of period $13.88 $14.09 $12.51 $9.72 $15.78 $14.88 $13.22 $12.37 $11.55 $10.00
Value at end of period $15.87 $13.88 $14.09 $12.51 $9.72 $15.78 $14.88 $13.22 $12.37 $11.55
Number of accumulation units outstanding at end of period 312,675 356,066 321,508 319,763 292,483 220,031 113,210 40,801 36,511 11,076
ING INDEX PLUS LARGECAP PORTFOLIO                    
Value at beginning of period $12.83 $13.00 $11.56 $9.49 $15.31 $14.76 $13.05 $12.53 $11.48 $10.00
Value at end of period $14.49 $12.83 $13.00 $11.56 $9.49 $15.31 $14.76 $13.05 $12.53 $11.48
Number of accumulation units outstanding at end of period 236,018 250,633 295,031 326,723 347,967 334,862 264,313 190,007 176,155 82,960
ING INDEX PLUS MIDCAP PORTFOLIO                    
Value at beginning of period $15.93 $16.32 $13.56 $10.42 $16.90 $16.21 $15.01 $13.68 $11.87 $10.00
Value at end of period $18.51 $15.93 $16.32 $13.56 $10.42 $16.90 $16.21 $15.01 $13.68 $11.87
Number of accumulation units outstanding at end of period 326,344 362,547 402,584 469,864 451,301 383,276 284,157 182,262 167,574 34,454
ING INDEX PLUS SMALLCAP PORTFOLIO                    
Value at beginning of period $15.37 $15.68 $12.93 $10.49 $15.97 $17.26 $15.36 $14.45 $11.99 $10.00
Value at end of period $17.07 $15.37 $15.68 $12.93 $10.49 $15.97 $17.26 $15.36 $14.45 $11.99
Number of accumulation units outstanding at end of period 149,345 161,576 182,934 215,411 211,659 225,294 164,081 116,762 102,531 23,838
ING INTERMEDIATE BOND PORTFOLIO                    
Value at beginning of period $13.48 $12.69 $11.70 $10.62 $11.75 $11.23 $10.93 $10.72 $10.36 $10.00
Value at end of period $14.56 $13.48 $12.69 $11.70 $10.62 $11.75 $11.23 $10.93 $10.72 $10.36
Number of accumulation units outstanding at end of period 4,153,615 4,343,512 4,485,423 4,474,848 4,087,996 3,097,195 816,196 196,383 115,446 12,127
ING INTERNATIONAL INDEX PORTFOLIO                    
(Funds were first received in this option during October 2008)                    
Value at beginning of period $7.09 $8.18 $7.68 $6.08 $7.59          
Value at end of period $8.32 $7.09 $8.18 $7.68 $6.08          
Number of accumulation units outstanding at end of period 173,655 216,468 250,707 292,920 1,172          
ING INTERNATIONAL VALUE PORTFOLIO                    
Value at beginning of period $13.09 $15.55 $15.35 $12.29 $21.52 $19.23 $15.08 $13.97 $12.05 $10.00
Value at end of period $15.43 $13.09 $15.55 $15.35 $12.29 $21.52 $19.23 $15.08 $13.97 $12.05
Number of accumulation units outstanding at end of period 239,146 281,511 336,066 396,578 407,630 308,600 121,448 64,182 33,591 8,311
ING INVESCO VAN KAMPEN COMSTOCK PORTFOLIO                    
Value at beginning of period $13.45 $13.88 $12.18 $9.57 $15.22 $15.73 $13.71 $13.39 $11.58 $10.00
Value at end of period $15.80 $13.45 $13.88 $12.18 $9.57 $15.22 $15.73 $13.71 $13.39 $11.58
Number of accumulation units outstanding at end of period 186,569 204,360 245,969 265,010 277,870 299,163 221,441 186,953 159,722 68,495
 
CFI 14

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS I)          
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.52 $12.78 $11.49 $9.46 $12.48 $12.17 $10.91 $10.06    
Value at end of period $13.98 $12.52 $12.78 $11.49 $9.46 $12.48 $12.17 $10.91    
Number of accumulation units outstanding at end of period 5,627 5,755 9,798 11,061 16,203 20,963 29,556 33,096    
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS S)          
Value at beginning of period $15.16 $15.52 $13.99 $11.55 $15.26 $14.92 $13.41 $12.57 $11.48 $10.00
Value at end of period $16.88 $15.16 $15.52 $13.99 $11.55 $15.26 $14.92 $13.41 $12.57 $11.48
Number of accumulation units outstanding at end of period 478,310 513,414 584,506 675,826 736,747 729,065 340,065 78,983 7,449 758
ING JPMORGAN MID CAP VALUE PORTFOLIO                    
Value at beginning of period $17.35 $17.21 $14.14 $11.37 $17.15 $16.92 $14.67 $13.66 $11.44 $10.00
Value at end of period $20.61 $17.35 $17.21 $14.14 $11.37 $17.15 $16.92 $14.67 $13.66 $11.44
Number of accumulation units outstanding at end of period 213,924 231,352 236,989 237,314 216,162 186,009 76,899 20,517 12,422 1,331
ING LARGE CAP GROWTH PORTFOLIO                    
(Funds were first received in this option during May 2012)                    
Value at beginning of period $10.32                  
Value at end of period $10.35                  
Number of accumulation units outstanding at end of period 3,302,668                  
ING LIQUID ASSETS PORTFOLIO                    
Value at beginning of period $10.79 $10.90 $11.01 $11.09 $10.93 $10.52 $10.15 $9.98 $9.99 $10.00
Value at end of period $10.69 $10.79 $10.90 $11.01 $11.09 $10.93 $10.52 $10.15 $9.98 $9.99
Number of accumulation units outstanding at end of period 1,214,498 2,007,621 1,249,425 1,800,379 2,579,107 2,670,718 364,855 334,813 407,476 33,869
ING MFS TOTAL RETURN PORTFOLIO                    
Value at beginning of period $13.70 $13.63 $12.53 $10.73 $13.96 $13.56 $12.24 $12.01 $10.92 $10.00
Value at end of period $15.08 $13.70 $13.63 $12.53 $10.73 $13.96 $13.56 $12.24 $12.01 $10.92
Number of accumulation units outstanding at end of period 198,528 225,137 269,977 360,427 370,388 362,569 191,421 268,091 284,682 60,823
ING MFS UTILITIES PORTFOLIO                    
(Funds were first received in this option during October 2006)                    
Value at beginning of period $14.97 $14.21 $12.63 $9.61 $15.57 $12.35 $11.06      
Value at end of period $16.79 $14.97 $14.21 $12.63 $9.61 $15.57 $12.35      
Number of accumulation units outstanding at end of period 381,590 391,287 387,029 318,951 214,448 49,615 4,404      
ING MIDCAP OPPORTUNITIES PORTFOLIO                    
Value at beginning of period $20.14 $20.50 $15.94 $11.41 $18.51 $14.90 $13.99 $12.83 $11.66 $10.00
Value at end of period $22.71 $20.14 $20.50 $15.94 $11.41 $18.51 $14.90 $13.99 $12.83 $11.66
Number of accumulation units outstanding at end of period 368,212 376,891 365,999 346,672 258,709 46,761 8,988 5,663 8,666 121
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.66 $13.92 $12.11 $8.77 $14.84 $14.06 $12.04 $10.06    
Value at end of period $15.25 $12.66 $13.92 $12.11 $8.77 $14.84 $14.06 $12.04    
Number of accumulation units outstanding at end of period 60,509 69,609 81,198 90,724 112,910 138,312 191,418 268,702    
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS S)                    
(Funds were first received in this option during January 2004)                    
Value at beginning of period $15.74 $17.35 $15.14 $10.97 $18.62 $17.69 $15.19 $13.54 $12.42  
Value at end of period $18.90 $15.74 $17.35 $15.14 $10.97 $18.62 $17.69 $15.19 $13.54  
Number of accumulation units outstanding at end of period 456,740 503,382 571,916 612,788 528,888 450,324 189,911 39,128 2,676  
ING PIMCO HIGH YIELD PORTFOLIO                    
(Funds were first received in this option during July 2005)                    
Value at beginning of period $15.35 $14.85 $13.13 $8.88 $11.57 $11.36 $10.54 $10.44    
Value at end of period $17.33 $15.35 $14.85 $13.13 $8.88 $11.57 $11.36 $10.54    
Number of accumulation units outstanding at end of period 307,408 304,544 320,099 272,773 217,608 241,186 68,484 72,101    
ING PIMCO TOTAL RETURN BOND PORTFOLIO                    
Value at beginning of period $15.39 $15.03 $14.09 $12.44 $12.06 $11.18 $10.82 $10.67 $10.41 $10.00
Value at end of period $16.57 $15.39 $15.03 $14.09 $12.44 $12.06 $11.18 $10.82 $10.67 $10.41
Number of accumulation units outstanding at end of period 1,760,630 1,698,993 1,843,479 1,711,393 1,348,558 803,489 31,839 78,592 89,251 1,063
 
CFI 15

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING PIMCO TOTAL RETURN PORTFOLIO                    
Value at beginning of period $14.28 $13.97 $13.12 $11.76 $11.91 $10.99 $10.68 $10.56 $10.23 $10.00
Value at end of period $15.25 $14.28 $13.97 $13.12 $11.76 $11.91 $10.99 $10.68 $10.56 $10.23
Number of accumulation units outstanding at end of period 213,481 263,141 340,471 425,758 405,275 187,300 74,753 57,541 48,780 8,451
ING PIONEER FUND PORTFOLIO                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $11.40 $12.06 $10.51 $8.55 $13.24 $12.73 $11.01 $10.68    
Value at end of period $12.44 $11.40 $12.06 $10.51 $8.55 $13.24 $12.73 $11.01    
Number of accumulation units outstanding at end of period 122,908 144,777 149,175 144,666 143,995 81,210 42,725 9,665    
ING PIONEER MID CAP VALUE PORTFOLIO                    
(Funds were first received in this option during May 2005)                    
Value at beginning of period $11.44 $12.16 $10.41 $8.41 $12.69 $12.15 $10.93 $10.34    
Value at end of period $12.57 $11.44 $12.16 $10.41 $8.41 $12.69 $12.15 $10.93    
Number of accumulation units outstanding at end of period 457,220 625,071 816,382 861,689 574,694 439,052 116,331 349,935    
ING RUSSELLTM LARGE CAP GROWTH INDEX PORTFOLIO                    
(Funds were first received in this option during June 2009)                    
Value at beginning of period $14.58 $14.17 $12.73 $10.51            
Value at end of period $16.49 $14.58 $14.17 $12.73            
Number of accumulation units outstanding at end of period 49,697 47,402 26,669 27,987            
ING SMALLCAP OPPORTUNITIES PORTFOLIO                    
Value at beginning of period $18.60 $18.69 $14.29 $11.04 $17.06 $15.69 $14.11 $13.09 $12.02 $10.00
Value at end of period $21.16 $18.60 $18.69 $14.29 $11.04 $17.06 $15.69 $14.11 $13.09 $12.02
Number of accumulation units outstanding at end of period 123,006 106,737 101,201 78,619 68,492 17,518 5,922 11,873 15,225 12,567
ING SMALL COMPANY PORTFOLIO                    
Value at beginning of period $17.77 $18.44 $15.02 $11.93 $17.52 $16.75 $14.57 $13.37 $11.84 $10.00
Value at end of period $20.10 $17.77 $18.44 $15.02 $11.93 $17.52 $16.75 $14.57 $13.37 $11.84
Number of accumulation units outstanding at end of period 218,416 260,992 328,705 340,079 211,209 69,019 48,264 29,546 28,245 11,108
ING SOLUTION 2015 PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $11.53 $11.73 $10.65 $8.80 $12.15 $11.73 $10.70 $10.37    
Value at end of period $12.73 $11.53 $11.73 $10.65 $8.80 $12.15 $11.73 $10.70    
Number of accumulation units outstanding at end of period 878,158 940,655 1,092,797 1,144,940 955,851 474,713 95,392 14,962    
ING SOLUTION 2025 PORTFOLIO                    
(Funds were first received in this option during March 2006)                    
Value at beginning of period $11.12 $11.59 $10.29 $8.26 $12.62 $12.18 $11.18      
Value at end of period $12.48 $11.12 $11.59 $10.29 $8.26 $12.62 $12.18      
Number of accumulation units outstanding at end of period 1,086,668 1,202,542 1,245,609 1,275,367 830,584 311,792 115,424      
ING SOLUTION 2035 PORTFOLIO                    
(Funds were first received in this option during July 2005)                    
Value at beginning of period $11.08 $11.73 $10.35 $8.14 $13.06 $12.52 $11.08 $10.66    
Value at end of period $12.62 $11.08 $11.73 $10.35 $8.14 $13.06 $12.52 $11.08    
Number of accumulation units outstanding at end of period 552,803 621,340 666,590 754,227 703,014 412,432 63,845 272    
ING SOLUTION 2045 PORTFOLIO                    
(Funds were first received in this option during November 2005)                    
Value at beginning of period $11.04 $11.75 $10.31 $8.02 $13.47 $12.86 $11.29 $10.96    
Value at end of period $12.62 $11.04 $11.75 $10.31 $8.02 $13.47 $12.86 $11.29    
Number of accumulation units outstanding at end of period 39,569 37,702 40,336 57,858 61,882 40,722 4,265 429    
ING SOLUTION INCOME PORTFOLIO                    
(Funds were first received in this option during March 2006)                    
Value at beginning of period $11.79 $11.87 $10.94 $9.43 $11.43 $10.97 $10.45      
Value at end of period $12.82 $11.79 $11.87 $10.94 $9.43 $11.43 $10.97      
Number of accumulation units outstanding at end of period 351,006 394,047 431,431 432,936 375,155 245,892 14,781      
 
CFI 16

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $14.56 $14.48 $13.19 $11.31 $15.02 $14.38 $13.43 $13.29    
Value at end of period $16.15 $14.56 $14.48 $13.19 $11.31 $15.02 $14.38 $13.43    
Number of accumulation units outstanding at end of period 58,419 54,811 61,125 59,209 51,178 35,099 10,595 727    
ING STRATEGIC ALLOCATION GROWTH PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $15.08 $15.73 $14.08 $11.39 $18.03 $17.38 $15.55 $15.13    
Value at end of period $17.12 $15.08 $15.73 $14.08 $11.39 $18.03 $17.38 $15.55    
Number of accumulation units outstanding at end of period 6,532 6,971 11,824 14,007 13,948 9,397 2,534 639    
ING STRATEGIC ALLOCATION MODERATE PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $14.82 $15.10 $13.65 $11.35 $16.52 $15.86 $14.46      
Value at end of period $16.64 $14.82 $15.10 $13.65 $11.35 $16.52 $15.86      
Number of accumulation units outstanding at end of period 38,427 39,851 23,867 14,951 15,514 19,320 13,646      
ING T. ROWE PRICE CAPITAL APPRECIATION PORTFOLIO                    
(Funds were first received in this option during September 2006)                    
Value at beginning of period $12.60 $12.37 $10.96 $8.31 $11.57 $11.20 $10.49      
Value at end of period $14.28 $12.60 $12.37 $10.96 $8.31 $11.57 $11.20      
Number of accumulation units outstanding at end of period 3,555,956 3,553,892 4,367,788 3,320,291 1,531,768 307,430 6,495      
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO                    
Value at beginning of period $16.50 $17.34 $13.67 $9.46 $16.84 $15.06 $13.96 $12.94 $12.04 $10.00
Value at end of period $18.93 $16.50 $17.34 $13.67 $9.46 $16.84 $15.06 $13.96 $12.94 $12.04
Number of accumulation units outstanding at end of period 283,336 389,030 495,278 468,960 183,107 83,768 38,635 17,356 17,517 17,688
ING T. ROWE PRICE EQUITY INCOME PORTFOLIO                    
(Funds were first received in this option during May 2005)                    
Value at beginning of period $11.31 $11.52 $10.12 $8.18 $12.85 $12.60 $10.68 $10.24    
Value at end of period $13.12 $11.31 $11.52 $10.12 $8.18 $12.85 $12.60 $10.68    
Number of accumulation units outstanding at end of period 527,173 549,501 581,466 539,839 426,558 275,482 67,732 1,282,187    
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO                    
Value at beginning of period $14.47 $14.81 $12.83 $9.09 $15.93 $14.68 $13.12 $12.51 $11.51 $10.00
Value at end of period $16.99 $14.47 $14.81 $12.83 $9.09 $15.93 $14.68 $13.12 $12.51 $11.51
Number of accumulation units outstanding at end of period 230,718 232,113 278,074 258,179 243,928 191,979 96,215 54,334 43,509 23,821
ING T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO                    
(Funds were first received in this option during March 2007)                    
Value at beginning of period $9.65 $11.12 $9.87 $7.24 $14.49 $12.25        
Value at end of period $11.34 $9.65 $11.12 $9.87 $7.24 $14.49        
Number of accumulation units outstanding at end of period 140,196 142,426 154,658 152,028 145,334 50,962        
ING TEMPLETON FOREIGN EQUITY PORTFOLIO                    
(Funds were first received in this option during October 2006)                    
Value at beginning of period $9.78 $11.25 $10.46 $8.02 $13.64 $11.95 $11.12      
Value at end of period $11.48 $9.78 $11.25 $10.46 $8.02 $13.64 $11.95      
Number of accumulation units outstanding at end of period 395,849 271,008 292,470 293,112 261,242 77,246 407      
ING U.S. BOND INDEX PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $11.87 $11.21 $10.69 $10.23 $10.05          
Value at end of period $12.17 $11.87 $11.21 $10.69 $10.23          
Number of accumulation units outstanding at end of period 414,766 553,441 646,868 608,436 174,461          
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO                    
Value at beginning of period $12.98 $13.48 $12.05 $9.25 $15.57 $15.59 $13.77 $12.76 $11.25 $10.00
Value at end of period $14.54 $12.98 $13.48 $12.05 $9.25 $15.57 $15.59 $13.77 $12.76 $11.25
Number of accumulation units outstanding at end of period 41,413 42,402 49,379 48,370 50,963 47,206 20,921 5,459 2,607 376
 
CFI 17

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING WISDOM TREESM GLOBAL HIGH-YIELDING EQUITY INDEX                    
PORTFOLIO                    
(Funds were first received in this option during February 2008)                    
Value at beginning of period $7.83 $8.23 $7.85 $6.10 $10.15          
Value at end of period $8.92 $7.83 $8.23 $7.85 $6.10          
Number of accumulation units outstanding at end of period 73,992 73,413 98,832 80,700 46,058          
OPPENHEIMER MAIN STREET SMALL- & MID-CAP FUND®/VA                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $18.39 $19.03 $15.62 $11.52 $18.78 $19.24 $16.95 $16.21    
Value at end of period $21.42 $18.39 $19.03 $15.62 $11.52 $18.78 $19.24 $16.95    
Number of accumulation units outstanding at end of period 39,595 43,815 53,714 57,892 34,471 33,785 14,877 825    
PIMCO VIT REAL RETURN PORTFOLIO                    
(Funds were first received in this option during July 2005)                    
Value at beginning of period $13.98 $12.65 $11.82 $10.08 $10.96 $10.01 $10.03 $9.89    
Value at end of period $15.05 $13.98 $12.65 $11.82 $10.08 $10.96 $10.01 $10.03    
Number of accumulation units outstanding at end of period 597,363 537,725 597,812 570,017 403,614 106,006 33,775 4,131    
PIONEER EQUITY INCOME VCT PORTFOLIO                    
Value at beginning of period $15.72 $15.01 $12.72 $11.28 $16.39 $16.47 $13.62 $13.04 $11.35 $10.00
Value at end of period $17.11 $15.72 $15.01 $12.72 $11.28 $16.39 $16.47 $13.62 $13.04 $11.35
Number of accumulation units outstanding at end of period 494,553 602,274 677,938 751,360 713,197 522,403 187,682 59,289 11,729 2,083
 
 
Separate Account Annual Charges of 1.10%
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
FIDELITY® VIP CONTRAFUND® PORTFOLIO                    
Value at beginning of period $15.63 $16.25 $14.05 $10.49 $18.51 $15.96 $14.48 $12.55 $11.02 $8.69
Value at end of period $17.95 $15.63 $16.25 $14.05 $10.49 $18.51 $15.96 $14.48 $12.55 $11.02
Number of accumulation units outstanding at end of period 55,129 63,841 69,449 78,836 86,121 110,156 121,820 31,128 8,167 9,123
FIDELITY® VIP EQUITY-INCOME PORTFOLIO                    
Value at beginning of period $11.35 $11.40 $10.03 $7.81 $13.81 $13.79 $11.62 $11.13 $10.12 $7.87
Value at end of period $13.14 $11.35 $11.40 $10.03 $7.81 $13.81 $13.79 $11.62 $11.13 $10.12
Number of accumulation units outstanding at end of period 28,618 30,924 32,281 36,955 32,253 37,783 36,354 23,542 3,418 3,417
FRANKLIN SMALL CAP VALUE SECURITIES FUND                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $17.58 $18.47 $14.56 $11.40 $17.21 $17.83 $15.41 $15.27    
Value at end of period $20.58 $17.58 $18.47 $14.56 $11.40 $17.21 $17.83 $15.41    
Number of accumulation units outstanding at end of period 5,963 6,073 6,718 7,079 8,901 11,590 12,150 11,321    
ING AMERICAN CENTURY SMALL-MID CAP VALUE PORTFOLIO                    
(Funds were first received in this option during January 2009)                    
Value at beginning of period $17.14 $17.90 $14.83 $10.23            
Value at end of period $19.73 $17.14 $17.90 $14.83            
Number of accumulation units outstanding at end of period 451 471 492 426            
ING AMERICAN FUNDS INTERNATIONAL PORTFOLIO                    
(Funds were first received in this option during December 2005)                    
Value at beginning of period $16.15 $19.07 $18.07 $12.84 $22.56 $19.10 $16.32 $15.62    
Value at end of period $18.72 $16.15 $19.07 $18.07 $12.84 $22.56 $19.10 $16.32    
Number of accumulation units outstanding at end of period 7,552 9,284 10,978 10,872 12,963 13,046 13,379 824    
ING BALANCED PORTFOLIO                    
Value at beginning of period $12.95 $13.31 $11.82 $10.05 $14.17 $13.61 $12.55 $12.20 $11.31 $10.00
Value at end of period $14.54 $12.95 $13.31 $11.82 $10.05 $14.17 $13.61 $12.55 $12.20 $11.31
Number of accumulation units outstanding at end of period 12,454 12,509 13,082 14,741 13,190 15,208 17,742 13,357 1,296 1,273
ING BARON GROWTH PORTFOLIO                    
Value at beginning of period $18.13 $17.93 $14.33 $10.72 $18.45 $17.58 $15.42 $14.53 $11.48 $8.70
Value at end of period $21.45 $18.13 $17.93 $14.33 $10.72 $18.45 $17.58 $15.42 $14.53 $11.48
Number of accumulation units outstanding at end of period 4,896 5,084 3,970 4,932 5,406 7,298 12,438 7,212 463 501
 
CFI 18

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING BLACKROCK INFLATION PROTECTED BOND PORTFOLIO                    
(Funds were first received in this option during May 2010)                    
Value at beginning of period $12.26 $11.07 $10.96              
Value at end of period $12.90 $12.26 $11.07              
Number of accumulation units outstanding at end of period 3,035 3,054 1,570              
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during December 2006)                    
Value at beginning of period $9.28 $9.54 $8.50 $6.60 $10.96 $10.38 $10.49      
Value at end of period $10.51 $9.28 $9.54 $8.50 $6.60 $10.96 $10.38      
Number of accumulation units outstanding at end of period 10,864 10,889 11,314 11,291 11,417 11,316 1,732      
ING BLACKROCK SCIENCE AND TECHNOLOGY OPPORTUNITIES                    
PORTFOLIO                    
(Funds were first received in this option during December 2005)                    
Value at beginning of period $14.75 $16.67 $14.27 $9.45 $15.94 $13.56 $12.84 $12.73    
Value at end of period $15.70 $14.75 $16.67 $14.27 $9.45 $15.94 $13.56 $12.84    
Number of accumulation units outstanding at end of period 2,613 10,911 11,262 11,430 10,112 10,654 12,983 447    
ING BOND PORTFOLIO                    
(Funds were first received in this option during August 2008)                    
Value at beginning of period $10.79 $10.32 $9.84 $8.87 $9.69          
Value at end of period $11.37 $10.79 $10.32 $9.84 $8.87          
Number of accumulation units outstanding at end of period 54,576 18,566 18,705 22,000 21,168          
ING CLARION GLOBAL REAL ESTATE PORTFOLIO                    
(Funds were first received in this option during September 2008)                    
Value at beginning of period $8.09 $8.63 $7.52 $5.70 $8.30          
Value at end of period $10.05 $8.09 $8.63 $7.52 $5.70          
Number of accumulation units outstanding at end of period 2,562 2,707 3,857 3,467 6,800          
ING DAVIS NEW YORK VENTURE PORTFOLIO                    
(Funds were first received in this option during September 2008)                    
Value at beginning of period $10.74 $11.39 $7.52 $5.70 $8.30          
Value at end of period $11.92 $10.74 $11.39 $7.52 $5.70          
Number of accumulation units outstanding at end of period 0 0 0 3,467 6,800          
ING GLOBAL BOND PORTFOLIO                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $13.58 $13.26 $11.61 $9.67 $11.61 $10.81 $10.10 $10.01    
Value at end of period $14.46 $13.58 $13.26 $11.61 $9.67 $11.61 $10.81 $10.10    
Number of accumulation units outstanding at end of period 5,690 5,912 6,317 7,385 7,112 8,147 9,614 5,235    
ING GROWTH AND INCOME CORE PORTFOLIO                    
(Funds were first received in this option during February 2006)                    
Value at beginning of period $9.39 $10.95 $9.96 $6.98 $11.74 $11.09 $9.77      
Value at end of period $10.12 $9.39 $10.95 $9.96 $6.98 $11.74 $11.09      
Number of accumulation units outstanding at end of period 0 1,751 1,812 3,949 3,946 4,078 4,200      
ING GROWTH AND INCOME PORTFOLIO (CLASS ADV)                    
(Funds were first received in this option during January 2011)                    
Value at beginning of period $9.60 $9.99                
Value at end of period $10.93 $9.60                
Number of accumulation units outstanding at end of period 36,783 52,058                
ING GROWTH AND INCOME PORTFOLIO (CLASS S)                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $14.43 $14.66 $13.03 $10.13 $16.47 $15.55 $13.82      
Value at end of period $16.48 $14.43 $14.66 $13.03 $10.13 $16.47 $15.55      
Number of accumulation units outstanding at end of period 9,616 13,071 13,463 12,341 12,283 13,618 14,396      
ING INDEX PLUS LARGECAP PORTFOLIO                    
Value at beginning of period $10.02 $10.17 $9.05 $7.44 $12.01 $11.59 $10.26 $9.86 $9.05 $7.27
Value at end of period $11.31 $10.02 $10.17 $9.05 $7.44 $12.01 $11.59 $10.26 $9.86 $9.05
Number of accumulation units outstanding at end of period 11,727 14,259 16,528 17,194 16,874 17,231 16,698 2,654 2,520 10,670
 
 
CFI 19

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING INDEX PLUS MIDCAP PORTFOLIO                    
Value at beginning of period $14.94 $15.32 $12.74 $9.80 $15.91 $15.28 $14.16 $12.92 $11.23 $8.59
Value at end of period $17.34 $14.94 $15.32 $12.74 $9.80 $15.91 $15.28 $14.16 $12.92 $11.23
Number of accumulation units outstanding at end of period 3,938 4,105 6,072 9,314 9,834 13,262 17,014 7,027 2,520 1,568
ING INDEX PLUS SMALLCAP PORTFOLIO                    
Value at beginning of period $14.79 $15.10 $12.47 $10.12 $15.43 $16.69 $14.87 $14.05 $11.63 $8.66
Value at end of period $16.40 $14.79 $15.10 $12.47 $10.12 $15.43 $16.69 $14.87 $12.24 $11.63
Number of accumulation units outstanding at end of period 641 668 2,102 3,877 4,556 4,701 5,994 836 0 542
ING INTERMEDIATE BOND PORTFOLIO                    
(Funds were first received in this option during October 2004)                    
Value at beginning of period $14.44 $13.61 $12.57 $11.42 $12.64 $12.09 $11.78 $11.57 $11.53  
Value at end of period $15.58 $14.44 $13.61 $12.57 $11.42 $12.64 $12.09 $11.78 $11.57  
Number of accumulation units outstanding at end of period 16,671 17,788 20,839 24,096 27,344 43,725 38,570 4,476 925  
ING INTERNATIONAL INDEX PORTFOLIO                    
(Funds were first received in this option during August 2009)                    
Value at beginning of period $12.86 $14.85 $13.95 $12.86            
Value at end of period $15.07 $12.86 $14.85 $13.95            
Number of accumulation units outstanding at end of period 4,178 4,185 4,253 4,336            
ING INTERNATIONAL VALUE PORTFOLIO                    
(Funds were first received in this option during November 2004)                    
Value at beginning of period $11.67 $13.88 $13.71 $10.99 $19.26 $17.22 $13.52 $12.53 $11.81  
Value at end of period $13.73 $11.67 $13.88 $13.71 $10.99 $19.26 $17.22 $13.52 $12.53  
Number of accumulation units outstanding at end of period 9,563 9,760 10,000 12,494 12,551 18,517 19,176 2,353 568  
ING INVESCO VAN KAMPEN COMSTOCK PORTFOLIO                    
(Funds were first received in this option during October 2004)                    
Value at beginning of period $12.29 $12.69 $11.14 $8.77 $13.96 $14.44 $12.60 $12.31 $11.27  
Value at end of period $14.42 $12.29 $12.69 $11.14 $8.77 $13.96 $14.44 $12.60 $12.31  
Number of accumulation units outstanding at end of period 16,833 13,439 14,784 16,919 16,939 21,660 24,727 4,552 1,637  
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.43 $12.71 $11.44 $9.43 $12.44 $12.15 $10.90 $10.06    
Value at end of period $13.87 $12.43 $12.71 $11.44 $9.43 $12.44 $12.15 $10.90    
Number of accumulation units outstanding at end of period 4,782 4,784 4,782 5,416 5,414 5,416 5,415 5,416    
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS S)                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $12.36 $12.67 $11.43 $9.45 $12.50 $12.23 $11.00 $10.74    
Value at end of period $13.76 $12.36 $12.67 $11.43 $9.45 $12.50 $12.23 $11.00    
Number of accumulation units outstanding at end of period 32,150 31,974 32,768 35,837 38,897 48,789 57,352 34,481    
ING JPMORGAN EMERGING MARKETS EQUITY PORTFOLIO                    
(Funds were first received in this option during June 2008)                    
Value at beginning of period $8.56 $10.59 $8.90 $5.24 $10.11          
Value at end of period $10.08 $8.56 $10.59 $8.90 $5.24          
Number of accumulation units outstanding at end of period 8,980 9,928 10,170 8,445 5,814          
ING JPMORGAN MID CAP VALUE PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $17.76 $17.64 $14.50 $11.67 $17.62 $17.41 $15.11 $15.09    
Value at end of period $21.08 $17.76 $17.64 $14.50 $11.67 $17.62 $17.41 $15.11    
Number of accumulation units outstanding at end of period 4,600 4,807 5,150 5,798 5,840 10,630 9,961 3,129    
ING LARGE CAP GROWTH PORTFOLIO                    
(Funds were first received in this option during July 2012)                    
Value at beginning of period $9.85                  
Value at end of period $10.34                  
Number of accumulation units outstanding at end of period 41,775                  
 
CFI 20

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during December 2005)                    
Value at beginning of period $15.05 $14.88 $13.17 $9.35 $13.05 $11.82 $11.32 $11.51    
Value at end of period $17.53 $15.05 $14.88 $13.17 $9.35 $13.05 $11.82 $11.32    
Number of accumulation units outstanding at end of period 4,451 4,518 1,250 1,246 279 323 343 317    
ING LIQUID ASSETS PORTFOLIO                    
(Funds were first received in this option during June 2005)                    
Value at beginning of period $17.64 $17.83 $18.02 $18.17 $17.93 $17.28 $16.69 $16.50    
Value at end of period $17.44 $17.64 $17.83 $18.02 $18.17 $17.93 $17.28 $16.69    
Number of accumulation units outstanding at end of period 1,677 1,798 2,206 21,106 20,586 19,582 12,197 1,000    
ING MFS TOTAL RETURN PORTFOLIO                    
Value at beginning of period $28.34 $28.21 $25.96 $22.27 $28.99 $28.19 $25.46 $25.02 $22.77 $19.72
Value at end of period $31.16 $28.34 $28.21 $25.96 $22.27 $28.99 $28.19 $25.46 $25.02 $22.77
Number of accumulation units outstanding at end of period 6,982 15,435 16,336 19,345 19,745 21,039 23,098 12,268 4,413 3,200
ING MFS UTILITIES PORTFOLIO                    
(Funds were first received in this option during March 2011)                    
Value at beginning of period $10.21 $10.20                
Value at end of period $11.44 $10.21                
Number of accumulation units outstanding at end of period 1,240 1,244                
ING MIDCAP OPPORTUNITIES PORTFOLIO                    
(Funds were first received in this option during May 2006)                    
Value at beginning of period $16.71 $17.03 $13.25 $9.50 $15.42 $12.43 $12.95      
Value at end of period $18.82 $16.71 $17.03 $13.25 $9.50 $15.42 $12.43      
Number of accumulation units outstanding at end of period 349 1,006 1,024 1,042 1,409 1,213 1,179      
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.57 $13.84 $12.06 $8.73 $14.79 $14.04 $12.03 $10.06    
Value at end of period $15.13 $12.57 $13.84 $12.06 $8.73 $14.79 $14.04 $12.03    
Number of accumulation units outstanding at end of period 0 0 0 1,260 1,261 1,261 4,171 6,672    
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS S)                    
(Funds were first received in this option during June 2005)                    
Value at beginning of period $14.25 $15.73 $13.73 $9.96 $16.93 $16.09 $13.84 $12.23    
Value at end of period $17.10 $14.25 $15.73 $13.73 $9.96 $16.93 $16.09 $13.84    
Number of accumulation units outstanding at end of period 20,617 22,131 23,624 26,385 29,436 38,005 49,555 25,663    
ING PIMCO HIGH YIELD PORTFOLIO                    
(Funds were first received in this option during November 2005                    
Value at beginning of period $15.25 $14.76 $13.07 $8.84 $11.54 $11.35 $10.53 $10.40    
Value at end of period $17.19 $15.25 $14.76 $13.07 $8.84 $11.54 $11.35 $10.53    
Number of accumulation units outstanding at end of period 10,080 11,879 13,829 14,907 15,574 17,386 15,686 1,439    
ING PIMCO TOTAL RETURN BOND PORTFOLIO                    
(Funds were first received in this option during February 2006)                    
Value at beginning of period $20.06 $19.60 $18.40 $16.26 $15.78 $14.64 $14.20      
Value at end of period $21.57 $20.06 $19.60 $18.40 $16.26 $15.78 $14.64      
Number of accumulation units outstanding at end of period 2,727 3,783 4,531 5,041 2,755 1,735 1,799      
ING PIMCO TOTAL RETURN PORTFOLIO                    
Value at beginning of period $15.29 $14.97 $14.07 $12.64 $12.80 $11.83 $11.50 $11.39 $11.04 $10.73
Value at end of period $16.31 $15.29 $14.97 $14.07 $12.64 $12.80 $11.83 $11.50 $11.39 $11.04
Number of accumulation units outstanding at end of period 3,079 3,243 3,612 4,159 4,649 5,609 5,380 2,507 1,151 1,151
ING PIONEER MID CAP VALUE PORTFOLIO                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $11.36 $12.09 $10.36 $8.37 $12.66 $12.13 $10.92 $10.86    
Value at end of period $12.47 $11.36 $12.09 $10.36 $8.37 $12.66 $12.13 $10.92    
Number of accumulation units outstanding at end of period 9,329 9,402 9,511 10,701 12,720 18,770 17,805 17,745    
 
CFI 21

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING RUSSELLTM LARGE CAP GROWTH INDEX PORTFOLIO                    
(Funds were first received in this option during July 2009)                    
Value at beginning of period $14.54 $14.15 $12.72 $10.85            
Value at end of period $16.43 $14.54 $14.15 $12.72            
Number of accumulation units outstanding at end of period 522 529 561 880            
ING SMALL COMPANY PORTFOLIO                    
Value at beginning of period $15.27 $15.87 $12.94 $10.28 $15.12 $14.46 $12.60 $11.58 $10.26 $7.53
Value at end of period $17.26 $15.27 $15.87 $12.94 $10.28 $15.12 $14.46 $12.60 $11.58 $10.26
Number of accumulation units outstanding at end of period 0 1,176 1,217 3,108 3,638 3,743 3,843 2,162 2,964 3,101
ING SOLUTION 2015 PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $11.45 $11.67 $10.60 $8.76 $12.12 $11.71 $10.69 $10.39    
Value at end of period $12.63 $11.45 $11.67 $10.60 $8.76 $12.12 $11.71 $10.69    
Number of accumulation units outstanding at end of period 28,258 27,944 29,551 29,921 26,283 36,351 36,516 15,279    
ING SOLUTION 2025 PORTFOLIO                    
(Funds were first received in this option during July 2006)                    
Value at beginning of period $11.04 $11.52 $10.24 $8.23 $12.58 $12.16 $11.16      
Value at end of period $12.39 $11.04 $11.52 $10.24 $8.23 $12.58 $12.16      
Number of accumulation units outstanding at end of period 0 0 825 822 844 877 888      
ING SOLUTION 2045 PORTFOLIO                    
(Funds were first received in this option during September 2006)                    
Value at beginning of period $10.96 $11.69 $10.26 $7.99 $-13.44 $12.84 $12.00      
Value at end of period $12.52 $10.96 $11.69 $10.26 $-7.99 $13.44 $12.84      
Number of accumulation units outstanding at end of period 0 0 0 0 0 0 10,191      
ING SOLUTION INCOME PORTFOLIO                    
(Funds were first received in this option during October 2007)                    
Value at beginning of period $11.71 $11.80 $10.89 $9.39 $11.40 $11.53        
Value at end of period $12.72 $11.71 $11.80 $10.89 $9.39 $11.40        
Number of accumulation units outstanding at end of period 0 0 0 0 2,798 2,796        
ING STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO                    
(Funds were first received in this option during October 2007)                    
Value at beginning of period $14.46 $14.40 $13.13 $11.27 $14.98 $15.09        
Value at end of period $16.02 $14.46 $14.40 $13.13 $11.27 $14.98        
Number of accumulation units outstanding at end of period 0 0 0 0 2,137 2,137        
ING STRATEGIC ALLOCATION GROWTH PORTFOLIO                    
(Funds were first received in this option during December 2005)                    
Value at beginning of period $14.98 $15.64 $14.02 $11.35 $17.98 $17.35 $15.54 $15.61    
Value at end of period $16.99 $14.98 $15.64 $14.02 $11.35 $17.98 $17.35 $15.54    
Number of accumulation units outstanding at end of period 0 0 608 601 612 932 946 322    
ING STRATEGIC ALLOCATION MODERATE PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $14.72 $15.02 $13.59 $11.31 $16.48 $15.83 $14.45 $13.88    
Value at end of period $16.51 $14.72 $15.02 $13.59 $11.31 $16.48 $15.83 $14.45    
Number of accumulation units outstanding at end of period 2,751 2,772 2,866 2,897 2,832 3,724 5,714 2,644    
ING T. ROWE PRICE CAPITAL APPRECIATION PORTFOLIO                    
(Funds were first received in this option during August 2008)                    
Value at beginning of period $11.02 $10.83 $9.60 $7.28 $9.70          
Value at end of period $12.47 $11.02 $10.83 $9.60 $7.28          
Number of accumulation units outstanding at end of period 19,235 21,042 22,825 8,710 1,665          
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO                    
(Funds were first received in this option during March 2006)                    
Value at beginning of period $13.30 $13.99 $11.04 $7.65 $13.63 $12.20 $11.95      
Value at end of period $15.24 $13.30 $13.99 $11.04 $7.65 $13.63 $12.20      
Number of accumulation units outstanding at end of period 3,257 3,265 3,322 3,440 3,456 3,457 3,522      
 
CFI 22

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING T. ROWE PRICE EQUITY INCOME PORTFOLIO                    
(Funds were first received in this option during October 2005)                    
Value at beginning of period $11.23 $11.46 $10.08 $8.15 $12.82 $12.58 $10.68 $10.25    
Value at end of period $13.02 $11.23 $11.46 $10.08 $8.15 $12.82 $12.58 $10.68    
Number of accumulation units outstanding at end of period 45,478 53,468 55,002 56,996 55,956 56,464 50,900 11,952    
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO                    
Value at beginning of period $12.07 $12.37 $10.73 $7.60 $13.34 $12.30 $11.01 $10.51 $9.68 $7.50
Value at end of period $14.16 $12.07 $12.37 $10.73 $7.60 $13.34 $12.30 $11.01 $10.51 $9.68
Number of accumulation units outstanding at end of period 17,738 13,849 14,043 13,334 13,434 20,025 11,264 1,294 1,607 1,595
ING TEMPLETON FOREIGN EQUITY PORTFOLIO                    
(Funds were first received in this option during April 2008)                    
Value at beginning of period $7.63 $8.79 $8.18 $6.28 $10.20          
Value at end of period $8.95 $7.63 $8.79 $8.18 $6.28          
Number of accumulation units outstanding at end of period 6,248 8,706 8,582 5,984 6,283          
ING U.S. BOND INDEX PORTFOLIO                    
(Funds were first received in this option during September 2008)                    
Value at beginning of period $11.82 $11.18 $10.67 $10.22 $10.00          
Value at end of period $12.11 $11.82 $11.18 $10.67 $10.22          
Number of accumulation units outstanding at end of period 7,081 7,261 8,022 11,193 910          
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO                    
Value at beginning of period $10.33 $10.73 $9.60 $7.38 $12.44 $12.46 $11.02 $10.22 $9.02 $7.32
Value at end of period $11.55 $10.33 $10.73 $9.60 $7.38 $12.44 $12.46 $11.02 $10.22 $9.02
Number of accumulation units outstanding at end of period 12,449 12,806 12,815 18,398 17,652 17,301 18,074 8,461 2,042 2,041
ING WISDOM TREESM GLOBAL HIGH-YIELDING EQUITY INDEX                    
PORTFOLIO                    
(Funds were first received in this option during March 2012)                    
Value at beginning of period $8.42                  
Value at end of period $8.88                  
Number of accumulation units outstanding at end of period 1,853                  
OPPENHEIMER MAIN STREET SMALL- & MID-CAP FUND®/VA                    
(Funds were first received in this option during December 2005)                    
Value at beginning of period $18.26 $18.92 $15.54 $11.48 $18.73 $19.20 $16.93 $17.10    
Value at end of period $21.25 $18.26 $18.92 $15.54 $11.48 $18.73 $19.20 $16.93    
Number of accumulation units outstanding at end of period 720 767 743 811 867 980 1,482 123    
PIMCO VIT REAL RETURN PORTFOLIO                    
(Funds were first received in this option during November 2005)                    
Value at beginning of period $13.89 $12.87 $11.76 $10.05 $10.93 $10.00 $10.03 $9.99    
Value at end of period $14.94 $13.89 $12.57 $11.76 $10.05 $10.93 $10.00 $10.03    
Number of accumulation units outstanding at end of period 1,772 2,355 0 0 2,540 2,308 2,268 3,823    
PIONEER EQUITY INCOME VCT PORTFOLIO                    
Value at beginning of period $13.71 $13.11 $11.12 $9.87 $14.36 $14.44 $11.95 $11.45 $9.98 $8.25
Value at end of period $14.91 $13.71 $13.11 $11.12 $9.87 $14.36 $14.44 $11.95 $11.45 $9.98
Number of accumulation units outstanding at end of period 15,134 16,397 17,926 19,977 24,245 27,908 24,210 9,715 4,026 3,655
 
Separate Account Annual Charges of 1.20%
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
FIDELITY® VIP CONTRAFUND® PORTFOLIO                    
Value at beginning of period $16.33 $17.00 $14.72 $11.00 $19.42 $16.76 $15.22 $13.21 $11.61 $10.00
Value at end of period $18.74 $16.33 $17.00 $14.72 $11.00 $19.42 $16.76 $15.22 $13.21 $11.61
Number of accumulation units outstanding at end of period 589,442 638,205 718,804 738,209 679,945 509,400 360,881 158,399 102,926 30,076
FIDELITY® VIP EQUITY-INCOME PORTFOLIO                    
Value at beginning of period $13.04 $13.12 $11.55 $9.00 $15.93 $15.92 $13.44 $12.88 $11.72 $10.00
Value at end of period $15.08 $13.04 $13.12 $11.55 $9.00 $15.93 $15.92 $13.44 $12.88 $11.72
Number of accumulation units outstanding at end of period 89,085 91,515 106,818 115,338 97,876 68,774 32,915 23,551 19,567 608
 
CFI 23

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
FRANKLIN SMALL CAP VALUE SECURITIES FUND                    
(Funds were first received in this option during January 2004)                    
Value at beginning of period $18.15 $19.09 $15.07 $11.81 $17.84 $18.50 $16.01 $14.89 $12.45  
Value at end of period $21.23 $18.15 $19.09 $15.07 $11.81 $17.84 $18.50 $16.01 $14.89  
Number of accumulation units outstanding at end of period 196,355 214,680 228,066 224,143 165,927 117,874 56,765 18,533 11,429  
ING AMERICAN CENTURY SMALL-MID CAP VALUE PORTFOLIO                    
Value at beginning of period $18.53 $19.37 $16.06 $11.98 $16.52 $17.22 $15.10 $14.17 $11.82 $10.00
Value at end of period $21.30 $18.53 $19.37 $16.06 $11.98 $16.52 $17.22 $15.10 $14.17 $11.82
Number of accumulation units outstanding at end of period 9,866 10,335 10,976 6,165 3,134 1,038 621 1,351 1,351 495
ING AMERICAN FUNDS INTERNATIONAL PORTFOLIO                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $10.81 $12.78 $12.13 $8.62 $15.17 $12.86 $10.99 $10.13    
Value at end of period $12.52 $10.81 $12.78 $12.13 $8.62 $15.17 $12.86 $10.99    
Number of accumulation units outstanding at end of period 430,879 454,437 507,012 457,180 367,881 185,259 49,006 1,722    
ING BALANCED PORTFOLIO                    
Value at beginning of period $12.54 $12.89 $11.47 $9.76 $13.77 $13.24 $12.22 $11.89 $11.04 $10.00
Value at end of period $14.06 $12.54 $12.89 $11.47 $9.76 $13.77 $13.24 $12.22 $11.89 $11.04
Number of accumulation units outstanding at end of period 39,053 42,276 47,597 55,088 55,562 41,378 16,674 10,588 14,207 3,014
ING BARON GROWTH PORTFOLIO                    
Value at beginning of period $17.99 $17.82 $14.25 $10.67 $18.38 $17.54 $15.40 $14.52 $11.48 $10.00
Value at end of period $21.27 $17.99 $17.82 $14.25 $10.67 $18.38 $17.54 $15.40 $14.52 $11.48
Number of accumulation units outstanding at end of period 163,500 178,517 194,526 206,770 170,621 142,690 56,329 13,234 11,139 6,977
ING BLACKROCK INFLATION PROTECTED BOND PORTFOLIO                    
(Funds were first received in this option during May 2009)                    
Value at beginning of period $12.23 $11.05 $10.60 $10.07            
Value at end of period $12.85 $12.23 $11.05 $10.60            
Number of accumulation units outstanding at end of period 180,515 172,098 134,891 55,441            
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during December 2006)                    
Value at beginning of period $9.24 $9.50 $8.48 $6.59 $10.94 $10.38 $10.49      
Value at end of period $10.44 $9.24 $9.50 $8.48 $6.59 $10.94 $10.38      
Number of accumulation units outstanding at end of period 17,185 15,910 15,640 13,484 4,370 1,113 289      
ING BLACKROCK SCIENCE AND TECHNOLOGY OPPORTUNITIES                    
PORTFOLIO                    
(Funds were first received in this option during April 2006)                    
Value at beginning of period $14.65 $16.58 $14.20 $9.42 $15.90 $13.54 $13.90      
Value at end of period $15.57 $14.65 $16.58 $14.20 $9.42 $15.90 $13.54      
Number of accumulation units outstanding at end of period 21,394 23,383 26,940 26,006 18,201 5,569 4,084      
ING BOND PORTFOLIO                    
(Funds were first received in this option during February 2008)                    
Value at beginning of period $10.75 $10.29 $9.82 $8.87 $9.86          
Value at end of period $11.31 $10.75 $10.29 $9.82 $8.87          
Number of accumulation units outstanding at end of period 482,569 500,542 528,857 433,746 196,521          
ING CLARION GLOBAL REAL ESTATE PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $8.06 $8.61 $7.51 $5.70 $9.99          
Value at end of period $10.00 $8.06 $8.61 $7.51 $5.70          
Number of accumulation units outstanding at end of period 256,095 289,966 331,726 349,853 286,038          
ING DAVIS NEW YORK VENTURE PORTFOLIO                    
(Funds were first received in this option during February 2004)                    
Value at beginning of period $12.28 $13.03 $11.77 $9.05 $15.08 $14.65 $13.02 $12.69 $12.58  
Value at end of period $13.62 $12.28 $13.03 $11.77 $9.05 $15.08 $14.65 $13.02 $12.69  
Number of accumulation units outstanding at end of period 16,437 17,506 21,488 22,766 12,388 4,671 4,863 1,002 1,001  
 
CFI 24

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING DFA WORLD EQUITY PORTFOLIO                    
(Funds were first received in this option during November 2008)                    
Value at beginning of period $8.54 $9.52 $7.72 $6.41 $5.21          
Value at end of period $9.96 $8.54 $9.52 $7.72 $6.41          
Number of accumulation units outstanding at end of period 29,413 31,054 35,111 27,303 3,846          
ING FRANKLIN TEMPLETON FOUNDING STRATEGY PORTFOLIO                  
(Funds were first received in this option during May 2008)                    
Value at beginning of period $9.33 $9.56 $8.74 $6.79 $10.32          
Value at end of period $10.68 $9.33 $9.56 $8.74 $6.79          
Number of accumulation units outstanding at end of period 9,221 9,146 8,496 8,423 7,749          
ING GLOBAL BOND PORTFOLIO                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $13.49 $13.19 $11.55 $9.64 $11.58 $10.79 $10.09 $10.01    
Value at end of period $14.34 $13.49 $13.19 $11.55 $9.64 $11.58 $10.79 $10.09    
Number of accumulation units outstanding at end of period 68,444 71,966 74,377 73,244 85,178 68,289 35,991 34,020    
ING GROWTH AND INCOME CORE PORTFOLIO                    
(Funds were first received in this option during February 2004)                    
Value at beginning of period $12.18 $14.21 $12.95 $9.08 $15.29 $14.46 $12.56 $12.55 $11.65  
Value at end of period $13.11 $12.18 $14.21 $12.95 $9.08 $15.29 $14.46 $12.56 $12.55  
Number of accumulation units outstanding at end of period 20,052 27,860 36,174 33,574 23,529 19,082 8,738 1,025 1,213  
ING GROWTH AND INCOME PORTFOLIO (CLASS ADV)                    
(Funds were first received in this option during January 2011)                    
Value at beginning of period $9.59 $9.99                
Value at end of period $10.91 $9.59                
Number of accumulation units outstanding at end of period 232,529 261,415                
ING GROWTH AND INCOME PORTFOLIO (CLASS S)                    
Value at beginning of period $13.65 $13.88 $12.35 $9.61 $15.64 $14.78 $13.15 $12.33 $11.54 $10.00
Value at end of period $15.57 $13.65 $13.88 $12.35 $9.61 $15.64 $14.78 $13.15 $12.33 $11.54
Number of accumulation units outstanding at end of period 20,912 38,521 40,318 36,826 35,140 17,604 17,612 11,403 8,635 7,751
ING INDEX PLUS LARGECAP PORTFOLIO                    
Value at beginning of period $12.61 $12.81 $11.41 $9.39 $15.18 $14.66 $12.99 $12.50 $11.47 $10.00
Value at end of period $14.22 $12.61 $12.81 $11.41 $9.39 $15.18 $14.66 $12.99 $12.50 $11.47
Number of accumulation units outstanding at end of period 47,057 51,641 69,817 87,218 96,454 97,961 84,322 75,466 56,191 39,178
ING INDEX PLUS MIDCAP PORTFOLIO                    
Value at beginning of period $15.66 $16.07 $13.38 $10.30 $16.75 $16.10 $14.94 $13.64 $11.86 $10.00
Value at end of period $18.16 $15.66 $16.07 $13.38 $10.30 $16.75 $16.10 $14.94 $13.64 $11.86
Number of accumulation units outstanding at end of period 80,479 92,273 103,862 110,986 117,944 109,533 78,990 45,744 38,504 13,062
ING INDEX PLUS SMALLCAP PORTFOLIO                    
Value at beginning of period $15.11 $15.45 $12.77 $10.38 $15.83 $17.14 $15.29 $14.41 $11.98 $10.00
Value at end of period $16.75 $15.11 $15.45 $12.77 $10.38 $15.83 $17.14 $15.29 $14.41 $11.98
Number of accumulation units outstanding at end of period 21,550 25,527 30,916 35,396 39,446 36,877 27,290 17,733 12,943 396
ING INTERMEDIATE BOND PORTFOLIO                    
(Funds were first received in this option during February 2004)                    
Value at beginning of period $13.25 $12.50 $11.55 $10.51 $11.64 $11.15 $10.87 $10.69 $10.45  
Value at end of period $14.28 $13.25 $12.50 $11.55 $10.51 $11.64 $11.15 $10.87 $10.69  
Number of accumulation units outstanding at end of period 890,271 974,330 1,053,124 1,094,538 867,104 657,328 238,379 45,661 25,257  
ING INTERNATIONAL INDEX PORTFOLIO                    
(Funds were first received in this option during August 2009)                    
Value at beginning of period $12.82 $14.82 $13.94 $12.86            
Value at end of period $15.01 $12.82 $14.82 $13.94            
Number of accumulation units outstanding at end of period 34,508 39,108 54,364 69,714            
ING INTERNATIONAL VALUE PORTFOLIO                    
Value at beginning of period $12.87 $15.32 $15.15 $12.16 $21.33 $19.10 $15.00 $13.93 $12.04 $10.00
Value at end of period $15.14 $12.87 $15.32 $15.15 $12.16 $21.33 $19.10 $15.00 $13.93 $12.04
Number of accumulation units outstanding at end of period 123,247 127,535 146,818 154,015 146,519 90,266 49,957 19,032 7,334 460
 
CFI 25

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING INVESCO VAN KAMPEN COMSTOCK PORTFOLIO                    
Value at beginning of period $13.23 $13.67 $12.02 $9.46 $15.08 $15.62 $13.65 $13.35 $11.57 $10.00
Value at end of period $15.50 $13.23 $13.67 $12.02 $9.46 $15.08 $15.62 $13.65 $13.35 $11.57
Number of accumulation units outstanding at end of period 52,843 53,872 67,731 68,612 83,504 88,287 84,377 76,315 61,837 24,259
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.35 $12.64 $11.39 $9.39 $12.41 $12.13 $10.89 $10.06    
Value at end of period $13.76 $12.35 $12.64 $11.39 $9.39 $12.41 $12.13 $10.89    
Number of accumulation units outstanding at end of period 700 726 3,163 8,847 8,818 10,434 14,260 14,265    
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS S)                  
(Funds were first received in this option during March 2005)                    
Value at beginning of period $14.90 $15.28 $13.81 $11.42 $15.12 $14.82 $13.34 $12.66    
Value at end of period $16.56 $14.90 $15.28 $13.81 $11.42 $15.12 $14.82 $13.34    
Number of accumulation units outstanding at end of period 59,336 69,649 79,907 88,652 89,823 94,506 45,723 7,064    
ING JPMORGAN EMERGING MARKETS EQUITY PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $8.53 $10.56 $8.88 $5.24 $10.54          
Value at end of period $10.03 $8.53 $10.56 $8.88 $5.24          
Number of accumulation units outstanding at end of period 374,354 374,519 394,562 308,728 161,656          
ING JPMORGAN MID CAP VALUE PORTFOLIO                    
Value at beginning of period $17.06 $16.96 $13.96 $11.24 $16.99 $16.81 $14.60 $13.62 $11.43 $10.00
Value at end of period $20.23 $17.06 $16.96 $13.96 $11.24 $16.99 $16.81 $14.60 $13.62 $11.43
Number of accumulation units outstanding at end of period 57,925 66,869 86,931 82,431 71,089 68,220 57,811 30,370 11,367 2,830
ING LARGE CAP GROWTH PORTFOLIO                    
(Funds were first received in this option during June 2012)                    
Value at beginning of period $9.56                  
Value at end of period $10.33                  
Number of accumulation units outstanding at end of period 766,267                  
ING LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during June 2005)                    
Value at beginning of period $14.95 $14.80 $13.11 $9.31 $13.01 $11.80 $11.31 $10.74    
Value at end of period $17.40 $14.95 $14.80 $13.11 $9.31 $13.01 $11.80 $11.31    
Number of accumulation units outstanding at end of period 22,260 22,644 10,172 9,001 713 457 457 601    
ING LIQUID ASSETS PORTFOLIO                    
Value at beginning of period $10.61 $10.74 $10.87 $10.96 $10.83 $10.45 $10.10 $9.95 $9.98 $10.00
Value at end of period $10.49 $10.61 $10.74 $10.87 $10.96 $10.83 $10.45 $10.10 $9.95 $9.98
Number of accumulation units outstanding at end of period 100,115 129,188 133,842 134,423 195,690 123,786 24,130 40,551 1,668 1,668
ING MFS TOTAL RETURN PORTFOLIO                    
Value at beginning of period $13.47 $13.42 $12.37 $10.62 $13.84 $13.47 $12.18 $11.98 $10.91 $10.00
Value at end of period $14.80 $13.47 $13.42 $12.37 $10.62 $13.84 $13.47 $12.18 $11.98 $10.91
Number of accumulation units outstanding at end of period 23,316 33,016 40,520 45,830 62,601 71,516 85,526 56,708 32,200 12,607
ING MFS UTILITIES PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $10.17 $9.68 $8.62 $6.57 $10.62          
Value at end of period $11.39 $10.17 $9.68 $8.62 $6.57          
Number of accumulation units outstanding at end of period 155,744 159,031 169,672 148,410 86,397          
ING MIDCAP OPPORTUNITIES PORTFOLIO                    
Value at beginning of period $19.80 $20.20 $15.73 $11.29 $18.35 $14.80 $13.92 $12.79 $11.30  
Value at end of period $22.29 $19.80 $20.20 $15.73 $11.29 $18.35 $14.80 $13.92 $12.79  
Number of accumulation units outstanding at end of period 57,875 54,622 51,681 45,889 32,638 4,517 32 32 32  
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.49 $13.76 $12.00 $8.70 $14.75 $14.01 $12.02 $10.06    
Value at end of period $15.02 $12.49 $13.76 $12.00 $8.70 $14.75 $14.01 $12.02    
Number of accumulation units outstanding at end of period 11,028 15,176 18,689 19,419 36,939 54,370 59,156 87,171    
 
CFI 26

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS S)                    
Value at beginning of period $15.47 $17.09 $14.94 $10.85 $18.45 $17.56 $15.12 $13.51 $11.89 $10.00
Value at end of period $18.55 $15.47 $17.09 $14.94 $10.85 $18.45 $17.56 $15.12 $13.51 $11.89
Number of accumulation units outstanding at end of period 126,879 147,658 172,067 170,446 164,794 172,735 120,893 32,951 2,348 2,102
ING PIMCO HIGH YIELD PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $15.14 $14.68 $13.00 $8.81 $11.51 $11.33 $10.52 $10.44    
Value at end of period $17.06 $15.14 $14.68 $13.00 $8.81 $11.51 $11.33 $10.52    
Number of accumulation units outstanding at end of period 50,011 49,248 53,376 50,455 31,363 23,496 6,814 1,705    
ING PIMCO TOTAL RETURN BOND PORTFOLIO                    
Value at beginning of period $15.13 $14.80 $13.91 $12.31 $11.95 $11.10 $10.77 $10.64 $10.27 $10.00
Value at end of period $16.26 $15.13 $14.80 $13.91 $12.31 $11.95 $11.10 $10.77 $10.64 $10.27
Number of accumulation units outstanding at end of period 125,290 121,378 115,935 75,349 19,911 3,730 5,591 6,180 5,051 3,244
ING PIMCO TOTAL RETURN PORTFOLIO                    
Value at beginning of period $14.04 $13.76 $12.95 $11.64 $11.80 $10.92 $10.62 $10.53 $10.22 $10.00
Value at end of period $14.96 $14.04 $13.76 $12.95 $11.64 $11.80 $10.92 $10.62 $10.53 $10.22
Number of accumulation units outstanding at end of period 35,047 44,285 53,838 63,013 70,639 45,568 43,588 45,286 33,200 28,461
ING PIONEER FUND PORTFOLIO                    
(Funds were first received in this option during September 2005)                    
Value at beginning of period $11.24 $11.92 $10.42 $8.49 $13.17 $12.68 $11.00 $10.67    
Value at end of period $12.25 $11.24 $11.92 $10.42 $8.49 $13.17 $12.68 $11.00    
Number of accumulation units outstanding at end of period 13,229 23,610 19,154 17,078 17,117 9,553 9,743 1,989    
ING PIONEER MID CAP VALUE PORTFOLIO                    
(Funds were first received in this option during May 2005)                    
Value at beginning of period $11.28 $12.02 $10.32 $8.34 $12.63 $12.11 $10.91 $10.36    
Value at end of period $12.38 $11.28 $12.02 $10.32 $8.34 $12.63 $12.11 $10.91    
Number of accumulation units outstanding at end of period 223,127 236,686 260,134 272,658 222,771 175,655 54,643 21,587    
ING RUSSELLTM LARGE CAP GROWTH INDEX PORTFOLIO                    
(Funds were first received in this option during July 2009)                    
Value at beginning of period $14.50 $14.12 $12.71 $10.85            
Value at end of period $16.37 $14.50 $14.12 $12.71            
Number of accumulation units outstanding at end of period 7,698 7,197 8,686 8,191            
ING SMALLCAP OPPORTUNITIES PORTFOLIO                    
(Funds were first received in this option during December 2004)                    
Value at beginning of period $18.29 $18.41 $14.11 $10.92 $16.91 $15.58 $14.04 $13.05 $11.34  
Value at end of period $20.77 $18.29 $18.41 $14.11 $10.92 $16.91 $15.58 $14.04 $13.05  
Number of accumulation units outstanding at end of period 23,529 22,023 22,364 19,963 13,608 1,373 699 31 31  
ING SMALL COMPANY PORTFOLIO                    
Value at beginning of period $17.47 $18.17 $14.83 $11.80 $17.36 $16.63 $14.50 $13.34 $11.83 $10.00
Value at end of period $19.72 $17.47 $18.17 $14.83 $11.80 $17.36 $16.63 $14.50 $13.34 $11.83
Number of accumulation units outstanding at end of period 49,534 54,353 68,908 69,544 66,563 48,294 30,105 18,321 17,641 10,452
ING SOLUTION 2015 PORTFOLIO                    
(Funds were first received in this option during April 2006)                    
Value at beginning of period $11.38 $11.60 $10.55 $8.73 $12.08 $11.69 $11.03      
Value at end of period $12.53 $11.38 $11.60 $10.55 $8.73 $12.08 $11.69      
Number of accumulation units outstanding at end of period 175,606 181,717 229,723 246,962 153,943 111,208 31,400      
ING SOLUTION 2025 PORTFOLIO                    
(Funds were first received in this option during August 2006)                    
Value at beginning of period $10.97 $11.45 $10.19 $8.20 $12.55 $12.14 $11.19      
Value at end of period $12.29 $10.97 $11.45 $10.19 $8.20 $12.55 $12.14      
Number of accumulation units outstanding at end of period 123,620 134,364 155,552 155,852 98,795 89,335 7,323      
ING SOLUTION 2035 PORTFOLIO                    
(Funds were first received in this option during June 2006)                    
Value at beginning of period $10.93 $11.60 $10.25 $8.08 $12.99 $12.48 $11.01      
Value at end of period $12.43 $10.93 $11.60 $10.25 $8.08 $12.99 $12.48      
Number of accumulation units outstanding at end of period 48,048 100,523 101,660 112,751 96,231 93,362 2,606      
 
CFI 27

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING SOLUTION 2045 PORTFOLIO                    
(Funds were first received in this option during August 2006)                    
Value at beginning of period $10.89 $11.62 $10.22 $7.96 $13.40 $12.82 $11.51      
Value at end of period $12.42 $10.89 $11.62 $10.22 $7.96 $13.40 $12.82      
Number of accumulation units outstanding at end of period 15,026 15,909 17,522 18,715 34,343 32,484 8,211      
ING SOLUTION INCOME PORTFOLIO                    
(Funds were first received in this option during April 2006)                    
Value at beginning of period $11.64 $11.73 $10.84 $9.36 $11.37 $10.93 $10.37      
Value at end of period $12.62 $11.64 $11.73 $10.84 $9.36 $11.37 $10.93      
Number of accumulation units outstanding at end of period 32,117 49,961 58,335 79,768 77,340 76,366 12,936      
ING STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO                    
(Funds were first received in this option during March 2006)                    
Value at beginning of period $14.37 $14.32 $13.07 $11.23 $14.94 $14.33 $13.69      
Value at end of period $15.90 $14.37 $14.32 $13.07 $11.23 $14.94 $14.33      
Number of accumulation units outstanding at end of period 10,663 11,203 11,974 12,319 9,367 11,480 12,184      
ING STRATEGIC ALLOCATION GROWTH PORTFOLIO                    
(Funds were first received in this option during August 2006)                    
Value at beginning of period $14.88 $15.55 $13.95 $11.30 $17.93 $17.32 $16.10      
Value at end of period $16.86 $14.88 $15.55 $13.95 $11.30 $17.93 $17.32      
Number of accumulation units outstanding at end of period 6,515 6,584 8,081 8,666 7,623 4,050 4,075      
ING STRATEGIC ALLOCATION MODERATE PORTFOLIO                    
(Funds were first received in this option during June 2006)                    
Value at beginning of period $14.62 $14.93 $13.52 $11.27 $16.43 $15.80 $14.44      
Value at end of period $16.38 $14.62 $14.93 $13.52 $11.27 $16.43 $15.80      
Number of accumulation units outstanding at end of period 6,132 6,332 6,711 8,763 5,610 5,401 5,402      
ING T. ROWE PRICE CAPITAL APPRECIATION PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $10.97 $10.80 $9.58 $7.28 $10.26          
Value at end of period $12.41 $10.97 $10.80 $9.58 $7.28          
Number of accumulation units outstanding at end of period 428,619 451,329 457,744 390,445 187,769          
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO                    
(Funds were first received in this option during February 2004)                    
Value at beginning of period $16.22 $17.09 $13.50 $9.36 $16.70 $14.95 $13.89 $12.90 $12.48  
Value at end of period $18.57 $16.22 $17.09 $13.50 $9.36 $16.70 $14.95 $13.89 $12.90  
Number of accumulation units outstanding at end of period 112,954 119,490 126,095 118,036 72,166 36,910 15,707 883 883  
ING T. ROWE PRICE EQUITY INCOME PORTFOLIO                    
(Funds were first received in this option during June 2005)                    
Value at beginning of period $11.15 $11.39 $10.03 $8.12 $12.78 $12.55 $10.67 $10.31    
Value at end of period $12.92 $11.15 $11.39 $10.03 $8.12 $12.78 $12.55 $10.67    
Number of accumulation units outstanding at end of period 74,770 79,553 98,792 96,536 66,174 38,076 10,049 6,730    
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO                    
Value at beginning of period $14.23 $14.59 $12.67 $8.99 $15.79 $14.58 $13.05 $12.47 $11.50 $10.00
Value at end of period $16.67 $14.23 $14.59 $12.67 $8.99 $15.79 $14.58 $13.05 $12.47 $11.50
Number of accumulation units outstanding at end of period 40,603 37,573 47,285 47,044 43,833 30,690 27,293 25,275 26,407 10,630
ING T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $7.10 $8.20 $7.29 $5.37 $10.46          
Value at end of period $8.33 $7.10 $8.20 $7.29 $5.37          
Number of accumulation units outstanding at end of period 38,625 42,481 51,752 53,610 46,099          
ING TEMPLETON FOREIGN EQUITY PORTFOLIO                    
(Funds were first received in this option during April 2008)                    
Value at beginning of period $7.60 $8.77 $8.17 $6.27 $10.20          
Value at end of period $8.91 $7.60 $8.77 $8.17 $6.27          
Number of accumulation units outstanding at end of period 54,639 59,580 58,914 54,868 35,664          
 
CFI 28

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING U.S. BOND INDEX PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $11.78 $11.15 $10.65 $10.22 $10.00          
Value at end of period $12.06 $11.78 $11.15 $10.65 $10.22          
Number of accumulation units outstanding at end of period 193,585 200,615 187,743 164,679 41,528          
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO                    
(Funds were first received in this option during August 2006)                    
Value at beginning of period $12.77 $13.28 $11.89 $9.15 $15.44 $15.48 $14.12      
Value at end of period $14.27 $12.77 $13.28 $11.89 $9.15 $15.44 $15.48      
Number of accumulation units outstanding at end of period 6,047 5,872 7,550 8,414 8,499 5,169 1,219      
ING WISDOM TREESM GLOBAL HIGH-YIELDING EQUITY INDEX                    
PORTFOLIO                    
(Funds were first received in this option during February 2008)                    
Value at beginning of period $7.77 $8.18 $7.82 $6.09 $9.74          
Value at end of period $8.83 $7.77 $8.18 $7.82 $6.09          
Number of accumulation units outstanding at end of period 34,267 35,039 37,118 35,840 15,434          
OPPENHEIMER MAIN STREET SMALL- & MID-CAP FUND®/VA                    
(Funds were first received in this option during January 2007)                    
Value at beginning of period $18.14 $18.81 $15.47 $11.44 $18.68 $19.56        
Value at end of period $21.09 $18.14 $18.81 $15.47 $11.44 $18.68        
Number of accumulation units outstanding at end of period 7,002 6,867 7,381 6,754 3,297 2,907        
PIMCO VIT REAL RETURN PORTFOLIO                    
(Funds were first received in this option during August 2005)                    
Value at beginning of period $13.79 $12.50 $11.70 $10.01 $10.90 $9.98 $10.02 $9.96    
Value at end of period $14.82 $13.79 $12.50 $11.70 $10.01 $10.90 $9.98 $10.02    
Number of accumulation units outstanding at end of period 177,618 172,909 116,289 114,207 69,454 20,344 9,642 1,271    
PIONEER EQUITY INCOME VCT PORTFOLIO                    
Value at beginning of period $15.46 $14.79 $12.55 $11.16 $16.24 $16.35 $13.55 $13.00 $11.34 $10.00
Value at end of period $16.79 $15.46 $14.79 $12.55 $11.16 $16.24 $16.35 $13.55 $13.00 $11.34
Number of accumulation units outstanding at end of period 149,128 169,403 184,835 203,515 183,805 170,555 71,803 31,852 19,187 8,986
 
 
Separate Account Annual Charges of 1.35%
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
FIDELITY® VIP CONTRAFUND® PORTFOLIO                    
Value at beginning of period $16.12 $16.81 $14.57 $10.91 $19.29 $16.67 $15.16 $13.18 $11.60 $10.00
Value at end of period $18.47 $16.12 $16.81 $14.57 $10.91 $19.29 $16.67 $15.16 $13.18 $11.60
Number of accumulation units outstanding at end of period 192,431 225,421 245,718 263,839 250,630 177,948 86,945 33,320 10,652 4,897
FIDELITY® VIP EQUITY-INCOME PORTFOLIO                    
Value at beginning of period $12.88 $12.97 $11.44 $8.93 $15.83 $15.84 $13.39 $12.86 $11.92  
Value at end of period $14.87 $12.88 $12.97 $11.44 $8.93 $15.83 $15.84 $13.39 $12.86  
Number of accumulation units outstanding at end of period 52,525 43,567 37,598 40,596 40,920 45,677 28,589 15,549 8,399  
FRANKLIN SMALL CAP VALUE SECURITIES FUND                    
Value at beginning of period $17.92 $18.88 $14.92 $11.71 $17.72 $18.41 $15.95 $14.86 $12.52  
Value at end of period $20.93 $17.92 $18.88 $14.92 $11.71 $17.72 $18.41 $15.95 $14.86  
Number of accumulation units outstanding at end of period 17,217 17,719 19,012 22,337 19,263 14,831 12,305 7,663 4,242  
ING AMERICAN CENTURY SMALL-MID CAP VALUE PORTFOLIO                    
Value at beginning of period $18.30 $19.15 $15.91 $11.89 $16.41 $17.13 $15.04 $14.09    
Value at end of period $21.00 $18.30 $19.15 $15.91 $11.89 $16.41 $17.13 $15.04    
Number of accumulation units outstanding at end of period 1,083 1,125 1,125 1,125 1,125 1,125 1,125 1,125    
ING AMERICAN FUNDS INTERNATIONAL PORTFOLIO                    
Value at beginning of period $10.71 $12.67 $12.04 $8.58 $15.11 $12.83 $10.99 $10.40    
Value at end of period $12.38 $10.71 $12.67 $12.04 $8.58 $15.11 $12.83 $10.99    
Number of accumulation units outstanding at end of period 165,474 172,700 178,288 188,289 177,891 101,347 26,181 1,057    
 
CFI 29

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING BALANCED PORTFOLIO                    
(Funds were first received in this option during November 2004)                    
Value at beginning of period $12.38 $12.75 $11.36 $9.68 $13.68 $13.17 $12.18 $11.87 $11.51  
Value at end of period $13.86 $12.38 $12.75 $11.36 $9.68 $13.68 $13.17 $12.18 $11.87  
Number of accumulation units outstanding at end of period 16,173 17,666 17,767 21,340 19,558 13,229 4,351 2,548 2,054  
ING BARON GROWTH PORTFOLIO                    
Value at beginning of period $17.76 $17.62 $14.12 $10.58 $18.26 $17.45 $15.35 $14.49 $11.48 $10.00
Value at end of period $20.97 $17.76 $17.62 $14.12 $10.58 $18.26 $17.45 $15.35 $14.49 $11.48
Number of accumulation units outstanding at end of period 26,871 34,091 35,222 39,511 41,142 30,669 18,310 4,222 230 239
ING BLACKROCK INFLATION PROTECTED BOND PORTFOLIO                    
(Funds were first received in this option during September 2009)                    
Value at beginning of period $12.18 $11.02 $10.59 $10.31            
Value at end of period $12.78 $12.18 $11.02 $10.59            
Number of accumulation units outstanding at end of period 81,763 78,239 61,282 53,423            
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2007)                    
Value at beginning of period $8.28 $8.50 $7.58 $5.89 $9.77 $10.03        
Value at end of period $9.37 $8.28 $8.50 $7.58 $5.89 $9.77        
Number of accumulation units outstanding at end of period 1,070 1,111 1,244 1,294 1,292 2,032        
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during January 2007)                    
Value at beginning of period $9.16 $9.44 $8.43 $6.57 $10.92 $10.60        
Value at end of period $10.35 $9.16 $9.44 $8.43 $6.57 $10.92        
Number of accumulation units outstanding at end of period 13,962 15,628 14,517 14,360 13,642 5,692        
ING BLACKROCK SCIENCE AND TECHNOLOGY OPPORTUNITIES                    
PORTFOLIO                    
(Funds were first received in this option during July 2005)                    
Value at beginning of period $14.50 $16.43 $14.10 $9.37 $15.83 $13.50 $12.82 $11.78    
Value at end of period $15.39 $14.50 $16.43 $14.10 $9.37 $15.83 $13.50 $12.82    
Number of accumulation units outstanding at end of period 27,027 26,277 26,303 27,723 22,782 3,794 4,660 650    
ING BOND PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $10.69 $10.25 $9.79 $8.85 $9.99          
Value at end of period $11.23 $10.69 $10.25 $9.79 $8.85          
Number of accumulation units outstanding at end of period 112,838 185,450 302,147 299,236 81,936          
ING CLARION GLOBAL REAL ESTATE PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $8.01 $8.57 $7.49 $5.69 $10.15          
Value at end of period $9.93 $8.01 $8.57 $7.49 $5.69          
Number of accumulation units outstanding at end of period 68,395 78,726 77,466 73,249 62,524          
ING DAVIS NEW YORK VENTURE PORTFOLIO                    
Value at beginning of period $12.12 $12.89 $11.66 $8.98 $14.98 $14.58 $12.98 $12.66 $11.84 $10.00
Value at end of period $13.42 $12.12 $12.89 $11.66 $8.98 $14.98 $14.58 $12.98 $12.66 $11.84
Number of accumulation units outstanding at end of period 2,762 2,825 2,968 3,956 3,421 2,676 2,275 1,432 1,450 475
ING DFA WORLD EQUITY PORTFOLIO                    
(Funds were first received in this option during November 2008)                    
Value at beginning of period $8.50 $9.49 $7.70 $6.41 $5.21          
Value at end of period $9.90 $8.50 $9.49 $7.70 $6.41          
Number of accumulation units outstanding at end of period 3,613 3,611 3,672 3,964 1,168          
ING FRANKLIN TEMPLETON FOUNDING STRATEGY PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $9.27 $9.52 $8.71 $6.78 $10.20          
Value at end of period $10.60 $9.27 $9.52 $8.71 $6.78          
Number of accumulation units outstanding at end of period 30,589 31,706 53,884 51,803 27,678          
 
CFI 30

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING GLOBAL BOND PORTFOLIO                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $13.35 $13.07 $11.47 $9.58 $11.53 $10.76 $10.08 $10.01    
Value at end of period $14.18 $13.35 $13.07 $11.47 $9.58 $11.53 $10.76 $10.08    
Number of accumulation units outstanding at end of period 11,647 18,463 22,628 28,067 33,134 24,538 14,118 12,368    
ING GROWTH AND INCOME CORE PORTFOLIO                    
(Funds were first received in this option during October 2007)                    
Value at beginning of period $12.02 $14.06 $12.82 $9.00 $15.19 $16.44        
Value at end of period $12.92 $12.02 $14.06 $12.82 $9.00 $15.19        
Number of accumulation units outstanding at end of period 2,895 2,923 2,768 2,547 2,028 1,155        
ING GROWTH AND INCOME PORTFOLIO (CLASS ADV)                    
(Funds were first received in this option during January 2011)                    
Value at beginning of period $9.57 $9.99                
Value at end of period $10.88 $9.57                
Number of accumulation units outstanding at end of period 231,046 243,943                
ING GROWTH AND INCOME PORTFOLIO (CLASS S)                    
(Funds were first received in this option during August 2006)                    
Value at beginning of period $13.47 $13.73 $12.23 $9.53 $15.54 $14.70 $13.66      
Value at end of period $15.35 $13.47 $13.73 $12.23 $9.53 $15.54 $14.70      
Number of accumulation units outstanding at end of period 19,671 20,304 21,177 24,451 23,825 5,501 1,971      
ING INDEX PLUS LARGECAP PORTFOLIO                    
Value at beginning of period $12.45 $12.66 $11.30 $9.31 $15.08 $14.59 $12.94 $12.47 $11.47 $10.00
Value at end of period $14.02 $12.45 $12.66 $11.30 $9.31 $15.08 $14.59 $12.94 $12.47 $11.47
Number of accumulation units outstanding at end of period 28,797 33,312 36,645 39,105 42,022 37,141 29,608 15,362 4,711 487
ING INDEX PLUS MIDCAP PORTFOLIO                    
Value at beginning of period $15.46 $15.89 $13.25 $10.22 $16.63 $16.02 $14.88 $13.61 $11.86 $10.00
Value at end of period $17.90 $15.46 $15.89 $13.25 $10.22 $16.63 $16.02 $14.88 $13.61 $11.86
Number of accumulation units outstanding at end of period 35,450 36,482 37,026 40,316 33,941 36,246 30,594 14,911 7,578 2,057
ING INDEX PLUS SMALLCAP PORTFOLIO                    
(Funds were first received in this option during January 2004)                    
Value at beginning of period $14.92 $15.28 $12.64 $10.29 $15.73 $17.05 $15.23 $14.38 $12.41  
Value at end of period $16.51 $14.92 $15.28 $12.64 $10.29 $15.73 $17.05 $15.23 $14.38  
Number of accumulation units outstanding at end of period 8,821 9,136 9,728 10,616 14,706 14,805 11,648 2,836 2,336  
ING INTERMEDIATE BOND PORTFOLIO                    
Value at beginning of period $13.09 $12.36 $11.44 $10.42 $11.57 $11.09 $10.83 $10.67 $10.34 $10.00
Value at end of period $14.08 $13.09 $12.36 $11.44 $10.42 $11.57 $11.09 $10.83 $10.67 $10.34
Number of accumulation units outstanding at end of period 325,440 333,677 368,058 381,536 364,084 251,998 101,631 17,331 5,720 1,523
ING INTERNATIONAL INDEX PORTFOLIO                    
(Funds were first received in this option during August 2009)                    
Value at beginning of period $12.77 $14.78 $13.92 $12.85            
Value at end of period $14.93 $12.77 $14.78 $13.92            
Number of accumulation units outstanding at end of period 10,589 11,797 12,174 15,115            
ING INTERNATIONAL VALUE PORTFOLIO                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.71 $15.15 $15.00 $12.06 $21.19 $19.00 $14.95 $13.69    
Value at end of period $14.92 $12.71 $15.15 $15.00 $12.06 $21.19 $19.00 $14.95    
Number of accumulation units outstanding at end of period 17,673 21,055 24,205 21,705 18,964 23,621 9,309 3,079    
ING INVESCO VAN KAMPEN COMSTOCK PORTFOLIO                    
(Funds were first received in this option during September 2004)                    
Value at beginning of period $13.06 $13.52 $11.90 $9.39 $14.98 $15.54 $13.60 $13.32 $12.08  
Value at end of period $15.28 $13.06 $13.52 $11.90 $9.39 $14.98 $15.54 $13.60 $13.32  
Number of accumulation units outstanding at end of period 7,585 8,774 9,718 10,225 10,418 15,763 14,718 6,785 1,652  
 
CFI 31

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS I)                  
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.22 $12.53 $11.31 $9.34 $12.36 $12.10 $10.88 $10.06    
Value at end of period $13.60 $12.22 $12.53 $11.31 $9.34 $12.36 $12.10 $10.88    
Number of accumulation units outstanding at end of period 0 0 0 0 713 764 797 830    
ING INVESCO VAN KAMPEN EQUITY AND INCOME PORTFOLIO (CLASS S)                  
Value at beginning of period $14.71 $15.11 $13.67 $11.33 $15.02 $14.74 $13.30 $12.51 $11.46 $10.00
Value at end of period $16.33 $14.71 $15.11 $13.67 $11.33 $15.02 $14.74 $13.30 $12.51 $11.46
Number of accumulation units outstanding at end of period 72,001 78,975 86,198 90,006 80,819 51,925 15,850 707 705 732
ING JPMORGAN EMERGING MARKETS EQUITY PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $8.48 $10.51 $8.86 $5.23 $10.82          
Value at end of period $9.96 $8.48 $10.51 $8.86 $5.23          
Number of accumulation units outstanding at end of period 58,724 68,740 72,883 58,503 33,233          
ING JPMORGAN MID CAP VALUE PORTFOLIO                    
(Funds were first received in this option during February 2005)                    
Value at beginning of period $16.84 $16.77 $13.82 $11.15 $16.88 $16.72 $14.55 $13.79    
Value at end of period $19.94 $16.84 $16.77 $13.82 $11.15 $16.88 $16.72 $14.55    
Number of accumulation units outstanding at end of period 13,477 16,454 17,889 19,000 20,170 18,159 12,533 2,866    
ING LARGE CAP GROWTH PORTFOLIO                    
(Funds were first received in this option during May 2012)                    
Value at beginning of period $9.66                  
Value at end of period $10.32                  
Number of accumulation units outstanding at end of period 339,640                  
ING LARGE CAP GROWTH PORTFOLIO (CLASS S)                    
(Funds were first received in this option during September 2006)                    
Value at beginning of period $14.80 $14.67 $13.01 $9.26 $12.96 $11.77 $11.06      
Value at end of period $17.19 $14.80 $14.67 $13.01 $9.26 $12.96 $11.77      
Number of accumulation units outstanding at end of period 30,621 32,085 9,330 7,688 132 1,244 132      
ING LIQUID ASSETS PORTFOLIO                    
(Funds were first received in this option during June 2005)                    
Value at beginning of period $10.48 $10.62 $10.76 $10.88 $10.76 $10.39 $10.07 $9.97    
Value at end of period $10.34 $10.48 $10.62 $10.76 $10.88 $10.76 $10.39 $10.07    
Number of accumulation units outstanding at end of period 264,707 300,890 132,537 120,763 147,780 67,486 34,412 26,607    
ING MFS TOTAL RETURN PORTFOLIO                    
Value at beginning of period $13.30 $13.27 $12.25 $10.53 $13.75 $13.40 $12.14 $11.95 $10.90 $10.00
Value at end of period $14.59 $13.30 $13.27 $12.25 $10.53 $13.75 $13.40 $12.14 $11.95 $10.90
Number of accumulation units outstanding at end of period 7,379 9,773 10,069 11,792 15,999 16,990 21,242 21,902 10,752 2,757
ING MFS UTILITIES PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $10.12 $9.64 $8.59 $6.56 $10.80          
Value at end of period $11.31 $10.12 $9.64 $8.59 $6.56          
Number of accumulation units outstanding at end of period 40,470 27,439 15,946 14,515 3,929          
ING MIDCAP OPPORTUNITIES PORTFOLIO                    
(Funds were first received in this option during March 2005)                    
Value at beginning of period $19.55 $19.97 $15.58 $11.20 $18.23 $14.73 $13.87 $12.36    
Value at end of period $21.97 $19.55 $19.97 $15.58 $11.20 $18.23 $14.73 $13.87    
Number of accumulation units outstanding at end of period 9,017 8,286 8,529 9,080 7,397 1,693 534 508    
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS I)                    
(Funds were first received in this option during April 2005)                    
Value at beginning of period $12.36 $13.64 $11.91 $8.65 $14.69 $13.98 $12.01 $10.06    
Value at end of period $14.84 $12.36 $13.64 $11.91 $8.65 $14.69 $13.98 $12.01    
Number of accumulation units outstanding at end of period 1,218 1,272 1,508 10,984 12,924 14,853 21,200 22,573    
 
CFI 32

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS S)                    
(Funds were first received in this option during February 2005)                    
Value at beginning of period $15.28 $16.90 $14.80 $10.76 $18.33 $17.47 $15.06 $13.22    
Value at end of period $18.29 $15.28 $16.90 $14.80 $10.76 $18.33 $17.47 $15.06    
Number of accumulation units outstanding at end of period 54,848 65,228 76,482 90,622 88,063 46,482 25,446 5,611    
ING PIMCO HIGH YIELD PORTFOLIO                    
(Funds were first received in this option during July 2005)                    
Value at beginning of period $14.99 $14.55 $12.91 $8.76 $11.46 $11.30 $10.51 $10.42    
Value at end of period $16.86 $14.99 $14.55 $12.91 $8.76 $11.46 $11.30 $10.51    
Number of accumulation units outstanding at end of period 23,086 28,281 34,858 35,609 22,199 23,498 10,889 6,583    
ING PIMCO TOTAL RETURN BOND PORTFOLIO                    
(Funds were first received in this option during August 2006)                    
Value at beginning of period $14.94 $14.64 $13.78 $12.20 $11.87 $11.04 $10.84      
Value at end of period $16.03 $14.94 $14.64 $13.78 $12.20 $11.87 $11.04      
Number of accumulation units outstanding at end of period 34,949 33,649 51,719 33,529 14,176 7,242 5,117      
ING PIMCO TOTAL RETURN PORTFOLIO                    
Value at beginning of period $13.86 $13.61 $12.82 $11.54 $11.72 $10.86 $10.59 $10.51 $10.21 $10.00
Value at end of period $14.75 $13.86 $13.61 $12.82 $11.54 $11.72 $10.86 $10.59 $10.51 $10.21
Number of accumulation units outstanding at end of period 18,096 33,947 37,569 53,328 41,115 13,258 5,074 2,634 2,623 2,303
ING PIONEER FUND PORTFOLIO                    
(Funds were first received in this option during February 2006)                    
Value at beginning of period $11.13 $11.82 $10.34 $8.44 $13.11 $12.65 $11.15      
Value at end of period $12.11 $11.13 $11.82 $10.34 $8.44 $13.11 $12.65      
Number of accumulation units outstanding at end of period 10,168 26,377 31,486 26,681 25,852 7,322 5,967      
ING PIONEER MID CAP VALUE PORTFOLIO                    
(Funds were first received in this option during June 2005)                    
Value at beginning of period $11.17 $11.92 $10.24 $8.30 $12.58 $12.08 $10.90 $10.47    
Value at end of period $12.23 $11.17 $11.92 $10.24 $8.30 $12.58 $12.08 $10.90    
Number of accumulation units outstanding at end of period 29,055 38,339 40,446 50,579 49,773 31,976 18,231 15,240    
ING RUSSELLTM LARGE CAP GROWTH INDEX PORTFOLIO                    
(Funds were first received in this option during July 2009)                    
Value at beginning of period $14.44 $14.08 $12.69 $10.85            
Value at end of period $16.27 $14.44 $14.08 $12.69            
Number of accumulation units outstanding at end of period 11,767 12,730 12,921 13,083            
ING SMALLCAP OPPORTUNITIES PORTFOLIO                    
(Funds were first received in this option during November 2006)                    
Value at beginning of period $18.05 $18.20 $13.97 $10.84 $16.79 $15.50 $15.17      
Value at end of period $20.47 $18.05 $18.20 $13.97 $10.84 $16.79 $15.50      
Number of accumulation units outstanding at end of period 8,493 5,828 6,095 6,572 4,831 636 558      
ING SMALL COMPANY PORTFOLIO                    
Value at beginning of period $17.25 $17.97 $14.69 $11.70 $17.25 $16.55 $14.45 $13.31 $11.83 $10.00
Value at end of period $19.44 $17.25 $17.97 $14.69 $11.70 $17.25 $16.55 $14.45 $13.31 $11.83
Number of accumulation units outstanding at end of period 9,752 9,659 10,086 11,780 3,953 1,731 3,019 3,143 3,281 460
ING SOLUTION 2015 PORTFOLIO                    
(Funds were first received in this option during March 2006)                    
Value at beginning of period $11.26 $11.50 $10.48 $8.68 $12.04 $11.66 $10.94      
Value at end of period $12.38 $11.26 $11.50 $10.48 $8.68 $12.04 $11.66      
Number of accumulation units outstanding at end of period 91,019 110,714 114,701 118,497 89,598 79,827 24,993      
ING SOLUTION 2025 PORTFOLIO                    
(Funds were first received in this option during March 2006)                    
Value at beginning of period $10.86 $11.36 $10.12 $8.15 $12.50 $12.11 $11.28      
Value at end of period $12.15 $10.86 $11.36 $10.12 $8.15 $12.50 $12.11      
Number of accumulation units outstanding at end of period 97,705 104,127 114,713 113,233 97,555 43,662 20,250      
 
CFI 33

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING SOLUTION 2035 PORTFOLIO                    
(Funds were first received in this option during September 2006)                    
Value at beginning of period $10.82 $11.50 $10.18 $8.04 $12.93 $12.45 $11.44      
Value at end of period $12.29 $10.82 $11.50 $10.18 $8.04 $12.93 $12.45      
Number of accumulation units outstanding at end of period 126,686 135,528 156,539 171,759 148,954 58,326 5,667      
ING SOLUTION 2045 PORTFOLIO                    
(Funds were first received in this option during July 2007)                    
Value at beginning of period $10.78 $11.52 $10.14 $7.92 $13.35 $13.26        
Value at end of period $12.28 $10.78 $11.52 $10.14 $7.92 $13.35        
Number of accumulation units outstanding at end of period 46,648 48,055 48,908 49,727 48,651 2,567        
ING SOLUTION INCOME PORTFOLIO                    
(Funds were first received in this option during January 2007)                    
Value at beginning of period $11.52 $11.63 $10.76 $9.31 $11.32 $10.92        
Value at end of period $12.47 $11.52 $11.63 $10.76 $9.31 $11.32        
Number of accumulation units outstanding at end of period 54,740 56,059 66,049 97,305 95,618 19,583        
ING STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO                    
(Funds were first received in this option during February 2007)                    
Value at beginning of period $14.22 $14.20 $12.97 $11.17 $14.88 $14.41        
Value at end of period $15.71 $14.22 $14.20 $12.97 $11.17 $14.88        
Number of accumulation units outstanding at end of period 80 81 82 84 85 86        
ING STRATEGIC ALLOCATION GROWTH PORTFOLIO                    
(Funds were first received in this option during February 2008)                    
Value at beginning of period $14.73 $15.41 $13.85 $11.24 $16.88          
Value at end of period $16.66 $14.73 $15.41 $13.85 $11.24          
Number of accumulation units outstanding at end of period 13,313 13,612 13,574 13,598 13,275          
ING STRATEGIC ALLOCATION MODERATE PORTFOLIO                    
(Funds were first received in this option during November 2005)                    
Value at beginning of period $14.47 $14.80 $13.43 $11.20 $16.37 $15.76 $14.42 $14.13    
Value at end of period $16.19 $14.47 $14.80 $13.43 $11.20 $16.37 $15.76 $14.42    
Number of accumulation units outstanding at end of period 6,591 6,275 6,391 7,767 7,731 5,872 3,475 480    
ING T. ROWE PRICE CAPITAL APPRECIATION PORTFOLIO                    
(Funds were first received in this option during June 2008)                    
Value at beginning of period $10.91 $10.75 $9.56 $7.27 $9.99          
Value at end of period $12.32 $10.91 $10.75 $9.56 $7.27          
Number of accumulation units outstanding at end of period 155,158 108,135 124,703 129,952 66,211          
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO                    
Value at beginning of period $16.02 $16.90 $13.37 $9.28 $16.58 $14.88 $13.84 $12.87 $12.02 $10.00
Value at end of period $18.31 $16.02 $16.90 $13.37 $9.28 $16.58 $14.88 $13.84 $12.87 $12.02
Number of accumulation units outstanding at end of period 18,307 18,549 20,013 26,313 17,163 11,673 3,882 2,387 217 225
ING T. ROWE PRICE EQUITY INCOME PORTFOLIO                    
(Funds were first received in this option during November 2005)                    
Value at beginning of period $11.04 $11.29 $9.96 $8.08 $12.73 $12.52 $10.66 $10.44    
Value at end of period $12.77 $11.04 $11.29 $9.96 $8.08 $12.73 $12.52 $10.66    
Number of accumulation units outstanding at end of period 53,833 60,738 59,684 63,325 61,797 28,395 17,422 21,829    
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO                    
(Funds were first received in this option during February 2004)                    
Value at beginning of period $14.05 $14.43 $12.54 $8.92 $15.68 $14.50 $13.00 $12.44 $11.73  
Value at end of period $16.43 $14.05 $14.43 $12.54 $8.92 $15.68 $14.50 $13.00 $12.44  
Number of accumulation units outstanding at end of period 7,643 7,940 11,441 13,494 16,556 16,099 12,540 6,578 5,495  
ING T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO                    
(Funds were first received in this option during September 2008)                    
Value at beginning of period $7.06 $8.17 $7.28 $5.36 $8.06          
Value at end of period $8.27 $7.06 $8.17 $7.28 $5.36          
Number of accumulation units outstanding at end of period 7,859 7,433 2,874 2,839 2,278          
 
CFI 34

 

 

Condensed Financial Information (continued)
 
  2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
ING TEMPLETON FOREIGN EQUITY PORTFOLIO                    
(Funds were first received in this option during April 2008)                    
Value at beginning of period $7.56 $8.73 $8.15 $6.27 $10.20          
Value at end of period $8.85 $7.56 $8.73 $8.15 $6.27          
Number of accumulation units outstanding at end of period 55,818 59,069 57,735 60,190 67,782          
ING U.S. BOND INDEX PORTFOLIO                    
(Funds were first received in this option during May 2008)                    
Value at beginning of period $11.71 $11.10 $10.62 $10.20 $10.01          
Value at end of period $11.97 $11.71 $11.10 $10.62 $10.20          
Number of accumulation units outstanding at end of period 74,715 77,544 77,812 72,600 42,925          
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO                    
Value at beginning of period $12.60 $13.13 $11.78 $9.08 $15.33 $15.40 $13.66 $12.70 $11.23 $10.00
Value at end of period $14.07 $12.60 $13.13 $11.78 $9.08 $15.33 $15.40 $13.66 $12.70 $11.23
Number of accumulation units outstanding at end of period 4,185 5,423 5,812 6,163 10,395 7,912 6,888 1,241 731 731
ING WISDOM TREESM GLOBAL HIGH-YIELDING EQUITY INDEX                    
PORTFOLIO                    
(Funds were first received in this option during June 2008)                    
Value at beginning of period $7.72 $8.14 $7.79 $6.08 $9.30          
Value at end of period $8.77 $7.72 $8.14 $7.79 $6.08          
Number of accumulation units outstanding at end of period 50,888 30,092 16,957 17,028 11,508          
OPPENHEIMER MAIN STREET SMALL- & MID-CAP FUND®/VA                    
(Funds were first received in this option during September 2006)                    
Value at beginning of period $17.96 $18.65 $15.36 $11.38 $18.60 $19.12 $17.86      
Value at end of period $20.85 $17.96 $18.65 $15.36 $11.38 $18.60 $19.12      
Number of accumulation units outstanding at end of period 4,697 4,299 4,904 5,229 2,595 2,892 916      
PIMCO VIT REAL RETURN PORTFOLIO                    
(Funds were first received in this option during November 2006)                    
Value at beginning of period $13.65 $12.39 $11.62 $9.95 $10.85 $9.95 $10.11      
Value at end of period $14.65 $13.65 $12.39 $11.62 $9.95 $10.85 $9.95      
Number of accumulation units outstanding at end of period 49,755 42,123 44,133 47,383 38,837 9,512 6,798      
PIONEER EQUITY INCOME VCT PORTFOLIO                    
Value at beginning of period $15.26 $14.62 $12.43 $11.07 $16.14 $16.27 $13.50 $12.97 $11.33 $10.00
Value at end of period $16.55 $15.26 $14.62 $12.43 $11.07 $16.14 $16.27 $13.50 $12.97 $11.33
Number of accumulation units outstanding at end of period 39,361 53,455 52,949 53,764 44,586 40,514 14,602 5,174 1,888 735
 
CFI 35

 


APPENDIX B
 
The Funds
 
During the accumulation phase, you may allocate your premium payments and contract value to any of
the funds available under this contract. They are listed in this appendix. You bear the entire investment
risk for amounts you allocate to any fund, and you may lose your principal.
 
List of Fund Name Changes
   
Former Fund Name New Fund Name  
ING Davis New York Venture Portfolio ING Columbia Contrarian Core Portfolio  
ING Invesco Van Kampen Comstock Portfolio ING Invesco Comstock Portfolio  
ING Invesco Van Kampen Equity and Income Portfolio ING Invesco Equity and Income Portfolio  
The investment results of the mutual funds (funds) are likely to differ significantly and there is no assurance
that any of the funds will achieve their respective investment objectives. You should consider the investment
objectives, risks and charges, and expenses of the funds carefully before investing. Please refer to the fund
prospectuses for additional information. Shares of the funds will rise and fall in value and you could lose
money by investing in the funds. Shares of the funds are not bank deposits and are not guaranteed, endorsed
or insured by any financial institution, the Federal Deposit Insurance Corporation or any other government
agency. Except as noted, all funds are diversified, as defined under the Investment Company Act of 1940.
Fund prospectuses may be obtained free of charge by contacting our Customer Service Center at the address
and telephone number listed on the first page of this contract prospectus, by accessing the SEC’s website or
by contacting the SEC Public Reference Branch. If you received a summary prospectus for any of the funds
available through your contract, you may obtain a full prospectus and other information free of charge by
either accessing the internet address, calling the telephone number or sending an email request to the email
address shown on the front of the fund’s summary prospectus.
 
Certain funds offered under the contracts have investment objectives and policies similar to other funds
managed by the fund’s investment adviser. The investment results of a fund may be higher or lower than
those of other funds managed by the same adviser. There is no assurance and no representation is made that
the investment results of any fund will be comparable to those of another fund managed by the same
investment adviser.
 
For the share class of each fund offered through your contract, please see the cover page.
            
Fund Name
Investment Adviser/Subadviser		 Investment Objective(s)
Fidelity® VIP Contrafund® Portfolio Seeks long-term capital appreciation.
 
Investment Adviser: Fidelity Management &  
Research Company (“FMR”)  
 
Subadvisers: FMR Co., Inc. (“FMRC”) and other  
investment advisers
        		        
Fidelity® VIP Equity-Income Portfolio Seeks reasonable income. Also considers the potential
  for capital appreciation. Seeks to achieve a yield which
Investment Adviser: FMR exceeds the composite yield on the securities
  comprising the S&P 500® Index.
Subadvisers: FMRC and other investment advisers
        		          
 
 
PRO.70600-13 B-1

 

 

  
Fund Name
Investment Adviser/Subadviser		 Investment Objective(s)
Franklin Small Cap Value Securities Fund Seeks long-term total return. Under normal market
  conditions, the fund invests at least 80% of its net assets
Investment Adviser: Franklin Advisory Services, in investments of small capitalization companies.
LLC
           		 
ING American Century Small-Mid Cap Value Seeks long-term capital growth; income is a secondary
Portfolio objective.
 
Investment Adviser: Directed Services LLC  
 
Subadviser: American Century Investment  
Management, Inc.
               		 
ING American Funds International Portfolio Seeks to provide you with long-term growth of capital.
 
Investment Adviser to the Portfolio: ING  
Investments, LLC  
 
Investment Adviser to Master Funds: Capital  
Research and Management CompanySM
   		      
ING Balanced Portfolio Seeks total return consisting of capital appreciation
  (both realized and unrealized) and current income; the
Investment Adviser: ING Investments, LLC secondary investment objective is long-term capital
  appreciation.
Subadviser: ING Investment Management Co. LLC
        		      
ING Baron Growth Portfolio Seeks capital appreciation.
 
Investment Adviser: Directed Services LLC  
 
Subadviser: BAMCO, Inc.
      		      
ING BlackRock Inflation Protected Bond Portfolio A non-diversified Portfolio that seeks to maximize real
  return, consistent with preservation of real capital and
Investment Adviser: Directed Services LLC prudent investment management.
 
Subadviser: BlackRock Financial Management, Inc.
   		    
ING BlackRock Large Cap Growth Portfolio Seeks long-term growth of capital.
 
Investment Adviser: Directed Services LLC  
 
Subadviser: BlackRock Investment Management,  
LLC
      		        
 
PRO.70600-13 B-2

 

 

 
Fund Name
Investment Adviser/Subadviser		 Investment Objective(s)
ING Bond Portfolio Seeks to provide maximum total return through income
  and capital appreciation.
Investment Adviser: ING Investments, LLC  
 
Subadviser: ING Investment Management Co. LLC
       		 
ING Clarion Global Real Estate Portfolio Seeks high total return, consisting of capital
  appreciation and current income.
Investment Adviser: ING Investments, LLC  
 
Subadviser: CBRE Clarion Securities LLC
      		 
ING Columbia Contrarian Core Portfolio Seeks total return, consisting of long-term capital
  appreciation and current income.
Investment Adviser: Directed Services LLC  
 
Subadviser: Columbia Management Investment  
Advisers, LLC
      		 
ING DFA World Equity Portfolio Seeks long-term capital appreciation.
 
Investment Adviser: Directed Services LLC  
 
Subadviser: Dimensional Fund Advisors LP
 		  
ING Franklin Templeton Founding Strategy Seeks capital appreciation and secondarily, income.
Portfolio  
 
Investment Adviser: Directed Services LLC  
 
Subadviser: Franklin Mutual Advisers, LLC
 		  
ING Global Bond Portfolio Seeks to maximize total return through a combination
  of current income and capital appreciation.
Investment Adviser: Directed Services LLC  
 
Subadviser: ING Investment Management Co. LLC
 		  
ING Growth and Income Portfolio Seeks to maximize total return through investments in a
  diversified portfolio of common stocks and securities
Investment Adviser: ING Investments, LLC convertible into common stocks. It is anticipated that
  capital appreciation and investment income will both be
Subadviser: ING Investment Management Co. LLC
 		 major factors in achieving total return.
 
ING Index Plus LargeCap Portfolio Seeks to outperform the total return performance of the
  S&P 500 Index, while maintaining a market level of
Investment Adviser: ING Investments, LLC risk.
 
Subadviser: ING Investment Management Co. LLC
  		  
 
PRO.70600-13 B-3

 

 

  
Fund Name
Investment Adviser/Subadviser		 Investment Objective(s)
ING Index Plus MidCap Portfolio Seeks to outperform the total return performance of the
  Standard and Poor’s MidCap 400 Index, while
Investment Adviser: ING Investments, LLC maintaining a market level of risk.
 
Subadviser: ING Investment Management Co. LLC
       		  
ING Index Plus SmallCap Portfolio Seeks to outperform the total return performance of the
  Standard and Poor’s SmallCap 600 Index, while
Investment Adviser: ING Investments, LLC maintaining a market level of risk.
 
Subadviser: ING Investment Management Co. LLC
       		  
ING Intermediate Bond Portfolio Seeks to maximize total return consistent with
  reasonable risk. The Portfolio seeks its objective
Investment Adviser: ING Investments, LLC through investments in a diversified portfolio consisting
  primarily of debt securities. It is anticipated that capital
Subadviser: ING Investment Management Co. LLC appreciation and investment income will both be major
   factors in achieving total return.
 
ING International Index Portfolio Seeks investment (before fees and expenses) results that
  correspond to the total return (which includes capital
Investment Adviser: ING Investments, LLC appreciation and income) of a widely accepted
  international index.
Subadviser: ING Investment Management Co. LLC
  		  
ING International Value Portfolio Seeks long-term capital appreciation.
 
Investment Adviser: ING Investments, LLC  
 
Subadviser: ING Investment Management Co. LLC
  		  
ING Invesco Comstock Portfolio Seeks capital growth and income.
 
Investment Adviser: Directed Services LLC  
 
Subadviser: Invesco Advisers, Inc.
  		  
ING Invesco Equity and Income Portfolio Seeks total return, consisting of long-term capital
  appreciation and current income.
Investment Adviser: Directed Services LLC  
 
Subadviser: Invesco Advisers, Inc.
  		  
ING JPMorgan Emerging Markets Equity Portfolio Seeks capital appreciation.
 
Investment Adviser: Directed Services LLC  
 
Subadviser: J.P. Morgan Investment Management  
Inc.
  		  
 
PRO.70600-13 B-4

 

 

  
Fund Name
Investment Adviser/Subadviser		 Investment Objective(s)
ING JPMorgan Mid Cap Value Portfolio
 		 Seeks growth from capital appreciation.
 
Investment Adviser: Directed Services LLC
 		  
Subadviser: J.P. Morgan Investment Management  
Inc.
 		  
ING Large Cap Growth Portfolio
 		 Seeks long-term capital growth.
 
Investment Adviser: Directed Services LLC
 		  
Subadviser: ING Investment Management Co. LLC
 		  
ING Liquid Assets Portfolio Seeks high level of current income consistent with the
  preservation of capital and liquidity.
Investment Adviser: Directed Services LLC
 		  
Subadviser: ING Investment Management Co. LLC
 		  
ING MFS Total Return Portfolio Seeks above-average income (compared to a portfolio
  entirely invested in equity securities) consistent with the
Investment Adviser: Directed Services LLC prudent employment of capital and secondarily, seeks
  reasonable opportunity for growth of capital and
Subadviser: Massachusetts Financial Services income.
Company
 		  
ING MFS Utilities Portfolio
 		 Seeks total return.
 
Investment Adviser: Directed Services LLC
 		  
Subadviser: Massachusetts Financial Services  
Company
 		  
ING MidCap Opportunities Portfolio
 		 Seeks long-term capital appreciation.
 
Investment Adviser: ING Investments, LLC
 		  
Subadviser: ING Investment Management Co. LLC
 		  
ING Multi-Manager Large Cap Core Portfolio
 		 Seeks reasonable income and capital growth.
 
Investment Adviser: Directed Services LLC
 		  
Subadviser: Columbia Management Investment  
Advisers, LLC and The London Company of Virginia  
d/b/a The London Company
 		  
ING Oppenheimer Global Portfolio
 		 Seeks capital appreciation.
 
Investment Adviser: Directed Services LLC
 		  
Subadviser: OppenheimerFunds, Inc.
 		  
 
PRO.70600-13 B-5

 

 

Fund Name
Investment Adviser/Subadviser		 Investment Objective(s)
ING PIMCO High Yield Portfolio Seeks maximum total return, consistent with
  preservation of capital and prudent investment
Investment Adviser: Directed Services LLC management.
 
Subadviser: Pacific Investment Management  
Company LLC
         		         
ING PIMCO Total Return Bond Portfolio Seeks maximum total return, consistent with
  preservation of capital and prudent investment
Investment Adviser: Directed Services LLC management.
 
Subadviser: Pacific Investment Management  
Company LLC
          		  
ING Pioneer Mid Cap Value Portfolio Seeks capital appreciation.
 
Investment Adviser: Directed Services LLC  
 
Subadviser: Pioneer Investment Management, Inc.
  		 
ING RussellTM Large Cap Growth Index Portfolio Seeks investment results (before fees and expenses) that
  correspond to the total return (which includes capital
Investment Adviser: ING Investments, LLC appreciation and income) of the Russell Top 200®
  Growth Index.
Subadviser: ING Investment Management Co. LLC
 		  
ING Small Company Portfolio Seeks growth of capital primarily through investment in
  a diversified portfolio of common stocks of companies
Investment Adviser: ING Investments, LLC with smaller market capitalizations.
 
Subadviser: ING Investment Management Co. LLC
 		  
ING SmallCap Opportunities Portfolio Seeks long-term capital appreciation.
 
Investment Adviser: ING Investments, LLC  
 
Subadviser: ING Investment Management Co. LLC
 		  
ING Solution 2015 Portfolio Until the day prior to its Target Date, the Portfolio seeks
  to provide total return consistent with an asset
Investment Adviser: Directed Services LLC allocation targeted at retirement in approximately 2015.
  On the Target Date, the Portfolio’s investment objective
Subadviser: ING Investment Management Co. LLC will be to seek to provide a combination of total return
  and stability of principal consistent with an asset
  allocation targeted to retirement.
 
 
PRO.70600-13 B-6

 

 

Fund Name
Investment Adviser/Subadviser		 Investment Objective(s)
ING Solution 2025 Portfolio Until the day prior to its Target Date, the Portfolio seeks
  to provide total return consistent with an asset
Investment Adviser: Directed Services LLC allocation targeted at retirement in approximately 2025.
  On the Target Date, the Portfolio’s investment objective
Subadviser: ING Investment Management Co. LLC will be to seek to provide a combination of total return
  and stability of principal consistent with an asset
  allocation targeted to retirement.
 
ING Solution 2035 Portfolio Until the day prior to its Target Date, the Portfolio seeks
  to provide total return consistent with an asset
Investment Adviser: Directed Services LLC allocation targeted at retirement in approximately 2035.
  On the Target Date, the Portfolio’s investment objective
Subadviser: ING Investment Management Co. LLC will be to seek to provide a combination of total return
  and stability of principal consistent with an asset
  allocation targeted to retirement.
 
ING Solution 2045 Portfolio Until the day prior to its Target Date, the Portfolio seeks
  to provide total return consistent with an asset
Investment Adviser: Directed Services LLC allocation targeted at retirement in approximately 2045.
  On the Target Date, the Portfolio’s investment objective
Subadviser: ING Investment Management Co. LLC will be to seek to provide a combination of total return
  and stability of principal consistent with an asset
  allocation targeted to retirement.
 
ING Solution Income Portfolio Seeks to provide a combination of total return and
  stability of principal consistent with an asset allocation
Investment Adviser: Directed Services LLC targeted to retirement.
 
Subadviser: ING Investment Management Co. LLC
 		  
ING Strategic Allocation Conservative Portfolio Seeks to provide total return (i.e., income and capital
  appreciation, both realized and unrealized) consistent
Investment Adviser: ING Investments, LLC with preservation of capital.
 
Subadviser: ING Investment Management Co. LLC
 		  
ING Strategic Allocation Growth Portfolio Seeks to provide capital appreciation.
 
Investment Adviser: ING Investments, LLC  
 
Subadviser: ING Investment Management Co. LLC
 		  
ING Strategic Allocation Moderate Portfolio Seeks to provide total return (i.e., income and capital
  appreciation, both realized and unrealized).
Investment Adviser: ING Investments, LLC  
 
Subadviser: ING Investment Management Co. LLC
 		  
 
PRO.70600-13 B-7

 

 

 
Fund Name
Investment Adviser/Subadviser		 Investment Objective(s)
ING T. Rowe Price Capital Appreciation Portfolio Seeks, over the long-term, a high total investment
return, consistent with the preservation of capital and
with prudent investment risk.
 
Investment Adviser: Directed Services LLC
 
Subadviser: T. Rowe Price Associates, Inc.
  		 
ING T. Rowe Price Diversified Mid Cap Growth Seeks long-term capital appreciation.
Portfolio
 		  
Investment Adviser: Directed Services LLC
 		  
Subadviser: T. Rowe Price Associates, Inc.
 		  
ING T. Rowe Price Equity Income Portfolio Seeks substantial dividend income as well as long-term
  growth of capital.
Investment Adviser: Directed Services LLC
 		  
Subadviser: T. Rowe Price Associates, Inc.
 		  
ING T. Rowe Price Growth Equity Portfolio Seeks long-term capital growth, and secondarily,
increasing dividend income.
 
Investment Adviser: Directed Services LLC
 		  
Subadviser: T. Rowe Price Associates, Inc.
 		  
ING T. Rowe Price International Stock Portfolio
 		 Seeks long-term growth of capital.
 
Investment Adviser: Directed Services LLC
 		  
Subadviser: T. Rowe Price Associates, Inc.
 		  
ING Templeton Foreign Equity Portfolio
 		 Seeks long-term capital growth.
 
Investment Adviser: Directed Services LLC
 		  
Subadviser: Templeton Investment Counsel, LLC
 		  
ING U.S. Bond Index Portfolio Seeks investment results (before fees and expenses) that
correspond to the total return (which includes capital
appreciation and income) of the Barclays Capital U.S.
Aggregate Bond Index.
 
Investment Adviser: ING Investments, LLC
 
Subadviser: ING Investment Management Co. LLC
 		  
 
 
PRO.70600-13 B-8

 

 

Fund Name
Investment Adviser/Subadviser		 Investment Objective(s)
ING WisdomTreeSM Global High-Yielding Equity Seeks investment returns that closely correspond to the
Index Portfolio* price and yield performance (before fees and expenses)
  of the WisdomTreeSM Global High-Yielding Equity
Investment Adviser: ING Investments, LLC Index.
 
Subadviser: ING Investment Management Co. LLC  
 
* WisdomTreeSM is a service mark of WisdomTree  
    Investments  
 

♦  Effective July 12, 2013, this fund will change its
     name to ING Global Value Advantage Portfolio, and
     at that time will change its investment objective to:
     Seeks long-term growth of capital and current
     income.
     		  
Oppenheimer Main Street Small Cap Fund® /VA The Fund seeks capital appreciation.
 
Investment Adviser: OppenheimerFunds, Inc.
 		  
PIMCO VIT Real Return Portfolio Seeks maximum real return, consistent with
  preservation of real capital and prudent investment
Investment Adviser: Pacific Investment management.
Management Company LLC (PIMCO)
  		 
Pioneer Equity Income VCT Portfolio Seeks current income and long-term growth of capital
  from a portfolio consisting primarily of income
Investment Adviser: Pioneer Investment producing equity securities of U.S. corporations.
Management, Inc.
  		 
 
PRO.70600-13 B-9

 

 

APPENDIX C
 
Fixed Account II
 
Fixed Account II (“Fixed Account”) is an optional fixed interest allocation offered during the accumulation phase of
your variable annuity contract between you and ING USA Annuity and Life Insurance Company (“ING USA,” the
“Company,” “we” or “our”). The Fixed Account, which is a segregated asset account of ING USA, provides a means
for you to invest on a tax-deferred basis and earn a guaranteed interest for guaranteed interest periods (Fixed Interest
Allocation(s)). We will credit your Fixed Interest Allocation(s) with a fixed rate of interest. We currently offer Fixed
Interest Allocations with guaranteed interest periods of 5, 7 and 10 years. In addition, we may offer DCA Fixed
Interest Allocations, which are 6-month and 1-year Fixed Interest Allocations available exclusively in connection with
our dollar cost averaging program. We may offer additional guaranteed interest periods in some or all states, may not
offer all guaranteed interest periods on all contracts or in all states and the rates for a given guaranteed interest period
may vary among contracts. We set the interest rates periodically. We may credit a different interest rate for each
interest period. The interest you earn in the Fixed Account as well as your principal is guaranteed by ING USA, as
long as you do not take your money out before the maturity date for the applicable interest period. If you take your
money out from a Fixed Interest Allocation more than 30 days before the applicable maturity date, we will apply a
market value adjustment (“Market Value Adjustment”). A Market Value Adjustment could increase or decrease your
contract value and/or the amount you take out. A surrender charge may also apply to withdrawals from your contract.
You bear the risk that you may receive less than your principal because of the Market Value Adjustment.
 
For contracts sold in some states, not all Fixed Interest Allocations are available. You have a right to return a contract
for a refund as described in the prospectus. To obtain a copy of the Fixed Account II prospectus, please write or call us
at the address and phone number listed on the front page of the prospectus.
 
The Fixed Account
You may allocate premium payments and transfer your contract value to the guaranteed interest periods of the Fixed
Account during the accumulation period as described in the prospectus. Every time you allocate money to the Fixed
Account, we set up a Fixed Interest Allocation for the guaranteed interest period you select. We will credit your Fixed
Interest Allocation with a guaranteed interest rate for the interest period you select, so long as you do not withdraw
money from that Fixed Interest Allocation before the end of the guaranteed interest period. Each guaranteed interest
period ends on its maturity date which is the last day of the month in which the interest period is scheduled to expire.
 
Your contract value in the Fixed Account is the sum of your Fixed Interest Allocations and the interest credited as
adjusted for any withdrawals, transfers or other charges we may impose, including any Market Value Adjustment.
Your Fixed Interest Allocation will be credited with the guaranteed interest rate in effect for the guaranteed interest
period you selected when we receive and accept your premium or reallocation of contract value. We will credit interest
daily at a rate that yields the quoted guaranteed interest rate.
 
If you surrender, withdraw, transfer or annuitize your investment in a Fixed Interest Allocation more than 30 days
before the end of the guaranteed interest period, we will apply a Market Value Adjustment to the transaction. A Market
Value Adjustment could increase or decrease the amount you surrender, withdraw, transfer or annuitize, depending on
current interest rates at the time of the transaction. You bear the risk that you may receive less than your principal
because of the Market Value Adjustment.
 
Guaranteed Interest Rates
Each Fixed Interest Allocation will have an interest rate that is guaranteed as long as you do not take your money out
until its maturity date. We do not have a specific formula for establishing the guaranteed interest rates for the different
guaranteed interest periods. We determine guaranteed interest rates at our sole discretion. We cannot predict the level
of future interest rates. For more information see the prospectus for the Fixed Account.
 
 
PRO.70600-13 C-1

 

 

Transfers from a Fixed Interest Allocation
You may transfer your contract value in a Fixed Interest Allocation to one or more new Fixed Interest Allocations with
new guaranteed interest periods, or to any of the subaccounts of ING USA’s separate account as described in the
prospectus on the maturity date of a guaranteed interest period. The minimum amount that you can transfer to or from
any Fixed Interest Allocation is $100. Transfers from a Fixed Interest Allocation may be subject to a Market Value
Adjustment. If you have a special Fixed Interest Allocation that was offered exclusively with our dollar cost averaging
program, canceling dollar cost averaging will cause a transfer of the entire contract value in such Fixed Interest
Allocation to the ING Liquid Assets Portfolio subaccount, and such a transfer will be subject to a Market Value
Adjustment.
 
Please be aware that the benefit we pay under certain optional benefit riders will be adjusted by any transfers made to
and from the Fixed Interest Allocations during specified periods while the rider is in effect.
 
Withdrawals from a Fixed Interest Allocation
During the accumulation phase, you may withdraw a portion of your contract value in any Fixed Interest Allocation.
You may make systematic withdrawals of only the interest earned during the prior month, quarter or year, depending
on the frequency chosen, from a Fixed Interest Allocation under our systematic withdrawal option. A withdrawal from
a Fixed Interest Allocation may be subject to a Market Value Adjustment and a contract surrender charge. Be aware
that withdrawals may have federal income tax consequences, including a 10% penalty tax, as well as state income tax
consequences.
 
Please be aware that the benefit we pay under certain optional benefit riders will be adjusted by any withdrawals made
to and from the Fixed Interest Allocations during specified periods while the rider is in effect.
 
Market Value Adjustment
A Market Value Adjustment may decrease, increase or have no effect on your contract value. We will apply a Market
Value Adjustment (i) whenever you withdraw or transfer money from a Fixed Interest Allocation (unless made within
30 days before the maturity date of the applicable guaranteed interest period, or under the systematic withdrawal or
dollar cost averaging program) and (ii) if on the income phase payment start date a guaranteed interest period for any
Fixed Interest Allocation does not end on or within 30 days of the income phase payment start date.
 
A Market Value Adjustment may be positive, negative or result in no change. In general, if interest rates are rising,
you bear the risk that any Market Value Adjustment will likely be negative and reduce your contract value. On the
other hand, if interest rates are falling, it is more likely that you will receive a positive Market Value Adjustment that
increases your contract value. In the event of a full surrender, transfer or annuitization from a Fixed Interest
Allocation, we will add or subtract any Market Value Adjustment from the amount surrendered, transferred or
annuitized. In the event of a partial withdrawal, transfer or annuitization, we will add or subtract any Market Value
Adjustment from the total amount withdrawn, transferred or annuitized in order to provide the amount requested. If a
negative Market Value Adjustment exceeds your contract value in the Fixed Interest Allocation, we will consider your
request to be a full surrender, transfer or annuitization of the Fixed Interest Allocation.
 
Contract Value in the Fixed Interest Allocations
On the contract date, the contract value in any Fixed Interest Allocation in which you are invested is equal to the
portion of the initial premium paid and designated for allocation to the Fixed Interest Allocation. On each business day
after the contract date, we calculate the amount of contract value in each Fixed Interest Allocation as follows:
1.    We take the contract value in the Fixed Interest Allocation at the end of the preceding business day;
2. We credit a daily rate of interest on 1) at the guaranteed rate since the preceding business day;
3. We add 1) and 2);
4. We subtract from 3) any transfers from that Fixed Interest Allocation; and
5. We subtract from 4) any withdrawals, and then subtract any contract fees (including any rider charges) and
premium taxes.
 
Additional premium payments and transfers allocated to the Fixed Account will be placed in a new Fixed Interest
Allocation. The contract value on the date of allocation will be the amount allocated. Several examples which illustrate
how the Market Value Adjustment works are included in the prospectus for Fixed Account II.
 
PRO.70600-13 C-2

 

 

Cash Surrender Value
The cash surrender value is the amount you receive when you surrender the contract. The cash surrender value of
amounts allocated to the Fixed Account will fluctuate daily based on the interest credited to Fixed Interest Allocations,
any Market Value Adjustment, and any surrender charge. We do not guarantee any minimum cash surrender value. On
any date during the accumulation phase, we calculate the cash surrender value as follows: we start with your contract
value, then we adjust for any Market Value Adjustment, and then we deduct any surrender charge, any charge for
premium taxes, the annual contract administrative fee (unless waived), and any optional benefit rider charge, and any
other charges incurred but not yet deducted.
 
Dollar Cost Averaging from Fixed Interest Allocations
You may elect to participate in our dollar cost averaging program from Fixed Account Interest Allocations with a
guaranteed interest period of 1 year or less. The Fixed Interest Allocations serve as the source accounts from which we
will, on a monthly basis, automatically transfer a set dollar amount of money to other Fixed Interest Allocations or
funds selected by you.
 
The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since we
transfer the same dollar amount to subaccounts each month, more units of a subaccount are purchased if the value of
its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than average value per
unit may be achieved over the long term. However, we cannot guarantee this. When you elect the dollar cost averaging
program, you are continuously investing in securities regardless of fluctuating price levels. You should consider your
tolerance for investing through periods of fluctuating price levels. You elect the dollar amount you want transferred
under this program. Each monthly transfer must be at least $100. You may change the transfer amount once each
contract year.
 
Transfers from a Fixed Interest Allocation under the dollar cost averaging program are not subject to a Market Value
Adjustment.
 
We may in the future offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or from
the dollar cost averaging program or otherwise modify, suspend or terminate this program. Of course, such changes
will not affect any dollar cost averaging programs in operation at the time.
 
Suspension of Payments
We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months.
 
More Information
See the prospectus for Fixed Account II.
 
PRO.70600-13 C-3

 

 

APPENDIX D
 
Fixed Interest Division
 
A Fixed Interest Division option is available through the group and individual deferred variable annuity contracts
offered by ING USA Annuity and Life Insurance Company. The Fixed Interest Division is part of the ING USA
General Account. Interests in the Fixed Interest Division have not been registered under the Securities Act of 1933,
and neither the Fixed Interest Division nor the General Account are registered under the Investment Company Act of
1940.
 
Interests in the Fixed Interest Division are offered in certain states through an Offering Brochure, dated
May 1, 2013. The Fixed Interest Division is different from the Fixed Account which is described in the prospectus but
which is not available in your state. If you are unsure whether the Fixed Account is available in your state, please
contact our Customer Service Center at 1-800-366-0066. When reading through the Prospectus, the Fixed Interest
Division should be counted among the various investment options available for the allocation of your premiums, in
lieu of the Fixed Account. The Fixed Interest Division may not be available in some states. Some restrictions may
apply.
 
You will find more complete information relating to the Fixed Interest Division in the Offering Brochure. Please read
the Offering Brochure carefully before you invest in the Fixed Interest Division.
 
 
PRO.70600-13 D-1

 

 

APPENDIX E
 
Surrender Charge for Excess Withdrawals Example
 
The following assumes you made an initial premium payment of $25,000 and additional premium payments of
$25,000 in each of the second and third contract years, for total premium payments under the contract of $75,000. It
also assumes a withdrawal at the beginning of the fifth contract year of 30% of the contract value of $90,000.
 
In this example, $9,000 (10% of $90,000) is maximum free withdrawal amount that you may withdraw during the
contract year without a surrender charge. The total amount withdrawn from the contract would be $27,000 ($90,000
x .30). Therefore, $18,000 ($27,000 – $9,000) is considered an excess withdrawal and would be subject to a 3%
surrender charge of $540 ($18,000 x .03). This example does not take into account any Market Value Adjustment or
deduction of any premium taxes.
 
 
 
 
PRO.70600-13 E-1

 

 
APPENDIX F
    
Pro-Rata Withdrawal Adjustment for 5% Roll-Up Death Benefit Examples
       
Example #1: The Contract Value (AV) is Lower than the Death Benefit
         
Assume a premium payment of $100,000, AV at the time of withdrawal of $80,000 and a 5% Roll-Up minimum
guarantee death benefit (“MGDB”) at the time of withdrawal of $120,000. A total withdrawal of $20,000 is made.
      
Calculate the Effect of the Withdrawal
 
Pro-rata Withdrawal Adjustment to MGDB = $30,000 ($120,000 * ($20,000 / $80,000))
 
MGDB after Pro-rata Withdrawal = $90,000 ($120,000 – $30,000)
 
AV after Withdrawal = $60,000 ($80,000 – $20,000)
              
Example #2: The Contract Value (AV) is Greater than the Death Benefit
             
Assume a premium payment of $100,000, AV at the time of withdrawal of $160,000 and a 5% Roll-Up minimum
guarantee death benefit (“MGDB”) at the time of withdrawal of $120,000. A total withdrawal of $20,000 is made.
            
Calculate the Effect of the Withdrawal
 
Pro-rata Withdrawal Adjustment to MGDB = $15,000 ($120,000 * ($20,000 / $160,000))
 
MGDB after Pro-rata Withdrawal = $105,000 ($120,000 – $15,000)
 
AV after Withdrawal = $140,000 ($160,000 – $20,000)
         
Example #3: The Contract Value (AV) is Equal to the Death Benefit
           
Assume a premium payment of $100,000, AV at the time of withdrawal of $120,000 and a 5% Roll-Up minimum
guarantee death benefit (“MGDB”) at the time of withdrawal of $120,000. A total withdrawal of $20,000 is made.
       
Calculate the Effect of the Withdrawal
 
Pro-rata Withdrawal Adjustment to MGDB = $20,000 ($120,000 * ($20,000 / $120,000))
 
MGDB after Pro-rata Withdrawal = $100,000 ($120,000 – $20,000)
 
AV after Pro-rata Withdrawal = $100,000 ($120,000 – $20,000)

 

PRO.70600-13 F-1

 

 

APPENDIX G
  
Special Funds 5% Roll-up Death Benefit Examples

 

MGDB* if 50% invested in
Special Funds		 MGDB* if 0% invested in
Special Funds		 MGDB* if 100% invested in
Special Funds
end of yr Covered Special Total end of yr Covered Special  Total end of yr Covered  Special Total
0 500 500 1,000 0 1,000 - 1,000 0 0 1000 1000
1 525 500 1,025 1 1,050 - 1,050 1 0 1000 1000
2 551 500 1,051 2 1,103 - 1,103 2 0 1000 1000
3 579 500 1,079 3 1,158 - 1,158 3 0 1000 1000
4 608 500 1,108 4 1,216 - 1,216 4 0 1000 1000
5 638 500 1,138 5 1,276 - 1,276 5 0 1000 1000
6 670 500 1,170 6 1,340 - 1,340 6 0 1000 1000
7 704 500 1,204 7 1,407 - 1,407 7 0 1000 1000
8 739 500 1,239 8 1,477 - 1,477 8 0 1000 1000
9 776 500 1,276 9 1,551 - 1,551 9 0 1000 1000
10 814 500 1,314 10 1,629 - 1,629 10 0 1000 1000
 
 
 
MGDB* if transferred to
Special Funds		 MGDB* if transferred to
Covered Funds
at the beginning of year 6 at the beginning of year 6
end of yr Covered Special Total end of yr Covered Special Total
0 1,000 - 1,000 0 - 1,000 1,000
1 1,050 - 1,050 1 - 1,000 1,000
2 1,103 - 1,103 2 - 1,000 1,000
3 1,158 - 1,158 3 - 1,000 1,000
4 1,216 - 1,216 4 - 1,000 1,000
5 1,276 - 1,276 5 - 1,000 1,000
6 - 1,276 1,276 6 1,050 - 1,050
7 - 1,276 1,276 7 1,103 - 1,103
8 - 1,276 1,276 8 1,158 - 1,158
9 - 1,276 1,276 9 1,216 - 1,216
10 - 1,276 1,276 10 1,276 - 1,276

 

*      MGDB is the 5% Roll-up Minimum Guaranteed Death Benefit.

PRO.70600-13                                                             G-1

 

APPENDIX H
 
Examples of Minimum Guaranteed Income Benefit Calculation
 
Example 1        
Age             Contract without
the MGIB Rider		 Contract with
the MGIB Rider		 Contract with
the MGIB Rider
Before 1/12/2009
55 Initial Value $100,000 $100,000 $100,000
  Accumulation Rate 0.0% 0.00% 0.00%
  Rider Charge 0.0% 0.60% 0.60%
65 Contract Value $100,000 $92,219 $92,219
  Contract Annuity Factor 4.71 4.71 4.71
  Monthly Income $471.00 $434.35 $434.35
  MGIB Rollup n/a $162,889 $162,889
  MGIB Ratchet n/a $100,000 $100,000
  MGIB Annuity Factor n/a 4.17 4.43
  MGIB Income n/a $679.25 $721.60
  Income $471.00 $679.25 $721.60
Example 2        
Age             Contract without
the MGIB Rider		 Contract with
the MGIB Rider		 Contract with
the MGIB Rider
Before 1/12/2009
55 Initial Value $100,000 $100,000 $100,000
  Accumulation Rate 3.0% 3.0% 3.0%
  Rider Charge 0.0% 0.60% 0.60%
65 Contract Value $134,392 $125,479 $125,479
  Contract Annuity Factor 4.71 4.71 4.71
  Monthly Income $632.98 $591.01 $591.01
  MGIB Rollup n/a $162,889 $162,889
  MGIB Ratchet n/a $125,479 $125,479
  MGIB Annuity Factor n/a 4.17 4.43
  MGIB Income n/a $679.25 $721.60
  Income $632.98 $679.25 $721.60

 

PRO.70600-13                                                                 H-1

Example 3        
Age            Contract without
the MGIB Rider		 Contract with
the MGIB Rider		 Contract with
the MGIB Rider
Before 1/12/2009
55 Initial Value $100,000 $100,000 $100,000
  Accumulation Rate 8.0% 8.0% 8.0%
  Rider Charge 0.0% 0.60% 0.60%
65 Contract Value $215,892 $203,538 $203,538
  Contract Annuity Factor 4.71 4.71 4.71
  Monthly Income $1,016.85 $958.66 $959.93
  MGIB Rollup n/a $162,889 $162,889
  MGIB Ratchet n/a $203,538 $203,808
  MGIB Annuity Factor n/a 4.17 4.17
  MGIB Income n/a $848.75 $902.87
  Income $1,016.85 $958.66 $959.93

        
The Accumulation Rates shown are hypothetical and intended to illustrate various market conditions. These rates
are assumed to be net of all fees and charges. Fees and charges are not assessed against the MGIB Rollup Rate.

PRO.70600-13                                                                H-2


APPENDIX I
 
ING LifePay Plus and ING Joint LifePay Plus Partial Withdrawal Amount Examples
 
(For riders issued on or after April 28, 2008, subject to state approval)
 
The following examples show the adjustment to the Maximum Annual Withdrawal amount for a withdrawal before the
Lifetime Withdrawal Phase has begun.
 
Illustration 1: Adjustment to the ING LifePay Plus Base for a withdrawal taken prior to the Lifetime
Withdrawal Phase.
 
Assume the Annuitant is age 55 and the first withdrawal taken during the contract year is $3,000 net, with $0 of
surrender charges. Because the ING LifePay Plus Rider is not yet eligible to enter the Lifetime Withdrawal Phase,
there is no Maximum Annual Withdrawal and the entire withdrawal is considered excess.
 
If the ING LifePay Plus Base and contract value before the withdrawal are $100,000 and $90,000, respectively, then
the ING LifePay Plus Base will be reduced by 3.33% ($3,000 / $90,000) to $96,667 ((1 – 3.33%) * $100,000).
 
Any additional withdrawals taken prior to the Annuitant reaching age 59½ will also result in an immediate pro-rata
reduction to the ING LifePay Plus Base.
 
The following are examples of adjustments to the Maximum Annual Withdrawal amount for withdrawals in excess of
the Maximum Annual Withdrawal:
 
Illustration 2: Adjustment to the Maximum Annual Withdrawal amount for a withdrawal in excess of the
Maximum Annual Withdrawal.
 
Assume the Maximum Annual Withdrawal is $5,000.
 
The first withdrawal taken during the contract year is $3,000 net, with no surrender charges. The Maximum Annual
Withdrawal is not exceeded.
 
The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges. The Maximum Annual
Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the Maximum Annual Withdrawal,
$5,000.
 
The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges. Because total net
withdrawals taken, $6,000, exceed the Maximum Annual Withdrawal, $5,000, there is an adjustment to the Maximum
Annual Withdrawal. However, because only $4,500 in gross withdrawals was taken during the contract year prior to
this withdrawal, $500 of the $1,500 gross withdrawal is not considered excess.
 
Total gross withdrawals during the contract year are $6,000 ($3,000 + $1,500 + $1,500). The adjustment is the lesser
of the amount by which the total gross withdrawals for the year exceed the Maximum Annual Withdrawal, $1,000, and
the amount of the current gross withdrawal, $1,500.
 
If the contract value before this withdrawal is $50,000, and the contract value is $49,500 after the part of the gross
withdrawal that was within the Maximum Annual Withdrawal, $500, then the Maximum Annual Withdrawal is
reduced by 2.02% ($1,000 / $49,500) to $4,899 ((1 – 2.02%) * $5,000).
 
Illustration 3: A withdrawal exceeds the Maximum Annual Withdrawal amount but does not exceed the
Additional Withdrawal Amount.
 
Assume the Maximum Annual Withdrawal is $5,000. The Required Minimum Distribution for the current calendar
year applicable to this contract is determined to be $6,000. The Additional Withdrawal Amount is set equal to the
excess of this amount above the Maximum Annual Withdrawal, $1,000 ($6,000 – $5,000).
 
PRO.70600-13 I-1

 

 

The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender charges. The Maximum Annual
Withdrawal is not exceeded.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges. The Maximum Annual
Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the Maximum Annual Withdrawal,
$5,000.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges. Total net withdrawals
taken, $6,000, exceed the Maximum Annual Withdrawal, $5,000, however, the Maximum Annual Withdrawal is not
adjusted until the Additional Withdrawal Amount is exhausted. The amount by which total net withdrawals taken
exceed the Maximum Annual Withdrawal, $1,000 ($6,000 – $5,000), is the same as the Additional Withdrawal
Amount, so no adjustment to the Maximum Annual Withdrawal is made. If total net withdrawals taken had exceeded
the sum of the Maximum Annual Withdrawal and the Additional Withdrawal Amount, then an adjustment would be
made to the Maximum Annual Withdrawal.

Illustration 4: The Additional Withdrawal Amount at the end of the calendar year before it is withdrawn.

Assume the most recent contract date was July 1, 2010 and the Maximum Annual Withdrawal is $5,000. Also assume
RMDs, applicable to this contract, are $6,000 and $5,000 for 2011 and 2012 calendar years respectively.

Between July 1, 2010 and December 31, 2011, a withdrawal of $5,000 is taken which exhausts the Maximum Annual
Withdrawal.

On January 1, 2011, the Additional Withdrawal Amount is set equal to the excess of the 2011 RMD above the existing
Maximum Annual Withdrawal, $1,000 ($6,000 – $5,000). Note that while the Maximum Annual Withdrawal has been
exhausted, it is still used to calculate the Additional Withdrawal Amount.

The owner now has until December 31, 2011 to take the newly calculated Additional Withdrawal Amount of $1,000.
The owner decides not to take the Additional Withdrawal Amount of $1,000 in 2011.

On January 1, 2012, the Additional Withdrawal Amount is set equal to the excess of the 2012 RMD above the existing
Maximum Annual Withdrawal, $0 ($5,000 – $5,000). Note that the Additional Withdrawal Amount of $1,000 from
the 2011 calendar year carries over into the 2012 calendar year and is available for withdrawal.

Illustration 5: A withdrawal exceeds the Maximum Annual Withdrawal amount and the Additional
Withdrawal Amount.

Assume the Maximum Annual Withdrawal is $5,000. The Required Minimum Distribution for the current calendar
year applicable to this contract is determined to be $6,000. The Additional Withdrawal Amount is set equal to the
excess of this amount above the Maximum Annual Withdrawal, $1,000 ($6,000 – $5,000).

The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender charges. The Maximum Annual
Withdrawal is not exceeded.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges. The Maximum Annual
Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the Maximum Annual Withdrawal,
$5,000.

The next withdrawal taken during the contract year is $3,500 net, with $0 of surrender charges. Total net withdrawals
taken, $8,000, exceed the sum of the Maximum Annual Withdrawal and the Additional Withdrawal Amount, $6,000,
and there is an adjustment to the Maximum Annual Withdrawal.

Total gross withdrawals during the contract year are $8,000 ($3,000 + $1,500 + $3,500). The adjustment is the lesser
of the amount by which the total gross withdrawals for the year exceed the sum of the Maximum Annual Withdrawal
and the Additional Withdrawal Amount ($8,000 – $6,000 = $2,000), and the amount of the current gross withdrawal
($3,500).

If the contract value before this withdrawal is $50,000, then the Maximum Annual Withdrawal is reduced by 4.12%
($2,000 / $48,500) to $4,794 ((1 – 4.12%) * $5,000).

PRO.70600-13                                                                      I-2

 

Illustration 6: Adjustment to the Maximum Annual Withdrawal amount for a withdrawal in excess of the
Maximum Annual Withdrawal.

Assume the Maximum Annual Withdrawal is $5,000.

The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender charges. The Maximum Annual
Withdrawal is not exceeded.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges. The Maximum Annual
Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the Maximum Annual Withdrawal,
$5,000.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges. Because total net
withdrawals taken, $6,000, exceed the Maximum Annual Withdrawal, $5,000, there is an adjustment to the Maximum
Annual Withdrawal. However, because only $4,500 in gross withdrawals was taken during the contract year prior to
this withdrawal, $500 of the $1,500 gross withdrawal is not considered excess.

Total gross withdrawals during the contract year are $6,000 ($3,000 + $1,500 + $1,500). The adjustment is the lesser
of the amount by which the total gross withdrawals for the year exceed the Maximum Annual Withdrawal, $1,000, and
the amount of the current gross withdrawal, $1,500.

If the contract value after the part of the gross withdrawal that was within the Maximum Annual Withdrawal, $500, is
$49,500, then the Maximum Annual Withdrawal is reduced by 2.02% ($1,000 / $49,500) to $4,899 ((1 – 2.02%) *
$5,000).

Another withdrawal is taken during that same contract year in the amount of $400 net, with $100 of surrender charges.
Total gross withdrawals during the contract year are $6,500 ($3,000 + $1,500 + $1,500 + $500). The adjustment to the
MAW is the lesser of the amount by which the total gross withdrawals for the year exceed the Maximum Annual
Withdrawal, $1,500, and the amount of the current gross withdrawal, $500.

If the contract value before this withdrawal is $48,500, then the Maximum Annual Withdrawal is reduced by 1.03%
($500 / $48,500) to $4,849 ((1 – 1.03%) * $4,899).

PRO.70600-13                                                                        I-3

 

APPENDIX J
 
Examples of Fixed Allocation Funds Automatic Rebalancing
 
The following examples are designed to assist you in understanding how Fixed Allocation Funds Automatic
Rebalancing works. The examples assume that there are no investment earnings or losses.
 
I. Subsequent Payments
 
A. Assume that on Day 1, an owner deposits an initial payment of $100,000, which is allocated 100% to Accepted
Funds. No Fixed Allocation Funds Automatic Rebalancing would occur, because this allocation meets the required
investment option allocation.
 
B. Assume that on Day 2, the owner deposits an additional payment of $500,000, bringing the total contract value to
$600,000, and allocates this deposit 100% to Other Funds. Because the percentage allocated to the Fixed Allocation
Funds (0%) is less than 30% of the total amount allocated to the Fixed Allocation Funds and the Other Funds, we will
automatically reallocate $150,000 from the amount allocated to the Other Funds (30% of the $500,000 allocated to the
Other Funds) to the Fixed Allocation Funds. Your ending allocations will be $100,000 to Accepted Funds, $150,000
to the Fixed Allocation Funds, and $350,000 to Other Funds.
 
II. Partial Withdrawals
 
A. Assume that on Day 1, an owner deposits an initial payment of $100,000, which is allocated 65% to Accepted
Funds ($65,000), 30% to the Fixed Allocation Funds ($30,000), and 5% to Other Funds ($5,000). No Fixed Allocation
Funds Automatic Rebalancing would occur, because this allocation meets the required investment option allocation.
 
B. Assume that on Day 2, the owner requests a partial withdrawal of $29,000 from the Fixed Allocation Funds.
Because the remaining amount allocated to the Fixed Allocation Funds ($1,000) is less than 30% of the total amount
allocated to the Fixed Allocation Funds and the Other Funds, we will automatically reallocate $800 from the Other
Funds to the Fixed Allocation Funds, so that the amount allocated to the Fixed Allocation Funds ($1,800) is 30% of
the total amount allocated to the Fixed Allocation Funds and Other Funds ($6,000).
 
 
 
 
PRO.70600-13 J-1

 

 

APPENDIX K
 
Information Regarding Previous Versions of the
ING LifePay Plus and ING Joint LifePay Plus Riders

                       
Important Note:
The following information pertains to the form of ING LifePay Plus and ING Joint LifePay Plus riders available for
purchase on and after April 28, 2008 through April 30, 2009, in states where approved. If this form of ING LifePay Plus
or ING Joint LifePay Plus rider is not yet approved for sale in your state, or if you have purchased a previous version of
this rider, please see page K8 for more information. If you purchased the ING LifePay or ING Joint LifePay rider,
please see Appendix L for more information.

ING LifePay Plus Minimum Guaranteed Withdrawal Benefit (“ING LifePay Plus”) Rider. The ING LifePay
Plus rider generally provides, subject to the restrictions and limitations below, that we will guarantee a minimum level
of annual withdrawals from the contract for the lifetime of the annuitant, even if these withdrawals deplete your
contract value to zero. You may wish to purchase this rider if you are concerned that you may outlive your income.

Purchase. In order to elect the ING LifePay Plus rider, the annuitant must be the owner or one of the owners,
unless the owner is a non-natural owner. Joint annuitants are not allowed. The maximum issue age is 80. The issue
age is the age of the owner (or the annuitant if there are joint owners or the owner is non-natural) on the rider effective
date. The ING LifePay Plus rider is subject to broker-dealer availability. This version of the ING LifePay Plus rider
was available for contracts issued on and after April 28, 2008 through April 30, 2009 (subject to availability and
state approvals) that did not already have a living benefit rider. The ING LifePay Plus rider will not be issued if the
initial allocation to investment options is not in accordance with the investment option restrictions described in
“Investment Option Restrictions,” below. The Company in its discretion may allow the rider to be elected after a
contract has been issued without it, subject to certain conditions. Contact the Customer Service Center for more
information. Such election must be received in good order, including compliance with the investment restrictions
described below. The rider will be effective as of the following quarterly contract anniversary.

Rider Effective Date. The rider effective date is the date coverage under the ING LifePay Plus rider begins. If you
purchase the ING LifePay Plus rider when the contract is issued, the rider effective date is also the contract date. If you
purchase the ING LifePay Plus rider after contract issue, the rider effective date will be the date of the contract’s next
following quarterly contract anniversary. A quarterly contract anniversary occurs each quarter of a contract year from
the contract date.

Charge. The charge for the ING LifePay Plus rider, a living benefit, is deducted quarterly from your contract value:

  
Maximum Annual Charge Current Annual Charge
1.30% 0.65%

              
This quarterly charge is a percentage of the ING LifePay Plus Base. If this rider was purchased before
January 12, 2009, the current annual charge is 0.55%. We deduct the charge in arrears based on the contract date
(contract year versus calendar year). In arrears means the first charge is deducted at the end of the first quarter from
the contract date. If the rider is added after contract issue, the rider and charges will begin on the next following
quarterly contract anniversary. The charge will be pro-rated when the rider is terminated. Charges will no longer be
deducted once your rider enters Lifetime Automatic Periodic Benefit Status. Lifetime Automatic Periodic Benefit
Status occurs if your contract value is reduced to zero and other conditions are met. We reserve the right to increase
the charge for the ING LifePay Plus rider upon an Annual Ratchet once the Lifetime Withdrawal Phase begins. For
riders issued before January 12, 2009, we reserve the right to increase the charge for the ING LifePay Plus rider upon a
Quarterly Ratchet once the Lifetime Withdrawal Phase begins. You will never pay more than new issues of this rider,
subject to the maximum annual charge. We will not increase your charge for your first five years after the effective
date of the rider.

If the contract value in the subaccounts is insufficient for the charge, then we deduct it from any Fixed Interest
Allocations, in which case a Market Value Adjustment may apply. But currently, a Market Value Adjustment would
not apply when this charge is deducted from the Fixed Account. With the Fixed Account, we deduct the charge from
the Fixed Interest Allocation having the nearest maturity. For more information about the Fixed Account, including the
Market Value Adjustment, please see Appendix C. We reserve the right to change the charge for this rider, subject to
the maximum annual charge. If changed, the new charge will only apply to riders issued after the change.

PRO.70600-13                                                                    K-1

 

No Cancellation. Once you purchase the ING LifePay Plus rider, you may not cancel it unless you: a) cancel the
contract during the contract’s free look period; b) surrender; c) begin income phase payments; or d) otherwise
terminate the contract pursuant to its terms. These events automatically cancel the ING LifePay Plus rider. The
Company may, at its discretion, cancel and/or replace the ING LifePay Plus rider at your request in order to renew or
reset the rider.
 
Termination. The ING LifePay Plus rider is a “living benefit,” which means the guaranteed benefits offered are
intended to be available to you while you are living and while your contract is in the accumulation phase. The optional
rider automatically terminates if you:
1.      Terminate your contract pursuant to its terms during the accumulation phase, surrender your contract, or begin
receiving income phase payments in lieu of payments under the rider; or
2. Die during the accumulation phase (first owner to die in the case of joint owners, or death of annuitant if the
contract is a custodial IRA), unless your spouse beneficiary elects to continue the contract; or
3. Change the owner of the contract (other than a spousal beneficiary continuation on your death).

         
Other circumstances that may cause the ING LifePay Plus rider to terminate automatically are discussed below.

Highlights. This paragraph introduces the terminology used with the ING LifePay Plus rider and how its components
generally work together. Benefits and guarantees are subject to the terms, conditions and limitations of the ING
LifePay Plus rider. More detailed information follows below, with capitalized words that are underlined indicating
headings for ease of reference. The ING LifePay Plus rider guarantees an amount available for withdrawal from the
contract in any contract year once the Lifetime Withdrawal Phase begins -- we use the ING LifePay Plus Base as part
of the calculation of the Maximum Annual Withdrawal. The guarantee continues when the ING LifePay Plus rider
enters Lifetime Automatic Periodic Benefit Status, at which time we will pay you periodic payments in an annual
amount equal to the Maximum Annual Withdrawal (since contract value would be zero) until the annuitant’s death.
The ING LifePay Plus Base is eligible for Annual Ratchets and 6% Compounding Step-Ups (Quarterly Ratchets and
7% Compounding Step-Ups for riders issued before January 12, 2009), and subject to adjustment for any Excess
Withdrawals. The ING LifePay Plus rider has an allowance for withdrawals from a contract subject to the Required
Minimum Distribution rules of the Tax Code that would otherwise be Excess Withdrawals. The ING LifePay Plus
rider has a death benefit that is payable upon the contract owner’s death only when the ING LifePay Plus Death
Benefit Base is greater than the contract’s death benefit. The ING LifePay Plus rider allows for spousal continuation.

ING LifePay Plus Base. The ING LifePay Plus Base is first calculated when you purchase the ING LifePay Plus
rider: (a) On the contract date, it is equal to the initial premium; and (b) After the contract date, it is equal to the
contract value on the effective date of the rider.

The ING LifePay Plus Base is increased, dollar for dollar, by any subsequent premiums. We refer to the ING LifePay
Plus Base as the MGWB Base in the ING LifePay Plus rider.

Withdrawals and Excess Withdrawals. Once the Lifetime Withdrawal Phase begins, withdrawals within a
contract year up to the Maximum Annual Withdrawal, including for payment of third-party investment advisory fees,
have no impact on the ING LifePay Plus Base. These withdrawals will not incur surrender charges or a negative
Market Value Adjustment associated with any Fixed Account allocations. For example, assume the current contract
value is $90,000 on a contract with the ING LifePay Plus rider in the Lifetime Withdrawal Phase. The ING LifePay
Plus Base is $100,000, and the Maximum Annual Withdrawal is $5,000. Even though a withdrawal of $5,000 would
reduce the contract value to $85,000, the ING LifePay Plus Base would remain at its current level (as would the
Maximum Annual Withdrawal as well) since the withdrawal did not exceed the Maximum Annual Withdrawal. See
below for more information about the Maximum Annual Withdrawal.

An Excess Withdrawal is either a) a withdrawal before the Lifetime Withdrawal Phase begins (except for payment of
third-party investment advisory fees); or b) once the Lifetime Withdrawal Phase begins, any portion of a withdrawal
during a contract year that exceeds the Maximum Annual Withdrawal. An Excess Withdrawal is also a withdrawal
after spousal continuation of the contract but before the ING LifePay Plus riders’ guarantees resume, which occurs on
the next quarterly contract anniversary following spousal continuation. An Excess Withdrawal will cause a pro-rate
reduction of the ING LifePay Plus Base -- in the same proportion as contract value is reduced by the portion of the
withdrawal that is considered excess, inclusive of surrender charges or Market Value Adjustment associated with any
Fixed Account allocations (rather than the total amount of the withdrawal). An Excess Withdrawal will also cause the
Maximum Annual Withdrawal to be recalculated. See Illustrations 1, 2, and 6 for examples of the consequences of an
excess withdrawal.

PRO.70600-13                                                                         K-2

 

Please not that any withdrawals before the rider effective date in the same contract year when the ING LifePay Plus
rider is added after contract issue are counted in calculating your withdrawals in that contract year to determine
whether the Maximum Annual Withdrawal has been exceeded.

Annual Ratchet. The ING LifePay Plus Base is recalculated on each contract anniversary -- to equal the greater of:
a) the current ING LifePay Plus Base; or b) the current contract value. We call this recalculation an Annual Ratchet.

For riders issued before January 12, 2009, the ING LifePay Plus Base is recalculated on each quarterly contract
anniversary (once each quarter a contract year from the contract date). We call this recalculation a Quarterly
Ratchet.

Once the Lifetime Withdrawal Phase begins, we reserve the right to increase the charge for the ING LifePay Plus rider
upon an Annual Ratchet. You will never pay more than new issues of the ING LifePay Plus rider, subject to the
maximum annual charge, and we will not increase this charge for your first five years after the rider effective date. We
will notify you in writing not less than 30 days before a charge increase. You may avoid the charge increase by
canceling the forthcoming Annual Ratchet. Our written notices will outline the procedure you will need to follow to do
so. Please note, however, that from then on the ING LifePay Plus Base would no longer be eligible for any Annual
Ratchets, so the Maximum Annual Withdrawal percentage would not be eligible to increase. More information about
the Maximum Annual Withdrawal Percentage is below under “Maximum Annual Withdrawal.” Our written notice will
also remind you of the consequences of canceling the forthcoming Annual Ratchet.

For riders issued before January 12, 2009, we reserve the right to increase the charge for this rider upon a Quarterly
Ratchet once the Lifetime Withdrawal Phase begins. You will never pay more than new issues of the rider, subject to
the maximum charge, and we promise not to increase the charge for your first five contract years. Canceling a
forthcoming Quarterly Ratchet to avoid the charge increase will have the same outcome as noted above.

6% Compounding Step-Up. The ING LifePay Plus Base is recalculated on each of the first ten contract
anniversaries after the rider effective date SO LONG AS no withdrawals were taken during the preceding contract
year. The recalculated ING LifePay Plus Base will equal the greatest of a) the current ING LifePay Plus Base; b) the
current contract value; and c) the ING LifePay Plus Base on the previous contract anniversary, increased by 6%, plus
any premiums received and minus any withdrawals for payment of third-party investment advisory fees since the
previous contract anniversary. We call this recalculation a 6% Compounding Step-Up.

Please note there are no partial 6% Compounding Step-Ups. The 6% Compounding Step-Up is not pro-rated. For
riders added to existing contracts (a post contract issuance election), the first opportunity for a 6% Compounding Step-
Up will not be until the first contract anniversary after a full contract year has elapsed since the rider effective date.

For example, assume a contract owner decides to add the ING LifePay Plus rider on March 15, 2009 to a contract that
was purchased on January 1, 2009. The rider effective date is April 1, 2009, which is the date of the contract’s next
following quarterly contract anniversary. Because on January 1, 2010 a full contract year will not have elapsed since
the rider effective date, the ING LifePay Plus Base will not be eligible for a step-up. Rather, the first opportunity for a
step-up with this contract will be on January 1, 2011.

For riders issued before January 12, 2009, the step-up is 7%, which we call a 7% Compounding Step-Up. The 7%
Compounding Step-Up is not pro-rated.

Lifetime Withdrawal Phase. The Lifetime Withdrawal Phase begins on the date of your first withdrawal (except
those for payment of third-party investment advisory fees), SO LONG AS the annuitant is age 59½. On this date, the
ING LifePay Plus Base is recalculated to equal the greater of the current ING LifePay Plus Base or the current contract
value. The Lifetime Withdrawal Phase will continue until the earliest of:
1.      the date income phase payments begin (see “The Income Phase”);
2.      reduction of the contract value to zero by an Excess Withdrawal;
3.      reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual Withdrawal;
4.      the surrender of the contract; or
5.      the death of the owner (first owner, in the case of joint owners; annuitant, in the case of a non-natural person
owner), unless your spouse beneficiary elects to continue the contract.

The ING LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status in the even contract value is reduced to
zero other than by an Excess Withdrawal. Please see “Lifetime Automatic Periodic Benefit Status” below for more
information.

PRO.70600-13                                                                               K-3

 

Maximum Annual Withdrawal. The Maximum Annual Withdrawal is the amount that the ING LifePay Plus rider
guarantees to be available for withdrawal from the contract in any contract year. The Maximum Annual Withdrawal is
first calculated when the Lifetime Withdrawal Phase begins and equals the Maximum Annual Withdrawal percentage,
based on the annuitant’s age, multiplied by the ING LifePay Plus Base.

The Maximum Annual Withdrawal Percentages are:
 
  Maximum Annual Withdrawal Percentage  Age
4% 59½ – 64
5% 65+

                
If the rider was issued prior to January 12, 2009, the Maximum Annual Withdrawal percentage is 5%.

The Maximum Annual Withdrawal is thereafter recalculated whenever the ING LifePay Plus Base is recalculated, for
example, upon an Annual Ratchet or 6% Compounding Step-Up (Quarterly Ratchet or 7% Compounding Step-Up if
this rider was purchased before January 12, 2009). In addition, the Maximum Annual Withdrawal Percentage can
increase with the Annual Ratchet as the annuitant grows older.

In the event that on the date the Lifetime Withdrawal Phase begins the contract value is greater than the ING LifePay
Plus Base, then before the Maximum Annual Withdrawal is first calculated, the ING LifePay Plus Base will be set
equal to the contract value. The greater the ING LifePay Plus Base, the greater the amount will be available to you for
withdrawal under the ING LifePay Plus rider in calculating the Maximum Annual Withdrawal for the first time. In
addition, if the contract’s income phase commencement date is reached while the ING LifePay Plus rider is in the
Lifetime Withdrawal Phase, you may elect a life only income phase option, in lieu of the contract’s other income phase
options, under which we will pay the greater of the income phase payout under the contract and the equal payments of
the Maximum Annual Withdrawal. For more information about the contract’s income phase options, see “The Income
Phase” in the prospectus.

Required Minimum Distributions. The ING LifePay Plus rider allows for withdrawals from a contract subject to
the Required Minimum Distribution rules of the Tax Code that exceed the Maximum Annual Withdrawal without
causing a pro-rata reduction of the ING LifePay Plus Base and recalculation of the Maximum Annual Withdrawal. If
your Required Minimum Distribution for a calendar year (determined on a date on or before January 31 of that year),
applicable to this contract, is greater than the Maximum Annual Withdrawal on that date, then an Additional
Withdrawal Amount will be set equal to that portion of the Required Minimum Distribution that exceeds the
Maximum Annual Withdrawal. Once you have taken the Maximum Annual Withdrawal for the then current contract
year, the dollar amount of any additional withdrawals will count first against and reduce any unused Additional
Withdrawal Amount for the previous calendar year followed by any Additional Withdrawal Amount for the current
calendar year -- without constituting an Excess Withdrawal.

See Illustration 3.

Withdrawals that exceed the Maximum Annual Withdrawal and all available Additional Withdrawal Amounts are
Excess Withdrawals that will cause a pro-rata reduction of the ING LifePay Plus Base and the Maximum Annual
Withdrawal to be recalculated. See Illustration 5 for an example of the consequences of an Excess Withdrawal with an
Additional Withdrawal Amount. The Additional Withdrawal Amount is available on a calendar year basis and
recalculated every January, reset to equal that portion of the Required Minimum Distribution for that calendar year that
exceeds the Maximum Annual Withdrawal on that date. Any unused amount of the Additional Withdrawal Amount
carries over into the next calendar year and is available through the end of that year, at which time any amount
remaining will expire. See Illustration 4 for an example of the Additional Withdrawal Amount being carried over.
Please note that there is no adjustment to the Additional Withdrawal Amount for Annual Ratchets (Quarterly
Ratchets for riders issued before January 12, 2009), or upon spousal continuation of the ING LifePay Plus
Rider.

PRO.70600-13                                                                   K-4

 

Lifetime Automatic Periodic Benefit Status. The ING LifePay Plus rider enters Lifetime Automatic Periodic
Benefit Status when your contract value is reduced to zero other than by an Excess Withdrawal (a withdrawal in excess
of the Maximum Annual Withdrawal that causes your contract value to be reduced to zero will terminate the ING
LifePay Plus rider). You will no longer be entitled to make withdrawals, but instead will begin to receive periodic
payments in an annual amount equal to the Maximum Annual Withdrawal. When the rider enters Lifetime Automatic
Periodic Benefit Status:
1.   The contract will provide no further benefits (including death benefits) other than as provided under the ING
LifePay Plus rider;
2. No further premium payments will be accepted; and
3.  Any other riders issued with the contract will terminate, unless otherwise specified in that rider.

During Lifetime Automatic Periodic Benefit Status, we will pay you periodic payments in an annual amount that is
equal to the Maximum Annual Withdrawal. These payments will cease upon the death of the annuitant at which time
both the rider and the contract will terminate. The rider will remain in Lifetime Automatic Periodic Benefit Status until
it terminates without value upon the annuitant’s death.

If, when the ING LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status, your net withdrawals to date
are less than the Maximum Annual Withdrawal for that contract year, then we will pay you the difference
immediately. The periodic payments will begin on the first contract anniversary following the date the rider enters
Lifetime Automatic Periodic Benefit Status and will continue to be paid annually thereafter.

In the event contract value is reduced to zero before the Lifetime Withdrawal Phase begins, Lifetime Automatic
Periodic Benefit Status is deferred until the contract anniversary on or after the annuitant is age 59½. During this time,
the ING LifePay Plus rider’s death benefit remains payable upon the annuitant’s death, and the ING LifePay Plus rider
remains eligible for the 6% Compounding Step-Ups (7% of Compounding Step-Ups for riders issued before
January 12, 2009). Once the ING LifePay Plus rider enters the Lifetime Automatic Periodic Benefit Status, periodic
payments will begin in an annual amount equal to the Maximum Annual Withdrawal percentage multiplied by the ING
LifePay Plus Base.

You may elect to receive systematic withdrawals pursuant to the terms of the contract. Under a systematic withdrawal,
either a fixed amount or an amount based upon a percentage of the contract value will be withdrawn from your
contract and paid to you on a scheduled basis, either monthly, quarterly, or annually. If, at the time the rider enters
Lifetime Automatic Periodic Benefit Status, you are receiving systematic withdrawals under the contract more
frequently than annually, the periodic payments will be made at the same frequency in equal amounts such that the
sum of the payments in each contract year will equal the annual Maximum Annual Withdrawal. Such payments will be
made on the same payment dates as previously set up, if the payments were being made monthly or quarterly. If the
payments were being made annually, then the payments will be made on each following contract anniversary.

Investment Option Restrictions. While the ING LifePay Plus rider is in effect, there are limits on the portfolios to
which your contract value may be allocated. Contract value allocated to portfolios other than Accepted Funds will be
rebalanced so as to maintain at least a specified percentage of such contract value in the Fixed Allocation Funds, which
percentage depends on the rider’s purchase date:.

Rider Purchase Date Fixed Allocation Fund Percentage
Currently 30%
Before January 12, 2009 25%
Before October 6, 2008 20%

           
See “Fixed Allocation Funds Automatic Rebalancing,” below. We impose these investment option restrictions in order
to lesser the likelihood we would have to make payments under this rider. We require these allocations regardless of
your investment instructions under the contract. The ING LifePay Plus rider will not be issued until your contract
value is allocated in accordance with these investment option restrictions. The timing of when and how we apply these
investment option restrictions is discussed further below.

PRO.70600-13                                                                  K-5

 

Accepted Funds. Currently, the Accepted Funds are:
·  Fixed Account II
·  Fixed Interest Division
·  ING Liquid Assets Portfolio
·  ING Solution 2015 Portfolio
·  ING Solution 2025 Portfolio
·  ING Solution 2035 Portfolio
·  ING Solution Income Portfolio
·  ING T. Rowe Price Capital Appreciation Portfolio
 
If this rider was purchased before January 12, 2009, the following are additional Accepted Funds:
·  ING Franklin Templeton Founding Strategy Portfolio; and
·  ING WisdomTreeSM Global High-Yielding Equity Index Portfolio
 
No rebalancing is necessary if the contract value is allocated entirely to Accepted Funds. We may change these
designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value
allocated to such portfolios after the date of the change.
 
Fixed Allocation Funds. Currently, the Fixed Allocation Funds are:
·   ING Bond Portfolio
·  ING BlackRock Inflation Protected Bond Portfolio
·  ING Intermediate Bond Portfolio
·  ING U.S. Bond Index Portfolio
 
You may allocate your contract value to one or more Fixed Allocated Funds. We consider the ING Intermediate
Bond Portfolio to be the default Fixed Allocation Fund in connection with Fixed Allocation Funds Automatic
Rebalancing.
 
If the rider is not continued under the spousal continuation right when available, a Fixed Allocation Fund may be
reclassified as a Special Fund as of the contract continuation date if it would otherwise be designated as a Special
Fund for purposes of the contract’s death benefits. For purposes of calculating any applicable death benefit
guaranteed under the contract, any allocation of contract value to the Fixed Allocation Funds will be considered a
Covered Fund allocation while the rider is in effect.
 
Other Funds. All portfolios available under the contract other than Accepted Funds or the Fixed Allocation
Funds are considered Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing. If the contract value in the Fixed Allocation Funds is less than
the specified percentage noted above of the total contract value allocated to the Fixed Allocation Funds and Other
Funds on any ING LifePay Plus Rebalancing Date, we will automatically rebalance the contract value allocated to the
Fixed Allocation Funds and Other Funds so that a specified percentage of this amount is allocated to the Fixed
Allocation Funds. The specified percentage depends on the rider’s purchase dated. Accepted Funds are excluded from
Fixed Allocation Funds Automatic Rebalancing. Any rebalancing is done on a pro-rata basis among the Other Funds
and will be the last transaction processed on that date. The ING LifePay Plus Rebalancing Dates occur on each
contract anniversary and after the following transactions:
1.   Receipt of additional premiums;
2. Transfer or reallocation among the Fixed Allocation Funds or Other Funds, whether automatic or specifically
directed by you;
3. Withdrawals from the Fixed Allocation Funds or Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing is separate from any other automatic rebalancing under the contract.
However, if the other automatic rebalancing under the contract causes the allocations to be out of compliance with the
investment option restrictions noted above, Fixed Allocation Funds Automatic Rebalancing will occur immediately
after the automatic rebalancing to restore the required allocations. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing.” You will be notified that Fixed Allocation Funds Automatic Rebalancing has
occurred, along with your new allocations, by a confirmation statement that will be mailed to you after Fixed
Allocation Funds Automatic Rebalancing has occurred.
 
 
PRO.70600-13 K-6

 

 

In certain circumstances, Fixed Allocation Funds Automatic Rebalancing may result in a reallocation into a Fixed
Allocation Fund even if you have not previously been invested in it. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing, Example I.” By electing to purchase the ING LifePay Plus rider, you are providing
the Company with direction and authorization to process these transactions, including reallocations into the
Fixed Allocation Funds. You should not purchase the ING LifePay Plus rider if you do not wish to have your
contract value reallocated in this manner.

Death of Owner or Annuitant. The ING LifePay Plus rider terminates (with the rider’s charges pro-rated) on the
date of death of the owner (or in the case of joint owners, the first owner), or the annuitant if there is a non-natural
owner. Also, an ING LifePay Plus rider that is in Lifetime Automatic Periodic Benefit Status terminates on the date of
the annuitant’s death.

ING LifePay Plus Death Benefit Base. The ING LifePay Plus rider has a death benefit that is payable upon the
owner’s death only when the ING LifePay Plus Death Benefit Base is greater than the contract’s death benefit. The
ING LifePay Plus Death Benefit Base is first calculated when you purchase the ING LifePay Plus rider. If the ING
LifePay Plus rider is purchased on the contract date, the initial ING LifePay Plus Death Benefit Base is equal to the
initial premium. If the ING LifePay Plus rider as purchased after the contract date, the initial ING LifePay Plus Death
Benefit Base is equal to the contract value on the rider effective date.

The ING LifePay Plus Death Benefit Base is increased by the dollar amount of any subsequent premiums and subject
to any withdrawal adjustments. The ING LifePay Plus Death Benefit Base is reduced by the dollar amount of any
withdrawals for the payment of third-party investment advisory fees before the Lifetime Withdrawal Phase beings, and
for any withdrawals once the Lifetime Withdrawal Phase begins that are not Excess Withdrawals, including
withdrawals for payment of third-party investment advisory fees. The ING LifePay Plus Death Benefit Base is subject
to a pro-rata reduction for an Excess Withdrawal. Please see “Withdrawals and Excess Withdrawals” for more
information.

There is no additional charge for the death benefit associated with the ING LifePay Plus rider. Please note that the ING
LifePay Plus Death Benefit Base is not eligible to participate in Annual Ratchets or 6% Compounding Step-Ups
(Quarterly Ratchets and 7% Compounding Step-Ups if the rider was purchased before January 12, 2009).

In the event the ING LifePay Plus Death Benefit Base is greater than zero when the ING LifePay Plus rider enters
Lifetime Automatic Periodic Benefit Status, each periodic payment reduces the ING LifePay Plus Death Benefit Base
dollar for dollar until the earlier of the ING LifePay Plus Death Benefit Base being reduced to zero or the annuitant’s
death. Upon the annuitant’s death, any remaining ING LifePay Plus death benefit is payable to the beneficiary in a
lump-sum.

Spousal Continuation. If the surviving spouse of the deceased owner continues the contract (see “Death Benefit
Choices–Continuation After Death–Spouse”), the rider will also continue, provided the spouse becomes the annuitant
and sole owner. At the time the contract is continued, the ING LifePay Plus Base is recalculated to equal the contract
value, inclusive of the guaranteed death benefit -- UNLESS the continuing spouse is a joint owner and the original
annuitant, OR the Lifetime Withdrawal Phase has not yet begun. In these cases, the ING LifePay Plus Base is
recalculated to equal the greater of a) the contract value, inclusive of the guaranteed death benefit; and b) the last-
calculated ING LifePay Plus Base, subject to pro-rata adjustment for any withdrawals before spousal continuation.
Regardless, the ING LifePay Plus rider’s guarantees resume on the next quarterly contract anniversary following
spousal continuation. Any withdrawals after spousal continuation of the contract but before the ING LifePay Plus
rider’s guarantees resume are Excess Withdrawals. The LifePay Plus rider remains eligible for the Annual Ratchet
upon recalculation of the ING LifePay Plus Base (Quarterly Ratchets if this rider was purchased before January 12,
2009).

The Maximum Annual Withdrawal is also recalculated at the same time as the ING LifePay Plus Base; however, there
is no Maximum Annual Withdrawal upon spousal continuation until the Lifetime Withdrawal Phase begins on the date
of the first withdrawal after spousal continuation, SO LONG AS the annuitant is age 59½. The Maximum Annual
Withdrawal is recalculated to equal 5% (the Maximum Annual Withdrawal percentage) multiplied by the ING LifePay
Plus Base. There is no adjustment to the Additional Withdrawal Amount upon spousal continuation of the ING
LifePay Plus rider for a contract subject to the Required Minimum Distribution rules of the Tax Code. Any
withdrawals before the contract owner’s death and spousal continuation are counted in calculating you withdrawals in
that contract year to determine whether the Maximum Annual Withdrawal has been exceeded.

PRO.70600-13                                                                 K-7

 

Please note, if the contract value is greater than the ING LifePay Plus Base on the date the Lifetime Withdrawal Phase
begins, then the ING LifePay Plus Base will be set equal to the contract value before the Maximum Annual
Withdrawal is first calculated. Also, upon spousal continuation, the ING LifePay Plus Death Benefit Base equals the
ING LifePay Plus Death Benefit Base before the contract owner’s death, subject to any pro-rata adjustment for
withdrawals before spousal continuation of the rider.

Contrary to the ING Joint LifePay Plus rider, spousal continuation of the ING LifePay Plus rider would likely NOT
take effect at the same time as the contract is continued. As noted above, the ING LifePay Plus rider provides for
spousal continuation only on a quarterly contract anniversary (subject to the spouse becoming the annuitant and sole
owner). So if you are concerned about the availability of benefits being interrupted with spousal continuation of the
ING LifePay Plus rider, you might instead want to purchase the ING Joint LifePay Plus rider.

Change of Owner or Annuitant. The ING LifePay Plus rider terminates (with the rider’s charge pro-rated) upon
an ownership change or change of annuitant, except for:
1.      spousal continuation as described above;
2.      change of owner from one custodian to another custodian;
3.      change of owner from a custodian for the benefit of an individual to the same individual;
4.      change of owner from an individual to a custodian for the benefit of the same individual;
5.      collateral assignments;
6.      change in trust as owner where the individual owner and the grantor of the trust are the same individual;
7.      change of owner from an individual to a trust where the individual owner and the grantor of the trust are the
same individual;
8.      change of owner from a trust to an individual where the individual owner and the grantor of the trust are the
same individual; and
9.      change of owner pursuant to a court order.

Surrender Charges. Once the Lifetime Withdrawal Phase begins, your withdrawals within a contract year up to
the Maximum Annual Withdrawal (and any applicable Additional Withdrawal Amount) are not subject to surrender
charges. We waive any surrender charges otherwise applicable to your withdrawal in a contract year that are less than
or equal to the Maximum Annual Withdrawal. Excess Withdrawals are subject to surrender charges, whether or not
the Lifetime Withdrawal Phase has begun. Once your contract value is reduced to zero, any periodic payments under
the ING LifePay Plus rider are not subject to surrender charges. Moreover, with no contract value, none of your
contract level recurring charges (e.g., the Mortality and Expense Risk Charge) would be deducted.

Loans. No loans are permitted on contracts with the ING LifePay Plus rider.

Taxation. For more information about the tax treatment of amounts paid to you under the ING LifePay Plus
Rider, see “Federal Tax Considerations–Tax Consequences of Living Benefits and Death Benefit” in the prospectus.

ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit (“ING Joint LifePay Plus”) Rider. The ING
Joint LifePay Plus rider generally provides, subject to the restrictions and limitations below, that we will guarantee a
minimum level of annual withdrawals from the contract for the lifetime of both you and your spouse, even if these
withdrawals deplete your contract value to zero. You may wish to purchase this rider if you are married and are
concerned that you and your spouse may outlive your income.

Purchase. The ING Joint LifePay Plus rider is only available for purchase by individuals who are married at the
time of purchase (spouses) and eligible to elect spousal continuation (as defined by the Tax Code) of the contract when
the death benefit becomes payable, subject to the owner, annuitant, and beneficiary requirement below. The maximum
issue age is 80. Both spouses must meet these issue age requirements. The issue age is the age of the owners on the
date on the rider effective date. The ING Joint LifePay Plus rider is subject to broker-dealer availability. The ING Joint
LifePay Plus rider was available for contracts issued on and after April 28, 2008 through April 30, 2009 (subject to
availability and state approvals) that did not already have a living benefit rider. The ING Joint LifePay Plus rider
will not be issued unless the required owner, annuitant, and beneficiary designations are met, and until your
contract value is allocated in accordance with the investment option restrictions described in “Investment
Option Restrictions,” below. The Company in its discretion may allow the rider to be elected after a contract has
been issued without it, subject to certain conditions. Contact the Customer Service Center for more information. Such
election must be received in good order, including compliance with the investment restrictions described below. The
rider will be effective as of the following quarterly contract anniversary.

PRO.70600-13                                                                          K-8

 

Ownership, Annuitant, and Beneficiary Designation Requirements. Certain ownership, annuitant, and
beneficiary designations are required in order to purchase the ING Joint LifePay Plus rider. These designations depend
upon whether the contract is issued as a nonqualified contract, an IRA or a custodial IRA. In all cases, the ownership,
annuitant, and beneficiary designations must allow for the surviving spouse to continue the contract when the death
benefit becomes payable, as provided by the Tax Code. Non-natural, custodial owners are only allowed with IRAs
(“custodial IRAs”). Joint annuitants are not allowed. The necessary ownership, annuitant, and/or beneficiary
designations are described below. Applications that do not meet the requirements below will be rejected. We reserve
the right to verify the date of birth and social security number of both spouses.

Nonqualified Contracts. For a jointly owned contract, the owners must be spouses, and the annuitant must be
one of the owners. For a contract with only one owner, the owner’s spouse must be the sole primary beneficiary, and
the annuitant must be one of the spouses.

IRAs. There may only be one owner, who must also be the annuitant. The owner’s spouse must be the sole
primary beneficiary.

Custodial IRAs. While we do not maintain individual owner and beneficiary designations for IRAs held by an
outside custodian, the ownership and beneficiary designations with the custodian must comply with the requirements
listed in “IRAs,” above. The annuitant must be the same as the beneficial owner of the custodial IRA. We require the
custodian to provide us the name and date of birth of both the owner and the owner’s spouse.

Rider Effective Date. The rider effective date is the date coverage under the ING Joint LifePay Plus rider begins.
If you purchase the ING Joint LifePay Plus rider when the contract is issued, the ING Joint LifePay Plus rider effective
date is also the contract date. If the ING Joint LifePay Plus rider is added after contract issue, the rider effective date is
the date of the contract’s next following quarterly contract anniversary. A quarterly contract anniversary occurs each
quarter of a contract year from the contract date.

No Cancellation. Once you purchase the ING Joint LifePay Plus rider, you may not cancel it unless you: a) cancel
the contract during the contract’s free look period; b) surrender; c) begin receiving income phase payments in lieu of
payments under the rider; or d) otherwise terminate the contract pursuant to its terms. These events automatically
cancel the rider. The Company may, at its discretion, cancel and/or replace the ING Joint LifePay Plus rider at your
request in order to renew or reset the rider.

Termination. The ING Joint LifePay Plus rider is a “living benefit,” which means the guaranteed benefits offered
are intended to be available to you and your spouse while you are living and while your contract is in the accumulation
phase. The optional rider automatically terminates if you:
1. Terminate your contract pursuant to its terms during the accumulation phase, surrender, or begin receiving
income phase payments in lieu of payments under the rider;
2.      Die during the accumulation phase (first owner to die in the case of joint owners, or death of annuitant if the
contract is a custodial IRA), unless your spouse elects to continue the contract (and your spouse is active for
purposes of the ING Joint LifePay Plus rider); or
3.      Change the owner of the contract.

Other circumstances that may cause the ING Joint LifePay Plus rider to terminate automatically are discussed below.

Active Spouse. An Active Spouse is the person (people) upon whose life and age the guarantees are calculated
under the ING Joint LifePay Plus rider. There must be two Active Spouses when you purchase the ING Joint LifePay
Plus rider, who are married to each other and are joint owners, or, for a contract with only one owner, the spouse must
be the sole primary beneficiary. You cannot add an Active Spouse after the rider effective date. In general, changes to
the ownership of the contract, or changes to the annuitant and/or beneficiary designations, will result in one spouse
being deactivated (the spouse is thereafter “inactive”). An inactive spouse is not eligible to exercise any rights or
receive any benefits under the ING Joint LifePay Plus rider, including continuing the ING Joint LifePay Plus rider
upon spousal continuation of the contract. Once an Active Spouse is deactivated, the spouse may not become an
Active Spouse again. Specific situations that will result in an Active Spouse being deactivated include:
1.        For nonqualified contracts where the spouses are joint owners, the removal of a joint owner (if that spouse
does not automatically become sole primary beneficiary pursuant to the terms of the contract), or the change
of one joint owner to a person other than an Active Spouse;
2. For nonqualified contracts where one spouse is the owner and the other spouse is the sole primary
beneficiary, as well as for IRA contracts (including custodial IRAs), the addition of a joint owner who is not
also an Active Spouse or any change of beneficiary (including the addition of primary beneficiaries); and
3. A spouse’s death.

PRO.70600-13                                                                                 K-9

 

An owner may also request that one spouse be treated as inactive (deactivated). Both contract owners must agree to
such a request when there are joint owners. However, all charges for the ING Joint LifePay Plus rider will
continue to apply, even after a spouse is deactivated, regardless of the reason. You should make sure you
understand the impact of beneficiary and owner changes on the ING Joint LifePay Plus rider prior to
requesting any such changes.

Please note that a divorce will terminate the ability of an ex-spouse to continue the contract. See “Divorce,” below.

Charge. The charge for the ING Joint LifePay Plus rider, a living benefit, is deducted quarterly from your contract
value:

Maximum Annual Charge Current Annual Charge
1.50% 0.90%

         
This quarterly charge is a percentage of the ING Joint LifePay Plus Base. If the rider was purchased before
January 12, 2009, the current annual charge is 0.80%. We deduct the charge in arrears based on the contract date
(contract year versus calendar year). In arrears means the first charge is deducted at the end of the first quarter from
the contract date. If the rider is added after contract issue, the rider and charges will begin on the next following
quarterly contract anniversary. The charge will be pro-rated when the rider is terminated. Charges will no longer be
deducted once your rider enters Lifetime Automatic Periodic Benefit Status. Lifetime Automatic Periodic Benefit
Status occurs if your contract value is reduced to zero and other conditions are met. We reserve the right to increase
the charge for the ING LifePay Plus rider upon an Annual Ratchet once the Lifetime Withdrawal Phase begins. For
riders issued before January 12, 2009, we reserve the right to increase the charge for the ING LifePay Plus rider upon a
Quarterly Ratchet once the Lifetime Withdrawal Phase begins. You will never pay more than new issues of this rider,
subject to the maximum annual charge. We will not increase the charge for the first five years after the effective date
of the rider. You will never pay more than new issues of this rider, subject to the maximum annual charge. For more
information about how this rider works, including when Lifetime Automatic Periodic Benefit Status begins, please see
“Optional Living Benefit Riders–ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit Rider.”

If the contract value in the subaccounts is insufficient for the charge, then we deduct it from any Fixed Interest
Allocations, in which case a Market Value Adjustment may apply. But currently, a Market Value Adjustment would
not apply when this charge is deducted from a Fixed Interest Allocation. With Fixed Interest Allocations, we deduct
the charge from the Fixed Interest Allocation having the nearest maturity. For more information about the Fixed
Interest Allocation, including the Market Value Adjustment, please see Appendix C. We reserve the right to change
the charge for this rider, subject to the maximum annual charge. If changed, the new charge will only apply to riders
issued after the change.

Highlights. This paragraph introduces the terminology used with the ING Joint LifePay Plus rider and how its
components generally work together. Benefits and guarantees are subject to the terms, conditions and limitations of
the ING Joint LifePay Plus rider. More detailed information follows below, with capitalized words that are underlined
indicating headings for ease of reference. The ING Joint LifePay Plus rider guarantees an amount available for
withdrawal from the contract in any contract year once the Lifetime Withdrawal Phase begins -- we use the ING Joint
LifePay Plus Base as part of the calculation of the Maximum Annual Withdrawal. The guarantee continues when the
ING Joint LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status, at which time we will pay you
periodic payments in an annual amount equal to the Maximum Annual Withdrawal (since contract value would be
zero) until the last Active Spouse’s death. The ING Joint LifePay Plus Base is eligible for Annual Ratchets and 6%
Compounding Step-Ups (Quarterly Ratchets and 7% Compounding Step-Ups for riders issued before
January 12, 2009), and subject to adjustment for any Excess Withdrawals. The ING Joint LifePay Plus rider has an
allowance for withdrawals from a contract subject to the Required Minimum Distribution rules of the Tax Code that
would otherwise be Excess Withdrawals. The ING Joint LifePay Plus rider has a death benefit that is payable upon the
contract owner’s death only when the ING Joint LifePay Plus Death Benefit Base is greater than the contract’s death
benefit. The ING Joint LifePay Plus rider allows for spousal continuation.

ING Joint LifePay Plus Base. The ING Joint LifePay Plus Base is first calculated when you purchase the ING Joint
LifePay Plus rider: (a) On the contract date, it is equal to the initial premium; and (b) After the contract date, it is equal
to the contract value on the effective date of the rider.

The ING Joint LifePay Plus Base is increased, dollar for dollar, by any subsequent premiums. We refer to the ING
Joint LifePay Plus Base as the MGWB Base in the ING Joint LifePay Plus rider.

PRO.70600-13                                                                 K-10

 

Withdrawals and Excess Withdrawals. Once the Lifetime Withdrawal Phase begins, withdrawals within a
contract year up to the Maximum Annual Withdrawal, including for payment of third-party investment advisory fees,
have no impact on the ING Joint LifePay Plus Base. These withdrawals will not incur surrender charges or a negative
Market Value Adjustment associated with any Fixed Account allocations. For example, assume the current contract
value is $90,000 on a contract with the ING Joint LifePay Plus rider in the Lifetime Withdrawal Phase. The ING Joint
LifePay Plus Base is $100,000, and the Maximum Annual Withdrawal is $5,000. Even though a withdrawal of $5,000
would reduce the contract value to $85,000, the ING Joint LifePay Plus Base would remain at its current level (as
would the Maximum Annual Withdrawal as well) since the withdrawal did not exceed the Maximum Annual
Withdrawal. See below for more information about the Maximum Annual Withdrawal.

An Excess Withdrawal is a withdrawal either before the Lifetime Withdrawal Phase begins (except for payment of
third-party investment advisory fees), or once the Lifetime Withdrawal Phase begins, any portion of a withdrawal
during a contract year that exceeds the Maximum Annual Withdrawal. An Excess Withdrawal will cause a pro-rate
reduction of the ING Joint LifePay Plus Base -- in the same proportion as contract value is reduced by the portion of
the withdrawal that is considered excess, inclusive of surrender charges, or Market Value Adjustment associated with
any Fixed Account allocations (rather than the total amount of the withdrawal). An Excess Withdrawal will also cause
the Maximum Annual Withdrawal to be recalculated. See Illustrations 1, 2, and 6 for examples of the consequences of
an Excess Withdrawal.

Please note that any withdrawals before the rider effective date in the same contract year when the ING Joint LifePay
Plus rider is added after contract issue are counted in calculating your withdrawals in that contract year to determine
whether the Maximum Annual Withdrawal has been exceeded.

Annual Ratchet. The ING Joint LifePay Plus Base is recalculated on each contract anniversary -- to equal the
greater of: a) the current ING Joint LifePay Plus Base; or b) the current contract value. We call this recalculation an
Annual Ratchet.

For riders issued before January 12, 2009, the ING Joint LifePay Plus Base is recalculated on each quarterly contract
anniversary (once each quarter of a contract year from the contract date). In this circumstance, we call this
recalculation a Quarterly Ratchet.

Once the Lifetime Withdrawal Phase begins, we reserve the right to increase the charge for the ING Joint LifePay Plus
rider upon an Annual Ratchet. You will never pay more than new issues of the ING Joint LifePay Plus rider, subject to
the maximum annual charge, and we will not increase this charge for your first five years after the rider effective date.
We will notify you in writing not less than 30 days before a charge increase. Our written notice will outline the
procedure you will need to follow to do so. You may avoid the charge increase by canceling the forthcoming Annual
Ratchet. Please note, however, that from then on the ING Joint LifePay Plus Base would no longer be eligible for any
Annual Ratchets, so the Maximum Annual Withdrawal percentage would not be eligible to increase. More information
about the Maximum Annual Percentage is below under “Maximum Annual Withdrawal.” Our written notice will also
remind you of the consequences of canceling the forthcoming Annual Ratchet.

For riders issued before January 12, 2009, we reserve the right to increase the charge for this rider upon a Quarterly
Ratchet once the Lifetime Withdrawal Phase begins. You will never pay more than new issues of the rider, subject to
the maximum charge, and we promise not to increase the charge for your first five contract years. Canceling a
forthcoming Quarterly Ratchet to avoid the charge increase will have the same outcome, as noted above.

6% Compounding Step-Up. The ING Joint LifePay Plus Base is recalculated on each of the first ten contract
anniversaries after the rider effective date, SO LONG AS no withdrawals were taken during the preceding contract
year. The recalculated ING Joint LifePay Plus Base will equal the greatest of a) The current ING Joint LifePay Plus
Base; b) The current contract value; and c) The ING Joint LifePay Plus Base on the previous contract anniversary,
increased by 6%, plus any premiums received and minus any withdrawals for payment of third-party investment
advisory fees since the previous contract anniversary. We call this recalculation a 6% Compounding Step-Up.

Please note there are no partial 6% Compounding Step-Ups. The 6% Compounding Step-Up is not pro-rated. For
riders added to existing contracts (a post contract issuance election), the first opportunity for a 6% Compounding Step-
Up will not be until the first contract anniversary after a full contract year has elapsed since the rider effective date.

For example, assume a contract owner decides to add the ING Joint LifePay Plus rider on March 15, 2009 to a contract
that was purchased on January 1, 2009. The rider effective date is April 1, 2009, which is the date of the contract’s
next following quarterly contract anniversary. Because on January 1, 2010 a full contract year will not have elapsed
since the rider effective date, the ING Joint LifePay Plus Base will not be eligible for a step-up. Rather, the first
opportunity for a step-up with this contract will be on January 1, 2011.

PRO.70600-13                                                                            K-11

 

For riders issued before January 12, 2009, the step-up is 7%, which we call a 7% Compounding Step-Up. The 7%
Compounding Step-Up is not pro-rated.

Lifetime Withdrawal Phase. The Lifetime Withdrawal Phase begins on the date of your first withdrawal (except
those for payment of third-party investment advisory fees), SO LONG AS the youngest Active Spouse is age 65. On
this date, the ING Joint LifePay Plus Base is recalculated to equal the greater of the current ING Joint LifePay Plus
Base or the current contract value. The Lifetime Withdrawal Phase will continue until the earliest of:
1.      the date income phase payments begin (see “The Income Phase);
2.      reduction of the contract value to zero by an Excess Withdrawal;
3.      reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual Withdrawal;
4.      the surrender of the contract; or
5.      the death of the owner (first owner, in the case of joint owners; annuitant, in the case of a non-natural person
owner), unless your spouse beneficiary is an Active Spouse who elects to continue the contract; or
6.      the last Active Spouse dies.

The ING Joint LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status in the even contract value is
reduced to zero other than by an Excess Withdrawal. Please see “Lifetime Automatic Periodic Benefit Status” below
for more information.

Maximum Annual Withdrawal. The Maximum Annual Withdrawal is the amount that the ING Joint LifePay Plus
rider guarantees to be available for withdrawal from the contract in any contract year. The Maximum Annual
Withdrawal is first calculated when the Lifetime Withdrawal Phase begins and equals the Maximum Annual
Withdrawal percentage of 5% multiplied by the ING Joint LifePay Plus Base. The Maximum Annual Withdrawal is
thereafter recalculated whenever the ING Joint LifePay Plus Base is recalculated (for example, upon a Quarterly
Ratchet or 7% Compounding Step-Ups).

In the event on the date the Lifetime Withdrawal Phase begins the contract value is greater than the ING Joint LifePay
Plus Base, then before the Maximum Annual Withdrawal is first calculated, the ING Joint LifePay Plus Base will be
set equal to the contract value. The greater the ING Joint LifePay Plus Base, the greater the amount will be available to
you for withdrawal under the ING Joint LifePay Plus rider in calculating the Maximum Annual Withdrawal for the
first time. In addition, if the contract’s income phase commencement date is reached while the ING Joint LifePay Plus
rider is in the Lifetime Withdrawal Phase, you may elect a life only income phase option, in lieu of the contract’s other
income phase options, under which we will pay the greater of the income phase payout under the contract and the
equal payments of the Maximum Annual Withdrawal. For more information about the contract’s income phase
options, see “The Income Phase” in the prospectus.

Required Minimum Distributions. The ING Joint LifePay Plus rider allows for withdrawals from a contract
subject to the Required Minimum Distribution rules of the Tax Code that exceed the Maximum Annual Withdrawal
without causing a pro-rata reduction of the ING Joint LifePay Plus Base and recalculation of the Maximum Annual
Withdrawal. If your Required Minimum Distribution for a calendar year (determined on a date on or before January 31
of that year), applicable to this contract, is greater than the Maximum Annual Withdrawal on that date, then an
Additional Withdrawal Amount will be set equal to that portion of the Required Minimum Distribution that exceeds
the Maximum Annual Withdrawal. Once you have taken the Maximum Annual Withdrawal for the then current
contract year, the dollar amount of any additional withdrawals will count first against and reduce any unused
Additional Withdrawal Amount for the previous calendar year followed by any Additional Withdrawal Amount for the
current calendar year -- without constituting an Excess Withdrawal.

See Illustration 3 below, for an example.

Withdrawals that exceed the Maximum Annual Withdrawal and all available Additional Withdrawal Amounts are
Excess Withdrawals that will cause a pro-rata reduction of the ING Joint LifePay Plus Base and the Maximum Annual
Withdrawal to be recalculated. See Illustration 5, below for an example of the consequences of an Excess Withdrawal
with an Additional Withdrawal Amount. The Additional Withdrawal Amount is available on a calendar year basis and
recalculated every January, reset to equal that portion of the Required Minimum Distribution for that calendar year that
exceeds the Maximum Annual Withdrawal on that date. Any unused amount of the Additional Withdrawal Amount
carries over into the next calendar year and is available through the end of that year, at which time any amount
remaining will expire. See Illustration 4 for an example of the Additional Withdrawal Amount being carried over.
Please note that there is no adjustment to the Additional Withdrawal Amount for Annual Ratchets (Quarterly
Ratchets for riders issued before January 12, 2009) or upon spousal continuation of the ING Joint LifePay Plus
Rider.

PRO.70600-13                                                                                      K-12

 

Lifetime Automatic Periodic Benefit Status. The ING Joint LifePay Plus rider enters Lifetime Automatic Periodic
Benefit Status when your contract value is reduced to zero other than by an Excess Withdrawal (a withdrawal in excess
of the Maximum Annual Withdrawal that causes your contract value to be reduced to zero will terminate the ING Joint
LifePay Plus rider). You will no longer be entitled to make withdrawals, but instead will begin to receive periodic
payments in an annual amount equal to the Maximum Annual Withdrawal. When the rider enters Lifetime Automatic
Periodic Benefit Status:
1.    The contract will provide no further benefits (including death benefits) other than as provided under the ING
Joint LifePay Plus rider;
2. No further premium payments will be accepted; and
3. Any other riders issued with the contract will terminate, unless otherwise specified in that rider.

During Lifetime Automatic Periodic Benefit Status, we will pay you periodic payments in an annual amount that is
equal to the Maximum Annual Withdrawal. These payments will cease upon the death of the annuitant at which time
both the rider and the contract will terminate. The rider will remain in Lifetime Automatic Periodic Benefit Status until
it terminates without value upon the last Active Spouse’s death.

If, when the ING Joint LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status, your net withdrawals to
date are less than the Maximum Annual Withdrawal for that contract year, then we will pay you the difference
immediately. The periodic payments will begin on the first contract anniversary following the date the rider enters
Lifetime Automatic Periodic Benefit Status and will continue to be paid annually thereafter.

In the event contract value is reduced to zero before the Lifetime Withdrawal Phase begins, Lifetime Automatic
Periodic Benefit Status is deferred until the contract anniversary on or after the youngest Active Spouse is age 65.
During this time, the ING Joint LifePay Plus rider’s death benefit remains payable upon the last Active Spouse’s
death, and the ING Joint LifePay Plus rider remains eligible for the 6% Compounding Step-Ups (7% Compounding
Step-Ups for riders issued before January 12, 2009). Once the ING Joint LifePay Plus rider enters the Lifetime
Automatic Periodic Benefit Status, periodic payments will begin in an annual amount equal to 5% (the Maximum
Annual Withdrawal percentage) multiplied by the ING Joint LifePay Plus Base.

You may elect to receive systematic withdrawals pursuant to the terms of the contract. Under a systematic withdrawal,
either a fixed amount or an amount based upon a percentage of the contract value will be withdrawn from your
contract and paid to you on a scheduled basis, either monthly, quarterly, or annually. If, at the time the rider enters
Lifetime Automatic Periodic Benefit Status, you are receiving systematic withdrawals under the contract more
frequently than annually, the periodic payments will be made at the same frequency in equal amounts such that the
sum of the payments in each contract year will equal the annual Maximum Annual Withdrawal. Such payments will be
made on the same payment dates as previously set up, if the payments were being made monthly or quarterly. If the
payments were being made annually, then the payments will be made on each following contract anniversary.

Investment Option Restrictions. While the ING Joint LifePay Plus rider is in effect, there are limits on the portfolios
to which your contract value may be allocated. Contract value allocated to portfolios other than Accepted Funds will
be rebalanced so as to maintain at least a specified percentage of such contract value in the Fixed Allocation Funds,
which percentage depends on the rider’s purchase date:
   
Rider Purchase Date Fixed Allocation Fund Percentage
Currently 30%
Before January 12, 2009 25%
Before October 6, 2008 20%

See “Fixed Allocation Funds Automatic Rebalancing,” below. We impose these investment option restrictions in
order to lessen the likelihood we would have to make payments under this rider. We require these allocations
regardless of your investment instructions to the contract. The ING Joint LifePay Plus rider will not be issued until
your contract value is allocated in accordance with these investment options restrictions. The timing of when and how
we apply these restrictions is discussed further below.

PRO.70600-13                                                                             K-13

 

Accepted Funds. Currently, the Accepted Funds are:
· Fixed Account II  
· Fixed Interest Division  
· ING Liquid Assets Portfolio  
· ING Solution 2015 Portfolio  
· ING Solution 2025 Portfolio  
· ING Solution 2035 Portfolio  
· ING Solution Income Portfolio
· ING T. Rowe Price Capital Appreciation Portfolio
 
If this rider was purchased before January 12, 2009, the following are additional Accepted Funds:
· ING Franklin Templeton Founding Strategy Portfolio; and
· ING WisdomTreeSM Global High-Yielding Equity Index Portfolio
 
No rebalancing is necessary if the contract value is allocated entirely to Accepted Funds. We may change these
designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value
allocated to such portfolios after the date of the change.
 
Fixed Allocation Fund. Currently, the Fixed Allocation Funds are:
· ING Bond Portfolio
· ING BlackRock Inflation Protected Bond Portfolio
· ING Intermediate Bond Portfolio
· ING U.S. Bond Index Portfolio
 
You may allocate your contract value to one or more Fixed Allocation Funds. We consider the ING Intermediate
Bond Portfolio to be the default Fixed Allocation Fund in connection with Fixed Allocation Funds Automatic
Rebalancing.
           
Other Funds. All portfolios available under the contract other than Accepted Funds or the Fixed Allocation Funds
are considered Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing. If the contract value in the Fixed Allocation Funds is less than
the specified percentage of the total contract value allocated to the Fixed Allocation Funds and Other Funds on any
ING Joint LifePay Plus Rebalancing Date, we will automatically rebalance the contract value allocated to the Fixed
Allocation Funds and Other Funds so that the specified percentage is allocated to the Fixed Allocation Funds. The
specified percentage depends on the rider’s purchase date. Accepted Funds are excluded from Fixed Allocation Funds
Automatic Rebalancing. Any rebalancing is done on a pro-rata basis among the Other Funds and will be the last
transaction processed on that date. The ING Joint LifePay Plus Rebalancing Dates occur on each contract anniversary
and after the following transactions:
1.   Receipt of additional premiums;
2. Transfer or reallocation among the Fixed Allocation Funds or Other Funds, whether automatic or specifically
directed by you; and
3. Withdrawals from the Fixed Allocation Funds or Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing is separate from any other automatic rebalancing under the contract.
However, if the other automatic rebalancing under the contract causes the allocations to be out of compliance with the
investment option restrictions noted above, Fixed Allocation Funds Automatic Rebalancing will occur immediately
after the automatic rebalancing to restore the required allocations. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing.” You will be notified that Fixed Allocation Funds Automatic Rebalancing has
occurred, along with your new allocations, by a confirmation statement that will be mailed to you after Fixed
Allocation Funds Automatic Rebalancing has occurred.
 
In certain circumstances, Fixed Allocation Funds Automatic Rebalancing may result in a reallocation into a Fixed
Allocation Fund even if you have not previously been invested in it. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing, Example I.” By electing to purchase the ING Joint LifePay Plus rider, you are
providing the Company with direction and authorization to process these transactions, including reallocations
into the Fixed Allocation Funds. You should not purchase the ING Joint LifePay Plus rider if you do not wish
to have your contract value reallocated in this manner.
  
PRO.70600-13 K-14

 

 

Divorce. Generally, in the event of a divorce, the spouse who retains ownership of the contract will continue to be
entitled to all rights and benefits of the ING Joint LifePay Plus rider, while the ex-spouse will no longer have any such
rights or be entitled to any such benefits. In the event of a divorce during the Lifetime Withdrawal Phase, the ING
Joint LifePay Plus rider will continue until the owner’s death (first owner in the case of joint owners, or the annuitant
in the case of a custodial IRA). Although spousal continuation may be available under the Tax Code for a subsequent
spouse, the ING Joint LifePay Plus rider cannot be continued by the new spouse. As the result of the divorce, we may
be required to withdraw assets for the benefit of an ex-spouse. Any such withdrawal will be considered a withdrawal
for purposes of the ING Joint LifePay Plus Base. See “Withdrawals” and “Excess Withdrawal,” above. In the event of
a divorce during Lifetime Automatic Periodic Benefit Status, there will be no change in the amount of your periodic
payments. Payments will continue until both spouses are deceased.

Death of Owner or Annuitant. The ING Joint LifePay Plus rider terminates (with the rider’s charges pro-rated)
on the earlier of the date of death of the last Active Spouse, or when the surviving spouse decides not to continue the
contract.

ING Joint LifePay Plus Death Benefit Base. The ING Joint LifePay Plus rider has a death benefit that is payable
upon the owner’s death only when the ING Joint LifePay Plus Death Benefit Base is greater than the contract’s death
benefit. The ING Joint LifePay Plus Death Benefit Base is first calculated when you purchase the ING Joint LifePay
Plus rider. If the ING Joint LifePay Plus rider is purchased on the contract date, the initial ING Joint LifePay Plus
Death Benefit Base is equal to the initial premium. If the ING Joint LifePay Plus rider is purchased after the contract
date, the initial ING Joint LifePay Plus Death Benefit Base is equal to the contract value on the rider effective date.

The ING Joint LifePay Plus Death Benefit Base is increased by the dollar amount of any subsequent premiums and
subject to any withdrawal adjustments. The ING Joint LifePay Plus Death Benefit Base is reduced by the dollar
amount of any withdrawals for the payment of third-party investment advisory fees before the Lifetime Withdrawal
Phase beings, and for any withdrawals once the Lifetime Withdrawal Phase begins that are not Excess Withdrawals,
including withdrawals for payment of third-party investment advisory fees. The ING Joint LifePay Plus Death Benefit
Base is subject to a pro-rata reduction for an Excess Withdrawal. Please see “Withdrawals and Excess Withdrawals”
for more information.

There is no additional charge for the death benefit associated with the ING Joint LifePay Plus rider. Please note that
the ING Joint LifePay Plus Death Benefit Base is not eligible to participate in Annual Ratchets or 6% Compounding
Step-Ups (Quarterly Ratchets and 7% Compounding Step-Ups for riders issued prior to January 12, 2009).

In the event the ING Joint LifePay Plus Death Benefit Base is greater than zero when the ING Joint LifePay Plus rider
enters Lifetime Automatic Periodic Benefit Status, each periodic payment reduces the ING Joint LifePay Plus Death
Benefit Base dollar for dollar until the earlier of the ING Joint LifePay Plus Death Benefit Base being reduced to zero
or the last Active Spouse’s death. Upon the last Active Spouse’s death, any remaining ING Joint LifePay Plus death
benefit is payable to the beneficiary in a lump-sum.

Spousal Continuation. If the surviving spouse of the deceased owner continues the contract (see “Death Benefit
Choices–Continuation After Death–Spouse”), the rider will continue, SO LONG AS the surviving spouse is an Active
Spouse. At that time, the ING Joint LifePay Plus Base is recalculated to equal the greater of a) the contract value,
inclusive of the guaranteed death benefit; and b) the last-calculated ING Joint LifePay Plus Base, subject to pro-rata
adjustment for any withdrawals before spousal continuation.

The Maximum Annual Withdrawal is also recalculated; however, there is no Maximum Annual Withdrawal upon
spousal continuation until the Lifetime Withdrawal Phase begins on the date of the first withdrawal after spousal
continuation, SO LONG AS the annuitant is age 65. The Maximum Annual Withdrawal is recalculated to equal 5%
(the Maximum Annual Withdrawal percentage) multiplied by the ING Joint LifePay Plus Base. There is no adjustment
to the Additional Withdrawal Amount upon spousal continuation of the ING Joint LifePay Plus rider for a contract
subject to the Required Minimum Distribution rules of the Tax Code. Any withdrawals before the contract owner’s
death and spousal continuation are counted in calculating you withdrawals in that contract year to determine whether
the Maximum Annual Withdrawal has been exceeded.

Please note, if the contract value is greater than the ING Joint LifePay Plus Base on the date the Lifetime Withdrawal
Phase begins, then the ING Joint LifePay Plus Base will be set equal to the contract value before the Maximum
Annual Withdrawal is first calculated. Also, upon spousal continuation, the ING Joint LifePay Plus Death Benefit
Base equals the ING Joint LifePay Plus Death Benefit Base before the contract owner’s death, subject to any pro-rata
adjustment for withdrawals before spousal continuation of the rider.

PRO.70600-13                                                                                      K-15

 

Change of Owner or Annuitant. The ING Joint LifePay Plus rider terminates (with the rider’s charge pro-rated)
upon an ownership change or change of annuitant, except for:
1.      spousal continuation by an Active Spouse, as described above;
2. change of owner from one custodian to another custodian;
3. change of owner from a custodian for the benefit of an individual to the same individual (the owner’s spouse
must be named sole beneficiary under the contract to remain an Active Spouse);
4. change of owner from an individual to a custodian for the benefit of the same individual;
5. collateral assignments;
6. for nonqualified contracts only, the addition of a joint owner, provided that the additional joint owner is the
original owner’s spouse and is an Active Spouse when added as joint owner;
7. for nonqualified contracts only, the removal of a joint owner, provided the removed joint owner is an Active
Spouse and becomes the sole primary beneficiary; and
8. change of owner where the owner becomes the sole primary beneficiary and the sole primary beneficiary
becomes the owner, provided both spouses are Active Spouses at the time of the change.

              
Surrender Charges. Once the Lifetime Withdrawal Phase begins, your withdrawals within a contract year up to
the Maximum Annual Withdrawal (and any applicable Additional Withdrawal Amount) are not subject to surrender
charges. We waive any surrender charges otherwise applicable to your withdrawal in a contract year that are less than
or equal to the Maximum Annual Withdrawal. Excess Withdrawals are subject to surrender charges, whether or not the
Lifetime Withdrawal Phase has begun. Once your contract value is reduced to zero, any periodic payments under the
ING Joint LifePay Plus rider are not subject to surrender charges. Moreover, with no contract value, none of your
contract level recurring charges (e.g., the Mortality and Expense Risk Charge) would be deducted.

Federal Tax Considerations. For more information about the tax treatment of amounts paid to you under the
ING Joint LifePay Plus rider, see “Federal Tax Considerations–Tax Consequences of Living Benefits and Death
Benefit” in the contract prospectus.

          
***

                
Important Note:
The following information pertains to the form of ING LifePay Plus and ING Joint LifePay Plus riders available for
purchase on and after April 20, 2007 through April 27, 2008. If you purchased the ING LifePay or ING Joint LifePay
rider, please see Appendix L for more information.

ING LifePay Plus Minimum Guaranteed Withdrawal Benefit (“ING LifePay Plus”) Rider. The ING LifePay
Plus rider generally provides, subject to the restrictions and limitations below, that we will guarantee a minimum level
of annual withdrawals from the contract for the lifetime of the annuitant, even if these withdrawals deplete your
contract value to zero. You may wish to purchase this rider if you are concerned that you may outlive your income.

Purchase. In order to elect the ING LifePay Plus rider, the annuitant must be the owner or one of the owners,
unless the owner is a non-natural owner. Joint annuitants are not allowed. The maximum issue age is 80. The issue
age is the age of the owner (or the annuitant if there are joint owners or the owner is non-natural) on the rider date.
Some broker-dealers may limit the availability of the rider to younger ages. The ING LifePay Plus rider was available
for contracts issued on and after August 20, 2007 through April 27, 2008 (subject to availability and state approvals)
that did not already have a living benefit rider. The ING LifePay Plus rider will not be issued if the initial allocation to
investment options is not in accordance with the investment option restrictions described in “Investment Option
Restrictions,” below. The Company in its discretion may allow the rider to be elected after a contract has been issued
without it, subject to certain conditions. Contact the Customer Service Center for more information. Such election
must be received in good order, including compliance with the investment restrictions described below. The rider will
be effective as of the following quarterly contract anniversary.

Rider Date. The rider date is the date the ING LifePay Plus rider becomes effective. If you purchase the ING
LifePay Plus rider when the contract is issued, the rider date is also the contract date.

PRO.70600-13                                                           K-16


Charge. The charge for the ING LifePay Plus rider, a living benefit, is deducted quarterly from your contract value:

Maximum Annual Charge Current Annual Charge
2.00% 0.50%

               
This quarterly charge is a percentage of the ING LifePay Plus Base. We deduct the charge in arrears based on the
contract date (contract year versus calendar year). In arrears means the first charge is deducted at the end of the first
quarter from the contract date. If the rider is added after contract issue, the rider and charges will begin on the next
following quarterly contract anniversary. The charge will be pro-rated when the rider is terminated. Charges are
deducted through the date your rider enters either the Automatic Periodic Benefit Status or Lifetime Automatic
Periodic Benefit Status. Automatic Periodic Benefit Status or Lifetime Automatic Periodic Benefit Status occurs if
your contract value is reduced to zero and other conditions are met. The current charge can change upon a reset after
your first five contract years. You will never pay more than the maximum annual charge.

If the contract value in the subaccounts is insufficient for the charge, then we deduct it from any Fixed Interest
Allocations, in which case a Market Value Adjustment may apply. But currently, a Market Value Adjustment would
not apply when this charge is deducted from the Fixed Account. With the Fixed Account, we deduct the charge from
the Fixed Interest Allocation having the nearest maturity. For more information about the Fixed Account, including the
Market Value Adjustment, please see Appendix C. We reserve the right to change the charge for this rider, subject to
the maximum annual charge. If changed, the new charge will only apply to riders issued after the change.

No Cancellation. Once you purchase the ING LifePay Plus rider, you may not cancel it unless you cancel the contract
during the contract’s free look period, surrender, begin income phase payments or otherwise terminate the contract.
These events automatically cancel the ING LifePay Plus rider. The Company may, at its discretion, cancel and/or
replace the ING LifePay Plus rider at your request in order to renew or reset the rider.

Termination. The ING LifePay Plus rider is a “living benefit,” which means the guaranteed benefits offered are
intended to be available to you while you are living and while your contract is in the accumulation phase. The optional
rider automatically terminates if you:
1. begin income phase payments, surrender or otherwise terminate your contract during the accumulation phase; or
2. die during the accumulation phase (first owner to die if there are multiple contract owners, or death of annuitant if
contract owner is not a natural person), unless your spouse beneficiary elects to continue the contract.
 
The ING LifePay Plus rider will also terminate if there is a change in contract ownership (other than a spousal
beneficiary continuation on your death). Other circumstances that may cause the ING LifePay Plus rider to terminate
automatically are discussed below.
 
Guaranteed Withdrawal Status. This status begins on the date of the first withdrawal, ONLY IF the quarterly
contract anniversary following the annuitant reaching age 59½ has not yet passed. While the ING LifePay Plus rider is
in guaranteed withdrawal status, withdrawals in a contract year up to the Maximum Guaranteed Withdrawal will
reduce the ING LifePay Plus Base dollar-for-dollar. This status will then continue until the earliest of:
1.     quarterly contract anniversary following the annuitant reaching age 59½, provided the contract owner does not
decline the change to Lifetime Guaranteed Withdrawal Status;
2. reduction of the ING LifePay Plus Base to zero, at which time the rider will terminate;
3. the income phase commencement date;
4. reduction of the contract value to zero by a withdrawal in excess of the Maximum Annual Withdrawal;
5. reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual Withdrawal
(see “Automatic Periodic Benefit Status,” below);
6. the surrender of the contract, or the election to begin income phase payments; or
7. the death of the owner (first owner, in the case of joint owners; annuitant, in the case of a non-natural person
owner), unless your spouse beneficiary elects to continue the contract.
 
Please note that withdrawals while the ING LifePay Plus rider is in Guaranteed Withdrawal status are not guaranteed
for the lifetime of the annuitant.
           
PRO.70600-13                                                                   K-17

 

Lifetime Guaranteed Withdrawal Status. This status begins on the date of your first withdrawal, provided the
quarterly contract anniversary following the annuitant’s age 59½ has passed. If your first withdrawal is taken before
this date, then the Lifetime Guaranteed Withdrawal Status will automatically begin on the quarterly contract
anniversary following the annuitant reaching age 59½. This status continues until the earliest of:
1.     the income phase commencement date;
2.   reduction of the contract value to zero by a withdrawal in excess of the Maximum Annual Withdrawal;
3.   reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual Withdrawal
  (see “Lifetime Automatic Periodic Benefit Status,” below);
4.   the surrender of the contract or the election to begin income phase payments; or
5.   the death of the owner (first owner, in the case of joint owners; annuitant, in the case of a non-natural person
  owner), unless your spouse beneficiary elects to continue the contract.

 

You will receive prior notice, of not less than 30 days, if you are in the Guaranteed Withdrawal Status and become
eligible for the Lifetime Guaranteed Withdrawal Status. This notice will explain the change, its impact to you and
your options. You may decline this change. However, this action will also apply to all future resets (see below) and
cannot be reversed. As described below, certain features of the ING LifePay Plus rider may differ depending upon
whether you are in Lifetime Guaranteed Withdrawal Status.
 
How the ING LifePay Plus Rider Works. The ING LifePay Plus Withdrawal Benefit rider has two phases. The
first phase, called the Growth Phase, begins on the effective date of the rider and ends as of the business day before the
first withdrawal is taken (or when the income phase commencement date is reached). The second phase is called the
Withdrawal Phase. This phase begins as of the date of the first withdrawal or the income phase commencement date,
whichever occurs first.
 
Benefits paid under the ING LifePay Plus rider require the calculation of the Maximum Annual Withdrawal. The ING
LifePay Plus Base (referred to as the “MGWB Base” in the contract) is used to determine the Maximum Annual
Withdrawal and is calculated as follows:
1.    If you purchased the ING LifePay Plus rider on the contract date, the initial ING LifePay Plus Base is equal to the
initial premium.
2. If you purchased the ING LifePay Plus rider after the contract date, the initial ING LifePay Plus Base is equal to
the contract value on the effective date of the rider.
 
During the Growth Phase, the initial ING LifePay Plus Base is increased dollar-for-dollar by any premiums received
(“eligible premiums”). In addition, on each quarterly contract anniversary, the ING LifePay Plus Base is recalculated
as the greater of:
· The current ING LifePay Plus Base; or
· The current contract value. This is referred to as a quarterly “ratchet.”
 
Also, on each of the first ten contract anniversaries, the ING LifePay Plus Base is recalculated as the greatest of:
· The current ING LifePay Plus Base; or
· The current contract value; and
· The ING LifePay Plus Base on the previous contract anniversary, increased by 7%, plus any eligible premiums
and minus any third-party investment advisory fees paid from your contract during the year. This is referred to as
an annual “step-up.”

              
Please note that if this rider is added after the contract date, then the first opportunity for a step-up will be on the first
contract anniversary following a complete contract year after the rider date. You may sometimes see the step-up
referred to as the Minimum Annual Deferral Enhancement (or MADE).

The ING LifePay Plus Base has no additional impact on the calculation of income phase payments or withdrawal
benefits.

Currently, any additional premiums paid during the Withdrawal Phase are not eligible premiums for purposes of
determining the ING LifePay Plus Base or the Maximum Annual Withdrawal; however, we reserve the right to treat
such premiums as eligible premiums at our discretion, in a nondiscriminatory manner. Premiums received during the
Withdrawal Phase do increase the contract value used to determine the reset Maximum Annual Withdrawal under the
benefit reset feature of the ING LifePay Plus rider (see “ING LifePay Plus Reset,” below). We reserve the right to
discontinue allowing premium payments during the Withdrawal Phase.

PRO.70600-13                                                        K-18

Determination of the Maximum Annual Withdrawal. The Maximum Annual Withdrawal is determined on the
date the Withdrawal Phase begins. It equals 5% of the greater of 1) the contract value and 2) the ING LifePay Plus
Base as of the last day of the Growth Phase. The first withdrawal after the effective date of the rider (which causes the
end of the Growth Phase) is treated as occurring on the first day of the Withdrawal Phase, after calculation of the
Maximum Annual Withdrawal.

If the Withdrawal Phase begins before the quarterly contract anniversary on or after the annuitant reaches age 59½,
withdrawals in a contract year up to the Maximum Annual Withdrawal will reduce the ING LifePay Plus Base dollar-
for-dollar, under what we refer to as the “Standard Withdrawal Benefit.” Then, on the quarterly contract anniversary
on or after the annuitant reaches age 59½, the ING LifePay Plus Base will automatically be reset to the current contract
value, if greater, and the Maximum Annual Withdrawal will be recalculated.

If the contract’s income phase commencement date is reached while you are in the ING LifePay Plus rider’s Lifetime
Guaranteed Withdrawal Status, then you may elect a life only income phase option, in lieu of the contract’s other
income phase options, under which we will pay the greater of the income phase payout under the contract and equal
annual payments of the Maximum Annual Withdrawal.

If withdrawals in any contract year exceed the Maximum Annual Withdrawal, then the ING LifePay Plus Base and the
Maximum Annual Withdrawal will be reduced on a pro-rata basis. This means that both the ING LifePay Plus Base
and the Maximum Annual Withdrawal will be reduced by the same proportion as the withdrawal in excess of the
Maximum Annual Withdrawal (the “excess withdrawal”) is of the contract value determined:
1. before the withdrawal, for the excess withdrawal; and
2.       after the withdrawal, for the amount withdrawn up to the Maximum Annual Withdrawal (without regard to the
excess withdrawal).

 

When a withdrawal is made, the total withdrawals taken in a contract year are compared with the current Maximum
Annual Withdrawal. To the extent that the withdrawal taken causes the total withdrawals in that year to exceed the
current Maximum Annual Withdrawal, that withdrawal is considered excess. For purposes of determining whether the
Maximum Annual Withdrawal has been exceeded, any applicable Market Value Adjustment or surrender charges will
not be applied to the withdrawal. However, for purposes of determining the Maximum Annual Withdrawal reduction
after an excess withdrawal, any surrender charges and/or Market Value Adjustment are considered to be part of the
withdrawal. See Illustration 1 and 2 below for examples of this concept.
 
Required Minimum Distributions. Withdrawals taken from the contract to satisfy the Required Minimum
Distribution rules of the Tax Code, that exceed the Maximum Annual Withdrawal for a specific contract year, will not
be deemed excess withdrawals in that contract year for purposes of the ING LifePay Plus rider, subject to the
following rules:
1.    If your Required Minimum Distribution for a calendar year (determined on a date on or before January 31 of
that year), applicable to this contract, is greater than the Maximum Annual Withdrawal on that date, an
Additional Withdrawal Amount will be set equal to that portion of the Required Minimum Distribution that
exceeds the Maximum Annual Withdrawal.
2. You may withdraw the Additional Withdrawal Amount from this contract without it being deemed an excess
withdrawal.
3. Any withdrawals taken in a contract year will count first against the Maximum Annual Withdrawal for that
contract year.
4. Once the Maximum Annual Withdrawal for the then current contract year has been taken, additional amounts
withdrawn in excess of the Maximum Annual Withdrawal will count first against and reduce any unused
Additional Withdrawal Amount for the previous calendar year followed by any Additional Withdrawal Amount
for the current calendar year.
5. Withdrawals that exceed all available Additional Withdrawal Amounts are excess withdrawals and will reduce
the Maximum Annual Withdrawal on a pro-rata basis, as described above.
6. The Additional Withdrawal Amount is reset to zero at the end of the second calendar year from which it was
originally calculated.
7. If the contract is still in the Growth Phase on the date the Additional Withdrawal Amount is determined, but
enters the Withdrawal Phase later during that calendar year, the Additional Withdrawal Amount will be equal to
the amount in excess of the Maximum Annual Withdrawal necessary to satisfy the Required Minimum
Distribution for that year (if any).
 
See Illustration 3, below.

             

PRO.70600-13                                                                      K-19


Investment Advisory Fees. Withdrawals taken pursuant to a program established by the owner for the payment of
investment advisory fees to a named third party investment adviser for advice on management of the contract’s values
will not cause the Withdrawal Phase to begin. During the Growth Phase, such withdrawals reduce the ING LifePay
Plus Base on a dollar-for-dollar basis, and during the Withdrawal Phase, these withdrawals are treated as any other
withdrawal.
 
Automatic Periodic Benefit Status. If the contract value is reduced to zero for a reason other than a withdrawal in
excess of the Maximum Annual Withdrawal while the rider is in Guaranteed Withdrawal Status, the rider will enter
Automatic Periodic Benefit Status and you are entitled to receive periodic payments in an annual amount equal to the
Maximum Annual Withdrawal, until the remaining ING LifePay Plus Base is exhausted.
When the rider enters Automatic Periodic Benefit Status:
1.   the contract will provide no further benefits other than as provided under the ING LifePay Plus rider;
2. no further premium payments will be accepted; and
3. any other riders attached to the contract will terminate, unless otherwise specified in that rider.

         
During Automatic Periodic Benefit Status, we will pay you periodic payments in an annual amount that is equal to the
Maximum Annual Withdrawal. These payments will continue until the ING LifePay Plus Base is reduced to zero, at
which time the rider will terminate without value.

The periodic payments will begin on the last day of the first full contract year following the date the rider enters
Automatic Periodic Benefit Status and will continue to be paid annually thereafter. If, at the time the rider enters
Automatic Periodic Benefit Status, you are receiving systematic withdrawals under the contract more frequently than
annually, the periodic payments will be made at the same frequency in equal amounts such that the sum of the
payments in each contract year will equal the annual Maximum Annual Withdrawal. Such payments will be made on
the same payment dates as previously set up, if the payments were being made monthly or quarterly. If the payments
were being made semi-annually or annually, the payments will be made at the end of the half-contract year or contract
year, as applicable.

Lifetime Automatic Periodic Benefit Status. If the contract value is reduced to zero by a withdrawal in excess
of the Maximum Annual Withdrawal, the contract and the rider will terminate due to the pro-rata reduction described
in “Determination of the Maximum Annual Withdrawal,” above.

If the contract value is reduced to zero for a reason other than a withdrawal in excess of the Maximum Annual
Withdrawal while the rider is in Lifetime Guaranteed Withdrawal Status, the rider will enter Lifetime Automatic
Periodic Benefit Status and you are entitled to receive periodic payments in an annual amount equal to the Maximum
Annual Withdrawal.
 
When the rider enters Lifetime Automatic Periodic Benefit Status:
1.   the contract will provide no further benefits other than as provided under the ING LifePay Plus rider;
2. no further premium payments will be accepted; and
3. any other riders attached to the contract will terminate, unless otherwise specified in that rider.

        
During Lifetime Automatic Periodic Benefit Status, we will pay you periodic payments in an annual amount that is
equal to the Maximum Annual Withdrawal. These payments will cease upon the death of the annuitant at which time
both the rider and the contract will terminate. The rider will remain in Lifetime Automatic Periodic Benefit Status
until it terminates without value upon the annuitant’s death.

The periodic payments will begin on the last day of the first full contract year following the date the rider enters
Lifetime Automatic Periodic Benefit Status and will continue to be paid annually thereafter. If, at the time the rider
enters Lifetime Automatic Periodic Benefit Status, you are receiving systematic withdrawals under the contract more
frequently than annually, the periodic payments will be made at the same frequency in equal amounts such that the
sum of the payments in each contract year will equal the annual Maximum Annual Withdrawal. Such payments will
be made on the same payment dates as previously set up, if the payments were being made monthly or quarterly. If the
payments were being made semi-annually or annually, the payments will be made at the end of the half-contract year
or contract year, as applicable.

ING LifePay Plus Reset. Once the Lifetime Guaranteed Withdrawal Status begins and the Maximum Annual
Withdrawal has been determined, on each quarterly contract anniversary we will increase (or “reset”) the ING LifePay
Plus Base to the current contract value, if the contract value is higher. The Maximum Annual Withdrawal will also be
recalculated, and the remaining portion of the new Maximum Annual Withdrawal will be available for withdrawal
immediately. This reset ONLY occurs when the rider is in Lifetime Guaranteed Withdrawal Status, and is automatic.

PRO.70600-13                                                                              K-20


We reserve the right to change the charge for this rider with a reset. In this event, you will receive prior notice, of not
less than 30 days, which explains the change, its impact to you and your options. You may decline this change (and the
reset). However, this action will apply to all future resets and cannot be reversed.
       
Investment Option Restrictions. While the ING LifePay Plus rider is in effect, there are limits on the portfolios to
which your contract value may be allocated. Contract value allocated to portfolios other than Accepted Funds will be
rebalanced so as to maintain at least 20% of such contract value in the Fixed Allocation Funds. See “Fixed Allocation
Funds Automatic Rebalancing,” below.
 
Accepted Funds. Currently, the Accepted Funds are:
· Fixed Account II  
· Fixed Interest Division  
· ING Liquid Assets Portfolio  
· ING Solution 2015 Portfolio  
· ING Solution 2025 Portfolio  
· ING Solution 2035 Portfolio  
· ING Solution Income Portfolio  
· ING T. Rowe Price Capital Appreciation Portfolio
 
If this rider was purchased before January 12, 2009, the following are additional Accepted Funds:
· ING Franklin Templeton Founding Strategy Portfolio; and
· ING WisdomTreeSM Global High-Yielding Equity Index Portfolio
 
No rebalancing is necessary if the contract value is allocated entirely to Accepted Funds. We may change these
designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value
allocated to such portfolios after the date of the change.
 
Fixed Allocation Funds. Currently, the Fixed Allocation Funds are:
· ING BlackRock Inflation Protected Bond Portfolio
· ING Bond Portfolio  
· ING Intermediate Bond Portfolio  
· ING U.S. Bond Index Portfolio  
 
You may allocate your contract value to one or more Fixed Allocated Funds. We consider the ING Intermediate
Bond Portfolio to be the default Fixed Allocation Fund in connection with Fixed Allocation Funds Automatic
Rebalancing.
 
If the rider is not continued under the spousal continuation right when available, a Fixed Allocation Fund may be
reclassified as a Special Fund as of the contract continuation date if it would otherwise be designated as a Special
Fund for purposes of the contract’s death benefits. For purposes of calculating any applicable death benefit
guaranteed under the contract, any allocation of contract value to the Fixed Allocation Fund will be considered a
Covered Fund allocation while the rider is in effect.
 
Other Funds. All portfolios available under the contract other than Accepted Funds or the Fixed Allocation Fund
are considered Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing. If the contract value in the Fixed Allocation Funds is less than
20% of the total contract value allocated to the Fixed Allocation Funds and Other Funds on any ING LifePay Plus
Rebalancing Date, we will automatically rebalance the contract value allocated to the Fixed Allocation Funds and
Other Funds so that 20% of this amount is allocated to the Fixed Allocation Funds. Accepted Funds are excluded from
Fixed Allocation Funds Automatic Rebalancing. Any rebalancing is done on a pro-rata basis among the Other Funds
and will be the last transaction processed on that date. The ING LifePay Plus Rebalancing Dates occur on each
contract anniversary and after the following transactions:
1. receipt of additional premiums;
2. transfer or reallocation among the Fixed Allocation Funds or Other Funds, whether automatic or specifically
directed by you;
3. withdrawals from the Fixed Allocation Funds or Other Funds.
  
PRO.70600-13 K-21

 

 

Fixed Allocation Funds Automatic Rebalancing is separate from any other automatic rebalancing under the contract.
However, if the other automatic rebalancing under the contract causes the allocations to be out of compliance with the
investment option restrictions noted above, Fixed Allocation Funds Automatic Rebalancing will occur immediately
after the automatic rebalancing to restore the required allocations. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing.”
 
In certain circumstances, Fixed Allocation Funds Automatic Rebalancing may result in a reallocation into the Fixed
Allocation Fund even if you have not previously been invested in it. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing, Example I.” By electing to purchase the ING LifePay Plus rider, you are providing
the Company with direction and authorization to process these transactions, including reallocations into the
Fixed Allocation Fund. You should not purchase the ING LifePay Plus rider if you do not wish to have your
contract value reallocated in this manner.
  
     Death of Owner or Annuitant. The ING LifePay Plus rider and charges will terminate on the date of death of
the owner (or in the case of joint owners, the first owner), or the annuitant if there is a non-natural owner.
   
     Continuation After Death–Spouse. If the surviving spouse of the deceased owner continues the contract (see
“Death Benefit Choices–Continuation After Death–Spouse”), the rider will also continue on the next quarterly contract
anniversary, provided the spouse becomes the annuitant and sole owner.
 
If the rider is in the Growth Phase at the time of spousal continuation:
1. The rider will continue in the Growth Phase;
2.      On the date the rider is continued, the ING LifePay Plus Base will be reset to equal the greater of the ING LifePay
Plus Base and the then current contract value;
3. The ING LifePay Plus charges will restart and be the same as were in effect prior to the claim date;
4. Ratchets, which stop on the claim date, are restarted, effective on the date the rider is continued;
5. Any remaining step-ups will be available, and if the rider is continued before an annual contract anniversary when
a step-up would have been available, then that step-up will be available; and
6. The rider’s Standard Withdrawal Benefit will be available until the quarterly contract anniversary on or after the
spouse is age 59½.
 
If the rider is in the Withdrawal Phase at the time of spousal continuation:
 
1. The rider will continue in the Withdrawal Phase.
2. The rider’s charges will restart on the date the rider is continued and be the same as were in effect prior to the
claim date.
3. On the quarterly contract anniversary that the date the rider is continued:
(a) If the surviving spouse was not the annuitant before the owner’s death, then the ING LifePay Plus Base will
be reset to the current contract value and the Maximum Annual Withdrawal is recalculated by multiplying the
new ING LifePay Plus Base by 5%. Withdrawals are permitted pursuant to the other provisions of the rider.
Withdrawals causing the contract value to fall to zero will terminate the contract and the rider.
(b) If the surviving spouse was the annuitant before the owner’s death, then the ING LifePay Plus Base will be
reset to the current contract value, only if greater, and the Maximum Annual Withdrawal is recalculated by
multiplying the new ING LifePay Plus Base by 5%. Withdrawals are permitted pursuant to the other
provisions of the rider.
4) The rider charges will restart on the quarter contract anniversary that the rider is continued and will be the same as
were in effect prior to the claim date.
 
      Effect of ING LifePay Plus Rider on Death Benefit. If you die before Lifetime Automatic Periodic Benefit
Status begins under the ING LifePay Plus rider, the death benefit is payable, but the rider terminates. However, if the
beneficiary is the owner’s spouse, and the spouse elects to continue the contract, the death benefit is not payable until
the spouse’s death. Thus, you should not purchase this rider with multiple owners, unless the owners are
spouses. See “Death of Owner or Annuitant” and “Continuation After Death–Spouse,” above for further information.
 
While in Lifetime Automatic Periodic Benefit Status, if the owner who is not the annuitant dies, we will continue to
pay the periodic payments that the owner was receiving under the ING LifePay Plus rider to the beneficiary. While in
Lifetime Automatic Periodic Benefit Status, if an owner who is also the annuitant dies, the periodic payments will
stop. No other death benefit is payable.
 
While the rider is in Automatic Periodic Benefit Status, if the owner dies, the remaining ING LifePay Plus Base will
be paid to the beneficiary in a lump-sum.
 
PRO.70600-13 K-22

 

 

Change of Owner or Annuitant. Other than as provided above under “Continuation After Death- Spouse,” you may
not change the annuitant. The rider and rider charges will terminate upon change of owner, including adding an
additional owner, except for the following ownership changes:

1. spousal continuation as described above;
2. change of owner from one custodian to another custodian;
3. change of owner from a custodian for the benefit of an individual to the same individual;
4. change of owner from an individual to a custodian for the benefit of the same individual;
5. collateral assignments;
6. change in trust as owner where the individual owner and the grantor of the trust are the same individual;
7.   change of owner from an individual to a trust where the individual owner and the grantor of the trust are the same
individual; and
8. change of owner from a trust to an individual where the individual owner and the grantor of the trust are the same
individual.

   
Surrender Charges. If you elect the ING LifePay Plus rider, your withdrawals will be subject to surrender charges
if they exceed the free withdrawal amount. However, once your contract value is zero, the periodic payments under
the ING LifePay Plus rider are not subject to surrender charges.

Loans. No loans are permitted on contracts with the ING LifePay Plus rider.

Taxation. For more information about the tax treatment of amounts paid to you under the ING LifePay Plus Rider,
see “Federal Tax Considerations–Tax Consequences of Living Benefits and Death Benefit.”

ING Joint LifePay Plus Minimum Guaranteed Withdrawal Benefit (“ING Joint LifePay Plus”) Rider. The ING
Joint LifePay Plus rider generally provides, subject to the restrictions and limitations below, that we will guarantee a
minimum level of annual withdrawals from the contract for the lifetime of both you and your spouse, even if these
withdrawals deplete your contract value to zero. You may wish to purchase this rider if you are married and are
concerned that you and your spouse may outlive your income.

Purchase. The ING Joint LifePay Plus rider is only available for purchase by individuals who are married at the
time of purchase and eligible to elect spousal continuation (as defined by the Tax Code) when the death benefit
becomes payable. We refer to these individuals as spouses. Certain ownership, annuitant, and beneficiary designations
are required in order to purchase the ING Joint LifePay Plus rider. See “Ownership, Annuitant, and Beneficiary
Requirements,” below.

The maximum issue age is 80. Both spouses must meet these issue age requirements on the contract anniversary on
which the ING Joint LifePay Plus rider is effective. The issue age is the age of the owners on the date on which the
rider is effective. Some broker-dealers may limit the maximum issue age to ages younger than age 80, but in no event
lower than age 55. We reserve the right to change the minimum or maximum issue ages on a nondiscriminatory basis.
The ING Joint LifePay Plus rider was available for contracts issued on and after August 20, 2007 through
April 27, 2008 (subject to availability and state approvals) that did not already have a living benefit rider. The ING
Joint LifePay Plus rider will not be issued if the initial allocation to investment options is not in accordance with the
investment option restrictions described in “Investment Option Restrictions,” below. The Company in its discretion
may allow the ING Joint LifePay Plus rider to be elected after a contract has been issued without it, subject to certain
conditions. Please contact our Customer Service Center for more information. Such election must be received in good
order, including owner, annuitant, and beneficiary designations and compliance with the investment restrictions
described below. The ING Joint LifePay Plus rider will be effective as of the following quarterly contract anniversary.

Ownership, Annuitant, and Beneficiary Designation Requirements. Certain ownership, annuitant, and
beneficiary designations are required in order to purchase the ING Joint LifePay Plus rider. These designations depend
upon whether the contract is issued as a nonqualified contract, an IRA or a custodial IRA. In all cases, the ownership,
annuitant, and beneficiary designations must allow for the surviving spouse to continue the contract when the death
benefit becomes payable, as provided by the Tax Code. Non-natural, custodial owners are only allowed with IRAs
(“custodial IRAs”). Joint annuitants are not allowed. The necessary ownership, annuitant, and/or beneficiary
designations are described below. Applications that do not meet the requirements below will be rejected. We reserve
the right to verify the date of birth and social security number of both spouses.

Nonqualified Contracts. For a jointly owned contract, the owners must be spouses, and the annuitant must be
one of the owners. For a contract with only one owner, the owner’s spouse must be the sole primary beneficiary, and
the annuitant must be one of the spouses.

PRO.70600-13 K-23

 

 

IRAs. There may only be one owner, who must also be the annuitant. The owner’s spouse must be the sole
primary beneficiary.

Custodial IRAs. While we do not maintain individual owner and beneficiary designations for IRAs held by an
outside custodian, the ownership and beneficiary designations with the custodian must comply with the requirements
listed in “IRAs,” above. The annuitant must be the same as the beneficial owner of the custodial IRA. We require the
custodian to provide us the name and date of birth of both the owner and the owner’s spouse.

Rider Date. The ING Joint LifePay Plus rider date is the date the ING Joint LifePay Plus rider becomes effective.
If you purchase the ING Joint LifePay Plus rider when the contract is issued, the ING Joint LifePay Plus rider date is
also the contract date.

Charge. The charge for the ING Joint LifePay Plus rider, a living benefit, is deducted quarterly from your contract
value:

Maximum Annual Charge Current Annual Charge
2.50% 0.75%

                
This quarterly charge is a percentage of the ING Joint LifePay Plus Base. We deduct the charge in arrears based on the
contract date (contract year versus calendar year). In arrears means the first charge is deducted at the end of the first
quarter from the contract date. If the rider is added after contract issue, the rider and charges will begin on the next
following quarterly contract anniversary. The charge will be pro-rated when the rider is terminated. Charges are
deducted through the date your rider enters either the Automatic Periodic Benefit Status or Lifetime Automatic
Periodic Benefit Status. Automatic Periodic Benefit Status or Lifetime Automatic Periodic Benefit Status occurs if
your contract value is reduced to zero and other conditions are met. The current charge can be subject to change upon a
reset after your first five contract years. You will never pay more than the maximum annual charge.

If the contract value in the subaccounts is insufficient for the charge, then we deduct it from any Fixed Interest
Allocations, in which case a Market Value Adjustment may apply. But currently, a Market Value Adjustment would
not apply when this charge is deducted from a Fixed Interest Allocation. With Fixed Interest Allocations, we deduct
the charge from the Fixed Interest Allocation having the nearest maturity. For more information about the Fixed
Interest Allocation, including the Market Value Adjustment, please see Appendix C. We reserve the right to change
the charge for this rider, subject to the maximum annual charge. If changed, the new charge will only apply to riders
issued after the change.

No Cancellation. Once you purchase the ING Joint LifePay Plus rider, you may not cancel it unless you cancel the
contract during the contract’s free look period (or otherwise cancel the contract pursuant to its terms), surrender or
elect to receive income phase payments in lieu of payments under the ING Joint LifePay Plus rider. These events
automatically cancel the ING Joint LifePay Plus rider. The Company may, at its discretion, cancel and/or replace the
ING Joint LifePay Plus rider at your request in order to renew or reset the ING Joint LifePay Plus rider.

Termination. The ING Joint LifePay Plus rider is a “living benefit,” which means the guaranteed benefits offered
are intended to be available to you and your spouse while you are living and while your contract is in the accumulation
phase. The optional rider automatically terminates if you:
1.   terminate your contract pursuant to its terms during the accumulation phase, surrender, or begin receiving
income phase payments in lieu of payments under the ING Joint LifePay Plus rider;
2. die during the accumulation phase (first owner to die in the case of joint owners, or death of annuitant if the
contract is a custodial IRA), unless your spouse elects to continue the contract (and your spouse is active for
purposes of the ING Joint LifePay Plus rider); or
3. change the owner of the contract (other than a spousal continuation by an active spouse).
 
See “Change of Owner or Annuitant,” below. Other circumstances that may cause the ING Joint LifePay Plus rider to
terminate automatically are discussed below.

           
PRO.70600-13                                                                K-24


Active Status. Once the ING Joint LifePay Plus rider has been issued, a spouse must remain in “active” status in
order to exercise rights and receive the benefits of the ING Joint LifePay Plus rider after the first spouse’s death by
electing spousal continuation. In general, changes to the ownership, annuitant, and/or beneficiary designation
requirements noted above will result in one spouse being designated as “inactive.” Inactive spouses are not eligible to
continue the benefits of the ING Joint LifePay Plus rider after the death of the other spouse. Once designated
“inactive,” a spouse may not regain active status under the ING Joint LifePay Plus rider. Specific situations that will
result in a spouse’s designation as “inactive” include the following:
1. For nonqualified contracts where the spouses are joint owners, the removal of a joint owner (if that spouse does
not automatically become sole primary beneficiary pursuant to the terms of the contract), or the change of one
joint owner to a person other than an active spouse.
2. For nonqualified contracts where one spouse is the owner and the other spouse is the sole primary beneficiary, as
well as for IRA contracts (including custodial IRAs), the addition of a joint owner who is not also an active spouse
or any change of beneficiary (including the addition of primary beneficiaries).
3. In the event of the death of one spouse (in which case the deceased spouse becomes inactive).
   
An owner may also request that one spouse be treated as inactive. In the case of joint-owned contracts, both contract
owners must agree to such a request. An inactive spouse is not eligible to exercise any rights or receive any benefits
under the ING Joint LifePay Plus rider. However, all charges for the ING Joint LifePay Plus rider will continue to
apply, even if one spouse becomes inactive, regardless of the reason. You should make sure you understand the
impact of beneficiary and owner changes on the ING Joint LifePay Plus rider prior to requesting any such
changes.
 
A divorce will terminate the ability of an ex-spouse to continue the contract. See “Divorce,” below.
 
Guaranteed Withdrawal Status. This status begins on the date of the first withdrawal, ONLY IF the quarterly
contract anniversary following the youngest active spouse’s 65th birthday has not yet passed. While the ING Joint
LifePay Plus rider is in Guaranteed Withdrawal Status, withdrawals in a contract year up to the Maximum Annual
Withdrawal will reduce the ING Joint LifePay Plus Base dollar-for-dollar. This status will then continue until the
earliest of:
1. quarterly contract anniversary following the youngest active spouse’s 65th birthday, provided the contract owner
does not decline the change to Lifetime Guaranteed Withdrawal Status;
2. reduction of the ING Joint LifePay Plus Base to zero, at which time the rider will terminate;
3. the income phase commencement date;
4. reduction of the contract value to zero by a withdrawal in excess of the Maximum Annual Withdrawal;
5. reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual Withdrawal
(see “Automatic Periodic Benefit Status,” below);
6. the surrender of the contract or the election to begin receiving income phase payments; or
7. the death of the owner (first owner, in the case of joint owners; annuitant, in the case of a non-natural person
owner), unless your spouse beneficiary elects to continue the contract.
 
Please note that withdrawals while the ING Joint LifePay Plus rider is in Guaranteed Withdrawal Status are not
guaranteed for the lifetime of the annuitant.
 
Lifetime Guaranteed Withdrawal Status. This status begins on the date of the first withdrawal, provided the
quarterly contract anniversary following the youngest active spouse’s 65th birthday has passed. If the first withdrawal
is taken prior to this date, then the Lifetime Guaranteed Withdrawal Status will automatically begin on the quarterly
contract anniversary following the youngest active spouse’s 65th birthday. This status continues until the earliest of:
1.      the income phase commencement date;
2. reduction of the contract value to zero by a withdrawal in excess of the Maximum Annual Withdrawal;
3. reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual Withdrawal
(see “Lifetime Automatic Periodic Benefit Status,” below);
4. the surrender of the contract; or
5. the death of the owner (first owner, in the case of joint owners, or the annuitant, in the case of a custodial IRA),
unless your active spouse beneficiary elects to continue the contract.
 
You will receive prior notice, of not less than 30 days, if you are in the Guaranteed Withdrawal Status and become
eligible for the Lifetime Guaranteed Withdrawal Status. This notice will explain the change, its impact to you and
your options. You may decline this change. However, this action will also apply to all future resets (see below) and
cannot be reversed. As described below, certain features of the ING Joint LifePay Plus rider may differ depending
upon whether you are in Lifetime Guaranteed Withdrawal Status.
 
PRO.70600-13 K-25

 

 

How the ING Joint LifePay Plus Rider Works. The ING Joint LifePay Plus rider has two phases. The first
phase, called the Growth Phase, begins on the effective date of the ING Joint LifePay Plus rider and ends as of the
business day before the first withdrawal is taken (or when the income phase commencement date is reached). The
second phase is called the Withdrawal Phase. This phase begins as of the date you take the first withdrawal of any
kind under the contract (other than advisory fees, as described below), or the income phase commencement date,
whichever occurs first.
 
Benefits paid under the ING Joint LifePay Plus rider require the calculation of the Maximum Annual Withdrawal. The
ING Joint LifePay Plus Base (referred to as the “MGWB Base” in the contract) is used to determine the Maximum
Annual Withdrawal and is calculated as follows:
1. If you purchased the ING Joint LifePay Plus rider on the contract date, the initial ING Joint LifePay Plus Base is
equal to the initial premium.
2. If you purchased the ING Joint LifePay Plus rider after the contract date, the initial ING Joint LifePay Plus Base is
equal to the contract value on the effective date of the ING Joint LifePay Plus rider.
 
During the Growth Phase, the initial ING Joint LifePay Plus Base is increased dollar-for-dollar by any premiums
received (“eligible premiums”). In addition, on each quarterly contract anniversary, the ING Joint LifePay Plus Base
is recalculated as the greater of:
·     The current ING Joint LifePay Plus Base; or
· The current contract value. This is referred to as a quarterly “ratchet.”
 
Also, on each of the first ten contract anniversaries, the ING Joint LifePay Plus Base is recalculated as the greatest of:
· The current ING Joint LifePay Plus Base; or
· The current contract value; and
· The ING Joint LifePay Plus Base on the previous contract anniversary, increased by 7%, plus any eligible
premiums and minus any third-party investment advisory fees paid from your contract during the year. This is
referred to as an annual “step-up.”
 
Please note that if this rider is added after the contract date, then the first opportunity for a step-up will be on the first
contract anniversary following a complete contract year after the rider date. You may sometimes see the step-up
referred to as the Minimum Annual Deferral Enhancement (or MADE).
 
The ING Joint LifePay Plus Base has no additional impact on the calculation of income phase payments or withdrawal
benefits.
 
Currently, any additional premiums paid during the Withdrawal Phase are not eligible premiums for purposes of
determining the ING Joint LifePay Plus Base or the Maximum Annual Withdrawal; however, we reserve the right to
treat such premiums as eligible premiums at our discretion, in a nondiscriminatory manner. Premiums received during
the Withdrawal Phase do increase the contract value used to determine the reset Maximum Annual Withdrawal under
the benefit reset feature of the ING Joint LifePay Plus rider (see “ING Joint LifePay Plus Reset,” below). We reserve
the right to discontinue allowing premium payments during the Withdrawal Phase.
 
       Determination of the Maximum Annual Withdrawal. The Maximum Annual Withdrawal is determined on the
date the Withdrawal Phase begins. It equals 5% multiplied by the greater of the contract value and the ING Joint
LifePay Plus Base, as of the last day of the Growth Phase. The first withdrawal after the effective date of the ING
Joint LifePay Plus rider (which causes the end of the Growth Phase) is treated as occurring on the first day of the
Withdrawal Phase, immediately after calculation of the Maximum Annual Withdrawal.
 
        If the Withdrawal Phase begins before the quarterly contract anniversary on or after the younger spouse reaches age
65, withdrawals in a contract year up to the Maximum Annual Withdrawal will reduce the ING Joint LifePay Plus
Base dollar-for-dollar, under what we refer to as the “Standard Withdrawal Benefit.” Then, on the quarterly contract
anniversary on or after the younger spouse reaches age 65, the ING Joint LifePay Plus Base will automatically be reset
to the current contract value, if greater, and the Maximum Annual Withdrawal will be recalculated.
 
        If the contract’s income phase commencement date is reached while you are in the ING Joint LifePay Plus rider’s
Lifetime Guaranteed Withdrawal Status, then you may elect a life only income phase option, in lieu of the contract’s
other income phase options, under which we will pay the greater of the income phase payout under the contract and
equal annual payments of the Maximum Annual Withdrawal, provided that, if both spouses are active, payments under
the life only income phase option will be calculated using the joint life expectancy table for both spouses. If only one
spouse is active, payments will be calculated using the single life expectancy table for the active spouse.
 
PRO.70600-13 K-26

 

 

Withdrawals in a contract year that do not exceed the Maximum Withdrawal Amount do not reduce the Maximum
Withdrawal Amount. However, if withdrawals in any contract year exceed the Maximum Annual Withdrawal (an
“excess withdrawal”), the ING Joint LifePay Plus Base and the Maximum Annual Withdrawal will be reduced on a
pro-rata basis. This means that both the ING Joint LifePay Plus Base and the Maximum Annual Withdrawal will be
reduced by the same proportion as the excess withdrawal is of the contract value determined after the deduction the
amount withdrawn up to the Maximum Annual Withdrawal but before deduction of the excess withdrawal.
 
When a withdrawal is made, the total withdrawals taken in a contract year are compared with the current Maximum
Annual Withdrawal. To the extent that the withdrawal taken causes the total withdrawals in that year to exceed the
current Maximum Annual Withdrawal, that withdrawal is considered excess. For purposes of determining whether the
Maximum Annual Withdrawal has been exceeded, any applicable Market Value Adjustment or surrender charges will
not be considered. However, for purposes of determining the Maximum Annual Withdrawal reduction after an excess
withdrawal, surrender charges and/or Market Value Adjustment are considered to be part of the withdrawal, and will
be included in the pro-rata adjustment to the Maximum Annual Withdrawal. See Illustration 1 and 2 below for
examples of this concept.
 
Required Minimum Distributions. Withdrawals taken from the contract to satisfy the Required Minimum
Distribution rules of the Tax Code are considered withdrawals for purposes of the ING Joint LifePay Plus rider, and
will begin the Withdrawal Phase if the Withdrawal Phase has not already started. Any such withdrawal which exceeds
the Maximum Annual Withdrawal for a specific contract year will not be deemed excess withdrawals in that contract
year for purposes of the ING Joint LifePay Plus rider, subject to the following:
1. If the contract owner’s Required Minimum Distribution for a calendar year (determined on a date on or before
January 31 of that year), applicable to the contract, is greater than the Maximum Annual Withdrawal on that
date, an Additional Withdrawal Amount will be set equal to that portion of the Required Minimum Distribution
that exceeds the Maximum Annual Withdrawal.
2. You may withdraw the Additional Withdrawal Amount from this contract without it being deemed an excess
withdrawal.
3. Any withdrawals taken in a contract year will count first against the Maximum Annual Withdrawal for that
contract year.
4. Once the Maximum Annual Withdrawal for the then current contract year has been taken, additional amounts
withdrawn in excess of the Maximum Annual Withdrawal will count first against and reduce any unused
Additional Withdrawal Amount for the previous calendar year followed by any Additional Withdrawal Amount
for the current contract year.
5. Withdrawals that exceed all available Additional Withdrawal Amounts are excess withdrawals and will reduce
the Maximum Annual Withdrawal on a pro-rata basis, as described above.
6. The Additional Withdrawal Amount is reset to zero at the end of the second calendar year from which it was
originally calculated.
7. If the contract is still in the Growth Phase on the date the Additional Withdrawal Amount is determined, but
enters the Withdrawal Phase later during that calendar year, the Additional Withdrawal Amount will be equal to
the amount in excess of the Maximum Annual Withdrawal Amount necessary to satisfy the Required Minimum
Distribution for that year (if any).
 
See Illustration 3, below.
 
Investment Advisory Fees. Withdrawals taken pursuant to a program established by the owner for the payment of
investment advisory fees to a named third party investment adviser for advice on management of the contract’s values
will not cause the Withdrawal Phase to begin. During the Growth Phase, such withdrawals reduce the ING Joint
LifePay Plus Base on a dollar-for-dollar basis, and during the Withdrawal Phase, these withdrawals are treated as any
other withdrawal.
 
Automatic Periodic Benefit Status. If the contract value is reduced to zero for a reason other than a withdrawal in
excess of the Maximum Annual Withdrawal while the rider is in Guaranteed Withdrawal Status, the rider will enter
Lifetime Automatic Periodic Benefit Status and you are entitled to receive periodic payments in an annual amount
equal to the Maximum Annual Withdrawal, until the remaining ING Joint LifePay Plus Base is exhausted.
 
When the rider enters Automatic Periodic Benefit Status:
1.    the contract will provide no further benefits other than as provided under the ING Joint LifePay Plus rider;
2. no further premium payments will be accepted; and
3. any other riders attached to the contract will terminate, unless otherwise specified in that rider.
   
PRO.70600-13 K-27

 

 

During Automatic Periodic Benefit Status, we will pay you periodic payments in an annual amount that is equal to the
Maximum Annual Withdrawal. These payments will continue until the ING Joint LifePay Plus Base is reduced to
zero, at which time the rider will terminate without value.

The periodic payments will begin on the last day of the first full contract year following the date the rider enters
Automatic Periodic Benefit Status and will continue to be paid annually thereafter. If, at the time the rider enters
Automatic Periodic Benefit Status, you are receiving systematic withdrawals under the contract more frequently than
annually, the periodic payments will be made at the same frequency in equal amounts such that the sum of the
payments in each contract year will equal the annual Maximum Annual Withdrawal. Such payments will be made on
the same payment dates as previously set up, if the payments were being made monthly or quarterly. If the payments
were being made semi-annually or annually, the payments will be made at the end of the half-contract year or contract
year, as applicable.

Lifetime Automatic Periodic Benefit Status. If the contract value is reduced to zero by a withdrawal in excess of
the Maximum Annual Withdrawal, the contract and the ING Joint LifePay Plus rider will terminate due to the pro-rata
reduction described in “Determination of the Maximum Annual Withdrawal,” above.

If the contract value is reduced to zero for a reason other than a withdrawal in excess of the Maximum Annual
Withdrawal while the ING Joint LifePay Plus rider is in Lifetime Guaranteed Withdrawal Status, the ING Joint
LifePay Plus rider will enter Lifetime Automatic Periodic Benefit Status and you are no longer entitled to make
withdrawals. Instead, under the ING Joint LifePay Plus rider you will begin to receive periodic payments in an annual
amount equal to the Maximum Annual Withdrawal.

When the ING Joint LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status:

1.      the contract will provide no further benefits (including death benefits) other than as provided under the ING
Joint LifePay Plus rider;
2.      no further premium payments will be accepted; and
3.      any other riders attached to the contract will terminate, unless otherwise specified in that rider.

During Lifetime Automatic Periodic Benefit Status, we will pay you periodic payments in an annual amount that is
equal to the Maximum Annual Withdrawal. The time period for which we will make these payments will depend upon
whether one or two spouses are active under the ING Joint LifePay Plus rider at the time this status begins. If both
spouses are active under the ING Joint LifePay Plus rider, these payments will cease upon the death of the second
spouse, at which time both the ING Joint LifePay Plus rider and the contract will terminate without further value. If
only one spouse is active under the ING Joint LifePay Plus rider, the payments will cease upon the death of the active
spouse, at which time both the ING Joint LifePay Plus rider and the contract will terminate without value.

If the Maximum Annual Withdrawal exceeds the net withdrawals taken the contract year when the ING Joint LifePay
Plus rider enters Lifetime Automatic Periodic Benefit Status (including the withdrawal that results in the contract value
decreasing to zero), that difference will be paid immediately to the contract owner. The periodic payments will begin
on the last day of the first full contract year following the date the ING Joint LifePay Plus rider enters Lifetime
Automatic Periodic Benefit Status and will continue to be paid annually thereafter.

You may elect to receive systematic withdrawals pursuant to the terms of the contract. Under a systematic withdrawal,
either a fixed amount or an amount based upon a percentage of the contract value will be withdrawn from your
contract and paid to you on a scheduled basis, either monthly, quarterly or annually. If, at the time the ING Joint
LifePay Plus rider enters Lifetime Automatic Periodic Benefit Status, you are receiving systematic withdrawals under
the contract more frequently than annually, the periodic payments will be made at the same frequency in equal
amounts such that the sum of the payments in each contract year will equal the annual Maximum Annual Withdrawal.
Such payments will be made on the same payment dates as previously set up, if the payments were being made
monthly or quarterly. If the payments were being made semi-annually or annually, the payments will be made at the
end of the half-contract year or contract year, as applicable.

ING Joint LifePay Plus Reset. Once the Lifetime Guaranteed Withdrawal Status begins and the Maximum
Annual Withdrawal has been determined, on each quarterly contract anniversary we will increase (or “reset”) the ING
Joint LifePay Plus Base to the current contract value, if the contract value is higher. The Maximum Annual
Withdrawal will also be recalculated, and the remaining portion of the new Maximum Annual Withdrawal will be
available for withdrawal immediately. This reset ONLY occurs when the rider is in Lifetime Guaranteed Withdrawal
Status, and is automatic.

PRO.70600-13                                                                       K-28

 

We reserve the right to change the charge for this rider with a reset. In this event, you will receive prior notice, of not
less than 30 days, which explains the change, its impact to you and your options. You may decline this change (and
the reset). However, this action will apply to all future resets and cannot be reversed.
Investment Option Restrictions. In order to mitigate the insurance risk inherent in our guarantee to provide you
and your spouse with lifetime payments (subject to the terms and restrictions of the ING Joint LifePay Plus rider), we
require that your contract value be allocated in accordance with certain limitations. In general, to the extent that you
choose not to invest in the Accepted Funds, we require that 20% of the amount not so invested be invested in the Fixed
Allocation Funds. We will require this allocation regardless of your investment instructions to the contract, as
described below.
  
While the ING Joint LifePay Plus rider is in effect, there are limits on the portfolios to which your contract value may
be allocated. Contract value allocated to portfolios other than Accepted Funds will be rebalanced so as to maintain at
least 20% of such contract value in the Fixed Allocation Fund. See “Fixed Allocation Funds Automatic Rebalancing,”
below.
  
Accepted Funds. Currently, the Accepted Funds are:  
· Fixed Account II  
· Fixed Interest Division  
· ING Liquid Assets Portfolio  
· ING Solution 2015 Portfolio  
· ING Solution 2025 Portfolio  
· ING Solution 2035 Portfolio  
· ING Solution Income Portfolio  
· ING T. Rowe Price Capital Appreciation Portfolio
 
If this rider was purchased before January 12, 2009, the following are additional Accepted Funds:
· ING Franklin Templeton Founding Strategy Portfolio; and
· ING WisdomTreeSM Global High-Yielding Equity Index Portfolio
 
No rebalancing is necessary if the contract value is allocated entirely to Accepted Funds. We may change these
designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value
allocated to such portfolios after the date of the change.
  
Fixed Allocation Funds. Currently, the Fixed Allocation Funds are:
· ING BlackRock Inflation Protected Bond Portfolio
· ING Bond Portfolio
· ING Intermediate Bond Portfolio
· ING U.S. Bond Index Portfolio
  
You may allocate your contract value to one or more Fixed Allocated Funds. We consider the ING Intermediate
Bond Portfolio to be the default Fixed Allocation Fund in connection with Fixed Allocation Funds Automatic
Rebalancing.
 
Other Funds. All portfolios available under the contract other than Accepted Funds or the Fixed Allocation Fund
are considered Other Funds.
  
Fixed Allocation Funds Automatic Rebalancing. If the contract value in the Fixed Allocation Funds is less than
20% of the total contract value allocated to the Fixed Allocation Funds and Other Funds on any ING Joint LifePay
Plus Rebalancing Date, we will automatically rebalance the contract value allocated to the Fixed Allocation Funds and
Other Funds so that 20% of this amount is allocated to the Fixed Allocation Funds. Accepted Funds are excluded from
Fixed Allocation Funds Automatic Rebalancing. Any rebalancing is done on a pro-rata basis among the Other Funds
and will be the last transaction processed on that date. The ING Joint LifePay Plus Rebalancing Dates occur on each
contract anniversary and after the following transactions:
1. receipt of additional premiums;
2. transfer or reallocation among the Fixed Allocation Funds or Other Funds, whether automatic or specifically
directed by you; and
3. withdrawals from the Fixed Allocation Funds or Other Funds.
   
PRO.70600-13 K-29

 

 

Fixed Allocation Funds Automatic Rebalancing is separate from any other automatic rebalancing under the contract.
However, if the other automatic rebalancing under the contract causes the allocations to be out of compliance with the
investment option restrictions noted above, Fixed Allocation Funds Automatic Rebalancing will occur immediately
after the automatic rebalancing to restore the required allocations. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing.”
 
In certain circumstances, Fixed Allocation Funds Automatic Rebalancing may result in a reallocation into the Fixed
Allocation Fund even if you have not previously been invested in it. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing, Example I.” By electing to purchase the ING Joint LifePay Plus rider, you are
providing the Company with direction and authorization to process these transactions, including reallocations
into the Fixed Allocation Fund. You should not purchase the ING Joint LifePay Plus rider if you do not wish to
have your contract value reallocated in this manner.
 
Divorce. Generally, in the event of a divorce, the spouse who retains ownership of the contract will continue to be
entitled to all rights and benefits of the ING Joint LifePay Plus rider, while the ex-spouse will no longer have any such
rights or be entitled to any such benefits. In the event of a divorce during Lifetime Guaranteed Withdrawal Status, the
ING Joint LifePay Plus rider continues, and terminates upon the death of the owner (first owner in the case of joint
owners, or the annuitant in the case of a custodial IRA). Although spousal continuation may be available under the
Tax Code for a subsequent spouse, the ING Joint LifePay Plus rider cannot be continued by the new spouse. As the
result of the divorce, we may be required to withdraw assets for the benefit of an ex-spouse. Any such withdrawal will
be considered a withdrawal for purposes of the Maximum Annual Withdrawal amount. In other words, if a withdrawal
incident to a divorce exceeds the Maximum Annual Withdrawal amount, it will be considered an excess withdrawal.
See “Determination of the Maximum Annual Withdrawal,” above. As noted, in the event of a divorce there is no
change to the Maximum Annual Withdrawal and we will continue to deduct charges for the ING Joint LifePay Plus
rider.
 
In the event of a divorce during Lifetime Automatic Periodic Benefit Status, there will be no change to the periodic
payments made. Payments will continue until both spouses are deceased.
 
Death of Owner. The death of the owner (or in the case of joint owners, the first owner, or for custodial IRAs, the
annuitant) may cause the termination of the ING Joint LifePay Plus rider and its charges, depending upon whether one
or both spouses are in active status at the time of death, as described below.
1. If both spouses are in active status: If the surviving spouse elects to continue the contract and becomes the
sole owner and annuitant, the ING Joint LifePay Plus rider will remain in effect pursuant to its original terms
and ING Joint LifePay Plus coverage and charges will continue. As of the date the contract is continued, the
Joint LifePay Plus Base will be reset to the current Contact value, if greater, and the Maximum Annual
Withdrawal will recalculated as 5% percentage multiplied by the new Joint LifePay Plus Base on the date the
contract is continued. However, under no circumstances will this recalculation result in a reduction to the
Maximum Annual Withdrawal.
 
2. If the surviving spouse elects not to continue the contract, ING Joint LifePay Plus rider coverage and charges
will cease upon the earlier of payment of the death benefit or notice that an alternative distribution option has
been chosen.
   
If the surviving spouse is in inactive status: The ING Joint LifePay Plus rider terminates and ING Joint
LifePay Plus coverage and charges cease upon the date of death of the last Active Spouse.
 
Change of Owner or Annuitant. Other than as a result of spousal continuation, you may not change the annuitant.
The ING Joint LifePay Plus rider and rider charges will terminate upon change of owner, including adding an
additional owner, except for the following ownership changes:
1. spousal continuation by an active spouse, as described above;
2. change of owner from one custodian to another custodian for the benefit of the same individual;
3. change of owner from a custodian for the benefit of an individual to the same individual (in order to avoid the
owner’s spouse from being designated inactive, the owner’s spouse must be named sole beneficiary under the
contract);
4. change of owner from an individual to a custodian for the benefit of the same individual;
5. collateral assignments;
6. for nonqualified contracts only, the addition of a joint owner, provided that the additional joint owner is the
original owner’s spouse and is active when added as joint owner;
   
PRO.70600-13 K-30

 

 

7.   for nonqualified contracts, removal of a joint owner, provided the removed joint owner is active and becomes
the primary contract beneficiary; and
8. change of owner where the owner becomes the sole primary beneficiary and the sole primary beneficiary
becomes the owner if both were active spouses at the time of the change.

  
Surrender Charges. If you elect the ING Joint LifePay Plus rider, your withdrawals will be subject to surrender
charges if they exceed the free withdrawal amount. However, once your contract value is zero, the periodic payments
under the ING Joint LifePay Plus rider are not subject to surrender charges, nor will these amounts be subject to any
other charges under the contract.

Federal Tax Considerations. For more information about the tax treatment of amounts paid to you under the ING
Joint LifePay Plus rider, see “Federal Tax Considerations–Tax Consequences of Living Benefits and Death Benefit.”

ING LifePay Plus and ING Joint LifePay Plus Partial Withdrawal Amount Examples

  
The following are examples of adjustments to the Maximum Annual Withdrawal amount for withdrawals in excess of
the Maximum Annual Withdrawal:

Illustration 1: Adjustment to the Maximum Annual Withdrawal amount for a withdrawal in excess of the
Maximum Annual Withdrawal, including surrender and/or MVA charges.

Assume the Maximum Annual Withdrawal is $5,000.

The first withdrawal taken during the contract year is $3,000 net, with $500 of surrender charges, and/or MVA
charges. The Maximum Annual Withdrawal is not exceeded.

The next withdrawal taken during the contract year is $1,500 net, with $300 of surrender charges, and/or MVA
charges. The Maximum Annual Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the
Maximum Annual Withdrawal, $5,000.

The next withdrawal taken during the contract year is $1,500 net, with $200 of surrender charges, and/or MVA
charges. Because total net withdrawals taken, $6,000, exceed the Maximum Annual Withdrawal, $5,000, then there is
an adjustment to the Maximum Annual Withdrawal.

Total gross withdrawals during the contract year are $7,000 ($3,000 + $500 + $1,500 + $300 + $1,500 + $200). The
adjustment is the lesser of the amount by which the total gross withdrawals for the year exceed the Maximum Annual
Withdrawal ($7,000 – $5,000 = $2,000), and the amount of the current gross withdrawal ($1,500 + 200 = $1,700.

If the contract value before this withdrawal is $50,000, then the Maximum Annual Withdrawal is reduced by 3.40%
($1,700 / $50,000) to $4,830 ((1 – 3.40%) * $5,000).

Illustration 2: Adjustment to the Maximum Annual Withdrawal amount for a withdrawal in excess of the
Maximum Annual Withdrawal.

Assume the Maximum Annual Withdrawal is $5,000.

The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender charges, and/or MVA charges.
The Maximum Annual Withdrawal is not exceeded.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges, and/or MVA charges.
The Maximum Annual Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the
Maximum Annual Withdrawal, $5,000.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges, and/or MVA charges.
Because total net withdrawals taken, $6,000, exceed the Maximum Annual Withdrawal, $5,000, there is an adjustment
to the Maximum Annual Withdrawal.

 
PRO.70600-13 K-31

 

 

Total gross withdrawals during the contract year are $6,000 ($3,000 + $1,500 + $1,500). The adjustment is the lesser
of the amount by which the total gross withdrawals for the year exceed the Maximum Annual Withdrawal, $1,000, and
the amount of the current gross withdrawal, $1,500.

If the contract value after the part of the gross withdrawal that was within the Maximum Annual Withdrawal, $500, is
$49,500, then the Maximum Annual Withdrawal is reduced by 2.02% ($1,000 / $49,500) to $4,899 ((1 – 2.02%) *
$5,000).

Illustration 3: A withdrawal exceeds the Maximum Annual Withdrawal amount but does not exceed the
Additional Withdrawal Amount.

Assume the Maximum Annual Withdrawal is $5,000. The RMD for the current calendar year applicable to this
contract is determined to be $6,000. The Additional Withdrawal Amount is set equal to the excess of this amount
above the Maximum Annual Withdrawal, $1,000 ($6,000 – $5,000).

The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender charges, and/or MVA charges.
The Maximum Annual Withdrawal is not exceeded.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges, and/or MVA charges.
The Maximum Annual Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the
Maximum Annual Withdrawal, $5,000.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender charges, and/or MVA charges.
Total net withdrawals taken, $6,000, exceed the Maximum Annual Withdrawal, $5,000, however, the Maximum
Annual Withdrawal is not adjusted until the Additional Withdrawal Amount is exhausted. The amount by which total
net withdrawals taken exceed the Maximum Annual Withdrawal, $1,000 ($6,000 – $5,000), is the same as the
Additional Withdrawal Amount, so no adjustment to the Maximum Annual Withdrawal is made. If total net
withdrawals taken had exceeded the sum of the Maximum Annual Withdrawal and the Additional Withdrawal
Amount, then an adjustment would be made to the Maximum Annual Withdrawal.

Illustration 4: The Reset Occurs.

Assume the Maximum Annual Withdrawal is $5,000 and the Maximum Annual Withdrawal percentage is 5%.

One year after the first withdrawal is taken, the contract value has increased to $120,000, and the Reset occurs. The
Maximum Annual Withdrawal is now $6,000 ($120,000 * 5%).

One year after the Reset, the contract value has increased further to $130,000. The Reset occurs again, and the
Maximum Annual Withdrawal is now $6,500 ($130,000 * 5%).

PRO.70600-13                                                                          K-32

 

APPENDIX L
 
ING LifePay and ING Joint LifePay Riders
 
(Available for contracts issued through August 20, 2007, subject to state approval)
 
ING LifePay Minimum Guaranteed Withdrawal Benefit (ING LifePay) Rider. The ING LifePay rider generally
provides, subject to the restrictions and limitations below, that we will guarantee a minimum level of annual
withdrawals from the contract for the lifetime of the annuitant, even if these withdrawals deplete your contract value to
zero. You may wish to purchase this rider if you are concerned that you may outlive your income.
 
       Purchase. In order to elect the ING LifePay rider, the annuitant must be the owner or one of the owners, unless the
owner is a non-natural person. Joint annuitants are not allowed. The minimum issue age is 50 and the maximum issue
age is 80. The issue age is the age of the owner (or the annuitant if there are joint owners or the owner is non-natural)
on the contract anniversary on which the rider is effective. Some broker-dealers may limit availability of the rider to
ages younger than 80, but in no event less than 50. The ING LifePay rider will not be issued if the initial allocation to
investment options is not in accordance with the investment option restrictions described in “Investment Option
Restrictions,” below. The Company in its discretion may allow the rider to be elected during the 30-day period
preceding a contract anniversary. Such election must be received in good order, including compliance with the
investment option restrictions described below. The rider will be effective as of that contract anniversary.
 
Rider Date. The rider date is the date the ING LifePay rider becomes effective. The rider date is also the contract date
if you purchased the ING LifePay rider when the contract was issued.
 
Charge. The charge for the ING LifePay rider is deducted quarterly from your contract value as follows:
 
   As an Annual Charge
   (Charge Deducted Quarterly)		    As a Quarterly Charge    Maximum Annual Charge if Reset
   Option Elected
   0.40% of contract value     0.10% of contract value    1.20% of contract value  
 
The charge is deducted during the period starting on the rider date and up to your rider’s Lifetime Automatic Periodic
Benefit status. Lifetime Automatic Periodic Benefit Status will occur if your contract value is reduced to zero and
other conditions are met. The charge may be subject to change if you elect the reset option, subject to the maximum
annual charge. For more information on this rider, including when Lifetime Automatic Periodic Benefit status begins,
please see “ING LifePay Minimum Guaranteed Withdrawal Benefit Rider” below. If you surrender your contract or
begin receiving income phase payments, the charge is pro-rated based upon the amount owed at the time. We reserve
the right to change the charge for this rider, subject to the maximum annual charge. If changed, the new charge will
only apply to riders issued after this change.
 
If the contract value in the subaccounts is insufficient for the charge, then we deduct it from any Fixed Interest
Allocations, in which case a Market Value Adjustment may apply. Currently, a Market Value Adjustment would not
apply when this charge is deducted from a Fixed Interest Allocation. With Fixed Interest Allocations, we deduct the
charge from the Fixed Interest Allocation having the nearest maturity. For more information about the Fixed Interest
Allocation, including the Market Value Adjustment, please see Appendix C. We reserve the right to change the charge
for this rider, subject to the maximum annual charge. If changed, the new charge will only apply to riders issued after
the change.
 
No Cancellation. Once you purchase the ING LifePay rider, you may not cancel it unless you a) cancel the contract
during the contract’s free look period, b) surrender, c) begin income phase payments, or d) otherwise terminate the
contract pursuant to its terms. These events automatically cancel the ING LifePay rider. Once the contract continues
beyond the free look period, you may not cancel the rider. The Company may, at its discretion, cancel and/or replace a
rider at your request in order to renew or reset a rider.
 
PRO.70600-13 L-1  

 

 

Termination. The ING LifePay rider is a “living benefit,” which means the guaranteed benefits offered by the rider is
intended to be available to you while you are living and while your contract is in the accumulation phase. Generally,
the optional riders automatically terminate if you:
1. Terminate your contract pursuant to its terms during the accumulation phase, surrender, or begin receiving income
phase payments in lieu of payments under the rider;
2. Die during the accumulation phase (first owner to die in the case of joint owners, or death of annuitant if the
contract is a custodial IRA), unless your spouse elects to continue the contract; or
3. Change the owner of the contract.
 
Other circumstances that may cause a rider to terminate automatically are discussed below with each rider.
 
Lifetime Guaranteed Withdrawal Status. This status begins on the rider date and continues until the earliest of:
1. the income phase start date;
2. reduction of the contract value to zero by a withdrawal in excess of the Maximum Annual Withdrawal;
3. reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual Withdrawal;
4. the surrender of the contract; or
5.      the death of the contract owner (or in the case of joint owners, the first contract owner, or the annuitant in the case
of a custodial IRA) unless your spouse beneficiary elects to continue the contract.
 
For more information about the effect of a withdrawal reducing the contract value to zero, please see “Lifetime
Automatic Periodic Benefit Status” below.
 
As described below, certain features of the ING LifePay rider may differ depending upon whether you are in Lifetime
Guaranteed Withdrawal Status.
 
        How the ING LifePay Rider Works. The ING LifePay Withdrawal Benefit rider has two phases. The first
phase, called the Growth Phase, begins on the rider date and ends as of the business day before the first withdrawal is
taken (or when the income phase start date is reached). The second phase is called the Withdrawal Phase. This phase
begins as of the date of the first withdrawal (other than investment advisory fees, as described below) or the income
phase start date, whichever occurs first.
 
During the accumulation phase of the contract, the ING LifePay rider may be in either the Growth Phase or the
Withdrawal Phase. The ING LifePay rider is initially in Lifetime Guaranteed Withdrawal Status. While in this status
you may terminate the ING LifePay rider by electing to enter the income phase and begin receiving income phase
payments. However, if you have not elected to begin receiving income phase payments, and the ING LifePay rider
enters Lifetime Automatic Periodic Benefit Status because the contract value has been reduced to zero, the ING
LifePay rider and contract terminate (other than those provisions regarding the payment of the Maximum Annual
Withdrawal, as described below) and you can no longer elect to receive income phase payments.
 
Benefits paid under the ING LifePay rider require the calculation of the Maximum Annual Withdrawal. The ING
LifePay Base (referred to as the “MGWB Base” in the contract) is used to determine the Maximum Annual
Withdrawal as follows:
1. If you purchased the ING LifePay rider on the contract date, the initial ING LifePay Base is equal to the initial
premium.
2. If you purchased the ING LifePay rider after the contract date, the initial ING LifePay Base is equal to the
contract value on the rider date.
3. The initial ING LifePay Base is increased dollar-for-dollar by premiums received during the Growth Phase
(“eligible premiums”). The ING LifePay Base is also increased to equal the contract value if the contract value is
greater than the current ING LifePay Base on each quarterly contract anniversary after the effective date of the
rider, during the Growth Phase. The ING LifePay Base has no additional impact on the calculation of income
phase payments or withdrawal benefits.
 
Currently, any additional premiums paid during the Withdrawal Phase are not eligible premiums for purposes of
determining the ING LifePay Base or the Maximum Annual Withdrawal. However, we reserve the right to treat such
premiums as eligible premiums at our discretion, in a nondiscriminatory manner. Premiums received during the
Withdrawal Phase do increase the contract value used to determine the reset Maximum Annual Withdrawal if you
choose to reset the ING LifePay rider (see “ING LifePay Reset Option,” below). We reserve the right to discontinue
allowing premium payments during the Withdrawal Phase.
 
PRO.70600-13 L-2

 

 

Determination of the Maximum Annual Withdrawal. The Maximum Annual Withdrawal is determined on the
date the Withdrawal Phase begins. It equals 5% of the greater of 1) the contract value and 2) the ING LifePay Base as
of the last day of the Growth Phase. The first withdrawal after the rider date (which causes the end of the Growth
Phase) is treated as occurring on the first day of the Withdrawal Phase, after calculation of the Maximum Annual
Withdrawal.

If the ING LifePay rider is in the Growth Phase, and the income phase commencement date is reached, the rider will
enter the Withdrawal Phase and the income phase will begin. In lieu of the income phase payment options available
under the contract, you may elect a life-only income phase payment option under which we will pay the greater of the
income phase payout under the contract and annual payments equal to the Maximum Annual Withdrawal.

Withdrawals in a contract year that do not exceed the Maximum Annual Withdrawal do not reduce the Maximum
Annual Withdrawal. However, if withdrawals in any contract year exceed the Maximum Annual Withdrawal, the
Maximum Annual Withdrawal will be reduced on a pro-rata basis. This means that the Maximum Annual Withdrawal
will be reduced by the same proportion that the withdrawal in excess of the Maximum Annual Withdrawal (the
“excess withdrawal”) is of the contract value determined:
1.      before the withdrawal, for the excess withdrawal; and
2.      after the withdrawal for the amount withdrawn up to the Maximum Annual Withdrawal (without regard to the
excess withdrawal).

When a withdrawal is made, the total withdrawals taken in a contract year are compared with the current Maximum
Annual Withdrawal. To the extent the withdrawal taken causes the total withdrawals in that year to exceed the current
Maximum Annual Withdrawal, that withdrawal is considered excess. For purposes of determining whether the
Maximum Annual Withdrawal has been exceeded, any applicable Market Value Adjustment or surrender charges will
not be applied to the withdrawal. However, for purposes of determining the Maximum Annual Withdrawal reduction
after an excess withdrawal, any surrender charges and/or Market Value Adjustment are considered to be part of the
withdrawal. See Illustration 1 and 2 below for an example of this concept.

Required Minimum Distributions. Withdrawals taken from this contract to satisfy the Required Minimum
Distribution rules of the Tax Code are considered withdrawals for the purposes of the rider, and will begin the
Withdrawal Phase if the Withdrawal Phase has not already started. Any such withdrawal that exceeds the Maximum
Annual Withdrawal for a specific contract year, will not be deemed excess withdrawals in that contract year for
purposes of the ING LifePay rider, subject to the following rules:
1.      If your Required Minimum Distribution for a calendar year (determined on a date on or before January 31 of
that year), applicable to this contract, is greater than the Maximum Annual Withdrawal on that date, an
Additional Withdrawal Amount will be set equal to that portion of the Required Minimum Distribution that
exceeds the Maximum Annual Withdrawal.
2.      You may withdraw the Additional Withdrawal Amount from this contract without it being deemed an excess
withdrawal.
3.      Any withdrawals taken in a contract year will count first against the Maximum Annual Withdrawal for that
contract year.
4.      Once the Maximum Annual Withdrawal for the then current contract year has been taken, additional amounts
withdrawn in excess of the Maximum Annual Withdrawal, other than Required Minimum Distributions will
count against and reduce any Additional Withdrawal Amount.
5.      Withdrawals that exceed the Additional Withdrawal Amount are excess withdrawals and will reduce the
Maximum Annual Withdrawal on a pro-rata basis, as described above.
6.      The Additional Withdrawal Amount is reset to zero at the end of each calendar year, and remains at zero until it
is reset in January of the following calendar year, even if, pursuant to the Tax Code, the contract owner may
take a Required Minimum Distribution for that calendar year after the end of the calendar year. The Additional
Withdrawal Amount when recalculated, will not include your Required Minimum Distribution for a calendar
year, or any portion thereof, that may otherwise be taken after that calendar year’s end.
7.      If the contract is still in the Growth Phase on the date the Additional Withdrawal Amount is determined, but
enters the Withdrawal Phase later during that calendar year, the Additional Withdrawal Amount will be set
equal to the amount in excess of the Additional Withdrawal Amount necessary to satisfy the Required
Minimum Distribution (if any).

See Appendix Illustration 3, below.

PRO.70600-13                                                                           L-3

 

Investment Advisory Fees. Withdrawals taken pursuant to a program established by the owner for the payment
of investment advisory fees to a named third party investment adviser for advice on management of the contract’s
values will not cause the Withdrawal Phase to begin. During the Growth Phase, such withdrawals reduce the ING
LifePay Base on a pro-rata basis, and during the Withdrawal Phase, these withdrawals are treated as any other
withdrawal.

Lifetime Automatic Periodic Benefit Status. If the contract value is reduced to zero by a withdrawal in excess
of the Maximum Annual Withdrawal, the contract and the rider will terminate due to the pro-rata reduction described
in “Determination of the Maximum Annual Withdrawal,” above.

If the contract value is reduced to zero for a reason other than a withdrawal in excess of the Maximum Annual
Withdrawal while the rider is in Lifetime Guaranteed Withdrawal Status, the rider will enter Lifetime Automatic
Periodic Benefit Status and you are no longer entitled to make withdrawals. Instead, under the rider, you will begin to
receive periodic payments in an annual amount equal to the Maximum Annual Withdrawal.

When the rider enters Lifetime Automatic Periodic Benefit Status,
1.      the contract will provide no further benefits other than as provided in the ING LifePay rider;
2.      no further premium payments will be accepted; and
3.      any other riders attached to the contract will terminate, unless otherwise specified in the rider.

During Lifetime Automatic Periodic Benefit Status, we will pay you periodic payments equal to the Maximum Annual
Withdrawal. These payments will cease upon the death of the annuitant at which time both the rider and the contract
will terminate. The rider will remain in Lifetime Automatic Periodic Benefit Status until it terminates without value
upon the annuitant’s death.

If the Maximum Annual Withdrawal exceeds the net withdrawals taken the contract year when the ING LifePay rider
enters Lifetime Automatic Periodic Benefit Status (including the withdrawal that results in the contract value
decreasing to zero), that difference will be paid immediately to the contract owner. The periodic payments will begin
on the last day of the first full contract year following the date the rider enters Lifetime Automatic Periodic Benefit
Status and will continue to be paid annually thereafter.

You may elect to receive systematic withdrawals pursuant to the terms of the contract. Under a systematic withdrawal,
either a fixed amount or an amount based upon a percentage of the contract value will be withdrawn from your
contract and paid to you on a scheduled basis, either monthly, quarterly or annually. If, at the time the rider enters
Lifetime Automatic Periodic Benefit Status, you are receiving systematic withdrawals under the contract more
frequently than annually, the periodic payments will be made at the same frequency in equal amounts such that the
sum of the payments in each contract year will equal the annual Maximum Annual Withdrawal. Such payments will
be made on the same payment dates as previously set up, if the payments were being made monthly or quarterly. If the
payments were being made semi-annually or annually, the payments will be made at the end of the half-contract year
or contract year, as applicable.

ING LifePay Reset Option. Beginning one year after the Withdrawal Phase begins, you may choose to reset the
Maximum Annual Withdrawal, if 5% of the contract value would be greater than your current Maximum Annual
Withdrawal. You must elect to reset by a request in a form satisfactory to us. On the date the request is received (the
“Reset Effective Date”), the Maximum Annual Withdrawal will increase to be equal to 5% of the contract value on the
Reset Effective Date. The reset option is only available when the rider is in Lifetime Guaranteed Withdrawal Status.

After exercising the reset option, you must wait one year before electing to reset again. We will not accept a request to
reset if the new Maximum Annual Withdrawal on the date the request is received would be less than your current
Maximum Annual Withdrawal.

If the reset option is exercised, the charge for the ING LifePay rider will be equal to the charge then in effect for a
newly purchased rider but will not exceed the maximum annual charge of 1.20%. However, we guarantee that the
rider charge will not increase for resets exercised within the first five contract years. See Illustration 4, below.

Investment Option Restrictions. In order to mitigate the insurance risk inherent in our guarantee to provide you with
lifetime payments (subject to the terms and restrictions of the ING LifePay rider), we require that your contract value
be allocated in accordance with certain limitations. In general, to the extent that you choose not to invest in the
Accepted Funds, we require that 20% of such contract value be invested in the Fixed Allocation Fund. See “Fixed
Allocation Funds Automatic Rebalancing” below.

PRO.70600-13                                                                         L-4

 

Accepted Funds. Currently, the Accepted Funds are:
· Fixed Account II  
· Fixed Interest Division  
· ING Liquid Assets Portfolio  
· ING Solution 2015 Portfolio  
· ING Solution 2025 Portfolio  
· ING Solution 2035 Portfolio  
· ING Solution Income Portfolio  
· ING T. Rowe Price Capital Appreciation Portfolio
 
If this rider was purchased before January 12, 2009, the following are additional Accepted Funds:
· ING Franklin Templeton Founding Strategy Portfolio; and
· ING WisdomTreeSM Global High-Yielding Equity Index Portfolio
 
No rebalancing is necessary if the contract value is allocated entirely to Accepted Funds. We may change these
designations at any time upon 30 days notice to you. If a change is made, the change will apply to contract value
allocated to such portfolios after the date of the change.
 
Fixed Allocation Funds. Currently, the Fixed Allocation Funds are:
· ING BlackRock Inflation Protected Bond Portfolio
· ING Bond Portfolio  
· ING Intermediate Bond Portfolio  
· ING U.S. Bond Index Portfolio  
 
You may allocate your contract value to one or more Fixed Allocated Funds. We consider the ING Intermediate
Bond Portfolio to be the default Fixed Allocation Fund in connection with Fixed Allocation Funds Automatic
Rebalancing.
 
Other Funds. All portfolios available under the contract other than Accepted Funds and the Fixed Allocation
Funds are considered Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing. If the contract value in the Fixed Allocation Funds is less than
20% of the contract value allocated to the Fixed Allocation Funds and Other Funds on any ING LifePay Rebalancing
Date, we will automatically rebalance the contract value allocated to Fixed Allocation Funds and Other Funds so that
20% of this amount is allocated to the Fixed Allocation Funds. Accepted Funds are excluded from Fixed Allocation
Funds Automatic Rebalancing. Any rebalancing is done on a pro-rata basis among the Fixed Allocation Funds and
Other Funds and will be the last transaction processed on that date. The ING LifePay Rebalancing Dates occur on each
contract anniversary and after the following transactions:
1. receipt of additional premiums;  
2. transfer or reallocation among Fixed Allocation Funds or Other Funds, whether automatic or specifically
directed by you; and
3. withdrawals from a Fixed Allocation Fund or Other Fund.
 
Fixed Allocation Funds Automatic Rebalancing is separate from any other automatic rebalancing under the contract.
However, if the other automatic rebalancing under the contract causes the allocations to be out of compliance with the
investment option restrictions noted above, Fixed Allocation Funds Automatic Rebalancing will occur immediately
after the automatic rebalancing to restore the required allocations. See “Appendix J – Examples of Fixed Allocation
Funds Automatic Rebalancing.”
 
In certain circumstances, Fixed Allocation Funds Automatic Rebalancing may result in a reallocation into the Fixed
Allocation Fund even if you have not previously been invested in it. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing, Example I.” By electing to purchase the ING LifePay rider, you are providing the
Company with direction and authorization to process these transactions, including reallocations into the Fixed
Allocation Fund. You should not purchase the ING LifePay rider if you do not wish to have your contract value
reallocated in this manner.
  
PRO.70600-13 L-5

 

 

Death of Owner or Annuitant. The ING LifePay rider and charges terminate on the earlier of:
1.    if the rider is in Lifetime Guaranteed Withdrawal status, the date of receipt of due proof of death (“notice date”)
of the contract owner (or in the case of joint contract owners, the death of the first owner) or the annuitant if
there is a non-natural owner; or
2. the date the rider enters Lifetime Automatic Periodic Benefit status.
 
Under 1), above, the rider terminates on the death of the first owner, even if the owner is not the annuitant. Thus, you
should not purchase this rider with multiple owners, unless the owners are spouses. Under 2), above, we will
continue to pay the periodic payments that the owner was receiving under the ING LifePay rider to the annuitant. No
other death benefit is payable in this situation.
 
Continuation After Death – Spouse. If the surviving spouse of the deceased owner continues the contract (see,
“Death Benefit Choices–Continuation After Death – Spouse”), this rider will also continue, provided the following
conditions are met:
1. The spouse is at least 50 years old on the date the contract is continued; and
2. The spouse becomes the annuitant and sole contract owner.
 
If the rider is in the Growth Phase at the time of spousal continuation:
1. The rider will continue in the Growth Phase;
2. On the date the rider is continued, the ING LifePay Base will be reset to equal the then current contract value;
and
3. The ING LifePay charges will restart and be the same as were in effect prior to the notice date.
 
If the rider is in the Withdrawal Phase at the time of spousal continuation:
1. The rider will continue in the Withdrawal Phase;  
2. On the contract anniversary following the date the rider is continued,
(a) If the surviving spouse had not been the annuitant before the owner’s death, the Maximum Annual
Withdrawal is recalculated by multiplying the contract value on that contract anniversary by 5%, and the
Maximum Annual Withdrawal is considered to be zero from the notice date to that contract anniversary.
Withdrawals are permitted pursuant to the other provisions of the contract. Withdrawals causing the
contract value to fall to zero will terminate the contract and rider.
(b) If the surviving spouse was the annuitant before the owner’s death, the Maximum Annual Withdrawal is
recalculated as the greater of the Maximum Annual Withdrawal on the notice date (adjusted for excess
withdrawals thereafter) and the Maximum Annual Withdrawal resulting from multiplying the contract
value on that contract anniversary by 5%. The Maximum Annual Withdrawal does not go to zero on the
notice date, and withdrawals may continue under the rider provisions.
3. The rider charges will restart on the contract anniversary following the date the rider is continued and will be
  the same as were in effect prior to the notice date.  
 
Change of Owner or Annuitant. Other than as provided above under “Continuation After Death–Spouse,” you
may not change the annuitant. The rider and rider charges will terminate upon change of owner, including adding an
additional owner, except for the following ownership changes:
1. spousal continuation as described above;  
2. change of owner from one custodian to another custodian;
3. change of owner from a custodian for the benefit of an individual to the same individual;
4. change of owner from an individual to a custodian for the benefit of the same individual;
5. collateral assignments;  
6. change in trust as owner where the individual owner and the grantor of the trust are the same individual;
7. change of owner from an individual to a trust where the individual owner and the grantor of the trust are the
  same individual; and  
8. change of owner from a trust to an individual where the individual owner and the grantor of the trust are the
  same individual.  
 
Surrender Charges. If you elect the ING LifePay rider, your withdrawals will be subject to surrender charges if
they exceed the free withdrawal amount. However, once your Contract value is zero, the periodic payments under the
ING LifePay rider are not subject to surrender charges.
 
Loans. The portion of any Contract value used to pay off an outstanding loan balance will reduce the ING LifePay
Base or Maximum Annual Withdrawal as applicable. We do not recommend the ING LifePay rider if loans are
contemplated.
 
PRO.70600-13 L-6

 

 

Effect of ING LifePay Rider on Death Benefit. If you die before Lifetime Automatic Periodic Benefit Status
begins under the ING LifePay rider, the death benefit is payable, but the rider terminates. However, if the beneficiary
is the owner’s spouse, and the spouse elects to continue the contract, the death benefit is not payable until the
spouse’s death. Thus, you should not purchase this rider with multiple owners, unless the owners are spouses.
See “ING LifePay Minimum Guaranteed Withdrawal Benefit Rider–Death of Owner or Annuitant” for further
information.

While in Lifetime Automatic Periodic Benefit Status, if the owner who is not the annuitant dies, we will continue to
pay the periodic payments that the owner was receiving under the ING LifePay rider to the annuitant. While in
Lifetime Automatic Periodic Benefit Status, if an owner who is also the annuitant dies, the periodic payments will
stop. No other death benefit is payable.

Taxation. For more information about the tax treatment of amounts paid to you under the ING LifePay Rider, see
“Federal Tax Considerations–Tax Consequences of Living Benefits and Death Benefit.”

ING Joint LifePay Minimum Guaranteed Withdrawal Benefit (ING Joint LifePay) Rider. The ING Joint
LifePay rider generally provides, subject to the restrictions and limitations below, that we will guarantee a minimum
level of annual withdrawals you may take from the contract for the lifetime of both you and your spouse, even if these
withdrawals deplete your contract value to zero. Annual withdrawals in excess of the annual withdrawal amount
allowed under the rider will reduce the amount of allowable future annual withdrawals, and may result in your
inability to receive lifetime payments under the rider. You may wish to purchase this rider if you are married and are
concerned that you and your spouse may outlive your income.

Purchase. The ING Joint LifePay rider is only available for purchase by individuals who are married at the time of
purchase and eligible to elect spousal continuation (as defined by the Tax Code) when the death benefit becomes
payable. We refer to these individuals as spouses. Certain ownership, annuitant, and beneficiary designations are
required in order to purchase the ING Joint LifePay rider. See “Ownership, Annuitant, and Beneficiary Designation
Requirements” below.

The minimum issue age is 60 and the maximum issue age is 80. Both spouses must meet these issue age requirements
on the contract anniversary on which the ING Joint LifePay rider is effective. Some broker-dealers may limit the
maximum issue age to ages younger than age 80, but in no event lower than age 60. We reserve the right to change
the minimum or maximum issue ages on a nondiscriminatory basis. The ING Joint LifePay rider is currently only
available if you have not already purchased an optional living benefit rider. We do, however, reserve the right to
allow the purchase of more than one optional living benefit rider in the future, as well as the right to allow contract
owners to replace the ING LifePay rider with the ING Joint LifePay rider. The ING Joint LifePay rider will not be
issued if the initial allocation to investment options is not in accordance with the investment option restrictions
described in “Investment Option Restrictions” below. The Company in its discretion may allow the ING Joint LifePay
rider to be elected during the 30-day period preceding a contract anniversary. Such election must be received in good
order, including owner, annuitant, and beneficiary designations and compliance with the investment restrictions
described below. The ING Joint LifePay rider will be effective as of that contract anniversary.

Ownership, Annuitant, and Beneficiary Designation Requirements. Certain ownership, annuitant, and
beneficiary designations are required in order to purchase the ING Joint LifePay rider. These designations depend
upon whether the contract is issued as a nonqualified contract or as an IRA. In both cases the ownership, annuitant,
and beneficiary designations must allow for the surviving spouse to continue the contract when the death benefit
becomes payable, as provided by the Tax Code. Non-natural, custodial owners are only allowed with IRAs
(“custodial IRAs”). Joint annuitants are not allowed. The necessary ownership, annuitant, and/or beneficiary
designations are described below. Applications that do not meet the requirements below will be rejected. We reserve
the right to verify the date of birth and social security number of both spouses.

Nonqualified Contracts. For a jointly owned contract, the owners must be spouses, and the annuitant must be
one of the owners. For a contract with only one owner, the owner’s spouse must be the sole primary beneficiary, and
the annuitant must be one of the spouses.

IRAs. There may only be one owner of a contract issued as an IRA, who must also be the annuitant. The owner’s
spouse must be the sole primary beneficiary.

PRO.70600-13                                                                              L-7

 

Custodial IRAs. While we do not maintain individual owner and beneficiary designations for IRAs held by an
outside custodian, the ownership and beneficiary designations with the custodian must comply with the requirements
listed in “IRAs” above. The annuitant must be the same as the beneficial owner of the custodial IRA. We require the
custodian to provide us the name and date of birth of both the owner and the owner’s spouse.

Rider Date. The rider date is the date the ING Joint LifePay rider becomes effective. The rider date is also the
contract date if you purchased the ING Joint LifePay rider when the contract was issued.

Charge. The charge for the ING Joint LifePay rider is deducted quarterly from your contract value as follows:

  As an Annual Charge
  (Charge Deducted Quarterly)		   As a Quarterly Charge   Maximum Annual Charge if
  Reset Option Elected
  0.65% of contract value   0.1625% of contract value   1.50% of contract value

             
The charge is deducted during the period starting on the rider date and up to your rider’s Lifetime Automatic Periodic
Benefit status. Lifetime Automatic Periodic Benefit Status will occur if your contract value is reduced to zero and
other conditions are met. The charge may be subject to change if you elect the reset option, subject to the maximum
annual charge. For more information on this rider, including when Lifetime Automatic Periodic Benefit status begins,
please see “ING Joint LifePay Minimum Guaranteed Withdrawal Benefit Rider” below. If you surrender your
contract or begin receiving income phase payments, the charge is pro-rated based upon the amount owed at the time.
We reserve the right to change the charge for this rider, subject to the maximum annual charge. If changed, the new
charge will only apply to riders issued after this change.

If the contract value in the subaccounts is insufficient for the charge, then we deduct it from any Fixed Interest
Allocations, in which case a Market Value Adjustment may apply. Currently, a Market Value Adjustment would not
apply when this charge is deducted from a Fixed Interest Allocation. With Fixed Interest Allocations, we deduct the
charge from the Fixed Interest Allocation having the nearest maturity. For more information about the Fixed Interest
Allocation, including the Market Value Adjustment, please see Appendix C. We reserve the right to change the
charge for this rider, subject to the maximum annual charge. If changed, the new charge will only apply to riders
issued after the change.

No Cancellation. Once you purchase the ING Joint LifePay rider, you may not cancel it unless you a) cancel the
contract during the contract’s free look period, b) surrender, c) begin income phase payments, or d) otherwise
terminate the contract pursuant to its terms. These events automatically cancel the ING Joint LifePay rider. Once the
contract continues beyond the free look period, you may not cancel the rider. The Company may, at its discretion,
cancel and/or replace a rider at your request in order to renew or reset a rider.

Termination. The ING Joint LifePay rider a “living benefit,” which means the guaranteed benefits offered by the
rider is intended to be available to you while you are living and while your contract is in the accumulation phase.
Generally, the optional riders automatically terminate if you:

1.      Terminate your contract pursuant to its terms during the accumulation phase, surrender, or begin receiving
income phase payments in lieu of payments under the rider;
2.      Die during the accumulation phase (first owner to die in the case of joint owners, or death of annuitant if the
contract is a custodial IRA), unless your spouse elects to continue the contract (and your spouse is active for
purposes of the ING Joint LifePay rider); or
3.      Change the owner of the contract (other than a spousal continuation by an active spouse).

Other circumstances that may cause a rider to terminate automatically are discussed below with each rider.

PRO.70600-13                                                                      L-8

 

Active Status. Once the ING Joint LifePay rider has been issued, a spouse must remain in “active” status in order
to exercise rights and receive the benefits of the ING Joint LifePay rider after the first spouse’s death by electing
spousal continuation. In general, changes to the ownership, annuitant, and/or beneficiary designation requirements
noted above will result in one spouse being designated as “inactive.” Inactive spouses are not eligible to continue the
benefits of the ING Joint LifePay rider after the death of the other spouse. Once designated “inactive,” a spouse may
not regain active status under the ING Joint LifePay rider. Specific situations that will result in a spouse’s designation
as “inactive” include the following:
1.      For nonqualified contracts where the spouses are joint owners, the removal of a joint owner (if that spouse does
not automatically become sole primary beneficiary pursuant to the terms of the contract), or the change of one
joint owner to a person other than an active spouse.
2. For nonqualified contracts where one spouse is the owner and the other spouse is the sole primary beneficiary,
as well as for IRA contracts (including custodial IRAs), the addition of a joint owner who is not also an active
spouse, or any change of beneficiary (including the addition of primary beneficiaries).
3. In the event of the death of one spouse (in which case the deceased spouse becomes inactive).
 
An owner may also request that one spouse be treated as inactive. In the case of joint-owned contracts, both contract
owners must agree to such a request. An inactive spouse is not eligible to exercise any rights or receive any benefits
under the ING Joint LifePay rider. However, all charges for the ING Joint LifePay rider will continue to apply,
even if one spouse becomes inactive, regardless of the reason. You should make sure you understand the
impact of beneficiary and owner changes on the ING Joint LifePay rider prior to requesting any such changes.
 
A divorce will terminate the ability of an ex-spouse to continue the contract. See “Divorce” below.
 
Lifetime Guaranteed Withdrawal Status. This status begins on the date the ING Joint LifePay rider is issued (the
“effective date of the ING Joint LifePay rider”) and continues until the earliest of: not used in other sections
1. the income phase commencement date;  
2. reduction of the contract value to zero by a withdrawal in excess of the Maximum Annual Withdrawal;
3. reduction of the contract value to zero by a withdrawal less than or equal to the Maximum Annual Withdrawal;
4. the surrender of the contract; or  
5. the death of the owner (first owner, in the case of joint owners, or the annuitant, in the case of a custodial IRA),
unless your active spouse beneficiary elects to continue the contract.
 
For more information on the impact of a withdrawal reducing the contract value to zero on the Maximum Annual
Withdrawal, please see “Lifetime Automatic Periodic Benefit Status” below. As described below, certain features of
the ING Joint LifePay rider may differ depending upon whether you are in Lifetime Guaranteed Withdrawal Status.
 
           How the ING Joint LifePay Rider Works. The ING Joint LifePay rider has two phases. The first phase, called
the Growth Phase, begins on the effective date of the ING Joint LifePay rider and ends as of the business day before
the first withdrawal is taken (or when the income phase commencement date is reached). The second phase is called
the Withdrawal Phase. This phase begins as of the date you take the first withdrawal of any kind under the contract
(other than investment advisory fees, as described below), or the income phase commencement date, whichever occurs
first. During the accumulation phase of the contract, the ING Joint LifePay rider may be in either the Growth Phase or
the Withdrawal Phase. During the income phase of the contract, the rider may only be in the Withdrawal Phase. The
rider is initially in Lifetime Guaranteed Withdrawal Status. While in this status you may terminate the rider by electing
to enter the income phase and begin receiving income phase payments. However, if you have not elected to begin
receiving income phase payments, and the rider enters Lifetime Automatic Periodic Benefit Status because the contract
value has been reduced to zero, the rider and contract terminate (other than those provisions regarding the payment of
the Maximum Annual Withdrawal, as described below) and you can no longer elect to receive income phase payments.
 
 
PRO.70600-13 L-9

 

 

Benefits paid under the ING Joint LifePay rider require the calculation of the Maximum Annual Withdrawal. The ING
Joint LifePay Base (referred to as the “MGWB Base” in the contract) is used to determine the Maximum Annual
Withdrawal and is calculated as follows:
1.      If you purchased the ING Joint LifePay rider on the contract date, the initial ING Joint LifePay Base is equal to
the initial premium.
2.      If you purchased the ING Joint LifePay rider after the contract date, the initial ING Joint LifePay Base is equal to
the contract value on the effective date of the ING Joint LifePay rider.
3.      The initial ING Joint LifePay Base is increased dollar-for-dollar by any premiums received during the Growth
Phase (“eligible premiums”). The ING Joint LifePay Base is also increased to equal the contract value if the
contract value is greater than the current ING Joint LifePay Base, valued on each quarterly contract anniversary
after the effective date of the ING Joint LifePay rider during the Growth Phase. The ING Joint LifePay Base has
no additional impact on the calculation of income phase payments or withdrawal benefits.

Currently, any additional premiums paid during the Withdrawal Phase are not eligible premiums for purposes of
determining the ING Joint LifePay Base or the Maximum Annual Withdrawal; however, we reserve the right to treat
such premiums as eligible premiums at our discretion, in a nondiscriminatory manner. Premiums received during the
Withdrawal Phase do increase the contract value used to determine the reset Maximum Annual Withdrawal if you
choose to reset the ING Joint LifePay rider (see “ING Joint LifePay Reset Option,” below). We reserve the right to
discontinue allowing premium payments during the Withdrawal Phase.

Determination of the Maximum Annual Withdrawal. The Maximum Annual Withdrawal is determined on the
date the Withdrawal Phase begins. It equals 5% of the greater of the contract value and the ING Joint LifePay Base, as
of the last day of the Growth Phase. The first withdrawal after the effective date of the ING Joint LifePay rider (which
causes the end of the Growth Phase) is treated as occurring on the first day of the Withdrawal Phase, immediately after
calculation of the Maximum Annual Withdrawal.

If the ING Joint LifePay rider is in the Growth Phase, and the income phase commencement date is reached, the ING
Joint LifePay rider will enter the Withdrawal Phase and income phase payments will begin. In lieu of the income phase
options under the Contract, you may elect a life only income phase option under which we will pay the greater of the
income phase payout under the Contract and equal annual payments of the Maximum Annual Withdrawal, provided
that, if both spouses are active, payments under the life only income phase option will be calculated using the joint life
expectancy table for both spouses. If only one spouse is active, payments will be calculated using the single life
expectancy table for the active spouse.

Withdrawals in a contract year that do not exceed the Maximum Withdrawal Amount do not reduce the Maximum
Withdrawal Amount. However, if withdrawals in any contract year exceed the Maximum Annual Withdrawal (an
“excess withdrawal”), the Maximum Annual Withdrawal will be reduced on a pro-rata basis. This means that the
Maximum Annual Withdrawal will be reduced by the same proportion as the excess withdrawal is of the contract
value determined after the deduction for the amount withdrawn up to the Maximum Annual Withdrawal but before the
deduction of the excess withdrawal.

When a withdrawal is made, the total withdrawals taken in a contract year are compared with the current Maximum
Annual Withdrawal. To the extent that the withdrawal taken causes the total withdrawals in that year to exceed the
current Maximum Annual Withdrawal, that withdrawal is considered excess. For purposes of determining whether the
Maximum Annual Withdrawal has been exceeded, any applicable Market Value Adjustment or surrender charges will
not be considered. However, for purposes of determining the Maximum Annual Withdrawal reduction after an excess
withdrawal, any surrender charges and/or Market Value Adjustment are considered to be part of the withdrawal, and
will be included in the pro-rata adjustment to the Maximum Annual Withdrawal. See Illustration 1 and 2 below for
examples of this concept.

PRO.70600-13                                                                       L-10

 

Required Minimum Distributions. Withdrawals taken from the contract to satisfy the Required Minimum
Distribution rules of the Tax Code are considered withdrawals for purposes of the rider, and will begin the Withdrawal
Phase if the Withdrawal Phase has not already started. Any such withdrawal which exceeds the Maximum Annual
Withdrawal for a specific contract year, will not be deemed excess withdrawals in that contract year for purposes of
the ING Joint LifePay rider, subject to the following:
1.     If the contract owner’s Required Minimum Distribution for a calendar year (determined on a date on or before
January 31 of that year), applicable to the contract, is greater than the Maximum Annual Withdrawal on that
date, an Additional Withdrawal Amount will be set equal to that portion of the Required Minimum Distribution
that exceeds the Maximum Annual Withdrawal.
2.
 You may withdraw the Additional Withdrawal Amount from this contract without it being deemed an excess
withdrawal.
3. Any withdrawals taken in a contract year will count first against the Maximum Annual Withdrawal for that
  contract year.  
4. Once the Maximum Annual Withdrawal for the then current contract year has been taken, additional amounts
  withdrawn in excess of the Maximum Annual Withdrawal will count against and reduce any Additional
  Withdrawal Amount.  
5. Withdrawals that exceed the Additional Withdrawal Amount are excess withdrawals and will reduce the
  Maximum Annual Withdrawal on a pro-rata basis, as described above.
6. The Additional Withdrawal Amount is reset to zero at the end of each calendar year, and remains at zero until it
is reset in January of the following calendar year, even if, pursuant to the Tax Code, the contract owner may
take a Required Minimum Distribution for that calendar year after the end of the calendar year. The Additional
Withdrawal Amount, when recalculated, will not include your Required Minimum Distribution for a calendar
year, or any portion thereof, that may otherwise be taken after that calendar year’s end.
7. If the contract is still in the Growth Phase on the date the Additional Withdrawal Amount is determined, but
enters the Withdrawal Phase later during that calendar year, the Additional Withdrawal Amount will be equal to
the amount in excess of the Maximum Annual Withdrawal Amount necessary to satisfy the Required Minimum
Distribution for that year (if any).
 
See Illustration 3, below.
 
Investment Advisory Fees. Withdrawals taken pursuant to a program established by the contract owner for the
payment of investment advisory fees to a named third party investment adviser for advice on management of the
contract’s values will not cause the Withdrawal Phase to begin. During the Growth Phase, such withdrawals reduce the
ING Joint LifePay Base on a pro-rata basis, and during the Withdrawal Phase, these withdrawals are treated as any
other withdrawal.
 
Lifetime Automatic Periodic Benefit Status. If the contract value is reduced to zero by a withdrawal in excess of
the Maximum Annual Withdrawal, the contract and the ING Joint LifePay rider will terminate due to the pro-rata
reduction described in “Determination of the Maximum Annual Withdrawal,” above.
 
If the contract value is reduced to zero for a reason other than a withdrawal in excess of the Maximum Annual
Withdrawal while the ING Joint LifePay rider is in Lifetime Guaranteed Withdrawal Status, the ING Joint LifePay
rider will enter Lifetime Automatic Periodic Benefit Status and you are no longer entitled to make withdrawals.
Instead, under the rider you will begin to receive periodic payments in an annual amount equal to the Maximum
Annual Withdrawal.
 
When the ING Joint LifePay rider enters Lifetime Automatic Periodic Benefit Status:
1. the contract will provide no further benefits (including death benefits) other than as provided under the ING
Joint LifePay rider;
2. no further premium payments will be accepted; and
3. any other riders attached to the contract will terminate, unless otherwise specified in that rider.
 
During Lifetime Automatic Periodic Benefit Status, we will pay you periodic payments in an annual amount equal to
the Maximum Annual Withdrawal. The time period for which we will make these payments will depend upon whether
one or two spouses are active under the ING Joint LifePay rider at the time this status begins. If both spouses are
active under the ING Joint LifePay rider, these payments will cease upon the death of the second spouse, at which time
both the ING Joint LifePay rider and the contract will terminate without further value. If only one spouse is active
under the ING Joint LifePay rider, the payments will cease upon the death of the active spouse, at which time both the
ING Joint LifePay rider and the contract will terminate without value.
 
PRO.70600-13 L-11

 

 

If the Maximum Annual Withdrawal exceeds the net withdrawals taken the contract year when the ING Joint LifePay
rider enters Lifetime Automatic Periodic Benefit Status (including the withdrawal that results in the contract value
decreasing to zero), that difference will be paid immediately to the contract owner. The periodic payments will begin
on the last day of the first full contract year following the date the ING Joint LifePay rider enters Lifetime Automatic
Periodic Benefit Status and will continue to be paid annually thereafter.

You may elect to receive systematic withdrawals pursuant to the terms of the contract. Under a systematic withdrawal,
either a fixed amount or an amount based upon a percentage of the contract value will be withdrawn from your
contract and paid to you on a scheduled basis, either monthly, quarterly, or annually. If, at the time the ING Joint
LifePay rider enters Lifetime Automatic Periodic Benefit Status, you are receiving systematic withdrawals under the
contract more frequently than annually, the periodic payments will be made at the same frequency in equal amounts
such that the sum of the payments in each contract year will equal the annual Maximum Annual Withdrawal. Such
payments will be made on the same payment dates as previously set up, if the payments were being made monthly or
quarterly. If the payments were being made semi-annually or annually, the payments will be made at the end of the
half-contract year or contract year, as applicable.

ING Joint LifePay Reset Option. Beginning one year after the Withdrawal Phase begins, you may choose to reset
the Maximum Annual Withdrawal, if 5% of the contract value would be greater than your current Maximum Annual
Withdrawal. You must elect to reset by a request in a form satisfactory to us. On the date the request is received (the
“Reset Effective Date”), the Maximum Annual Withdrawal will increase to be equal to 5% of the contract value on the
Reset Effective Date. The reset option is only available when the ING Joint LifePay rider is in Lifetime Guaranteed
Withdrawal Status. We reserve the right to limit resets to the contract anniversary.

After exercising the reset option, you must wait one year before electing to reset again. We will not accept a request to
reset if the new Maximum Annual Withdrawal on the date the request is received would be less than your current
Maximum Annual Withdrawal.

If the reset option is exercised, the charge for the ING Joint LifePay rider will be equal to the charge then in effect for
a newly purchased rider but will not exceed the maximum annual charge of 1.50%. However, we guarantee that the
ING Joint LifePay rider charge will not increase for resets exercised within the first five contract years. See Illustration
4, below.

Investment Option Restrictions. In order to mitigate the insurance risk inherent in our guarantee to provide you
and your spouse with lifetime payments (subject to the terms and restrictions of the ING Joint LifePay rider, as
described in this supplement), we require that your contract value be allocated in accordance with certain limitations.
In general, to the extent that you choose not to invest in the Accepted Funds, we require that 20% of the amount not so
invested be invested in the Fixed Allocation Fund. We will require this allocation regardless of your investment
instructions to the contrary, as described further below.

Accepted Funds. Currently, the Accepted Funds are:  
· Fixed Account II  
· Fixed Interest Division  
· ING Liquid Assets Portfolio  
· ING Solution 2015 Portfolio  
· ING Solution 2025 Portfolio  
· ING Solution 2035 Portfolio  
· ING Solution Income Portfolio  
· ING T. Rowe Price Capital Appreciation Portfolio

If this rider was purchased before January 12, 2009, the following are additional Accepted Funds:
       
· ING Franklin Templeton Founding Strategy Portfolio; and
· ING WisdomTreeSM Global High-Yielding Equity Index Portfolio
      
No rebalancing is necessary if the contract value is allocated entirely to Accepted Funds. We may change these
designations at any time upon 30 days’ notice to you. If a change is made, the change will apply to contract value
allocated to such portfolios after the date of the change.
 
 
PRO.70600-13 L-12

 

 

Fixed Allocation Funds. Currently, the Fixed Allocation Funds are:
· ING BlackRock Inflation Protected Bond Portfolio
· ING Bond Portfolio  
· ING Intermediate Bond Portfolio  
· ING U.S. Bond Index Portfolio  
 
You may allocate your contract value to one or more Fixed Allocated Funds. We consider the ING Intermediate
Bond Portfolio to be the default Fixed Allocation Fund in connection with Fixed Allocation Funds Automatic
Rebalancing.
 
Other Funds. All portfolios available under the contract other than Accepted Funds or Fixed Allocation Funds are
considered Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing. If the contract value in the Fixed Allocation Funds is less than
20% of the total contract value allocated to the Fixed Allocation Funds and Other Funds on any ING Joint LifePay
Rebalancing Date, we will automatically rebalance the contract value allocated to the Fixed Allocation Funds and
Other Funds so that 20% of this amount is allocated to the Fixed Allocation Funds. Accepted Funds are excluded from
Fixed Allocation Funds Automatic Rebalancing. Any rebalancing is done on a pro-rata basis among the Other Funds
and will be the last transaction processed on that date. The ING Joint LifePay Rebalancing Dates occur on each
contract anniversary and after the following transactions:
1. receipt of additional premiums;  
2. transfer or reallocation among the Fixed Allocation Funds or Other Funds, whether automatic or specifically
  directed by you; and  
3. withdrawals from the Fixed Allocation Funds or Other Funds.
 
Fixed Allocation Funds Automatic Rebalancing is separate from any other automatic rebalancing under the contract.
However, if the other automatic rebalancing under the contract causes the allocations to be out of compliance with the
investment option restrictions noted above, Fixed Allocation Funds Automatic Rebalancing will occur immediately
after the automatic rebalancing to restore the required allocations. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing.”
 
In certain circumstances, Fixed Allocation Funds Automatic Rebalancing may result in a reallocation into the Fixed
Allocation Fund even if you have not previously been invested in it. See “Appendix J–Examples of Fixed Allocation
Funds Automatic Rebalancing, Example I.” By electing to purchase the ING Joint LifePay rider, you are
providing the Company with direction and authorization to process these transactions, including reallocations
into the Fixed Allocation Fund. You should not purchase the ING Joint LifePay rider if you do not wish to have
your contract value reallocated in this manner.
         
Divorce. Generally, in the event of a divorce, the spouse who retains ownership of the contract will continue to be
entitled to all rights and benefits of the ING Joint LifePay rider, while the ex-spouse will no longer have any such
rights or be entitled to any such benefits. In the event of a divorce during Lifetime Guaranteed Withdrawal Status, the
ING Joint LifePay rider continues, and terminates upon the death of the owner (first owner in the case of joint owners,
or the annuitant in the case of a custodial IRA). Although spousal continuation may be available under the Tax Code
for a subsequent spouse, the ING Joint LifePay rider cannot be continued by the new spouse. As the result of the
divorce, we may be required to withdraw assets for the benefit of an ex-spouse. Any such withdrawal will be
considered a withdrawal for purposes of the Maximum Annual Withdrawal amount. In other words, if a withdrawal
incident to a divorce exceeds the Maximum Annual Withdrawal amount, it will be considered an excess withdrawal.
See “Determination of the Maximum Annual Withdrawal,” above. As noted, in the event of a divorce there is no
change to the Maximum Annual Withdrawal and we will continue to deduct charges for the ING Joint LifePay rider.
 
In the event of a divorce during Lifetime Automatic Periodic Benefit Status, there will be no change to the periodic
payments made. Payments will continue until both spouses are deceased.
Death of Owner. The death of the owner (in the case of joint owners, the first owner, or for custodial IRAs, the
annuitant) during Lifetime Guaranteed Withdrawal Status may cause the termination of the ING Joint LifePay rider
and its charges, depending upon whether one or both spouses are in active status at the time of death, as described
below.
  
PRO.70600-13 L-13

 

 

1. If both spouses are in active status: If the surviving spouse elects to continue the contract and becomes the owner and annuitant, the ING Joint LifePay rider will remain in effect pursuant to its original terms and ING
Joint LifePay coverage and charges will continue. As of the date the contract is continued, the Maximum Annual Withdrawal will be set to the greater of the existing Maximum Annual Withdrawal or 5% of the contract value on the date the contract is continued. Such a reset will not count as an exercise of the ING Joint LifePay Reset Option, and rider charges will not increase.
If the surviving spouse elects not to continue the contract, ING Joint LifePay rider coverage and charges will cease upon the earlier of payment of the death benefit or notice that an alternative distribution option has been chosen.
           
2.    If the surviving spouse is in inactive status: The ING Joint LifePay rider terminates and ING Joint LifePay coverage and charges cease upon proof of death.

Change of Owner or Annuitant. Other than as a result of spousal continuation, you may not change the annuitant.
The ING Joint LifePay rider and rider charges will terminate upon change of owner, including adding an additional
owner, except for the following ownership changes:

1.      spousal continuation by an active spouse, as described above;
2.      change of owner from one custodian to another custodian for the benefit of the same individual;
3.      change of owner from a custodian for the benefit of an individual to the same individual (in order to avoid the
owner’s spouse from being designated inactive, the owner’s spouse must be named sole beneficiary under the
contract);
4.      change of owner from an individual to a custodian for the benefit of the same individual;
5.      collateral assignments;
6.      for nonqualified contracts only, the addition of a joint owner, provided that the additional joint owner is the
original owner’s spouse and is active when added as joint owner;
7.      for nonqualified contracts, removal of a joint owner, provided the removed joint owner is active and becomes
the primary contract beneficiary; and
8.      for nonqualified contracts, change of owner where the owner becomes the sole primary beneficiary and the sole
primary beneficiary becomes the owner if both were active spouses at the time of the change.

Surrender Charges. If you elect the ING Joint LifePay rider, your withdrawals will be subject to surrender charges
if they exceed the free withdrawal amount. However, once your contract value is zero, the periodic payments under the
ING Joint LifePay rider are not subject to surrender charges, nor will these amounts be subject to any other charges
under the contract.

Taxation. For more information about the tax treatment of amounts paid to you under the ING LifePay and the ING
Joint LifePay riders, see “Federal Tax Considerations–Tax Consequences of Living Benefits and Death Benefits.”

ING LifePay and ING Joint LifePay Partial Withdrawal Amount Examples

The following are examples of adjustments to the Maximum Annual Withdrawal amount for withdrawals in excess
of the Maximum Annual Withdrawal:

Illustration 1: Adjustment to the Maximum Annual Withdrawal amount for a withdrawal in excess of the
Maximum Annual Withdrawal, including surrender and/or MVA charges.

Assume the Maximum Annual Withdrawal is $5,000.

The first withdrawal taken during the contract year is $3,000 net, with $500 of surrender and/or MVA charges. The
Maximum Annual Withdrawal is not exceeded.

The next withdrawal taken during the contract year is $1,500 net, with $300 of surrender and/or MVA charges. The
Maximum Annual Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the Maximum
Annual Withdrawal, $5,000.

The next withdrawal taken during the contract year is $1,500 net, with $200 of surrender and/or MVA charges.
Because total net withdrawals taken, $6,000, exceed the Maximum Annual Withdrawal, $5,000, then there is an
adjustment to the Maximum Annual Withdrawal.

Total gross withdrawals during the contract year are $7,000 ($3,000 + $500 + $1,500 + $300 + $1,500 + $200). The
adjustment is the lesser of the amount by which the total gross withdrawals for the year exceed the Maximum Annual
Withdrawal ($7,000 – $5,000 = $2,000), and the amount of the current gross withdrawal ($1,500 + $200 = $1,700).

PRO.70600-13                                                                            L-14

 

If the contract value before this withdrawal is $50,000, then the Maximum Annual Withdrawal is reduced by 3.40%
($1,700 / $50,000) to $4,830 ((1 – 3.40%) * $5,000).

Illustration 2: Adjustment to the Maximum Annual Withdrawal amount for a withdrawal in excess of the
Maximum Annual Withdrawal.

Assume the Maximum Annual Withdrawal is $5,000.

The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender and/or MVA charges. The
Maximum Annual Withdrawal is not exceeded.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. The
Maximum Annual Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the Maximum
Annual Withdrawal, $5,000.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. Because
total net withdrawals taken, $6,000, exceed the Maximum Annual Withdrawal, $5,000, there is an adjustment to the
Maximum Annual Withdrawal.

Total gross withdrawals during the contract year are $6,000 ($3,000 + $1,500 + $1,500). The adjustment is the lesser
of the amount by which the total gross withdrawals for the year exceed the Maximum Annual Withdrawal, $1,000,
and the amount of the current gross withdrawal, $1,500.

If the contract value after the part of the gross withdrawal that was within the Maximum Annual Withdrawal, $500, is
$49,500, then the Maximum Annual Withdrawal is reduced by 2.02% ($1,000 / $49,500) to $4,899 ((1 – 2.02%) *
$5,000).

Illustration 3: A withdrawal exceeds the Maximum Annual Withdrawal amount but does not exceed the
Additional Withdrawal Amount.

Assume the Maximum Annual Withdrawal is $5,000. On January 31, the Required Minimum Distribution for the
current calendar year applicable to this contract is determined to be $6,000. The Additional Withdrawal Amount is set
equal to the excess of this amount above the Maximum Annual Withdrawal, $1,000 ($6,000 – $5,000).

The first withdrawal taken during the contract year is $3,000 net, with $0 of surrender and/or MVA charges. The
Maximum Annual Withdrawal is not exceeded.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. The
Maximum Annual Withdrawal is not exceeded because total net withdrawals, $4,500, do not exceed the Maximum
Annual Withdrawal, $5,000.

The next withdrawal taken during the contract year is $1,500 net, with $0 of surrender and/or MVA charges. Total net
withdrawals taken, $6,000, exceed the Maximum Annual Withdrawal, $5,000, however, the Maximum Annual
Withdrawal is not adjusted until the Additional Withdrawal Amount is exhausted. The amount by which total net
withdrawals taken exceed the Maximum Annual Withdrawal, $1,000 ($6,000 – $5,000), is the same as the Additional
Withdrawal Amount, so no adjustment to the Maximum Annual Withdrawal is made. If total net withdrawals taken
had exceeded the sum of the Maximum Annual Withdrawal and the Additional Withdrawal Amount, then an
adjustment would be made to the Maximum Annual Withdrawal.

Illustration 4: The Reset Option is utilized.

Assume the Maximum Annual Withdrawal is $5,000.

One year after the first withdrawal is taken, the contract value has increased to $120,000, and the Reset Option is
utilized. The Maximum Annual Withdrawal is now $6,000 ($120,000 * 5%).

One year after the Reset Option was first utilized, the contract value has increased further to $130,000. The Reset
Option is utilized again, and the Maximum Annual Withdrawal is now $6,500 ($130,000 * 5%).

PRO.70600-13                                                                                   L-15

 



PART B

 

 

Statement of Additional Information
 
 
RETIREMENT SOLUTIONS — ING ROLLOVER CHOICESM
 
 
DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT
 
 
ISSUED BY
SEPARATE ACCOUNT B
 
 
OF
ING USA ANNUITY AND LIFE INSURANCE COMPANY
 
This Statement of Additional Information is not a prospectus. The information contained herein should be
read in conjunction with the Prospectus for the ING USA Annuity and Life Insurance Company Deferred
Variable Annuity Contract, which is referred to herein. The Prospectus sets forth information that a
prospective investor ought to know before investing. For a copy of the Prospectus, send a written request to
ING USA Annuity and Life Insurance Company, Customer Service Center, P.O. Box 9271, Des Moines, IA
50306-9271 or telephone 1-800-366-0066.
 
 
 
DATE OF PROSPECTUS
AND
STATEMENT OF ADDITIONAL INFORMATION:
 
May 1, 2013

 

 

Table of Contents
 
Item Page
 
Introduction 1
Description of ING USA Annuity and Life Insurance Company 1
Separate Account B 1
Safekeeping of Assets 1
Experts 1
Distribution of Contracts 1
Published Ratings 2
Accumulation Unit Value 2
IRA Partial Withdrawal Option 3
Other Information 3
Financial Statements of Separate Account B 4
Financial Statements of ING USA Annuity and Life Insurance Company 4
 
 
 
 
SAI.70600-13 i  

 

 

Introduction
 
This Statement of Additional Information provides background information regarding Separate Account B.
 
Description of ING USA Annuity and Life Insurance Company
 
ING USA Annuity and Life Insurance Company (“ING USA”) is an Iowa stock life insurance company,
which was originally incorporated in Minnesota on January 2, 1973. ING USA is a wholly owned subsidiary
of Lion Connecticut Holdings Inc. (“Lion Connecticut”), which in turn is a wholly owned subsidiary of ING
Groep N.V. (“ING”), a global financial services holding company based in The Netherlands. ING USA is
authorized to sell insurance and annuities in all states, except New York, and the District of Columbia. ING
USA is authorized to sell insurance and annuities in all states, except New York, and the District of
Columbia. ING USA’s financial statements appear in the Statement of Additional Information.
ING USA is authorized to do business in all jurisdictions except New York. ING USA offers variable
insurance products. ReliaStar Life Insurance Company of New York (“RLNY”), an affiliate of ING USA, is
licensed to do variable annuity business in the state of New York.
 
Separate Account B
 
Separate Account B is a separate account established by the Company for the purpose of funding variable
annuity contracts issued by the Company. The separate account is registered with the Securities and
Exchange Commission (“SEC”) as a unit investment trust under the Investment Company Act of 1940, as
amended. Purchase payments to accounts under the contract may be allocated to one or more of the
subaccounts. Each subaccount invests in the shares of only one of the funds offered under the contracts. We
may make additions to, deletions from or substitutions of available investment options as permitted by law
and subject to the conditions of the contract. The availability of the funds is subject to applicable regulatory
authorization. Not all funds are available in all jurisdictions or under all contracts.
 
Safekeeping of Assets
 
ING USA acts as its own custodian for Separate Account B.
 
Experts
 
The statements of assets and liabilities of Separate Account B as of December 31, 2012, and the related
statements of operations and changes in net assets for the periods disclosed in the financial statements, and
the financial statements of the Company as of December 31, 2012 and 2011, and for each of the three years
in the period ended December 31, 2012, included in the Statement of Additional Information, have been
audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports
thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of
such firm as experts in accounting and auditing.
  
The primary business address of Ernst & Young LLP is Suite 1000, 55 Ivan Allen Jr. Boulevard, Atlanta,
GA 30308.
 
Distribution of Contracts
 
The offering of contracts under the prospectus associated with this Statement of Additional Information
is continuous. Directed Services LLC, an affiliate of ING USA, acts as the principal underwriter (as defined
in the Securities Act of 1933 and the Investment Company Act of 1940, as amended) of the variable
insurance products (the “variable insurance products”) issued by ING USA. The contracts are distributed
through registered representatives of other broker-dealers who have entered into selling agreements with
Directed Services LLC. For the years ended 2012, 2011 and 2010 commissions paid by ING USA, including
amounts paid by its affiliated Companies, RLNY & ILIAC, to Directed Services LLC aggregated
$225,489,553, $218,345,765 and $219,973,765, respectively. All commissions received by the distributor
were passed through to the broker-dealers who sold the contracts. Directed Services LLC is located at 1475
Dunwoody Drive, West Chester, Pennsylvania 19380-1478.
 
SAI.70600-13 1

 

 

Under a management services agreement, last amended in 1995, ING USA provides to Directed Services
LLC certain of its personnel to perform management, administrative and clerical services and the use of
certain facilities. ING USA charges Directed Services LLC for such expenses and all other general and
administrative costs, first on the basis of direct charges when identifiable, and the remainder allocated based
on the estimated amount of time spent by ING USA’s employees on behalf of Directed Services LLC. In the
opinion of management, this method of cost allocation is reasonable. This fee, calculated as a percentage of
average assets in the variable separate accounts, was $141,124,215, $143,404,615 and $146,897,323 for the
years ended 2012, 2011 and 2010, respectively.
 
Published Ratings
 
From time to time, the rating of ING USA as an insurance company by A.M. Best may be referred to in
advertisements or in reports to contract owners. Each year the A.M. Best Company reviews the financial
status of thousands of insurers, culminating in the assignment of Best’s Ratings. These ratings reflect their
current opinion of the relative financial strength and operating performance of an insurance company in
comparison to the norms of the life/health insurance industry. Best’s ratings range from A+ + to F. An A++
and A+ ratings mean, in the opinion of A.M. Best, that the insurer has demonstrated the strongest ability to
meet its respective policyholder and other contractual obligations.
 
Accumulation Unit Value
 
The calculation of the Accumulation Unit Value (“AUV”) is discussed in the prospectus for the Contracts
under Condensed Financial Information. Note that in your Contract, accumulation unit value is referred to as
the Index of Investment Experience. The following illustrations show a calculation of a new AUV and the
purchase of Units (using hypothetical examples). Note that the examples below are calculated for a Contract
issued with the death benefit option with the highest mortality and expense risk charge. The mortality and
expense risk charge associated with other death benefit options are lower than that used in the examples and
would result in higher AUV’s or contract values.
 
Illustration of Calculation of AUV
Example 1.
 
1. AUV, beginning of period $10.00
2. Value of securities, beginning of period $10.00
3. Change in value of securities $0.10
4. Gross investment return (3) divided by (2) 0.01
5. Less daily mortality and expense charge 0.00004280
6. Less asset based administrative charge 0.00000411
7. Net investment return (4) minus (5) minus (6) 0.009953092
8. Net investment factor (1.000000) plus (7) 1.009953092
9. AUV, end of period (1) multiplied by (8) $10.09953092
 
Illustration of Purchase of Units (Assuming no state premium tax)  
Example 2.  
 
1. Initial premium payment $1,000
2. AUV on effective date of purchase (see Example 1) $10.00
3. Number of units purchased (1) divided by (2) 100
4. AUV for valuation date following purchase (see Example 1) $10.09953092
5. Contract Value in account for valuation date following
purchase (3) multiplied by (4)		 $1,009.95
 
 
SAI.70600-13 2

 

 

IRA Partial Withdrawal Option
 
If the contract owner has an IRA contract and will attain age 70½ in the current calendar year, distributions
will be made in accordance with the requirements of Federal tax law. This option is available to assure that
the required minimum distributions from qualified plans under the Internal Revenue Code (the “Code”) are
made. Under the Code, distributions must begin no later than April 1st of the calendar year following the
calendar year in which the contract owner attains age 70½. If the required minimum distribution is not
withdrawn, there may be a penalty tax in an amount equal to 50% of the difference between the amount
required to be withdrawn and the amount actually withdrawn. Even if the IRA Partial Withdrawal Option is
not elected, distributions must nonetheless be made in accordance with the requirements of Federal tax law.
 
ING USA notifies the contract owner of these regulations with a letter mailed in the calendar year in which
the contract owner reaches age 70½ which explains the IRA Partial Withdrawal Option and supplies an
election form. If electing this option, the owner specifies whether the withdrawal amount will be based on a
life expectancy calculated on a single life basis (contract owner’s life only) or, if the contract owner is
married, on a joint life basis (contract owner’s and spouse’s lives combined). The contract owner selects the
payment mode on a monthly, quarterly or annual basis. If the payment mode selected on the election form is
more frequent than annually, the payments in the first calendar year in which the option is in effect will be
based on the amount of payment modes remaining when ING USA receives the completed election form.
ING USA calculates the IRA Partial Withdrawal amount each year based on the minimum distribution rules.
We do this by dividing the contract value by the life expectancy. In the first year withdrawals begin; we use
the contract value as of the date of the first payment. Thereafter, we use the contract value on December 31st
of each year. The life expectancy is recalculated each year. Certain minimum distribution rules govern
payouts if the designated beneficiary is other than the contract owner’s spouse and the beneficiary is more
than ten years younger than the contract owner.
 
Other Information
 
Registration statements have been filed with the SEC under the Securities Act of 1933, as amended, with
respect to the contracts discussed in this Statement of Additional Information. Not all of the information set
forth in the registration statements, amendments and exhibits thereto has been included in this Statement of
Additional Information. Statements contained in this Statement of Additional Information concerning the
content of the contracts and other legal instruments are intended to be summaries. For a complete statement
of the terms of these documents, reference should be made to the instruments filed with the SEC.
 
 
 
 
SAI.70600-13 3

 

 

Financial Statements of Separate Account B
 
The audited financial statements of Separate Account B are listed below and are included in this Statement of
Additional Information:
 
Report of Independent Registered Public Accounting Firm
Statements of Assets and Liabilities as of December 31, 2012
Statements of Operations for the year ended December 31, 2012
Statements of Changes in Net Assets for the years ended December 31, 2012 and 2011
Notes to Financial Statements
 
Financial Statements of ING USA Annuity and Life Insurance Company
 
The audited financial statements of ING USA Annuity and Life Insurance Company are listed below and are
included in this Statement of Additional Information:
 
Report of Independent Registered Public Accounting Firm
Balance Sheets as of December 31, 2012 and 2011
Statements of Operations for the years ended December 31, 2012, 2011 and 2010
Statements of Comprehensive Income for the years ended December 31, 2012, 2011 and 2010
Statements of Changes in Shareholder’s Equity for the years ended December 31, 2012, 2011
and 2010
Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010
Notes to Financial Statements
 
 
 
 
SAI.70600-13 4

 


FINANCIAL STATEMENTS
ING USA Annuity and Life Insurance Company
Separate Account B
Year Ended December 31, 2012
with Report of Independent Registered Public Accounting Firm

S-1


This page intentionally left blank.


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Financial Statements
Year Ended December 31, 2012

 

Contents
 
Report of Independent Registered Public Accounting Firm  1 
 
Audited Financial Statements   
 
Statements of Assets and Liabilities  2 
Statements of Operations  31 
Statements of Changes in Net Assets  61 
Notes to Financial Statements  99 

 


This page intentionally left blank.


Report of Independent Registered Public Accounting Firm 

 

The Board of Directors and Participants
ING USA Annuity and Life Insurance Company

We have audited the accompanying financial statements of ING USA Annuity and Life Insurance Company
Separate Account B (the“Account”), which comprise the statements of assets and liabilities of each of the
investment divisions disclosed in Note 1 as of December 31, 2012, and the related statements of operations
for the year or period then ended, and the statements of changes in net assets for the years or periods
ended December 31, 2012 and 2011.  These financial statements are the responsibility of
the Account’s management. Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. We were not engaged
to perform an audit of the Account’s internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Account’s internal control over financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. Our procedures included
confirmation of securities owned as of December 31, 2012, by correspondence with the transfer agents or
fund companies. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of each of the investment divisions disclosed in Note 1 constituting ING USA Annuity
and Life Insurance Company Separate Account B at December 31, 2012, the results of their operations
for the year or period then ended, and the changes in their net assets for the years or periods
ended December 31, 2012 and 2011, in conformity with U.S. generally accepted accounting principles.

/s/Ernst & Young LLP
Atlanta, Georgia 
April 3, 2013 

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

        Columbia Small   
  BlackRock  Columbia Asset Columbia Small  Company  Columbia VP 
  Global  Allocation  Cap Value  Growth Fund,  Large Cap 
  Allocation V.I.  Fund, Variable  Fund, Variable  Variable Series -  Growth Fund - 
  Fund - Class III  Series - Class A  Series - Class B  Class A  Class 1 
Assets           
Investments in mutual funds           
at fair value  $ 993,488  $ 325  $ 128,890  $ 13  $ 299 
Total assets  993,488  325  128,890  13  299 
 
Liabilities           
Payable to related parties  75  -  23  -  - 
Total liabilities  75  -  23  -  - 
Net assets  $ 993,413  $ 325  $ 128,867  $ 13  $ 299 
 
Total number of mutual fund shares  69,280,864  24,867  8,391,271  968  37,620 
 
Cost of mutual fund shares  $ 928,184  $ 339  $ 143,177  $ 12  $ 283 

 

The accompanying notes are an integral part of these financial statements. 
2

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  Columbia VP  Fidelity® VIP  Fidelity® VIP  Franklin Small   
  Short Duration  Equity-Income Contrafund®  Cap Value  ING Balanced 
  US Government  Portfolio -  Portfolio -  Securities  Portfolio - 
  Fund - Class 1  Service Class 2  Service Class 2  Fund - Class 2  Class S 
Assets           
Investments in mutual funds           
at fair value  $ 3  $ 159,116  $ 670,399  $ 11,060  $ 4,876 
Total assets  3  159,116  670,399  11,060  4,876 
 
Liabilities           
Payable to related parties  -  21  66  -  - 
Total liabilities  -  21  66  -  - 
Net assets  $ 3  $ 159,095  $ 670,333  $ 11,060  $ 4,876 
 
Total number of mutual fund shares  324  8,109,891  25,784,592  606,704  399,691 
 
Cost of mutual fund shares  $ 3  $ 189,411  $ 601,876  $ 7,150  $ 4,714 

 

The accompanying notes are an integral part of these financial statements. 
3

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

        ING American   
      ING American  Funds   
  ING  ING American  Funds Global  International  ING American 
  Intermediate  Funds Asset  Growth and  Growth and  Funds 
  Bond Portfolio -  Allocation  Income  Income  International 
  Class S  Portfolio  Portfolio  Portfolio  Portfolio 
Assets           
Investments in mutual funds           
at fair value  $ 1,185,699  $ 392,947  $ 14,790  $ 11,030  $ 1,009,153 
Total assets  1,185,699  392,947  14,790  11,030  1,009,153 
 
Liabilities           
Payable to related parties  125  30  1  1  106 
Total liabilities  125  30  1  1  106 
Net assets  $ 1,185,574  $ 392,917  $ 14,789  $ 11,029  $ 1,009,047 
 
Total number of mutual fund shares  91,985,927  35,918,349  1,343,313  1,068,815  62,178,250 
 
Cost of mutual fund shares  $ 1,109,604  $ 286,115  $ 13,654  $ 10,543  $ 1,119,263 

 

The accompanying notes are an integral part of these financial statements. 
4

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

        ING BlackRock   
  ING American  ING BlackRock  ING BlackRock  Large Cap  ING BlackRock 
  Funds World  Health Sciences Inflation  Growth  Large Cap 
  Allocation  Opportunities  Protected Bond  Portfolio -  Growth 
  Portfolio -  Portfolio -  Portfolio -  Institutional  Portfolio - 
  Service Class  Service Class  Service Class  Class  Service Class 
Assets           
Investments in mutual funds           
at fair value  $ 185,983  $ 198,656  $ 568,906  $ 69  $ 146,132 
Total assets  185,983  198,656  568,906  69  146,132 
 
Liabilities           
Payable to related parties  16  26  50  -  18 
Total liabilities  16  26  50  -  18 
Net assets  $ 185,967  $ 198,630  $ 568,856  $ 69  $ 146,114 
 
Total number of mutual fund shares  17,078,366  14,914,124  51,954,910  6,292  13,406,612 
 
Cost of mutual fund shares  $ 192,156  $ 161,385  $ 559,157  $ 70  $ 127,424 

 

The accompanying notes are an integral part of these financial statements. 
5

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

    ING Clarion  ING Clarion     
    Global Real  Global Real  ING Clarion  ING Clarion 
    Estate  Estate  Real Estate  Real Estate 
  ING Bond  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Portfolio  Service Class  Service 2 Class  Service Class  Service 2 Class 
Assets           
Investments in mutual funds           
at fair value  $ 446,320  $ 130,689  $ 1,935  $ 283,312  $ 20,240 
Total assets  446,320  130,689  1,935  283,312  20,240 
 
Liabilities           
Payable to related parties  37  13  -  53  3 
Total liabilities  37  13  -  53  3 
Net assets  $ 446,283  $ 130,676  $ 1,935  $ 283,259  $ 20,237 
 
Total number of mutual fund shares  42,628,491  11,763,178  173,256  10,438,908  749,891 
 
Cost of mutual fund shares  $ 422,752  $ 105,915  $ 1,627  $ 228,046  $ 17,590 

 

The accompanying notes are an integral part of these financial statements. 
6

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING DFA  ING FMRSM  ING FMRSM  ING Franklin  ING Franklin 
  World Equity  Diversified Mid  Diversified Mid Income  Income 
  Portfolio -  Cap Portfolio -  Cap Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service Class  Service 2 Class  Service Class  Service 2 Class 
Assets           
Investments in mutual funds           
at fair value  $ 160,733  $ 596,416  $ 30,182  $ 483,726  $ 10,260 
Total assets  160,733  596,416  30,182  483,726  10,260 
 
Liabilities           
Payable to related parties  15  99  4  46  1 
Total liabilities  15  99  4  46  1 
Net assets  $ 160,718  $ 596,317  $ 30,178  $ 483,680  $ 10,259 
 
Total number of mutual fund shares  18,182,444  38,778,680  1,973,969  46,918,127  997,066 
 
Cost of mutual fund shares  $ 130,661  $ 528,972  $ 26,511  $ 443,923  $ 9,169 

 

The accompanying notes are an integral part of these financial statements. 
7

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

ING Franklin
Templeton
  ING Franklin  Founding  ING Global  ING Global  ING Global 
  Mutual Shares  Strategy  Resources  Resources  Resources 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service Class  Adviser Class  Service Class  Service 2 Class 
Assets           
Investments in mutual funds           
at fair value  $ 176,583  $ 768,338  $ 72,220  $ 410,721  $ 21,588 
Total assets  176,583  768,338  72,220  410,721  21,588 
 
Liabilities           
Payable to related parties  16  72  6  59  3 
Total liabilities  16  72  6  59  3 
Net assets  $ 176,567  $ 768,266  $ 72,214  $ 410,662  $ 21,585 
 
Total number of mutual fund shares  20,485,276  85,276,173  3,970,292  21,940,225  1,160,623 
 
Cost of mutual fund shares  $ 159,150  $ 704,778  $ 79,814  $ 447,732  $ 25,139 

 

The accompanying notes are an integral part of these financial statements. 
8

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING Invesco  ING Invesco       
  Van Kampen  Van Kampen  ING JPMorgan  ING JPMorgan  ING JPMorgan 
  Growth and  Growth and  Emerging  Emerging  Small Cap Core 
  Income  Income  Markets Equity  Markets Equity Equity 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service 2 Class  Service Class  Service 2 Class  Service Class 
Assets           
Investments in mutual funds           
at fair value  $ 373,710  $ 44,652  $ 565,618  $ 26,946  $ 223,987 
Total assets  373,710  44,652  565,618  26,946  223,987 
 
Liabilities           
Payable to related parties  66  5  70  3  23 
Total liabilities  66  5  70  3  23 
Net assets  $ 373,644  $ 44,647  $ 565,548  $ 26,943  $ 223,964 
 
Total number of mutual fund shares  15,841,889  1,904,123  27,167,029  1,306,787  14,630,105 
 
Cost of mutual fund shares  $ 356,075  $ 45,831  $ 519,966  $ 24,254  $ 184,392 

 

The accompanying notes are an integral part of these financial statements. 
9

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING JPMorgan         
  Small Cap Core  ING Large Cap  ING Large Cap  ING Large Cap   
  Equity  Growth  Growth  Growth  ING Large Cap 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Value Portfolio - 
  Service 2 Class  Adviser Class  Service Class  Service 2 Class  Service Class 
Assets           
Investments in mutual funds           
at fair value  $ 33,174  $ 1,901,488  $ 214,566  $ 856  $ 76,891 
Total assets  33,174  1,901,488  214,566  856  76,891 
 
Liabilities           
Payable to related parties  4  209  26  -  11 
Total liabilities  4  209  26  -  11 
Net assets  $ 33,170  $ 1,901,279  $ 214,540  $ 856  $ 76,880 
 
Total number of mutual fund shares  2,183,965  134,191,101  14,686,245  58,889  8,412,544 
 
Cost of mutual fund shares  $ 27,289  $ 1,803,880  $ 197,437  $ 655  $ 70,123 

 

The accompanying notes are an integral part of these financial statements. 
10

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING Limited  ING Liquid  ING Liquid  ING Marsico  ING Marsico 
  Maturity Bond  Assets  Assets  Growth  Growth 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service Class  Service 2 Class  Service Class  Service 2 Class 
Assets           
Investments in mutual funds           
at fair value  $ 62,741  $ 822,886  $ 15,421  $ 405,326  $ 16,540 
Total assets  62,741  822,886  15,421  405,326  16,540 
 
Liabilities           
Payable to related parties  14  131  2  84  2 
Total liabilities  14  131  2  84  2 
Net assets  $ 62,727  $ 822,755  $ 15,419  $ 405,242  $ 16,538 
 
Total number of mutual fund shares  6,145,038  822,886,171  15,420,738  21,525,553  884,955 
 
Cost of mutual fund shares  $ 64,909  $ 822,886  $ 15,421  $ 330,271  $ 13,371 

 

The accompanying notes are an integral part of these financial statements. 
11

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

        ING Morgan  ING Morgan 
  ING MFS Total  ING MFS Total  ING MFS  Stanley Global  Stanley Global 
  Return  Return  Utilities  Franchise  Franchise 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service 2 Class  Service Class  Service Class  Service 2 Class 
Assets           
Investments in mutual funds           
at fair value  $ 614,174  $ 30,936  $ 460,236  $ 357,557  $ 59,533 
Total assets  614,174  30,936  460,236  357,557  59,533 
 
Liabilities           
Payable to related parties  102  4  61  40  7 
Total liabilities  102  4  61  40  7 
Net assets  $ 614,072  $ 30,932  $ 460,175  $ 357,517  $ 59,526 
 
Total number of mutual fund shares  38,100,132  1,937,119  30,682,396  21,749,227  3,643,375 
 
Cost of mutual fund shares  $ 596,601  $ 31,475  $ 429,376  $ 294,482  $ 48,975 

 

The accompanying notes are an integral part of these financial statements 
12

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING         
  Oppenheimer         
  Active  ING PIMCO  ING PIMCO  ING PIMCO   
  Allocation  High Yield  Total Return  Total Return  ING Pioneer 
  Portfolio -  Portfolio -  Bond Portfolio -  Bond Portfolio -  Fund Portfolio - 
  Service Class  Service Class  Service Class  Service 2 Class  Service Class 
Assets           
Investments in mutual funds           
at fair value  $ 49,207  $ 590,793  $ 2,930,217  $ 64,895  $ 45,388 
Total assets  49,207  590,793  2,930,217  64,895  45,388 
 
Liabilities           
Payable to related parties  4  66  255  6  6 
Total liabilities  4  66  255  6  6 
Net assets  $ 49,203  $ 590,727  $ 2,929,962  $ 64,889  $ 45,382 
 
Total number of mutual fund shares  4,389,572  55,577,890  239,985,052  5,345,537  3,967,520 
 
Cost of mutual fund shares  $ 47,082  $ 545,878  $ 2,867,371  $ 62,565  $ 45,005 

 

The accompanying notes are an integral part of these financial statements. 
13

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

        ING Retirement   
  ING Pioneer  ING Retirement  ING Retirement  Moderate  ING Retirement 
  Mid Cap Value  Conservative  Growth  Growth  Moderate 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Adviser Class  Adviser Class  Adviser Class  Adviser Class 
Assets           
Investments in mutual funds           
at fair value  $ 438,357  $ 584,981  $ 4,209,105  $ 2,853,203  $ 1,668,639 
Total assets  438,357  584,981  4,209,105  2,853,203  1,668,639 
 
Liabilities           
Payable to related parties  72  56  614  322  175 
Total liabilities  72  56  614  322  175 
Net assets  $ 438,285  $ 584,925  $ 4,208,491  $ 2,852,881  $ 1,668,464 
 
Total number of mutual fund shares  38,758,363  61,706,844  372,817,093  248,320,581  144,096,661 
 
Cost of mutual fund shares  $ 419,112  $ 544,421  $ 3,457,821  $ 2,375,532  $ 1,418,866 

 

The accompanying notes are an integral part of these financial statements. 
14

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING T. Rowe  ING T. Rowe  ING T. Rowe  ING T. Rowe  ING T. Rowe 
  Price Capital  Price Capital  Price Equity  Price Equity  Price 
  Appreciation  Appreciation  Income  Income  International 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Stock Portfolio - 
  Service Class  Service 2 Class  Service Class  Service 2 Class  Service Class 
Assets           
Investments in mutual funds           
at fair value  $ 2,461,723  $ 77,170  $ 645,295  $ 24,317  $ 144,838 
Total assets  2,461,723  77,170  645,295  24,317  144,838 
 
Liabilities           
Payable to related parties  295  8  88  3  17 
Total liabilities  295  8  88  3  17 
Net assets  $ 2,461,428  $ 77,162  $ 645,207  $ 24,314  $ 144,821 
 
Total number of mutual fund shares  98,233,143  3,091,765  49,071,851  1,863,343  12,379,340 
 
Cost of mutual fund shares  $ 2,213,336  $ 71,673  $ 590,428  $ 23,420  $ 155,819 

 

The accompanying notes are an integral part of these financial statements. 
15

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

        ING American   
  ING Templeton  ING Templeton    Century Small-  ING Baron 
  Global Growth  Global Growth  ING Diversified  Mid Cap Value  Growth 
  Portfolio -  Portfolio -  International  Portfolio -  Portfolio - 
  Service Class  Service 2 Class  Fund - Class R  Service Class  Service Class 
Assets           
Investments in mutual funds           
at fair value  $ 243,298  $ 4,627  $ 100  $ 1,828  $ 351,077 
Total assets  243,298  4,627  100  1,828  351,077 
 
Liabilities           
Payable to related parties  35  -  -  -  - 
Total liabilities  35  -  -  -  - 
Net assets  $ 243,263  $ 4,627  $ 100  $ 1,828  $ 351,077 
 
Total number of mutual fund shares  19,448,305  372,256  10,906  151,946  15,145,683 
 
Cost of mutual fund shares  $ 237,589  $ 4,570  $ 119  $ 1,615  $ 250,122 

 

The accompanying notes are an integral part of these financial statements. 
16

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING Columbia         
  Small Cap  ING Davis New    ING Growth  ING Growth 
  Value II  York Venture  ING Global  and Income  and Income 
  Portfolio -  Portfolio -  Bond Portfolio -  Core Portfolio -  Core Portfolio - 
  Service Class  Service Class  Service Class  Initial Class  Service Class 
Assets           
Investments in mutual funds           
at fair value  $ 125,010  $ 244,783  $ 8,567  $ 711  $ 5,715 
Total assets  125,010  244,783  8,567  711  5,715 
 
Liabilities           
Payable to related parties  11  19  -  -  1 
Total liabilities  11  19  -  -  1 
Net assets  $ 124,999  $ 244,764  $ 8,567  $ 711  $ 5,714 
 
Total number of mutual fund shares  10,908,387  13,055,071  746,217  23,722  191,771 
 
Cost of mutual fund shares  $ 84,068  $ 206,471  $ 8,363  $ 649  $ 5,812 

 

The accompanying notes are an integral part of these financial statements. 
17

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

    ING Invesco  ING Invesco     
  ING Invesco  Van Kampen  Van Kampen    ING 
  Van Kampen  Equity and  Equity and  ING JPMorgan  Oppenheimer 
  Comstock  Income  Income  Mid Cap Value  Global 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Initial Class  Service Class  Service Class  Initial Class 
Assets           
Investments in mutual funds           
at fair value  $ 189,092  $ 1,521  $ 176,309  $ 168,053  $ 4,776 
Total assets  189,092  1,521  176,309  168,053  4,776 
 
Liabilities           
Payable to related parties  20  19  -  13  1 
Total liabilities  20  19  -  13  1 
Net assets  $ 189,072  $ 1,502  $ 176,309  $ 168,040  $ 4,775 
 
Total number of mutual fund shares  16,428,471  41,762  4,866,380  10,063,027  317,151 
 
Cost of mutual fund shares  $ 163,261  $ 1,389  $ 152,753  $ 142,410  $ 4,237 

 

The accompanying notes are an integral part of these financial statements. 
18

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING         
  Oppenheimer  ING PIMCO       
  Global  Total Return  ING Solution  ING Solution  ING Solution 
  Portfolio -  Portfolio -  2015 Portfolio -  2025 Portfolio -  2035 Portfolio - 
  Service Class  Service Class  Service Class  Service Class  Service Class 
Assets           
Investments in mutual funds           
at fair value  $ 130,904  $ 5,259  $ 15,403  $ 16,393  $ 9,409 
Total assets  130,904  5,259  15,403  16,393  9,409 
 
Liabilities           
Payable to related parties  13  -  -  1  1 
Total liabilities  13  -  -  1  1 
Net assets  $ 130,891  $ 5,259  $ 15,403  $ 16,392  $ 9,408 
 
Total number of mutual fund shares  8,947,627  431,429  1,358,310  1,410,797  786,736 
 
Cost of mutual fund shares  $ 123,015  $ 4,787  $ 13,871  $ 13,141  $ 8,072 

 

The accompanying notes are an integral part of these financial statements. 
19

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

      ING T. Rowe     
      Price Diversified  ING T. Rowe   
    ING Solution  Mid Cap  Price Growth  ING Templeton 
  ING Solution  Income  Growth  Equity  Foreign Equity 
  2045 Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service Class  Service Class  Service Class  Service Class 
Assets           
Investments in mutual funds           
at fair value  $ 1,283  $ 5,875  $ 8,501  $ 158,188  $ 609,723 
Total assets  1,283  5,875  8,501  158,188  609,723 
 
Liabilities           
Payable to related parties  -  -  -  14  74 
Total liabilities  -  -  -  14  74 
Net assets  $ 1,283  $ 5,875  $ 8,501  $ 158,174  $ 609,649 
 
Total number of mutual fund shares  106,007  532,630  988,474  2,506,544  54,979,560 
 
Cost of mutual fund shares  $ 1,139  $ 5,499  $ 5,829  $ 146,691  $ 532,124 

 

The accompanying notes are an integral part of these financial statements. 
20

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING UBS U.S.  ING Strategic  ING Strategic  ING Strategic   
  Large Cap  Allocation  Allocation  Allocation  ING Growth 
  Equity  Conservative  Growth  Moderate  and Income 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Class S  Class S  Class S  Class A 
Assets           
Investments in mutual funds           
at fair value  $ 5,110  $ 1,560  $ 505  $ 1,042  $ 1,198,383 
Total assets  5,110  1,560  505  1,042  1,198,383 
 
Liabilities           
Payable to related parties  -  -  -  -  131 
Total liabilities  -  -  -  -  131 
Net assets  $ 5,110  $ 1,560  $ 505  $ 1,042  $ 1,198,252 
 
Total number of mutual fund shares  524,668  141,051  46,244  94,763  49,316,153 
 
Cost of mutual fund shares  $ 5,270  $ 1,541  $ 525  $ 988  $ 1,098,809 

 

The accompanying notes are an integral part of these financial statements. 
21

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING Growth  ING Growth       
  and Income  and Income  ING GET U.S.  ING GET U.S.  ING GET U.S. 
  Portfolio -  Portfolio -  Core Portfolio -  Core Portfolio -  Core Portfolio - 
  Class I  Class S  Series 11  Series 12  Series 13 
Assets           
Investments in mutual funds           
at fair value  $ 65  $ 701,339  $ 3,515  $ 1,696  $ 6,922 
Total assets  65  701,339  3,515  1,696  6,922 
 
Liabilities           
Payable to related parties  -  118  -  -  1 
Total liabilities  -  118  -  -  1 
Net assets  $ 65  $ 701,221  $ 3,515  $ 1,696  $ 6,921 
 
Total number of mutual fund shares  2,647  28,837,959  455,911  221,363  725,568 
 
Cost of mutual fund shares  $ 63  $ 581,236  $ 3,904  $ 1,982  $ 7,086 

 

The accompanying notes are an integral part of these financial statements. 
22

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

ING BlackRock
Science and
    Technology  ING Euro  ING FTSE 100   
  ING GET U.S.  Opportunities  STOXX 50®  Index®  ING Hang Seng 
  Core Portfolio -  Portfolio -  Index Portfolio -  Portfolio -  Index Portfolio - 
  Series 14  Class S  Class A  Class A  Class S 
Assets           
Investments in mutual funds           
at fair value  $ 23,807  $ 186,226  $ 8,829  $ 2,261  $ 52,714 
Total assets  23,807  186,226  8,829  2,261  52,714 
 
Liabilities           
Payable to related parties  7  21  1  -  4 
Total liabilities  7  21  1  -  4 
Net assets  $ 23,800  $ 186,205  $ 8,828  $ 2,261  $ 52,710 
 
Total number of mutual fund shares  2,402,368  34,939,219  891,796  184,590  3,714,855 
 
Cost of mutual fund shares  $ 24,218  $ 188,992  $ 8,128  $ 2,204  $ 51,079 

 

The accompanying notes are an integral part of these financial statements. 
23

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING Index Plus  ING Index Plus  ING Index Plus  ING  ING Japan 
  LargeCap  MidCap  SmallCap  International  TOPIX Index® 
  Portfolio -  Portfolio -  Portfolio -  Index Portfolio -  Portfolio - 
  Class S  Class S  Class S  Class S  Class A 
Assets           
Investments in mutual funds           
at fair value  $ 120,491  $ 108,190  $ 81,430  $ 45,023  $ 4,665 
Total assets  120,491  108,190  81,430  45,023  4,665 
 
Liabilities           
Payable to related parties  19  13  10  4  1 
Total liabilities  19  13  10  4  1 
Net assets  $ 120,472  $ 108,177  $ 81,420  $ 45,019  $ 4,664 
 
Total number of mutual fund shares  7,906,217  6,161,156  5,315,306  5,353,460  498,963 
 
Cost of mutual fund shares  $ 118,964  $ 102,969  $ 79,728  $ 43,065  $ 4,846 

 

The accompanying notes are an integral part of these financial statements. 
24

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  ING Russell™    ING Russell™  ING Russell™   
  Large Cap  ING Russell™  Large Cap  Mid Cap  ING Russell™ 
  Growth Index  Large Cap  Value Index  Growth Index  Mid Cap Index 
  Portfolio -  Index Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Class S  Class S  Class S  Class S  Class S 
Assets           
Investments in mutual funds           
at fair value  $ 152,883  $ 330,068  $ 61,927  $ 246,598  $ 123,550 
Total assets  152,883  330,068  61,927  246,598  123,550 
 
Liabilities           
Payable to related parties  23  59  5  44  8 
Total liabilities  23  59  5  44  8 
Net assets  $ 152,860  $ 330,009  $ 61,922  $ 246,554  $ 123,542 
 
Total number of mutual fund shares  9,149,177  30,088,282  4,354,921  13,460,566  9,995,967 
 
Cost of mutual fund shares  $ 127,254  $ 269,005  $ 57,774  $ 180,685  $ 116,116 

 

The accompanying notes are an integral part of these financial statements. 
25

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

        ING   
        WisdomTreeSM   
  ING Russell™  ING Small    Global High-  ING 
  Small Cap Index  Company  ING U.S. Bond  Yielding Equity  International 
  Portfolio -  Portfolio -  Index Portfolio -  Index Portfolio -  Value Portfolio - 
  Class S  Class S  Class S  Class S  Class S 
Assets           
Investments in mutual funds           
at fair value  $ 151,314  $ 82,215  $ 241,749  $ 176,345  $ 6,905 
Total assets  151,314  82,215  241,749  176,345  6,905 
 
Liabilities           
Payable to related parties  14  6  25  17  - 
Total liabilities  14  6  25  17  - 
Net assets  $ 151,300  $ 82,209  $ 241,724  $ 176,328  $ 6,905 
 
Total number of mutual fund shares  11,839,889  4,248,830  22,097,739  21,427,048  826,951 
 
Cost of mutual fund shares  $ 144,806  $ 71,876  $ 241,275  $ 143,598  $ 8,051 

 

The accompanying notes are an integral part of these financial statements. 
26

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

      Legg Mason      Oppenheimer 
      ClearBridge      Main Street 
  ING MidCap  ING SmallCap  Variable Large  Western Asset  Small- & Mid- 
  Opportunities  Opportunities  Cap Value  Variable High  Cap 
  Portfolio -  Portfolio -  Portfolio -  Income Fund®/VA - 
  Class S  Class S  Class I  Portfolio  Service Class 
Assets             
Investments in mutual funds             
at fair value  $ 349,433  $ 58,288  $ 73  $ 65  $ 1,478 
Total assets  349,433  58,288  73    65  1,478 
 
Liabilities             
Payable to related parties  66  10  -    -  - 
Total liabilities  66  10  -    -  - 
Net assets  $ 349,367  $ 58,278  $ 73  $ 65  $ 1,478 
 
Total number of mutual fund shares  27,798,939  2,693,511  4,759  10,879  74,033 
 
Cost of mutual fund shares  $ 285,764  $ 49,128  $ 77  $ 63  $ 1,003 

 

The accompanying notes are an integral part of these financial statements. 
27

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  PIMCO Real         
  Return  Pioneer Equity       
  Portfolio -  Income VCT      ProFund VP 
  Administrative  Portfolio -  ProFund VP  ProFund VP  Rising Rates 
  Class  Class II  Bull  Europe 30  Opportunity 
Assets           
Investments in mutual funds           
at fair value  $ 14,814  $ 13,428  $ 11,204  $ 6,720  $ 5,178 
Total assets  14,814  13,428  11,204  6,720  5,178 
 
Liabilities           
Payable to related parties  -  -  3  1  1 
Total liabilities  -  -  3  1  1 
Net assets  $ 14,814  $ 13,428  $ 11,201  $ 6,719  $ 5,177 
 
Total number of mutual fund shares  1,039,548  621,675  379,529  311,235  741,864 
 
Cost of mutual fund shares  $ 13,947  $ 11,704  $ 11,612  $ 8,073  $ 12,318 

 

The accompanying notes are an integral part of these financial statements. 
28

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  Invesco Van         
  Kampen    Wells Fargo    Wells Fargo 
  American  Wells Fargo  Advantage VT  Wells Fargo  Advantage VT 
  Franchise  Advantage VT  Index Asset  Advantage VT  Small Cap 
  Fund - Class I  Omega Growth  Allocation  Intrinsic Value  Growth 
  Shares  Fund - Class 2  Fund - Class 2  Fund - Class 2  Fund - Class 2 
Assets           
Investments in mutual funds           
at fair value  $ 16,728  $ 1,122  $ 1,443  $ 747  $ 233 
Total assets  16,728  1,122  1,443  747  233 
 
Liabilities           
Payable to related parties  3  -  -  -  - 
Total liabilities  3  -  -  -  - 
Net assets  $ 16,725  $ 1,122  $ 1,443  $ 747  $ 233 
 
Total number of mutual fund shares  461,085  44,645  107,139  51,088  29,522 
 
Cost of mutual fund shares  $ 17,157  $ 870  $ 1,346  $ 695  $ 179 

 

The accompanying notes are an integral part of these financial statements. 
29

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Assets and Liabilities
December 31, 2012
(Dollars in thousands)

 

  Wells Fargo 
  Advantage VT 
  Total Return 
  Bond Fund 
Assets   
Investments in mutual funds   
at fair value  $ 712 
Total assets  712 
 
Liabilities   
Payable to related parties  - 
Total liabilities  - 
Net assets  $ 712 
 
Total number of mutual fund shares  65,786 
 
Cost of mutual fund shares  $ 663 

 

The accompanying notes are an integral part of these financial statements. 
30

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

          Columbia Small 
    BlackRock  Columbia Asset Columbia Small  Company 
  Invesco V.I.  Global  Allocation  Cap Value  Growth Fund, 
  Leisure Fund -  Allocation V.I.  Fund, Variable  Fund, Variable  Variable 
  Series I Shares  Fund - Class III  Series - Class A  Series - Class B  Series - Class A 
Net investment income (loss)           
Income:           
Dividends  $ 30  $ 14,487  $ 7  $ 373  $ - 
Total investment income  30  14,487  7  373  - 
Expenses:           
Mortality, expense risk           
and other charges  103  18,048  5  2,316  - 
Annual administrative charges  (1)  155  -  45  - 
Contingent deferred sales charges  2  362  -  52  - 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  43  8,602  -  1,121  - 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  147  27,167  5  3,534  - 
Net investment income (loss)  (117)  (12,680)  2  (3,161)  - 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  1,876  55,930  (1)  (2,841)  - 
Capital gains distributions  -  3,265  -  5,992  - 
Total realized gain (loss) on investments           
and capital gains distributions  1,876  59,195  (1)  3,151  - 
Net unrealized appreciation           
(depreciation) of investments  1,714  25,261  31  10,402  1 
Net realized and unrealized gain (loss)           
on investments  3,590  84,456  30  13,553  1 
Net increase (decrease) in net assets           
resulting from operations  $ 3,473  $ 71,776  $ 32  $ 10,392  $ 1 

 

The accompanying notes are an integral part of these financial statements. 
31

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  Columbia VP  Columbia VP  Fidelity® VIP  Fidelity® VIP  Franklin Small 
  Large Cap  Short Duration Equity-Income  Contrafund®  Cap Value 
  Growth Fund -  US Government  Portfolio -  Portfolio -  Securities 
  Class 1 Fund - Class 1  Service Class 2  Service Class 2  Fund - Class 2 
Net investment income (loss)             
Income:             
Dividends  $ -  $ -  $ 4,547  $ 7,472  $ 88 
Total investment income    -  -  4,547  7,472  88 
Expenses:             
Mortality, expense risk             
and other charges    5  -  2,700  11,448  122 
Annual administrative charges    -  -  45  141  1 
Contingent deferred sales charges    -  -  72  347  1 
Minimum death benefit guarantee charges    -  -  -  -  - 
Other contract charges    -  -  1,107  4,801  58 
Amortization of deferred charges    -  -  -  -  - 
Total expenses    5  -  3,924  16,737  182 
Net investment income (loss)    (5)  -  623  (9,265)  (94) 
 
Realized and unrealized gain (loss)             
on investments             
Net realized gain (loss) on investments    1  -  (6,170)  (37,161)  (138) 
Capital gains distributions    -  -  10,260  -  - 
Total realized gain (loss) on investments             
and capital gains distributions    1  -  4,090  (37,161)  (138) 
Net unrealized appreciation             
(depreciation) of investments    54  -  16,690  132,644  1,986 
Net realized and unrealized gain (loss)             
on investments    55  -  20,780  95,483  1,848 
Net increase (decrease) in net assets             
resulting from operations  $ 50  $ -  $ 21,403  $ 86,218  $ 1,754 

 

The accompanying notes are an integral part of these financial statements. 
32

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

        ING American   
    ING  ING American  Funds Global   
  ING Balanced  Intermediate  Funds Asset  Growth and  ING American 
  Portfolio -  Bond Portfolio -  Allocation  Income  Funds Growth 
  Class S  Class S  Portfolio  Portfolio  Portfolio 
Net investment income (loss)           
Income:           
Dividends  $ 149  $ 50,880  $ 4,867  $ 156  $ 1,354 
Total investment income  149  50,880  4,867  156  1,354 
Expenses:           
Mortality, expense risk           
and other charges  62  20,021  6,283  179  18,925 
Annual administrative charges  1  263  65  3  42 
Contingent deferred sales charges  -  847  247  6  652 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  8  8,124  3,012  73  8,431 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  71  29,255  9,607  261  28,050 
Net investment income (loss)  78  21,625  (4,740)  (105)  (26,696) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (213)  (9,267)  3,338  (11)  (46,498) 
Capital gains distributions  -  -  947  10  39,311 
Total realized gain (loss) on investments           
and capital gains distributions  (213)  (9,267)  4,285  (1)  (7,187) 
Net unrealized appreciation           
(depreciation) of investments  754  63,614  43,813  1,427  150,180 
Net realized and unrealized gain (loss)           
on investments  541  54,347  48,098  1,426  142,993 
Net increase (decrease) in net assets           
resulting from operations  $ 619  $ 75,972  $ 43,358  $ 1,321  $ 116,297 

 

The accompanying notes are an integral part of these financial statements. 
33

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)
 
 
  ING American               
  Funds      ING American       
  International  ING American  Funds World  ING Artio  ING Artio 
  Growth and  Funds  Allocation  Foreign  Foreign 
  Income  International  Portfolio -  Portfolio -  Portfolio - 
  Portfolio  Portfolio  Service Class  Service Class  Service 2 Class 
Net investment income (loss)                 
Income:                 
Dividends  $ 126  $ 13,479  $ 2,625  $ 4,727  $ 333 
Total investment income  126    13,479    2,625    4,727  333 
Expenses:                 
Mortality, expense risk                 
and other charges  124    17,180    3,166    3,657  328 
Annual administrative charges  2    217    32    11  1 
Contingent deferred sales charges  5    521    79    111  4 
Minimum death benefit guarantee charges  -    -    -    -  - 
Other contract charges  60    7,484    1,587    1,566  171 
Amortization of deferred charges  -    -    -    -  - 
Total expenses  191    25,402    4,864    5,345  504 
Net investment income (loss)  (65)    (11,923)    (2,239)    (618)  (171) 
 
Realized and unrealized gain (loss)                 
on investments                 
Net realized gain (loss) on investments  (62)    (65,844)    651    (207,064)  (16,017) 
Capital gains distributions  21    -    14,283    -  - 
Total realized gain (loss) on investments                 
and capital gains distributions  (41)    (65,844)    14,934    (207,064)  (16,017) 
Net unrealized appreciation                 
(depreciation) of investments  877    211,784    5,035    212,846  16,511 
Net realized and unrealized gain (loss)                 
on investments  836    145,940    19,969    5,782  494 
Net increase (decrease) in net assets                 
resulting from operations  $ 771  $ 134,017  $ 17,730  $ 5,164  $ 323 
 
 
 
The accompanying notes are an integral part of these financial statements.   
 
    34             

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

      ING BlackRock     
  ING BlackRock  ING BlackRock  Large Cap  ING BlackRock   
  Health Sciences  Inflation  Growth  Large Cap   
  Opportunities Protected Bond  Portfolio -  Growth   
  Portfolio -  Portfolio -  Institutional  Portfolio -  ING Bond 
  Service Class  Service Class  Class  Service Class  Portfolio 
Net investment income (loss)           
Income:           
Dividends  $ 1,387  $ 3,582  $ -  $ 724  $ 11,913 
Total investment income  1,387  3,582  -  724  11,913 
Expenses:           
Mortality, expense risk           
and other charges  3,362  9,271  1  2,613  7,522 
Annual administrative charges  55  100  -  40  75 
Contingent deferred sales charges  115  680  -  82  425 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  1,440  4,065  -  1,075  3,573 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  4,972  14,116  1  3,810  11,595 
Net investment income (loss)  (3,585)  (10,534)  (1)  (3,086)  318 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  2,696  6,960  (13)  13,265  12,152 
Capital gains distributions  2,910  27,469  -  -  11,677 
Total realized gain (loss) on investments           
and capital gains distributions  5,606  34,429  (13)  13,265  23,829 
Net unrealized appreciation           
(depreciation) of investments  25,003  (5,449)  31  5,868  (7,352) 
Net realized and unrealized gain (loss)           
on investments  30,609  28,980  18  19,133  16,477 
Net increase (decrease) in net assets           
resulting from operations  $ 27,024  $ 18,446  $ 17  $ 16,047  $ 16,795 

 

The accompanying notes are an integral part of these financial statements. 
35

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Clarion  ING Clarion       
  Global Real  Global Real  ING Clarion  ING Clarion  ING DFA 
  Estate  Estate  Real Estate  Real Estate  World Equity 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service 2 Class  Service Class  Service 2 Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 690  $ 7  $ 2,853  $ 181  $ 3,373 
Total investment income  690  7  2,853  181  3,373 
Expenses:           
Mortality, expense risk           
and other charges  2,167  34  5,119  372  2,671 
Annual administrative charges  28  -  113  5  30 
Contingent deferred sales charges  86  -  178  5  98 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  977  18  1,854  189  1,350 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  3,258  52  7,264  571  4,149 
Net investment income (loss)  (2,568)  (45)  (4,411)  (390)  (776) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (3,587)  (105)  (22,078)  (884)  (3,040) 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (3,587)  (105)  (22,078)  (884)  (3,040) 
Net unrealized appreciation           
(depreciation) of investments  32,157  529  62,236  3,677  26,004 
Net realized and unrealized gain (loss)           
on investments  28,570  424  40,158  2,793  22,964 
Net increase (decrease) in net assets           
resulting from operations  $ 26,002  $ 379  $ 35,747  $ 2,403  $ 22,188 

 

The accompanying notes are an integral part of these financial statements. 
36

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING FMRSM  ING FMRSM  ING Franklin  ING Franklin  ING Franklin 
  Diversified Mid  Diversified Mid Income  Income  Mutual Shares 
  Cap Portfolio -  Cap Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service 2 Class  Service Class  Service 2 Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 3,640  $ 146  $ 28,040  $ 552  $ 2,755 
Total investment income  3,640  146  28,040  552  2,755 
Expenses:           
Mortality, expense risk           
and other charges  10,829  554  8,292  171  3,091 
Annual administrative charges  210  8  99  2  35 
Contingent deferred sales charges  243  4  280  1  89 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  3,889  280  3,052  82  1,266 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  15,171  846  11,723  256  4,481 
Net investment income (loss)  (11,531)  (700)  16,317  296  (1,726) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  1,507  291  (6,867)  163  (4,250) 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  1,507  291  (6,867)  163  (4,250) 
Net unrealized appreciation           
(depreciation) of investments  80,705  3,685  34,961  411  24,395 
Net realized and unrealized gain (loss)           
on investments  82,212  3,976  28,094  574  20,145 
Net increase (decrease) in net assets           
resulting from operations  $ 70,681  $ 3,276  $ 44,411  $ 870  $ 18,419 

 

The accompanying notes are an integral part of these financial statements. 
37

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Franklin        ING Invesco 
  Templeton        Van Kampen 
  Founding  ING Global  ING Global  ING Global  Growth and 
  Strategy  Resources  Resources  Resources  Income 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Adviser Class  Service Class  Service 2 Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 28,104  $ 499  $ 3,410  $ 138  $ 7,104 
Total investment income  28,104  499  3,410  138  7,104 
Expenses:           
Mortality, expense risk           
and other charges  12,875  1,481  7,804  410  6,716 
Annual administrative charges  167  14  119  5  140 
Contingent deferred sales charges  560  50  295  4  100 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  6,228  699  3,416  215  1,722 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  19,830  2,244  11,634  634  8,678 
Net investment income (loss)  8,274  (1,745)  (8,224)  (496)  (1,574) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (13,285)  (9,349)  (25,567)  (549)  (8,164) 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (13,285)  (9,349)  (25,567)  (549)  (8,164) 
Net unrealized appreciation           
(depreciation) of investments  97,911  5,143  9,264  (289)  55,203 
Net realized and unrealized gain (loss)           
on investments  84,626  (4,206)  (16,303)  (838)  47,039 
Net increase (decrease) in net assets           
resulting from operations  $ 92,900  $ (5,951)  $ (24,527)  $ (1,334)  $ 45,465 

 

The accompanying notes are an integral part of these financial statements. 
38

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Invesco         
  Van Kampen  ING JPMorgan  ING JPMorgan  ING JPMorgan  ING JPMorgan 
  Growth and  Emerging  Emerging  Small Cap Core  Small Cap Core 
  Income  Markets Equity  Markets Equity Equity  Equity 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service 2 Class  Service Class  Service 2 Class  Service Class  Service 2 Class 
Net investment income (loss)           
Income:           
Dividends  $ 748  $ -  $ -  $ 376  $ 4 
Total investment income  748  -  -  376  4 
Expenses:           
Mortality, expense risk           
and other charges  831  9,426  472  4,086  604 
Annual administrative charges  10  146  6  50  9 
Contingent deferred sales charges  6  322  6  112  7 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  387  4,150  237  1,810  309 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  1,234  14,044  721  6,058  929 
Net investment income (loss)  (486)  (14,044)  (721)  (5,682)  (925) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (613)  (21,331)  628  20,877  569 
Capital gains distributions  -  13,496  664  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (613)  (7,835)  1,292  20,877  569 
Net unrealized appreciation           
(depreciation) of investments  5,962  99,394  3,295  17,881  5,071 
Net realized and unrealized gain (loss)           
on investments  5,349  91,559  4,587  38,758  5,640 
Net increase (decrease) in net assets           
resulting from operations  $ 4,863  $ 77,515  $ 3,866  $ 33,076  $ 4,715 

 

The accompanying notes are an integral part of these financial statements. 
39

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Large Cap  ING Large Cap  ING Large Cap    ING Limited 
  Growth  Growth  Growth  ING Large Cap  Maturity Bond
  Portfolio -  Portfolio -  Portfolio -  Value Portfolio -  Portfolio - 
  Adviser Class  Service Class  Service 2 Class  Service Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 153  $ 1,020  $ 4  $ 1,657  $ 542 
Total investment income  153  1,020  4  1,657  542 
Expenses:           
Mortality, expense risk           
and other charges  15,069  4,403  16  1,343  1,122 
Annual administrative charges  400  55  -  24  31 
Contingent deferred sales charges  428  132  -  80  9 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  6,769  1,957  8  455  117 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  22,666  6,547  24  1,902  1,279 
Net investment income (loss)  (22,513)  (5,527)  (20)  (245)  (737) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  4,760  14,316  13  2,597  (1,426) 
Capital gains distributions  215  2,341  8  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  4,975  16,657  21  2,597  (1,426) 
Net unrealized appreciation           
(depreciation) of investments  97,608  20,382  111  6,005  1,929 
Net realized and unrealized gain (loss)           
on investments  102,583  37,039  132  8,602  503 
Net increase (decrease) in net assets           
resulting from operations  $ 80,070  $ 31,512  $ 112  $ 8,357  $ (234) 

 

The accompanying notes are an integral part of these financial statements. 
40

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Liquid  ING Liquid  ING Marsico  ING Marsico  ING MFS Total 
  Assets  Assets  Growth  Growth  Return 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service 2 Class  Service Class  Service 2 Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ -  $ -  $ 1,714  $ 42  $ 15,224 
Total investment income  -  -  1,714  42  15,224 
Expenses:           
Mortality, expense risk           
and other charges  14,291  293  7,653  307  10,812 
Annual administrative charges  292  5  181  4  216 
Contingent deferred sales charges  2,437  27  141  2  246 
Minimum death benefit guarantee charges  1  -  -  -  - 
Other contract charges  4,523  124  2,323  155  3,189 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  21,544  449  10,298  468  14,463 
Net investment income (loss)  (21,544)  (449)  (8,584)  (426)  761 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  -  -  33,265  509  (16,289) 
Capital gains distributions  59  1  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  59  1  33,265  509  (16,289) 
Net unrealized appreciation           
(depreciation) of investments  -  -  15,787  1,441  68,715 
Net realized and unrealized gain (loss)           
on investments  59  1  49,052  1,950  52,426 
Net increase (decrease) in net assets           
resulting from operations  $ (21,485)  $ (448)  $ 40,468  $ 1,524  $ 53,187 

 

The accompanying notes are an integral part of these financial statements. 
41

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

          ING 
      ING Morgan  ING Morgan  Oppenheimer 
  ING MFS Total  ING MFS  Stanley Global  Stanley Global  Active 
  Return  Utilities  Franchise  Franchise  Allocation 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service 2 Class  Service Class  Service Class  Service 2 Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 696  $ 14,169  $ 6,001  $ 914  $ 1,300 
Total investment income  696  14,169  6,001  914  1,300 
Expenses:           
Mortality, expense risk           
and other charges  571  8,046  6,351  1,110  839 
Annual administrative charges  7  122  86  16  7 
Contingent deferred sales charges  7  442  166  13  27 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  281  3,461  2,771  528  430 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  866  12,071  9,374  1,667  1,303 
Net investment income (loss)  (170)  2,098  (3,373)  (753)  (3) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (588)  (15,205)  (3,182)  1,602  1,096 
Capital gains distributions  -  -  17,066  2,905  51 
Total realized gain (loss) on investments           
and capital gains distributions  (588)  (15,205)  13,884  4,507  1,147 
Net unrealized appreciation           
(depreciation) of investments  3,125  58,800  31,806  3,375  3,600 
Net realized and unrealized gain (loss)           
on investments  2,537  43,595  45,690  7,882  4,747 
Net increase (decrease) in net assets           
resulting from operations  $ 2,367  $ 45,693  $ 42,317  $ 7,129  $ 4,744 

 

The accompanying notes are an integral part of these financial statements. 
42

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING PIMCO  ING PIMCO  ING PIMCO    ING Pioneer 
  High Yield  Total Return  Total Return  ING Pioneer  Mid Cap Value 
  Portfolio -  Bond Portfolio -  Bond Portfolio -  Fund Portfolio -  Portfolio - 
  Service Class  Service Class  Service 2 Class  Service Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 35,952  $ 95,175  $ 2,078  $ 593  $ 3,980 
Total investment income  35,952  95,175  2,078  593  3,980 
Expenses:           
Mortality, expense risk           
and other charges  9,922  48,485  1,173  815  7,883 
Annual administrative charges  146  525  13  13  148 
Contingent deferred sales charges  290  1,717  12  24  220 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  3,358  20,401  528  339  3,051 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  13,716  71,128  1,726  1,191  11,302 
Net investment income (loss)  22,236  24,047  352  (598)  (7,322) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  938  29,270  190  (366)  1,672 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  938  29,270  190  (366)  1,672 
Net unrealized appreciation           
(depreciation) of investments  36,790  110,960  3,141  4,477  43,206 
Net realized and unrealized gain (loss)           
on investments  37,728  140,230  3,331  4,111  44,878 
Net increase (decrease) in net assets           
resulting from operations  $ 59,964  $ 164,277  $ 3,683  $ 3,513  $ 37,556 

 

The accompanying notes are an integral part of these financial statements. 
43

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

      ING Retirement    ING T. Rowe 
  ING Retirement  ING Retirement  Moderate  ING Retirement  Price Capital 
  Conservative  Growth  Growth  Moderate  Appreciation 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Adviser Class  Adviser Class  Adviser Class  Adviser Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 17,018  $ 99,416  $ 73,572  $ 53,048  $ 38,021 
Total investment income  17,018  99,416  73,572  53,048  38,021 
Expenses:           
Mortality, expense risk           
and other charges  9,768  73,682  50,058  29,220  42,083 
Annual administrative charges  113  1,264  684  367  624 
Contingent deferred sales charges  368  2,642  1,910  1,056  1,150 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  4,323  37,328  21,804  12,177  16,144 
Amortization of deferred charges  -  -  -  -  (2) 
Total expenses  14,572  114,916  74,456  42,820  59,999 
Net investment income (loss)  2,446  (15,500)  (884)  10,228  (21,978) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  12,021  65,751  48,345  25,815  16,492 
Capital gains distributions  7,226  -  -  -  68,436 
Total realized gain (loss) on investments           
and capital gains distributions  19,247  65,751  48,345  25,815  84,928 
Net unrealized appreciation           
(depreciation) of investments  6,886  348,163  195,022  85,932  206,957 
Net realized and unrealized gain (loss)           
on investments  26,133  413,914  243,367  111,747  291,885 
Net increase (decrease) in net assets           
resulting from operations  $ 28,579  $ 398,414  $ 242,483  $ 121,975  $ 269,907 

 

The accompanying notes are an integral part of these financial statements. 
44

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING T. Rowe  ING T. Rowe  ING T. Rowe  ING T. Rowe   
  Price Capital  Price Equity  Price Equity  Price  ING Templeton 
  Appreciation  Income  Income  International  Global Growth 
  Portfolio -  Portfolio -  Portfolio -  Stock Portfolio -  Portfolio - 
  Service 2 Class  Service Class  Service 2 Class  Service Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 1,094  $ 12,494  $ 447  $ 392  $ 4,336 
Total investment income  1,094  12,494  447  392  4,336 
Expenses:           
Mortality, expense risk           
and other charges  1,382  11,286  434  2,497  3,984 
Annual administrative charges  17  185  7  37  72 
Contingent deferred sales charges  18  309  4  57  82 
Minimum death benefit guarantee charges  -  1  -  -  - 
Other contract charges  675  4,338  221  1,103  1,393 
Amortization of deferred charges  -  (1)  -  -  - 
Total expenses  2,092  16,118  666  3,694  5,531 
Net investment income (loss)  (998)  (3,624)  (219)  (3,302)  (1,195) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  30  (580)  (267)  (15,703)  (863) 
Capital gains distributions  2,177  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  2,207  (580)  (267)  (15,703)  (863) 
Net unrealized appreciation           
(depreciation) of investments  6,940  93,445  3,585  38,693  42,699 
Net realized and unrealized gain (loss)           
on investments  9,147  92,865  3,318  22,990  41,836 
Net increase (decrease) in net assets           
resulting from operations  $ 8,149  $ 89,241  $ 3,099  $ 19,688  $ 40,641 

 

The accompanying notes are an integral part of these financial statements. 
45

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

      ING American    ING Columbia 
  ING Templeton    Century Small-  ING Baron  Small Cap 
  Global Growth  ING Diversified  Mid Cap Value  Growth  Value II 
  Portfolio -  International  Portfolio -  Portfolio -  Portfolio - 
  Service 2 Class  Fund - Class R  Service Class  Service Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 75  $ 2  $ 20  $ -  $ 305 
Total investment income  75  2  20  -  305 
Expenses:           
Mortality, expense risk           
and other charges  77  1  19  5,922  2,214 
Annual administrative charges  1  -  -  69  23 
Contingent deferred sales charges  -  -  2  176  76 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  40  -  10  2,637  992 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  118  1  31  8,804  3,305 
Net investment income (loss)  (43)  1  (11)  (8,804)  (3,000) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (89)  (25)  209  26,578  1,735 
Capital gains distributions  -  -  133  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (89)  (25)  342  26,578  1,735 
Net unrealized appreciation           
(depreciation) of investments  837  40  (75)  34,570  14,966 
Net realized and unrealized gain (loss)           
on investments  748  15  267  61,148  16,701 
Net increase (decrease) in net assets           
resulting from operations  $ 705  $ 16  $ 256  $ 52,344  $ 13,701 

 

The accompanying notes are an integral part of these financial statements. 
46

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

          ING Invesco 
  ING Davis New    ING Growth  ING Growth  Van Kampen 
  York Venture  ING Global  and Income  and Income  Comstock 
  Portfolio -  Bond Portfolio -  Core Portfolio -  Core Portfolio -  Portfolio - 
  Service Class  Service Class  Initial Class  Service Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 717  $ 506  $ 3  $ 5  $ 2,293 
Total investment income  717  506  3  5  2,293 
Expenses:           
Mortality, expense risk           
and other charges  4,311  86  11  91  3,253 
Annual administrative charges  39  1  -  1  42 
Contingent deferred sales charges  108  -  -  1  128 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  1,804  22  -  39  1,414 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  6,262  109  11  132  4,837 
Net investment income (loss)  (5,545)  397  (8)  (127)  (2,544) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (4,582)  27  59  (157)  (4,783) 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (4,582)  27  59  (157)  (4,783) 
Net unrealized appreciation           
(depreciation) of investments  32,595  113  17  689  34,064 
Net realized and unrealized gain (loss)           
on investments  28,013  140  76  532  29,281 
Net increase (decrease) in net assets           
resulting from operations  $ 22,468  $ 537  $ 68  $ 405  $ 26,737 

 

The accompanying notes are an integral part of these financial statements. 
47

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Invesco  ING Invesco       
  Van Kampen  Van Kampen    ING  ING 
  Equity and  Equity and  ING JPMorgan  Oppenheimer  Oppenheimer 
  Income  Income  Mid Cap Value  Global  Global 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Initial Class  Service Class  Service Class  Initial Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 36  $ 3,347  $ 1,130  $ 63  $ 1,242 
Total investment income  36  3,347  1,130  63  1,242 
Expenses:           
Mortality, expense risk           
and other charges  12  3,067  2,606  57  1,992 
Annual administrative charges  (2)  43  28  1  26 
Contingent deferred sales charges  -  76  83  -  69 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  -  1,226  1,136  1  826 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  10  4,412  3,853  59  2,913 
Net investment income (loss)  26  (1,065)  (2,723)  4  (1,671) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  14  (1,338)  8,079  144  (6,479) 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  14  (1,338)  8,079  144  (6,479) 
Net unrealized appreciation           
(depreciation) of investments  138  19,826  17,490  758  28,311 
Net realized and unrealized gain (loss)           
on investments  152  18,488  25,569  902  21,832 
Net increase (decrease) in net assets           
resulting from operations  $ 178  $ 17,423  $ 22,846  $ 906  $ 20,161 

 

The accompanying notes are an integral part of these financial statements. 
48

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING PIMCO         
  Total Return  ING Solution  ING Solution  ING Solution  ING Solution 
  Portfolio -  2015 Portfolio -  2025 Portfolio -  2035 Portfolio -  2045 Portfolio - 
  Service Class  Service Class  Service Class  Service Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 173  $ 627  $ 447  $ 217  $ 22 
Total investment income  173  627  447  217  22 
Expenses:           
Mortality, expense risk           
and other charges  59  163  176  110  14 
Annual administrative charges  -  1  1  1  - 
Contingent deferred sales charges  1  2  -  3  - 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  12  86  102  65  8 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  72  252  279  179  22 
Net investment income (loss)  101  375  168  38  - 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  90  (107)  (147)  (202)  (6) 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  90  (107)  (147)  (202)  (6) 
Net unrealized appreciation           
(depreciation) of investments  187  1,154  1,830  1,404  157 
Net realized and unrealized gain (loss)           
on investments  277  1,047  1,683  1,202  151 
Net increase (decrease) in net assets           
resulting from operations  $ 378  $ 1,422  $ 1,851  $ 1,240  $ 151 

 

The accompanying notes are an integral part of these financial statements. 
49

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

    ING T. Rowe       
    Price Diversified  ING T. Rowe    ING UBS U.S. 
  ING Solution  Mid Cap  Price Growth  ING Templeton  Large Cap 
  Income  Growth  Equity  Foreign Equity  Equity 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service Class  Service Class  Service Class  Service Class 
Net investment income (loss)           
Income:           
Dividends  $ 269  $ 21  $ -  $ 8,343  $ 36 
Total investment income  269  21  -  8,343  36 
Expenses:           
Mortality, expense risk           
and other charges  64  97  2,669  6,557  85 
Annual administrative charges  -  1  31  139  1 
Contingent deferred sales charges  2  1  86  167  4 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  22  52  1,140  2,835  33 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  88  151  3,926  9,698  123 
Net investment income (loss)  181  (130)  (3,926)  (1,355)  (87) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (64)  898  16,982  10,412  (81) 
Capital gains distributions  -  749  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (64)  1,647  16,982  10,412  (81) 
Net unrealized appreciation           
(depreciation) of investments  348  (250)  2,522  85,080  703 
Net realized and unrealized gain (loss)           
on investments  284  1,397  19,504  95,492  622 
Net increase (decrease) in net assets           
resulting from operations  $ 465  $ 1,267  $ 15,578  $ 94,137  $ 535 

 

The accompanying notes are an integral part of these financial statements. 
50

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Strategic  ING Strategic  ING Strategic     
  Allocation  Allocation  Allocation  ING Growth  ING Growth 
  Conservative  Growth  Moderate  and Income  and Income 
  Portfolio -  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Class S  Class S  Class S  Class A  Class I 
Net investment income (loss)           
Income:           
Dividends  $ 35  $ 5  $ 17  $ 16,562  $ 1 
Total investment income  35  5  17  16,562  1 
Expenses:           
Mortality, expense risk           
and other charges  14  6  10  21,452  1 
Annual administrative charges  -  -  -  279  - 
Contingent deferred sales charges  -  -  -  739  - 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  -  -  3  9,163  - 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  14  6  13  31,633  1 
Net investment income (loss)  21  (1)  4  (15,071)  - 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (16)  (12)  (32)  11,380  (1) 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (16)  (12)  (32)  11,380  (1) 
Net unrealized appreciation           
(depreciation) of investments  139  73  143  144,912  11 
Net realized and unrealized gain (loss)           
on investments  123  61  111  156,292  10 
Net increase (decrease) in net assets           
resulting from operations  $ 144  $ 60  $ 115  $ 141,221  $ 10 

 

The accompanying notes are an integral part of these financial statements. 
51

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Growth         
  and Income  ING GET U.S.  ING GET U.S.  ING GET U.S.  ING GET U.S. 
  Portfolio -  Core Portfolio -  Core Portfolio -  Core Portfolio -  Core Portfolio - 
  Class S  Series 7  Series 8  Series 9  Series 10 
Net investment income (loss)           
Income:           
Dividends  $ 11,087  $ 113  $ 32  $ 66  $ 48 
Total investment income  11,087  113  32  66  48 
Expenses:           
Mortality, expense risk           
and other charges  12,727  17  19  31  32 
Annual administrative charges  251  -  -  -  - 
Contingent deferred sales charges  272  -  1  5  - 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  4,697  -  -  -  - 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  17,947  17  20  36  32 
Net investment income (loss)  (6,860)  96  12  30  16 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  14,051  (921)  (384)  (431)  (380) 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  14,051  (921)  (384)  (431)  (380) 
Net unrealized appreciation           
(depreciation) of investments  81,107  813  345  363  323 
Net realized and unrealized gain (loss)           
on investments  95,158  (108)  (39)  (68)  (57) 
Net increase (decrease) in net assets           
resulting from operations  $ 88,298  $ (12)  $ (27)  $ (38)  $ (41) 

 

The accompanying notes are an integral part of these financial statements. 
52

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

          ING BlackRock 
          Science and 
          Technology 
  ING GET U.S.  ING GET U.S.  ING GET U.S.  ING GET U.S.  Opportunities 
  Core Portfolio -  Core Portfolio -  Core Portfolio -  Core Portfolio -  Portfolio - 
  Series 11  Series 12  Series 13  Series 14  Class S 
Net investment income (loss)           
Income:           
Dividends  $ 75  $ 40  $ 171  $ 734  $ - 
Total investment income  75  40  171  734  - 
Expenses:           
Mortality, expense risk           
and other charges  72  30  136  461  3,613 
Annual administrative charges  1  -  5  13  47 
Contingent deferred sales charges  -  1  -  1  132 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  -  -  -  -  1,695 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  73  31  141  475  5,487 
Net investment income (loss)  2  9  30  259  (5,487) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (135)  (42)  (127)  (95)  11,694 
Capital gains distributions  -  -  -  -  13,023 
Total realized gain (loss) on investments           
and capital gains distributions  (135)  (42)  (127)  (95)  24,717 
Net unrealized appreciation           
(depreciation) of investments  42  13  (65)  (692)  (10,575) 
Net realized and unrealized gain (loss)           
on investments  (93)  (29)  (192)  (787)  14,142 
Net increase (decrease) in net assets           
resulting from operations  $ (91)  $ (20)  $ (162)  $ (528)  $ 8,655 

 

The accompanying notes are an integral part of these financial statements. 
53

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Euro  ING FTSE 100    ING Index Plus  ING Index Plus 
  STOXX 50®  Index®  ING Hang Seng  LargeCap  MidCap 
  Index Portfolio -  Portfolio -  Index Portfolio -  Portfolio -  Portfolio - 
  Class A  Class A  Class S  Class S  Class S 
Net investment income (loss)           
Income:           
Dividends  $ 152  $ 59  $ 500  $ 1,706  $ 697 
Total investment income  152  59  500  1,706  697 
Expenses:           
Mortality, expense risk           
and other charges  94  42  806  1,974  1,831 
Annual administrative charges  2  1  9  47  28 
Contingent deferred sales charges  3  2  34  22  37 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  45  41  403  656  735 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  144  86  1,252  2,699  2,631 
Net investment income (loss)  8  (27)  (752)  (993)  (1,934) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (873)  (120)  83  (4,899)  (2,138) 
Capital gains distributions  -  120  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (873)  -  83  (4,899)  (2,138) 
Net unrealized appreciation           
(depreciation) of investments  1,533  275  10,712  20,112  19,187 
Net realized and unrealized gain (loss)           
on investments  660  275  10,795  15,213  17,049 
Net increase (decrease) in net assets           
resulting from operations  $ 668  $ 248  $ 10,043  $ 14,220  $ 15,115 

 

The accompanying notes are an integral part of these financial statements. 
54

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

        ING Russell™   
  ING Index Plus  ING  ING Japan  Large Cap  ING Russell™ 
  SmallCap  International  TOPIX Index®  Growth Index Large Cap 
  Portfolio -  Index Portfolio -  Portfolio -  Portfolio -  Index Portfolio - 
  Class S  Class S  Class A  Class S  Class S 
Net investment income (loss)           
Income:           
Dividends  $ 243  $ 1,104  $ 52  $ 1,621  $ 7,074 
Total investment income  243  1,104  52  1,621  7,074 
Expenses:           
Mortality, expense risk           
and other charges  1,403  709  109  2,892  5,555 
Annual administrative charges  20  9  -  50  130 
Contingent deferred sales charges  26  26  1  68  115 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  583  295  19  1,252  1,510 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  2,032  1,039  129  4,262  7,310 
Net investment income (loss)  (1,789)  65  (77)  (2,641)  (236) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (2,524)  (409)  (1,089)  17,997  24,920 
Capital gains distributions  -  -  380  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (2,524)  (409)  (709)  17,997  24,920 
Net unrealized appreciation           
(depreciation) of investments  11,823  6,298  947  1,029  11,948 
Net realized and unrealized gain (loss)           
on investments  9,299  5,889  238  19,026  36,868 
Net increase (decrease) in net assets           
resulting from operations  $ 7,510  $ 5,954  $ 161  $ 16,385  $ 36,632 

 

The accompanying notes are an integral part of these financial statements. 
55

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

  ING Russell™  ING Russell™       
  Large Cap  Mid Cap  ING Russell™  ING Russell™  ING Small 
  Value Index  Growth Index  Mid Cap Index  Small Cap  Company 
  Portfolio -  Portfolio -  Portfolio -  Index Portfolio -  Portfolio - 
  Class S  Class S  Class S  Class S  Class S 
Net investment income (loss)           
Income:           
Dividends  $ 683  $ 875  $ 1,053  $ 972  $ 132 
Total investment income  683  875  1,053  972  132 
Expenses:           
Mortality, expense risk           
and other charges  813  4,449  1,950  2,635  1,532 
Annual administrative charges  11  94  17  30  14 
Contingent deferred sales charges  75  105  69  75  33 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  281  1,392  834  1,129  681 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  1,180  6,040  2,870  3,869  2,260 
Net investment income (loss)  (497)  (5,165)  (1,817)  (2,897)  (2,128) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  1,597  16,044  5,011  8,075  3,953 
Capital gains distributions  -  -  4,074  7,527  3,341 
Total realized gain (loss) on investments           
and capital gains distributions  1,597  16,044  9,085  15,602  7,294 
Net unrealized appreciation           
(depreciation) of investments  4,987  19,064  6,729  5,105  4,427 
Net realized and unrealized gain (loss)           
on investments  6,584  35,108  15,814  20,707  11,721 
Net increase (decrease) in net assets           
resulting from operations  $ 6,087  $ 29,943  $ 13,997  $ 17,810  $ 9,593 

 

The accompanying notes are an integral part of these financial statements 
56

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

    ING       
    WisdomTreeSM       
    Global High-  ING  ING MidCap  ING SmallCap 
  ING U.S. Bond  Yielding Equity  International  Opportunities  Opportunities 
  Index Portfolio -  Index Portfolio -  Value Portfolio -  Portfolio -  Portfolio - 
  Class S  Class S  Class S  Class S  Class S 
Net investment income (loss)           
Income:           
Dividends  $ 4,997  $ 6,923  $ 159  $ 1,455  $ - 
Total investment income  4,997  6,923  159  1,455  - 
Expenses:           
Mortality, expense risk           
and other charges  4,279  2,963  72  6,378  1,018 
Annual administrative charges  48  32  1  144  22 
Contingent deferred sales charges  124  87  -  142  19 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  1,882  1,493  33  2,143  439 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  6,333  4,575  106  8,807  1,498 
Net investment income (loss)  (1,336)  2,348  53  (7,352)  (1,498) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  4,825  (2,729)  (1,058)  16,569  2,674 
Capital gains distributions  5,749  -  -  9,736  5,949 
Total realized gain (loss) on investments           
and capital gains distributions  10,574  (2,729)  (1,058)  26,305  8,623 
Net unrealized appreciation           
(depreciation) of investments  (6,800)  20,189  2,097  19,276  (270) 
Net realized and unrealized gain (loss)           
on investments  3,774  17,460  1,039  45,581  8,353 
Net increase (decrease) in net assets           
resulting from operations  $ 2,438  $ 19,808  $ 1,092  $ 38,229  $ 6,855 

 

The accompanying notes are an integral part of these financial statements. 
57

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

      Legg Mason           
  Legg Mason  Global Currents      Oppenheimer   
  ClearBridge  Variable      Main Street  PIMCO Real 
  Variable Large  International  Western Asset  Small- & Mid-  Return 
  Cap Value  All Cap  Variable High  Cap Portfolio - 
  Portfolio -  Opportunity  Income Fund®/VA -  Administrative 
  Class I Portfolio  Portfolio  Service Class  Class 
Net investment income (loss)                 
Income:                 
Dividends  $ 2  $ -  $ 5  $ 5  $ 148 
Total investment income    2  -    5    5  148 
Expenses:                 
Mortality, expense risk                 
and other charges    1  -    1    14  144 
Annual administrative charges    -  -    -    -  1 
Contingent deferred sales charges    -  -    -    -  1 
Minimum death benefit guarantee charges    -  -    -    -  - 
Other contract charges    -  -    -    7  41 
Amortization of deferred charges    -  -    -    -  - 
Total expenses    1  -    1    21  187 
Net investment income (loss)    1  -    4    (16)  (39) 
 
Realized and unrealized gain (loss)                 
on investments                 
Net realized gain (loss) on investments    (2)  (18)    (4)    67  459 
Capital gains distributions    -  -    -    -  772 
Total realized gain (loss) on investments                 
and capital gains distributions    (2)  (18)    (4)    67  1,231 
Net unrealized appreciation                 
(depreciation) of investments    12  20    10    169  (223) 
Net realized and unrealized gain (loss)                 
on investments    10  2    6    236  1,008 
Net increase (decrease) in net assets                 
resulting from operations  $ 11  $ 2  $ 10  $ 220  $ 969 

 

The accompanying notes are an integral part of these financial statements. 
58

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

          Invesco Van 
          Kampen 
  Pioneer Equity        American 
  Income VCT      ProFund VP  Franchise 
  Portfolio -  ProFund VP  ProFund VP  Rising Rates  Fund - Class I 
  Class II  Bull  Europe 30  Opportunity  Shares 
Net investment income (loss)           
Income:           
Dividends  $ 524  $ -  $ 226  $ -  $ - 
Total investment income  524  -  226  -  - 
Expenses:           
Mortality, expense risk           
and other charges  148  214  117  96  205 
Annual administrative charges  1  7  3  2  7 
Contingent deferred sales charges  2  4  2  2  5 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  57  96  51  36  89 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  208  321  173  136  306 
Net investment income (loss)  316  (321)  53  (136)  (306) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  (633)  (172)  (654)  (1,612)  (94) 
Capital gains distributions  -  -  -  -  - 
Total realized gain (loss) on investments           
and capital gains distributions  (633)  (172)  (654)  (1,612)  (94) 
Net unrealized appreciation           
(depreciation) of investments  1,476  1,762  1,444  1,213  (429) 
Net realized and unrealized gain (loss)           
on investments  843  1,590  790  (399)  (523) 
Net increase (decrease) in net assets           
resulting from operations  $ 1,159  $ 1,269  $ 843  $ (535)  $ (829) 

 

The accompanying notes are an integral part of these financial statements. 
59

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Operations
For the Year Ended December 31, 2012
(Dollars in thousands)

 

    Wells Fargo    Wells Fargo   
  Wells Fargo  Advantage VT  Wells Fargo  Advantage VT  Wells Fargo 
  Advantage VT  Index Asset  Advantage VT  Small Cap  Advantage VT 
  Omega Growth  Allocation  Intrinsic Value  Growth  Total Return 
  Fund - Class 2  Fund - Class 2  Fund - Class 2  Fund - Class 2  Bond Fund 
Net investment income (loss)           
Income:           
Dividends  $ -  $ 24  $ 11  $ -  $ 12 
Total investment income  -  24  11  -  12 
Expenses:           
Mortality, expense risk           
and other charges  25  31  15  6  14 
Annual administrative charges  -  -  -  -  - 
Contingent deferred sales charges  -  -  -  -  - 
Minimum death benefit guarantee charges  -  -  -  -  - 
Other contract charges  7  15  3  2  6 
Amortization of deferred charges  -  -  -  -  - 
Total expenses  32  46  18  8  20 
Net investment income (loss)  (32)  (22)  (7)  (8)  (8) 
 
Realized and unrealized gain (loss)           
on investments           
Net realized gain (loss) on investments  93  29  (16)  (20)  18 
Capital gains distributions  84  -  -  16  15 
Total realized gain (loss) on investments           
and capital gains distributions  177  29  (16)  (4)  33 
Net unrealized appreciation           
(depreciation) of investments  64  189  142  32  4 
Net realized and unrealized gain (loss)           
on investments  241  218  126  28  37 
Net increase (decrease) in net assets           
resulting from operations  $ 209  $ 196  $ 119  $ 20  $ 29 

 

The accompanying notes are an integral part of these financial statements. 
60

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011 
(Dollars in thousands)

 

    BlackRock  Columbia Asset  Columbia Small 
  Invesco V.I.  Global  Allocation  Cap Value 
  Leisure Fund -  Allocation V.I.  Fund, Variable  Fund, Variable 
  Series I Shares  Fund - Class III  Series - Class A  Series - Class B 
Net assets at January 1, 2011  $ 20,497  $ 1,153,042  $ 303  $ 162,178 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (414)  (3,123)  4  (2,655) 
Total realized gain (loss) on investments         
and capital gains distributions  (1,800)  76,307  (4)  15,972 
Net unrealized appreciation (depreciation)         
of investments  1,068  (139,537)  (5)  (26,358) 
Net increase (decrease) in net assets from operations  (1,146)  (66,353)  (5)  (13,041) 
Changes from principal transactions:         
Premiums  1  13,377  -  30 
Death Benefits  (221)  (7,414)  (3)  (1,361) 
Surrenders and withdrawals  (1,688)  (57,125)  (14)  (10,266) 
Transfers between Divisions         
(including fixed account), net  (945)  46,569  (2)  (5,088) 
Increase (decrease) in net assets derived from         
principal transactions  (2,853)  (4,593)  (19)  (16,685) 
Total increase (decrease) in net assets  (3,999)  (70,946)  (24)  (29,726) 
Net assets at December 31, 2011  16,498  1,082,096  279  132,452 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (117)  (12,680)  2  (3,161) 
Total realized gain (loss) on investments         
and capital gains distributions  1,876  59,195  (1)  3,151 
Net unrealized appreciation (depreciation)         
of investments  1,714  25,261  31  10,402 
Net increase (decrease) in net assets from operations  3,473  71,776  32  10,392 
Changes from principal transactions:         
Premiums  -  9,239  -  26 
Death Benefits  (57)  (8,386)  -  (1,234) 
Surrenders and withdrawals  (479)  (50,053)  (2)  (9,490) 
Transfers between Divisions         
(including fixed account), net  (19,435)  (111,259)  16  (3,279) 
Increase (decrease) in net assets derived from         
principal transactions  (19,971)  (160,459)  14  (13,977) 
Total increase (decrease) in net assets  (16,498)  (88,683)  46  (3,585) 
Net assets at December 31, 2012  $ -  $ 993,413  $ 325  $ 128,867 

 

The accompanying notes are an integral part of these financial statements. 
61

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011 
(Dollars in thousands)

 

Columbia Small
  Company  Columbia VP  Columbia VP  Fidelity® VIP 
  Growth Fund,  Large Cap  Short Duration  Equity-Income 
  Variable Series -  Growth Fund -  US Government  Portfolio - 
  Class A  Class 1  Fund - Class 1  Service Class 2 
Net assets at January 1, 2011  $ 18  $ -  $ -  $ 181,385 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  -  (3)  -  (380) 
Total realized gain (loss) on investments         
and capital gains distributions  -  (8)  -  (7,177) 
Net unrealized appreciation (depreciation)         
of investments  -  (38)  -  4,916 
Net increase (decrease) in net assets from operations  -  (49)  -  (2,641) 
Changes from principal transactions:         
Premiums  -  -  -  74 
Death Benefits  -  (47)  -  (2,343) 
Surrenders and withdrawals  (7)  (3)  (15)  (13,460) 
Transfers between Divisions         
(including fixed account), net  -  370  19  (5,882) 
Increase (decrease) in net assets derived from         
principal transactions  (7)  320  4  (21,611) 
Total increase (decrease) in net assets  (7)  271  4  (24,252) 
Net assets at December 31, 2011  11  271  4  157,133 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  -  (5)  -  623 
Total realized gain (loss) on investments         
and capital gains distributions  -  1  -  4,090 
Net unrealized appreciation (depreciation)         
of investments  1  54  -  16,690 
Net increase (decrease) in net assets from operations  1  50  -  21,403 
Changes from principal transactions:         
Premiums  -  -  -  139 
Death Benefits  -  -  -  (1,954) 
Surrenders and withdrawals  -  (21)  (1)  (12,990) 
Transfers between Divisions         
(including fixed account), net  1  (1)  -  (4,636) 
Increase (decrease) in net assets derived from         
principal transactions  1  (22)  (1)  (19,441) 
Total increase (decrease) in net assets  2  28  (1)  1,962 
Net assets at December 31, 2012  $ 13  $ 299  $ 3  $ 159,095 

 

The accompanying notes are an integral part of these financial statements. 
62

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011 
(Dollars in thousands)

 

  Fidelity® VIP  Franklin Small    ING 
  Contrafund®  Cap Value  ING Balanced  Intermediate 
  Portfolio -  Securities  Portfolio -  Bond Portfolio - 
  Service Class 2  Fund - Class 2  Class S  Class S 
Net assets at January 1, 2011  $ 795,262  $ 14,384  $ 6,681  $ 1,253,226 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (12,348)  (117)  67  21,866 
Total realized gain (loss) on investments         
and capital gains distributions  (40,649)  (653)  (257)  (19,884) 
Net unrealized appreciation (depreciation)         
of investments  16,548  (28)  22  54,114 
Net increase (decrease) in net assets from operations  (36,449)  (798)  (168)  56,096 
Changes from principal transactions:         
Premiums  830  116  14  10,511 
Death Benefits  (7,807)  (27)  (77)  (13,805) 
Surrenders and withdrawals  (45,525)  (1,522)  (668)  (111,658) 
Transfers between Divisions         
(including fixed account), net  (43,442)  (334)  (390)  20,254 
Increase (decrease) in net assets derived from         
principal transactions  (95,944)  (1,767)  (1,121)  (94,698) 
Total increase (decrease) in net assets  (132,393)  (2,565)  (1,289)  (38,602) 
Net assets at December 31, 2011  662,869  11,819  5,392  1,214,624 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (9,265)  (94)  78  21,625 
Total realized gain (loss) on investments         
and capital gains distributions  (37,161)  (138)  (213)  (9,267) 
Net unrealized appreciation (depreciation)         
of investments  132,644  1,986  754  63,614 
Net increase (decrease) in net assets from operations  86,218  1,754  619  75,972 
Changes from principal transactions:         
Premiums  343  31  4  8,551 
Death Benefits  (6,699)  (40)  (31)  (13,839) 
Surrenders and withdrawals  (46,026)  (1,807)  (1,048)  (108,619) 
Transfers between Divisions         
(including fixed account), net  (26,372)  (697)  (60)  8,885 
Increase (decrease) in net assets derived from         
principal transactions  (78,754)  (2,513)  (1,135)  (105,022) 
Total increase (decrease) in net assets  7,464  (759)  (516)  (29,050) 
Net assets at December 31, 2012  $ 670,333  $ 11,060  $ 4,876  $ 1,185,574 

 

The accompanying notes are an integral part of these financial statements. 
63

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011 
(Dollars in thousands)

 

        ING American 
    ING American    Funds 
  ING American  Funds Global    International 
  Funds Asset  Growth and  ING American  Growth and 
  Allocation  Income  Funds Growth  Income 
  Portfolio  Portfolio  Portfolio  Portfolio 
Net assets at January 1, 2011  $ 352,116  $ -  $ 2,301,516  $ - 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (4,054)  (107)  (51,036)  (78) 
Total realized gain (loss) on investments         
and capital gains distributions  1,197  (172)  17,035  (127) 
Net unrealized appreciation (depreciation)         
of investments  (3,094)  (291)  (113,998)  (390) 
Net increase (decrease) in net assets from operations  (5,951)  (570)  (147,999)  (595) 
Changes from principal transactions:         
Premiums  5,773  237  16,229  223 
Death Benefits  (2,039)  -  (20,943)  - 
Surrenders and withdrawals  (15,070)  (296)  (129,107)  (190) 
Transfers between Divisions         
(including fixed account), net  6,105  7,451  (135,685)  5,052 
Increase (decrease) in net assets derived from         
principal transactions  (5,231)  7,392  (269,506)  5,085 
Total increase (decrease) in net assets  (11,182)  6,822  (417,505)  4,490 
Net assets at December 31, 2011  340,934  6,822  1,884,011  4,490 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (4,740)  (105)  (26,696)  (65) 
Total realized gain (loss) on investments         
and capital gains distributions  4,285  (1)  (7,187)  (41) 
Net unrealized appreciation (depreciation)         
of investments  43,813  1,427  150,180  877 
Net increase (decrease) in net assets from operations  43,358  1,321  116,297  771 
Changes from principal transactions:         
Premiums  6,022  179  4,988  324 
Death Benefits  (2,428)  (14)  (12,514)  (78) 
Surrenders and withdrawals  (22,746)  (619)  (63,502)  (395) 
Transfers between Divisions         
(including fixed account), net  27,777  7,100  (1,929,280)  5,917 
Increase (decrease) in net assets derived from         
principal transactions  8,625  6,646  (2,000,308)  5,768 
Total increase (decrease) in net assets  51,983  7,967  (1,884,011)  6,539 
Net assets at December 31, 2012  $ 392,917  $ 14,789  $ -  $ 11,029 

 

The accompanying notes are an integral part of these financial statements. 
64

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
    ING American       
  ING American  Funds World  ING Artio  ING Artio 
  Funds  Allocation  Foreign  Foreign 
  International  Portfolio -  Portfolio -  Portfolio - 
  Portfolio  Service Class  Service Class  Service 2 Class 
Net assets at January 1, 2011  $ 1,355,667  $ 180,515  $ 543,023  $ 45,325 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  (10,812)    (4,044)    (3,104)  (411) 
Total realized gain (loss) on investments             
and capital gains distributions  (29,984)    17,717    (39,745)  (1,096) 
Net unrealized appreciation (depreciation)             
of investments  (160,596)    (33,776)    (73,201)  (8,632) 
Net increase (decrease) in net assets from operations  (201,392)    (20,103)    (116,050)  (10,139) 
Changes from principal transactions:             
Premiums  9,683    3,400    8,337  409 
Death Benefits  (11,129)    (1,420)    (4,528)  (174) 
Surrenders and withdrawals  (73,055)    (11,668)    (34,361)  (2,968) 
Transfers between Divisions             
(including fixed account), net  (102,655)    33,590    (36,473)  (1,495) 
Increase (decrease) in net assets derived from             
principal transactions  (177,156)    23,902    (67,025)  (4,228) 
Total increase (decrease) in net assets  (378,548)    3,799    (183,075)  (14,367) 
Net assets at December 31, 2011  977,119    184,314    359,948  30,958 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  (11,923)    (2,239)    (618)  (171) 
Total realized gain (loss) on investments             
and capital gains distributions  (65,844)    14,934    (207,064)  (16,017) 
Net unrealized appreciation (depreciation)             
of investments  211,784    5,035    212,846  16,511 
Net increase (decrease) in net assets from operations  134,017    17,730    5,164  323 
Changes from principal transactions:             
Premiums  6,699    2,415    974  (34) 
Death Benefits  (9,657)    (1,666)    (2,262)  (142) 
Surrenders and withdrawals  (60,638)    (8,507)    (13,612)  (833) 
Transfers between Divisions             
(including fixed account), net  (38,493)    (8,319)    (350,212)  (30,272) 
Increase (decrease) in net assets derived from             
principal transactions  (102,089)    (16,077)    (365,112)  (31,281) 
Total increase (decrease) in net assets  31,928    1,653    (359,948)  (30,958) 
Net assets at December 31, 2012  $ 1,009,047  $ 185,967  $ -  $ - 

 

The accompanying notes are an integral part of these financial statements. 
65

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
      ING BlackRock   
  ING BlackRock  ING BlackRock  Large Cap  ING BlackRock 
  Health Sciences  Inflation  Growth  Large Cap 
  Opportunities Protected Bond  Portfolio -  Growth 
  Portfolio -  Portfolio -  Institutional  Portfolio - 
  Service Class  Service Class  Class  Service Class 
Net assets at January 1, 2011  $ 167,211  $ 255,091  $ 153  $ 131,991 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (3,711)  (1,356)  -  (3,118) 
Total realized gain (loss) on investments         
and capital gains distributions  (4,717)  15,724  (5)  (4,312) 
Net unrealized appreciation (depreciation)         
of investments  9,734  13,968  2  (2,224) 
Net increase (decrease) in net assets from operations  1,306  28,336  (3)  (9,654) 
Changes from principal transactions:         
Premiums  1,611  4,226  -  1,361 
Death Benefits  (1,672)  (2,738)  -  (1,242) 
Surrenders and withdrawals  (14,192)  (29,921)  (9)  (12,457) 
Transfers between Divisions         
(including fixed account), net  21,097  249,319  (7)  28,505 
Increase (decrease) in net assets derived from         
principal transactions  6,844  220,886  (16)  16,167 
Total increase (decrease) in net assets  8,150  249,222  (19)  6,513 
Net assets at December 31, 2011  175,361  504,313  134  138,504 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (3,585)  (10,534)  (1)  (3,086) 
Total realized gain (loss) on investments         
and capital gains distributions  5,606  34,429  (13)  13,265 
Net unrealized appreciation (depreciation)         
of investments  25,003  (5,449)  31  5,868 
Net increase (decrease) in net assets from operations  27,024  18,446  17  16,047 
Changes from principal transactions:         
Premiums  1,811  5,001  -  1,099 
Death Benefits  (1,361)  (5,793)  -  (1,634) 
Surrenders and withdrawals  (14,273)  (57,509)  (66)  (12,716) 
Transfers between Divisions         
(including fixed account), net  10,068  104,398  (16)  4,814 
Increase (decrease) in net assets derived from         
principal transactions  (3,755)  46,097  (82)  (8,437) 
Total increase (decrease) in net assets  23,269  64,543  (65)  7,610 
Net assets at December 31, 2012  $ 198,630  $ 568,856  $ 69  $ 146,114 

 

The accompanying notes are an integral part of these financial statements. 
66

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
    ING Clarion  ING Clarion   
    Global Real  Global Real  ING Clarion 
    Estate  Estate  Real Estate 
  ING Bond  Portfolio -  Portfolio -  Portfolio - 
  Portfolio  Service Class  Service 2 Class  Service Class 
Net assets at January 1, 2011  $ 500,271  $ 148,699  $ 2,264  $ 322,300 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  945    1,253    10  (3,710) 
Total realized gain (loss) on investments             
and capital gains distributions  14,974    (7,827)    (169)  (28,568) 
Net unrealized appreciation (depreciation)             
of investments  (1,823)    (3,437)    (5)  53,114 
Net increase (decrease) in net assets from operations  14,096    (10,011)    (164)  20,836 
Changes from principal transactions:             
Premiums  5,253    219    -  98 
Death Benefits  (4,601)    (1,088)    (8)  (4,016) 
Surrenders and withdrawals  (31,238)    (8,368)    (146)  (32,265) 
Transfers between Divisions             
(including fixed account), net  (20,043)    (8,689)    (131)  (14,007) 
Increase (decrease) in net assets derived from             
principal transactions  (50,629)    (17,926)    (285)  (50,190) 
Total increase (decrease) in net assets  (36,533)    (27,937)    (449)  (29,354) 
Net assets at December 31, 2011  463,738    120,762    1,815  292,946 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  318    (2,568)    (45)  (4,411) 
Total realized gain (loss) on investments             
and capital gains distributions  23,829    (3,587)    (105)  (22,078) 
Net unrealized appreciation (depreciation)             
of investments  (7,352)    32,157    529  62,236 
Net increase (decrease) in net assets from operations  16,795    26,002    379  35,747 
Changes from principal transactions:             
Premiums  4,942    201    -  95 
Death Benefits  (5,190)    (1,140)    (2)  (5,158) 
Surrenders and withdrawals  (32,239)    (8,234)    (143)  (28,958) 
Transfers between Divisions             
(including fixed account), net  (1,763)    (6,915)    (114)  (11,413) 
Increase (decrease) in net assets derived from             
principal transactions  (34,250)    (16,088)    (259)  (45,434) 
Total increase (decrease) in net assets  (17,455)    9,914    120  (9,687) 
Net assets at December 31, 2012  $ 446,283  $ 130,676  $ 1,935  $ 283,259 

 

The accompanying notes are an integral part of these financial statements.

67


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
  ING Clarion  ING DFA  ING FMRSM  ING FMRSM 
  Real Estate  World Equity  Diversified Mid  Diversified Mid 
  Portfolio -  Portfolio -  Cap Portfolio -  Cap Portfolio - 
  Service 2 Class  Service Class  Service Class  Service 2 Class 
Net assets at January 1, 2011  $ 21,031  $ 222,454  $ 879,120  $ 37,335 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (323)    (619)  (16,920)  (854) 
Total realized gain (loss) on investments           
and capital gains distributions  (814)    (9,816)  16,739  529 
Net unrealized appreciation (depreciation)           
of investments  2,420    (11,536)  (99,698)  (4,364) 
Net increase (decrease) in net assets from operations  1,283    (21,971)  (99,879)  (4,689) 
Changes from principal transactions:           
Premiums  1    2,448  4,636  37 
Death Benefits  (163)    (1,726)  (10,394)  (139) 
Surrenders and withdrawals  (1,352)    (9,687)  (73,472)  (2,011) 
Transfers between Divisions           
(including fixed account), net  (593)    (34,729)  (73,095)  (929) 
Increase (decrease) in net assets derived from           
principal transactions  (2,107)    (43,694)  (152,325)  (3,042) 
Total increase (decrease) in net assets  (824)    (65,665)  (252,204)  (7,731) 
Net assets at December 31, 2011  20,207    156,789  626,916  29,604 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (390)    (776)  (11,531)  (700) 
Total realized gain (loss) on investments           
and capital gains distributions  (884)    (3,040)  1,507  291 
Net unrealized appreciation (depreciation)           
of investments  3,677    26,004  80,705  3,685 
Net increase (decrease) in net assets from operations  2,403    22,188  70,681  3,276 
Changes from principal transactions:           
Premiums  -    2,026  4,796  18 
Death Benefits  (118)    (1,698)  (10,479)  (205) 
Surrenders and withdrawals  (1,584)    (7,126)  (55,185)  (1,663) 
Transfers between Divisions           
(including fixed account), net  (671)    (11,461)  (40,412)  (852) 
Increase (decrease) in net assets derived from           
principal transactions  (2,373)    (18,259)  (101,280)  (2,702) 
Total increase (decrease) in net assets  30    3,929  (30,599)  574 
Net assets at December 31, 2012  $ 20,237  $ 160,718  $ 596,317  $ 30,178 

 

The accompanying notes are an integral part of these financial statements. 
68

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
          ING Franklin 
          Templeton 
  ING Franklin  ING Franklin  ING Franklin  Founding 
  Income  Income  Mutual Shares  Strategy 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service 2 Class  Service Class  Service Class 
Net assets at January 1, 2011  $ 448,938  $ 8,983  $ 200,678  $ 857,015 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  14,871  254    1,814  (2,193) 
Total realized gain (loss) on investments           
and capital gains distributions  (8,436)  (179)    (4,723)  (22,689) 
Net unrealized appreciation (depreciation)           
of investments  (7,611)  (115)    (3,018)  (5,336) 
Net increase (decrease) in net assets from operations  (1,176)  (40)    (5,927)  (30,218) 
Changes from principal transactions:           
Premiums  4,564  24    1,957  6,767 
Death Benefits  (5,258)  (63)    (1,816)  (7,177) 
Surrenders and withdrawals  (32,737)  (658)    (11,943)  (37,714) 
Transfers between Divisions           
(including fixed account), net  41,927  762    (4,785)  (40,822) 
Increase (decrease) in net assets derived from           
principal transactions  8,496  65    (16,587)  (78,946) 
Total increase (decrease) in net assets  7,320  25    (22,514)  (109,164) 
Net assets at December 31, 2011  456,258  9,008    178,164  747,851 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  16,317  296    (1,726)  8,274 
Total realized gain (loss) on investments           
and capital gains distributions  (6,867)  163    (4,250)  (13,285) 
Net unrealized appreciation (depreciation)           
of investments  34,961  411    24,395  97,911 
Net increase (decrease) in net assets from operations  44,411  870    18,419  92,900 
Changes from principal transactions:           
Premiums  3,389  -    1,472  5,532 
Death Benefits  (5,599)  (173)    (1,902)  (7,821) 
Surrenders and withdrawals  (37,042)  (457)    (11,678)  (44,824) 
Transfers between Divisions           
(including fixed account), net  22,263  1,011    (7,908)  (25,372) 
Increase (decrease) in net assets derived from           
principal transactions  (16,989)  381    (20,016)  (72,485) 
Total increase (decrease) in net assets  27,422  1,251    (1,597)  20,415 
Net assets at December 31, 2012  $ 483,680  $ 10,259  $ 176,567  $ 768,266 

 

The accompanying notes are an integral part of these financial statements. 
69

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
            ING Invesco 
            Van Kampen 
  ING Global  ING Global  ING Global  Growth and 
  Resources  Resources  Resources  Income 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Adviser Class  Service Class  Service 2 Class  Service Class 
Net assets at January 1, 2011  $ -  $ 653,531  $ 30,533  $ 460,426 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  (1,165)    (12,000)    (659)  (4,125) 
Total realized gain (loss) on investments             
and capital gains distributions  (3,055)    (14,694)    (164)  10,484 
Net unrealized appreciation (depreciation)             
of investments  (12,737)    (37,942)    (2,491)  (24,374) 
Net increase (decrease) in net assets from operations  (16,957)    (64,636)    (3,314)  (18,015) 
Changes from principal transactions:             
Premiums  1,569    162    1  1,798 
Death Benefits  (341)    (5,108)    (280)  (11,952) 
Surrenders and withdrawals  (3,589)    (45,240)    (1,349)  (36,822) 
Transfers between Divisions             
(including fixed account), net  107,262    (47,432)    (792)  (11,902) 
Increase (decrease) in net assets derived from             
principal transactions  104,901    (97,618)    (2,420)  (58,878) 
Total increase (decrease) in net assets  87,944    (162,254)    (5,734)  (76,893) 
Net assets at December 31, 2011  87,944    491,277    24,799  383,533 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  (1,745)    (8,224)    (496)  (1,574) 
Total realized gain (loss) on investments             
and capital gains distributions  (9,349)    (25,567)    (549)  (8,164) 
Net unrealized appreciation (depreciation)             
of investments  5,143    9,264    (289)  55,203 
Net increase (decrease) in net assets from operations  (5,951)    (24,527)    (1,334)  45,465 
Changes from principal transactions:             
Premiums  911    149    1  1,843 
Death Benefits  (382)    (3,871)    (117)  (12,024) 
Surrenders and withdrawals  (5,199)    (31,439)    (1,349)  (33,155) 
Transfers between Divisions             
(including fixed account), net  (5,109)    (20,927)    (415)  (12,018) 
Increase (decrease) in net assets derived from             
principal transactions  (9,779)    (56,088)    (1,880)  (55,354) 
Total increase (decrease) in net assets  (15,730)    (80,615)    (3,214)  (9,889) 
Net assets at December 31, 2012  $ 72,214  $ 410,662  $ 21,585  $ 373,644 

 

The accompanying notes are an integral part of these financial statements. 
70

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
ING Invesco
  Van Kampen  ING JPMorgan  ING JPMorgan  ING JPMorgan 
  Growth and  Emerging  Emerging  Small Cap Core 
  Income  Markets Equity Markets Equity  Equity 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service 2 Class  Service Class  Service 2 Class  Service Class 
Net assets at January 1, 2011  $ 52,570  $ 657,788  $ 35,486  $ 257,411 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (788)  (9,954)  (610)  (5,091) 
Total realized gain (loss) on investments         
and capital gains distributions  (784)  12,708  2,397  (5,048) 
Net unrealized appreciation (depreciation)         
of investments  (848)  (133,654)  (8,715)  3,052 
Net increase (decrease) in net assets from operations  (2,420)  (130,900)  (6,928)  (7,087) 
Changes from principal transactions:         
Premiums  12  4,929  -  1,480 
Death Benefits  (464)  (4,227)  (172)  (1,607) 
Surrenders and withdrawals  (3,683)  (43,624)  (2,031)  (18,328) 
Transfers between Divisions         
(including fixed account), net  (1,482)  11,179  (879)  (7,974) 
Increase (decrease) in net assets derived from         
principal transactions  (5,617)  (31,743)  (3,082)  (26,429) 
Total increase (decrease) in net assets  (8,037)  (162,643)  (10,010)  (33,516) 
Net assets at December 31, 2011  44,533  495,145  25,476  223,895 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (486)  (14,044)  (721)  (5,682) 
Total realized gain (loss) on investments         
and capital gains distributions  (613)  (7,835)  1,292  20,877 
Net unrealized appreciation (depreciation)         
of investments  5,962  99,394  3,295  17,881 
Net increase (decrease) in net assets from operations  4,863  77,515  3,866  33,076 
Changes from principal transactions:         
Premiums  24  4,392  (1)  1,538 
Death Benefits  (449)  (4,988)  (129)  (1,881) 
Surrenders and withdrawals  (3,339)  (35,740)  (1,265)  (17,239) 
Transfers between Divisions         
(including fixed account), net  (985)  29,224  (1,004)  (15,425) 
Increase (decrease) in net assets derived from         
principal transactions  (4,749)  (7,112)  (2,399)  (33,007) 
Total increase (decrease) in net assets  114  70,403  1,467  69 
Net assets at December 31, 2012  $ 44,647  $ 565,548  $ 26,943  $ 223,964 

 

The accompanying notes are an integral part of these financial statements. 
71

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
ING JPMorgan
  Small Cap Core  ING Large Cap  ING Large Cap  ING Large Cap 
  Equity  Growth  Growth  Growth 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service 2 Class  Adviser Class  Service Class  Service 2 Class 
Net assets at January 1, 2011  $ 38,538  $ -  $ 121,916  $ 886 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (900)  -  (5,190)  (23) 
Total realized gain (loss) on investments         
and capital gains distributions  198  -  25,733  72 
Net unrealized appreciation (depreciation)         
of investments  (580)  -  (23,630)  (55) 
Net increase (decrease) in net assets from operations  (1,282)  -  (3,087)  (6) 
Changes from principal transactions:         
Premiums  3  -  1,442  - 
Death Benefits  (492)  -  (1,111)  - 
Surrenders and withdrawals  (2,502)  -  (14,155)  (72) 
Transfers between Divisions         
(including fixed account), net  (2,183)  -  112,727  (24) 
Increase (decrease) in net assets derived from         
principal transactions  (5,174)  -  98,903  (96) 
Total increase (decrease) in net assets  (6,456)  -  95,816  (102) 
Net assets at December 31, 2011  32,082  -  217,732  784 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (925)  (22,513)  (5,527)  (20) 
Total realized gain (loss) on investments         
and capital gains distributions  569  4,975  16,657  21 
Net unrealized appreciation (depreciation)         
of investments  5,071  97,608  20,382  111 
Net increase (decrease) in net assets from operations  4,715  80,070  31,512  112 
Changes from principal transactions:         
Premiums  2  4,508  575  - 
Death Benefits  (270)  (8,393)  (2,205)  (14) 
Surrenders and withdrawals  (2,463)  (56,134)  (16,567)  (12) 
Transfers between Divisions         
(including fixed account), net  (896)  1,881,228  (16,507)  (14) 
Increase (decrease) in net assets derived from         
principal transactions  (3,627)  1,821,209  (34,704)  (40) 
Total increase (decrease) in net assets  1,088  1,901,279  (3,192)  72 
Net assets at December 31, 2012  $ 33,170  $ 1,901,279  $ 214,540  $ 856 

 

The accompanying notes are an integral part of these financial statements. 
72

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
    ING Limited  ING Liquid  ING Liquid 
  ING Large Cap  Maturity Bond  Assets  Assets 
  Value Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service Class  Service Class  Service 2 Class 
Net assets at January 1, 2011  $ -  $ 94,829  $ 1,063,594  $ 23,027 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (757)    1,105  (27,386)  (617) 
Total realized gain (loss) on investments           
and capital gains distributions  (836)    (2,671)  291  6 
Net unrealized appreciation (depreciation)           
of investments  763    1,059  -  - 
Net increase (decrease) in net assets from operations  (830)    (507)  (27,095)  (611) 
Changes from principal transactions:           
Premiums  294    (18)  21,374  1,001 
Death Benefits  (1,419)    (3,202)  (15,050)  (192) 
Surrenders and withdrawals  (7,240)    (12,513)  (363,002)  (13,161) 
Transfers between Divisions           
(including fixed account), net  73,935    (2,825)  314,406  9,264 
Increase (decrease) in net assets derived from           
principal transactions  65,570    (18,558)  (42,272)  (3,088) 
Total increase (decrease) in net assets  64,740    (19,065)  (69,367)  (3,699) 
Net assets at December 31, 2011  64,740    75,764  994,227  19,328 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (245)    (737)  (21,544)  (449) 
Total realized gain (loss) on investments           
and capital gains distributions  2,597    (1,426)  59  1 
Net unrealized appreciation (depreciation)           
of investments  6,005    1,929  -  - 
Net increase (decrease) in net assets from operations  8,357    (234)  (21,485)  (448) 
Changes from principal transactions:           
Premiums  285    13  14,478  403 
Death Benefits  (1,318)    (2,660)  (20,576)  (439) 
Surrenders and withdrawals  (10,047)    (9,569)  (266,991)  (8,311) 
Transfers between Divisions           
(including fixed account), net  14,863    (587)  123,102  4,886 
Increase (decrease) in net assets derived from           
principal transactions  3,783    (12,803)  (149,987)  (3,461) 
Total increase (decrease) in net assets  12,140    (13,037)  (171,472)  (3,909) 
Net assets at December 31, 2012  $ 76,880  $ 62,727  $ 822,755  $ 15,419 

 

The accompanying notes are an integral part of these financial statements. 
73

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
  ING Marsico  ING Marsico  ING MFS Total  ING MFS Total 
  Growth  Growth  Return  Return 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service 2 Class  Service Class  Service 2 Class 
Net assets at January 1, 2011  $ 502,962  $ 18,769  $ 742,863  $ 34,511 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (9,711)  (468)  760  (149) 
Total realized gain (loss) on investments         
and capital gains distributions  45,214  527  (15,414)  (1,228) 
Net unrealized appreciation (depreciation)         
of investments  (53,861)  (834)  10,803  928 
Net increase (decrease) in net assets from operations  (18,358)  (775)  (3,851)  (449) 
Changes from principal transactions:         
Premiums  3,314  6  4,364  14 
Death Benefits  (10,652)  (135)  (16,030)  (288) 
Surrenders and withdrawals  (42,353)  (1,259)  (72,532)  (2,001) 
Transfers between Divisions         
(including fixed account), net  (17,241)  (239)  (19,187)  (797) 
Increase (decrease) in net assets derived from         
principal transactions  (66,932)  (1,627)  (103,385)  (3,072) 
Total increase (decrease) in net assets  (85,290)  (2,402)  (107,236)  (3,521) 
Net assets at December 31, 2011  417,672  16,367  635,627  30,990 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (8,584)  (426)  761  (170) 
Total realized gain (loss) on investments         
and capital gains distributions  33,265  509  (16,289)  (588) 
Net unrealized appreciation (depreciation)         
of investments  15,787  1,441  68,715  3,125 
Net increase (decrease) in net assets from operations  40,468  1,524  53,187  2,367 
Changes from principal transactions:         
Premiums  2,448  2  4,584  66 
Death Benefits  (10,154)  (222)  (15,466)  (269) 
Surrenders and withdrawals  (36,007)  (927)  (62,581)  (2,187) 
Transfers between Divisions         
(including fixed account), net  (9,185)  (206)  (1,279)  (35) 
Increase (decrease) in net assets derived from         
principal transactions  (52,898)  (1,353)  (74,742)  (2,425) 
Total increase (decrease) in net assets  (12,430)  171  (21,555)  (58) 
Net assets at December 31, 2012  $ 405,242  $ 16,538  $ 614,072  $ 30,932 

 

The accompanying notes are an integral part of these financial statements. 
74

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
            ING 
    ING Morgan  ING Morgan  Oppenheimer 
  ING MFS  Stanley Global  Stanley Global  Active 
  Utilities  Franchise  Franchise  Allocation 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service Class  Service 2 Class  Service Class 
Net assets at January 1, 2011  $ 431,592  $ 326,147  $ 62,764  $ 60,023 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  4,298    (886)    (320)  (1,460) 
Total realized gain (loss) on investments             
and capital gains distributions  (14,338)    (1,028)    1,762  5,331 
Net unrealized appreciation (depreciation)             
of investments  25,614    21,385    2,267  (7,753) 
Net increase (decrease) in net assets from operations  15,574    19,471    3,709  (3,882) 
Changes from principal transactions:             
Premiums  5,069    2,845    67  822 
Death Benefits  (3,936)    (3,234)    (598)  (487) 
Surrenders and withdrawals  (33,233)    (22,101)    (4,785)  (3,297) 
Transfers between Divisions             
(including fixed account), net  48,812    9,970    (2,359)  (2,420) 
Increase (decrease) in net assets derived from             
principal transactions  16,712    (12,520)    (7,675)  (5,382) 
Total increase (decrease) in net assets  32,286    6,951    (3,966)  (9,264) 
Net assets at December 31, 2011  463,878    333,098    58,798  50,759 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  2,098    (3,373)    (753)  (3) 
Total realized gain (loss) on investments             
and capital gains distributions  (15,205)    13,884    4,507  1,147 
Net unrealized appreciation (depreciation)             
of investments  58,800    31,806    3,375  3,600 
Net increase (decrease) in net assets from operations  45,693    42,317    7,129  4,744 
Changes from principal transactions:             
Premiums  4,135    2,345    62  593 
Death Benefits  (5,428)    (3,031)    (482)  (359) 
Surrenders and withdrawals  (35,281)    (26,718)    (4,852)  (2,332) 
Transfers between Divisions             
(including fixed account), net  (12,822)    9,506    (1,129)  (4,202) 
Increase (decrease) in net assets derived from             
principal transactions  (49,396)    (17,898)    (6,401)  (6,300) 
Total increase (decrease) in net assets  (3,703)    24,419    728  (1,556) 
Net assets at December 31, 2012  $ 460,175  $ 357,517  $ 59,526  $ 49,203 

 

The accompanying notes are an integral part of these financial statements. 
75

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
  ING PIMCO  ING PIMCO  ING PIMCO   
  High Yield  Total Return  Total Return  ING Pioneer 
  Portfolio -  Bond Portfolio -  Bond Portfolio -  Fund Portfolio - 
  Service Class  Service Class  Service 2 Class  Service Class 
Net assets at January 1, 2011  $ 519,986  $ 2,995,230  $ 73,254  $ 57,938 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  25,043  45,341  951  (621) 
Total realized gain (loss) on investments         
and capital gains distributions  (2,553)  131,304  4,358  237 
Net unrealized appreciation (depreciation)         
of investments  (12,874)  (155,150)  (4,911)  (3,366) 
Net increase (decrease) in net assets from operations  9,616  21,495  398  (3,750) 
Changes from principal transactions:         
Premiums  2,512  25,877  75  250 
Death Benefits  (8,955)  (32,139)  (554)  (540) 
Surrenders and withdrawals  (57,362)  (241,232)  (10,855)  (4,637) 
Transfers between Divisions         
(including fixed account), net  40,480  50,421  3,518  (879) 
Increase (decrease) in net assets derived from         
principal transactions  (23,325)  (197,073)  (7,816)  (5,806) 
Total increase (decrease) in net assets  (13,709)  (175,578)  (7,418)  (9,556) 
Net assets at December 31, 2011  506,277  2,819,652  65,836  48,382 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  22,236  24,047  352  (598) 
Total realized gain (loss) on investments         
and capital gains distributions  938  29,270  190  (366) 
Net unrealized appreciation (depreciation)         
of investments  36,790  110,960  3,141  4,477 
Net increase (decrease) in net assets from operations  59,964  164,277  3,683  3,513 
Changes from principal transactions:         
Premiums  3,014  23,119  84  241 
Death Benefits  (8,914)  (31,092)  (451)  (605) 
Surrenders and withdrawals  (61,798)  (230,667)  (5,965)  (4,346) 
Transfers between Divisions         
(including fixed account), net  92,184  184,673  1,702  (1,803) 
Increase (decrease) in net assets derived from         
principal transactions  24,486  (53,967)  (4,630)  (6,513) 
Total increase (decrease) in net assets  84,450  110,310  (947)  (3,000) 
Net assets at December 31, 2012  $ 590,727  $ 2,929,962  $ 64,889  $ 45,382 

 

The accompanying notes are an integral part of these financial statements. 
76

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
        ING Retirement 
  ING Pioneer  ING Retirement  ING Retirement  Moderate 
  Mid Cap Value  Conservative  Growth  Growth 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Adviser Class  Adviser Class  Adviser Class 
Net assets at January 1, 2011  $ 572,449  $ 470,803  $ 4,611,727  $ 3,185,520 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (6,473)  (4,733)  (84,105)  (46,691) 
Total realized gain (loss) on investments         
and capital gains distributions  1,707  16,679  55,907  39,098 
Net unrealized appreciation (depreciation)         
of investments  (33,023)  571  (139,667)  (65,826) 
Net increase (decrease) in net assets from operations  (37,789)  12,517  (167,865)  (73,419) 
Changes from principal transactions:         
Premiums  2,881  5,306  42,896  24,135 
Death Benefits  (7,225)  (4,923)  (40,032)  (39,428) 
Surrenders and withdrawals  (44,054)  (34,728)  (197,531)  (169,785) 
Transfers between Divisions         
(including fixed account), net  (24,437)  106,029  (137,508)  (68,075) 
Increase (decrease) in net assets derived from         
principal transactions  (72,835)  71,684  (332,175)  (253,153) 
Total increase (decrease) in net assets  (110,624)  84,201  (500,040)  (326,572) 
Net assets at December 31, 2011  461,825  555,004  4,111,687  2,858,948 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (7,322)  2,446  (15,500)  (884) 
Total realized gain (loss) on investments         
and capital gains distributions  1,672  19,247  65,751  48,345 
Net unrealized appreciation (depreciation)         
of investments  43,206  6,886  348,163  195,022 
Net increase (decrease) in net assets from operations  37,556  28,579  398,414  242,483 
Changes from principal transactions:         
Premiums  2,655  3,633  31,152  17,402 
Death Benefits  (6,719)  (6,486)  (37,628)  (36,700) 
Surrenders and withdrawals  (36,291)  (44,470)  (188,129)  (176,880) 
Transfers between Divisions         
(including fixed account), net  (20,741)  48,665  (107,005)  (52,372) 
Increase (decrease) in net assets derived from         
principal transactions  (61,096)  1,342  (301,610)  (248,550) 
Total increase (decrease) in net assets  (23,540)  29,921  96,804  (6,067) 
Net assets at December 31, 2012  $ 438,285  $ 584,925  $ 4,208,491  $ 2,852,881 

 

The accompanying notes are an integral part of these financial statements. 
77

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
    ING T. Rowe  ING T. Rowe  ING T. Rowe 
  ING Retirement  Price Capital  Price Capital  Price Equity 
  Moderate  Appreciation  Appreciation  Income 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Adviser Class  Service Class  Service 2 Class  Service Class 
Net assets at January 1, 2011  $ 1,823,032  $ 2,636,403  $ 83,486  $ 685,068 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  (19,776)    (16,539)    (845)  (3,318) 
Total realized gain (loss) on investments             
and capital gains distributions  21,753    77,517    (654)  (4,738) 
Net unrealized appreciation (depreciation)             
of investments  (7,486)    (50,721)    1,563  (16,655) 
Net increase (decrease) in net assets from operations  (5,509)    10,257    64  (24,711) 
Changes from principal transactions:             
Premiums  14,570    24,676    53  4,033 
Death Benefits  (26,638)    (33,095)    (856)  (9,883) 
Surrenders and withdrawals  (101,101)    (215,118)    (8,224)  (56,847) 
Transfers between Divisions             
(including fixed account), net  (22,874)    (52,715)    (1,420)  45,446 
Increase (decrease) in net assets derived from             
principal transactions  (136,043)    (276,252)    (10,447)  (17,251) 
Total increase (decrease) in net assets  (141,552)    (265,995)    (10,383)  (41,962) 
Net assets at December 31, 2011  1,681,480    2,370,408    73,103  643,106 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  10,228    (21,978)    (998)  (3,624) 
Total realized gain (loss) on investments             
and capital gains distributions  25,815    84,928    2,207  (580) 
Net unrealized appreciation (depreciation)             
of investments  85,932    206,957    6,940  93,445 
Net increase (decrease) in net assets from operations  121,975    269,907    8,149  89,241 
Changes from principal transactions:             
Premiums  11,922    19,827    274  3,938 
Death Benefits  (27,093)    (34,550)    (877)  (11,894) 
Surrenders and withdrawals  (117,053)    (199,731)    (5,781)  (57,709) 
Transfers between Divisions             
(including fixed account), net  (2,767)    35,567    2,294  (21,475) 
Increase (decrease) in net assets derived from             
principal transactions  (134,991)    (178,887)    (4,090)  (87,140) 
Total increase (decrease) in net assets  (13,016)    91,020    4,059  2,101 
Net assets at December 31, 2012  $ 1,668,464  $ 2,461,428  $ 77,162  $ 645,207 

 

The accompanying notes are an integral part of these financial statements. 
78

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
  ING T. Rowe  ING T. Rowe     
  Price Equity    Price  ING Templeton  ING Templeton 
  Income  International  Global Growth Global Growth 
  Portfolio -  Stock Portfolio -  Portfolio -  Portfolio - 
  Service 2 Class  Service Class  Service Class  Service 2 Class 
Net assets at January 1, 2011  $ 23,922  $ 166,057  $ 286,405  $ 4,732 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (217)    1,414  (2,192)  (62) 
Total realized gain (loss) on investments           
and capital gains distributions  (483)    (8,521)  3,451  (104) 
Net unrealized appreciation (depreciation)           
of investments  (238)    (15,620)  (23,014)  (184) 
Net increase (decrease) in net assets from operations  (938)    (22,727)  (21,755)  (350) 
Changes from principal transactions:           
Premiums  9    1,100  1,810  3 
Death Benefits  (252)    (1,021)  (4,689)  (12) 
Surrenders and withdrawals  (1,646)    (10,404)  (23,614)  (321) 
Transfers between Divisions           
(including fixed account), net  2,194    (2,370)  (9,620)  (151) 
Increase (decrease) in net assets derived from           
principal transactions  305    (12,695)  (36,113)  (481) 
Total increase (decrease) in net assets  (633)    (35,422)  (57,868)  (831) 
Net assets at December 31, 2011  23,289    130,635  228,537  3,901 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (219)    (3,302)  (1,195)  (43) 
Total realized gain (loss) on investments           
and capital gains distributions  (267)    (15,703)  (863)  (89) 
Net unrealized appreciation (depreciation)           
of investments  3,585    38,693  42,699  837 
Net increase (decrease) in net assets from operations  3,099    19,688  40,641  705 
Changes from principal transactions:           
Premiums  64    1,131  1,509  4 
Death Benefits  (260)    (1,728)  (4,393)  (23) 
Surrenders and withdrawals  (1,708)    (8,747)  (20,713)  (190) 
Transfers between Divisions           
(including fixed account), net  (170)    3,842  (2,318)  230 
Increase (decrease) in net assets derived from           
principal transactions  (2,074)    (5,502)  (25,915)  21 
Total increase (decrease) in net assets  1,025    14,186  14,726  726 
Net assets at December 31, 2012  $ 24,314  $ 144,821  $ 243,263  $ 4,627 

 

The accompanying notes are an integral part of these financial statements. 
79

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
    ING American      ING Columbia 
    Century Small-  ING Baron  Small Cap 
  ING Diversified  Mid Cap Value  Growth  Value II 
  International  Portfolio -  Portfolio -  Portfolio - 
  Fund - Class R  Service Class  Service Class  Service Class 
Net assets at January 1, 2011  $ 178  $ 3,047  $ 342,203  $ 153,917 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  (2)    (14)    (9,161)  (3,097) 
Total realized gain (loss) on investments             
and capital gains distributions  (6)    510    1,071  1,260 
Net unrealized appreciation (depreciation)             
of investments  (17)    (666)    2,806  (5,379) 
Net increase (decrease) in net assets from operations  (25)    (170)    (5,284)  (7,216) 
Changes from principal transactions:             
Premiums  -    124    3,746  42 
Death Benefits  -    (6)    (1,956)  (1,486) 
Surrenders and withdrawals  (25)    (846)    (21,686)  (7,006) 
Transfers between Divisions             
(including fixed account), net  -    (174)    18,748  (10,734) 
Increase (decrease) in net assets derived from             
principal transactions  (25)    (902)    (1,148)  (19,184) 
Total increase (decrease) in net assets  (50)    (1,072)    (6,432)  (26,400) 
Net assets at December 31, 2011  128    1,975    335,771  127,517 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  1    (11)    (8,804)  (3,000) 
Total realized gain (loss) on investments             
and capital gains distributions  (25)    342    26,578  1,735 
Net unrealized appreciation (depreciation)             
of investments  40    (75)    34,570  14,966 
Net increase (decrease) in net assets from operations  16    256    52,344  13,701 
Changes from principal transactions:             
Premiums  -    46    4,822  36 
Death Benefits  -    -    (2,972)  (1,020) 
Surrenders and withdrawals  (43)    (485)    (23,363)  (6,396) 
Transfers between Divisions             
(including fixed account), net  (1)    36    (15,525)  (8,839) 
Increase (decrease) in net assets derived from             
principal transactions  (44)    (403)    (37,038)  (16,219) 
Total increase (decrease) in net assets  (28)    (147)    15,306  (2,518) 
Net assets at December 31, 2012  $ 100  $ 1,828  $ 351,077  $ 124,999 

 

The accompanying notes are an integral part of these financial statements. 
80

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
  ING Davis New      ING Growth  ING Growth 
  York Venture  ING Global  and Income  and Income 
  Portfolio -  Bond Portfolio -  Core Portfolio -  Core Portfolio - 
  Service Class  Service Class  Initial Class  Service Class 
Net assets at January 1, 2011  $ 291,613  $ 9,633  $ 1,384  $ 8,281 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (4,201)    543  (8)  (122) 
Total realized gain (loss) on investments           
and capital gains distributions  (8,149)    135  89  (51) 
Net unrealized appreciation (depreciation)           
of investments  (6,855)    (470)  (226)  (1,004) 
Net increase (decrease) in net assets from operations  (19,205)    208  (145)  (1,177) 
Changes from principal transactions:           
Premiums  2,253    90  4  23 
Death Benefits  (2,609)    (53)  (4)  (99) 
Surrenders and withdrawals  (14,548)    (1,697)  (338)  (419) 
Transfers between Divisions           
(including fixed account), net  (14,771)    749  (6)  (261) 
Increase (decrease) in net assets derived from           
principal transactions  (29,675)    (911)  (344)  (756) 
Total increase (decrease) in net assets  (48,880)    (703)  (489)  (1,933) 
Net assets at December 31, 2011  242,733    8,930  895  6,348 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (5,545)    397  (8)  (127) 
Total realized gain (loss) on investments           
and capital gains distributions  (4,582)    27  59  (157) 
Net unrealized appreciation (depreciation)           
of investments  32,595    113  17  689 
Net increase (decrease) in net assets from operations  22,468    537  68  405 
Changes from principal transactions:           
Premiums  2,007    23  3  32 
Death Benefits  (3,186)    (32)  (107)  (27) 
Surrenders and withdrawals  (13,537)    (744)  (137)  (497) 
Transfers between Divisions           
(including fixed account), net  (5,721)    (147)  (11)  (547) 
Increase (decrease) in net assets derived from           
principal transactions  (20,437)    (900)  (252)  (1,039) 
Total increase (decrease) in net assets  2,031    (363)  (184)  (634) 
Net assets at December 31, 2012  $ 244,764  $ 8,567  $ 711  $ 5,714 

 

The accompanying notes are an integral part of these financial statements. 
81

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
    ING Invesco  ING Invesco   
  ING Invesco  Van Kampen  Van Kampen   
  Van Kampen  Equity and  Equity and  ING JPMorgan 
  Comstock  Income  Income  Mid Cap Value 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Initial Class  Service Class  Service Class 
Net assets at January 1, 2011  $ 189,031  $ 2,046  $ 207,495  $ 121,321 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  (2,183)    24    (958)  (2,108) 
Total realized gain (loss) on investments             
and capital gains distributions  (6,672)    20    (2,510)  15,019 
Net unrealized appreciation (depreciation)             
of investments  1,288    (69)    (3,013)  (14,481) 
Net increase (decrease) in net assets from operations  (7,567)    (25)    (6,481)  (1,570) 
Changes from principal transactions:             
Premiums  1,409    -    1,374  1,280 
Death Benefits  (2,068)    -    (2,513)  (1,137) 
Surrenders and withdrawals  (14,291)    (365)    (15,594)  (8,676) 
Transfers between Divisions             
(including fixed account), net  6,564    (116)    (10,198)  14,596 
Increase (decrease) in net assets derived from             
principal transactions  (8,386)    (481)    (26,931)  6,063 
Total increase (decrease) in net assets  (15,953)    (506)    (33,412)  4,493 
Net assets at December 31, 2011  173,078    1,540    174,083  125,814 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  (2,544)    26    (1,065)  (2,723) 
Total realized gain (loss) on investments             
and capital gains distributions  (4,783)    14    (1,338)  8,079 
Net unrealized appreciation (depreciation)             
of investments  34,064    138    19,826  17,490 
Net increase (decrease) in net assets from operations  26,737    178    17,423  22,846 
Changes from principal transactions:             
Premiums  1,324    -    1,842  1,525 
Death Benefits  (1,606)    -    (2,496)  (968) 
Surrenders and withdrawals  (14,830)    (176)    (13,479)  (10,178) 
Transfers between Divisions             
(including fixed account), net  4,369    (40)    (1,064)  29,001 
Increase (decrease) in net assets derived from             
principal transactions  (10,743)    (216)    (15,197)  19,380 
Total increase (decrease) in net assets  15,994    (38)    2,226  42,226 
Net assets at December 31, 2012  $ 189,072  $ 1,502  $ 176,309  $ 168,040 

 

The accompanying notes are an integral part of these financial statements. 
82

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
  ING    ING       
  Oppenheimer  Oppenheimer  ING PIMCO   
  Global  Global  Total Return  ING Solution 
  Portfolio -  Portfolio -  Portfolio -  2015 Portfolio - 
  Initial Class  Service Class  Service Class  Service Class 
Net assets at January 1, 2011  $ 6,776  $ 124,699  $ 7,923  $ 17,776 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  8    (1,384)    121  252 
Total realized gain (loss) on investments             
and capital gains distributions  199    (2,785)    215  (380) 
Net unrealized appreciation (depreciation)             
of investments  (701)    (9,838)    (190)  (217) 
Net increase (decrease) in net assets from operations  (494)    (14,007)    146  (345) 
Changes from principal transactions:             
Premiums  -    1,060    -  50 
Death Benefits  (102)    (1,068)    (105)  (286) 
Surrenders and withdrawals  (1,119)    (8,584)    (742)  (1,647) 
Transfers between Divisions             
(including fixed account), net  (189)    14,346    (972)  (537) 
Increase (decrease) in net assets derived from             
principal transactions  (1,410)    5,754    (1,819)  (2,420) 
Total increase (decrease) in net assets  (1,904)    (8,253)    (1,673)  (2,765) 
Net assets at December 31, 2011  4,872    116,446    6,250  15,011 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  4    (1,671)    101  375 
Total realized gain (loss) on investments             
and capital gains distributions  144    (6,479)    90  (107) 
Net unrealized appreciation (depreciation)             
of investments  758    28,311    187  1,154 
Net increase (decrease) in net assets from operations  906    20,161    378  1,422 
Changes from principal transactions:             
Premiums  -    988    -  133 
Death Benefits  (31)    (1,203)    (74)  (67) 
Surrenders and withdrawals  (908)    (8,197)    (1,102)  (942) 
Transfers between Divisions             
(including fixed account), net  (64)    2,696    (193)  (154) 
Increase (decrease) in net assets derived from             
principal transactions  (1,003)    (5,716)    (1,369)  (1,030) 
Total increase (decrease) in net assets  (97)    14,445    (991)  392 
Net assets at December 31, 2012  $ 4,775  $ 130,891  $ 5,259  $ 15,403 

 

The accompanying notes are an integral part of these financial statements. 
83

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
            ING Solution 
  ING Solution  ING Solution  ING Solution  Income 
  2025 Portfolio -  2035 Portfolio -  2045 Portfolio -  Portfolio - 
  Service Class  Service Class  Service Class  Service Class 
Net assets at January 1, 2011  $ 18,481  $ 11,158  $ 1,270  $ 6,790 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  77    (11)    (9)  170 
Total realized gain (loss) on investments             
and capital gains distributions  (395)    (304)    (21)  (50) 
Net unrealized appreciation (depreciation)             
of investments  (505)    (398)    (46)  (181) 
Net increase (decrease) in net assets from operations  (823)    (713)    (76)  (61) 
Changes from principal transactions:             
Premiums  447    239    3  13 
Death Benefits  (367)    (180)    -  (92) 
Surrenders and withdrawals  (1,276)    (405)    (43)  (467) 
Transfers between Divisions             
(including fixed account), net  (59)    (322)    (23)  (128) 
Increase (decrease) in net assets derived from             
principal transactions  (1,255)    (668)    (63)  (674) 
Total increase (decrease) in net assets  (2,078)    (1,381)    (139)  (735) 
Net assets at December 31, 2011  16,403    9,777    1,131  6,055 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  168    38    -  181 
Total realized gain (loss) on investments             
and capital gains distributions  (147)    (202)    (6)  (64) 
Net unrealized appreciation (depreciation)             
of investments  1,830    1,404    157  348 
Net increase (decrease) in net assets from operations  1,851    1,240    151  465 
Changes from principal transactions:             
Premiums  72    12    3  24 
Death Benefits  -    -    -  - 
Surrenders and withdrawals  (1,590)    (1,319)    (19)  (962) 
Transfers between Divisions             
(including fixed account), net  (344)    (302)    17  293 
Increase (decrease) in net assets derived from             
principal transactions  (1,862)    (1,609)    1  (645) 
Total increase (decrease) in net assets  (11)    (369)    152  (180) 
Net assets at December 31, 2012  $ 16,392  $ 9,408  $ 1,283  $ 5,875 

 

The accompanying notes are an integral part of these financial statements. 
84

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
ING T. Rowe
  Price Diversified  ING T. Rowe    ING UBS U.S. 
  Mid Cap  Price Growth  ING Templeton  Large Cap 
  Growth    Equity  Foreign Equity  Equity 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Service Class  Service Class  Service Class  Service Class 
Net assets at January 1, 2011  $ 11,833  $ 108,925  $ 260,443  $ 6,229 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (168)    (2,736)  (2,202)  (93) 
Total realized gain (loss) on investments           
and capital gains distributions  (158)    12,015  (18,388)  (130) 
Net unrealized appreciation (depreciation)           
of investments  (290)    (14,415)  (16,533)  (41) 
Net increase (decrease) in net assets from operations  (616)    (5,136)  (37,123)  (264) 
Changes from principal transactions:           
Premiums  127    1,395  1,968  7 
Death Benefits  (11)    (558)  (1,465)  (39) 
Surrenders and withdrawals  (1,815)    (7,504)  (16,647)  (515) 
Transfers between Divisions           
(including fixed account), net  (187)    8,706  (16,686)  (219) 
Increase (decrease) in net assets derived from           
principal transactions  (1,886)    2,039  (32,830)  (766) 
Total increase (decrease) in net assets  (2,502)    (3,097)  (69,953)  (1,030) 
Net assets at December 31, 2011  9,331    105,828  190,490  5,199 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (130)    (3,926)  (1,355)  (87) 
Total realized gain (loss) on investments           
and capital gains distributions  1,647    16,982  10,412  (81) 
Net unrealized appreciation (depreciation)           
of investments  (250)    2,522  85,080  703 
Net increase (decrease) in net assets from operations  1,267    15,578  94,137  535 
Changes from principal transactions:           
Premiums  84    1,555  2,501  1 
Death Benefits  (12)    (1,288)  (4,241)  (131) 
Surrenders and withdrawals  (1,715)    (9,867)  (23,712)  (337) 
Transfers between Divisions           
(including fixed account), net  (454)    46,368  350,474  (157) 
Increase (decrease) in net assets derived from           
principal transactions  (2,097)    36,768  325,022  (624) 
Total increase (decrease) in net assets  (830)    52,346  419,159  (89) 
Net assets at December 31, 2012  $ 8,501  $ 158,174  $ 609,649  $ 5,110 

 

The accompanying notes are an integral part of these financial statements. 
85

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
  ING Strategic  ING Strategic  ING Strategic   
  Allocation  Allocation  Allocation  ING Growth 
  Conservative  Growth  Moderate  and Income 
  Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Class S  Class S  Class S  Class A 
Net assets at January 1, 2011  $ 1,451  $ 601  $ 775  $ - 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  37  8    14  (19,807) 
Total realized gain (loss) on investments           
and capital gains distributions  (51)  (80)    (35)  (4,004) 
Net unrealized appreciation (depreciation)           
of investments  24  56    6  (45,338) 
Net increase (decrease) in net assets from operations  10  (16)    (15)  (69,149) 
Changes from principal transactions:           
Premiums  (175)  (126)    120  7,594 
Death Benefits  -  -    (4)  (18,267) 
Surrenders and withdrawals  -  -    (37)  (69,762) 
Transfers between Divisions           
(including fixed account), net  -  1    134  1,327,583 
Increase (decrease) in net assets derived from           
principal transactions  (175)  (125)    213  1,247,148 
Total increase (decrease) in net assets  (165)  (141)    198  1,177,999 
Net assets at December 31, 2011  1,286  460    973  1,177,999 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  21  (1)    4  (15,071) 
Total realized gain (loss) on investments           
and capital gains distributions  (16)  (12)    (32)  11,380 
Net unrealized appreciation (depreciation)           
of investments  139  73    143  144,912 
Net increase (decrease) in net assets from operations  144  60    115  141,221 
Changes from principal transactions:           
Premiums  131  (15)    14  8,806 
Death Benefits  -  -    -  (15,397) 
Surrenders and withdrawals  -  -    (21)  (77,200) 
Transfers between Divisions           
(including fixed account), net  (1)  -    (39)  (37,177) 
Increase (decrease) in net assets derived from           
principal transactions  130  (15)    (46)  (120,968) 
Total increase (decrease) in net assets  274  45    69  20,253 
Net assets at December 31, 2012  $ 1,560  $ 505  $ 1,042  $ 1,198,252 

 

The accompanying notes are an integral part of these financial statements. 
86

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
  ING Growth  ING Growth     
  and Income  and Income  ING GET U.S.  ING GET U.S. 
  Portfolio -  Portfolio -  Core Portfolio -  Core Portfolio - 
  Class I  Class S  Series 7  Series 8 
Net assets at January 1, 2011  $ 114  $ 449,666  $ 7,465  $ 4,109 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  -  (1,854)  6  (22) 
Total realized gain (loss) on investments         
and capital gains distributions  (4)  2,752  (585)  (407) 
Net unrealized appreciation (depreciation)         
of investments  3  (8,237)  447  346 
Net increase (decrease) in net assets from operations  (1)  (7,339)  (132)  (83) 
Changes from principal transactions:         
Premiums  -  219  (2)  (15) 
Death Benefits  -  (7,754)  -  (121) 
Surrenders and withdrawals  (35)  (46,532)  (1,576)  (1,242) 
Transfers between Divisions         
(including fixed account), net  (1)  335,936  (345)  (29) 
Increase (decrease) in net assets derived from         
principal transactions  (36)  281,869  (1,923)  (1,407) 
Total increase (decrease) in net assets  (37)  274,530  (2,055)  (1,490) 
Net assets at December 31, 2011  77  724,196  5,410  2,619 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  -  (6,860)  96  12 
Total realized gain (loss) on investments         
and capital gains distributions  (1)  14,051  (921)  (384) 
Net unrealized appreciation (depreciation)         
of investments  11  81,107  813  345 
Net increase (decrease) in net assets from operations  10  88,298  (12)  (27) 
Changes from principal transactions:         
Premiums  -  136  (4)  (1) 
Death Benefits  -  (11,097)  -  (124) 
Surrenders and withdrawals  (22)  (68,824)  (808)  (679) 
Transfers between Divisions         
(including fixed account), net  -  (31,488)  (4,586)  (1,788) 
Increase (decrease) in net assets derived from         
principal transactions  (22)  (111,273)  (5,398)  (2,592) 
Total increase (decrease) in net assets  (12)  (22,975)  (5,410)  (2,619) 
Net assets at December 31, 2012  $ 65  $ 701,221  $ -  $ - 

 

The accompanying notes are an integral part of these financial statements. 
87

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
  ING GET U.S.  ING GET U.S.  ING GET U.S.  ING GET U.S. 
  Core Portfolio -  Core Portfolio -  Core Portfolio -  Core Portfolio - 
  Series 9  Series 10  Series 11  Series 12 
Net assets at January 1, 2011  $ 4,036  $ 3,216  $ 4,857  $ 1,962 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  7    12  7  13 
Total realized gain (loss) on investments           
and capital gains distributions  (342)    (244)  (239)  (48) 
Net unrealized appreciation (depreciation)           
of investments  270    191  180  19 
Net increase (decrease) in net assets from operations  (65)    (41)  (52)  (16) 
Changes from principal transactions:           
Premiums  -    (1)  8  - 
Death Benefits  (54)    -  -  (51) 
Surrenders and withdrawals  (801)    (932)  (807)  (59) 
Transfers between Divisions           
(including fixed account), net  (381)    -  (5)  (19) 
Increase (decrease) in net assets derived from           
principal transactions  (1,236)    (933)  (804)  (129) 
Total increase (decrease) in net assets  (1,301)    (974)  (856)  (145) 
Net assets at December 31, 2011  2,735    2,242  4,001  1,817 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  30    16  2  9 
Total realized gain (loss) on investments           
and capital gains distributions  (431)    (380)  (135)  (42) 
Net unrealized appreciation (depreciation)           
of investments  363    323  42  13 
Net increase (decrease) in net assets from operations  (38)    (41)  (91)  (20) 
Changes from principal transactions:           
Premiums  (3)    -  -  - 
Death Benefits  -    -  (54)  (5) 
Surrenders and withdrawals  (820)    (1,040)  (339)  (76) 
Transfers between Divisions           
(including fixed account), net  (1,874)    (1,161)  (2)  (20) 
Increase (decrease) in net assets derived from           
principal transactions  (2,697)    (2,201)  (395)  (101) 
Total increase (decrease) in net assets  (2,735)    (2,242)  (486)  (121) 
Net assets at December 31, 2012  $ -  $ -  $ 3,515  $ 1,696 

 

The accompanying notes are an integral part of these financial statements. 
88

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
      ING BlackRock   
      Science and   
      Technology  ING Euro 
  ING GET U.S.  ING GET U.S.  Opportunities  STOXX 50® 
  Core Portfolio -  Core Portfolio -  Portfolio -  Index Portfolio - 
  Series 13  Series 14  Class S  Class A 
Net assets at January 1, 2011  $ 12,854  $ 36,259  $ 263,966  $ 4,739 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  51  404  (6,441)  299 
Total realized gain (loss) on investments         
and capital gains distributions  (169)  (26)  33,032  (2,811) 
Net unrealized appreciation (depreciation)         
of investments  126  55  (60,848)  (772) 
Net increase (decrease) in net assets from operations  8  433  (34,257)  (3,284) 
Changes from principal transactions:         
Premiums  (1)  (3)  2,645  163 
Death Benefits  (128)  (466)  (2,733)  (141) 
Surrenders and withdrawals  (3,625)  (6,837)  (17,495)  (1,139) 
Transfers between Divisions         
(including fixed account), net  (5)  (222)  (14,106)  2,617 
Increase (decrease) in net assets derived from         
principal transactions  (3,759)  (7,528)  (31,689)  1,500 
Total increase (decrease) in net assets  (3,751)  (7,095)  (65,946)  (1,784) 
Net assets at December 31, 2011  9,103  29,164  198,020  2,955 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  30  259  (5,487)  8 
Total realized gain (loss) on investments         
and capital gains distributions  (127)  (95)  24,717  (873) 
Net unrealized appreciation (depreciation)         
of investments  (65)  (692)  (10,575)  1,533 
Net increase (decrease) in net assets from operations  (162)  (528)  8,655  668 
Changes from principal transactions:         
Premiums  -  1  1,715  78 
Death Benefits  (89)  (225)  (1,607)  (21) 
Surrenders and withdrawals  (1,873)  (4,483)  (13,845)  (342) 
Transfers between Divisions         
(including fixed account), net  (58)  (129)  (6,733)  5,490 
Increase (decrease) in net assets derived from         
principal transactions  (2,020)  (4,836)  (20,470)  5,205 
Total increase (decrease) in net assets  (2,182)  (5,364)  (11,815)  5,873 
Net assets at December 31, 2012  $ 6,921  $ 23,800  $ 186,205  $ 8,828 

 

The accompanying notes are an integral part of these financial statements. 
89

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
  ING FTSE 100    ING Index Plus  ING Index Plus 
  Index®  ING Hang Seng  LargeCap  MidCap 
  Portfolio - Class  Index Portfolio -  Portfolio -  Portfolio - 
  A  Class S  Class S  Class S 
Net assets at January 1, 2011  $ 3,595  $ 81,884  $ 161,332  $ 131,427 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (22)  5  (660)  (2,162) 
Total realized gain (loss) on investments         
and capital gains distributions  (1,240)  170  (10,242)  (3,109) 
Net unrealized appreciation (depreciation)         
of investments  (408)  (13,476)  8,254  1,687 
Net increase (decrease) in net assets from operations  (1,670)  (13,301)  (2,648)  (3,584) 
Changes from principal transactions:         
Premiums  (2,769)  793  49  89 
Death Benefits  (86)  (579)  (2,850)  (1,708) 
Surrenders and withdrawals  (503)  (3,793)  (18,095)  (9,635) 
Transfers between Divisions         
(including fixed account), net  3,733  (20,825)  (11,807)  (8,868) 
Increase (decrease) in net assets derived from         
principal transactions  375  (24,404)  (32,703)  (20,122) 
Total increase (decrease) in net assets  (1,295)  (37,705)  (35,351)  (23,706) 
Net assets at December 31, 2011  2,300  44,179  125,981  107,721 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (27)  (752)  (993)  (1,934) 
Total realized gain (loss) on investments         
and capital gains distributions  -  83  (4,899)  (2,138) 
Net unrealized appreciation (depreciation)         
of investments  275  10,712  20,112  19,187 
Net increase (decrease) in net assets from operations  248  10,043  14,220  15,115 
Changes from principal transactions:         
Premiums  4,770  382  48  85 
Death Benefits  (132)  (265)  (3,023)  (1,807) 
Surrenders and withdrawals  (283)  (2,479)  (12,886)  (8,187) 
Transfers between Divisions         
(including fixed account), net  (4,642)  850  (3,868)  (4,750) 
Increase (decrease) in net assets derived from         
principal transactions  (287)  (1,512)  (19,729)  (14,659) 
Total increase (decrease) in net assets  (39)  8,531  (5,509)  456 
Net assets at December 31, 2012  $ 2,261  $ 52,710  $ 120,472  $ 108,177 

 

The accompanying notes are an integral part of these financial statements. 
90

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
          ING Russell™ 
  ING Index Plus  ING  ING Japan  Large Cap 
  SmallCap  International  TOPIX Index® Growth Index 
  Portfolio -  Index Portfolio -  Portfolio -  Portfolio - 
  Class S  Class S  Class A  Class S 
Net assets at January 1, 2011  $ 99,899  $ 65,044  $ 8,463  $ 142,575 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (1,683)  52    (44)  (2,272) 
Total realized gain (loss) on investments           
and capital gains distributions  (3,407)  774    (149)  11,059 
Net unrealized appreciation (depreciation)           
of investments  2,183  (8,670)    (1,847)  (7,707) 
Net increase (decrease) in net assets from operations  (2,907)  (7,844)    (2,040)  1,080 
Changes from principal transactions:           
Premiums  48  753    2,890  898 
Death Benefits  (1,380)  (208)    (72)  (1,770) 
Surrenders and withdrawals  (7,073)  (4,200)    (414)  (11,980) 
Transfers between Divisions           
(including fixed account), net  (5,109)  (14,057)    740  15,230 
Increase (decrease) in net assets derived from           
principal transactions  (13,514)  (17,712)    3,144  2,378 
Total increase (decrease) in net assets  (16,421)  (25,556)    1,104  3,458 
Net assets at December 31, 2011  83,478  39,488    9,567  146,033 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (1,789)  65    (77)  (2,641) 
Total realized gain (loss) on investments           
and capital gains distributions  (2,524)  (409)    (709)  17,997 
Net unrealized appreciation (depreciation)           
of investments  11,823  6,298    947  1,029 
Net increase (decrease) in net assets from operations  7,510  5,954    161  16,385 
Changes from principal transactions:           
Premiums  27  443    (4,735)  741 
Death Benefits  (1,082)  (358)    -  (1,952) 
Surrenders and withdrawals  (5,869)  (3,221)    (136)  (14,190) 
Transfers between Divisions           
(including fixed account), net  (2,644)  2,713    (193)  5,843 
Increase (decrease) in net assets derived from           
principal transactions  (9,568)  (423)    (5,064)  (9,558) 
Total increase (decrease) in net assets  (2,058)  5,531    (4,903)  6,827 
Net assets at December 31, 2012  $ 81,420  $ 45,019  $ 4,664  $ 152,860 

 

The accompanying notes are an integral part of these financial statements. 
91

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
    ING Russell™  ING Russell™   
  ING Russell™  Large Cap  Mid Cap  ING Russell™ 
  Large Cap  Value Index  Growth Index  Mid Cap Index 
  Index Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Class S  Class S  Class S  Class S 
Net assets at January 1, 2011  $ 355,951  $ 35,226  $ 297,977  $ 120,857 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (2,619)  (341)    (5,295)  (1,639) 
Total realized gain (loss) on investments           
and capital gains distributions  21,769  1,678    21,859  17,402 
Net unrealized appreciation (depreciation)           
of investments  (21,331)  (2,166)    (29,466)  (21,722) 
Net increase (decrease) in net assets from operations  (2,181)  (829)    (12,902)  (5,959) 
Changes from principal transactions:           
Premiums  1,657  322    1,653  1,216 
Death Benefits  (7,615)  (357)    (6,739)  (562) 
Surrenders and withdrawals  (35,620)  (5,240)    (21,743)  (7,369) 
Transfers between Divisions           
(including fixed account), net  (15,225)  9,828    (15,154)  (5,359) 
Increase (decrease) in net assets derived from           
principal transactions  (56,803)  4,553    (41,983)  (12,074) 
Total increase (decrease) in net assets  (58,984)  3,724    (54,885)  (18,033) 
Net assets at December 31, 2011  296,967  38,950    243,092  102,824 
 
Increase (decrease) in net assets           
Operations:           
Net investment income (loss)  (236)  (497)    (5,165)  (1,817) 
Total realized gain (loss) on investments           
and capital gains distributions  24,920  1,597    16,044  9,085 
Net unrealized appreciation (depreciation)           
of investments  11,948  4,987    19,064  6,729 
Net increase (decrease) in net assets from operations  36,632  6,087    29,943  13,997 
Changes from principal transactions:           
Premiums  2,205  360    1,188  1,578 
Death Benefits  (9,887)  (446)    (5,467)  (1,177) 
Surrenders and withdrawals  (31,821)  (5,149)    (21,470)  (8,190) 
Transfers between Divisions           
(including fixed account), net  35,913  22,120    (732)  14,510 
Increase (decrease) in net assets derived from           
principal transactions  (3,590)  16,885    (26,481)  6,721 
Total increase (decrease) in net assets  33,042  22,972    3,462  20,718 
Net assets at December 31, 2012  $ 330,009  $ 61,922  $ 246,554  $ 123,542 

 

The accompanying notes are an integral part of these financial statements. 
92

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
        ING 
        WisdomTreeSM 
  ING Russell™  ING Small    Global High- 
  Small Cap  Company  ING U.S. Bond  Yielding Equity 
  Index Portfolio -  Portfolio -  Index Portfolio -  Index Portfolio - 
  Class S  Class S  Class S  Class S 
Net assets at January 1, 2011  $ 174,052  $ 102,443  $ 232,631  $ 201,282 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (2,981)  (2,225)  (854)  927 
Total realized gain (loss) on investments         
and capital gains distributions  23,082  6,818  10,181  (6,031) 
Net unrealized appreciation (depreciation)         
of investments  (31,952)  (10,456)  70  (6,484) 
Net increase (decrease) in net assets from operations  (11,851)  (5,863)  9,397  (11,588) 
Changes from principal transactions:         
Premiums  1,520  854  2,106  2,084 
Death Benefits  (1,278)  (862)  (2,371)  (2,663) 
Surrenders and withdrawals  (12,517)  (6,631)  (20,455)  (8,257) 
Transfers between Divisions         
(including fixed account), net  (13,850)  (49)  76,246  (11,122) 
Increase (decrease) in net assets derived from         
principal transactions  (26,125)  (6,688)  55,526  (19,958) 
Total increase (decrease) in net assets  (37,976)  (12,551)  64,923  (31,546) 
Net assets at December 31, 2011  136,076  89,892  297,554  169,736 
 
Increase (decrease) in net assets         
Operations:         
Net investment income (loss)  (2,897)  (2,128)  (1,336)  2,348 
Total realized gain (loss) on investments         
and capital gains distributions  15,602  7,294  10,574  (2,729) 
Net unrealized appreciation (depreciation)         
of investments  5,105  4,427  (6,800)  20,189 
Net increase (decrease) in net assets from operations  17,810  9,593  2,438  19,808 
Changes from principal transactions:         
Premiums  1,352  742  2,620  2,508 
Death Benefits  (1,457)  (815)  (3,241)  (1,385) 
Surrenders and withdrawals  (10,840)  (6,041)  (23,055)  (8,054) 
Transfers between Divisions         
(including fixed account), net  8,359  (11,162)  (34,592)  (6,285) 
Increase (decrease) in net assets derived from         
principal transactions  (2,586)  (17,276)  (58,268)  (13,216) 
Total increase (decrease) in net assets  15,224  (7,683)  (55,830)  6,592 
Net assets at December 31, 2012  $ 151,300  $ 82,209  $ 241,724  $ 176,328 

 

The accompanying notes are an integral part of these financial statements. 
93

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
          Legg Mason 
          ClearBridge 
  ING  ING MidCap  ING SmallCap  Variable Large 
  International  Opportunities  Opportunities  Cap Value 
  Value Portfolio -  Portfolio -  Portfolio -  Portfolio - 
  Class S  Class S  Class S  Class I
Net assets at January 1, 2011  $ 9,445  $ 399,457  $ 68,086  $ 78 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  64  (9,715)    (1,600)    1 
Total realized gain (loss) on investments             
and capital gains distributions  (1,173)  19,709    3,096    (2) 
Net unrealized appreciation (depreciation)             
of investments  (251)  (26,696)    (2,758)    4 
Net increase (decrease) in net assets from operations  (1,360)  (16,702)    (1,262)    3 
Changes from principal transactions:             
Premiums  73  2,372    29    - 
Death Benefits  (16)  (6,288)    (413)    - 
Surrenders and withdrawals  (798)  (42,215)    (5,898)    (6) 
Transfers between Divisions             
(including fixed account), net  (689)  16,675    (1,687)    - 
Increase (decrease) in net assets derived from             
principal transactions  (1,430)  (29,456)    (7,969)    (6) 
Total increase (decrease) in net assets  (2,790)  (46,158)    (9,231)    (3) 
Net assets at December 31, 2011  6,655  353,299    58,855    75 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  53  (7,352)    (1,498)    1 
Total realized gain (loss) on investments             
and capital gains distributions  (1,058)  26,305    8,623    (2) 
Net unrealized appreciation (depreciation)             
of investments  2,097  19,276    (270)    12 
Net increase (decrease) in net assets from operations  1,092  38,229    6,855    11 
Changes from principal transactions:             
Premiums  82  1,964    59    - 
Death Benefits  (47)  (7,483)    (454)    - 
Surrenders and withdrawals  (505)  (34,113)    (6,216)    (11) 
Transfers between Divisions             
(including fixed account), net  (372)  (2,529)    (821)    (2) 
Increase (decrease) in net assets derived from             
principal transactions  (842)  (42,161)    (7,432)    (13) 
Total increase (decrease) in net assets  250  (3,932)    (577)    (2) 
Net assets at December 31, 2012  $ 6,905  $ 349,367  $ 58,278  $ 73 

 

The accompanying notes are an integral part of these financial statements. 
94

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
Legg Mason
  Global Currents      Oppenheimer   
  Variable      Main Street  PIMCO Real 
  International  Western Asset  Small- & Mid-  Return 
  All Cap  Variable High  Cap  Portfolio - 
  Opportunity  Income  Fund®/VA -  Administrative 
  Portfolio  Portfolio  Service Class  Class 
Net assets at January 1, 2011  $ 39  $ 72  $ 1,859  $ 12,463 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  2    5    (16)  468 
Total realized gain (loss) on investments             
and capital gains distributions  (1)    (1)    (56)  187 
Net unrealized appreciation (depreciation)             
of investments  (7)    (4)    10  510 
Net increase (decrease) in net assets from operations  (6)    -    (62)  1,165 
Changes from principal transactions:             
Premiums  -    -    16  142 
Death Benefits  -    -    (4)  (8) 
Surrenders and withdrawals  (1)    (2)    (196)  (1,569) 
Transfers between Divisions             
(including fixed account), net  1    1    (171)  790 
Increase (decrease) in net assets derived from             
principal transactions  -    (1)    (355)  (645) 
Total increase (decrease) in net assets  (6)    (1)    (417)  520 
Net assets at December 31, 2011  33    71    1,442  12,983 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  -    4    (16)  (39) 
Total realized gain (loss) on investments             
and capital gains distributions  (18)    (4)    67  1,231 
Net unrealized appreciation (depreciation)             
of investments  20    10    169  (223) 
Net increase (decrease) in net assets from operations  2    10    220  969 
Changes from principal transactions:             
Premiums  -    -    6  209 
Death Benefits  -    -    -  (21) 
Surrenders and withdrawals  (7)    (15)    (104)  (2,065) 
Transfers between Divisions             
(including fixed account), net  (28)    (1)    (86)  2,739 
Increase (decrease) in net assets derived from             
principal transactions  (35)    (16)    (184)  862 
Total increase (decrease) in net assets  (33)    (6)    36  1,831 
Net assets at December 31, 2012  $ -  $ 65  $ 1,478  $ 14,814 

 

The accompanying notes are an integral part of these financial statements. 
95

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
 
Pioneer Equity
  Income VCT          ProFund VP 
  Portfolio -  ProFund VP  ProFund VP  Rising Rates 
  Class II    Bull  Europe 30  Opportunity 
Net assets at January 1, 2011  $ 15,665  $ 15,111  $ 9,261  $ 10,541 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  83    (365)    (134)  (204) 
Total realized gain (loss) on investments             
and capital gains distributions  (708)    (194)    (686)  (1,534) 
Net unrealized appreciation (depreciation)             
of investments  1,285    240    (61)  (2,040) 
Net increase (decrease) in net assets from operations  660    (319)    (881)  (3,778) 
Changes from principal transactions:             
Premiums  112    3    1  1 
Death Benefits  (34)    (232)    (81)  (110) 
Surrenders and withdrawals  (1,648)    (1,982)    (875)  (913) 
Transfers between Divisions             
(including fixed account), net  (17)    (568)    (476)  14 
Increase (decrease) in net assets derived from             
principal transactions  (1,587)    (2,779)    (1,431)  (1,008) 
Total increase (decrease) in net assets  (927)    (3,098)    (2,312)  (4,786) 
Net assets at December 31, 2011  14,738    12,013    6,949  5,755 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  316    (321)    53  (136) 
Total realized gain (loss) on investments             
and capital gains distributions  (633)    (172)    (654)  (1,612) 
Net unrealized appreciation (depreciation)             
of investments  1,476    1,762    1,444  1,213 
Net increase (decrease) in net assets from operations  1,159    1,269    843  (535) 
Changes from principal transactions:             
Premiums  158    6    1  1 
Death Benefits  (60)    (427)    (114)  (194) 
Surrenders and withdrawals  (2,043)    (1,433)    (718)  (406) 
Transfers between Divisions             
(including fixed account), net  (524)    (227)    (242)  556 
Increase (decrease) in net assets derived from             
principal transactions  (2,469)    (2,081)    (1,073)  (43) 
Total increase (decrease) in net assets  (1,310)    (812)    (230)  (578) 
Net assets at December 31, 2012  $ 13,428  $ 11,201  $ 6,719  $ 5,177 

 

The accompanying notes are an integral part of these financial statements. 
96

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Statements of Changes in Net Assets
For the Years Ended December 31, 2012 and 2011
(Dollars in thousands)
 
 
 
Invesco Van
  Kampen      Wells Fargo   
  American  Wells Fargo  Advantage VT  Wells Fargo 
  Franchise  Advantage VT  Index Asset  Advantage VT 
  Fund - Class I  Omega Growth  Allocation  Intrinsic Value 
  Shares  Fund - Class 2  Fund - Class 2  Fund - Class 2 
Net assets at January 1, 2011  $ -  $ 1,487  $ 2,156  $ 807 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  -    (39)    11  (16) 
Total realized gain (loss) on investments             
and capital gains distributions  -    48    (15)  (15) 
Net unrealized appreciation (depreciation)             
of investments  -    (122)    85  (2) 
Net increase (decrease) in net assets from operations  -    (113)    81  (33) 
Changes from principal transactions:             
Premiums  -    -    -  - 
Death Benefits  -    -    -  - 
Surrenders and withdrawals  -    (126)    (116)  (52) 
Transfers between Divisions             
(including fixed account), net  -    (8)    (69)  (1) 
Increase (decrease) in net assets derived from             
principal transactions  -    (134)    (185)  (53) 
Total increase (decrease) in net assets  -    (247)    (104)  (86) 
Net assets at December 31, 2011  -    1,240    2,052  721 
 
Increase (decrease) in net assets             
Operations:             
Net investment income (loss)  (306)    (32)    (22)  (7) 
Total realized gain (loss) on investments             
and capital gains distributions  (94)    177    29  (16) 
Net unrealized appreciation (depreciation)             
of investments  (429)    64    189  142 
Net increase (decrease) in net assets from operations  (829)    209    196  119 
Changes from principal transactions:             
Premiums  -    (154)    -  (75) 
Death Benefits  (91)    -    (6)  - 
Surrenders and withdrawals  (1,184)    (158)    (734)  (16) 
Transfers between Divisions             
(including fixed account), net  18,829    (15)    (65)  (2) 
Increase (decrease) in net assets derived from             
principal transactions  17,554    (327)    (805)  (93) 
Total increase (decrease) in net assets  16,725    (118)    (609)  26 
Net assets at December 31, 2012  $ 16,725  $ 1,122  $ 1,443  $ 747 

 

The accompanying notes are an integral part of these financial statements. 
97

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Statements of Changes in Net Assets 
For the Years Ended December 31, 2012 and 2011 
(Dollars in thousands) 
 
 
 
  Wells Fargo   
  Advantage VT  Wells Fargo 
  Small Cap  Advantage VT 
  Growth Fund -  Total Return 
  Class 2  Bond Fund 
Net assets at January 1, 2011  $ 436  $ 1,075 
 
Increase (decrease) in net assets     
Operations:     
Net investment income (loss)  (10)  2 
Total realized gain (loss) on investments     
and capital gains distributions  1  53 
Net unrealized appreciation (depreciation)     
of investments  (17)  (3) 
Net increase (decrease) in net assets from operations  (26)  52 
Changes from principal transactions:     
Premiums  -  - 
Death Benefits  -  (5) 
Surrenders and withdrawals  (39)  (236) 
Transfers between Divisions     
(including fixed account), net  (10)  (37) 
Increase (decrease) in net assets derived from     
principal transactions  (49)  (278) 
Total increase (decrease) in net assets  (75)  (226) 
Net assets at December 31, 2011  361  849 
 
Increase (decrease) in net assets     
Operations:     
Net investment income (loss)  (8)  (8) 
Total realized gain (loss) on investments     
and capital gains distributions  (4)  33 
Net unrealized appreciation (depreciation)     
of investments  32  4 
Net increase (decrease) in net assets from operations  20  29 
Changes from principal transactions:     
Premiums  -  - 
Death Benefits  (23)  (29) 
Surrenders and withdrawals  (85)  (152) 
Transfers between Divisions     
(including fixed account), net  (40)  15 
Increase (decrease) in net assets derived from     
principal transactions  (148)  (166) 
Total increase (decrease) in net assets  (128)  (137) 
Net assets at December 31, 2012  $ 233  $ 712 

 

The accompanying notes are an integral part of these financial statements. 
98

 


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

1. Organization

ING USA Annuity and Life Insurance Company Separate Account B (the “Account”) was
established by ING USA Annuity and Life Insurance Company (“ING USA” or the
“Company”) to support the operations of variable annuity contracts (“Contracts”). The
Company is an indirect, wholly owned subsidiary of ING U.S., Inc. (name changed from
ING America Insurance Holdings, Inc.), an insurance holding company domiciled in the
State of Delaware. ING U.S., Inc. is an indirect, wholly owned subsidiary of ING Groep,
N.V. (“ING”), a global financial services holding company based in The Netherlands.

ING has announced the anticipated separation of its global banking and insurance
businesses. While all options for effecting this separation remain open, ING has
announced that the base case for this separation includes an initial public offering ("IPO")
of ING U.S., Inc., which together with its subsidiaries, constitutes ING's U.S.-based
retirement, investment management, and insurance operations. ING U.S., Inc. filed a
registration statement on Form S-1 with the U.S. Securities and Exchange Commission
(“SEC”) on November 9, 2012, which was amended on January 23, 2013 and March 19,
2013, in connection with the proposed IPO of its common stock.

The Account includes ING Architect Contracts, ING GoldenSelect Contracts, ING
Retirement Solutions Rollover Choice Contracts and ING SmartDesign Contracts
(collectively, the “Contracts”), that ceased being available to new contract owners in
2011. These Contracts were, however, still available to existing contract owners in 2012.
ING GoldenSelect Contracts included Access, DVA Plus, Premium Plus, ES II, and
Landmark. ING SmartDesign Contracts include Advantage, Signature Variable Annuity
and Variable Annuity.

The Account also includes the following discontinued offerings:

ING GoldenSelect Contracts:
Access One (September 2003)
DVA and DVA Series 100 (May 2000)
DVA 80 (May 1991)
DVA Plus (January 2004)
Generations (October 2008)
Granite PrimElite (May 2001)
Opportunities and Legends (March 2007)
Value (June 2003)
ING Simplicity Contracts (August 2007)
ING SmartDesign Contracts:
Variable Annuity, Advantage and Signature (April 2008)
Wells Fargo ING Contracts:
Opportunities and Landmark (June 2006)
ING Customized Solutions Focus Contracts (September 2004)

99


ING USA ANNUITY AND LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
Notes to Financial Statements

  The Account is registered as a unit investment trust with the SEC under the Investment
Company Act of 1940, as amended. ING USA provides for variable accumulation and
benefits under the Contracts by crediting annuity considerations to one or more divisions
within the Account or the ING USA guaranteed interest division, the ING USA fixed
interest division, and the fixed account (an investment option in the Company’s general
account), as directed by the contract owners. The portion of the Account’s assets
applicable to Contracts will not be charged with liabilities arising out of any other
business ING USA may conduct, but obligations of the Account, including the promise to
make benefit payments, are obligations of ING USA. Under applicable insurance law, the
assets and liabilities of the Account are clearly identified and distinguished from the other
assets and liabilities of ING USA.

At December 31, 2012, the Account had 141 investment divisions (the “Divisions”), 23
of which invest in independently managed mutual funds and 118 of which invest in
mutual funds managed by affiliates, either Directed Services LLC (“DSL”) or ING
Investments, LLC (“IIL”). The assets in each Division are invested in shares of a
designated mutual fund (“Fund”) of various investment trusts (the “Trusts”). Investment
Divisions with assets balances at December 31, 2012 and related Trusts are as follows:

BlackRock Variable Series Funds, Inc.:  ING Investors Trust (continued): 
BlackRock Global Allocation V.I. Fund - Class III  ING American Funds World Allocation Portfolio - 
Columbia Funds Variable Insurance Trust:  Service Class 
Columbia Asset Allocation Fund, Variable Series -  ING BlackRock Health Sciences Opportunities 
Class A  Portfolio - Service Class 
Columbia Small Cap Value Fund, Variable Series -  ING BlackRock Inflation Protected Bond Portfolio - 
Class B  Service Class 
Columbia Small Company Growth Fund, Variable  ING BlackRock Large Cap Growth Portfolio - 
Series - Class A  Institutional Class 
Columbia Funds Variable Series Trust II:  ING BlackRock Large Cap Growth Portfolio - 
Columbia VP Large Cap Growth Fund - Class 1  Service Class 
Columbia VP Short Duration US Government Fund -  ING Bond Portfolio 
Class 1  ING Clarion Global Real Estate Portfolio - Service 
Fidelity® Variable Insurance Products:  Class 
Fidelity® VIP Equity-Income Portfolio - Service  ING Clarion Global Real Estate Portfolio - Service 2 
Class 2  Class 
Fidelity® Variable Insurance Products II:  ING Clarion Real Estate Portfolio - Service Class 
Fidelity® VIP Contrafund® Portfolio - Service Class 2  ING Clarion Real Estate Portfolio - Service 2 Class 
Franklin Templeton Variable Insurance Products Trust:  ING DFA World Equity Portfolio - Service Class 
Franklin Small Cap Value Securities Fund - Class 2  ING FMRSM Diversified Mid Cap Portfolio - Service 
ING Balanced Portfolio, Inc.:  Class 
ING Balanced Portfolio - Class S  ING FMRSM Diversified Mid Cap Portfolio - 
ING Intermediate Bond Portfolio:  Service 2 Class 
ING Intermediate Bond Portfolio - Class S  ING Franklin Income Portfolio - Service Class 
ING Investors Trust:  ING Franklin Income Portfolio - Service 2 Class 
ING American Funds Asset Allocation Portfolio  ING Franklin Mutual Shares Portfolio - Service 
ING American Funds Global Growth and Income  Class 
Portfolio  ING Franklin Templeton Founding Strategy 
ING American Funds International Growth and Income  Portfolio - Service Class 
Portfolio  ING Global Resources Portfolio - Adviser Class 
ING American Funds International Portfolio  ING Global Resources Portfolio - Service Class 
  ING Global Resources Portfolio - Service 2 Class 

 

100


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

ING Investors Trust (continued):  ING Mutual Funds: 
ING Invesco Van Kampen Growth and Income  ING Diversified International Fund - Class R 
Portfolio - Service Class  ING Partners, Inc.: 
ING Invesco Van Kampen Growth and Income  ING American Century Small-Mid Cap Value 
Portfolio - Service 2 Class  Portfolio - Service Class 
ING JPMorgan Emerging Markets Equity Portfolio -  ING Baron Growth Portfolio - Service Class 
Service Class  ING Columbia Small Cap Value II Portfolio - Service 
ING JPMorgan Emerging Markets Equity Portfolio -  Class 
Service 2 Class  ING Davis New York Venture Portfolio - Service 
ING JPMorgan Small Cap Core Equity Portfolio -  Class 
Service Class  ING Global Bond Portfolio - Service Class 
ING JPMorgan Small Cap Core Equity Portfolio -  ING Growth and Income Core Portfolio - Initial 
Service 2 Class  Class 
ING Large Cap Growth Portfolio - Adviser Class  ING Growth and Income Core Portfolio - Service 
ING Large Cap Growth Portfolio - Service Class  Class 
ING Large Cap Growth Portfolio - Service 2 Class  ING Invesco Van Kampen Comstock Portfolio - 
ING Large Cap Value Portfolio - Service Class  Service Class 
ING Limited Maturity Bond Portfolio - Service Class  ING Invesco Van Kampen Equity and Income 
ING Liquid Assets Portfolio - Service Class  Portfolio - Initial Class 
ING Liquid Assets Portfolio - Service 2 Class  ING Invesco Van Kampen Equity and Income 
ING Marsico Growth Portfolio - Service Class  Portfolio - Service Class 
ING Marsico Growth Portfolio - Service 2 Class  ING JPMorgan Mid Cap Value Portfolio - Service 
ING MFS Total Return Portfolio - Service Class  Class 
ING MFS Total Return Portfolio - Service 2 Class  ING Oppenheimer Global Portfolio - Initial Class 
ING MFS Utilities Portfolio - Service Class  ING Oppenheimer Global Portfolio - Service Class 
ING Morgan Stanley Global Franchise Portfolio -  ING PIMCO Total Return Portfolio - Service Class 
Service Class  ING Solution 2015 Portfolio - Service Class 
ING Morgan Stanley Global Franchise Portfolio -  ING Solution 2025 Portfolio - Service Class 
Service 2 Class  ING Solution 2035 Portfolio - Service Class 
ING Oppenheimer Active Allocation Portfolio -  ING Solution 2045 Portfolio - Service Class 
Service Class  ING Solution Income Portfolio - Service Class 
ING PIMCO High Yield Portfolio - Service Class  ING T. Rowe Price Diversified Mid Cap Growth 
ING PIMCO Total Return Bond Portfolio - Service  Portfolio - Service Class 
Class  ING T. Rowe Price Growth Equity Portfolio - Service 
ING PIMCO Total Return Bond Portfolio - Service 2  Class 
Class  ING Templeton Foreign Equity Portfolio - Service 
ING Pioneer Fund Portfolio - Service Class  Class 
ING Pioneer Mid Cap Value Portfolio - Service Class  ING UBS U.S. Large Cap Equity Portfolio - Service 
ING Retirement Conservative Portfolio - Adviser Class  Class 
ING Retirement Growth Portfolio - Adviser Class  ING Strategic Allocation Portfolios, Inc.: 
ING Retirement Moderate Growth Portfolio - Adviser  ING Strategic Allocation Conservative Portfolio - 
Class  Class S 
ING Retirement Moderate Portfolio - Adviser Class  ING Strategic Allocation Growth Portfolio - Class S 
ING T. Rowe Price Capital Appreciation Portfolio -  ING Strategic Allocation Moderate Portfolio - 
Service Class  Class S 
ING T. Rowe Price Capital Appreciation Portfolio -  ING Variable Funds: 
Service 2 Class  ING Growth and Income Portfolio - Class A 
ING T. Rowe Price Equity Income Portfolio - Service  ING Growth and Income Portfolio - Class I 
Class  ING Growth and Income Portfolio - Class S 
ING T. Rowe Price Equity Income Portfolio - Service 2  ING Variable Insurance Trust: 
Class  ING GET U.S. Core Portfolio - Series 11 
ING T. Rowe Price International Stock Portfolio -  ING GET U.S. Core Portfolio - Series 12 
Service Class  ING GET U.S. Core Portfolio - Series 13 
ING Templeton Global Growth Portfolio - Service  ING GET U.S. Core Portfolio - Series 14 
Class   
ING Templeton Global Growth Portfolio - Service 2   
Class   

 

101


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

ING Variable Portfolios, Inc.:  Legg Mason Partners Variable Equity Trust: 
ING BlackRock Science and Technology Opportunities  Legg Mason ClearBridge Variable Large Cap Value 
Portfolio - Class S  Portfolio - Class I 
ING Euro STOXX 50® Index Portfolio - Class A  Legg Mason Partners Variable Income Trust: 
ING FTSE 100 Index® Portfolio - Class A  Western Asset Variable High Income Portfolio 
ING Hang Seng Index Portfolio - Class S  Oppenheimer Variable Account Funds: 
ING Index Plus LargeCap Portfolio - Class S  Oppenheimer Main Street Small- & Mid-Cap 
ING Index Plus MidCap Portfolio - Class S  Fund®/VA - Service Class 
ING Index Plus SmallCap Portfolio - Class S  PIMCO Variable Insurance Trust: 
ING International Index Portfolio - Class S  PIMCO Real Return Portfolio - Administrative Class 
ING Japan TOPIX Index® Portfolio - Class A  Pioneer Variable Contracts Trust: 
ING Russell™ Large Cap Growth Index Portfolio -  Pioneer Equity Income VCT Portfolio - Class II 
Class S  ProFunds: 
ING Russell™ Large Cap Index Portfolio - Class S  ProFund VP Bull 
ING Russell™ Large Cap Value Index Portfolio -  ProFund VP Europe 30 
Class S  ProFund VP Rising Rates Opportunity 
ING Russell™ Mid Cap Growth Index Portfolio -  Van Kampen Equity Trust II: 
Class S  Invesco Van Kampen American Franchise Fund - 
ING Russell™ Mid Cap Index Portfolio - Class S  Class I Shares 
ING Russell™ Small Cap Index Portfolio - Class S  Wells Fargo Funds Trust: 
ING Small Company Portfolio - Class S  Wells Fargo Advantage VT Omega Growth Fund - 
ING U.S. Bond Index Portfolio - Class S  Class 2 
ING WisdomTreeSM Global High-Yielding Equity  Wells Fargo Variable Trust: 
Index Portfolio - Class S  Wells Fargo Advantage VT Index Asset Allocation 
ING Variable Products Trust:  Fund - Class 2 
ING International Value Portfolio - Class S  Wells Fargo Advantage VT Intrinsic Value Fund - 
ING MidCap Opportunities Portfolio - Class S  Class 2 
ING SmallCap Opportunities Portfolio - Class S  Wells Fargo Advantage VT Small Cap Growth 
  Fund - Class 2 
  Wells Fargo Advantage VT Total Return Bond Fund 

 

The names of certain Trusts and Divisions were changed during 2012. The following is a 
summary of current and former names for those Trusts and Divisions: 

 

Current Name  Former Name 
AIM Variable Insurance Funds  Invesco Variable Insurance Funds 
ING Investors Trust:  ING Investors Trust: 
ING Bond Portfolio  ING American Funds Bond Portfolio 
ING Partners, Inc.:  ING Partners, Inc.: 
ING Baron Growth Portfolio - Service Class  ING Baron Small Cap Growth Portfolio - Service Class 
ING Growth and Income Core Portfolio - Initial Class  ING Thornburg Value Portfolio - Initial Class 
ING Growth and Income Core Portfolio - Service Class  ING Thornburg Value Portfolio - Service Class 
Legg Mason Partners Variable Income Trust:  Legg Mason Partners Variable Income Trust: 
Western Asset Variable High Income Portfolio  Legg Mason Western Asset Variable High Income 
  Portfolio 

 

102


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 
 
 
During 2012, the following Divisions were closed to contract owners: 
 
AIM Variable Insurance Funds: 
Invesco V.I. Leisure Fund - Series I Shares 
ING Investors Trust: 
ING American Funds Growth Portfolio 
ING Artio Foreign Portfolio- Service Class 
ING Artio Foreign Portfolio- Service 2 Class 
ING Variable Insurance Trust: 
ING GET U.S. Core Portfolio - Series 7 
ING GET U.S. Core Portfolio - Series 8 
ING GET U.S. Core Portfolio - Series 9 
ING GET U.S. Core Portfolio - Series 10 
Legg Mason Partners Variable Equity Trust: 
Legg Mason Global Currents Variable International All Cap Opportunity Portfolio 

 

2. Significant Accounting Policies

The following is a summary of the significant accounting policies of the Account:

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from reported results using those
estimates.

Investments

Investments are made in shares of a Division and are recorded at fair value, determined
by the net asset value per share of the respective Division. Investment transactions in each
Division are recorded on the trade date. Distributions of net investment income and
capital gains from each Division are recognized on the ex-distribution date. Realized
gains and losses on redemptions of the shares of the Division are determined on a first-in,
first-out basis. The difference between cost and current fair value of investments owned
on the day of measurement is recorded as unrealized appreciation or depreciation of
investments.

Federal Income Taxes

Operations of the Account form a part of, and are taxed with, the total operations of ING
USA, which is taxed as a life insurance company under the Internal Revenue Code
(“IRC”). Under the current provisions of the IRC, the Company does not expect to incur
federal income taxes on the earnings of the Account to the extent the earnings are credited
to contract owners. Accordingly, earnings and realized capital gains of the Account
attributable to the contract owners are excluded in the determination of the federal
income tax liability of ING USA, and no charge is being made to the Account for federal

103


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

  income taxes for these amounts. The Company will review this tax accounting in the
event of changes in the tax law. Such changes in the law may result in a charge for federal
income taxes.

Contract Owner Reserves

The annuity reserves of the Account are represented by net assets on the Statements of
Assets and Liabilities and are equal to the aggregate account values of the contract
owners invested in the Account Divisions. To the extent that benefits to be paid to the
contract owners exceed their account values, ING USA will contribute additional funds to
the benefit proceeds. Conversely, if amounts allocated exceed amounts required, transfers
may be made to ING USA. Prior to the annuity date, the Contracts are redeemable for the
net cash surrender value of the Contracts.

Amounts Receivable From/Payable to Related Parties

Amount payable to/receivable from related parties in each Division on the Statement of
Asset and Liabilities represent accrued fees to ING USA.

Changes from Principal Transactions

Included in Changes from Principal Transactions on the Statements of Changes in Net
Assets are items which relate to contract owner activity, including deposits, surrenders
and withdrawals, benefits, and contract charges. Also included are transfers between the
fixed account and the Divisions, transfers between Divisions, and transfers to (from) ING
USA related to gains and losses resulting from actual mortality experience (the full
responsibility for which is assumed by ING USA). Any net unsettled transactions as of
the reporting date are included in Payable to related parties on the Statements of Assets
and Liabilities.

Subsequent Events

The Account has evaluated subsequent events for recognition and disclosure through the
date the financial statements as of December 31, 2012 and for the years ended
December 31, 2012 and 2011, were issued.

3. Financial Instruments

The Account invests assets in shares of open-end mutual funds, which process orders to
purchase and redeem shares on a daily basis at the fund's next computed net asset values
(“NAV”). The fair value of the Account’s assets is based on the NAVs of mutual funds,
which are obtained from the custodian and reflect the fair values of the mutual fund
investments. The NAV is calculated daily upon close of the New York Stock Exchange
and is based on the fair values of the underlying securities.

104


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

  The Account’s financial assets are recorded at fair value on the Statements of Assets and 
  Liabilities and are categorized as Level 1 as of December 31, 2012 based on the priority 
  of the inputs to the valuation technique below. There were no transfers among the levels 
  for the year ended December 31, 2012. The Account had no financial liabilities as of 
  December 31, 2012. 
  The Account categorizes its financial instruments into a three-level hierarchy based on the 
  priority of the inputs to the valuation technique. The fair value hierarchy gives the highest 
  priority to quoted prices in active markets for identical assets or liabilities (Level 1) and 
  the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair 
  value fall within different levels of the hierarchy, the category level is based on the lowest 
  priority level input that is significant to the fair value measurement of the instrument. 
 
  §  Level 1 - Unadjusted quoted prices for identical assets or liabilities in an active 
    market. The Account defines an active market as a market in which transactions 
    take place with sufficient frequency and volume to provide pricing information on 
    an ongoing basis. 
  §  Level 2 - Quoted prices in markets that are not active or valuation techniques that 
    require 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; and 
    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. These 
    valuations, whether derived internally or obtained from a third party, use critical 
    assumptions that are not widely available to estimate market participant 
    expectations in valuing the asset or liability. 
 
4.  Charges and Fees 
 
  Under the terms of all Contracts, certain charges and fees are incurred by the Contracts to 
  cover ING USA’s expenses in connection with the issuance and administration of the 
  Contracts. Following is a summary of these charges and fees: 
 
  Mortality and Expense Risk Charges 
 
  ING USA assumes mortality and expense risks related to the operations of the Account 
  and, in accordance with the terms of the Contracts, deducts a daily charge from the assets 
  of the Account. Daily charges are deducted at annual rates of 0.35% to 2.20% of the 
  average daily net asset value of each Division of the Account to cover these risks, as 
  specified in the Contracts. These charges are assessed through a reduction in unit values. 

 

105


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

  Asset Based Administrative Charges

A daily charge to cover administrative expenses of the Account at an annual rate of up to
0.15% of the assets attributable to the Contracts. These charges are assessed through a
reduction in unit values.

Contract Maintenance Charges

An annual Contract maintenance fee of up to $40 may be deducted from the accumulation
value of Contracts to cover ongoing administrative expenses, as specified in the
Contracts. These charges are assessed through the redemption of units.

Contingent Deferred Sales Charges

For certain Contracts, a contingent deferred sales charge (“Surrender Charge”) is imposed
as a percentage that ranges up to 8.00% of each premium payment if the Contract is
surrendered or an excess partial withdrawal is taken as specified in the Contract. These
charges are assessed through the redemption of units.

Withdrawal and Distribution Charges

For certain Contracts, a charge is deducted from the accumulation value for contract
owners taking more than one conventional partial withdrawal during a Contract year. For
certain Contracts, annual distribution fees are deducted from the Contracts’ accumulation
values. These charges are assessed through the redemption of units.

Premium Taxes

For certain Contracts, premium taxes are deducted, where applicable, from the
accumulation value of each Contract. The amount and timing of the deduction depends
on the contract owner’s state of residence and currently ranges up to 4.00% of premiums.
These charges are assessed through the redemption of units.

Other Contract Charges

For certain Contracts, an additional annual charge of 0.50% is deducted daily from the
accumulation value for amounts invested in the ING GET U.S. Core Portfolio Funds.

Certain Contacts contain optional riders that are available for an additional charge, such
as minimum guaranteed income benefits and minimum guaranteed withdrawal benefits.
The amounts charged for these optional benefits vary based on a number of factors and
are defined in the Contracts.

These charges are assessed through either a reduction in unit values or the redemption of
units.

106


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

  Fees Waived by ING USA

Certain charges and fees for various types of Contracts may be waived by ING USA. ING
USA reserves the right to discontinue these waivers at its discretion or to conform with
changes in the law.

5. Related Party Transactions

During the year ended December 31, 2012, management fees were paid indirectly to DSL,
an affiliate of the Company, in its capacity as investment adviser to the ING Investors
Trust and ING Partners, Inc. The Trust's advisory agreement provided for a fee at annual
rates up to 1.25% of the average net assets of each respective Fund.

Management fees were also paid indirectly to IIL, an affiliate of the Company, in its
capacity as investment adviser to the ING Balanced Portfolio, Inc., ING Intermediate
Bond Portfolio, ING Mutual Funds, ING Strategic Allocation Portfolio, Inc., ING
Variable Funds, ING Variable Insurance Trust, ING Variable Portfolios, Inc., and ING
Variable Products Trust. The Trusts' advisory agreement provided for fees at annual rates
up to 0.95% of the average net assets of each respective Fund.

107


ING USA ANNUITY AND LIFE INSURANCE COMPANY     
SEPARATE ACCOUNT B     
Notes to Financial Statements     
 
6.  Purchases and Sales of Investment Securities     
 
  The aggregate cost of purchases and proceeds from sales of investments for the year 
  ended December 31, 2012 follow:     
 
    Purchases  Sales 
    (Dollars in thousands) 
  AIM Variable Insurance Funds:     
  Invesco V.I. Leisure Fund - Series I Shares  $ 92  $ 20,184 
  BlackRock Variable Series Funds, Inc.:     
  BlackRock Global Allocation V.I. Fund - Class III  65,255  235,191 
  Columbia Funds Variable Insurance Trust:     
  Columbia Asset Allocation Fund, Variable Series - Class A  22  7 
  Columbia Small Cap Value Fund, Variable Series - Class B  6,921  18,078 
  Columbia Small Company Growth Fund, Variable Series - Class A  -  - 
  Columbia Funds Variable Series Trust II:     
  Columbia VP Large Cap Growth Fund - Class 1  -  27 
  Columbia VP Short Duration US Government Fund - Class 1  -  1 
  Fidelity® Variable Insurance Products:     
  Fidelity® VIP Equity-Income Portfolio - Service Class 2  14,902  23,468 
  Fidelity® Variable Insurance Products II:     
  Fidelity® VIP Contrafund® Portfolio - Service Class 2  7,916  95,973 
  Franklin Templeton Variable Insurance Products Trust:     
  Franklin Small Cap Value Securities Fund - Class 2  185  2,793 
  ING Balanced Portfolio, Inc.:     
  ING Balanced Portfolio - Class S  158  1,215 
  ING Intermediate Bond Portfolio:     
  ING Intermediate Bond Portfolio - Class S  167,796  251,266 
  ING Investors Trust:     
  ING American Funds Asset Allocation Portfolio  35,646  30,831 
  ING American Funds Global Growth and Income Portfolio  10,403  3,851 
  ING American Funds Growth Portfolio  49,442  2,037,455 
  ING American Funds International Growth and Income Portfolio  6,923  1,198 
  ING American Funds International Portfolio  42,495  156,562 
  ING American Funds World Allocation Portfolio - Service Class  30,921  34,965 
  ING Artio Foreign Portfolio - Service Class  19,808  385,610 
  ING Artio Foreign Portfolio - Service 2 Class  1,336  32,794 
  ING BlackRock Health Sciences Opportunities Portfolio - Service Class  23,352  27,790 
  ING BlackRock Inflation Protected Bond Portfolio - Service Class  178,699  115,690 
  ING BlackRock Large Cap Growth Portfolio - Institutional Class  -  82 
  ING BlackRock Large Cap Growth Portfolio - Service Class  21,907  33,439 
  ING Bond Portfolio  63,786  86,068 
  ING Clarion Global Real Estate Portfolio - Service Class  1,603  20,266 
  ING Clarion Global Real Estate Portfolio - Service 2 Class  21  324 
  ING Clarion Real Estate Portfolio - Service Class  3,867  53,733 
  ING Clarion Real Estate Portfolio - Service 2 Class  333  3,098 
  ING DFA World Equity Portfolio - Service Class  9,844  28,887 
  ING FMRSM Diversified Mid Cap Portfolio - Service Class  12,490  125,347 
  ING FMRSM Diversified Mid Cap Portfolio - Service 2 Class  576  3,979 
  ING Franklin Income Portfolio - Service Class  56,430  57,126 

 

108


ING USA ANNUITY AND LIFE INSURANCE COMPANY     
SEPARATE ACCOUNT B     
Notes to Financial Statements     
 
  Purchases  Sales 
  (Dollars in thousands) 
ING Investors Trust (continued):     
ING Franklin Income Portfolio - Service 2 Class  $ 1,920  $ 1,243 
ING Franklin Mutual Shares Portfolio - Service Class  6,972  28,724 
ING Franklin Templeton Founding Strategy Portfolio - Service Class  35,855  100,109 
ING Global Resources Portfolio - Adviser Class  27,275  38,804 
ING Global Resources Portfolio - Service Class  13,893  78,245 
ING Global Resources Portfolio - Service 2 Class  558  2,934 
ING Invesco Van Kampen Growth and Income Portfolio - Service Class  26,332  83,288 
ING Invesco Van Kampen Growth and Income Portfolio - Service 2 Class  971  6,208 
ING JPMorgan Emerging Markets Equity Portfolio - Service Class  73,615  81,299 
ING JPMorgan Emerging Markets Equity Portfolio - Service 2 Class  886  3,343 
ING JPMorgan Small Cap Core Equity Portfolio - Service Class  38,753  77,456 
ING JPMorgan Small Cap Core Equity Portfolio - Service 2 Class  35  4,590 
ING Large Cap Growth Portfolio - Adviser Class  1,912,234  113,114 
ING Large Cap Growth Portfolio - Service Class  40,631  78,535 
ING Large Cap Growth Portfolio - Service 2 Class  13  65 
ING Large Cap Value Portfolio - Service Class  37,655  34,121 
ING Limited Maturity Bond Portfolio - Service Class  868  14,414 
ING Liquid Assets Portfolio - Service Class  219,664  391,203 
ING Liquid Assets Portfolio - Service 2 Class  10,223  14,134 
ING Marsico Growth Portfolio - Service Class  30,244  91,759 
ING Marsico Growth Portfolio - Service 2 Class  339  2,119 
ING MFS Total Return Portfolio - Service Class  29,385  103,411 
ING MFS Total Return Portfolio - Service 2 Class  1,320  3,918 
ING MFS Utilities Portfolio - Service Class  28,570  75,900 
ING Morgan Stanley Global Franchise Portfolio - Service Class  47,376  51,598 
ING Morgan Stanley Global Franchise Portfolio - Service 2 Class  4,119  8,372 
ING Oppenheimer Active Allocation Portfolio - Service Class  5,013  11,266 
ING PIMCO High Yield Portfolio - Service Class  128,371  81,672 
ING PIMCO Total Return Bond Portfolio - Service Class  458,290  488,359 
ING PIMCO Total Return Bond Portfolio - Service 2 Class  6,325  10,608 
ING Pioneer Fund Portfolio - Service Class  2,260  9,372 
ING Pioneer Mid Cap Value Portfolio - Service Class  6,642  75,094 
ING Retirement Conservative Portfolio - Adviser Class  106,400  95,413 
ING Retirement Growth Portfolio - Adviser Class  111,035  428,389 
ING Retirement Moderate Growth Portfolio - Adviser Class  78,141  327,740 
ING Retirement Moderate Portfolio - Adviser Class  61,573  186,432 
ING T. Rowe Price Capital Appreciation Portfolio - Service Class  166,365  298,935 
ING T. Rowe Price Capital Appreciation Portfolio - Service 2 Class  5,541  8,457 
ING T. Rowe Price Equity Income Portfolio - Service Class  36,242  127,047 
ING T. Rowe Price Equity Income Portfolio - Service 2 Class  910  3,204 
ING T. Rowe Price International Stock Portfolio - Service Class  17,004  25,814 
ING Templeton Global Growth Portfolio - Service Class  9,619  36,741 
ING Templeton Global Growth Portfolio - Service 2 Class  408  429 
ING Mutual Funds:     
ING Diversified International Fund - Class R  2  45 

 

109


ING USA ANNUITY AND LIFE INSURANCE COMPANY     
SEPARATE ACCOUNT B     
Notes to Financial Statements     
 
  Purchases  Sales 
  (Dollars in thousands) 
ING Partners, Inc.:     
ING American Century Small-Mid Cap Value Portfolio - Service Class  $ 370  $ 651 
ING Baron Growth Portfolio - Service Class  29,444  75,302 
ING Columbia Small Cap Value II Portfolio - Service Class  472  19,699 
ING Davis New York Venture Portfolio - Service Class  6,551  32,548 
ING Global Bond Portfolio - Service Class  1,179  1,682 
ING Growth and Income Core Portfolio - Initial Class  54  313 
ING Growth and Income Core Portfolio - Service Class  173  1,339 
ING Invesco Van Kampen Comstock Portfolio - Service Class  16,836  30,132 
ING Invesco Van Kampen Equity and Income Portfolio - Initial Class  36  227 
ING Invesco Van Kampen Equity and Income Portfolio - Service Class  22,638  38,908 
ING JPMorgan Mid Cap Value Portfolio - Service Class  51,131  34,481 
ING Oppenheimer Global Portfolio - Initial Class  75  1,073 
ING Oppenheimer Global Portfolio - Service Class  15,234  22,626 
ING PIMCO Total Return Portfolio - Service Class  372  1,640 
ING Solution 2015 Portfolio - Service Class  791  1,445 
ING Solution 2025 Portfolio - Service Class  536  2,230 
ING Solution 2035 Portfolio - Service Class  538  2,109 
ING Solution 2045 Portfolio - Service Class  69  69 
ING Solution Income Portfolio - Service Class  601  1,065 
ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Service Class  1,034  2,512 
ING T. Rowe Price Growth Equity Portfolio - Service Class  93,778  60,939 
ING Templeton Foreign Equity Portfolio - Service Class  408,522  84,810 
ING UBS U.S. Large Cap Equity Portfolio - Service Class  80  790 
ING Strategic Allocation Portfolios, Inc.:     
ING Strategic Allocation Conservative Portfolio - Class S  219  68 
ING Strategic Allocation Growth Portfolio - Class S  7  23 
ING Strategic Allocation Moderate Portfolio - Class S  33  74 
ING Variable Funds:     
ING Growth and Income Portfolio - Class A  46,395  182,503 
ING Growth and Income Portfolio - Class I  1  24 
ING Growth and Income Portfolio - Class S  11,318  129,502 
ING Variable Insurance Trust:     
ING GET U.S. Core Portfolio - Series 7  113  5,417 
ING GET U.S. Core Portfolio - Series 8  32  2,613 
ING GET U.S. Core Portfolio - Series 9  66  2,734 
ING GET U.S. Core Portfolio - Series 10  48  2,233 
ING GET U.S. Core Portfolio - Series 11  79  472 
ING GET U.S. Core Portfolio - Series 12  44  137 
ING GET U.S. Core Portfolio - Series 13  171  2,161 
ING GET U.S. Core Portfolio - Series 14  826  5,406 
ING Variable Portfolios, Inc.:     
ING BlackRock Science and Technology Opportunities Portfolio - Class S  37,635  50,582 
ING Euro STOXX 50® Index Portfolio - Class A  12,859  7,645 
ING FTSE 100 Index® Portfolio - Class A  3,141  3,335 
ING Hang Seng Index Portfolio - Class S  13,209  15,476 
ING Index Plus LargeCap Portfolio - Class S  2,140  22,872 
ING Index Plus MidCap Portfolio - Class S  1,010  17,609 
ING Index Plus SmallCap Portfolio - Class S  738  12,099 
ING International Index Portfolio - Class S  10,689  11,050 

 

110


ING USA ANNUITY AND LIFE INSURANCE COMPANY     
SEPARATE ACCOUNT B     
Notes to Financial Statements     
 
  Purchases  Sales 
  (Dollars in thousands) 
ING Variable Portfolios, Inc. (continued):     
ING Japan TOPIX Index® Portfolio - Class A  $ 4,921  $ 9,682 
ING Russell™ Large Cap Growth Index Portfolio - Class S  40,280  52,488 
ING Russell™ Large Cap Index Portfolio - Class S  81,310  85,154 
ING Russell™ Large Cap Value Index Portfolio - Class S  46,596  30,210 
ING Russell™ Mid Cap Growth Index Portfolio - Class S  15,840  47,501 
ING Russell™ Mid Cap Index Portfolio - Class S  38,940  29,967 
ING Russell™ Small Cap Index Portfolio - Class S  65,018  62,981 
ING Small Company Portfolio - Class S  12,049  28,117 
ING U.S. Bond Index Portfolio - Class S  46,143  100,020 
ING WisdomTreeSM Global High-Yielding Equity Index Portfolio - Class S  12,861  23,739 
ING Variable Products Trust:     
ING International Value Portfolio - Class S  451  1,240 
ING MidCap Opportunities Portfolio - Class S  38,509  78,311 
ING SmallCap Opportunities Portfolio - Class S  6,209  9,195 
Legg Mason Partners Variable Equity Trust:     
Legg Mason ClearBridge Variable Large Cap Value Portfolio - Class I  2  13 
Legg Mason Global Currents Variable International All Cap Opportunity Portfolio  -  35 
Legg Mason Partners Variable Income Trust:     
Western Asset Variable High Income Portfolio  5  16 
Oppenheimer Variable Account Funds:     
Oppenheimer Main Street Small- & Mid-Cap Fund®/VA - Service Class  245  446 
PIMCO Variable Insurance Trust:     
PIMCO Real Return Portfolio - Administrative Class  3,774  2,180 
Pioneer Variable Contracts Trust:     
Pioneer Equity Income VCT Portfolio - Class II  914  3,067 
ProFunds:     
ProFund VP Bull  81  2,484 
ProFund VP Europe 30  270  1,290 
ProFund VP Rising Rates Opportunity  706  884 
Van Kampen Equity Trust II:     
Invesco Van Kampen American Franchise Fund - Class I Shares  19,202  1,951 
Wells Fargo Funds Trust:     
Wells Fargo Advantage VT Omega Growth Fund - Class 2  96  371 
Wells Fargo Variable Trust:     
Wells Fargo Advantage VT Index Asset Allocation Fund - Class 2  24  851 
Wells Fargo Advantage VT Intrinsic Value Fund - Class 2  11  111 
Wells Fargo Advantage VT Small Cap Growth Fund - Class 2  18  158 
Wells Fargo Advantage VT Total Return Bond Fund  48  207 

 

111


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

7.  Changes in Units 
  The changes in units outstanding for the years ended December 31, 2012 and 2011 are shown in the following table. 

 

      Year Ended December 31     
    2012      2011   
  Units  Units  Net Increase  Units  Units  Net Increase 
  Issued  Redeemed  (Decrease)  Issued  Redeemed  (Decrease) 
AIM Variable Insurance Funds:             
Invesco V.I. Leisure Fund - Series I Shares  -  1,456,838  (1,456,838)  202,162  454,602  (252,440) 
BlackRock Variable Series Funds, Inc.:             
BlackRock Global Allocation V.I. Fund - Class III  12,847,905  29,744,902  (16,896,997)  34,124,070  35,162,633  (1,038,563) 
Columbia Funds Variable Insurance Trust:             
Columbia Asset Allocation Fund, Variable Series - Class A  943  147  796  4  1,118  (1,114) 
Columbia Small Cap Value Fund, Variable Series - Class B  138,962  923,481  (784,519)  660,550  1,573,933  (913,383) 
Columbia Small Company Growth Fund, Variable Series - Class A  -  -  -  -  321  (321) 
Columbia Funds Variable Series Trust II:             
Columbia VP Large Cap Growth Fund - Class 1  -  2,875  (2,875)  56,308  14,839  41,469 
Columbia VP Short Duration US Government Fund - Class 1  -  69  (69)  2,306  1,907  399 
Fidelity® Variable Insurance Products:             
Fidelity® VIP Equity-Income Portfolio - Service Class 2  287,260  2,040,149  (1,752,889)  1,185,076  3,260,043  (2,074,967) 
Fidelity® Variable Insurance Products II:             
Fidelity® VIP Contrafund® Portfolio - Service Class 2  954,380  6,620,153  (5,665,773)  2,033,498  9,345,908  (7,312,410) 
Franklin Templeton Variable Insurance Products Trust:             
Franklin Small Cap Value Securities Fund - Class 2  13,075  142,322  (129,247)  21,094  123,046  (101,952) 
ING Balanced Portfolio, Inc.:             
ING Balanced Portfolio - Class S  12,199  99,764  (87,565)  57,999  160,824  (102,825) 
ING Intermediate Bond Portfolio:             
ING Intermediate Bond Portfolio - Class S  22,261,655  30,442,457  (8,180,802)  34,427,145  42,580,885  (8,153,740) 
ING Investors Trust:             
ING American Funds Asset Allocation Portfolio  6,208,895  5,690,492  518,403  4,727,342  5,588,550  (861,208) 
ING American Funds Global Growth and Income Portfolio  1,205,860  555,347  650,513  1,100,518  366,357  734,161 
ING American Funds Growth Portfolio  -  149,922,104  (149,922,104)  13,444,808  35,072,503  (21,627,695) 
ING American Funds International Growth and Income Portfolio  872,686  280,231  592,455  732,161  221,147  511,014 
ING American Funds International Portfolio  4,664,873  11,606,803  (6,941,930)  5,614,495  16,690,020  (11,075,525) 
ING American Funds World Allocation Portfolio - Service Class  1,791,493  3,173,961  (1,382,468)  7,773,280  6,387,255  1,386,025 

 

112


ING USA ANNUITY AND LIFE INSURANCE COMPANY             
SEPARATE ACCOUNT B             
Notes to Financial Statements             
 
 
 
      Year Ended December 31     
    2012      2011   
  Units  Units  Net Increase  Units  Units  Net Increase 
  Issued  Redeemed  (Decrease)  Issued  Redeemed  (Decrease) 
ING Investors Trust (continued):             
ING Artio Foreign Portfolio - Service Class  -  34,478,946  (34,478,946)  3,940,000  9,375,319  (5,435,319) 
ING Artio Foreign Portfolio - Service 2 Class  -  2,743,479  (2,743,479)  118,038  441,972  (323,934) 
ING BlackRock Health Sciences Opportunities Portfolio - Service Class  3,673,851  4,118,680  (444,829)  7,460,244  7,163,736  296,508 
ING BlackRock Inflation Protected Bond Portfolio - Service Class  22,579,058  19,273,054  3,306,004  34,212,058  15,682,140  18,529,918 
ING BlackRock Large Cap Growth Portfolio - Institutional Class  1,960  10,573  (8,613)  -  1,856  (1,856) 
ING BlackRock Large Cap Growth Portfolio - Service Class  3,876,108  4,648,621  (772,513)  8,009,399  6,981,483  1,027,916 
ING Bond Portfolio  8,888,582  12,462,021  (3,573,439)  12,484,675  17,829,707  (5,345,032) 
ING Clarion Global Real Estate Portfolio - Service Class  338,508  1,863,453  (1,524,945)  696,927  2,498,930  (1,802,003) 
ING Clarion Global Real Estate Portfolio - Service 2 Class  2,472  27,259  (24,787)  2,335  31,785  (29,450) 
ING Clarion Real Estate Portfolio - Service Class  148,066  959,589  (811,523)  632,166  1,622,083  (989,917) 
ING Clarion Real Estate Portfolio - Service 2 Class  11,589  119,894  (108,305)  9,601  122,194  (112,593) 
ING DFA World Equity Portfolio - Service Class  2,134,200  4,530,500  (2,396,300)  4,547,336  10,021,213  (5,473,877) 
ING FMRSM Diversified Mid Cap Portfolio - Service Class  2,500,706  9,181,370  (6,680,664)  6,787,931  16,476,640  (9,688,709) 
ING FMRSM Diversified Mid Cap Portfolio - Service 2 Class  45,443  198,832  (153,389)  76,359  242,344  (165,985) 
ING Franklin Income Portfolio - Service Class  8,116,499  9,860,786  (1,744,287)  12,519,380  12,159,848  359,532 
ING Franklin Income Portfolio - Service 2 Class  135,057  109,052  26,005  244,296  246,338  (2,042) 
ING Franklin Mutual Shares Portfolio - Service Class  1,622,990  3,706,914  (2,083,924)  2,583,825  4,405,289  (1,821,464) 
ING Franklin Templeton Founding Strategy Portfolio - Service Class  3,615,778  12,569,278  (8,953,500)  5,549,303  15,763,799  (10,214,496) 
ING Global Resources Portfolio - Adviser Class  5,144,943  6,510,985  (1,366,042)  16,351,503  6,388,268  9,963,235 
ING Global Resources Portfolio - Service Class  693,419  2,512,241  (1,818,822)  1,392,195  4,061,767  (2,669,572) 
ING Global Resources Portfolio - Service 2 Class  28,732  118,356  (89,624)  11,957  113,850  (101,893) 
ING Invesco Van Kampen Growth and Income Portfolio - Service Class  1,972,664  4,056,435  (2,083,771)  2,963,555  5,343,808  (2,380,253) 
ING Invesco Van Kampen Growth and Income Portfolio - Service 2 Class  43,393  389,088  (345,695)  262,920  684,494  (421,574) 
ING JPMorgan Emerging Markets Equity Portfolio - Service Class  6,246,263  6,887,301  (641,038)  6,217,031  8,018,719  (1,801,688) 
ING JPMorgan Emerging Markets Equity Portfolio - Service 2 Class  12,635  104,982  (92,347)  14,127  125,729  (111,602) 
ING JPMorgan Small Cap Core Equity Portfolio - Service Class  4,662,493  6,820,131  (2,157,638)  7,505,923  9,179,828  (1,673,905) 
ING JPMorgan Small Cap Core Equity Portfolio - Service 2 Class  4,382  219,617  (215,235)  17,700  332,843  (315,143) 
ING Large Cap Growth Portfolio - Adviser Class  200,867,518  16,205,302  184,662,216  -  -  - 

 

113


ING USA ANNUITY AND LIFE INSURANCE COMPANY             
SEPARATE ACCOUNT B             
Notes to Financial Statements             
 
 
 
      Year Ended December 31     
    2012      2011   
  Units  Units  Net Increase  Units  Units  Net Increase 
  Issued  Redeemed  (Decrease)  Issued  Redeemed  (Decrease) 
ING Investors Trust (continued):             
ING Large Cap Growth Portfolio - Service Class  3,745,420  6,101,120  (2,355,700)  13,298,580  6,315,795  6,982,785 
ING Large Cap Growth Portfolio - Service 2 Class  858  4,090  (3,232)  2  7,854  (7,852) 
ING Large Cap Value Portfolio - Service Class  4,580,619  4,213,914  366,705  8,875,823  2,412,936  6,462,887 
ING Limited Maturity Bond Portfolio - Service Class  140,252  735,017  (594,765)  3,363,708  4,215,004  (851,296) 
ING Liquid Assets Portfolio - Service Class  44,117,809  53,947,736  (9,829,927)  106,924,585  110,207,357  (3,282,772) 
ING Liquid Assets Portfolio - Service 2 Class  1,251,795  1,615,455  (363,660)  2,501,772  2,833,831  (332,059) 
ING Marsico Growth Portfolio - Service Class  3,856,091  7,245,433  (3,389,342)  6,732,807  11,065,297  (4,332,490) 
ING Marsico Growth Portfolio - Service 2 Class  27,905  130,561  (102,656)  78,501  201,745  (123,244) 
ING MFS Total Return Portfolio - Service Class  2,190,819  5,166,948  (2,976,129)  5,316,698  9,655,946  (4,339,248) 
ING MFS Total Return Portfolio - Service 2 Class  79,888  285,320  (205,432)  92,292  357,617  (265,325) 
ING MFS Utilities Portfolio - Service Class  3,789,568  6,755,459  (2,965,891)  8,616,871  7,866,999  749,872 
ING Morgan Stanley Global Franchise Portfolio - Service Class  3,617,205  4,682,156  (1,064,951)  7,227,628  8,108,666  (881,038) 
ING Morgan Stanley Global Franchise Portfolio - Service 2 Class  67,973  420,126  (352,153)  84,986  540,415  (455,429) 
ING Oppenheimer Active Allocation Portfolio - Service Class  706,300  1,276,455  (570,155)  1,891,811  2,399,221  (507,410) 
ING PIMCO High Yield Portfolio - Service Class  13,694,248  12,269,488  1,424,760  19,435,436  21,207,620  (1,772,184) 
ING PIMCO Total Return Bond Portfolio - Service Class  43,333,511  47,692,271  (4,358,760)  69,844,353  81,688,089  (11,843,736) 
ING PIMCO Total Return Bond Portfolio - Service 2 Class  550,592  893,173  (342,581)  846,948  1,423,623  (576,675) 
ING Pioneer Fund Portfolio - Service Class  351,919  950,667  (598,748)  1,028,461  1,576,598  (548,137) 
ING Pioneer Mid Cap Value Portfolio - Service Class  1,786,816  7,305,238  (5,518,422)  4,357,601  11,024,593  (6,666,992) 
ING Retirement Conservative Portfolio - Adviser Class  17,429,624  17,829,554  (399,930)  32,251,365  24,732,660  7,518,705 
ING Retirement Growth Portfolio - Adviser Class  11,622,039  43,823,029  (32,200,990)  17,148,549  53,786,812  (36,638,263) 
ING Retirement Moderate Growth Portfolio - Adviser Class  10,897,502  35,889,680  (24,992,178)  15,767,610  42,328,101  (26,560,491) 
ING Retirement Moderate Portfolio - Adviser Class  10,241,625  23,515,287  (13,273,662)  15,738,761  29,715,320  (13,976,559) 
ING T. Rowe Price Capital Appreciation Portfolio - Service Class  7,595,676  11,862,125  (4,266,449)  12,261,275  21,187,562  (8,926,287) 
ING T. Rowe Price Capital Appreciation Portfolio - Service 2 Class  233,852  487,050  (253,198)  128,637  783,171  (654,534) 
ING T. Rowe Price Equity Income Portfolio - Service Class  3,490,754  6,628,549  (3,137,795)  6,990,667  7,645,411  (654,744) 
ING T. Rowe Price Equity Income Portfolio - Service 2 Class  60,126  215,814  (155,688)  243,097  235,821  7,276 
ING T. Rowe Price International Stock Portfolio - Service Class  2,209,751  2,776,314  (566,563)  1,529,730  2,603,630  (1,073,900) 
ING Templeton Global Growth Portfolio - Service Class  1,004,601  2,362,725  (1,358,124)  2,825,113  4,803,716  (1,978,603) 
ING Templeton Global Growth Portfolio - Service 2 Class  23,736  26,594  (2,858)  14,000  48,355  (34,355) 

 

114


ING USA ANNUITY AND LIFE INSURANCE COMPANY             
SEPARATE ACCOUNT B             
Notes to Financial Statements             
 
 
 
      Year Ended December 31     
    2012      2011   
  Units  Units  Net Increase  Units  Units  Net Increase 
  Issued  Redeemed  (Decrease)  Issued  Redeemed  (Decrease) 
ING Mutual Funds:             
ING Diversified International Fund - Class R  -  5,438  (5,438)  54  2,730  (2,676) 
ING Partners, Inc.:             
ING American Century Small-Mid Cap Value Portfolio - Service Class  13,999  34,695  (20,696)  19,787  70,217  (50,430) 
ING Baron Growth Portfolio - Service Class  5,710,429  8,632,139  (2,921,710)  13,603,676  14,217,136  (613,460) 
ING Columbia Small Cap Value II Portfolio - Service Class  364,139  2,063,800  (1,699,661)  718,373  2,786,396  (2,068,023) 
ING Davis New York Venture Portfolio - Service Class  2,259,304  4,564,899  (2,305,595)  3,214,212  6,594,512  (3,380,300) 
ING Global Bond Portfolio - Service Class  68,791  133,990  (65,199)  147,407  216,481  (69,074) 
ING Growth and Income Core Portfolio - Initial Class  7,732  34,800  (27,068)  36,128  69,626  (33,498) 
ING Growth and Income Core Portfolio - Service Class  38,463  135,394  (96,931)  60,091  130,727  (70,636) 
ING Invesco Van Kampen Comstock Portfolio - Service Class  2,528,444  3,483,676  (955,232)  4,192,162  4,939,156  (746,994) 
ING Invesco Van Kampen Equity and Income Portfolio - Initial Class  2,639  18,462  (15,823)  16  37,071  (37,055) 
ING Invesco Van Kampen Equity and Income Portfolio - Service Class  2,619,195  3,868,673  (1,249,478)  2,675,941  4,972,616  (2,296,675) 
ING JPMorgan Mid Cap Value Portfolio - Service Class  6,167,133  4,780,072  1,387,061  6,935,908  6,366,531  569,377 
ING Oppenheimer Global Portfolio - Initial Class  6,605  78,635  (72,030)  42,390  145,022  (102,632) 
ING Oppenheimer Global Portfolio - Service Class  1,546,234  2,108,740  (562,506)  2,106,009  1,715,139  390,870 
ING PIMCO Total Return Portfolio - Service Class  15,024  106,709  (91,685)  1,442  127,404  (125,962) 
ING Solution 2015 Portfolio - Service Class  17,594  109,141  (91,547)  27,294  240,734  (213,440) 
ING Solution 2025 Portfolio - Service Class  20,080  181,111  (161,031)  54,371  173,197  (118,826) 
ING Solution 2035 Portfolio - Service Class  25,428  163,028  (137,600)  46,105  114,579  (68,474) 
ING Solution 2045 Portfolio - Service Class  4,033  4,728  (695)  3,697  9,117  (5,420) 
ING Solution Income Portfolio - Service Class  27,348  82,668  (55,320)  11,184  69,718  (58,534) 
ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Service Class  24,073  141,216  (117,143)  20,414  137,627  (117,213) 
ING T. Rowe Price Growth Equity Portfolio - Service Class  13,049,533  9,726,062  3,323,471  6,522,538  6,462,520  60,018 
ING Templeton Foreign Equity Portfolio - Service Class  48,687,031  10,807,712  37,879,319  6,049,172  9,940,714  (3,891,542) 
ING UBS U.S. Large Cap Equity Portfolio - Service Class  40,846  98,475  (57,629)  44,737  116,115  (71,378) 
ING Strategic Allocation Portfolios, Inc.:             
ING Strategic Allocation Conservative Portfolio - Class S  11,819  3,522  8,297  831  12,688  (11,857) 
ING Strategic Allocation Growth Portfolio - Class S  204  1,159  (955)  796  8,504  (7,708) 
ING Strategic Allocation Moderate Portfolio - Class S  1,073  4,022  (2,949)  18,942  4,593  14,349 

 

115


ING USA ANNUITY AND LIFE INSURANCE COMPANY             
SEPARATE ACCOUNT B             
Notes to Financial Statements             
 
      Year Ended December 31     
    2012      2011   
  Units  Units  Net Increase  Units  Units  Net Increase 
  Issued  Redeemed  (Decrease)  Issued  Redeemed  (Decrease) 
ING Variable Funds:             
ING Growth and Income Portfolio - Class A  9,468,664  22,035,746  (12,567,082)  143,913,488  20,386,939  123,526,549 
ING Growth and Income Portfolio - Class I  221  2,572  (2,351)  -  3,967  (3,967) 
ING Growth and Income Portfolio - Class S  1,473,364  13,907,232  (12,433,868)  44,058,797  10,507,034  33,551,763 
ING Variable Insurance Trust:             
ING GET U.S. Core Portfolio - Series 7  167,047  705,099  (538,052)  260,735  453,441  (192,706) 
ING GET U.S. Core Portfolio - Series 8  -  260,341  (260,341)  24,402  162,774  (138,372) 
ING GET U.S. Core Portfolio - Series 9  -  268,198  (268,198)  19,177  137,833  (118,656) 
ING GET U.S. Core Portfolio - Series 10  51,607  273,520  (221,913)  141,447  237,329  (95,882) 
ING GET U.S. Core Portfolio - Series 11  8,704  47,153  (38,449)  390,773  471,493  (80,720) 
ING GET U.S. Core Portfolio - Series 12  2,415  12,332  (9,917)  79,201  93,701  (14,500) 
ING GET U.S. Core Portfolio - Series 13  4,435  196,551  (192,116)  45,012  401,043  (356,031) 
ING GET U.S. Core Portfolio - Series 14  163,606  620,658  (457,052)  207,446  915,956  (708,510) 
ING Variable Portfolios, Inc.:             
ING BlackRock Science and Technology Opportunities Portfolio - Class S  4,942,875  7,142,265  (2,199,390)  9,826,536  13,226,849  (3,400,313) 
ING Euro STOXX 50® Index Portfolio - Class A  1,866,623  1,245,397  621,226  2,173,418  2,299,813  (126,395) 
ING FTSE 100 Index® Portfolio - Class A  381,984  411,144  (29,160)  1,988,665  2,093,981  (105,316) 
ING Hang Seng Index Portfolio - Class S  1,523,987  1,740,134  (216,147)  1,706,482  3,668,047  (1,961,565) 
ING Index Plus LargeCap Portfolio - Class S  261,058  2,187,615  (1,926,557)  997,237  4,341,938  (3,344,701) 
ING Index Plus MidCap Portfolio - Class S  208,673  1,275,789  (1,067,116)  672,087  2,186,473  (1,514,386) 
ING Index Plus SmallCap Portfolio - Class S  183,422  955,648  (772,226)  565,383  1,668,184  (1,102,801) 
ING International Index Portfolio - Class S  1,907,442  2,006,784  (99,342)  1,882,474  4,234,491  (2,352,017) 
ING Japan TOPIX Index® Portfolio - Class A  561,812  1,112,255  (550,443)  1,780,192  1,524,553  255,639 
ING Russell™ Large Cap Growth Index Portfolio - Class S  3,632,451  4,326,464  (694,013)  4,470,554  4,444,078  26,476 
ING Russell™ Large Cap Index Portfolio - Class S  11,777,149  12,418,448  (641,299)  8,477,808  15,187,233  (6,709,425) 
ING Russell™ Large Cap Value Index Portfolio - Class S  3,881,779  2,734,705  1,147,074  2,114,023  1,807,972  306,051 
ING Russell™ Mid Cap Growth Index Portfolio - Class S  1,956,030  3,637,263  (1,681,233)  3,801,203  6,608,994  (2,807,791) 
ING Russell™ Mid Cap Index Portfolio - Class S  4,709,206  4,211,248  497,958  7,573,006  8,930,677  (1,357,671) 
ING Russell™ Small Cap Index Portfolio - Class S  7,454,526  7,776,514  (321,988)  9,161,403  11,915,474  (2,754,071) 
ING Small Company Portfolio - Class S  1,708,698  3,284,591  (1,575,893)  4,018,875  4,729,901  (711,026) 
ING U.S. Bond Index Portfolio - Class S  7,174,183  12,393,012  (5,218,829)  18,810,676  14,212,030  4,598,646 
ING WisdomTreeSM Global High-Yielding Equity Index Portfolio - Class S  2,007,321  3,840,716  (1,833,395)  3,435,107  6,123,066  (2,687,959) 

 

116


ING USA ANNUITY AND LIFE INSURANCE COMPANY             
SEPARATE ACCOUNT B             
Notes to Financial Statements             
 
 
 
      Year Ended December 31     
    2012      2011   
  Units  Units  Net Increase  Units  Units  Net Increase 
  Issued  Redeemed  (Decrease)  Issued  Redeemed  (Decrease) 
ING Variable Products Trust:             
ING International Value Portfolio - Class S  26,892  88,628  (61,736)  10,468  111,649  (101,181) 
ING MidCap Opportunities Portfolio - Class S  6,070,998  9,698,120  (3,627,122)  14,534,969  17,826,042  (3,291,073) 
ING SmallCap Opportunities Portfolio - Class S  150,560  961,834  (811,274)  970,229  1,887,369  (917,140) 
Legg Mason Partners Variable Equity Trust:             
Legg Mason ClearBridge Variable Large Cap Value Portfolio - Class I  3  1,264  (1,261)  -  788  (788) 
Legg Mason Global Currents Variable International All Cap Opportunity Portfolio  -  2,797  (2,797)  -  118  (118) 
Legg Mason Partners Variable Income Trust:             
Western Asset Variable High Income Portfolio  -  671  (671)  3  89  (86) 
Oppenheimer Variable Account Funds:             
Oppenheimer Main Street Small- & Mid-Cap Fund®/VA - Service Class  12,211  21,562  (9,351)  2,451  21,642  (19,191) 
PIMCO Variable Insurance Trust:             
PIMCO Real Return Portfolio - Administrative Class  266,238  210,068  56,170  221,528  276,792  (55,264) 
Pioneer Variable Contracts Trust:             
Pioneer Equity Income VCT Portfolio - Class II  39,743  194,275  (154,532)  51,358  159,150  (107,792) 
ProFunds:             
ProFund VP Bull  91,266  334,704  (243,438)  3,519,900  3,863,881  (343,981) 
ProFund VP Europe 30  64,591  195,876  (131,285)  334,564  496,622  (162,058) 
ProFund VP Rising Rates Opportunity  636,496  668,271  (31,775)  2,543,426  2,781,811  (238,385) 
Van Kampen Equity Trust II:             
Invesco Van Kampen American Franchise Fund - Class I Shares  1,924,792  236,409  1,688,383  -  -  - 
Wells Fargo Funds Trust:             
Wells Fargo Advantage VT Omega Growth Fund - Class 2  1,186  26,075  (24,889)  774  12,557  (11,783) 
Wells Fargo Variable Trust:             
Wells Fargo Advantage VT Index Asset Allocation Fund - Class 2  237  59,536  (59,299)  384  16,546  (16,162) 
Wells Fargo Advantage VT Intrinsic Value Fund - Class 2  18  7,556  (7,538)  27  4,930  (4,903) 
Wells Fargo Advantage VT Small Cap Growth Fund - Class 2  214  8,605  (8,391)  154  2,935  (2,781) 
Wells Fargo Advantage VT Total Return Bond Fund  2,462  14,443  (11,981)  431  22,167  (21,736) 

 

117


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

8.  Financial Highlights 
 
  A summary of unit values, units outstanding, and net assets for variable annuity Contracts, expense ratios, excluding expenses of 
  underlying Funds, investment income ratios, and total return for the years ended December 31, 2012, 2011, 2010, 2009, and 2008, 
  follows: 

 

            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
BlackRock Global Allocation V.I. Fund - Class III                         
2012  94,889  $10.15  to  $10.86  $993,413  1.40%  0.95%  to  2.35%  7.41%  to  8.93% 
2011  111,786  $9.45  to  $9.97  $1,082,096  2.30%  0.95%  to  2.35%  -5.88%  to  -4.50% 
2010  112,825  $9.97  to  $10.44  $1,153,042  1.14%  0.95%  to  2.60%  6.86%  to  8.65% 
2009  102,963  $9.33  to  $9.61  $975,605  2.36%  0.95%  to  2.60%  17.80%  to  19.83% 
2008  49,903  $7.92  to  $8.02  $397,800  (a)  0.95%  to  2.60%    (a)   
Columbia Asset Allocation Fund, Variable Series - Class A                         
2012  19  $16.40  to  $17.06  $325  2.32%  1.40%  to  1.80%  10.96%  to  11.43% 
2011  18  $14.78  to  $15.31  $279  2.75%  1.40%  to  1.80%  -2.64%  to  -2.23% 
2010  20  $15.18  to  $15.66  $303  2.29%  1.40%  to  1.80%  11.37%  to  11.86% 
2009  22  $13.63  to  $14.00  $308  3.86%  1.40%  to  1.80%  21.81%  to  22.27% 
2008  23  $11.19  to  $11.45  $262  3.66%  1.40%  to  1.80%  -29.62%  to  -29.36% 
Columbia Small Cap Value Fund, Variable Series - Class B                         
2012  6,310  $12.36  to  $22.07  $128,867  0.29%  0.95%  to  2.35%  8.61%  to  10.19% 
2011  7,095  $11.38  to  $20.09  $132,452  0.88%  0.95%  to  2.35%  -8.37%  to  -7.04% 
2010  8,008  $12.42  to  $21.68  $162,178  1.03%  0.95%  to  2.35%  23.58%  to  25.22% 
2009  9,211  $10.05  to  $17.36  $150,066  0.85%  0.95%  to  2.35%  21.97%  to  23.89% 
2008  10,670  $8.24  to  $14.06  $141,739  0.46%  0.95%  to  2.45%  -29.89%  to  -28.85% 
Columbia Small Company Growth Fund, Variable Series - Class A                       
2012  1    $19.18    $13  -    1.55%      10.29%   
2011  1    $17.39    $11  -    1.55%      -7.01%   
2010  1  $18.70  to  $18.85  $18  -  1.45%  to  1.55%  26.35%  to  26.51% 
2009  2  $14.55  to  $14.90  $25  -  1.45%  to  1.80%  23.41%  to  23.86% 
2008  4  $11.79  to  $12.07  $51  -  1.40%  to  1.80%  -41.89%  to  -41.63% 
Columbia VP Large Cap Growth Fund - Class 1                         
2012  39  $7.70  to  $7.76  $299  -  1.40%  to  1.90%  18.07%  to  18.65% 
2011  41  $6.52  to  $6.55  $271  (d)  1.40%  to  1.90%    (d)   
2010  (d)    (d)    (d)  (d)    (d)      (d)   
2009  (d)    (d)    (d)  (d)    (d)      (d)   
2008  (d)    (d)    (d)  (d)    (d)      (d)   

 

118


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
 
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
Columbia VP Short Duration US Government Fund - Class 1                         
2012  -    $10.29    $3  -    1.80%      -0.10%   
2011  -    $10.30    $4  (d)    1.80%      (d)   
2010  (d)    (d)    (d)  (d)    (d)      (d)   
2009  (d)    (d)    (d)  (d)    (d)      (d)   
2008  (d)    (d)    (d)  (d)    (d)      (d)   
Fidelity® VIP Equity-Income Portfolio - Service Class 2                         
2012  12,874  $10.10  to  $15.37  $159,095  2.88%  0.75%  to  2.35%  14.35%  to  16.13% 
2011  14,627  $8.73  to  $13.27  $157,133  2.22%  0.75%  to  2.55%  -1.91%  to  -0.08% 
2010  16,702  $8.77  to  $13.31  $181,385  1.50%  0.75%  to  2.60%  11.86%  to  14.02% 
2009  19,074  $7.72  to  $11.70  $183,254  1.91%  0.75%  to  2.60%  26.51%  to  28.93% 
2008  22,259  $6.01  to  $9.10  $167,056  2.07%  0.75%  to  2.60%  -44.30%  to  -43.24% 
Fidelity® VIP Contrafund® Portfolio - Service Class 2                         
2012  44,664  $9.61  to  $19.10  $670,333  1.12%  0.75%  to  2.60%  13.09%  to  15.23% 
2011  50,330  $8.47  to  $16.61  $662,869  0.76%  0.75%  to  2.60%  -5.27%  to  -3.51% 
2010  57,642  $8.91  to  $17.26  $795,262  0.94%  0.75%  to  2.60%  13.86%  to  16.09% 
2009  66,360  $7.79  to  $14.91  $795,683  1.12%  0.75%  to  2.60%  31.90%  to  34.45% 
2008  72,902  $5.89  to  $11.12  $656,498  0.94%  0.75%  to  2.60%  -44.18%  to  -43.14% 
Franklin Small Cap Value Securities Fund - Class 2                         
2012  516  $20.58  to  $21.64  $11,060  0.77%  0.75%  to  1.35%  16.80%  to  17.52% 
2011  646  $17.58  to  $18.46  $11,819  0.72%  0.75%  to  1.35%  -5.08%  to  -4.51% 
2010  748  $18.47  to  $19.38  $14,384  0.75%  0.75%  to  1.35%  26.54%  to  27.30% 
2009  799  $14.56  to  $15.26  $12,115  1.65%  0.75%  to  1.35%  27.41%  to  28.14% 
2008  611  $11.40  to  $11.94  $7,246  1.14%  0.75%  to  1.35%  -33.92%  to  -33.50% 
ING Balanced Portfolio - Class S                         
2012  372  $10.56  to  $15.04  $4,876  2.90%  0.75%  to  2.00%  11.24%  to  12.66% 
2011  460  $9.44  to  $13.35  $5,392  2.50%  0.75%  to  2.10%  -3.67%  to  -2.34% 
2010  562  $9.80  to  $13.67  $6,681  2.62%  0.75%  to  2.10%  11.49%  to  12.88% 
2009  654  $8.76  to  $12.11  $6,899  4.06%  0.75%  to  2.20%  16.33%  to  18.15% 
2008  724  $7.46  to  $10.25  $6,399  3.34%  0.75%  to  2.55%  -30.08%  to  -28.87% 

 

119


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Intermediate Bond Portfolio - Class S                         
2012  82,847  $11.50  to  $16.18  $1,185,574  4.24%  0.75%  to  2.60%  6.25%  to  8.30% 
2011  91,027  $10.79  to  $14.94  $1,214,624  4.18%  0.75%  to  2.60%  4.48%  to  6.49% 
2010  99,181  $10.28  to  $14.03  $1,253,226  4.77%  0.75%  to  2.60%  6.67%  to  8.68% 
2009  106,012  $9.60  to  $12.91  $1,241,312  6.19%  0.75%  to  2.60%  8.41%  to  10.44% 
2008  104,672  $8.83  to  $11.69  $1,122,300  6.23%  0.75%  to  2.60%  -11.04%  to  -9.31% 
ING American Funds Asset Allocation Portfolio                         
2012  36,387  $10.46  to  $11.18  $392,917  1.33%  0.95%  to  2.35%  12.84%  to  14.55% 
2011  35,868  $9.27  to  $9.76  $340,934  1.42%  0.95%  to  2.35%  -1.49%  to  -0.10% 
2010  36,730  $9.41  to  $9.77  $352,116  1.56%  0.95%  to  2.35%  9.40%  to  10.90% 
2009  35,172  $8.60  to  $8.81  $306,208  1.71%  0.95%  to  2.35%  20.45%  to  22.19% 
2008  20,680  $7.13  to  $7.21  $148,369  (a)  0.95%  to  2.60%    (a)   
ING American Funds Global Growth and Income Portfolio                         
2012  1,385  $10.54  to  $10.83  $14,789  1.44%  0.95%  to  2.35%  14.07%  to  15.71% 
2011  734  $9.24  to  $9.36  $6,822  (d)  0.95%  to  2.35%    (d)   
2010  (d)    (d)    (d)  (d)    (d)      (d)   
2009  (d)    (d)    (d)  (d)    (d)      (d)   
2008  (d)    (d)    (d)  (d)    (d)      (d)   
ING American Funds International Growth and Income Portfolio                       
2012  1,103  $9.86  to  $10.14  $11,029  1.62%  0.95%  to  2.35%  12.94%  to  14.58% 
2011  511  $8.73  to  $8.85  $4,490  (d)  0.95%  to  2.35%    (d)   
2010  (d)    (d)    (d)  (d)    (d)      (d)   
2009  (d)    (d)    (d)  (d)    (d)      (d)   
2008  (d)    (d)    (d)  (d)    (d)      (d)   
ING American Funds International Portfolio                         
2012  60,606  $8.00  to  $18.99  $1,009,047  1.36%  0.75%  to  2.60%  14.15%  to  16.35% 
2011  67,548  $6.98  to  $16.35  $977,119  1.65%  0.75%  to  2.60%  -16.58%  to  -15.04% 
2010  78,623  $8.34  to  $19.28  $1,355,667  0.88%  0.75%  to  2.60%  3.94%  to  5.90% 
2009  84,125  $8.00  to  $18.25  $1,387,295  3.37%  0.75%  to  2.60%  38.56%  to  41.37% 
2008  80,618  $5.75  to  $12.94  $953,776  1.98%  0.75%  to  2.60%  -43.93%  to  -42.92% 

 

120


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING American Funds World Allocation Portfolio - Service Class                       
2012  13,575  $13.30  to  $15.30  $185,967  1.42%  0.95%  to  2.35%  10.37%  to  11.92% 
2011  14,957  $12.05  to  $13.67  $184,314  1.09%  0.95%  to  2.35%  -8.09%  to  -6.75% 
2010  13,571  $13.11  to  $14.66  $180,515  0.82%  0.95%  to  2.35%  10.08%  to  11.65% 
2009  8,491  $11.91  to  $13.13  $102,079  0.49%  0.95%  to  2.35%  31.60%  to  33.44% 
2008  1,447  $9.05  to  $9.09  $13,128  (a)  1.00%  to  2.35%    (a)   
ING BlackRock Health Sciences Opportunities Portfolio - Service Class                       
2012  14,891  $10.48  to  $14.38  $198,630  0.74%  0.90%  to  2.60%  15.59%  to  17.58% 
2011  15,336  $8.98  to  $12.23  $175,361  0.55%  0.90%  to  2.60%  2.09%  to  3.82% 
2010  15,039  $8.72  to  $11.78  $167,211  -  0.90%  to  2.60%  4.17%  to  6.05% 
2009  16,988  $8.19  to  $11.11  $179,816  -  0.90%  to  2.60%  16.96%  to  19.08% 
2008  18,362  $6.98  to  $9.33  $164,749  0.14%  0.90%  to  2.60%  -30.52%  to  -29.35% 
ING BlackRock Inflation Protected Bond Portfolio - Service Class                       
2012  45,124  $12.19  to  $13.07  $568,856  0.67%  0.75%  to  2.60%  3.80%  to  5.57% 
2011  41,818  $11.85  to  $12.38  $504,313  2.03%  0.75%  to  2.35%  9.42%  to  11.13% 
2010  23,288  $10.78  to  $11.14  $255,091  1.85%  0.75%  to  2.60%  2.76%  to  4.70% 
2009  15,090  $10.49  to  $10.64  $159,401  (b)  0.75%  to  2.60%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   
ING BlackRock Large Cap Growth Portfolio - Institutional Class                       
2012  7  $9.37  to  $9.70  $69  -  0.75%  to  1.35%  13.16%  to  13.98% 
2011  16  $8.28  to  $8.51  $134  0.70%  0.75%  to  1.35%  -2.59%  to  -2.07% 
2010  18  $8.50  to  $8.69  $153  0.66%  0.75%  to  1.35%  12.14%  to  12.71% 
2009  19  $7.58  to  $7.71  $148  0.72%  0.75%  to  1.35%  28.69%  to  29.58% 
2008  22  $5.89  to  $5.95  $131  -  0.75%  to  1.35%  -39.71%  to  -39.35% 
ING BlackRock Large Cap Growth Portfolio - Service Class                         
2012  12,257  $9.97  to  $13.18  $146,114  0.51%  0.75%  to  2.35%  11.83%  to  13.65% 
2011  13,029  $8.86  to  $11.62  $138,504  0.47%  0.75%  to  2.60%  -4.13%  to  -2.38% 
2010  12,002  $9.15  to  $11.92  $131,991  0.27%  0.75%  to  2.60%  10.40%  to  12.56% 
2009  13,216  $8.21  to  $10.60  $130,165  0.32%  0.75%  to  2.60%  26.78%  to  29.32% 
2008  12,227  $6.41  to  $8.22  $94,345  -  0.75%  to  2.60%  -40.61%  to  -39.55% 

 

121


ING USA ANNUITY AND LIFE INSURANCE COMPANY                   
SEPARATE ACCOUNT B                       
Notes to Financial Statements                       
 
            Investment           
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Bond Portfolio                       
2012  40,340  $10.68  to  $11.65  $446,283  2.62%  0.75%  to 2.35%  3.99%  to  5.66% 
2011  43,914  $10.27  to  $11.04  $463,738  2.67%  0.75%  to 2.35%  3.31%  to  4.99% 
2010  49,259  $9.94  to  $10.55  $500,271  2.49%  0.75%  to 2.60%  3.28%  to  5.25% 
2009  49,758  $9.60  to  $10.04  $484,377  3.65%  0.75%  to 2.60%  9.18%  to  11.35% 
2008  28,568  $8.77  to  $9.04  $252,168  (a)  0.75%  to 2.60%    (a)   
ING Clarion Global Real Estate Portfolio - Service Class                       
2012  10,755  $9.93  to  $12.94  $130,676  0.55%  0.75%  to 2.35%  22.73%  to  24.79% 
2011  12,280  $8.01  to  $10.40  $120,762  3.48%  0.75%  to 2.35%  -7.52%  to  -6.08% 
2010  14,082  $8.57  to  $11.08  $148,699  8.36%  0.75%  to 2.35%  13.21%  to  15.19% 
2009  16,302  $7.49  to  $9.65  $151,036  2.43%  0.75%  to 2.60%  29.94%  to  32.34% 
2008  16,758  $5.69  to  $7.30  $118,550  -  0.75%  to 2.60%  -42.79%  to  -41.83% 
ING Clarion Global Real Estate Portfolio - Service 2 Class                       
2012  160  $11.77  to  $12.43  $1,935  0.37%  1.40%  to 2.20%  22.73%  to  23.68% 
2011  185  $9.59  to  $10.05  $1,815  3.33%  1.40%  to 2.20%  -7.52%  to  -6.69% 
2010  214  $10.37  to  $10.77  $2,264  8.28%  1.40%  to 2.20%  13.21%  to  14.09% 
2009  247  $9.16  to  $9.44  $2,299  2.15%  1.40%  to 2.20%  30.30%  to  31.48% 
2008  239  $7.03  to  $7.18  $1,695  -  1.40%  to 2.20%  -42.61%  to  -42.19% 
ING Clarion Real Estate Portfolio - Service Class                       
2012  4,386  $12.07  to  $102.65  $283,259  0.99%  0.50%  to 2.60%  12.57%  to  14.96% 
2011  5,197  $10.67  to  $89.29  $292,946  1.29%  0.50%  to 2.60%  6.64%  to  8.96% 
2010  6,187  $9.95  to  $81.95  $322,300  3.38%  0.50%  to 2.60%  24.70%  to  27.33% 
2009  7,573  $7.94  to  $64.36  $307,226  3.51%  0.50%  to 2.60%  32.26%  to  35.21% 
2008  8,954  $5.97  to  $47.60  $270,838  1.26%  0.50%  to 2.60%  -40.10%  to  -38.82% 
ING Clarion Real Estate Portfolio - Service 2 Class                       
2012  872  $15.09  to  $27.92  $20,237  0.89%  1.40%  to 2.20%  12.86%  to  13.77% 
2011  981  $13.37  to  $24.54  $20,207  1.17%  1.40%  to 2.20%  6.87%  to  7.77% 
2010  1,093  $12.51  to  $22.77  $21,031  3.24%  1.40%  to 2.20%  24.98%  to  26.01% 
2009  1,228  $10.01  to  $18.07  $18,836  3.33%  1.40%  to 2.20%  32.76%  to  33.80% 
2008  1,378  $7.54  to  $13.51  $15,856  1.08%  1.40%  to 2.20%  -39.97%  to  -39.44% 

 

122


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
 
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING DFA World Equity Portfolio - Service Class                     
2012  18,092  $8.54  to  $10.16  $160,718  2.12%  0.75%  to 2.35%  15.25%  to 17.05% 
2011  20,489  $7.41  to  $8.68  $156,789  2.37%  0.75%  to 2.35%  -11.36%  to -9.77% 
2010  25,962  $8.36  to  $9.62  $222,454  1.62%  0.75%  to 2.60%  22.04%  to 23.81% 
2009  22,107  $6.85  to  $7.77  $154,311  -  0.75%  to 2.35%  18.92%  to 21.03% 
2008  22,447  $5.76  to  $6.42  $130,749  2.64%  0.75%  to 2.35%  -44.40%  to -43.67% 
ING FMRSM Diversified Mid Cap Portfolio - Service Class                     
2012  36,325  $10.38  to  $19.33  $596,317  0.60%  0.50%  to 2.35%  11.94%  to 14.04% 
2011  43,006  $9.27  to  $16.95  $626,916  0.20%  0.50%  to 2.35%  -13.06%  to -11.40% 
2010  52,695  $10.64  to  $19.13  $879,120  0.14%  0.50%  to 2.60%  25.00%  to 27.70% 
2009  57,858  $8.48  to  $14.98  $766,006  0.46%  0.50%  to 2.60%  35.66%  to 38.45% 
2008  59,892  $6.23  to  $10.82  $581,082  0.72%  0.50%  to 2.60%  -40.75%  to -39.42% 
ING FMRSM Diversified Mid Cap Portfolio - Service 2 Class                     
2012  1,542  $14.16  to  $22.32  $30,178  0.49%  1.40%  to 2.20%  11.85%  to 12.78% 
2011  1,696  $12.66  to  $19.79  $29,604  0.20%  1.40%  to 2.20%  -12.99%  to -12.32% 
2010  1,862  $14.55  to  $22.57  $37,335  0.04%  1.40%  to 2.20%  25.32%  to 26.37% 
2009  2,037  $11.61  to  $17.86  $32,436  0.34%  1.40%  to 2.20%  35.95%  to 37.17% 
2008  2,176  $8.54  to  $13.02  $25,387  0.38%  1.40%  to 2.20%  -40.57%  to -40.14% 
ING Franklin Income Portfolio - Service Class                     
2012  39,474  $11.10  to  $12.97  $483,680  5.97%  0.95%  to 2.60%  9.67%  to 11.55% 
2011  41,219  $10.08  to  $11.63  $456,258  5.81%  0.95%  to 2.60%  -0.09%  to 1.58% 
2010  40,859  $10.06  to  $11.46  $448,938  5.17%  0.95%  to 2.60%  10.00%  to 11.87% 
2009  43,601  $9.11  to  $10.25  $431,653  6.53%  0.95%  to 2.60%  28.61%  to 30.74% 
2008  37,779  $7.10  to  $7.84  $288,417  3.41%  0.95%  to 2.60%  -31.12%  to -29.89% 
ING Franklin Income Portfolio - Service 2 Class                     
2012  846  $11.78  to  $12.44  $10,259  5.73%  1.40%  to 2.20%  9.99%  to 10.97% 
2011  820  $10.71  to  $11.21  $9,008  5.55%  1.40%  to 2.20%  0.19%  to 0.90% 
2010  822  $10.69  to  $11.11  $8,983  4.58%  1.40%  to 2.20%  10.32%  to 11.21% 
2009  799  $9.69  to  $9.99  $7,857  6.74%  1.40%  to 2.20%  28.86%  to 30.08% 
2008  770  $7.52  to  $7.68  $5,852  3.40%  1.40%  to 2.20%  -30.95%  to -30.43% 

 

123


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Franklin Mutual Shares Portfolio - Service Class                         
2012  16,434  $9.26  to  $11.25  $176,567  1.55%  0.95%  to  2.55%  10.68%  to  12.54% 
2011  18,518  $8.34  to  $10.00  $178,164  3.44%  0.95%  to  2.55%  -3.34%  to  -1.77% 
2010  20,340  $8.60  to  $10.18  $200,678  0.43%  0.95%  to  2.60%  8.73%  to  10.53% 
2009  20,839  $7.89  to  $9.21  $187,539  0.13%  0.95%  to  2.60%  23.25%  to  25.34% 
2008  20,205  $6.38  to  $7.35  $146,314  3.71%  0.95%  to  2.60%  -39.44%  to  -38.34% 
ING Franklin Templeton Founding Strategy Portfolio - Service Class                       
2012  81,829  $8.87  to  $10.91  $768,266  3.71%  0.75%  to  2.60%  12.85%  to  14.96% 
2011  90,783  $7.86  to  $9.49  $747,851  2.35%  0.75%  to  2.60%  -3.79%  to  -1.96% 
2010  100,997  $8.17  to  $9.68  $857,015  2.48%  0.75%  to  2.60%  7.93%  to  9.88% 
2009  109,090  $7.57  to  $8.81  $849,891  2.86%  0.75%  to  2.60%  26.80%  to  29.37% 
2008  112,503  $5.97  to  $6.81  $684,019  0.13%  0.75%  to  2.60%  -37.36%  to  -36.31% 
ING Global Resources Portfolio - Adviser Class                         
2012  8,597  $8.30  to  $8.53  $72,214  0.62%  0.95%  to  2.35%  -5.47%  to  -4.16% 
2011  9,963  $8.78  to  $8.90  $87,944  (d)  0.95%  to  2.35%    (d)   
2010  (d)    (d)    (d)  (d)    (d)      (d)   
2009  (d)    (d)    (d)  (d)    (d)      (d)   
2008  (d)    (d)    (d)  (d)    (d)      (d)   
ING Global Resources Portfolio - Service Class                         
2012  12,902  $7.99  to  $44.31  $410,662  0.76%  0.80%  to  2.60%  -5.36%  to  -3.61% 
2011  14,721  $8.41  to  $45.97  $491,277  0.55%  0.80%  to  2.60%  -11.52%  to  -9.88% 
2010  17,390  $9.47  to  $51.01  $653,531  0.86%  0.80%  to  2.60%  18.51%  to  20.68% 
2009  22,047  $7.96  to  $42.27  $692,061  0.33%  0.80%  to  2.60%  33.93%  to  36.40% 
2008  23,618  $5.92  to  $30.99  $547,001  2.07%  0.80%  to  2.60%  -42.56%  to  -41.47% 
ING Global Resources Portfolio - Service 2 Class                         
2012  962  $16.65  to  $26.47  $21,585  0.60%  1.40%  to  2.20%  -5.13%  to  -4.34% 
2011  1,052  $17.55  to  $27.67  $24,799  0.42%  1.40%  to  2.20%  -11.23%  to  -10.51% 
2010  1,153  $19.77  to  $30.92  $30,533  0.77%  1.40%  to  2.20%  18.81%  to  19.75% 
2009  1,285  $16.64  to  $25.82  $28,489  0.04%  1.40%  to  2.20%  34.19%  to  35.32% 
2008  1,367  $12.40  to  $19.08  $22,531  1.65%  1.40%  to  2.20%  -42.38%  to  -41.90% 

 

124


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
 
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Invesco Van Kampen Growth and Income Portfolio - Service Class                   
2012  13,206  $9.98  to  $38.04  $373,644  1.88%  0.50%  to 2.35%  11.85%  to 13.99% 
2011  15,290  $8.86  to  $33.37  $383,533  1.22%  0.50%  to 2.60%  -4.70%  to -2.65% 
2010  17,670  $9.21  to  $34.28  $460,426  0.24%  0.50%  to 2.60%  9.59%  to 11.92% 
2009  20,388  $8.35  to  $30.63  $482,174  1.23%  0.50%  to 2.60%  20.71%  to 23.31% 
2008  21,955  $6.85  to  $24.84  $428,956  3.75%  0.50%  to 2.60%  -34.00%  to -32.55% 
ING Invesco Van Kampen Growth and Income Portfolio - Service 2 Class                   
2012  2,943  $11.70  to  $16.95  $44,647  1.68%  1.40%  to 2.20%  11.85%  to 12.77% 
2011  3,289  $10.46  to  $15.03  $44,533  1.08%  1.40%  to 2.20%  -4.47%  to -3.72% 
2010  3,710  $10.95  to  $15.61  $52,570  0.24%  1.40%  to 2.20%  9.83%  to 10.79% 
2009  3,999  $9.97  to  $14.09  $51,349  1.11%  1.40%  to 2.20%  21.14%  to 21.99% 
2008  4,227  $8.23  to  $11.55  $44,662  3.49%  1.40%  to 2.20%  -33.84%  to -33.24% 
ING JPMorgan Emerging Markets Equity Portfolio - Service Class                   
2012  26,345  $9.00  to  $25.39  $565,548  -  0.75%  to 2.60%  16.04%  to 18.22% 
2011  26,986  $7.73  to  $21.49  $495,145  0.87%  0.75%  to 2.60%  -20.39%  to -18.90% 
2010  28,787  $9.68  to  $26.50  $657,788  0.49%  0.75%  to 2.60%  17.13%  to 19.44% 
2009  35,528  $8.23  to  $22.21  $692,447  1.48%  0.75%  to 2.60%  67.19%  to 70.19% 
2008  35,629  $4.91  to  $13.05  $414,868  2.61%  0.75%  to 2.60%  -52.55%  to -51.67% 
ING JPMorgan Emerging Markets Equity Portfolio - Service 2 Class                   
2012  914  $21.83  to  $35.58  $26,943  -  1.40%  to 2.20%  16.30%  to 17.23% 
2011  1,006  $18.77  to  $30.35  $25,476  0.70%  1.40%  to 2.20%  -20.20%  to -19.54% 
2010  1,118  $23.52  to  $37.72  $35,486  0.41%  1.40%  to 2.20%  17.48%  to 18.47% 
2009  1,238  $20.02  to  $31.84  $33,336  1.14%  1.40%  to 2.20%  67.53%  to 68.91% 
2008  1,298  $11.95  to  $18.85  $20,686  2.26%  1.40%  to 2.20%  -52.41%  to -52.04% 
ING JPMorgan Small Cap Core Equity Portfolio - Service Class                   
2012  13,087  $12.81  to  $19.13  $223,964  0.17%  0.90%  to 2.60%  15.58%  to 17.65% 
2011  15,244  $11.03  to  $16.26  $223,895  0.33%  0.90%  to 2.60%  -3.87%  to -2.22% 
2010  16,918  $11.41  to  $16.63  $257,411  0.27%  0.90%  to 2.60%  23.46%  to 25.60% 
2009  12,649  $9.20  to  $13.24  $153,523  0.41%  0.90%  to 2.60%  23.95%  to 26.22% 
2008  13,007  $7.38  to  $10.58  $126,323  0.47%  0.80%  to 2.60%  -31.75%  to -30.53% 

 

125


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
 
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING JPMorgan Small Cap Core Equity Portfolio - Service 2 Class                       
2012  1,788  $13.30  to  $21.57  $33,170  0.01%  1.40%  to  2.20%  15.85%  to  16.85% 
2011  2,003  $11.48  to  $18.46  $32,082  0.19%  1.40%  to  2.20%  -3.61%  to  -2.84% 
2010  2,318  $11.91  to  $19.00  $38,538  0.11%  1.40%  to  2.20%  23.80%  to  24.75% 
2009  2,557  $9.62  to  $15.23  $34,226  0.22%  1.40%  to  2.20%  24.29%  to  25.35% 
2008  2,792  $7.74  to  $12.15  $30,008  0.28%  1.40%  to  2.20%  -31.56%  to  -31.04% 
ING Large Cap Growth Portfolio - Adviser Class                         
2012  184,662  $10.23  to  $10.37  $1,901,279  (e)  0.75%  to  2.60%    (e)   
2011  (e)    (e)    (e)  (e)    (e)      (e)   
2010  (e)    (e)    (e)  (e)    (e)      (e)   
2009  (e)    (e)    (e)  (e)    (e)      (e)   
2008  (e)    (e)    (e)  (e)    (e)      (e)   
ING Large Cap Growth Portfolio - Service Class                         
2012  13,596  $14.48  to  $18.02  $214,540  0.47%  0.75%  to  2.35%  15.01%  to  16.94% 
2011  15,951  $12.59  to  $15.41  $217,732  0.27%  0.75%  to  2.35%  -0.16%  to  1.52% 
2010  8,969  $12.61  to  $15.18  $121,916  0.34%  0.75%  to  2.35%  11.59%  to  13.37% 
2009  7,714  $11.30  to  $13.39  $93,436  0.43%  0.75%  to  2.35%  39.16%  to  41.39% 
2008  1,030  $8.12  to  $9.47  $8,916  0.14%  0.75%  to  2.55%  -29.38%  to  -28.09% 
ING Large Cap Growth Portfolio - Service 2 Class                         
2012  56  $14.49  to  $16.10  $856  0.49%  1.40%  to  2.20%  15.09%  to  16.08% 
2011  59  $12.59  to  $13.87  $784  0.24%  1.40%  to  2.20%  -0.16%  to  0.58% 
2010  67  $12.61  to  $13.79  $886  -  1.40%  to  2.20%  11.59%  to  12.57% 
2009  74  $11.30  to  $12.25  $879  -  1.40%  to  2.20%  38.99%  to  40.16% 
2008  94  $8.13  to  $8.74  $802  -  1.40%  to  2.20%  -29.18%  to  -28.65% 
ING Large Cap Value Portfolio - Service Class                         
2012  6,830  $11.12  to  $11.45  $76,880  2.34%  0.90%  to  2.35%  11.65%  to  13.37% 
2011  6,463  $9.95  to  $10.10  $64,740  (d)  0.90%  to  2.45%    (d)   
2010  (d)    (d)    (d)  (d)    (d)      (d)   
2009  (d)    (d)    (d)  (d)    (d)      (d)   
2008  (d)    (d)    (d)  (d)    (d)      (d)   

 

126


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
 
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Limited Maturity Bond Portfolio - Service Class                     
2012  2,884  $10.41  to  $28.62  $62,727  0.78%  0.50%  to 2.25%  -0.79%  to 0.99% 
2011  3,478  $10.46  to  $28.34  $75,764  3.11%  0.50%  to 2.25%  -1.10%  to 0.64% 
2010  4,330  $10.56  to  $28.16  $94,829  3.66%  0.50%  to 2.25%  0.85%  to 2.62% 
2009  5,258  $10.44  to  $27.44  $113,748  4.79%  0.50%  to 2.25%  4.76%  to 6.65% 
2008  6,346  $9.94  to  $25.73  $130,395  6.53%  0.50%  to 2.25%  -2.48%  to -0.73% 
ING Liquid Assets Portfolio - Service Class                     
2012  57,672  $9.17  to  $18.98  $822,755  -  0.75%  to 2.35%  -2.44%  to -0.73% 
2011  67,502  $9.39  to  $19.12  $994,227  -  0.75%  to 2.35%  -2.29%  to -0.73% 
2010  70,785  $9.60  to  $19.26  $1,063,594  -  0.75%  to 2.60%  -2.58%  to -0.77% 
2009  97,754  $9.82  to  $19.41  $1,494,964  0.11%  0.75%  to 2.60%  -2.33%  to -0.41% 
2008  150,409  $10.01  to  $19.49  $2,331,467  2.26%  0.75%  to 2.60%  -0.19%  to 1.67% 
ING Liquid Assets Portfolio - Service 2 Class                     
2012  1,568  $9.63  to  $10.15  $15,419  -  1.40%  to 2.20%  -2.23%  to -1.36% 
2011  1,931  $9.84  to  $10.29  $19,328  -  1.40%  to 2.20%  -2.18%  to -1.34% 
2010  2,263  $10.04  to  $10.43  $23,027  -  1.40%  to 2.20%  -2.13%  to -1.42% 
2009  3,118  $10.23  to  $10.58  $32,318  0.06%  1.40%  to 2.20%  -2.00%  to -1.12% 
2008  5,349  $10.40  to  $10.70  $56,288  2.09%  1.40%  to 2.20%  0.10%  to 0.85% 
ING Marsico Growth Portfolio - Service Class                     
2012  24,264  $9.91  to  $20.10  $405,242  0.42%  0.80%  to 2.60%  9.68%  to 11.60% 
2011  27,653  $8.96  to  $18.01  $417,672  0.23%  0.80%  to 2.60%  -4.24%  to -2.44% 
2010  31,986  $9.26  to  $18.46  $502,962  0.52%  0.80%  to 2.60%  16.68%  to 18.87% 
2009  34,422  $7.78  to  $15.53  $460,437  0.84%  0.80%  to 2.60%  25.61%  to 28.03% 
2008  37,553  $6.17  to  $12.13  $397,436  0.52%  0.80%  to 2.60%  -41.84%  to -40.80% 
ING Marsico Growth Portfolio - Service 2 Class                     
2012  1,125  $11.15  to  $16.64  $16,538  0.26%  1.40%  to 2.20%  9.85%  to 10.71% 
2011  1,227  $10.15  to  $15.03  $16,367  0.10%  1.40%  to 2.20%  -3.97%  to -3.16% 
2010  1,351  $10.57  to  $15.52  $18,769  0.40%  1.40%  to 2.20%  16.92%  to 17.93% 
2009  1,476  $9.04  to  $13.16  $17,480  0.69%  1.40%  to 2.20%  26.08%  to 27.03% 
2008  1,535  $7.17  to  $10.36  $14,277  0.32%  1.40%  to 2.20%  -41.75%  to -41.24% 

 

127


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
 
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING MFS Total Return Portfolio - Service Class                     
2012  23,691  $10.48  to  $34.79  $614,072  2.44%  0.50%  to 2.60%  8.32%  to 10.62% 
2011  26,667  $9.62  to  $31.45  $635,627  2.40%  0.50%  to 2.60%  -1.08%  to 1.09% 
2010  31,007  $9.66  to  $31.11  $742,863  0.45%  0.50%  to 2.60%  7.07%  to 9.27% 
2009  35,805  $8.98  to  $28.47  $797,586  2.44%  0.50%  to 2.60%  14.78%  to 17.31% 
2008  38,189  $7.77  to  $24.27  $740,739  5.93%  0.50%  to 2.60%  -24.37%  to -22.73% 
ING MFS Total Return Portfolio - Service 2 Class                     
2012  2,266  $11.37  to  $15.15  $30,932  2.25%  1.40%  to 2.20%  8.49%  to 9.39% 
2011  2,472  $10.48  to  $13.85  $30,990  2.33%  1.40%  to 2.20%  -0.76%  to 0.07% 
2010  2,737  $10.56  to  $13.84  $34,511  0.44%  1.40%  to 2.20%  7.32%  to 8.12% 
2009  2,933  $9.84  to  $12.80  $34,335  2.28%  1.40%  to 2.20%  15.09%  to 16.05% 
2008  3,225  $8.55  to  $11.03  $32,705  5.67%  1.40%  to 2.20%  -24.13%  to -23.51% 
ING MFS Utilities Portfolio - Service Class                     
2012  24,539  $10.29  to  $20.27  $460,175  3.07%  0.75%  to 2.35%  10.63%  to 12.46% 
2011  27,505  $9.29  to  $18.06  $463,878  3.57%  0.75%  to 2.60%  3.61%  to 5.61% 
2010  26,755  $8.94  to  $17.13  $431,592  2.55%  0.75%  to 2.60%  10.77%  to 12.77% 
2009  28,774  $8.04  to  $15.20  $416,638  5.29%  0.75%  to 2.60%  29.34%  to 31.87% 
2008  31,245  $6.19  to  $11.55  $347,825  3.74%  0.75%  to 2.60%  -39.34%  to -38.27% 
ING Morgan Stanley Global Franchise Portfolio - Service Class                     
2012  17,853  $12.04  to  $22.63  $357,517  1.74%  0.90%  to 2.35%  13.03%  to 14.76% 
2011  18,918  $10.64  to  $19.72  $333,098  2.35%  0.90%  to 2.60%  6.19%  to 8.05% 
2010  19,799  $9.98  to  $18.25  $326,147  0.41%  0.90%  to 2.60%  10.90%  to 12.86% 
2009  18,516  $8.96  to  $16.29  $272,604  6.66%  0.80%  to 2.60%  25.54%  to 27.86% 
2008  18,444  $7.11  to  $12.74  $215,647  1.99%  0.80%  to 2.60%  -30.39%  to -29.14% 
ING Morgan Stanley Global Franchise Portfolio - Service 2 Class                   
2012  2,939  $16.57  to  $22.71  $59,526  1.54%  1.40%  to 2.20%  13.03%  to 13.89% 
2011  3,291  $14.66  to  $19.94  $58,798  2.24%  1.40%  to 2.20%  6.54%  to 7.38% 
2010  3,747  $13.76  to  $18.57  $62,764  0.30%  1.40%  to 2.20%  11.33%  to 12.27% 
2009  4,059  $12.36  to  $16.54  $60,900  6.66%  1.40%  to 2.20%  25.74%  to 26.74% 
2008  4,476  $9.83  to  $13.05  $53,281  1.77%  1.40%  to 2.20%  -30.23%  to -29.65% 

 

128


ING USA ANNUITY AND LIFE INSURANCE COMPANY                   
SEPARATE ACCOUNT B                       
Notes to Financial Statements                       
 
 
 
            Investment           
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Oppenheimer Active Allocation Portfolio - Service Class                       
2012  3,962  $12.03  to  $15.50  $49,203  2.60%  0.95%  to 2.35%  10.06%  to  11.75% 
2011  4,532  $10.93  to  $13.87  $50,759  0.03%  0.95%  to 2.35%  -6.66%  to  -5.39% 
2010  5,040  $11.71  to  $14.66  $60,023  1.62%  0.95%  to 2.35%  11.40%  to  12.94% 
2009  2,217  $10.51  to  $12.98  $23,532  1.10%  0.95%  to 2.35%  24.97%  to  26.39% 
2008  412  $8.41  to  $8.45  $3,471  (a)  1.15%  to 2.35%    (a)   
ING PIMCO High Yield Portfolio - Service Class                       
2012  34,403  $12.07  to  $19.25  $590,727  6.55%  0.50%  to 2.60%  11.03%  to  13.44% 
2011  32,978  $10.80  to  $16.97  $506,277  7.29%  0.50%  to 2.60%  1.69%  to  3.92% 
2010  34,750  $12.41  to  $16.33  $519,986  7.27%  0.50%  to 2.60%  11.31%  to  13.64% 
2009  29,928  $11.24  to  $14.47  $400,025  8.29%  0.50%  to 2.60%  45.49%  to  48.60% 
2008  35,884  $7.65  to  $9.76  $326,164  8.81%  0.50%  to 2.60%  -24.50%  to  -22.89% 
ING PIMCO Total Return Bond Portfolio - Service Class                       
2012  158,327  $12.71  to  $23.01  $2,929,962  3.31%  0.75%  to 2.60%  5.90%  to  7.98% 
2011  162,686  $11.92  to  $21.31  $2,819,652  4.06%  0.75%  to 2.60%  0.76%  to  2.67% 
2010  174,530  $11.75  to  $20.76  $2,995,230  4.93%  0.75%  to 2.60%  4.96%  to  6.90% 
2009  184,659  $11.14  to  $19.42  $2,982,070  4.08%  0.75%  to 2.60%  11.41%  to  13.57% 
2008  146,635  $10.05  to  $17.10  $2,112,274  3.67%  0.75%  to 2.60%  1.54%  to  3.45% 
ING PIMCO Total Return Bond Portfolio - Service 2 Class                       
2012  4,251  $13.92  to  $16.23  $64,889  3.18%  1.40%  to 2.20%  6.26%  to  7.13% 
2011  4,593  $13.10  to  $15.15  $65,836  4.01%  1.40%  to 2.20%  1.00%  to  1.75% 
2010  5,170  $12.97  to  $14.89  $73,254  4.52%  1.40%  to 2.20%  5.19%  to  6.05% 
2009  5,514  $12.33  to  $14.04  $73,887  3.66%  1.40%  to 2.20%  11.79%  to  12.68% 
2008  5,145  $11.03  to  $12.46  $61,403  3.17%  1.40%  to 2.20%  1.66%  to  2.64% 
ING Pioneer Fund Portfolio - Service Class                       
2012  3,858  $9.88  to  $12.69  $45,382  1.26%  0.75%  to 2.35%  7.69%  to  9.49% 
2011  4,457  $9.06  to  $11.59  $48,382  1.32%  0.75%  to 2.60%  -7.09%  to  -5.23% 
2010  5,005  $9.61  to  $12.23  $57,938  1.02%  0.75%  to 2.60%  12.94%  to  14.94% 
2009  5,109  $8.39  to  $10.64  $51,948  1.15%  0.75%  to 2.60%  20.84%  to  23.29% 
2008  5,490  $6.83  to  $8.63  $45,727  2.81%  0.75%  to 2.60%  -36.39%  to  -35.26% 

 

129


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
 
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Pioneer Mid Cap Value Portfolio - Service Class                         
2012  36,866  $10.05  to  $12.82  $438,285  0.88%  0.75%  to  2.45%  8.30%  to  10.23% 
2011  42,385  $9.21  to  $11.63  $461,825  1.23%  0.75%  to  2.60%  -7.48%  to  -5.68% 
2010  49,052  $9.86  to  $12.33  $572,449  0.83%  0.75%  to  2.60%  14.92%  to  16.99% 
2009  56,025  $8.41  to  $10.54  $563,986  1.19%  0.75%  to  2.60%  21.84%  to  24.29% 
2008  60,375  $6.88  to  $8.48  $494,199  1.66%  0.75%  to  2.60%  -34.81%  to  -33.65% 
ING Retirement Conservative Portfolio - Adviser Class                         
2012  60,572  $9.46  to  $9.90  $584,925  2.99%  0.95%  to  2.35%  5.35%  to  6.92% 
2011  60,971  $8.98  to  $9.26  $555,004  1.59%  0.95%  to  2.35%  2.75%  to  4.16% 
2010  53,453  $8.74  to  $8.89  $470,803  0.25%  0.95%  to  2.35%  5.30%  to  6.85% 
2009  48,192  $8.30  to  $8.32  $400,422  (b)  0.95%  to  2.35%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   
ING Retirement Growth Portfolio - Adviser Class                         
2012  380,195  $10.76  to  $11.35  $4,208,491  2.39%  0.95%  to  2.60%  10.02%  to  11.83% 
2011  412,396  $9.78  to  $10.15  $4,111,687  0.83%  0.95%  to  2.60%  -3.74%  to  -2.12% 
2010  449,035  $10.16  to  $10.37  $4,611,727  0.37%  0.95%  to  2.60%  8.66%  to  10.55% 
2009  484,226  $9.35  to  $9.38  $4,534,412  (b)  0.95%  to  2.60%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   
ING Retirement Moderate Growth Portfolio - Adviser Class                         
2012  251,860  $11.01  to  $11.61  $2,852,881  2.58%  0.95%  to  2.60%  8.69%  to  10.48% 
2011  276,852  $10.13  to  $10.51  $2,858,948  1.05%  0.95%  to  2.60%  -2.50%  to  -0.85% 
2010  303,412  $10.39  to  $10.60  $3,185,520  0.47%  0.95%  to  2.60%  8.12%  to  9.96% 
2009  322,936  $9.61  to  $9.64  $3,108,225  (b)  0.95%  to  2.60%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   
ING Retirement Moderate Portfolio - Adviser Class                         
2012  144,592  $11.21  to  $11.83  $1,668,464  3.17%  0.95%  to  2.60%  7.38%  to  9.23% 
2011  157,865  $10.44  to  $10.83  $1,681,480  1.39%  0.95%  to  2.60%  -0.48%  to  1.12% 
2010  171,842  $10.49  to  $10.71  $1,823,032  0.56%  0.95%  to  2.60%  6.61%  to  8.51% 
2009  186,216  $9.84  to  $9.87  $1,834,949  (b)  0.95%  to  2.60%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   

 

130


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING T. Rowe Price Capital Appreciation Portfolio - Service Class                   
2012  60,087  $11.95  to  $68.46  $2,461,428  1.57%  0.75%  to 2.60%  11.48%  to 13.62% 
2011  64,353  $10.65  to  $60.29  $2,370,408  1.81%  0.75%  to 2.60%  0.24%  to 2.10% 
2010  73,279  $10.56  to  $59.06  $2,636,403  1.59%  0.75%  to 2.60%  11.01%  to 13.15% 
2009  75,826  $9.45  to  $52.21  $2,513,348  1.88%  0.75%  to 2.60%  29.86%  to 32.33% 
2008  75,307  $7.26  to  $39.50  $1,962,032  4.41%  0.75%  to 2.60%  -29.40%  to -28.10% 
ING T. Rowe Price Capital Appreciation Portfolio - Service 2 Class                   
2012  4,186  $14.04  to  $20.92  $77,162  1.46%  1.40%  to 2.20%  11.87%  to 12.78% 
2011  4,440  $12.55  to  $18.55  $73,103  1.65%  1.40%  to 2.20%  0.48%  to 1.26% 
2010  5,094  $12.49  to  $18.32  $83,486  1.42%  1.40%  to 2.20%  11.32%  to 12.32% 
2009  5,711  $11.22  to  $16.31  $83,348  1.69%  1.40%  to 2.20%  30.16%  to 31.11% 
2008  6,234  $8.62  to  $12.44  $69,529  3.87%  1.40%  to 2.20%  -29.23%  to -28.63% 
ING T. Rowe Price Equity Income Portfolio - Service Class                     
2012  22,522  $10.36  to  $43.40  $645,207  1.94%  0.50%  to 2.45%  14.30%  to 16.64% 
2011  25,659  $8.99  to  $37.21  $643,106  1.98%  0.50%  to 2.60%  -3.43%  to -1.40% 
2010  26,314  $9.23  to  $37.74  $685,068  1.57%  0.50%  to 2.60%  11.93%  to 14.40% 
2009  28,154  $8.17  to  $32.99  $652,560  1.66%  0.50%  to 2.60%  21.80%  to 24.35% 
2008  28,972  $6.65  to  $26.53  $553,960  4.20%  0.50%  to 2.60%  -37.39%  to -36.01% 
ING T. Rowe Price Equity Income Portfolio - Service 2 Class                     
2012  1,624  $11.53  to  $16.55  $24,314  1.88%  1.40%  to 2.20%  14.27%  to 15.25% 
2011  1,780  $10.09  to  $14.36  $23,289  1.90%  1.40%  to 2.20%  -3.07%  to -2.31% 
2010  1,773  $10.41  to  $14.70  $23,922  1.49%  1.40%  to 2.20%  12.18%  to 13.16% 
2009  1,880  $9.28  to  $12.99  $22,439  1.53%  1.40%  to 2.20%  22.06%  to 23.01% 
2008  2,064  $7.60  to  $10.56  $20,160  3.93%  1.40%  to 2.20%  -37.24%  to -36.69% 
ING T. Rowe Price International Stock Portfolio - Service Class                   
2012  10,865  $7.79  to  $14.39  $144,821  0.28%  0.75%  to 2.60%  15.60%  to 17.87% 
2011  11,431  $6.71  to  $12.23  $130,635  3.60%  0.75%  to 2.60%  -14.58%  to -13.01% 
2010  12,505  $7.83  to  $14.08  $166,057  1.37%  0.75%  to 2.60%  10.86%  to 12.93% 
2009  14,798  $7.04  to  $12.48  $175,866  1.22%  0.75%  to 2.60%  33.99%  to 36.62% 
2008  18,200  $5.23  to  $9.16  $160,191  1.13%  0.75%  to 2.60%  -50.83%  to -49.95% 

 

131


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Templeton Global Growth Portfolio - Service Class                     
2012  11,449  $9.16  to  $27.76  $243,263  1.84%  0.80%  to 2.35%  18.96%  to 20.75% 
2011  12,807  $7.70  to  $22.99  $228,537  1.62%  0.80%  to 2.60%  -8.11%  to -6.43% 
2010  14,785  $8.35  to  $24.57  $286,405  1.43%  0.80%  to 2.60%  4.99%  to 6.87% 
2009  16,283  $7.93  to  $22.99  $299,463  2.07%  0.80%  to 2.60%  28.88%  to 31.22% 
2008  16,433  $6.13  to  $17.52  $234,440  1.02%  0.80%  to 2.60%  -41.26%  to -40.14% 
ING Templeton Global Growth Portfolio - Service 2 Class                     
2012  295  $11.49  to  $17.97  $4,627  1.76%  1.40%  to 2.20%  18.94%  to 19.88% 
2011  298  $9.66  to  $14.99  $3,901  1.44%  1.40%  to 2.20%  -7.91%  to -7.13% 
2010  332  $10.49  to  $16.14  $4,732  1.36%  1.40%  to 2.20%  5.22%  to 6.04% 
2009  346  $9.97  to  $15.22  $4,691  1.95%  1.40%  to 2.20%  29.15%  to 30.20% 
2008  357  $7.72  to  $11.69  $3,738  0.71%  1.40%  to 2.20%  -41.07%  to -40.60% 
ING Diversified International Fund - Class R                     
2012  11  $8.86  to  $9.20  $100  1.75%  0.75%  to 1.35%  15.97%  to 16.60% 
2011  17  $7.64  to  $7.89  $128  0.65%  0.75%  to 1.35%  -16.50%  to -15.97% 
2010  19  $9.15  to  $9.39  $178  0.52%  0.75%  to 1.35%  9.84%  to 10.47% 
2009  24  $8.33  to  $8.50  $203  0.52%  0.75%  to 1.35%  32.85%  to 33.86% 
2008  29  $6.27  to  $6.35  $182  7.24%  0.75%  to 1.35%  -46.77%  to -46.46% 
ING American Century Small-Mid Cap Value Portfolio - Service Class                   
2012  85  $19.73  to  $21.71  $1,828  1.05%  0.75%  to 1.35%  14.75%  to 15.45% 
2011  106  $17.14  to  $18.85  $1,975  1.15%  0.75%  to 1.35%  -4.44%  to -3.85% 
2010  157  $17.90  to  $19.66  $3,047  1.06%  0.75%  to 1.35%  20.36%  to 21.06% 
2009  127  $14.83  to  $16.27  $2,051  2.20%  0.75%  to 1.35%  33.81%  to 34.63% 
2008  34  $11.17  to  $12.12  $404  0.87%  0.75%  to 1.35%  -27.54%  to -27.11% 
ING Baron Growth Portfolio - Service Class                     
2012  23,792  $11.79  to  $22.28  $351,077  -  0.75%  to 2.60%  16.58%  to 18.76% 
2011  26,714  $10.08  to  $18.76  $335,771  -  0.75%  to 2.60%  -0.43%  to 1.46% 
2010  27,327  $10.09  to  $18.49  $342,203  -  0.75%  to 2.60%  23.17%  to 25.61% 
2009  28,614  $8.16  to  $14.72  $288,247  -  0.75%  to 2.60%  31.77%  to 34.18% 
2008  23,371  $6.17  to  $10.97  $177,288  -  0.75%  to 2.60%  -42.81%  to -41.71% 

 

132


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Columbia Small Cap Value II Portfolio - Service Class                     
2012  11,729  $10.21  to  $12.27  $124,999  0.24%  0.95%  to 2.35%  11.58%  to 13.14% 
2011  13,429  $9.15  to  $10.85  $127,517  0.41%  0.95%  to 2.35%  -4.98%  to -3.60% 
2010  15,497  $9.52  to  $11.27  $153,917  1.16%  0.95%  to 2.60%  22.05%  to 24.12% 
2009  19,380  $7.80  to  $9.08  $156,330  1.23%  0.95%  to 2.60%  21.50%  to 23.51% 
2008  20,680  $6.42  to  $7.36  $136,090  0.10%  0.95%  to 2.60%  -35.80%  to -34.69% 
ING Davis New York Venture Portfolio - Service Class                     
2012  24,498  $9.05  to  $13.88  $244,764  0.29%  0.75%  to 2.60%  9.35%  to 11.42% 
2011  26,804  $8.24  to  $12.49  $242,733  0.98%  0.75%  to 2.60%  -7.16%  to -5.44% 
2010  30,184  $8.85  to  $13.23  $291,613  0.41%  0.75%  to 2.60%  9.11%  to 11.26% 
2009  30,411  $8.08  to  $11.93  $266,995  0.67%  0.75%  to 2.60%  28.14%  to 30.66% 
2008  27,384  $6.28  to  $9.15  $185,900  0.86%  0.75%  to 2.60%  -40.84%  to -39.67% 
ING Global Bond Portfolio - Service Class                     
2012  587  $14.18  to  $14.85  $8,567  5.78%  0.75%  to 1.35%  6.22%  to 6.83% 
2011  652  $13.35  to  $13.90  $8,930  7.06%  0.75%  to 1.35%  2.14%  to 2.73% 
2010  721  $13.07  to  $13.53  $9,633  3.10%  0.75%  to 1.35%  13.95%  to 14.66% 
2009  732  $11.47  to  $11.80  $8,547  3.29%  0.75%  to 1.35%  19.73%  to 20.41% 
2008  914  $9.58  to  $9.80  $8,886  6.50%  0.75%  to 1.35%  -16.91%  to -16.38% 
ING Growth and Income Core Portfolio - Initial Class                     
2012  78  $8.48  to  $12.69  $711  0.37%  0.95%  to 2.00%  7.08%  to 8.18% 
2011  105  $7.91  to  $11.76  $895  0.70%  0.95%  to 2.00%  -14.85%  to -13.98% 
2010  138  $9.29  to  $13.71  $1,384  1.47%  0.95%  to 2.10%  8.98%  to 10.36% 
2009  163  $8.51  to  $12.46  $1,479  1.12%  0.95%  to 2.10%  41.78%  to 43.50% 
2008  188  $5.99  to  $8.72  $1,193  0.52%  0.95%  to 2.10%  -41.01%  to -40.35% 
ING Growth and Income Core Portfolio - Service Class                     
2012  523  $9.60  to  $13.36  $5,714  0.08%  0.75%  to 2.35%  6.43%  to 8.12% 
2011  620  $9.02  to  $12.38  $6,348  0.55%  0.75%  to 2.35%  -15.38%  to -13.89% 
2010  690  $10.66  to  $14.43  $8,281  1.41%  0.75%  to 2.35%  8.55%  to 10.24% 
2009  718  $9.82  to  $13.11  $7,716  0.79%  0.75%  to 2.35%  40.89%  to 43.36% 
2008  679  $6.97  to  $9.18  $4,948  0.10%  0.75%  to 2.35%  -41.30%  to -40.37% 

 

133


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Invesco Van Kampen Comstock Portfolio - Service Class                     
2012  14,417  $10.47  to  $15.80  $189,072  1.27%  0.75%  to 2.60%  15.46%  to 17.69% 
2011  15,372  $8.97  to  $13.45  $173,078  1.34%  0.75%  to 2.60%  -4.60%  to -2.75% 
2010  16,119  $9.32  to  $13.88  $189,031  1.38%  0.75%  to 2.60%  12.14%  to 14.24% 
2009  15,876  $8.24  to  $12.18  $164,271  2.32%  0.75%  to 2.60%  25.28%  to 27.51% 
2008  16,491  $6.55  to  $9.57  $135,204  3.99%  0.75%  to 2.60%  -38.19%  to -36.94% 
ING Invesco Van Kampen Equity and Income Portfolio - Initial Class                   
2012  107  $13.76  to  $14.25  $1,502  2.34%  0.75%  to 1.20%  11.42%  to 11.94% 
2011  123  $12.35  to  $12.73  $1,540  2.04%  0.75%  to 1.20%  -2.29%  to -1.85% 
2010  160  $12.64  to  $12.97  $2,046  1.74%  0.75%  to 1.20%  10.97%  to 11.52% 
2009  202  $11.39  to  $11.63  $2,321  1.91%  0.75%  to 1.20%  21.30%  to 21.78% 
2008  221  $9.34  to  $9.55  $2,076  5.06%  0.75%  to 1.35%  -24.43%  to -23.96% 
ING Invesco Van Kampen Equity and Income Portfolio - Service Class                   
2012  13,440  $10.11  to  $16.88  $176,309  1.91%  0.75%  to 2.60%  9.51%  to 11.63% 
2011  14,689  $9.18  to  $15.16  $174,083  1.91%  0.75%  to 2.60%  -3.83%  to -2.06% 
2010  16,986  $9.50  to  $15.52  $207,495  1.64%  0.75%  to 2.60%  9.13%  to 11.22% 
2009  17,055  $8.66  to  $13.99  $189,556  1.66%  0.75%  to 2.60%  19.14%  to 21.49% 
2008  18,391  $7.23  to  $11.55  $169,926  7.22%  0.75%  to 2.60%  -25.55%  to -24.14% 
ING JPMorgan Mid Cap Value Portfolio - Service Class                     
2012  11,668  $11.78  to  $21.89  $168,040  0.77%  0.75%  to 2.35%  17.21%  to 19.10% 
2011  10,281  $10.05  to  $18.38  $125,814  0.84%  0.75%  to 2.35%  -0.59%  to 1.10% 
2010  9,712  $10.11  to  $18.18  $121,321  0.90%  0.75%  to 2.45%  19.98%  to 22.01% 
2009  6,384  $8.42  to  $14.90  $67,915  1.46%  0.75%  to 2.55%  22.50%  to 24.69% 
2008  3,989  $6.86  to  $11.95  $35,664  2.75%  0.75%  to 2.55%  -34.77%  to -33.54% 
ING Oppenheimer Global Portfolio - Initial Class                     
2012  317  $14.11  to  $15.55  $4,775  1.31%  0.75%  to 2.00%  19.27%  to 20.73% 
2011  389  $11.83  to  $12.88  $4,872  1.46%  0.75%  to 2.00%  -9.97%  to -8.78% 
2010  492  $13.07  to  $14.12  $6,776  1.56%  0.75%  to 2.10%  13.65%  to 15.17% 
2009  618  $11.50  to  $12.26  $7,415  2.34%  0.75%  to 2.10%  36.74%  to 38.53% 
2008  762  $8.38  to  $8.85  $6,611  2.25%  0.75%  to 2.20%  -41.64%  to -40.76% 

 

134


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
 
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Oppenheimer Global Portfolio - Service Class                     
2012  8,771  $10.36  to  $18.90  $130,891  1.00%  0.75%  to 2.60%  18.18%  to 20.49% 
2011  9,333  $8.68  to  $15.74  $116,446  1.32%  0.75%  to 2.60%  -10.74%  to -9.12% 
2010  8,943  $9.62  to  $17.35  $124,699  1.37%  0.75%  to 2.60%  12.82%  to 14.95% 
2009  10,171  $8.44  to  $15.14  $124,376  2.14%  0.75%  to 2.60%  35.73%  to 38.33% 
2008  11,877  $6.16  to  $10.97  $105,333  2.45%  0.75%  to 2.60%  -42.04%  to -40.94% 
ING PIMCO Total Return Portfolio - Service Class                     
2012  338  $14.75  to  $16.94  $5,259  3.01%  0.75%  to 1.35%  6.42%  to 7.08% 
2011  430  $13.86  to  $15.82  $6,250  2.89%  0.75%  to 1.35%  1.84%  to 2.46% 
2010  556  $13.61  to  $15.44  $7,923  3.19%  0.75%  to 1.35%  6.16%  to 6.78% 
2009  718  $12.82  to  $14.46  $9,629  3.45%  0.75%  to 1.35%  11.09%  to 11.75% 
2008  713  $11.54  to  $12.94  $8,589  5.66%  0.75%  to 1.35%  -1.54%  to -0.92% 
ING Solution 2015 Portfolio - Service Class                     
2012  1,215  $12.38  to  $12.97  $15,403  4.12%  0.75%  to 1.35%  9.95%  to 10.57% 
2011  1,306  $11.26  to  $11.73  $15,011  3.15%  0.75%  to 1.35%  -2.09%  to -1.43% 
2010  1,520  $11.50  to  $11.90  $17,776  2.21%  0.75%  to 1.35%  9.73%  to 10.39% 
2009  1,596  $10.48  to  $10.78  $16,960  3.91%  0.75%  to 1.35%  20.74%  to 21.40% 
2008  1,280  $8.68  to  $8.88  $11,249  1.89%  0.75%  to 1.35%  -27.91%  to -27.39% 
ING Solution 2025 Portfolio - Service Class                     
2012  1,318  $12.15  to  $12.73  $16,392  2.73%  0.75%  to 1.35%  11.88%  to 12.65% 
2011  1,479  $10.86  to  $11.30  $16,403  2.09%  0.75%  to 1.35%  -4.40%  to -3.83% 
2010  1,598  $11.36  to  $11.75  $18,481  1.57%  0.75%  to 1.35%  12.25%  to 12.87% 
2009  1,640  $10.12  to  $10.41  $16,849  3.52%  0.75%  to 1.35%  24.17%  to 24.82% 
2008  1,108  $8.15  to  $8.34  $9,138  1.46%  0.75%  to 1.35%  -34.80%  to -34.33% 
ING Solution 2035 Portfolio - Service Class                     
2012  749  $12.29  to  $12.87  $9,408  2.26%  0.75%  to 1.35%  13.59%  to 14.20% 
2011  887  $10.82  to  $11.27  $9,777  1.62%  0.75%  to 1.35%  -5.91%  to -5.29% 
2010  955  $11.50  to  $11.90  $11,158  1.23%  0.75%  to 1.35%  12.97%  to 13.66% 
2009  1,070  $10.18  to  $10.47  $11,035  2.91%  0.75%  to 1.35%  26.62%  to 27.37% 
2008  980  $8.04  to  $8.22  $7,954  1.64%  0.75%  to 1.35%  -37.82%  to -37.44% 

 

135


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
 
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Solution 2045 Portfolio - Service Class                     
2012  103  $12.28  to  $12.86  $1,283  1.82%  0.75%  to 1.35%  13.91%  to 14.51% 
2011  104  $10.78  to  $11.23  $1,131  1.17%  0.75%  to 1.35%  -6.42%  to -5.79% 
2010  109  $11.52  to  $11.92  $1,270  0.90%  0.75%  to 1.35%  13.61%  to 14.29% 
2009  135  $10.14  to  $10.43  $1,384  2.15%  0.75%  to 1.35%  28.03%  to 28.77% 
2008  153  $7.92  to  $8.10  $1,225  1.36%  0.75%  to 1.35%  -40.67%  to -40.27% 
ING Solution Income Portfolio - Service Class                     
2012  460  $12.47  to  $13.07  $5,875  4.51%  0.75%  to 1.35%  8.25%  to 9.01% 
2011  515  $11.52  to  $11.99  $6,055  4.06%  0.75%  to 1.35%  -0.95%  to -0.42% 
2010  574  $11.63  to  $12.04  $6,790  3.21%  0.75%  to 1.35%  8.09%  to 8.76% 
2009  635  $10.76  to  $11.07  $6,919  5.25%  0.75%  to 1.35%  15.57%  to 16.28% 
2008  581  $9.31  to  $9.52  $5,469  2.11%  0.75%  to 1.35%  -17.76%  to -17.22% 
ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Service Class                   
2012  459  $15.24  to  $18.93  $8,501  0.24%  0.75%  to 1.35%  14.29%  to 15.02% 
2011  576  $13.30  to  $16.50  $9,331  0.12%  0.75%  to 1.35%  -5.21%  to -4.64% 
2010  694  $13.99  to  $17.34  $11,833  0.07%  0.75%  to 1.35%  26.40%  to 27.20% 
2009  680  $11.04  to  $13.67  $9,112  0.31%  0.75%  to 1.35%  44.07%  to 44.90% 
2008  339  $7.65  to  $9.46  $3,090  0.06%  0.75%  to 1.35%  -44.03%  to -43.68% 
ING T. Rowe Price Growth Equity Portfolio - Service Class                     
2012  14,940  $10.07  to  $16.99  $158,174  -  0.75%  to 2.35%  15.88%  to 17.76% 
2011  11,616  $8.69  to  $14.47  $105,828  -  0.75%  to 2.35%  -3.66%  to -2.11% 
2010  11,556  $8.93  to  $14.81  $108,925  0.03%  0.75%  to 2.60%  13.47%  to 15.78% 
2009  11,877  $7.87  to  $12.83  $97,640  0.01%  0.75%  to 2.60%  39.05%  to 41.41% 
2008  5,066  $5.66  to  $9.09  $30,425  1.09%  0.75%  to 2.60%  -43.72%  to -42.73% 
ING Templeton Foreign Equity Portfolio - Service Class                     
2012  59,624  $8.23  to  $11.48  $609,649  2.09%  0.75%  to 2.60%  15.92%  to 17.85% 
2011  21,745  $7.08  to  $9.78  $190,490  1.75%  0.75%  to 2.35%  -14.34%  to -12.95% 
2010  25,636  $8.22  to  $11.25  $260,443  2.06%  0.75%  to 2.60%  5.73%  to 7.77% 
2009  25,327  $7.67  to  $10.46  $241,228  -  0.75%  to 2.60%  28.47%  to 31.00% 
2008  21,711  $5.97  to  $8.02  $159,726  3.32%  0.75%  to 2.60%  -42.17%  to -41.17% 

 

136


ING USA ANNUITY AND LIFE INSURANCE COMPANY 
SEPARATE ACCOUNT B 
Notes to Financial Statements 

 

            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING UBS U.S. Large Cap Equity Portfolio - Service Class                         
2012  429  $10.66  to  $14.54  $5,110  0.70%  0.75%  to  2.35%  10.47%  to  12.24% 
2011  486  $9.65  to  $12.98  $5,199  0.68%  0.75%  to  2.35%  -4.93%  to  -3.43% 
2010  558  $10.15  to  $13.48  $6,229  0.64%  0.75%  to  2.35%  10.33%  to  12.15% 
2009  649  $9.20  to  $12.05  $6,503  1.15%  0.75%  to  2.35%  28.49%  to  30.69% 
2008  796  $7.16  to  $9.25  $6,145  1.56%  0.75%  to  2.35%  -41.41%  to  -40.47% 
ING Strategic Allocation Conservative Portfolio - Class S                         
2012  97  $15.71  to  $16.46  $1,560  2.46%  0.75%  to  1.35%  10.48%  to  11.14% 
2011  88  $14.22  to  $14.81  $1,286  3.65%  0.75%  to  1.35%  0.14%  to  0.82% 
2010  100  $14.20  to  $14.69  $1,451  4.21%  0.75%  to  1.35%  9.48%  to  10.04% 
2009  102  $12.97  to  $13.35  $1,353  8.24%  0.75%  to  1.35%  16.11%  to  16.90% 
2008  103  $11.17  to  $11.42  $1,170  4.28%  0.75%  to  1.35%  -24.93%  to  -24.47% 
ING Strategic Allocation Growth Portfolio - Class S                         
2012  30  $16.66  to  $17.46  $505  1.04%  0.75%  to  1.35%  13.10%  to  13.89% 
2011  31  $14.73  to  $15.33  $460  2.64%  0.75%  to  1.35%  -4.41%  to  -3.89% 
2010  39  $15.41  to  $15.95  $601  3.36%  0.75%  to  1.35%  11.26%  to  11.93% 
2009  42  $13.85  to  $14.25  $589  9.26%  0.75%  to  1.35%  23.22%  to  24.02% 
2008  45  $11.24  to  $11.49  $512  3.10%  0.75%  to  1.35%  -36.98%  to  -36.69% 
ING Strategic Allocation Moderate Portfolio - Class S                         
2012  63  $16.19  to  $16.96  $1,042  1.69%  0.75%  to  1.35%  11.89%  to  12.54% 
2011  66  $14.47  to  $15.07  $973  2.75%  0.75%  to  1.35%  -2.23%  to  -1.63% 
2010  51  $14.80  to  $15.32  $775  4.19%  0.75%  to  1.35%  10.20%  to  10.93% 
2009  48  $13.43  to  $13.81  $657  7.97%  0.75%  to  1.35%  19.91%  to  20.51% 
2008  50  $11.20  to  $11.46  $573  3.34%  0.75%  to  1.35%  -31.58%  to  -31.09% 
ING Growth and Income Portfolio - Class A                         
2012  110,959  $10.66  to  $11.01  $1,198,252  1.39%  0.75%  to  2.35%  12.45%  to  14.33% 
2011  123,527  $9.46  to  $9.63  $1,177,999  (d)  0.75%  to  2.60%    (d)   
2010  (d)    (d)    (d)  (d)    (d)      (d)   
2009  (d)    (d)    (d)  (d)    (d)      (d)   
2008  (d)    (d)    (d)  (d)    (d)      (d)   

 

137


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
 
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Growth and Income Portfolio - Class I                     
2012  7  $9.94  to  $10.01  $65  1.41%  1.25%  to 1.40%  14.25%  to 14.27% 
2011  9  $8.70  to  $8.76  $77  1.05%  1.25%  to 1.40%  -1.69%  to -1.46% 
2010  13  $8.85  to  $8.89  $114  0.90%  1.25%  to 1.40%  12.45%  to 12.67% 
2009  14  $7.87  to  $7.89  $109  1.01%  1.25%  to 1.40%  28.50%  to 28.59% 
2008  15  $6.12  to  $6.14  $90  1.67%  1.25%  to 1.40%  -38.55%  to -38.35% 
ING Growth and Income Portfolio - Class S                     
2012  72,404  $9.21  to  $17.05  $701,221  1.56%  0.50%  to 2.60%  12.45%  to 14.86% 
2011  84,838  $8.19  to  $14.88  $724,196  1.47%  0.50%  to 2.60%  -3.08%  to -1.00% 
2010  51,286  $8.45  to  $15.07  $449,666  0.79%  0.50%  to 2.60%  10.89%  to 13.28% 
2009  57,953  $7.62  to  $13.34  $453,859  1.45%  0.50%  to 2.60%  26.58%  to 29.34% 
2008  44,763  $6.02  to  $10.33  $274,706  3.86%  0.50%  to 2.60%  -39.13%  to -38.33% 
ING GET U.S. Core Portfolio - Series 11                     
2012  348  $9.80  to  $10.45  $3,515  2.00%  1.45%  to 2.35%  -2.87%  to -1.97% 
2011  387  $10.05  to  $10.66  $4,001  2.17%  1.45%  to 2.40%  -1.57%  to -0.56% 
2010  468  $9.94  to  $10.72  $4,857  2.38%  1.45%  to 2.95%  1.74%  to 3.28% 
2009  565  $9.77  to  $10.38  $5,718  3.98%  1.45%  to 2.95%  -3.65%  to -2.17% 
2008  742  $10.14  to  $10.61  $7,708  2.42%  1.45%  to 2.95%  -2.31%  to -0.93% 
ING GET U.S. Core Portfolio - Series 12                     
2012  162  $9.93  to  $10.64  $1,696  2.28%  1.45%  to 2.45%  -1.88%  to -0.84% 
2011  172  $10.12  to  $10.73  $1,817  2.59%  1.45%  to 2.45%  -1.36%  to -0.37% 
2010  187  $10.23  to  $10.77  $1,962  2.77%  1.45%  to 2.50%  3.13%  to 4.26% 
2009  221  $9.71  to  $10.33  $2,232  3.19%  1.45%  to 3.05%  -3.67%  to -2.09% 
2008  268  $10.08  to  $10.55  $2,781  1.71%  1.45%  to 3.05%  -9.03%  to -7.54% 
ING GET U.S. Core Portfolio - Series 13                     
2012  667  $9.99  to  $10.54  $6,921  2.13%  1.45%  to 2.25%  -2.54%  to -1.68% 
2011  859  $10.25  to  $10.72  $9,103  2.21%  1.45%  to 2.25%  -0.49%  to 0.28% 
2010  1,215  $10.21  to  $10.69  $12,854  2.48%  1.45%  to 2.45%  3.97%  to 5.11% 
2009  1,567  $9.82  to  $10.17  $15,806  3.48%  1.45%  to 2.45%  -4.47%  to -3.51% 
2008  2,204  $10.16  to  $10.54  $23,085  2.18%  1.45%  to 2.90%  -0.59%  to 0.86% 

 

138


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING GET U.S. Core Portfolio - Series 14                         
2012  2,252  $10.09  to  $10.75  $23,800  2.77%  1.45%  to  2.50%  -2.61%  to  -1.65% 
2011  2,709  $10.36  to  $10.93  $29,164  3.07%  1.45%  to  2.50%  0.58%  to  1.67% 
2010  3,418  $10.30  to  $10.75  $36,259  3.84%  1.45%  to  2.50%  4.24%  to  5.39% 
2009  4,490  $9.72  to  $10.20  $45,358  3.95%  1.45%  to  3.05%  -3.76%  to  -2.30% 
2008  7,383  $10.10  to  $10.44  $76,227  1.88%  1.45%  to  3.05%  -0.10%  to  1.56% 
ING BlackRock Science and Technology Opportunities Portfolio - Class S                       
2012  17,592  $10.07  to  $16.13  $186,205  -  0.75%  to  2.60%  4.79%  to  6.82% 
2011  19,792  $9.61  to  $15.10  $198,020  -  0.75%  to  2.60%  -12.87%  to  -11.23% 
2010  23,192  $11.03  to  $17.01  $263,966  -  0.75%  to  2.60%  15.14%  to  17.23% 
2009  22,823  $9.58  to  $14.51  $223,254  -  0.75%  to  2.60%  48.53%  to  51.46% 
2008  13,408  $6.45  to  $9.58  $87,426  -  0.75%  to  2.60%  -40.81%  to  -40.46% 
ING Euro STOXX 50® Index Portfolio - Class A                         
2012  1,036  $8.38  to  $8.74  $8,828  2.58%  0.95%  to  2.25%  19.18%  to  20.75% 
2011  415  $7.03  to  $7.24  $2,955  14.38%  0.95%  to  2.25%  -19.20%  to  -18.12% 
2010  541  $8.69  to  $8.83  $4,739  0.22%  1.00%  to  2.35%  -11.13%  to  -10.18% 
2009  62  $9.79  to  $9.82  $608  (b)  1.15%  to  2.25%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   
ING FTSE 100 Index® Portfolio - Class A                         
2012  193  $11.47  to  $12.01  $2,261  2.59%  0.95%  to  2.35%  12.56%  to  14.16% 
2011  222  $10.19  to  $10.52  $2,300  4.95%  0.95%  to  2.35%  -6.43%  to  -5.06% 
2010  328  $10.89  to  $11.07  $3,595  0.28%  1.00%  to  2.35%  6.44%  to  7.59% 
2009  74  $10.24  to  $10.27  $755  (b)  1.15%  to  2.25%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   
ING Hang Seng Index Portfolio - Class S                         
2012  3,815  $13.50  to  $14.23  $52,710  1.03%  0.95%  to  2.35%  25.35%  to  27.17% 
2011  4,031  $10.77  to  $11.19  $44,179  2.58%  0.95%  to  2.35%  -20.34%  to  -19.21% 
2010  5,992  $13.52  to  $13.85  $81,884  0.06%  0.95%  to  2.35%  5.05%  to  6.54% 
2009  3,225  $12.87  to  $13.00  $41,686  (b)  0.95%  to  2.35%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   

 

139


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
 
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Index Plus LargeCap Portfolio - Class S                         
2012  11,145  $9.46  to  $14.49  $120,472  1.38%  0.75%  to  2.60%  11.15%  to  13.27% 
2011  13,071  $8.46  to  $12.83  $125,981  1.62%  0.75%  to  2.60%  -2.98%  to  -1.05% 
2010  16,416  $8.66  to  $13.00  $161,332  1.70%  0.75%  to  2.60%  10.77%  to  12.77% 
2009  19,841  $7.78  to  $11.56  $174,337  2.75%  0.75%  to  2.60%  19.74%  to  21.99% 
2008  24,189  $6.45  to  $9.49  $174,373  2.25%  0.75%  to  2.60%  -39.00%  to  -37.84% 
ING Index Plus MidCap Portfolio - Class S                         
2012  7,243  $10.77  to  $18.51  $108,177  0.65%  0.75%  to  2.60%  14.39%  to  16.52% 
2011  8,310  $9.36  to  $15.93  $107,721  0.58%  0.75%  to  2.60%  -4.01%  to  -2.15% 
2010  9,825  $9.69  to  $16.32  $131,427  0.85%  0.75%  to  2.60%  18.48%  to  20.73% 
2009  11,403  $8.13  to  $13.56  $127,725  1.34%  0.75%  to  2.60%  28.07%  to  30.42% 
2008  13,369  $6.31  to  $10.42  $115,644  1.19%  0.75%  to  2.60%  -39.37%  to  -38.21% 
ING Index Plus SmallCap Portfolio - Class S                         
2012  6,026  $9.78  to  $17.08  $81,420  0.29%  0.75%  to  2.60%  9.19%  to  11.34% 
2011  6,798  $8.90  to  $15.37  $83,478  0.60%  0.75%  to  2.60%  -3.53%  to  -1.73% 
2010  7,901  $9.17  to  $15.68  $99,899  0.49%  0.75%  to  2.60%  19.20%  to  21.57% 
2009  8,979  $7.64  to  $12.93  $94,468  1.41%  0.75%  to  2.60%  21.34%  to  23.58% 
2008  10,297  $6.26  to  $10.49  $88,612  0.67%  0.75%  to  2.60%  -35.36%  to  -34.20% 
ING International Index Portfolio - Class S                         
2012  5,493  $7.79  to  $15.27  $45,019  2.61%  0.75%  to  2.35%  15.58%  to  17.64% 
2011  5,593  $6.74  to  $12.98  $39,488  2.67%  0.75%  to  2.35%  -14.47%  to  -13.12% 
2010  7,945  $7.82  to  $14.94  $65,044  3.38%  0.75%  to  2.60%  4.83%  to  6.79% 
2009  8,995  $7.46  to  $13.99  $69,588  -  0.75%  to  2.60%  24.42%  to  26.32% 
2008  998  $6.02  to  $6.09  $6,041  (a)  0.95%  to  2.35%    (a)   
ING Japan TOPIX Index® Portfolio - Class A                         
2012  475  $9.67  to  $10.12  $4,664  0.73%  0.95%  to  2.35%  5.11%  to  6.64% 
2011  1,025  $9.20  to  $9.49  $9,567  1.85%  0.95%  to  2.35%  -15.75%  to  -14.58% 
2010  770  $10.92  to  $11.11  $8,463  0.07%  0.95%  to  2.35%  10.98%  to  12.46% 
2009  33  $9.84  to  $9.87  $324  (b)  1.00%  to  2.35%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   

 

140


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Russell™ Large Cap Growth Index Portfolio - Class S                         
2012  9,520  $15.23  to  $16.65  $152,860  1.08%  0.75%  to  2.35%  11.61%  to  13.42% 
2011  10,214  $13.34  to  $14.68  $146,033  1.00%  0.75%  to  2.35%  1.45%  to  3.16% 
2010  10,188  $13.02  to  $14.23  $142,575  0.54%  0.75%  to  2.35%  9.84%  to  11.61% 
2009  11,210  $11.73  to  $12.75  $141,894  (b)  0.75%  to  2.55%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   
ING Russell™ Large Cap Index Portfolio - Class S                         
2012  32,375  $9.86  to  $16.57  $330,009  2.26%  0.80%  to  2.35%  12.56%  to  14.38% 
2011  33,016  $8.68  to  $14.51  $296,967  1.43%  0.80%  to  2.60%  -0.57%  to  1.32% 
2010  39,726  $8.73  to  $14.33  $355,951  3.29%  0.80%  to  2.60%  9.13%  to  11.17% 
2009  45,756  $8.00  to  $12.91  $372,497  -  0.80%  to  2.60%  20.57%  to  22.44% 
2008  3,418  $6.66  to  $6.73  $22,903  (a)  0.80%  to  2.35%    (a)   
ING Russell™ Large Cap Value Index Portfolio - Class S                         
2012  4,034  $14.99  to  $15.81  $61,922  1.35%  0.95%  to  2.35%  13.22%  to  14.90% 
2011  2,887  $13.24  to  $13.76  $38,950  1.41%  0.95%  to  2.35%  -1.78%  to  -0.43% 
2010  2,581  $13.42  to  $13.82  $35,226  1.65%  0.95%  to  2.60%  8.23%  to  10.12% 
2009  1,922  $12.40  to  $12.55  $24,005  (b)  0.95%  to  2.60%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   
ING Russell™ Mid Cap Growth Index Portfolio - Class S                         
2012  14,090  $17.08  to  $18.05  $246,554  0.36%  0.90%  to  2.35%  12.74%  to  14.46% 
2011  15,771  $15.04  to  $15.77  $243,092  0.44%  0.90%  to  2.60%  -4.75%  to  -3.07% 
2010  18,579  $15.79  to  $16.27  $297,977  0.29%  0.90%  to  2.60%  22.59%  to  24.77% 
2009  19,157  $12.88  to  $13.04  $248,368  (b)  0.90%  to  2.60%    (b)   
2008  (b)    (b)    (b)  (b)    (b)      (b)   
ING Russell™ Mid Cap Index Portfolio - Class S                         
2012  10,856  $11.04  to  $11.81  $123,542  0.93%  0.95%  to  2.35%  13.93%  to  15.56% 
2011  10,358  $9.69  to  $10.22  $102,824  1.16%  0.95%  to  2.35%  -4.34%  to  -2.94% 
2010  11,716  $10.13  to  $10.53  $120,857  0.51%  0.95%  to  2.35%  21.90%  to  23.74% 
2009  10,132  $8.30  to  $8.51  $85,119  -  0.95%  to  2.40%  36.45%  to  38.37% 
2008  3,704  $6.04  to  $6.15  $22,649  (a)  0.80%  to  2.35%    (a)   

 

141


ING USA ANNUITY AND LIFE INSURANCE COMPANY                   
SEPARATE ACCOUNT B                       
Notes to Financial Statements                       
 
 
 
            Investment           
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING Russell™ Small Cap Index Portfolio - Class S                       
2012  13,186  $11.13  to  $11.93  $151,300  0.68%  0.90%  to 2.35%  13.11%  to  14.71% 
2011  13,508  $9.84  to  $10.40  $136,076  0.79%  0.90%  to 2.35%  -6.37%  to  -5.02% 
2010  16,262  $10.51  to  $10.95  $174,052  0.44%  0.80%  to 2.35%  23.07%  to  25.00% 
2009  13,275  $8.54  to  $8.76  $114,700  -  0.90%  to 2.35%  23.41%  to  25.32% 
2008  10,143  $6.91  to  $7.00  $70,527  (a)  0.80%  to 2.45%    (a)   
ING Small Company Portfolio - Class S                       
2012  6,827  $11.33  to  $20.10  $82,209  0.15%  0.75%  to 2.35%  11.63%  to  13.40% 
2011  8,403  $10.15  to  $17.77  $89,892  0.23%  0.75%  to 2.35%  -4.96%  to  -3.42% 
2010  9,114  $10.65  to  $18.44  $102,443  0.32%  0.75%  to 2.35%  21.09%  to  23.07% 
2009  8,151  $8.82  to  $15.02  $75,533  0.54%  0.75%  to 2.35%  24.23%  to  26.28% 
2008  5,881  $7.09  to  $11.93  $43,479  0.10%  0.75%  to 2.55%  -32.17%  to  -31.74% 
ING U.S. Bond Index Portfolio - Class S                       
2012  20,537  $11.27  to  $12.44  $241,724  1.85%  0.75%  to 2.60%  0.90%  to  2.84% 
2011  25,756  $11.17  to  $12.12  $297,554  1.93%  0.75%  to 2.60%  4.20%  to  6.11% 
2010  21,158  $10.72  to  $11.43  $232,631  2.46%  0.75%  to 2.60%  3.18%  to  5.12% 
2009  23,840  $10.39  to  $10.89  $251,758  2.45%  0.75%  to 2.60%  2.77%  to  4.78% 
2008  17,418  $10.11  to  $10.41  $177,261  (a)  0.75%  to 2.60%    (a)   
ING WisdomTreeSM Global High-Yielding Equity Index Portfolio - Class S                     
2012  20,465  $8.34  to  $9.03  $176,328  4.00%  0.75%  to 2.35%  12.40%  to  14.16% 
2011  22,299  $7.42  to  $7.91  $169,736  3.21%  0.75%  to 2.35%  -6.08%  to  -4.58% 
2010  24,986  $7.89  to  $8.29  $201,282  3.31%  0.75%  to 2.35%  3.39%  to  5.07% 
2009  27,525  $7.61  to  $7.89  $213,033  -  0.75%  to 2.35%  26.91%  to  28.92% 
2008  23,942  $6.00  to  $6.12  $145,051  (a)  0.75%  to 2.35%    (a)   
ING International Value Portfolio - Class S                       
2012  457  $13.73  to  $15.43  $6,905  2.35%  0.75%  to 1.35%  17.39%  to  18.11% 
2011  519  $11.67  to  $13.09  $6,655  2.35%  0.75%  to 1.35%  -16.11%  to  -15.57% 
2010  620  $13.88  to  $15.55  $9,445  1.72%  0.75%  to 1.35%  1.00%  to  1.56% 
2009  713  $13.71  to  $15.35  $10,718  1.54%  0.75%  to 1.35%  24.38%  to  25.22% 
2008  740  $10.99  to  $12.29  $8,896  2.78%  0.75%  to 1.35%  -43.09%  to  -42.76% 

 

142


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
ING MidCap Opportunities Portfolio - Class S                         
2012  27,450  $11.65  to  $22.71  $349,367  0.41%  0.50%  to  2.35%  11.26%  to  13.37% 
2011  31,078  $10.46  to  $20.14  $353,299  -  0.50%  to  2.35%  -3.14%  to  -1.33% 
2010  34,369  $10.79  to  $20.50  $399,457  0.49%  0.50%  to  2.60%  26.91%  to  29.39% 
2009  32,727  $8.49  to  $15.94  $297,130  0.12%  0.50%  to  2.35%  37.78%  to  40.23% 
2008  34,217  $6.16  to  $11.41  $223,352  -  0.50%  to  2.45%  -39.19%  to  -38.22% 
ING SmallCap Opportunities Portfolio - Class S                         
2012  5,427  $9.67  to  $21.16  $58,278  -  0.75%  to  2.35%  12.20%  to  14.02% 
2011  6,239  $8.61  to  $18.60  $58,855  -  0.75%  to  2.35%  -1.79%  to  -0.20% 
2010  7,156  $8.76  to  $18.69  $68,086  -  0.75%  to  2.35%  28.98%  to  31.14% 
2009  8,154  $6.79  to  $14.29  $59,441  -  0.75%  to  2.35%  27.54%  to  29.65% 
2008  9,121  $5.31  to  $11.04  $51,591  -  0.75%  to  2.45%  -36.17%  to  -35.11% 
Legg Mason ClearBridge Variable Large Cap Value Portfolio - Class I                       
2012  8  $9.72  to  $9.81  $73  2.70%  1.25%  to  1.40%  14.76%  to  15.01% 
2011  9  $8.47  to  $8.53  $75  2.61%  1.25%  to  1.40%  3.55%  to  3.65% 
2010  10  $8.18  to  $8.23  $78  2.53%  1.25%  to  1.40%  7.92%  to  8.15% 
2009  11  $7.58  to  $7.61  $80  1.31%  1.25%  to  1.40%  22.85%  to  22.94% 
2008  12  $6.17  to  $6.19  $73  0.83%  1.25%  to  1.40%  -36.59%  to  -36.45% 
Western Asset Variable High Income Portfolio                         
2012  3    $24.84    $65  7.35%    1.40%      16.18%   
2011  3    $21.38    $71  8.39%    1.40%      0.99%   
2010  3  $21.17  to  $21.68  $72  9.33%  1.25%  to  1.40%  14.99%  to  15.20% 
2009  4  $18.41  to  $18.82  $78  12.40%  1.25%  to  1.40%  57.75%  to  57.89% 
2008  4  $11.67  to  $11.92  $51  9.94%  1.25%  to  1.40%  -30.99%  to  -30.86% 
Oppenheimer Main Street Small- & Mid-Cap Fund®/VA - Service Class                       
2012  69  $20.85  to  $21.84  $1,478  0.34%  0.75%  to  1.35%  16.09%  to  16.79% 
2011  78  $17.96  to  $18.70  $1,442  0.42%  0.75%  to  1.35%  -3.70%  to  -3.11% 
2010  97  $18.65  to  $19.30  $1,859  0.40%  0.75%  to  1.35%  21.42%  to  22.15% 
2009  102  $15.36  to  $15.80  $1,600  0.50%  0.75%  to  1.35%  34.97%  to  35.86% 
2008  71  $11.38  to  $11.63  $822  0.28%  0.75%  to  1.35%  -38.82%  to  -38.47% 

 

143


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
 
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
PIMCO Real Return Portfolio - Administrative Class                     
2012  986  $14.65  to  $15.35  $14,814  1.06%  0.75%  to 1.35%  7.33%  to 7.95% 
2011  929  $13.65  to  $14.22  $12,983  4.88%  0.75%  to 1.35%  10.17%  to 10.83% 
2010  985  $12.39  to  $12.83  $12,463  1.47%  0.75%  to 1.35%  6.63%  to 7.27% 
2009  949  $11.62  to  $11.96  $11,216  2.94%  0.75%  to 1.35%  16.78%  to 17.49% 
2008  745  $9.95  to  $10.18  $7,515  4.22%  0.75%  to 1.35%  -8.29%  to -7.71% 
Pioneer Equity Income VCT Portfolio - Class II                     
2012  801  $14.91  to  $17.11  $13,428  3.72%  0.75%  to 1.35%  8.45%  to 9.15% 
2011  955  $13.71  to  $15.72  $14,738  2.01%  0.75%  to 1.35%  4.38%  to 5.03% 
2010  1,063  $13.11  to  $15.01  $15,665  1.99%  0.75%  to 1.35%  17.62%  to 18.27% 
2009  1,206  $11.12  to  $12.72  $15,029  3.01%  0.75%  to 1.35%  12.29%  to 13.04% 
2008  1,213  $9.87  to  $11.28  $13,323  2.72%  0.75%  to 1.35%  -31.41%  to -30.97% 
ProFund VP Bull                     
2012  1,228  $8.60  to  $10.95  $11,201  -  0.95%  to 2.25%  11.40%  to 12.82% 
2011  1,471  $7.72  to  $10.92  $12,013  -  0.95%  to 2.25%  -2.28%  to -0.89% 
2010  1,815  $7.90  to  $11.12  $15,111  0.12%  0.95%  to 2.25%  10.03%  to 11.48% 
2009  2,036  $7.18  to  $10.05  $15,316  0.65%  0.95%  to 2.25%  21.49%  to 23.28% 
2008  2,280  $5.91  to  $8.22  $14,046  -  0.95%  to 2.60%  -39.27%  to -38.28% 
ProFund VP Europe 30                     
2012  713  $8.86  to  $10.33  $6,719  3.31%  0.95%  to 2.35%  13.85%  to 15.42% 
2011  844  $7.77  to  $8.95  $6,949  1.04%  0.95%  to 2.35%  -10.98%  to -9.69% 
2010  1,006  $8.72  to  $13.52  $9,261  1.57%  0.95%  to 2.35%  0.21%  to 1.64% 
2009  1,144  $8.70  to  $13.41  $10,444  2.60%  0.95%  to 2.35%  29.26%  to 31.05% 
2008  1,401  $6.72  to  $10.32  $9,835  2.06%  0.90%  to 2.35%  -45.34%  to -44.50% 
ProFund VP Rising Rates Opportunity                     
2012  1,866  $2.61  to  $3.23  $5,177  -  0.95%  to 2.35%  -9.12%  to -8.01% 
2011  1,897  $2.87  to  $3.55  $5,755  -  0.95%  to 2.35%  -38.96%  to -38.03% 
2010  2,136  $4.70  to  $5.80  $10,541  -  0.95%  to 2.60%  -18.20%  to -16.72% 
2009  2,393  $5.72  to  $7.07  $14,303  0.55%  0.95%  to 2.60%  28.82%  to 30.95% 
2008  2,870  $4.43  to  $5.47  $13,199  5.38%  0.95%  to 2.60%  -39.61%  to -38.60% 

 

144


ING USA ANNUITY AND LIFE INSURANCE COMPANY                     
SEPARATE ACCOUNT B                         
Notes to Financial Statements                         
 
            Investment             
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
Invesco Van Kampen American Franchise Fund - Class I Shares                       
2012  1,688  $9.87  to  $9.96  $16,725  (e)  0.95%  to  2.35%    (e)   
2011  (e)    (e)    (e)  (e)    (e)      (e)   
2010  (e)    (e)    (e)  (e)    (e)      (e)   
2009  (e)    (e)    (e)  (e)    (e)      (e)   
2008  (e)    (e)    (e)  (e)    (e)      (e)   
Wells Fargo Advantage VT Omega Growth Fund - Class 2                         
2012  82  $13.66  to  $13.94  $1,122  -  1.40%  to  2.20%  17.76%  to  18.74% 
2011  106  $11.60  to  $11.74  $1,240  -  1.40%  to  2.20%  -7.64%  to  -6.90% 
2010  118  $12.56  to  $12.61  $1,487  (c)  1.40%  to  2.20%    (c)   
2009  (c)    (c)    (c)  (c)    (c)      (c)   
2008  (c)    (c)    (c)  (c)    (c)      (c)   
Wells Fargo Advantage VT Index Asset Allocation Fund - Class 2                       
2012  104  $11.92  to  $14.36  $1,443  1.37%  1.40%  to  2.20%  10.58%  to  11.40% 
2011  164  $10.78  to  $12.89  $2,052  3.04%  1.40%  to  2.20%  4.15%  to  5.05% 
2010  180  $10.35  to  $12.27  $2,156  1.73%  1.40%  to  2.20%  10.70%  to  11.65% 
2009  187  $9.35  to  $10.99  $2,009  1.85%  1.40%  to  2.20%  12.92%  to  13.89% 
2008  210  $8.28  to  $9.65  $1,989  2.43%  1.40%  to  2.20%  -30.65%  to  -30.12% 
Wells Fargo Advantage VT Intrinsic Value Fund - Class 2                         
2012  60  $10.75  to  $13.05  $747  1.50%  1.65%  to  2.20%  16.85%  to  17.57% 
2011  67  $9.20  to  $11.10  $721  0.52%  1.65%  to  2.20%  -4.37%  to  -3.81% 
2010  72  $9.62  to  $11.54  $807  0.73%  1.65%  to  2.20%  11.34%  to  11.93% 
2009  55  $8.64  to  $10.31  $555  1.85%  1.65%  to  2.20%  14.29%  to  14.94% 
2008  60  $7.56  to  $8.97  $529  1.96%  1.65%  to  2.20%  -37.83%  to  -37.49% 
Wells Fargo Advantage VT Small Cap Growth Fund - Class 2                         
2012  13  $15.09  to  $18.48  $233  -  1.40%  to  2.20%  5.45%  to  6.33% 
2011  22  $14.31  to  $17.38  $361  -  1.40%  to  2.20%  -6.65%  to  -5.90% 
2010  24  $15.33  to  $18.47  $436  -  1.40%  to  2.20%  23.93%  to  24.97% 
2009  32  $12.37  to  $14.78  $464  -  1.40%  to  2.20%  49.40%  to  50.51% 
2008  44  $8.28  to  $9.82  $419  -  1.40%  to  2.20%  -42.74%  to  -42.24% 

 

145


ING USA ANNUITY AND LIFE INSURANCE COMPANY                 
SEPARATE ACCOUNT B                     
Notes to Financial Statements                     
 
            Investment         
  Units  Unit Fair Value  Net Assets  Income  Expense RatioB  Total ReturnC 
  (000's)  (lowest to highest)  (000's)  RatioA  (lowest to highest)  (lowest to highest) 
Wells Fargo Advantage VT Total Return Bond Fund                     
2012  50  $13.26  to  $14.77  $712  1.54%  1.40%  to 2.20%  3.76%  to 4.60% 
2011  62  $12.78  to  $14.12  $849  2.60%  1.40%  to 2.20%  5.97%  to 6.81% 
2010  84  $12.06  to  $13.22  $1,075  3.34%  1.40%  to 2.20%  4.69%  to 5.51% 
2009  89  $11.52  to  $12.53  $1,080  4.46%  1.40%  to 2.20%  9.51%  to 10.49% 
2008  93  $10.52  to  $11.34  $1,029  4.95%  1.40%  to 2.20%  0.10%  to 0.89% 

 

(a)      As investment Division had no investment until 2008, this data is not meaningful and is therefore not presented.
(b)      As investment Division had no investment until 2009, this data is not meaningful and is therefore not presented.
(c)      As investment Division had no investment until 2010, this data is not meaningful and is therefore not presented.
(d)      As investment Division had no investment until 2011, this data is not meaningful and is therefore not presented.
(e)      As investment Division had no investment until 2012, this data is not meaningful and is therefore not presented.
A      The Investment Income Ratio represents dividends received by the Division, excluding capital gains distributions, divided by the average net assets. The recognition of investment income is determined by the timing of the declaration of dividends by the underlying fund in which the Division invests.
B      The Expense Ratio considers only the expenses borne directly by the Account, excluding expenses charged through the redemption of units, and is equal to the mortality and expense, administrative, and other charges, as defined in the Charges and Fees note. Certain items in this table are presented as a range of minimum and maximum values; however, such information is calculated independently for each column in the table.
C      Total Return is calculated as the change in unit value for each Contract presented in the Statements of Assets and Liabilities. Certain items in this table are presented as a range of minimum and maximum values; however, such information is calculated independently for each column in the table.

146


 

ING USA Annuity and Life Insurance Company   
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)   
 
Index to Financial Statements   
  Page 
Report of Independent Registered Public Accounting Firm  C-2 
Financial Statements:   
Balance Sheets as of December 31, 2012 and 2011  C-3 
Statements of Operations for the years ended   
December 31, 2012, 2011 and 2010  C-5 
Statements of Comprehensive Income for the years ended   
December 31, 2012, 2011 and 2010  C-6 
Statements of Changes in Shareholder's Equity for the years ended   
December 31, 2012, 2011 and 2010  C-7 
Statements of Cash Flows for the years ended   
December 31, 2012, 2011 and 2010  C-8 
Notes to Financial Statements  C-10 

 

 

C-1


Report of Independent Registered Public Accounting Firm

The Board of Directors
ING USA Annuity and Life Insurance Company

We have audited the accompanying balance sheets of ING USA Annuity and Life Insurance Company as of December 31,
2012 and 2011, and the related statements of operations, comprehensive income, changes in shareholder's equity, and cash
flows for each of the three years in the period ended December 31, 2012. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over
financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ING
USA Annuity and Life Insurance Company at December 31, 2012 and 2011, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting
principles.

As discussed in Note 1 to the financial statements, the Company retrospectively changed its method of accounting for costs
associated with acquiring or renewing insurance contracts. Additionally, as discussed in Note 1 to the financial statements, the
Company has elected to change its method of accounting for guaranteed minimum withdrawal benefits with life payouts riders,
and has also elected to change its method of recognizing actuarial gains and losses related to its pension and post-retirement
benefit plans.

/s/ Ernst & Young LLP

Atlanta, Georgia
March 27, 2013

                                                                                                        C-2

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Balance Sheets
December 31, 2012 and 2011
(In millions, except share data)
 
    As of December 31,
    2012 2011
Assets      
Investments:      
Fixed maturities, available-for-sale, at fair value (amortized cost of $18,560.6 at 2012      
and $20,062.4 at 2011) $ 20,586.6 $ 21,400.7
Fixed maturities, at fair value using the fair value option   326.7 335.0
Equity securities, available-for-sale, at fair value (cost of $26.4 at 2012 and $26.7 at      
2011)   29.8 27.7
Short-term investments   2,686.6 2,397.0
Mortgage loans on real estate, net of valuation allowance of $1.2 at 2012 and $1.5 at      
2011   2,835.0 3,137.3
Policy loans   101.8 112.0
Loan - Dutch State obligation   — 658.2
Limited partnerships/corporations   166.9 305.4
Derivatives   1,381.3 1,609.1
Other investments   80.7 82.2
Securities pledged (amortized cost of $684.7 at 2012 and $965.0 at 2011)   714.0 1,012.8
Total investments   28,909.4 31,077.4
Cash and cash equivalents   295.6 121.2
Short-term investments under securities loan agreement, including collateral delivered   138.9 248.3
Accrued investment income   208.7 233.3
Receivable for securities sold   7.5 32.4
Premium receivable   30.9 28.2
Deposits and reinsurance recoverable   4,014.7 4,068.6
Deferred policy acquisition costs, Value of business acquired and Sales inducements to      
contract owners   3,738.2 4,396.5
Short-term loan to affiliate   — 535.9
Due from affiliates   37.0 363.5
Current income tax recoverable from Parent   — 204.0
Deferred income taxes   — 38.6
Other assets   370.0 394.6
Assets held in separate accounts   39,799.1 39,356.9
Total assets $ 77,550.0 $ 81,099.4

 

                                              The accompanying notes are an integral part of these Financial Statements.

                                                                                                              C-3

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Balance Sheets
December 31, 2012 and 2011
(In millions, except share data)
 
    As of December 31,  
    2012   2011  
 
Liabilities and Shareholder’s Equity          
Future policy benefits and contract owner account balances $ 27,094.2 $ 29,708.3  
Payable for securities purchased   0.2   0.4  
Payables under securities loan agreement, including collateral held   905.5   1,069.4  
Long-term debt   435.0   435.0  
Due to affiliates   64.1   128.9  
Funds held under reinsurance treaties with affiliates   4,082.9   5,456.4  
Derivatives   798.6   604.9  
Current income tax payable to Parent   22.6   —  
Deferred income taxes   32.9   —  
Other liabilities   182.8   203.1  
Liabilities related to separate accounts   39,799.1   39,356.9  
Total liabilities   73,417.9   76,963.3  
 
Shareholder’s equity:          
Common stock (250,000 shares authorized, issued and outstanding; $10 per share          
value)   2.5   2.5  
Additional paid-in capital   5,755.5   5,971.6  
Accumulated other comprehensive income (loss)   634.2   245.1  
Retained earnings (deficit)   (2,260.1 ) (2,083.1 )
Total shareholder’s equity   4,132.1   4,136.1  
Total liabilities and shareholder’s equity $ 77,550.0 $ 81,099.4  

 

                                      The accompanying notes are an integral part of these Financial Statements.

                                                                                                   C-4

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Statements of Operations
For the Years Ended December 31, 2012, 2011 and 2010
(In millions)
 
  Years Ended December 31,
    2012   2011   2010  
Revenues:              
Net investment income $ 1,285.5 $ 1,409.3 $ 1,356.4  
Fee income   810.9   871.5   880.1  
Premiums   459.0   456.2   280.6  
Net realized capital gains (losses):              
Total other-than-temporary impairments   (27.9 ) (201.5 ) (300.1 )
Less: Portion of other-than-temporary impairments recognized in              
Other comprehensive income (loss)   (9.4 ) (21.1 ) (105.7 )
Net other-than-temporary impairments recognized in earnings   (18.5 ) (180.4 ) (194.4 )
Other net realized capital gains (losses)   (1,355.6 ) (776.6 ) (723.2 )
Total net realized capital gains (losses)   (1,374.1 ) (957.0 ) (917.6 )
Other revenue   34.7   54.2   61.5  
Total revenues   1,216.0   1,834.2   1,661.0  
Benefits and expenses:              
Interest credited and other benefits to contract owners   364.5   2,227.1   654.9  
Operating expenses   444.3   447.3   453.5  
Net amortization of deferred policy acquisition costs and value of              
business acquired   343.7   (904.4 ) 418.3  
Interest expense   30.9   31.7   32.1  
Other expense   27.3   11.7   38.9  
Total benefits and expenses   1,210.7   1,813.4   1,597.7  
Income (loss) before income taxes   5.3   20.8   63.3  
Income tax expense (benefit)   182.3   (131.3 ) (42.1 )
Net income (loss) $ (177.0 ) $ 152.1 $ 105.4  

 

                                       The accompanying notes are an integral part of these Financial Statements.

                                                                                                     C-5

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Statements of Comprehensive Income
For the Years Ended December 31, 2012, 2011 and 2010
(In millions)
 
  Years Ended December 31, 
    2012   2011 2010
Net income (loss)  $ (177.0 )  $152.1 $105.4
Other comprehensive income (loss), before tax:          
Unrealized gains/losses on securities   514.6   (11.6 ) 785.3
Other-than-temporary impairments   12.7   29.0 (6.9 )
Pension and other post-employment benefit liability   (0.2 ) — (0.2 )
Other comprehensive income (loss), before tax   527.1   17.4 778.2
Income tax benefit (expense) related to items of other          
comprehensive income (loss)   (138.0 ) 72.9 (99.3 )
Other comprehensive income (loss), after tax   389.1   90.3 678.9
Comprehensive income (loss)   $212.1   $242.4 $784.3

 

                                             The accompanying notes are an integral part of these Financial Statements.

                                                                                                             C-6

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Statements of Changes in Shareholder’s Equity
For the Years Ended December 31, 2012, 2011 and 2010
(In millions)
 
Common
Stock		 Additional
Paid-In
Capital		 Accumulated
Other
Comprehensive
Income (Loss) 		Retained
Earnings
(Deficit) 		Total
Shareholder's
Equity
Balance at January 1, 2010 - Before change in                
method $ 2.5 $ 5,172.7 $ (532.5 ) $ (1,902.6 ) $ 2,740.1  
Cumulative effect of changes in accounting:                
Deferred policy acquisition costs — — 8.0   (419.8 ) (411.8 )
Fair value for Guaranteed Minimum                
Withdrawal Benefits for Life — — (4.2 ) (13.6 ) (17.8 )
Actuarial gains (losses) for pension and post-                
retirement benefit plans — — 4.6   (4.6 ) —  
Balance at January 1, 2010 - As reported 2.5 5,172.7 (524.1 ) (2,340.6 ) 2,310.5  
Comprehensive income (loss):                
Net income (loss) — — —   105.4   105.4  
Other comprehensive income (loss), after tax — — 678.9   —   678.9  
Total comprehensive income (loss)             784.3  
Contribution of capital — 749.0 —   —   749.0  
Balance at December 31, 2010 $ 2.5 $ 5,921.7 $ 154.8   $ (2,235.2 ) $ 3,843.8  
Comprehensive income (loss):                
Net income (loss) — — —   152.1   152.1  
Other comprehensive income (loss), after tax — — 90.3   —   90.3  
Total comprehensive income (loss)             242.4  
Contribution of capital — 44.0 —   —   44.0  
Employee related benefits — 5.9 —   —   5.9  
Balance at December 31, 2011 $ 2.5 $ 5,971.6 $ 245.1   $ (2,083.1 ) $ 4,136.1  
Comprehensive income (loss):                
Net income (loss) — — —   (177.0 ) (177.0 )
Other comprehensive income (loss), after tax — — 389.1       389.1  
Total comprehensive income (loss)             212.1  
Distribution of capital — (250.0 ) —   —   (250.0 )
Employee related benefits — 33.9 —   —   33.9  
Balance at December 31, 2012 $ 2.5 $ 5,755.5 $ 634.2   $ (2,260.1 ) $ 4,132.1  

 

                                                           The accompanying notes are an integral part of these Financial Statements.

                                                                                                                        C-7

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Statements of Cash Flows
For the Years Ended December 31, 2012, 2011 and 2010
(In millions)
  Years Ended December 31,
    2012   2011   2010  
Cash Flows from Operating Activities:              
Net income (loss) $ (177.0 )   $ 152.1 $ 105.4  
Adjustments to reconcile net income (loss) to net cash provided by              
operating activities:              
Capitalization of deferred policy acquisition costs, value of              
business acquired and sales inducements   (137.6 ) (159.1 ) (218.1 )
Net amortization of deferred policy acquisition costs, value of              
business acquired and sales inducements   646.9   (1,366.2 ) 500.3  
Net accretion/amortization of discount/premium   50.1   65.7   44.1  
Future policy benefits, claims reserves and interest credited   575.8   1,461.6   963.7  
Deferred income tax (benefit) expense   (66.5 ) 64.5   (665.0 )
Net realized capital (gains) losses   1,374.1   957.0   917.6  
Change in:              
Accrued investment income   24.6   0.1   (46.1 )
Reinsurance recoverable   (37.8 ) (728.1 ) (290.2 )
Other receivables and asset accruals   0.4   44.5   15.9  
Other reinsurance asset   21.5   (0.5 ) 17.7  
Due to/from affiliates   261.7   (262.1 ) 721.3  
Income tax recoverable   226.6   (283.2 ) 10.2  
Other payables and accruals   (1,393.8 ) 1,909.7   205.7  
Employee share-based payments   33.9   5.9   0.6  
Other, net   12.8   (10.7 ) (9.8 )
Net cash provided by operating activities   1,415.7   1,851.2   2,273.3  
Cash Flows from Investing Activities:              
Proceeds from the sale, maturity, disposal or redemption of:              
Fixed maturities $ 6,606.1 $ 5,400.7 $ 8,028.5  
Equity securities, available-for-sale   2.7   38.8   66.8  
Mortgage loans on real estate   687.2   678.4   714.7  
Limited partnerships/corporations   153.3   38.9   23.0  
Acquisition of:              
Fixed maturities   (4,757.0 ) (5,483.6 ) (10,791.6 )
Equity securities, available-for-sale   (2.6 ) (5.7 ) (58.4 )
Mortgage loans on real estate   (384.7 ) (853.6 ) (278.6 )
Limited partnerships/corporations   (25.9 ) (39.4 ) (57.1 )
Derivatives, net   (1,232.4 ) (511.9 ) (740.1 )
Short-term investments, net   (285.7 ) (1,458.0 ) 1,104.7  
Loan-Dutch State obligation, net   651.5   185.7   182.1  
Policy loans, net   10.2   10.1   9.5  
Collateral (delivered) received   (54.5 ) 763.2   25.8  
Other, net   (0.1 ) (1.3 ) 2.0  
Net cash provided by (used in) investing activities   1,368.1   (1,237.7 ) (1,768.7 )

 

                                                  The accompanying notes are an integral part of these Financial Statements.

                                                                                                                       C-8

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Statements of Cash Flows
For the Years Ended December 31, 2012, 2011 and 2010
(In millions)
  Years Ended December 31,
  2012 2011 2010
Cash Flows from Financing Activities:          
Deposits received for investment contracts 6,651.8   6,363.2   3,549.4  
Maturities and withdrawals from investment contracts (9,638.8 ) (7,170.1 ) (4,571.3 )
Reinsurance recoverable on investment contracts 91.7   (81.4 ) 7.3  
Short-term repayments of repurchase agreements, net —   —   (311.1 )
Return of capital distribution (250.0 ) —   —  
Short-term loans to affiliates, net 535.9   280.5   103.5  
Capital contribution from parent —   44.0   749.0  
Net cash used in financing activities (2,609.4 ) (563.8 ) (473.2 )
Net increase in cash and cash equivalents 174.4   49.7   31.4  
Cash and cash equivalents, beginning of year 121.2   71.5   40.1  
Cash and cash equivalents, end of year $ 295.6 $ 121.2 $ 71.5  
Supplemental cash flow information:
Income taxes paid, net $ 40.0 $ 87.1 $ 614.0  
Interest paid 28.2   28.8   29.1  

 

                                                      The accompanying notes are an integral part of these Financial Statements.

                                                                                                           C-9

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)
                                                                                                                                                                                                                        

1. Business, Basis of Presentation and Significant Accounting Policies

Business

ING USA Annuity and Life Insurance Company ("ING USA" or "the Company") is a stock life insurance company domiciled
in the State of Iowa and provides financial products and services in the United States. ING USA is authorized to conduct its
insurance business in all states, except New York, and in the District of Columbia.

ING USA is a direct, wholly owned subsidiary of Lion Connecticut Holdings Inc. ("Lion" or "Parent"), which is a direct,
wholly owned subsidiary of ING U.S., Inc. ING U.S., Inc. is a wholly owned subsidiary of ING Insurance International B.V.,
which is a wholly owned subsidiary of ING Verzekeringen N.V. ("ING Insurance"), which is a wholly owned subsidiary of
ING Insurance Topholding N.V., which is a wholly owned subsidiary of ING Groep N.V. ("ING Group" or "ING"), the
ultimate parent company. ING is a global financial services holding company based in The Netherlands, with American
Depository Shares listed on the New York Stock Exchange under the symbol "ING."

ING has announced the anticipated separation of its global banking and insurance businesses. While all options for effecting
this separation remain open, ING has announced that the base case for this separation includes an initial public offering ("IPO")
of ING U.S., Inc., which together with its subsidiaries, constitutes ING's U.S.-based retirement, investment management, and
insurance operations. ING U.S., Inc. filed a registration statement on Form S-1 with the U.S. Securities and Exchange
Commission ("SEC") on November 9, 2012, which was amended on January 23, 2013 and March 19, 2013, in connection with
the proposed IPO of its common stock.

The Company offers various insurance products, including immediate and deferred fixed annuities. The Company's fixed
annuity products are distributed by national and regional brokerage and securities firms, independent broker-dealers, banks, life
insurance companies with captive agency sales forces, independent insurance agents, independent marketing organizations and
affiliated broker-dealers. The Company's primary annuity customers are individual consumers. The Company ceased new
sales of retail variable annuity products in March of 2010, as part of a global business strategy and risk reduction plan. New
amounts will continue to be deposited on ING USA variable annuities as add-on premiums to existing contracts.

The Company has historically issued guaranteed investment contracts and funding agreements (collectively referred to as
"GICs"), primarily to institutional investors and corporate benefit plans. In 2009, the Company made a strategic decision to
run-off the assets and liabilities in the GIC business over time. New GIC contracts may be issued on a limited basis to replace
maturing contracts.

The Company has one operating segment.

Basis of Presentation

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

Certain reclassifications have been made to prior year financial information to conform to the current year classifications,
including the presentation of changes in fair value of embedded derivatives within annuity products and the presentation of
market value adjustment items in order to align with the presentation of the Consolidated Financial Statements of ING U.S.,
Inc. For the years ended December 31, 2011 and 2010, respectively, reclassifications decreased Fee income by $207.9 and
$211.2, decreased Other net realized capital gains (losses) by $1.7 billion and $111.9, increased Other revenue by $53.5 and
$61.5, and decreased Interest credited and other benefits to contact owners by $1.9 billion and $260.4, in the Statements of
Operations. Such reclassifications had no impact on Shareholder's equity or Net income (loss).

                                                                                        C-10

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                   
Accounting Changes

Future Policy Benefits and Contract Owner Accounts

As of January 1, 2012, the Company voluntarily changed to fair value accounting for the guaranteed minimum withdrawal
benefits with life payouts (“GMWBL”) riders as a retrospective change in accounting principle. Under fair value accounting,
GMWBLs are considered embedded derivatives, which are measured at estimated fair value separately from the host annuity
contract. Changes in estimated fair value are reported in Other net realized capital gains (losses) in the Statements of
Operations. Previously, GMWBLs were accounted for by estimating the value of expected benefits in excess of the projected
account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The new
accounting method is preferable, as it provides more useful financial reporting information to financial statement users and fair
value is more closely aligned with the underlying economics of the guarantee.

The cumulative effect of this change as of January 1, 2010, is a decrease to Accumulated other comprehensive income (loss)
and to Retained earnings of $(4.2) and $(13.6), respectively, net of other related impacts of DAC, other intangible assets, and
taxes.

Deferred Policy Acquisition Costs

In October 2010, the FASB issued ASU 2010-26, “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.

The provisions of ASU 2010-26 were adopted retrospectively by the Company on January 1, 2012. As a result of
implementing ASU 2010-26, the Company recognized a cumulative effect of change in accounting principle of $419.8, net of
income taxes of $226.0, as a reduction to January 1, 2010 Retained earnings (deficit). In addition, the Company recognized a
$8.0 increase to Accumulated other comprehensive income (“AOCI”).

Employee Benefit Plans

As of January 1, 2012, the Company 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. The
Company 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 31 and, accordingly, will generally be
recorded during the fourth quarter.

The Company's change in accounting methodology has been applied retrospectively. The cumulative effect of this change as of
January 1, 2010, is a decrease to Retained earnings, with a corresponding increase to Accumulated other comprehensive
income, of $4.6, net of tax.

                                                                                                  C-11

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                      
The impacts of the accounting changes to the Balance Sheet as of December 31, 2012 and 2011, and to the Statements of
Operations for the years ended December 31, 2012, 2011 and 2010, were as follows:

  2012
Before
Change in
Method		 Effect of
GMWBL
Change		 Effect of
Pension
Change		 As
Reported
Balance Sheet:    
Deferred policy acquisition costs, Value of business acquired    
and Sales inducements to contract owners $ 2,725.5 $ 1,012.7  $ — $ 3,738.2  
Deferred income taxes 141.8 (174.7 ) — (32.9 ) (1)
Future policy benefits and claims reserves 25,582.5 1,511.7   — 27,094.2  
Accumulated other comprehensive income (loss) 810.9 (179.6 ) 2.9 634.2  
Retained earnings (deficit) (2,112.4) (144.8 ) (2.9) (2,260.1 )
 
Statement of Operations:      
Other net realized capital gains (losses) (1,581.9) 226.3   — (1,355.6 )
Operating expenses 444.8 —   (0.5) 444.3  
Net amortization of deferred policy acquisition costs and      
value of business acquired 536.7 (193.0 ) — 343.7  
Income tax expense (benefit) 170.4 11.7   0.2 182.3  
Net income (loss) (198.9) 21.6   0.3 (177.0 )
(1) Reflects a deferred tax liability      
 
  2011
Before
Change in
Method		 Effect of
GMWBL
Change		 Effect of
Pension
Change		 Other
Changes(1)		 As
Reported
Balance Sheet:            
Deferred policy acquisition costs, Value of business            
acquired and Sales inducements to contract owners $ 3,974.9 $1,037.6 $ — $ (616.0 ) $ 4,396.5  
Other assets 385.8 —   —   8.8 394.6  
Future policy benefits and claims reserves 27,970.2 1,738.1   —   — 29,708.3  
Deferred income taxes 418.9 (245.1 ) —   (212.4) (38.6 ) (2)
Accumulated other comprehensive income (loss) 435.2 (288.9 ) 3.2   95.6 245.1  
Retained earnings (deficit) (1,423.3 ) (166.4 ) (3.2 ) (490.2) (2,083.1 )
 
Statement of Operations:            
Fee income $ 1,079.4 $ — $ — $ (207.9 ) $ 871.5  
Other net realized capital gains (losses) 922.5 —   —   (1,699.1) (776.6 )
Other revenue 0.7 —   —   53.5 54.2  
Interest credited and other benefits to contract            
owners 3,044.9 1,035.8   —   (1,853.6) 2,227.1  
Operating expenses 437.1 —   (0.9 ) 11.1 447.3  
Net amortization of deferred policy acquisition costs            
and value of business acquired (236.5) (804.1 ) —   136.2 (904.4 )
Other expense 11.4 —   —   0.3 11.7  
Income tax expense (benefit) 1.1 (81.1 ) 0.3   (51.6) (131.3 )
Net income (loss) 398.0 (150.7 ) 0.6   (95.8) 152.1  
(1) See reclassifications in Basis of Presentation and Accounting Changes above.
(2) Reflects a deferred income tax asset.

 

                                                                                                                    C-12

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                           
          2010          
Change Before in
Method		 GMWBL Effect of
Change		 Effect Pension of
Change		 Other Changes(1) As
Reported
Statement of Operations:                    
Fee income $ 1,091.3   $ —   $ —   $ (211.2 ) $ 880.1  
Other net realized capital gains (losses) (611.3 ) —   —   (111.9 ) (723.2 )
Other revenue —   —   —   61.5   61.5  
Interest credited and other benefits to contract                    
owners 985.0   (69.7 ) —   (260.4 ) 654.9  
Operating expenses 428.4   —   (1.2 ) 26.3   453.5  
Net amortization of deferred policy acquisition                    
costs and value of business acquired 411.6   73.2   —   (66.5 ) 418.3  
Other expense 39.3   —   —   (0.4 ) 38.9  
Income tax expense (benefit) (55.1 ) (1.2 ) 0.4   13.8   (42.1 )
Net income (loss) 81.3   (2.3 ) 0.8   25.6   105.4  
(1) See reclassifications in Basis of Presentation above and Accounting Changes above.

             
Significant Accounting Policies

Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Those
estimates are inherently subject to change and actual results could differ from those estimates.

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

Reserves for future policy benefits, valuation and amortization of deferred policy acquisition costs ("DAC"), value of
business acquired ("VOBA") and deferred sales inducements ("DSI"), valuation of investments and derivatives,
impairments, income taxes and contingencies.

Fair Value Measurement

The Company measures the fair value of its financial assets and liabilities based on assumptions used by market participants in
pricing the asset or liability, which may include inherent risk, restrictions on the sale or use of an asset, or nonperformance risk,
which is the risk the Company will not fulfill its obligation. The estimate of an exchange price is the price in an orderly
transaction between market participants to sell the asset or transfer the liability ("exit price") in the principal market, or the most
advantageous market in the absence of a principal market, for that asset or liability. The Company utilizes a number of
valuation sources to determine the fair values of its financial assets and liabilities, including quoted market prices, third-party
commercial pricing services, third-party brokers, industry-standard, vendor-provided software that models the value based on
market observable inputs, and other internal modeling techniques based on projected cash flows.

Investments

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

Fixed Maturities and Equity Securities: The Company's fixed maturities and equity securities are currently designated as
available-for-sale, except those accounted for using the fair value option ("FVO"). Available-for-sale securities are reported at
fair value and unrealized capital gains (losses) on these securities are recorded directly in Accumulated other comprehensive

                                                                                              C-13

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
income (loss) ("AOCI") and presented net of related changes in DAC, VOBA, DSI and deferred income taxes. In addition,
certain fixed maturities have embedded derivatives, which are reported with the host contract on the Balance Sheets.

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

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

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

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

Short-term Investments: Short-term investments include investments with remaining maturities of one year or less, but greater
than three months, at the time of purchase. These investments are stated at fair value.

Assets Held in Separate Accounts: Assets held in separate accounts are reported at the fair values of the underlying investments
in the separate accounts. The underlying investments include mutual funds, short-term investments, cash and fixed maturities.

Mortgage Loans on Real Estate: The Company's mortgage loans on real estate are all commercial mortgage loans, which are
reported at amortized cost, less impairment write-downs and allowance for losses. If a mortgage loan is determined to be
impaired (i.e., when it is probable that the Company will be unable to collect all amounts due according to the contractual terms
of the loan agreement), the carrying value of the mortgage loan is reduced to the lower of either the present value of expected
cash flows from the loan discounted at the loan's original purchase yield or fair value of the collateral. For those mortgages that
are determined to require foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net of
estimated costs to obtain and sell at the point of foreclosure. The carrying value of the impaired loans is reduced by
establishing a permanent write-down recorded in Other net realized capital gains (losses) in the Statements of Operations.
Property obtained from foreclosed mortgage loans is recorded in Other investments on the Balance Sheets.

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

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

The Company's policy is to recognize interest income until a loan becomes 90 days delinquent or foreclosure proceedings are
commenced, at which point interest accrual is discontinued. Interest accrual is not resumed until the loan is brought current.

                                                                                                C-14

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
The Company records an allowance for probable losses incurred on non-impaired loans on an aggregate basis, rather than
specifically identified probable losses incurred by individual loan.

Loan - Dutch State Obligation: The reported value of the State of The Netherlands (the "Dutch State") loan obligation was
based on the outstanding loan balance, plus any unamortized premium. This loan obligation was sold to a related party in
November 2012.

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

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

Other Investments: Other investments are comprised primarily of Federal Home Loan Bank ("FHLB") stock and property
obtained from foreclosed mortgage loans, as well as other miscellaneous investments. The Company is a member of the FHLB
system and is required to own a certain amount of stock based on the level of borrowings and other factors, the Company may
invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security and periodically evaluated for
impairment based on ultimate recovery of par value.

Securities Lending: The Company engages in securities lending whereby certain domestic securities from its portfolio are
loaned to other institutions for short periods of time. Initial collateral, primarily cash, is required at a rate of 102% of the market
value of the loaned securities. For portions of the program, the lending agent retains 5% of the collateral deposited by the
borrower and transfers the remaining 95% to the Company. For other portions of the program, the lending agent retains the
cash collateral. Collateral retained by the agent is invested in liquid assets on behalf of the Company. The market value of the
loaned securities is monitored on a daily basis with additional collateral obtained or refunded as the market value of the loaned
securities fluctuates.

Other-than-temporary Impairments

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

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

When the Company has determined it has the intent to sell or if it is more likely than not that the Company will be required to
sell a security before recovery of its amortized cost basis and the fair value has declined below amortized cost ("intent
impairment"), the individual security is written down from amortized cost to fair value and a corresponding charge is recorded
in Net realized capital gains (losses) in the Statements of Operations as an other-than-temporary impairment ("OTTI"). If the
Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the
security before recovery of its amortized cost basis, but the Company has determined that there has been an other-than-

                                                                                                       C-15

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
temporary decline in fair value below the amortized cost basis, the OTTI is bifurcated into the amount representing the present
value of the decrease in cash flows expected to be collected ("credit impairment") and the amount related to other factors
("noncredit impairment"). The credit impairment is recorded in Net realized capital gains (losses) in the Statements of
Operations. The noncredit impairment is recorded in Other comprehensive income (loss).

The Company uses the following methodology and significant inputs to determine the amount of the OTTI credit loss:

n  The Company performs a discounted cash flow analysis comparing the current amortized cost of a security to the
present value of future cash flows expected to be received including estimated defaults and prepayments. The
discount rate is generally the effective interest rate of the fixed maturity prior to impairment.
n  When determining collectability and the period over which the value is expected to recover, the Company applies the
same considerations utilized in its overall impairment evaluation process, which incorporates information regarding
the specific security, the industry and geographic area in which the issuer operates and overall macroeconomic
conditions. Projected future cash flows are estimated using assumptions derived from the Company's best estimates of
likely scenario-based outcomes, after giving consideration to a variety of variables that includes, but is not limited to:
general payment terms of the security; the likelihood that the issuer can service the scheduled interest and principal
payments; the quality and amount of any credit enhancements; the security's position within the capital structure of the
issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the
issuer by rating agencies.
n  Additional considerations are made when assessing the unique features that apply to certain structured securities such
as subprime, Alt-A, non-agency, RMBS, CMBS and ABS. These additional factors for structured securities include,
but are not limited to: the quality of underlying collateral; expected prepayment speeds; loan-to-value ratios; debt
service coverage ratios; current and forecasted loss severity; and the payment priority within the tranche structure of
the security.
n  When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government
securities and state and political subdivision securities, the Company considers the estimated fair value as the recovery
value when available information does not indicate that another value is more appropriate. When information is
identified that indicates a recovery value other than estimated fair value, the Company considers in the determination
of recovery value the same considerations utilized in its overall impairment evaluation process, which incorporates
available information and the Company's best estimate of scenarios-based outcomes regarding the specific security and
issuer; possible corporate restructurings or asset sales by the issuer; the quality and amount of any credit
enhancements; the security's position within the capital structure of the issuer; fundamentals of the industry and
geographic area in which the security issuer operates and the overall macroeconomic conditions.

 

In periods subsequent to the recognition of the credit related impairment components of OTTI on a fixed maturity, the
Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment.
Accordingly, the discount (or reduced premium) based on the new cost basis is accreted into net investment income over the
remaining term of the fixed maturity in a prospective manner based on the amount and timing of estimated future cash flows.

Derivatives

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

The Company enters into interest rate, equity market, credit default and currency contracts, including swaps, futures, forwards,
caps, floors and options, to reduce and manage various risks associated with changes in value, yield, price, cash flow, or
exchange rates of assets or liabilities held or intended to be held, or to assume or reduce credit exposure associated with a
referenced asset, index, or pool. The Company also utilizes options and futures on equity indices to reduce and manage risks
associated with its annuity products. Open derivative contracts are reported as Derivatives assets or liabilities on the Balance
Sheets at fair value. Changes in the fair value of derivatives are recorded in Net realized capital gains (losses) in the Statements
of Operations.

                                                                                                 C-16

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk
management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge as either (a)
a hedge of the exposure to changes in the estimated fair value of a recognized asset or liability or an identified portion thereof
that is attributable to a particular risk ("fair value hedge") or (b) a hedge of a forecasted transaction or of the variability of cash
flows that is attributable to interest rate risk to be received or paid related to a recognized asset or liability ("cash flow hedge").
In this documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to
the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument's
effectiveness and the method that will be used to measure ineffectiveness. A derivative designated as a hedging instrument
must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally
assessed at inception and periodically throughout the life of the designated hedging relationship.
  • Fair Value Hedge: For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on
    the derivative instrument as well as the hedged item, to the extent of the risk being hedged, are recognized in Other net
    realized capital gains (losses).
  • Cash Flow Hedge: For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion
    of the gain or loss on the derivative instrument is reported as a component of AOCI and reclassified into     earnings in the
    same periods during which the hedged transaction impacts earnings in the same line item associated     with the forecasted
    transaction. The ineffective portion of the derivative's change in value, if any, along with any of     the derivative's change
    in value that is excluded from the assessment of hedge effectiveness, are recorded in Other net     realized capital gains
    (losses).

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

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

If the Company's current debt and claims paying ratings were downgraded in the future, the terms in the Company's derivative
agreements may be triggered, which could negatively impact overall liquidity. For the majority of the Company's
counterparties, there is a termination event should the Company's long-term debt ratings drop below BBB+/Baal.

The Company also has investments in certain fixed maturities and has issued certain annuity products, that contain embedded
derivatives whose fair value is at least partially determined by levels of or changes in domestic and/or foreign interest rates
(short-term or long-term), exchange rates, prepayment rates, equity markets, or credit ratings/spreads. Embedded derivatives
within fixed maturities are included with the host contract on the Balance Sheets and changes in fair value of the embedded
derivatives are recorded in Other net realized capital gains (losses) in the Statements of Operations. Embedded derivatives
within certain annuity products are included in Future policy benefits and contract owner account balances on the Balance
Sheets and changes in the fair value of the embedded derivatives are recorded in Other net realized capital gains (losses) in the
Statements of Operations.

In addition, the Company has entered into two coinsurance with funds withheld arrangements that contains an embedded
derivative, the fair value of which is based on the change in the fair value of the underlying assets held in trust. The embedded
derivative within the coinsurance funds withheld arrangement is included in Funds held under reinsurance treaties with
affiliates on the Balance Sheets and changes in the fair value are recorded in Interest credited and other benefits to contract
owners in the Statements of Operations.

                                                                                           C-17

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
Cash and Cash Equivalents

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

DAC and VOBA

DAC represents policy acquisition costs that have been capitalized and are subject to amortization and interest. Capitalized
costs are incremental, direct costs of contract acquisition, as well as certain costs related directly to successful acquisition
activities. Such costs consist principally of certain commissions, underwriting, sales and contract issuance and processing
expenses directly related to the successful acquisition of new and renewal business. Indirect or unsuccessful acquisition costs,
maintenance, product development and overhead expenses are charged to expense as incurred. VOBA represents the
outstanding value of in force business acquired and is subject to amortization and interest. The value is based on the present
value of estimated net cash flows embedded in the insurance contracts at the time of the acquisition and increased for
subsequent deferrable expenses on purchased policies.

Amortization Methodologies
The Company amortizes DAC and VOBA related to universal life contracts and fixed and variable deferred annuity contracts
over the estimated lives of the contracts in relation to the emergence of estimated gross profits. Assumptions as to mortality,
persistency, interest crediting rates, returns associated with separate account performance, impact of hedge performance,
expenses to administer the business and certain economic variables, such as inflation, are based on the Company's experience
and overall capital markets. At each valuation date, estimated gross profits are updated with actual gross profits and the
assumptions underlying future estimated gross profits are evaluated for continued reasonableness. Adjustments to estimated
gross profits require that amortization rates be revised retroactively to the date of the contract issuance ("unlocking").

The Company also reviews the estimated gross profits for each block of business to determine the recoverability of DAC and
VOBA balances each period. DAC and VOBA are deemed to be recoverable if the estimated gross profits exceed these
balances.

Assumptions
Changes in assumptions can have a significant impact on DAC and VOBA balances and amortization rates. Amortization of
DSI on these products are also impacted by changes in assumptions (see Sales Inducements below).

Several assumptions are considered significant in the estimation of future gross profits associated with variable products. One
significant assumption is the assumed return associated with the variable account performance. To reflect the volatility in the
equity markets, this assumption involves a combination of near-term expectations and long-term assumptions regarding market
performance. The overall return on the variable account is dependent on multiple factors, including the relative mix of the
underlying sub-accounts among bond funds and equity funds, as well as equity sector weightings. The Company's practice
assumes that intermediate-term appreciation in equity markets reverts to the long-term appreciation in equity markets
("reversion to the mean"). The Company monitors market events and only changes the assumption when sustained deviations
are expected. This methodology incorporates a 9% long-term equity return assumption, a 14% cap and a five-year lookforward
period. The reversion to the mean methodology was implemented prospectively on January 1, 2011.

Prior to January 1, 2011, the Company utilized a static long-term equity return assumption for projecting account balance
growth in all future years. This return assumption was reviewed annually or more frequently, if deemed necessary. Actual
returns that were higher than long-term expectations produced higher contract owner account balances, which increased future
fee expectations and decreased future benefit payment expectations on minimum death and living benefit guarantees, resulting
in higher expected gross profits. The opposite result occurred when returns were lower than long-term expectations.

Other significant assumptions include estimated policyholder behavior assumptions, such as surrender, lapse and annuitization
rates. Estimated gross profits of variable annuity contracts are sensitive to these assumptions.

Contract owners may periodically exchange one contract for another, or make modifications to an existing contract. These
transactions are identified as internal replacements. Internal replacements that are determined to result in substantially
unchanged contracts are accounted for as continuations of the replaced contracts. Any costs associated with the issuance of the

                                                                                          C-18

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
new contracts are considered maintenance costs and expensed as incurred. Unamortized DAC and VOBA related to the
replaced contracts continue to be deferred and amortized in connection with the new contracts. Internal replacements that are
determined to result in contracts that are substantially changed are accounted for as extinguishments of the replaced contracts
and any unamortized DAC and VOBA related to the replaced contracts are written off to Net amortization of deferred policy
acquisition costs and value of business acquired in the Statements of Operations.

Sales Inducements

DSI represent benefits paid to contract owners for a specified period that are incremental to the amounts the Company credits
on similar contracts and are higher than the contract's expected ongoing crediting rates for periods after the inducement. The
Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions
used to amortize DAC. The amortization of sales inducements is included in Interest credited and other benefits to contract
owners on the Statements of Operations. Each year, or more frequently if circumstances indicate a potentially significant
recoverability issue exists, the Company reviews DSI to determine the recoverability of these balances.

Future Policy Benefits and Contract Owner Account Balances

Future Policy Benefits
The Company establishes and carries actuarially-determined reserves that are calculated to meet its future obligations.
Reserves also include estimates of unpaid claims as well as claims that the Company believes have been incurred but have not
yet been reported as of the balance sheet date. The principal assumptions used to establish liabilities for future policy benefits
are based upon Company experience and periodically reviewed against industry standards. These assumptions include
mortality, morbidity, policy lapse, contract renewal, payment of subsequent premiums or deposits by the contract owner,
retirement, investment returns, inflation, benefit utilization and expenses. Changes in, or deviations from, the assumptions used
can significantly affect the Company's reserve levels and related results of operations.

Reserves for individual and group life insurance contracts (mainly term insurance, non-participating whole life
insurance, and traditional group life insurance) and accident and health insurance represent the present value of future
benefits to be paid to or on behalf of contract owners and related expenses, less the present value of future net
premiums. Assumptions as to interest rates, mortality, expenses, and persistency are based upon the Company's
estimates of anticipated experience at the period the policy is sold or acquired, including a provision for adverse
deviation. Interest rates used to calculate the present value of these reserves ranged from 3.5% to 6.25%.

Reserves for payout contracts with life contingencies are equal to the present value of expected future payments.
Assumptions as to interest rates, mortality, and expenses are based upon the Company's experience at the period the
policy is sold or acquired, including a provision for adverse deviation. Such assumptions generally vary by annuity
plan type, year of issue, and policy duration. Interest rates used to calculate the present value of future benefits ranged
from 3.0% to 7.50%.

Although assumptions are "locked-in" upon the issuance of traditional life insurance and immediate annuities with life
contingent payout benefits, significant changes in experience or assumptions may require the Company to provide for expected
future losses on a product by establishing premium deficiency reserves. Premium deficiency reserves are determined based on
best estimate assumptions that exist at the time the premium deficiency reserve is established and do not include a provision for
adverse deviation.

Contract Owner Account Balances
Contract owner account balances relate to investment-type contracts, such as guaranteed investment contracts and funding
agreements (collectively referred to as "GICs"), universal life-type contracts and fixed-indexed annuity ("FIA") contracts.

  • Account balances for GICs are calculated using the amount deposited with the Company, less withdrawals, plus interest
    accrued to the ending valuation date. Interest on these contracts is accrued by a predetermined index, plus a     spread or a
    fixed rate, established at the issue date of the contract.
  • Account balances for fixed annuities and payout contracts without life contingencies are equal to cumulative deposits,
    less charges and withdrawals, plus credited interest thereon. Credited interest rates vary by product and ranged up to
    8.0% for the years 2012, 2011 and 2010. Account balances for group immediate annuities without life contingent payouts
    are equal to the discounted value of the payment at the implied break-even rate.

                                                                                       C-19

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
  • Account balances for universal life-type contracts are equal to cumulative deposits, less charges and withdrawals and
    account values released upon death, plus credited interest thereon.
  • For FIAs, the aggregate initial liability is equal to the deposit received, plus a bonus, if applicable, and is split into a host
    component and an embedded derivative component. Thereafter, the host liability accumulates at a set interest rate     and
    the embedded derivative liability is recognized at fair value.

Guarantees and Additional Reserves
The Company calculates additional reserve liabilities for certain universal life products and certain variable annuity guaranteed
benefits. The additional reserve for such products recognizes the portion of contract assessments received in early years used to
compensate the Company for benefits provided in later years.

The Company also calculates a benefit ratio for each block of business that meets the requirements for additional reserves and
calculates an additional reserve by accumulating amounts equal to the benefit ratio multiplied by the assessments for each
period, reduced by excess benefits during the period. The additional reserve is accumulated at interest rates consistent with the
DAC model for the period. The calculated reserve includes a provision for universal life contracts with patterns of cost of
insurance charges that produce expected gains from the insurance benefit function followed by losses from that function in later
years.

Guaranteed minimum death benefits and Guaranteed minimum income benefits
Reserves for annuity guaranteed minimum death benefits ("GMDB") and guaranteed minimum income benefits ("GMIB") are
determined by estimating the value of expected benefits in excess of the projected account balance and recognizing the excess
ratably over the accumulation period based on total expected assessments. Expected experience is based on a range of
scenarios. Assumptions used, such as the long-term equity market return, lapse rate and mortality, are consistent with
assumptions used in estimating gross profits for purposes of amortizing DAC. The assumptions of investment performance and
volatility are consistent with the historical experience of the appropriate underlying equity index, such as the Standard & Poor's
("S&P") 500 Index. In addition, the reserve for the GMIB guarantee incorporates assumptions for the likelihood and timing of
the potential annuitizations that may be elected by the contract owner. In general, the Company assumes that GMIB
annuitization rates will be higher for policies with more valuable guarantees ("in the money" guarantees where the notional
benefit amount is in excess of the account value). Reserves for GMDB and GMIB are recorded in Future policy benefits on the
Balance Sheets. Changes in reserves for GMDB and GMIB are reported in Interest credited and other benefits to contract
owners in the Statements of Operations.

Most contracts issued on or before December 31, 1999 with enhanced death benefit guarantees were reinsured to third-party
reinsurers to mitigate the risk associated with such guarantees. For contracts issued after December 31, 1999, the Company
instituted a variable annuity guarantee hedging program to mitigate the risks associated with these guarantees, for which the
Company did not seek hedge accounting. The variable annuity guarantee hedging program is based on the Company entering
into derivative positions to offset such exposures to GMDB and GMIB due to adverse changes in the equity markets.

GMAB, GMWB, GMWBL and FIA
The Company also issues certain products which contain embedded derivatives that are measured at estimated fair value
separately from the host contracts. These products include annuity guaranteed minimum accumulation benefits ("GMAB"),
guaranteed minimum withdrawal benefits without life contingencies ("GMWBs"), guaranteed minimum withdrawal benefits
with life contingent payouts ("GMWBL") and FIAs which are measured at estimated fair value separately from the host annuity
contract, with changes in estimated fair value, along with attributed fees collected or payments made, are reported in Other net
realized capital gains (losses) in the Statements of Operations.

At inception of the GMAB, GMWB and GMWBL contracts, the Company projects a fee to be attributed to the embedded
derivative portion of the guarantee equal to the present value of projected future guaranteed benefits. After inception the
estimated fair value of the GMAB, GMWB and GMWBL contracts is determined based on the present value of projected future
guaranteed benefits minus the present value of projected attributed fees. A risk neutral valuation methodology is used under
which the cash flows from the guarantees are projected under multiple capital market scenarios using observable risk free rates.
The projection of future guaranteed benefits and future attributed fees require the use of assumptions for capital markets (e.g.,
implied volatilities, correlation among indices, risk-free swap curve, etc.) and policyholder behavior (e.g., lapse, benefit
utilization, mortality, etc.). Risk margins are established to capture uncertainties related to policyholder behavior assumptions.
The margin represents additional compensation a market participant would require to assume these risks.

                                                                                            C-20

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

The estimated fair value of the FIA contracts is based on the present value of the excess of interest payments to the contract
owners over the minimum guaranteed interest rate. The excess interest payments are determined as the excess of projected
index driven benefits over the projected guaranteed benefits. The projection horizon is over the anticipated life of the related
contracts, which takes into account best estimate actuarial assumptions, such as, partial withdrawals, full surrenders, deaths,
annuitizations and, maturities.

The GMAB, GMWB, GMWBL and FIA embedded derivative liabilities include a risk margin to capture uncertainties related to
policyholder behavior assumptions. The margin represents additional compensation a market participant would require to
assume these risks.

Separate Accounts

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

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

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

n Such separate accounts are legally recognized;
n Assets supporting the contract liabilities are legally insulated from the Company's general account liabilities;
n Investments are directed by the contract owner or participant; and
n All investment performance, net of contract fees and assessments, is passed through to the contract owner.

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

Long-term Debt

Long-term debt is carried at an amount equal to the unpaid principal balance, net of any remaining unamortized discount or
premium attributable to issuance. Direct and incremental costs to issue the debt are recorded in Other assets on the Balance
Sheets and are recognized as a component of Interest expense in the Statements of Operations over the life of the debt, using the
effective interest method of amortization.

Repurchase Agreements

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

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

Company policy requires that at all times during the term of the dollar roll and repurchase agreements that cash or other
collateral types obtained is sufficient to allow the Company to fund substantially all of the cost of purchasing replacement
assets. Cash received is invested in Short-term investments, with the offsetting obligation to repay the loan included as an

                                                                                            C-21

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

Other liability on the Balance Sheets. The carrying value of the securities pledged in dollar rolls and repurchase agreement
transactions and the related repurchase obligation are included in Securities pledged and Short-term debt, respectively, on the
Balance Sheets.

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

Recognition of Insurance Revenue and Related Benefits

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

Amounts received as payment for investment-type and universal life-type contracts are reported as deposits to contract owner
account balances. Revenues from these contracts consist primarily of fees assessed against the contract owner account balance
for mortality, policy administration and surrender charges and are reported in Fee income. In addition, the Company earns
investment income from the investment of contract deposits in the Company's general account portfolio which is reported in
Net Investment Income in the Statements of Operations. Fees assessed that represent compensation to the Company for
services to be provided in future periods and certain other fees are deferred and amortized into revenue over the expected life of
the related contracts in proportion to estimated gross profits, in a manner consistent with DAC for these contracts. Benefits and
expenses for these products include claims in excess of related account balances, expenses of contract administration and
interest credited to contract owner account balances.

Income Taxes

The Company uses certain assumptions and estimates in determining the income taxes payable or refundable to/from the Parent
for the current year, the deferred income tax liabilities and assets for items recognized differently in its financial statements
from amounts shown on its income tax returns and the federal income tax expense. Determining these amounts requires
analysis and interpretation of current tax laws and regulations, including the loss limitation rules associated with change in
control. Management exercises considerable judgment in evaluating the amount and timing of recognition of the resulting
income tax liabilities and assets. These judgments and estimates are reevaluated on a continual basis as regulatory and business
factors change.

The Company's deferred tax assets and liabilities resulting from temporary differences between financial reporting and tax
bases of assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income
in the years the temporary differences are expected to reverse.

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

  • The nature and character of the deferred tax assets and liabilities;
  • Taxable income in prior carryback years;
  • Projected future income, exclusive of reversing temporary differences and carryforwards;
  • Projected future reversals of existing temporary differences;
  • The length of time carryforwards can be utilized;
  • Any prudent and feasible tax planning strategies the Company would employ to avoid a tax benefit from expiring unused;
  • The nature, frequency and severity of cumulative U.S. GAAP losses in recent years; and

                                                                              C-22

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

n Any tax rules that would impact the utilization of the deferred tax assets.

In establishing unrecognized tax benefits, the Company determines whether a tax position is more likely than not to be
sustained under examination by the appropriate taxing authority. The Company also considers positions that have been
reviewed and agreed to as part of an examination by the appropriate taxing authority. Tax positions that do not meet the more
likely than not standard are not recognized. Tax positions that meet this standard are recognized in the Financial Statements.
The Company measures the tax position as the largest amount of benefit that is greater than 50% likely of being realized upon
ultimate resolution with the tax authority that has full knowledge of all relevant information.

Reinsurance

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

For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss
or liability relating to insurance risk. The Company reviews all contractual features, particularly those that may limit the
amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims.

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

For prospective reinsurance of short-duration contacts that meet the criteria for reinsurance accounting, amounts paid are
recorded as ceded premiums and ceded unearned premiums and are reflected as a component of Premiums in the Statements of
Operations and Other assets on the Balance Sheets, respectively. Ceded unearned premiums are amortized through premiums
over the remaining contract period in proportion to the amount of protection provided.

If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a
significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits
received are included in Other liabilities and deposits made are included in Deposits and reinsurance recoverable on the
Balance Sheets. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are
adjusted. Interest on such deposits is recorded as Other revenues or Other expenses, as appropriate. Periodically, the Company
evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through Other revenues
or Other expenses, as appropriate.

Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance
of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and
anticipated experience compared to the assumptions used to establish assets and liabilities relating to ceded and assumed
reinsurance. The Company also evaluates the financial strength of potential reinsurers and continually monitors the financial
condition of reinsurers. Only those reinsurance recoverable balances deemed probable of recovery are reflected as assets on the
Balance Sheets and are stated net of allowances for uncollectible reinsurance. Amounts currently recoverable under
reinsurance agreements are included in Reinsurance recoverable and amounts currently payable are included in Other liabilities.
Such assets and liabilities relating to reinsurance agreements with the same reinsurer are recorded net on the Balance Sheets if a
right of offset exists within the reinsurance agreement.

Premiums, Fee income and Policyholder benefits are reported net of reinsurance ceded. Amounts received from reinsurers for
policy administration are reported in Other revenue.

The combined coinsurance and coinsurance funds withheld reinsurance agreement between the Company and Security Life of
Denver International Limited ("SLDI"), an affiliate, contains an embedded derivative whose carrying value is estimated based
upon the change in the fair value of the assets supporting the funds withheld payable under the agreement.

                                                                                            C-23

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
The Company currently has significant concentrations of ceded reinsurance with its affiliates, Security Life of Denver
Insurance Company ("SLD") and SLDI primarily related to GICs, fixed annuities and universal life policies with respect to
SLD and variable annuities with respect to SLDI. The outstanding recoverable balances may fluctuate from period to period.

Participating Insurance

Participating business approximates 12.5% of the Company's ordinary life insurance in force and 29.9% of life insurance
premium income. The amount of dividends to be paid is determined annually by the Board of Directors. Amounts allocable to
participating contract owners are based on published dividend projections or expected dividend scales. Dividends to
participating policyholders of $9.8, $11.1 and $12.1, were incurred during the years ended December 31, 2012, 2011 and 2010,
respectively.

Contingencies

A loss contingency is an existing condition, situation, or set of circumstances involving uncertainty as to possible loss that will
ultimately be resolved when one or more future events occur or fail to occur. Examples of loss contingencies include pending
or threatened adverse litigation, threat of expropriation of assets and actual or possible claims and assessments. Amounts
related to loss contingencies are accrued and recorded in Other liabilities on the Balance Sheets if it is probable that a loss has
been incurred and the amount can be reasonably estimated, based on the Company's best estimate of the ultimate outcome. If
determined to meet the criteria for a reserve, the Company also evaluates whether there are external legal or other costs directly
associated with the resolution of the matter and accrues such costs if estimable.

Adoption of New Pronouncements

Financial Instruments

Reconsideration of Effective Control for Repurchase Agreements
In April 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-03,
"Transfers and Servicing (Accounting Standards CodificationTM ("ASC") Topic 860): Reconsideration of Effective Control for
Repurchase Agreements" ("ASU 2011-03"), which removes from the assessment of effective control (1) the criterion requiring
the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms and (2) the
collateral maintenance implementation guidance related to that criterion.

The provisions of ASU 2011-03 were adopted by the Company on January 1, 2012. The Company determined that there was
no effect on the Company's financial condition, results of operations or cash flows, as the guidance is consistent with that
previously applied by the Company.

A Creditor's Determination of Whether a Restructuring is a Troubled Debt Restructuring
In April 2011, the FASB issued ASU 2011-02, "Receivables ASC Topic 310): A Creditor's Determination of Whether a
Restructuring is a Troubled Debt Restructuring" ("ASU 2011-02"), which clarifies the guidance on a creditor's evaluation of
whether it has granted a concession and whether the debtor is experiencing financial difficulties, as follows:
  • If a debtor does not have access to funds at a market rate for similar debt, the restructuring would be considered to be at
    a below-market rate;
  • An increase in the contractual interest rate does not preclude the restructuring from being considered a concession, as the
    new rate could still be below the market interest rate;
  • A restructuring that results in a delay in payment that is insignificant is not a concession;
  • A creditor should evaluate whether it is probable that the debtor would be in payment default on any of its debt without
    the modification to determine if the debtor is experiencing financial difficulties; and
  • A creditor is precluded from using the effective interest rate test.

Also, ASU 2011-02 requires disclosure of certain information about troubled debt restructuring, which was previously deferred
by ASU 2011-01, "Deferral of the Effective Date of Disclosure about Troubled Debt Restructurings in Update No. 2010-20"
("ASU 2011-01").

                                                                                                       C-24

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
The provisions of ASU 2011-02 were adopted by the Company on July 1, 2011, and applied retrospectively to January 1, 2011.
The Company determined, however, that there was no effect on the Company's financial position, results of operations or cash
flows upon adoption, as there were no troubled debt restructurings between January 1, 2011 and July 1, 2011. The disclosures
required by ASU 2011-02 are included in the Investments note to these Financial Statements.

Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses
In July 2010, the FASB issued ASU 2010-20, "Receivables (ASC Topic 310): Disclosures about the Credit Quality of
Financing Receivables and the Allowance for Credit Losses" ("ASU 2010-20"), which requires certain existing disclosures to
be disaggregated by class of financing receivable, including the rollforward of the allowance for credit losses, with the ending
balance further disaggregated on the basis of impairment method. For each disaggregated ending balance, an entity also is
required to disclose the related recorded investment in financing receivables, the nonaccrual status of financing receivables, and
impaired financing receivables.

ASU 2010-20 also requires new disclosures by class of financing receivable, including credit quality indicators, aging of past
due amounts, the nature and extent of troubled debt restructurings and related defaults, and significant purchases and sales of
financing receivables disaggregated by portfolio segment.

In January 2011, the FASB issued ASU 2011-01, which temporarily delayed the effective date of the disclosures about troubled
debt restructurings in ASU 2010-20.

The provisions of ASU 2010-20 were adopted by the Company on December 31, 2010, and are included in the Investments
note to these Financial Statements, as well as the "Reinsurance" section above, except for the disclosures about troubled debt
restructurings included in ASU 2011-02 that were adopted by the Company on July 1, 2011 (see above). The disclosures that
include information for activity that occurs during a reporting period were adopted by the Company on January 1, 2011 and are
included in the Investment note to these Financial Statements. As this pronouncement only pertains to additional disclosure,
the adoption had no effect on the Company's financial condition, results of operations, or cash flows.

Scope Exception Related to Embedded Credit Derivatives
In March 2010, the FASB issued ASU 2010-11, "Derivatives and Hedging (ASC Topic 815): Scope Exception Related to
Embedded Credit Derivatives" ("ASU 2010-11"), which clarifies that the only type of embedded credit derivatives that are
exempt from bifurcation requirements are those that relate to the subordination of one financial instrument to another.

The provisions of ASU 2010-11 were adopted by the Company on July 1, 2010. The Company determined, however, that there
was no effect on the Company's financial condition, results of operations, or cash flows upon adoption, as the guidance is
consistent with that previously applied by the Company.

Fair Value

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International
Financial Reporting Standards ("IFRS").
In May 2011, the FASB issued Accounting Standards Update ("ASU") 2011-04, "Fair Value Measurement (ASC Topic 820):
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS" ("ASU
2011-04"), which includes the following amendments:
  • The concepts of highest and best use and valuation premise are relevant only when measuring the fair value of nonfinancial
    assets;
  • The requirements for measuring the fair value of equity instruments are consistent with those for measuring liabilities;
  • An entity is permitted to measure the fair value of financial instruments managed within a portfolio at the price that would
    be received to sell or transfer a net position for a particular risk; and
  • The application of premiums and discounts in a fair value measurement is related to the unit of account for the asset or
    liability.

ASU 2011-04 also requires additional disclosures, including use of a nonfinancial asset in a way that differs from its highest
and best use, categorization by level for items in which fair value is required to be disclosed and further information regarding
Level 3 fair value measurements.

                                                                                             C-25

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

The provisions of ASU 2011-04 were adopted, prospectively, by the Company on January 1, 2012. The adoption had no effect
on the Company's financial condition, results of operations or cash flows as the pronouncement only pertains to additional
disclosure. The disclosures required by ASU 2011-04 are included in the Fair Value Measurements note to these Financial
Statements.

Improving Disclosures about Fair Value Measurements
In January 2010, the FASB issued ASU 2010-06, "Fair Value Measurements and Disclosure (ASC Topic 820): Improving
Disclosures about Fair Value Measurements" ("ASU 2010-06"), which requires several new disclosures, as well as clarification
to existing disclosures, as follows:

  • Significant transfers in and out of Level 1 and Level 2 fair value measurements and the reason for the transfers;
  • Purchases, sales, issuances and settlement, in the Level 3 fair value measurements reconciliation on a gross basis;
  • Fair value measurement disclosures for each class of assets and liabilities (i.e., disaggregated); and
  • Valuation techniques and inputs for both recurring and nonrecurring fair value measurements that fall in either Level 2
    or Level 3 fair value measurements.

The provisions of ASU 2010-06 were adopted by the Company on January 1, 2010, except for the disclosures related to the
Level 3 reconciliation that were adopted by the Company on January 1, 2011. The adoption had no effect on the Company's
financial condition, results of operations, or cash flows as the pronouncement only pertains to additional disclosure. The
disclosures required by ASU 2010-06 are included in the Fair Value Measurements note to these Financial Statements.

Improvements to Financial Reporting by Enterprises Involved in Variable Interest Entities
In December 2009, the FASB issued ASU 2009-17, "Consolidations (ASC Topic 810): Improvements to Financial Reporting
by Enterprises Involved in Variable Interest Entities," ("ASU 2009-17"), which amends the consolidation guidance for variable
interest entities ("VIEs"), as follows:

  • Eliminates the quantitative-based assessment for consolidation of VIEs and, instead, requires a qualitative assessment of
    whether an entity has the power to direct the VIE's activities and whether the entity has the obligation to absorb     losses
    or the right to receive benefits that could be significant to the VIE;
  • Requires an ongoing reassessment of whether an entity is the primary beneficiary of a VIE; and
  • Requires enhanced disclosures, including (i) presentation on the balance sheet of assets and liabilities of consolidated
    VIEs that meet the separate presentation criteria and disclosure of assets and liabilities recognized on the balance sheet
    and (ii) the maximum exposure to loss for those VIEs in which a reporting entity is determined to not be the primary
    beneficiary but in which it has a variable interest.

In addition, in February 2010, the FASB issued ASU 2010-10, "Consolidation (ASC Topic 810): Amendments for Certain
Investment Funds" (ASU 2010-10), which defers to ASU 2009-17 for reporting entity's interests in certain investment funds
that have attributes of investment companies, for which the reporting entity does not have an obligation to fund losses and that
are not structured as securitization entities.

The provisions of ASU 2009-17 and ASU 2010-10 were adopted on January 1, 2010. The Company determined, however, that
there was no effect on the Company's financial condition, results of operations, or cash flows upon adoption, as the
consolidation conclusions were consistent with those under previous U.S. GAAP. The disclosure provisions required by ASU
2009-17 are presented in the Financial Instruments note to these Financial Statements.

Other Pronouncements

Presentation of Comprehensive Income
In June 2011, the FASB issued ASU 2011-05, "Comprehensive Income (ASC Topic 220): Presentation of Comprehensive
Income" ("ASU 2011-05"), which states that an entity has the option to present total comprehensive income and the
components of net income and other comprehensive income either in a single, continuous statement of comprehensive income
or in two separate, consecutive statements.

In December 2011, the FASB issued ASU 2011-12, which defers the ASU 2011-05 requirements to present, on the face of the
financial statements, the effects of reclassification out of AOCI on the components of net income and other comprehensive
income.

                                                                                                 C-26

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
The Company early adopted provisions of ASU 2011-05 and ASU 2010-12 on December 31, 2011, and applied the provisions
retrospectively. The Statement of Comprehensive Income, with corresponding revisions to the Statements of Changes in
Shareholder's Equity, is included in the Financial Statements. In addition, the required disclosures are included in the
Accumulated Other Comprehensive Income (Loss) note to these Financial Statements.

Future Adoption of Accounting Pronouncements

Disclosures about Offsetting Assets and Liabilities
In December 2011, the FASB issued ASU 2011-11, "Balance Sheet (ASC Topic 210): Disclosures about Offsetting Assets and
Liabilities" ("ASU 2011-11"), which requires an entity to disclose both gross and net information about instruments and
transactions eligible for offset in the statement of financial position, as well as instruments and transactions subject to an
agreement similar to a master netting arrangement. In addition, the standard requires disclosure of collateral received and
posted in connection with master netting agreements or similar arrangements.

In January 2013, the FASB issued ASU 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about
Offsetting Assets and Liabilities" ("ASU 2013-01"), which clarifies that the scope of ASU 2011-11 applies to derivatives
accounted for in accordance with ASU Topic 815, Derivatives and Hedging, including bifurcated embedded derivatives,
repurchase agreements and reverse repurchase agreements and securities borrowing and securities lending transactions that are
either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to an enforceable master netting
arrangement or similar agreement.

The provisions of ASU 2013-01 and ASU 2011-11 are effective retrospectively for annual reporting periods beginning on or
after January 1, 2013 and periods within those annual reporting periods. The Company will adopt the provisions of these ASUs
in the first quarter of 2013 which will include additional disclosure of the gross and net information instruments deemed in
scope, including any related collateral received or posted.

Disclosures about Amounts Reclassified out of AOCI
In January 2013, the FASB issued ASU 2013-02, "Comprehensive Income (ASC Topic 220): Reporting of Amounts
Reclassified Out of Accumulated Other Comprehensive Income" ("ASU 2013-02"), which requires an entity to provide
information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an
entity is required to present, either on the face of the statement where net income is presented or in the notes, significant
amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the
amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period.
For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required
to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts.

The provisions of ASU 2013-02 are effective prospectively for reporting periods beginning after December 15, 2012. The
Company will adopt the provisions of ASU 2013-02 in the first quarter of 2013 to provide additional information about
amounts reclassified out of accumulated other comprehensive income by component.

                                                                                                     C-27

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

2.                   Investments

Fixed Maturities and Equity Securities

Available-for-sale and fair value option ("FVO") fixed maturities and equity securities were as follows as of December 31,
2012:

Amortized
Cost		 Gross
Unrealized
Capital
Gains		 Gross
Unrealized
Capital
Losses		 Embedded
Derivatives(2)


Fair Value


OTTI(3)
Fixed maturities:                
U.S. Treasuries $ 1,218.9 $ 92.6 $ — $ —   $ 1,311.5 $ —
U.S. government agencies and                
authorities 19.3 4.4 —   —   23.7 —
State, municipalities and political                
subdivisions 80.1 9.9 —   —   90.0 —
U.S. corporate securities 9,511.8 1,039.6 13.9   —   10,537.5 6.5
 
Foreign securities(1) :                
Government 404.7 41.4 2.7   —   443.4 —
Other 4,473.1 469.9 19.8   —   4,923.2 —
Total foreign securities 4,877.8 511.3 22.5   —   5,366.6 —
 
Residential mortgage-backed                
securities:                
Agency 1,072.4 144.9 4.6   39.4   1,252.1 —
Non-Agency 544.7 68.4 26.8   15.3   601.6 58.5
Total Residential mortgage-backed                
securities 1,617.1 213.3 31.4   54.7   1,853.7 58.5
 
Commercial mortgage-backed                
securities 1,565.4 201.2 3.0   —   1,763.6 —
Other asset-backed securities 681.6 26.5 23.5   (3.9 ) 680.7 0.3
Total fixed maturities, including                
securities pledged 19,572.0 2,098.8 94.3   50.8   21,627.3 65.3
Less: Securities pledged 684.7 29.8 0.5   —   714.0 —
Total fixed maturities 18,887.3 2,069.0 93.8   50.8   20,913.3 65.3
Equity securities 26.4 3.6 0.2   —   29.8 —
Total fixed maturities and equity                
securities investments $ 18,913.7 $ 2,072.6 $ 94.0 $ 50.8   $20,943.1 $ 65.3
(1) Primarily U.S. dollar denominated.
(2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Statements of Operations.

(3) Represents other-than-temporary impairments ("OTTI") reported as a component of Other comprehensive income.

                                                                                                   C-28

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

Available-for-sale and FVO fixed maturities and equity securities were as follows as of December 31, 2011:

Amortized
Cost		 Gross
Unrealized
Capital
Gains		 Gross
Unrealized
Capital
Losses		 Embedded
Derivatives(2)

Fair
Value


OTTI(3)
Fixed maturities:                
U.S. Treasuries $ 1,692.9 $ 92.9 $ — $ —   $ 1,785.8 $ —
U.S. government agencies and                
authorities 19.9 3.8 —   —   23.7 —
State, municipalities and political                
subdivisions 98.9 6.8 0.9   —   104.8 —
U.S. corporate securities 9,527.7 784.5 41.4   —   10,270.8 —
 
Foreign securities(1) :                
Government 349.0 26.7 5.4   —   370.3 —
Other 4,939.4 336.8 64.4   —   5,211.8 0.1
Total foreign securities 5,288.4 363.5 69.8   —   5,582.1 0.1
 
Residential mortgage-backed                
securities                
Agency 1,354.6 186.9 2.4   46.4   1,585.5 0.3
Non-Agency 735.4 58.3 88.5   15.1   720.3 75.7
Total Residential mortgage-backed                
securities 2,090.0 245.2 90.9   61.5   2,305.8 76.0
 
Commercial mortgage-backed                
securities 1,910.3 118.0 26.4   —   2,001.9 1.9
Other asset-backed securities 734.3 15.4 69.6   (6.5 ) 673.6 —
Total fixed maturities, including                
securities pledged 21,362.4 1,630.1 299.0   55.0   22,748.5 78.0
Less: Securities pledged 965.0 49.8 2.0   —   1,012.8 —
Total fixed maturities 20,397.4 1,580.3 297.0   55.0   21,735.7 78.0
Equity securities 26.7 1.8 0.8   —   27.7 —
Total fixed maturities and equity                
securities investments $ 20,424.1 $ 1,582.1 $ 297.8 $ 55.0   $21,763.4 $ 78.0
               

(1) Primarily U.S. dollar denominated.
(2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in
Other net realized capital gains (losses) in the Statements of Operations.
(3) Represents OTTI reported as a component of Other comprehensive income.

                                                                                                   C-29

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

The amortized cost and fair value of fixed maturities, including securities pledged, as of December 31, 2012, are shown below
by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called, or
prepaid. Mortgage-backed securities ("MBS") and other asset-backed securities ("ABS") are shown separately because they are
not due at a single maturity date.

  Amortized Fair
  Cost Value
Due to mature:    
One year or less $ 1,122.5 $ 1,145.2
After one year through five years 4,967.1 5,274.6
After five years through ten years 5,836.5 6,440.6
After ten years 3,781.8 4,468.9
Mortgage-backed securities 3,182.5 3,617.3
Other asset-backed securities 681.6 680.7
Fixed maturities, including securities pledged $ 19,572.0 $ 21,627.3

 

The investment portfolio is monitored to maintain a diversified portfolio on an ongoing basis. Credit risk is mitigated by
monitoring concentrations by issuer, sector and geographic stratification and limiting exposure to any one issuer.

As of December 31, 2012, the Company did not have any investments in a single issuer, other than obligations of the U.S.
government and government agencies, with a carrying value in excess of 10% of the Company’s Shareholder’s equity. As of
December 31, 2011 the Company did not have any investments in a single issuer, other than obligations of the U.S. government
and government agencies and the Dutch State loan obligation, with a carrying value in excess of 10% of the Company’s
Shareholder’s equity.

The following tables set forth the composition of the U.S. and foreign corporate securities within the fixed maturity portfolio by
industry category as of December 31, 2012 and 2011:

Amortized
Cost		 Gross
Unrealized
Capital
Gains		 Gross
Unrealized
Capital
Losses		 Fair Value
2012        
Communications $ 991.8 $ 138.8 $ 0.5 $ 1,130.1
Financial 1,669.5 179.0 17.6 1,830.9
Industrial and other companies 8,393.6 839.0 5.5 9,227.1
Utilities 2,573.6 310.8 9.9 2,874.5
Transportation 356.4 41.9 0.2 398.1
Total $ 13,984.9 $ 1,509.5 $ 33.7 $ 15,460.7
 
2011        
Communications $ 1,109.9 $ 96.0 $ 5.3 $ 1,200.6
Financial 1,948.2 115.1 54.3 2,009.0
Industrial and other companies 8,453.1 634.0 33.2 9,053.9
Utilities 2,589.6 244.5 10.5 2,823.6
Transportation 366.3 31.7 2.5 395.5
Total $ 14,467.1 $ 1,121.3 $ 105.8 $ 15,482.6

         
The Company invests in various categories of collateralized mortgage obligations ("CMOs"), including CMOs that are not
agency-backed, that are subject to different degrees of risk from changes in interest rates and defaults. The principal risks
inherent in holding CMOs are prepayment and extension risks related to significant decreases and increases in interest rates

                                                                                   C-30

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

resulting in the prepayment of principal from the underlying mortgages, either earlier or later than originally anticipated. As of
December 31, 2012 and 2011, approximately 32.9% and 28.3%, respectively, of the Company’s CMO holdings, such as
interest-only or principal-only strips, were invested in those types of CMOs, which are subject to more prepayment and
extension risk than traditional CMOs.

Repurchase Agreements

As described in the Business, Basis of Presentation and Significant Accounting Policy note, the Company engages in dollar
repurchase agreements with mortgage-backed securities ("dollar rolls") and repurchase agreements with other collateral types
to increase its return on investments and improve liquidity. Such arrangements meet the requirements to be accounted for as
financing arrangements. As of December 31, 2012 and 2011 the Company did not have any securities pledged in dollar rolls
and repurchase agreement transactions.

The Company also enters into reverse repurchase agreements. These transactions involve a purchase of securities and an
agreement to sell substantially the same securities as those purchased. As of December 31, 2012 and 2011, the Company did
not have any securities pledged under reverse repurchase agreements.

Securities Lending

As described in the Business, Basis of Presentation and Significant Accounting Policy note, the Company engages in securities
lending whereby certain domestic securities from its portfolio are loaned to other institutions for short periods of time. As of
December 31, 2012 and 2011, the fair value of loaned securities was $134.7 and $233.0, respectively, and is included in
Securities pledged on the Balance Sheets. As of December 31, 2012 and 2011, collateral retained by the lending agent and
invested in liquid assets on the Company's behalf was $138.9 and $248.3, respectively, and recorded in Short-term investments
under securities loan agreement, including collateral delivered on the Balance Sheets. As of December 31, 2012 and 2011,
liabilities to return collateral of $138.9 and $248.3, respectively, are included in Payables under securities loan agreement,
including collateral held on the Balance Sheets.

Variable Interest Entities ("VIEs")

The Company holds certain VIEs for investment purposes. VIEs may be in the form of private placement securities, structured
securities, securitization transactions, or limited partnerships. The Company has reviewed each of its holdings and determined
that consolidation of these investments in the Company’s financial statements is not required, as the Company is not the
primary beneficiary, because the Company does not have both the power to direct the activities that most significantly impact
the entity’s economic performance and the obligation or right to potentially significant losses or benefits, for any of its
investments in VIEs. The Company provided no non-contractual financial support and its carrying value represents the
Company’s exposure to loss. The carrying value of the equity tranches of the collateralized loan obligations ("CLOs") of $4.0
and $3.5 as of December 31, 2012 and 2011, respectively, is included in Limited partnerships/corporations on the Balance
Sheets. Income and losses recognized on these investments are reported in Net investment income in the Statements of
Operations.

On June 4, 2012, the Company entered into an agreement to sell certain general account private equity limited partnership
investment interest holdings with a carrying value of $146.1 as of March 31, 2012 to a group of private equity funds that are
managed by Pomona Management LLC, an affiliate of the Company. The transaction resulted in a net pretax loss of $16.9 in
the second quarter of 2012 reported in Net investment income on the Statements of Operations. The transaction closed in two
tranches with the first tranche closed on June 29, 2012 and the second tranche closed on October 29, 2012. Consideration
received included $8.2 of promissory notes due in two equal installments at December 31, 2013 and 2014. In connection with
these promissory notes, ING U.S., Inc. unconditionally guarantees payments of the notes in the event of any default of
payments due. No additional loss was incurred on the second tranche since the fair value of the alternative investments was
reduced to the agreed-upon sales price as of June 30, 2012.

Securitizations

The Company invests in various tranches of securitization entities, including residential mortgage-backed securities ("RMBS"),
commercial mortgage-backed securities ("CMBS") and ABS. Certain RMBS investments represent agency pass-through
securities and close-to-the-index tranches issued by Fannie Mae, Freddie Mac, or a similar government-sponsored entity.

                                                                                        C-31

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

Investments held by the Company in non-agency RMBS and CMBS also include interest-only, principal-only and inverse
floating securities. Through its investments, the Company is not obligated to provide any financial or other support to these
entities. Each of the RMBS, CMBS and ABS entities described above are thinly capitalized by design and considered VIEs
under ASC 810-10-25 as amended by ASU 2009-17. As discussed above, the Company's involvement with these entities is
limited to that of a passive investor. The Company has no unilateral right to appoint or remove the servicer, special servicer, or
investment manager, which are generally viewed to have the power to direct the activities that most significantly impact the
securitization entities' economic performance, in any of these entities, nor does the Company function in any of these roles. The
Company through its investments or other arrangements does not have the obligation to absorb losses or the right to receive
benefits from the entity that could potentially be significant to the entity. Therefore, the Company is not the primary beneficiary
and will not consolidate any of the RMBS, CMBS and ABS entities in which it holds investments. These investments are
accounted for as investments available-for-sale as described in the Business, Basis of Presentation and Significant Accounting
Policies note to these Financial Statements.

Unrealized Capital Losses

Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including
securities pledged, by market sector and duration were as follows as of December 31, 2012 and 2011:

Six Months or Less Below
Amortized Cost 		More Than Six
Months and Twelve
Months or Less Below
Amortized Cost

More Than Twelve Months
Below Amortized Cost


Total
  Fair Unrealized Fair Unrealized Fair Unrealized Fair Unrealized
  Value Capital Losses Value Capital Losses Value Capital Losses Value Capital Losses
2012                    
U.S. corporate, state                    
and municipalities $ 237.3 $ 2.9 $ 40.1 $ 0.6 $ 94.0 $ 10.4 $ 371.4 $ 13.9
Foreign 33.3   3.1 23.9   1.8 158.1 17.6 215.3 22.5
Residential                    
mortgage-backed 116.3   2.2 10.9   0.1 181.6 29.1 308.8 31.4
Commercial                    
mortgage-backed 4.8   — 11.2   1.2 15.8 1.8 31.8 3.0
Other asset-backed 0.1   — —   — 152.8 23.5 152.9 23.5
                  1,080.  
Total $ 391.8 $ 8.2 $ 86.1 $ 3.7 $ 602.3 $ 82.4 $ 2 $ 94.3
 
2011                    
U.S. corporate, state                 1,104.  
and municipalities $ 798.9 $ 17.6 $ 97.6 $ 4.1 $ 208.0 $ 20.6 $ 5 $ 42.3
Foreign 476.5   30.2 51.1   5.0 339.5 34.6 867.1 69.8
Residential                    
mortgage-backed 74.6   0.9 188.2   5.7 305.6 84.3 568.4 90.9
Commercial                    
mortgage-backed 155.1   1.9 234.7   17.9 35.7 6.6 425.5 26.4
Other asset-backed 42.6   0.3 26.5   9.6 142.1 59.7 211.2 69.6
  1,547.           1,030.   3,176.  
Total $ 7 $ 50.9 $ 598.1 $ 42.3 $ 9 $ 205.8 $ 7 $ 299.0


Of the unrealized capital losses aged more than twelve months, the average fair value of the related fixed maturities was 87.9%
and 83.4% of the average book value as of December 31, 2012 and 2011, respectively.

                                                                                                 C-32

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    
Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, for instances in
which fair value declined below amortized cost by greater than or less than 20% were as follows as of December 31, 2012 and
2011:

  Amortized Cost Unrealized Capital Losses Number of Securities
  < 20% > 20% < 20% > 20% < 20% > 20%
2012            
Six months or less below amortized cost $ 553.1 $ 27.3 $ 22.8 $ 6.5 116 13
More than six months and twelve months            
or less below amortized cost 151.9 2.9 7.9 1.0 35 3
More than twelve months below            
amortized cost 290.1 149.2 10.0 46.1 83 55
Total $ 995.1 $ 179.4 $ 40.7 $ 53.6 234 71
 
2011            
Six months or less below amortized cost $ 1,638.7 $ 178.0 $ 52.5 $ 52.5 271 49
More than six months and twelve months            
or less below amortized cost 645.4 57.1 38.0 17.3 67 22
More than twelve months below            
amortized cost 735.1 221.4 47.0 91.7 126 80
Total $ 3,019.2 $ 456.5 $ 137.5 $ 161.5 464 151

              
Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, by market sector
for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive months as
indicated in the tables below, were as follows as of December 31, 2012 and 2011:
         

  Amortized Cost Unrealized Capital Losses Number of Securities
  < 20% > 20% < 20% > 20% < 20% > 20%
2012            
U.S. corporate, state and municipalities $ 370.3 $ 15.0 $ 7.5 $ 6.4 50 1
Foreign 187.8 50.0 7.6 14.9 20 10
Residential mortgage-backed 277.3 62.9 13.3 18.1 112 43
Commercial mortgage-backed 33.2 1.6 2.5 0.5 12 1
Other asset-backed 126.5 49.9 9.8 13.7 40 16
Total $ 995.1 $ 179.4 $ 40.7 $ 53.6 234 71
 
2011            
U.S. corporate, state and municipalities $ 1,112.3 $ 34.5 $ 32.4 $ 9.9 137 5
Foreign 850.6 86.3 41.7 28.1 131 12
Residential mortgage-backed 500.9 158.4 31.7 59.2 98 89
Commercial mortgage-backed 446.3 5.6 25.1 1.3 24 1
Other asset-backed 109.1 171.7 6.6 63.0 74 44
Total $ 3,019.2 $ 456.5 $ 137.5 $ 161.5 464 151

      
All investments with fair values less than amortized cost are included in the Company's other-than-temporary impairments
analysis and impairments were recognized as disclosed in the "Evaluating Securities for Other-Than-Temporary Impairments"
section below. The Company evaluates non-agency RMBS and ABS for other-than-temporary impairments each quarter based
on actual and projected cash flows after considering the quality and updated loan-to-value ratios of underlying collateral,
forecasted loss severity, the payment priority within the tranche structure of the security and amount of any credit
enhancements. The Company's assessment of current levels of cash flows compared to estimated cash flows at the time the

                                                                                              C-33

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

securities were acquired indicates the amount and the pace of projected cash flows from the underlying collateral has generally
been lower and slower, respectively. However, since cash flows are typically projected at a trust level, the impairment review
incorporates the security's position within the trust structure as well as credit enhancement remaining in the trust to determine
whether an impairment is warranted. Therefore, while lower and slower cash flows will impact the trust, the effect on a
particular security within the trust will be dependent upon the trust structure. Where the assessment continues to project full
recovery of principal and interest on schedule, the Company has not recorded an impairment. Unrealized losses on below
investment grade securities are principally related to RMBS (primarily Alt-A RMBS) and ABS (primarily subprime RMBS)
largely due to economic and market uncertainties including concerns over unemployment levels, lower interest rate
environment on floating rate securities requiring higher risk premiums since purchase and valuations of residential real estate
supporting non-agency RMBS. Based on this analysis, the Company determined that the remaining investments in an
unrealized loss position were not other-than-temporarily impaired and therefore no further other-than-temporary impairment
was necessary

Fixed Maturity Securities Credit Quality - Ratings

The Securities Valuation Office ("SVO") of the National Association of Insurance Commissioners ("NAIC") evaluates the
fixed maturity security investments of insurers for regulatory reporting and capital assessment purposes and assigns securities
to one of six credit quality categories called "NAIC designations." An internally developed rating is used as permitted by the
NAIC if no rating is available. These designations are generally similar to the credit quality designations of the NAIC
acceptable rating organizations ("ARO") for marketable fixed maturity securities, called rating agency designations except for
certain structured securities as described below. NAIC designations of "1," highest quality and "2," high quality, include fixed
maturity securities generally considered investment grade by such rating organizations. NAIC designations "3" through "6"
include fixed maturity securities generally considered below investment grade by such rating organizations.

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

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

Information about certain of the Company's fixed maturity securities holdings by NAIC designations is set forth in the
following tables. Corresponding rating agency designation does not directly translate into NAIC designation, but represents the
Company's best estimate of comparable ratings from rating agencies, including Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Services ("S&P") and Fitch, Inc. ("Fitch"). If no rating is available from a rating agency, then an
internally developed rating is used.

The fixed maturities in the Company's portfolio are generally rated by external rating agencies and, if not externally rated, are
rated by the Company on a basis similar to that used by the rating agencies. Ratings are derived from three ARO ratings and
are applied as follows based on the number of agency ratings received:

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

                                                                         C-34

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

Subprime and Alt-A Mortgage Exposure

The Company does not originate or purchase subprime or Alt-A whole-loan mortgages. Subprime lending is the origination of
loans to customers with weaker credit profiles. The Company defines Alt-A Loans to include the following: residential
mortgage loans to customers who have strong credit profiles but lack some element, such as documentation to substantiate
income; residential mortgage loans to borrowers that would otherwise be classified as prime but whose loan structure provides
repayment options to the borrower that increase the risk of default; and any securities backed by residential mortgage collateral
not clearly identifiable as prime or subprime.

The Company's exposure to subprime mortgage backed securities is primarily in the form of ABS structures collateralized by
subprime residential mortgages and the majority of these holdings are included in Other ABS in the "Fixed Maturities and
Equity Securities" section above. As of December 31, 2012, the fair value, and gross unrealized losses related to the Company's
exposure to subprime mortgage backed securities was $194.0 and $23.5, respectively, representing 0.9% of total fixed
maturities, including securities pledged, based on fair value. As of December 31, 2011, the fair value and gross unrealized
losses related to the Company's exposure to subprime mortgage backed securities were $189.3 and $69.7, respectively,
representing 0.8% of total fixed maturities, including securities pledged, based on fair value.

The following tables summarize the Company's exposure to subprime mortgage-backed securities by credit quality using NAIC
designations, ARO ratings and vintage year as of December 31, 2012 and 2011:

 
% of Total Subprime Mortgage-backed Securities
  NAIC Designation ARO Ratings Vintage
2012              
  1 67.1 % AAA —   2007 13.2 %
  2 3.1 % AA 4.0 % 2006 6.2 %
  3 14.2 % A 9.1 % 2005 and prior 80.6 %
  4 13.5 % BBB 8.5 %   100.0 %
  5 1.0 % BB and below 78.4 %    
  6 1.1 %   100.0 %    
  100.0 %          
2011              
  1 79.0 % AAA 1.6 % 2007 18.9 %
  2 6.2 % AA 5.9 % 2006 6.6 %
  3 10.5 % A 7.9 % 2005 and prior 74.5 %
  4 1.5 % BBB 9.8 %   100.0 %
  5 1.3 % BB and below 74.8 %    
  6 1.5 %   100.0 %    
  100.0 %          

 

                                                                                       C-35

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

The Company's exposure to Alt-A mortgages is included in Residential mortgage-backed securities in the "Fixed Maturities
and Equity Securities" section above. As of December 31, 2012, the fair value and gross unrealized losses related to the
Company's exposure to Alt-A RMBS aggregated to $133.6 and $21.7, respectively, representing 0.6% of total fixed maturities
including securities pledged, based on fair value. As of December 31, 2011, the fair value and gross unrealized losses related
to the Company's exposure to Alt-A RMBS aggregated to $129.7 and $52.7, respectively, representing 0.6% of total fixed
maturities, including securities pledged, based on fair value.

The following tables summarize the Company's exposure to Alt-A residential mortgage-backed securities by credit quality
using NAIC designations, ARO ratings and vintage year as of December 31, 2012 and 2011:

  % of Total Alt-A Mortgage-backed Securities
  NAIC Designation ARO Ratings Vintage
2012            
  1 36.3 % AAA 0.2 % 2007 31.4 %
  2 10.9 % AA 0.8 % 2006 19.4 %
  3 15.7 % A 0.6 % 2005 and prior 49.2 %
  4 30.4 % BBB 2.6 %   100.0 %
  5 5.7 % BB and below 95.8 %    
  6 1.0 %   100.0 %    
  100.0 %        
2011            
  1 38.5 % AAA 0.3 % 2007 30.0 %
  2 11.6 % AA 1.7 % 2006 18.9 %
  3 12.2 % A 5.0 % 2005 and prior 51.1 %
  4 29.1 % BBB 2.9 %   100.0 %
  5 7.4 % BB and below 90.1 %    
  6 1.2 %   100.0 %    
  100.0 %        

 

                                                                                     C-36

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

Commercial Mortgage-backed and Other Asset-backed Securities

As of December 31, 2012 and 2011, the fair value of the Company's CMBS totaled $1.8 billion and $2.0 billion, respectively,
and Other ABS, excluding subprime exposure, totaled $491.9 and $489.7, respectively. As of December 31, 2012 and 2011,
the gross unrealized losses related to CMBS totaled $3.0 and $26.4, respectively. As of December 31, 2012, there were no
gross unrealized losses related to Other ABS, excluding subprime exposure. As of December 31, 2011, gross unrealized losses
related to Other ABS, excluding subprime exposure, totaled $0.2. CMBS investments represent pools of commercial mortgages
that are broadly diversified across property types and geographical areas.

The following tables summarize the Company's exposure to CMBS holdings by credit quality using NAIC designations, ARO
ratings and vintage year as of December 31, 2012 and 2011:

  % of Total CMBS
  NAIC Designation ARO Ratings Vintage
2012              
  1 97.5 % AAA 47.6 % 2008 0.6 %
  2 1.8 % AA 25.4 % 2007 28.8 %
  3 0.4 % A 10.1 % 2006 35.3 %
  4 0.3 % BBB 7.3 % 2005 and prior 35.3 %
  5 —   BB and below 9.6 %   100.0 %
  6 —     100.0 %    
    100.0 %        
2011              
  1 97.1 % AAA 52.7 % 2008 0.5 %
  2 1.8 % AA 18.4 % 2007 25.9 %
  3 —   A 12.7 % 2006 31.2 %
  4 —   BBB 8.8 % 2005 and prior 42.4 %
  5 —   BB and below 7.4 %   100.0 %
  6 1.1 %   100.0 %    
    100.0 %        


                                                                                                      C-37

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

As of December 31, 2012, Other ABS was also broadly diversified both by type and issuer with credit card receivables,
nonconsolidated collateralized loan obligations and automobile receivables, comprising 29.2%, 11.2% and 36.6%, respectively,
of total Other ABS, excluding subprime exposure. As of December 31, 2011, Other ABS was also broadly diversified both by
type and issuer with credit card receivables, nonconsolidated collateralized loan obligations and automobile receivables,
comprising 31.6%, 13.1% and 31.3%, respectively, of total Other ABS, excluding subprime exposure.

The following tables summarize the Company's exposure to Other ABS holdings, excluding subprime exposure, by credit
quality using NAIC designations, ARO ratings and vintage year as of December 31, 2012 and 2011:

  % of Total Other ABS
  NAIC Designation ARO Ratings Vintage
2012              
  1 97.0 % AAA 92.5 % 2012 18.0 %
  2 2.2 % AA 1.0 % 2011 17.1 %
  3 —   A 3.5 % 2010 4.6 %
  4 —   BBB 2.2 % 2009 6.0 %
  5 —   BB and below 0.8 % 2008 3.1 %
  6 0.8 %   100.0 % 2007 14.7 %
    100.0 %     2006 21.2 %
            2005 and prior 15.3 %
              100.0 %
2011              
  1 96.9 % AAA 87.3 % 2011 19.0 %
  2 1.8 % AA 3.9 % 2010 10.8 %
  3 —   A 3.0 % 2009 8.4 %
  4 0.1 % BBB 3.8 % 2008 3.6 %
  5 1.2 % BB and below 2.0 % 2007 19.3 %
  6 —     100.0 % 2006 20.5 %
    100.0 %     2005 and prior 18.4 %
              100.0 %

     
Troubled Debt Restructuring

The Company invests in high quality, well performing portfolios of commercial mortgage loans and private placements. Under
certain circumstances, modifications are granted to these contracts. Each modification is evaluated as to whether a troubled
debt restructuring has occurred. A modification is a troubled debt restructure when the borrower is in financial difficulty and
the creditor makes concessions. Generally, the types of concessions may include reducing the face amount or maturity amount
of the debt as originally stated, reducing the contractual interest rate, extending the maturity date at an interest rate lower than
current market interest rates and/or reducing accrued interest. The Company considers the amount, timing and extent of the
concession granted in determining any impairment or changes in the specific valuation allowance recorded in connection with
the troubled debt restructuring. A valuation allowance may have been recorded prior to the quarter when the loan is modified in
a troubled debt restructuring. Accordingly, the carrying value (net of the specific valuation allowance) before and after
modification through a troubled debt restructuring may not change significantly, or may increase if the expected recovery is
higher than the pre-modification recovery assessment. As of December 31, 2012 the Company did not have any troubled debt
restructurings. As of December 31, 2011, the Company had one private placement troubled debt restructuring with a pre-
modification and post-modification carrying value of $9.8.

As of December 31, 2012 and 2011, the Company did not have any commercial mortgage loans or private placements modified
in a troubled debt restructuring with a subsequent payment default.

                                                                                               C-38

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

Mortgage Loans on Real Estate

The Company's mortgage loans on real estate are all commercial mortgage loans, which are reported at amortized cost, less
impairment write-downs and allowance for losses.

The Company diversifies its commercial mortgage loan portfolio by geographic region and property type to reduce
concentration risk. The Company manages risk when originating commercial mortgage loans by generally lending only up to
75% of the estimated fair value of the underlying real estate. Subsequently, the Company continuously evaluates all mortgage
loans based on relevant current information including an appraisal of loan-specific credit quality, property characteristics and
market trends. Loan performance is monitored on a loan-specific basis through the review of submitted appraisals, operating
statements, rent revenues and annual inspection reports, among other items. This review ensures properties are performing at a
consistent and acceptable level to secure the debt.

The following table summarizes the Company’s investment in mortgage loans as of December 31, 2012 and 2011:

  2012 2011
Commercial mortgage loans $ 2,836.2 $ 3,138.8
Collective valuation allowance (1.2 ) (1.5 )
Total net commercial mortgage loans $ 2,835.0 $ 3,137.3

 

There were no impairments taken on the mortgage loan portfolio for the year ended December 31, 2012. Impairments taken on
the mortgage loan portfolio were $6.9 for the year ended December 31, 2011.

The following table summarizes the activity in the allowance for losses for all commercial mortgage loans as of December 31,
2012 and 2011:

  2012 2011
Collective valuation allowance for losses, beginning of period $ 1.5 $ 3.0
Addition to / (reduction of) allowance for losses   (0.3 )   (1.5 )
Collective valuation allowance for losses, end of period $ 1.2 $ 1.5
 
The following table presents information on impaired loans as of December 31, 2012 and 2011:
 
  2012 2011
Impaired loans, average investment during the period $ — $ 8.3

 

There were no mortgage loans in the Company's portfolio in process of foreclosure as of December 31, 2012 and 2011. There
were no other loans in arrears with respect to principal and interest as of December 31, 2012 and 2011.

The following table presents information on interest income recognized on impaired loans for the years ended December 31,
2012, 2011 and 2010:

  Years Ended December 31,
  2012 2011 2010
Interest income recognized on impaired loans, on an accrual basis $ — $ — $ 1.3
Interest income recognized on impaired loans, on a cash basis — — 1.4

     
Loan-to-value ("LTV") and debt service coverage ("DSC") ratios are measures commonly used to assess the risk and quality of
mortgage loans. The LTV ratio, calculated at time of origination, is expressed as a percentage of the amount of the loan relative
to the value of the underlying property. A LTV ratio in excess of 100% indicates the unpaid loan amount exceeds the
underlying collateral. The DSC ratio, based upon the most recently received financial statements, is expressed as a percentage

                                                                                                   C-39

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

of the amount of a property’s net income to its debt service payments. A DSC ratio of less than 1.0 indicates that property’s
operations do not generate sufficient income to cover debt payments. These ratios are utilized as part of the review process
described above.

The following table presents the LTV ratios as of December 31, 2012 and 2011:
 
  2012(1) 2011(1)
Loan-to-Value Ratio:    
0% - 50% $ 658.9 $ 920.9
50% - 60% 848.0 833.9
60% - 70% 1,169.4 1,173.2
70% - 80% 149.4 191.3
80% and above 10.5 19.5
Total Commercial mortgage loans $ 2,836.2 $ 3,138.8
(1) Balances do not include allowance for mortgage loan credit losses.    
 
The following table presents the DSC ratios as of December 31, 2012 and 2011:
 
  2012(1) 2011(1)
Debt Service Coverage Ratio:    
Greater than 1.5x $ 1,970.9 $ 2,105.3
1.25x - 1.5x 464.8 565.8
1.0x - 1.25x 259.2 355.5
Less than 1.0x 141.3 112.2
Total Commercial mortgage loans $ 2,836.2 $ 3,138.8
(1) Balances do not include allowance for mortgage loan credit losses.    

 

Properties collateralizing mortgage loans are geographically dispersed throughout the United States, as well as diversified by
property type, as reflected in the following tables as of December 31, 2012 and 2011:

  2012(1) 2011(1)
Gross
Carrying Value		 % of Total Gross
Carrying Value		 % of Total
Commercial Mortgage Loans by U.S. Region:          
Pacific $ 622.7 22.1 % $ 702.5 22.4 %
South Atlantic   528.3 18.6 % 582.8 18.6 %
Middle Atlantic   338.9 11.9 % 361.7 11.5 %
East North Central   347.2 12.2 % 411.4 13.1 %
West South Central   373.7 13.2 % 414.1 13.2 %
Mountain   338.2 11.9 % 364.9 11.6 %
West North Central   135.8 4.8 % 138.2 4.4 %
New England   77.5 2.7 % 82.2 2.6 %
East South Central   73.9 2.6 % 81.0 2.6 %
Total Commercial mortgage loans $ 2,836.2 100.0 % $ 3,138.8 100.0 %
(1) Balances do not include allowance for mortgage loan credit losses.

 

                                                                                                                 C-40

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

  2012(1) 2011(1)
Gross
Carrying Value		 % of Total Gross
Carrying Value		 % of Total
Commercial Mortgage Loans by Property Type:
Industrial $ 1,159.2 41.0 % $ 1,223.2 39.0 %
Retail   711.8 25.0 % 807.4 25.7 %
Office   427.4 15.1 % 542.2 17.3 %
Apartments   366.8 12.9 % 371.5 11.8 %
Hotel/Motel   69.0 2.4 % 129.6 4.1 %
Mixed use   16.6 0.6 % 12.6 0.4 %
Other   85.4 3.0 % 52.3 1.7 %
Total Commercial mortgage loans $ 2,836.2 100.0 % $ 3,138.8 100.0 %
(1) Balances do not include allowance for mortgage loan credit losses.

 

The following table sets forth the breakdown of mortgages by year of origination as of December 31, 2012 and 2011:

  2012(1) 2011(1)
Year of Origination:    
2012 $ 314.3 $ —
2011 795.4 791.2
2010 184.8 272.1
2009 65.9 77.8
2008 253.8 406.5
2007 272.8 447.7
2006 and prior 949.2 1,143.5
Total Commercial mortgage loans $ 2,836.2 $ 3,138.8

 

(1)      Balances do not include allowance for mortgage loan credit losses.

                                                                                     C-41

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

Evaluating Securities for Other-Than-Temporary Impairments

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

The following tables identify the Company’s credit-related and intent-related impairments included in the Statements of
Operations, excluding impairments included in Other comprehensive income (loss) by type for the years ended December 31,
2012, 2011 and 2010:

                       
  2012   2011     2010  
    No. of   No. of     No. of
  Impairment Securities Impairment Securities Impairment Securities
U.S. corporate $ 6.0 3 $ 9.5 17 $ 5.1   24
Foreign(1) 0.7 3 27.2 52 30.7   23
Residential mortgage-backed 9.7 55 12.3 65 24.5   67
Commercial mortgage-backed 1.7 1 49.7 14 23.2   7
Other asset-backed 0.4 3 74.8 60 104.6   54
Equity — — — — — * 1
Mortgage loans on real estate — — 6.9 5 6.3   5
Total $ 18.5 65 $ 180.4 213 $ 194.4   181
(1) Primarily U.S. dollar denominated.
* Less than $0.1.


The above tables include $14.7, $27.6 and $95.5 of write-downs related to credit impairments for the years ended
December 31, 2012, 2011 and 2010, respectively, in Other-than-temporary impairments which are recognized in the Statements
of Operations. The remaining $3.8, $152.8 and $98.9, in write-downs for the years ended December 31, 2012, 2011 and 2010,
respectively, are related to intent impairments.

The following tables summarize these intent impairments, which are also recognized in earnings, by type for the years ended
December 31, 2012, 2011 and 2010 :

                       
    2012   2011   2010  
      No. of   No. of   No. of
  Impairment Securities Impairment Securities Impairment Securities
U.S. corporate $ 0.5   1 $ 9.5 16 $ 4.1 23
Foreign(1) 0.7   3 24.1 48 12.8 18
Residential mortgage-backed 0.9   6 1.8 8 6.1 11
Commercial mortgage-backed 1.7   1 45.5 14 3.9 2
Other asset-backed — * 1 71.9 59 72.0 35
Mortgage loans on real estate —   — — — — —
Total $ 3.8   12 $ 152.8 145 $ 98.9 89
(1) Primarily U.S. dollar denominated.
* Less than $0.1.

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

                                                                                                    C-42

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

The fair value of fixed maturities with OTTI as of December 31, 2012 and 2011 was $2.2 billion and $2.1 billion, respectively.

The following tables identify the amount of credit impairments on fixed maturities for which a portion of the OTTI loss was
recognized in Other comprehensive income (loss) and the corresponding changes in such amounts for the years ended
December 31, 2012, 2011 and 2010:

  2012   2011   2010  
Balance at January 1 $ 64.1 $ 118.2 $ 123.3  
Additional credit impairments:            
On securities not previously impaired 4.8   5.0   20.0  
On securities previously impaired 6.8   6.7   23.4  
Reductions:            
Securities intent impaired —   (3.4 ) (7.1 )
Securities sold, matured, prepaid or paid down (27.8 ) (62.4 ) (41.4 )
Balance at December 31 $ 47.9 $ 64.1 $ 118.2  

        
Net Investment Income

The following table summarizes Net investment income for the years ended December 31, 2012, 2011 and 2010:

  2012 2011 2010
Fixed maturities $ 1,137.9 $ 1,242.5 $ 1,182.2
Equity securities, available-for-sale 4.0 3.7 4.5
Mortgage loans on real estate 166.3 174.9 180.8
Policy loans 5.7 6.6 7.2
Short-term investments and cash equivalents 0.2 2.0 4.1
Other 23.7 38.4 30.7
Gross investment income 1,337.8 1,468.1 1,409.5
Less: Investment expenses 52.3 58.8 53.1
Net investment income $ 1,285.5 $ 1,409.3 $ 1,356.4

   
As of December 31, 2012 and 2011, the Company did not have any investments in fixed maturities which produced no net
investment income. Fixed maturities are moved to a non-accrual status immediately when the investment defaults.

Net Realized Capital Gains (Losses)

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

                                                                                   C-43

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

Net realized capital gains (losses) were as follows for the years ended December 31, 2012, 2011 and 2010:

  2012   2011   2010  
Fixed maturities, available-for-sale, including securities pledged $ 138.0 $ 33.7  $ 11.8  
Fixed maturities, at fair value option (57.7 ) (34.4 ) (14.6 )
Equity securities, available-for-sale (0.2 ) (0.2 ) 1.9  
Derivatives (1,654.0 ) 744.4   (807.9 )
Embedded derivative - fixed maturities (4.2 ) 4.3   12.3  
Embedded derivative - product guarantees 202.9   (1,699.1 ) (111.9 )
Other investments 1.1   (5.7 ) (9.2 )
Net realized capital gains (losses) $ (1,374.1 )   $ (957.0  ) $ (917.6 )
After-tax net realized capital gains (losses) $ (932.8 )  $ (513.1 )   $ (660.6 )

 

Proceeds from the sale of fixed maturities and equity securities, available-for-sale and the related gross realized gains and
losses, before-tax were as follows for the years ended December 31, 2012, 2011 and 2010:

    2012 2011 2010
Proceeds on sales $ 4,652.0 $ 3,821.9 $ 6,211.7
Gross gains 177.8   238.0   243.1
Gross losses (14.3 ) (33.7 ) (37.4 )
 
 
3.                             Derivative Financial Instruments
 
The Company enters into the following types of derivatives:

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

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

Credit default swaps: Credit default swaps are used to reduce credit loss exposure with respect to certain assets that the
Company owns, or to assume credit exposure on certain assets that the Company does not own. Payments are made to or
received from the counterparty at specified intervals. In the event of a default on the underlying credit exposure, the Company
will either receive a payment (purchased credit protection) or will be required to make a payment (sold credit protection) equal
to the par minus recovery value of the swap contract. The Company utilizes these contracts in non-qualifying hedging
relationships.

Total return swaps: The Company uses total return swaps as a hedge against a decrease in variable annuity account values,
which are invested in certain indices. Using total return swaps, the Company agrees with another party to exchange, at
specified intervals, the difference between the economic risk and reward of assets or a market index and the LIBOR rate,
calculated by reference to an agreed upon notional principal amount. No cash is exchanged at the onset of the contracts. Cash is
paid and received over the life of the contract based upon the terms of the swaps. The Company utilizes these contracts in non-
qualifying hedging relationships.

Currency forwards: The Company uses currency forward contracts to hedge policyholder liabilities associated with the variable
annuity contracts which are linked to foreign indices. The currency fluctuations may result in a decrease in account values,

                                                                                       C-44

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

which would increase the possibility of the Company incurring an expense for guaranteed benefits in excess of account values.
The Company utilizes these contracts in non-qualifying hedging relationships.

Forwards: The Company uses forward contracts to hedge certain invested assets against movement in interest rates,
particularly mortgage rates. The Company uses To Be Announced securities as an economic hedge against rate movements.
The Company utilizes these contracts in non-qualifying hedging relationships.

Futures: Futures contracts are used to hedge against a decrease in certain equity indices. Such decreases may result in a
decrease in variable annuity account values which would increase the possibility of the Company incurring an expense for
guaranteed benefits in excess of account values. The Company also uses futures contracts as a hedge against an increase in
certain equity indices. Such increases may result in increased payments to the holders of the fixed index annuity contracts.
The Company enters into exchange traded futures with regulated futures commissions that are members of the exchange. The
Company also posts initial and variation margin with the exchange on a daily basis. The Company utilizes exchange-traded
futures in non-qualifying hedging relationships.

Swaptions: A swaption is an option to enter into a swap with a forward starting effective date. The Company uses swaptions to
hedge the interest rate exposure associated with the minimum crediting rate and book value guarantees embedded in the
retirement products that the Company offers. Increases in interest rates will generate losses on assets that are backing such
liabilities. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into
offsetting written swaptions. Swaptions are also used to hedge against an increase in the interest rate benchmarked crediting
strategies within Fixed indexed annuities ("FIA") contracts. Such increases may result in increased payments to contract
holders of FIA contracts and the interest rate swaptions offset this increased exposure. The Company pays a premium when it
purchases the swaption. The Company utilizes these contracts in non-qualifying hedging relationships.

Options: The Company uses put options to manage the equity, interest rate, and equity volatility risk of the economic liabilities
associated with variable annuity minimum guaranteed living benefits. The Company also uses call options to hedge against an
increase in various equity indices. Such increases may result in increased payments to the holders of the FIA contracts. The
Company pays an upfront premium to purchase these options. The Company utilizes these options in non-qualifying hedging
relationships.

Variance swaps: The Company uses variance swaps to manage equity volatility risk on the economic liabilities associated with
certain minimum guaranteed living benefits. An increase in the equity volatility results in a higher valuations of such
liabilities. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on the
changes in equity volatility over a defined period. The Company utilizes equity variance swaps in non-qualifying hedging
relationships.

Embedded derivatives: The Company also invests in certain fixed maturity instruments and has issued certain annuity
products, that contain embedded derivatives whose market value is at least partially determined by, among other things, levels
of or changes in domestic and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates, equity rates,
or credit ratings/spreads. Embedded derivatives within fixed maturities are reported with the host contract on the Balance
Sheets and changes in fair value of the embedded derivatives are recorded in Other net realized capital gains (losses) in the
Statements of Operations. Embedded derivatives within annuity products are included in Future policy benefits and contract
owner account balances on the Balance Sheets and changes in the fair value of the embedded derivatives are recorded in Other
net realized capital gains (losses) in the Statements of Operations.

In addition, the Company has entered into two coinsurance with funds withheld arrangements that contain embedded
derivatives in which the fair value is based on the change in the fair value of the underlying assets held in trust. The embedded
derivative within the coinsurance funds withheld arrangement is included in Funds held under reinsurance treaties with
affiliates on the Balance Sheets and changes in the fair value are recorded in Interest credited and other benefits to contract
owners in the Statements of Operations.

                                                                              C-45

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

The notional amounts and fair values of derivatives were as follows as of December 31, 2012 and 2011:

  2012 2011
  Notional Asset Liability Notional Asset Liability
  Amount Fair Value Fair Value Amount Fair Value Fair Value
Derivatives: Non-qualifying for            
hedge accounting:            
Interest rate contracts $ 31,588.1 $ 1,283.5 $ 539.5 $ 27,046.0 $ 1,538.4 $ 520.0
Foreign exchange contracts 1,508.7 10.4 27.4 1,297.8 9.7 42.4
Equity contracts 14,482.7 86.4 231.7 15,434.3 60.1 28.4
Credit contracts 155.5 1.0 — 143.4 0.9 14.1
Embedded derivatives:            
Within fixed maturity            
investments N/A 50.8 — N/A 55.0 —
Within annuity products N/A — 3,397.8 N/A — 3,512.1
Within reinsurance agreements N/A — 301.3 N/A — 230.9
Total   $ 1,432.1 $ 4,497.7   $ 1,664.1 $ 4,347.9
N/A - Not Applicable.            

           
Net realized gains (losses) on derivatives were as follows for the years ended December 31, 2012, 2011 and 2010:

                       
  2012   2011   2010  
Derivatives: Qualifying for hedge accounting(1) :            
Fair value hedges:            
    Interest rate contracts $ —  $ —  $ (3.3 )  
Derivatives: Non-qualifying for hedge accounting(2) :            
Interest rate contracts 121.6   1,300.8   38.5  
Foreign exchange contracts 2.4   (5.8 ) 9.3  
Equity contracts (1,779.3 ) (548.2 ) (853.4 )
Credit contracts 1.3   (2.4 ) 1.0  
Embedded derivatives:            
Within fixed maturity investments(2) (4.2 ) 4.3   12.3  
Within annuity products(2) 202.9   (1,699.1 ) (111.9 )
Within reinsurance agreements 50.9   (251.8 ) (17.8 )
Total $ (1,404.4 ) $ (1,202.2 ) $ (925.3 )

(1) Changes in value for effective fair value hedges are recorded in Other net realized capital gains (losses). Changes in fair value upon disposal for effective cash
flow hedges are recorded in Other net realized capital gains (losses) in the Statements of Operations. For the years ended December 31, 2012, 2011 and 2010,
ineffective amounts are deemed to be immaterial.
(2) Changes in value are included in other net realized capital gains (losses) in the Statements of Operations.

Credit Default Swaps

The Company has entered into various credit default swaps. When credit default swaps are sold, the Company assumes credit
exposure to certain assets that it does not own. Credit default swaps may also be purchased to reduce credit exposure in the
Company’s portfolio. Credit default swaps involve a transfer of credit risk from one party to another in exchange for periodic
payments. These instruments are typically written for a maturity period of five years and do not contain recourse provisions,
which would enable the seller to recover from third parties. The Company has International Swaps and Derivatives
Association, Inc. ("ISDA") agreements with each counterparty with which it conducts business and tracks the collateral
positions for each counterparty. To the extent cash collateral is received, it is included in Payables under securities loan
agreements, including collateral held, on the Balance Sheets and is reinvested in short-term investments. Collateral held is used
in accordance with the Credit Support Annex ("CSA") to satisfy any obligations. Investment grade bonds owned by the

                                                                                 C-46

 

ING USA Annuity and Life Insurance Company
(A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to the Financial Statements
(Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                    

Company are the source of noncash collateral posted, which is reported in Securities pledged on the Balance Sheets. In the
event of a default on the underlying credit exposure, the Company will either receive an additional payment (purchased credit
protection) or will be required to make an additional payment (sold credit protection) equal to par value minus recovery value
of the swap contract. As of December 31, 2012, the fair value of credit default swaps of $1.0 were included in Derivatives
assets and there were no credit default swaps included in Derivatives liabilities, respectively, on the Balance Sheets. As of
December 31, 2011, the fair value of credit default swaps of $0.9 and $14.1 were included in Derivatives assets and Derivatives
liabilities, respectively, on the Balance Sheets. As of December 31, 2012 and 2011, the maximum potential future exposure to
the Company on the sale of credit default swaps was $155.5 and $108.8, respectively.

4. Fair Value Measurements

Fair Value Measurement

The Company categorizes its financial instruments into a three-level hierarchy based on the priority of the inputs to the
valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or
liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within
different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value
measurement of the instrument. Financial assets and liabilities recorded at fair value on the Balance Sheets are categorized as
follows:

  		•  Level 1 - Unadjusted quoted prices for identical assets or liabilities in an active market. The Company defines an active
    market as a market in which transactions take place with sufficient frequency and volume to provide pricing information
     on an ongoing basis.
  		•  Level 2 - Quoted prices in markets that are not active or valuation techniques that require 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; and
      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. These valuations, whether derived internally or obtained from a third party, use critical assumptions
    that are not widely available to estimate market participant expectations in valuing the asset or liability.

    When available, the estimated fair value of financial instruments is based on quoted prices in active markets that are readily and
    regularly obtainable. When quoted prices in active markets are not available, the determination of estimated fair value is based
    on market standard valuation methodologies, including discounted cash flow methodologies, matrix pricing, or other similar
    techniques.

                                                                                                C-47

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        

    The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as
    of December 31, 2012:

      2012
      Level 1 Level 2   Level 3 Total
    Assets:          
    Fixed maturities, including securities pledged:          
    U.S. Treasuries $ 1,303.7 $ 7.8 $ — $ 1,311.5
    U.S government agencies and authorities — 23.7   — 23.7
    U.S. corporate, state and municipalities — 10,513.9   113.6 10,627.5
    Foreign(1) — 5,345.7   20.9 5,366.6
    Residential mortgage-backed securities — 1,829.5   24.2 1,853.7
    Commercial mortgage-backed securities — 1,763.6   — 1,763.6
    Other asset-backed securities — 602.5   78.2 680.7
    Total fixed maturities, including securities pledged 1,303.7 20,086.7   236.9 21,627.3
    Equity securities, available-for-sale 14.0 —   15.8 29.8
    Derivatives:          
    Interest rate contracts — 1,283.5   — 1,283.5
    Foreign exchange contracts — 10.4   — 10.4
    Equity contracts 23.9 50.8   11.7 86.4
    Credit contracts — 1.0   — 1.0
    Cash and cash equivalents, short-term investments and short-term          
    investments under securities loan agreements 3,115.0 6.1   — 3,121.1
    Assets held in separate accounts 39,799.1 —   — 39,799.1
    Total assets $44,255.7 $21,438.5 $ 264.4 $65,958.6
     
    Liabilities:          
    Annuity product guarantees:          
    FIA $ — $ — $ 1,393.8 $ 1,393.8
    GMAB / GMWB / GMWBL(2) — —   2,004.0 2,004.0
    Embedded derivative on reinsurance — 301.3   — 301.3
    Derivatives:          
    Interest rate contracts 0.4 539.1   — 539.5
    Foreign exchange contracts — 27.4   — 27.4
    Equity contracts 212.6 19.1   — 231.7
    Credit contracts — —   — —
    Total liabilities $ 213.0 $ 886.9 $ 3,397.8 $ 4,497.7

    (1) Primarily U.S. dollar dominated
    (2) Guaranteed minimum accumulation benefits ("GMAB"), Guaranteed minimum withdrawal benefits ("GMWB"), Guaranteed minimum withdrawal benefits
    for life ("GMWBL").

                                                                                                            C-48

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        

    The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as
    of December 31, 2011:

      2011
      Level 1 Level 2   Level 3 Total
    Assets:          
    Fixed maturities, including securities pledged:          
    U.S. Treasuries $ 1,778.0 $ 7.8 $ — $ 1,785.8
    U.S government agencies and authorities — 23.7   — 23.7
    U.S. corporate, state and municipalities — 10,251.1   124.5 10,375.6
    Foreign(1) — 5,525.2   56.9 5,582.1
    Residential mortgage-backed securities — 2,245.1   60.7 2,305.8
    Commercial mortgage-backed securities — 2,001.9   — 2,001.9
    Other asset-backed securities — 600.8   72.8 673.6
    Total fixed maturities, including securities pledged 1,778.0 20,655.6   314.9 22,748.5
    Equity securities, available-for-sale 11.4 —   16.3 27.7
    Derivatives:          
    Interest rate contracts 4.0 1,534.4   — 1,538.4
    Foreign exchange contracts — 9.7   — 9.7
    Equity contracts 26.5 —   33.6 60.1
    Credit contracts — 0.9   — 0.9
    Cash and cash equivalents, short-term investments and short-term          
    investments under securities loan agreements 2,760.7 5.8   — 2,766.5
    Assets held in separate accounts 39,356.9 —   — 39,356.9
    Total assets $43,937.5 $22,206.4 $ 364.8 $ 66,508.7
     
    Liabilities:          
    Annuity product guarantees:          
    FIA $ — $ — $ 1,282.2 $ 1,282.2
    GMAB / GMWB / GMWBL(2) — —   2,229.9 2,229.9
    Embedded derivative on reinsurance — 230.9   — 230.9
    Derivatives:          
    Interest rate contracts — 520.0   — 520.0
    Foreign exchange contracts — 42.4   — 42.4
    Equity contracts 3.3 —   25.1 28.4
    Credit contracts — 1.2   12.9 14.1
    Total liabilities $ 3.3 $ 794.5 $ 3,550.1 $ 4,347.9

    (1) Primarily U.S. dollar dominated
    (2) Guaranteed minimum accumulation benefits ("GMAB"), Guaranteed minimum withdrawal benefits ("GMWB"), Guaranteed minimum withdrawal benefits
    for life ("GMWBL").

    Valuation of Financial Assets and Liabilities at Fair Value

    Certain assets and liabilities are measured at estimated fair value on the Company’s Balance Sheets. In addition, further
    disclosure of estimated fair values is included in the Investments note to these Financial Statements. The Company defines fair
    value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most
    advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
    The exit price and the transaction (or entry) price will be the same at initial recognition in many circumstances. However, in
    certain cases, the transaction price may not represent fair value. The fair value of a liability is based on the amount that would
    be paid to transfer a liability to a third-party with an equal credit standing. Fair value is required to be a market-based
    measurement which is determined based on a hypothetical transaction at the measurement date, from a market participant’s

                                                                                                C-49

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    perspective. The Company considers three broad valuation techniques when a quoted price is unavailable: (i) the market
    approach, (ii) the income approach and (iii) the cost approach. The Company determines the most appropriate valuation
    technique to use, given the instrument being measured and the availability of sufficient inputs. The Company prioritizes the
    inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent that observable inputs are not
    available.

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

    The following valuation methods and assumptions were used by the Company in estimating the reported values for the
    investments and derivatives described below:

    Fixed maturities: The fair values for the actively traded marketable bonds are determined based upon the quoted market prices
    and are classified as Level 1 assets. Assets in this category would primarily include certain U.S. Treasury securities. The fair
    values for marketable bonds without an active market are obtained through several commercial pricing services which provide
    the estimated fair values and are classified as Level 2 assets. These services incorporate a variety of market observable
    information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids,
    offers and other reference data. This category includes U.S. and foreign corporate bonds, ABS, U.S. agency and government
    guaranteed securities, CMBS and RMBS, including certain CMO assets.

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

    Broker quotes and prices obtained from pricing services are reviewed and validated through an internal valuation committee
    price variance review, comparisons to internal pricing models, back testing to recent trades, or monitoring of trading volumes.
    As of December 31, 2012, $157.7 and $16.3 billion of a total fair value of $21.6 billion in fixed maturities, including securities
    pledged, were valued using unadjusted broker quotes and unadjusted prices obtained from pricing services, respectively and
    verified through the review process. The remaining balance in fixed maturities consisted primarily of privately placed bonds
    valued using a matrix-based pricing. At December 31, 2011, $157.1 and $17.7 billion of a total of $22.7 billion in fixed
    maturities, including securities pledged, were valued using unadjusted broker quotes and unadjusted prices obtained from
    pricing services, respectively, and verified through the review process. The remaining balance in fixed maturities consisted
    primarily of privately placed bonds valued using a matrix-based pricing model.

    All prices and broker quotes obtained go through the review process described above including valuations for which only one
    broker quote is obtained. After review, for those instruments where the price is determined to be appropriate, the unadjusted
    price provided is used for financial statement valuation. If it is determined that the price is questionable, another price may be
    requested from a different vendor. The internal valuation committee then reviews all prices for the instrument again, along
    with information from the review, to determine which price best represents "exit price" for the instrument.

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

                                                                                              C-50

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    Equity securities, available-for-sale: Fair values of publicly traded equity securities are based upon quoted market price and are
    classified as Level 1 assets. Other equity securities, typically private equities or equity securities not traded on an exchange, are
    valued by other sources such as analytics or brokers and are classified as Level 2 or Level 3 assets.

    Derivatives: Derivatives are carried at fair value which is determined using the Company’s derivative accounting system in
    conjunction with observable key financial data from third party sources, such as yield curves, exchange rates, S&P 500 Index
    prices, London Interbank Offered Rates ("LIBOR") and Overnight Index Swap ("OIS") rates. In June 2012, the Company
    began using OIS rather than LIBOR for valuations of collateralized interest rate derivatives, which are obtained from third-
    party sources. For those derivatives that are unable to be valued by the accounting system, the Company typically utilizes
    values established by third-party brokers. Counterparty credit risk is considered and incorporated in the Company’s valuation
    process through counterparty credit rating requirements and monitoring of overall exposure. It is the Company’s policy to
    transact only with investment grade counterparties with a credit rating of A- or better. The Company’s nonperformance risk is
    also considered and incorporated in the Company’s valuation process. Valuations for the Company’s futures and interest rate
    forward contracts are based on unadjusted quoted prices from an active exchange and, therefore, are classified as Level 1. The
    Company also has certain credit default swaps and options that are priced using models that primarily use market observable
    inputs, but contain inputs that are not observable to market participants, which have been classified as Level 3. However, all
    other derivative instruments are valued based on market observable inputs and are classified as Level 2.

    The Company has entered into a number of options as hedges on its FIA liabilities. The maximum exposure is the current
    value of the option. The payoff of these contracts depends on market conditions during the lifetime of the option. The fair
    value measurement of options is highly sensitive to implied equity and interest rate volatility and the market reflects a
    considerable variance in broker quotes. The Company uses a third-party vendor to determine the market value of these options.

    Cash and cash equivalents, Short-term investments and Short-term investments under securities loan agreement: The carrying
    amounts for cash reflect the assets' fair values. The fair value for cash equivalents and most short-term investments are
    determined based on quoted market prices. These assets are classified as Level 1. Other short-term investments are valued and
    classified in the fair value hierarchy consistent with the policies described herein, depending on investment type.

    Assets held in separate accounts: Assets held in separate accounts are reported at the quoted fair values of the underlying
    investments in the separate accounts. The underlying investments include mutual funds, short-term investments and cash, the
    valuations of which are based upon a quoted market price and are included in Level 1. Fixed maturity valuations are obtained
    from third-party commercial pricing services and brokers and are classified in the fair value hierarchy consistent with the
    policy described above for fixed maturities.

    Annuity product guarantees: The Company records reserves for annuity contracts containing GMAB, GMWB and GMWBL
    riders. The guarantee is an embedded derivative and is required to be accounted for separately from the host variable annuity
    contract. The fair value of the obligation is calculated based on actuarial and capital market assumptions related to the
    projected cash flows, including benefits and related contract charges, over the anticipated life of the related contracts. The cash
    flow estimates are produced by using stochastic techniques under a variety of market return scenarios and other market implied
    assumptions. These derivatives are classified as Level 3 liabilities in the fair value hierarchy.

    The Company records an embedded derivative liability for its FIA contracts for interest payments to contract holders above the
    minimum guaranteed interest rate. The guarantee is treated as an embedded derivative and is required to be accounted for
    separately from the host contract. The fair value of the obligation is calculated based on actuarial and capital market
    assumptions related to the projected cash flows, including benefits and related contract charges, over the anticipated life of the
    related contracts. The cash flow estimates are produced by market implied assumptions. These derivatives are classified as
    Level 3 liabilities in the fair value hierarchy.

    The discount rate used to determine the fair value of the Company's guaranteed minimum accumulation benefits ("GMAB"),
    guaranteed minimum withdrawal benefits ("GMWB"), guaranteed minimum withdrawal benefits with life payouts
    ("GMWBL") and fixed-indexed annuity ("FIA") embedded derivative liabilities includes an adjustment to reflect the risk that
    these obligations will not be fulfilled ("nonperformance risk"). Through June 30, 2012, the Company's nonperformance risk
    adjustment was based on the credit default swap spreads of ING Insurance, the Company's indirect parent company and applied
    to the risk-free swap curve in the Company's valuation models for these product guarantees. As a result of the availability of
    ING U.S., Inc.'s market observable data following the issuance of long-term debt on July 13, 2012, the Company changed its
    estimate of nonperformance risk as of the beginning of the third quarter of 2012 to incorporate a blend of observable, similarly

                                                                                                     C-51

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    rated peer company credit default swap spreads, adjusted to reflect the credit quality of the Company as well as an adjustment
    to reflect the priority of policyholder claims.

    The Company's valuation actuaries are responsible for the policies and procedures for valuing the embedded derivatives,
    reflecting the capital markets and actuarial valuation inputs and nonperformance risk in the estimate of the fair value of the
    embedded derivatives. The actuarial and capital market assumptions for each liability are approved by each product's Chief
    Risk Officer ("CRO"), including an independent annual review by the U.S. CRO. Models used to value the embedded
    derivatives must comply with the Company's governance policies.

    Quarterly, an attribution analysis is performed to quantify changes in fair value measurements and a sensitivity analysis is used
    to analyze the changes. The changes in fair value measurements are also compared to corresponding movements in the hedge
    target to assess the validity of the attributions. The results of the attribution analysis are reviewed by the valuation actuaries,
    responsible CFOs, Controllers, CROs and/or others as nominated by management.

    Embedded derivative on reinsurance: The carrying value of the embedded derivative is estimated based upon the change in the
    fair value of the assets supporting the funds withheld payable under the combined coinsurance and coinsurance funds withheld
    reinsurance agreement between the Company and Security Life of Denver International Limited ("SLDI"). As the fair value of
    the assets held in trust is based on a quoted market price (Level 1), the fair value of the embedded derivative is based on market
    observable inputs and is classified as Level 2.

    Transfers in and out of Level 1 and 2

    There were no securities transferred between Levels 1 and Level 2 for the years ended December 31, 2012 and 2011. The
    Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.

    Level 3 Financial Instruments

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

                                                                                                           C-52

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    The following table summarizes the change in fair value of the Company’s Level 3 assets and liabilities and transfers in and out of Level 3 for the year ended December 31,
    2012:
      Year Ended December 31, 2012
    Fair
    Value
    as of
    January 1
    		 Total Realized/Unreal
    ized
    Gains (Losses)
    Included in:

    Purchases



    Issuances



    Sales



    Settlements
    Transfers
    in to
    Level 3(2)
    		 Transfers
    out of
    Level 3(2)
    		 Fair Value
    as of
    December 31
    		 Change in
    Unrealized
    Gains
    (Losses)
    Included in
    Earnings (3)
    Net
    Income
    OCI
    Fixed maturities, including                                    
    U.S. corporate, state and                                    
    municipalities $ 124.5 $ 0.6   $ (1.9 ) $ — $ —   $ —   $ (22.3 ) $ 36.3 $ (23.6 ) $ 113.6 $ 0.6  
    Foreign 56.9   0.6   (0.5 ) — —   (4.0 ) (5.6 ) 8.3 (34.8 ) 20.9 —  
    Residential mortgage-backed                                    
    securities 60.7   (0.8 ) 0.2 — —   —   (1.0 ) — (34.9 ) 24.2 (0.8 )
    Other asset-backed securities 72.8   6.4   3.1 — —   (16.6 ) (4.4 ) 16.9 —   78.2 2.6  
    Total fixed maturities, including 314.9   6.8   0.9 — —   (20.6 ) (33.3 ) 61.5 (93.3 ) 236.9 2.4  
     
    Equity securities, available-for-sale 16.3   (0.1 ) (0.1 ) 2.3 —   (2.4 ) —   — (0.2 ) 15.8 —  
    Derivatives, net (4.4 ) (0.9 ) — 18.5 —   —   —   — (1.5 ) 11.7 (6.7 )
    Annuity product guarantees:                                    
    FIA (1,282.2 ) (173.7 ) — — (81.2 ) —   143.3   — —   (1,393.8 ) —  
    GMWB/GMAB/GMWBL (2,229.9 ) 376.6   — — (151.3 ) —   0.6   — —   (2,004.0 ) —  
    Total annuity product guarantees (3,512.1 ) 202.9 (1) — — (232.5 ) —   143.9   — —   (3,397.8 ) —  
    (1) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract
    basis. These amounts are included in Other net realized capital gains (losses) in the Statements of Operations.
    (2) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
    (3) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net realized capital gains (losses) in the Statements of Operations.

                                                                                                                                                  C-53

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        

    The following table summarizes the change in fair value of the Company’s Level 3 assets and liabilities and transfers in and out of Level 3 for the year ended December 31,
    2011:

      Year Ended December 31, 2011
    Fair
    Value
    as of
    January 1    		 Total Realized/Unreal
    ized
    Gains (Losses)
    Included in:    		 Purchases Issuances Sales Settlements Transfers
    in to
    Level 3    (2)    		 Transfers
    out of
    Level 3    (2)    		 Fair Value
    as of
    December 31    		 Change in
    Unrealized
    Gains
    (Losses)
    Included in
    Earnings     (3)
    Net
    Income    		 OCI
    Fixed maturities, including                        
    securities pledged:                        
    U.S. corporate, state and                        
    municipalities $ 40.1 $ (0.3) $ (2.7) $ 12.6 $ — $ — $ (24.7) $ 99.5 $ — $ 124.5 $ (0.2)
    Foreign 9.8 0.3   (0.1) 13.9 — (12.5) (7.7) 54.9 (1.7) 56.9 (0.5)
    Residential mortgage-backed                        
    securities 198.6 —   (0.6) 34.3 — (0.1) (11.3) 1.9 (162.1) 60.7 (1.0)
    Other asset-backed securities 644.8 (78.7)   64.3 — — (214.7) (35.7) — (307.2) 72.8 (10.1)
    Total fixed maturities, including                        
    securities pledged 893.3 (78.7)   60.9 60.8 — (227.3) (79.4) 156.3 (471.0) 314.9 (11.8)
     
    Equity securities, available-for-sale 13.5 (0.1)   0.1 4.3 — (0.2) — — (1.3) 16.3 —
    Derivatives, net 76.6 (38.6)   — — — (42.4) — — — (4.4) (50.0)
    Annuity product guarantees:                        
    FIA (1,165.5) (111.7)   — — (128.3) — 123.3 — — (1,282.2) —
    GMWB/GMAB/GMWBL (490.2) (1,587.4)   — — (154.5) — 2.2 — — (2,229.9) —
    Total annuity product guarantees (1,655.7) (1,699.1) (1) — — $ (282.8) $ — 125.5 — — (3,512.1) —

    (1) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-
    contract basis. These amounts are included in Other net realized capital gains (losses) in the Statements of Operations.
    (2) The Company's policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
    (3) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net realized capital gains (losses) in the Statements of Operations.

                                                                                                                                 C-54

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    The transfers in and out of Level 3 for fixed maturities, equity securities and separate account for the year ended December 31,
    2012, were due to the variation in inputs relied upon for valuation each quarter. Securities that are primarily valued using
    independent broker quotes when prices are not available from one of the commercial pricing services are reflected as transfers
    into Level 3. When securities are valued using more widely available information, the securities are transferred out of Level 3
    and into Level 1 or 2, as appropriate.

    The fair value of certain options and swap contracts were valued using observable inputs and such options and swap contracts
    were transferred from Level 3 to Level 2 during the year ended December 31, 2012.

    The transfers out of Level 3 for the year ended December 31, 2011 in fixed maturities, including securities pledged, were
    primarily due to the Company's determination that the market for subprime RMBS securities had become active in the first
    quarter 2011 and to an increased utilization of vendor valuations for certain CMO assets, as opposed to the previous use of
    broker quotes in the second quarter of 2011. While the valuation methodology for subprime RMBS securities has not changed,
    the Company has concluded that the frequency of transactions in the market for subprime RMBS securities represent regularly
    occurring market transactions and therefore are now classified as Level 2.

    Significant Unobservable Inputs

    Quantitative information about the significant unobservable inputs used in the Company's Level 3 fair value measurements of
    its annuity product guarantees is presented in the following sections and table.

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

    Significant unobservable inputs used in the fair value measurements of GMABs, GMWBs and GMWBLs include long-term
    equity implied volatility, correlations between the rate of return on policyholder funds and between interest rates and equity
    returns, nonperformance risk, mortality and policyholder behavior assumptions, such as benefit utilization, lapses and partial
    withdrawals.

    Significant unobservable inputs used in the fair value measurements of FIAs include nonperformance risk and lapses. Such
    inputs are monitored quarterly.

    Following is a description of selected inputs:

    Equity Volatility: A term-structure model is used to approximate implied volatility for the equity indices for GMAB,
    GMWB and GMWBL fair value measurements. Where no implied volatility is readily available in the market, an
    alternative approach is applied based on historical volatility.

    Correlations: Integrated interest rate and equity scenarios are used in GMAB, GMWB and GMWBL fair value
    measurements to better reflect market interest rates and interest rate volatility correlations between equity and fixed
    income fund groups and between equity fund groups and interest rates. The correlations are based on historical fund
    returns and swap rates from external sources.

    Nonperformance Risk: For the estimate of the fair value of embedded derivatives associated with the Company's product
    guarantees, the Company uses a blend of observable, similarly rated peer company credit default swap spreads, adjusted to
    reflect the credit quality of the Company as well as adjustment to reflect the priority of policyholder claims.

    Actuarial Assumptions: Management regularly reviews actuarial assumptions, which are based on the Company's
    experience and periodically reviewed against industry standards. Industry standards and Company experience may be
    limited on certain products.

                                                                                     C-55

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    The following table presents the unobservable inputs for Level 3 fair value measurements as of December 31, 2012:
             
          Range(1)      
      GMWB /          
    Unobservable Input GMWBL   GMAB   FIA  
    Long-term equity implied volatility 15% to 25%   15% to 25%   —  
    Correlations between:            
    Equity Funds 50% to 98%   50% to 98%   —  
    Equity and Fixed Income Funds -20% to 44%   -20% to 44%   —  
    Interest Rates and Equity Funds -25% to -16%   -25% to -16%   —  
    Nonperformance risk 0.10% to 1.3%   0.10% to 1.3%   0.10% to 1.3%  
    Actuarial Assumptions:            
    Benefit Utilization 85% to 100% (2) —   —  
    Partial Withdrawals 0% to 10%   0% to 10%   —  
    Lapses 0.08% to 32% (3) 0.08% to 31% (3) 0% to 10% (3)
    Mortality — (4) — (4) —  

     

    (1) Represents the range of reasonable assumptions that management has used in its fair value calculations.
    (2) Those policyholders who have elected systematic withdrawals are assumed to continue taking withdrawals. As a percent of account value, 26% are taking
    systematic withdrawals. Of those policyholders who are not taking withdrawals, we assume that 85% will begin systematic withdrawals after a delay period.
    The utilization function varies by policyholder age and policy duration. Interactions with lapses and mortality also affect utilization. The utilization rate for
    GMWB and GMWBL tends to be lower for younger contract owners and contracts that have not reached their maximum accumulated GMWB and GMWBL
    benefit amount. There is also a lower utilization rate, though indirectly, for contracts that are less “in the money” due to higher lapses. Conversely, the utilization
    rate tends to be higher for contract owners near or beyond retirement age and contracts that have accumulated their maximum GMWB or GMWBL benefit
    amount. There is also a higher utilization rate, though indirectly, for contracts that are highly “in the money”. The chart below provides the GMWBL account
    value by current age group and average expected delay times from the associated attained age group as of December 31, 2012 (account value amounts are in
    $ billions).
                   
      Account Values
     
    Attained Age Group In the Money Out of the Money Total Average Expected
    Delay (Years)
    < 60 $ 3.54 $ 0.27 $ 3.81 5.5
    60-69 6.80 0.36 7.16 1.9
    70+ 4.16 0.14 4.30 0.2
      $ 14.50 $ 0.77 $ 15.27 2.8

     

    (3)      Lapse rates tend to be lower during the contractual surrender charge period and higher after the surrender charge period ends; the highest lapse rates occur in
    the year immediately after the end of the surrender charge period. We make dynamic adjustments to lower the lapse rates for contracts that are more “in the
    money.” The table below shows an analysis of policy account values according to whether they are in or out of the surrender charge period and to whether
    they are "in the money" or "out of the money" as of December 31, 2012 (account value amounts are in $ billions).
        GMAB   GMWB/GMWBL
      Moneyness Account Value Lapse Range Account Value Lapse Range
    During Surrender Charge Period          
      In the Money** $ — 0.08% to 8.2% $ 8.5 0.08% to 5.8%
      Out of the Money — 0.41% to 12% 0.9 0.35% to 12%
    After Surrender Charge Period          
      In the Money** — 2.4% to 22% 6.1 1.5% to 17%
      Out of the Money 0.1 12% to 31% 0.6 3.2% to 32%

     

    **      The low end of the range corresponds to policies that are highly "in the money." The high end of the range corresponds to the policies that are close to zero
    in terms of "in the moneyness."

    (4) The mortality rate is based on the Annuity 2000 Basic table with mortality improvements.

                                                                                                       C-56

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        

    Generally, the following will cause an increase (decrease) in the GMAB, GMWB and GMWBL embedded derivative fair value
    liabilities:

    • An increase (decrease) in long-term equity implied volatility
    • An increase (decrease) in equity-interest rate correlations
    • A decrease (increase) in nonperformance risk
    • A decrease (increase) in mortality
    • An increase (decrease) in benefit utilization
    • A decrease (increase) in lapses

    Changes in fund correlations may increase or decrease the fair value depending on the direction of the movement and the mix
    of funds. Changes in partial withdrawals may increase or decrease the fair value depending on the timing and magnitude of
    withdrawals.

    Generally, the following will cause an increase (decrease) in the FIA embedded derivative fair value liability:

    • A decrease (increase) in nonperformance risk
    • A decrease (increase) in lapses

    The Company notes the following interrelationships:

    • Higher long-term equity implied volatility is often correlated with lower equity returns, which will result in higher in-
      the-moneyness, which in turn, results in lower lapses due to the dynamic lapse component reducing the lapses. This
      increases the projected number of policies that are available to use the GMWBL benefit and may also increase the fair
      value of the GMWBL.
    • Generally, an increase (decrease) in benefit utilization will decrease (increase) lapses for GMWB and GMWBL.

                                                                                                             C-57

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        

    Other Financial Instruments

    The carrying values and estimated fair values of the Company’s financial instruments were as follows as of December 31, 2012
    and 2011:

        2012     2011  
      Carrying Fair   Carrying   Fair
      Value Value   Value   Value
    Assets:            
    Fixed maturities, including securities pledged $ 21,627.3 $ 21,627.3 $ 22,748.5 $ 22,748.5
    Equity securities, available-for-sale 29.8 29.8   27.7   27.7
    Mortgage loans on real estate 2,835.0 2,924.7   3,137.3   3,214.1
    Loan - Dutch State obligation(1) — —   658.2   660.6
    Policy loans 101.8 101.8   112.0   112.0
    Limited partnerships/corporations 166.9 166.9   305.4   305.4
    Cash, cash equivalents, short-term investments and short-            
    term investments under securities loan agreements 3,121.1 3,121.1   2,766.5   2,766.5
    Derivatives 1,381.3 1,381.3   1,609.1   1,609.1
    Other investments 80.7 80.7   82.2   82.2
    Deposits from affiliates 901.7 984.4   1,377.6   1,360.3
    Assets held in separate accounts 39,799.1 39,799.1   39,356.9   39,356.9
    Liabilities:            
    Investment contract liabilities:            
    Deferred annuities(2) 20,262.4 21,062.8   22,453.2   22,749.4
    Funding agreements with a fixed maturity and guaranteed            
    investment contracts 1,818.6 1,718.0   2,568.2   2,367.7
    Supplementary contracts, immediate annuities and other 1,094.1 1,194.4   1,062.7   1,128.4
    Annuity product guarantees:            
    FIA 1,393.8 1,393.8   1,282.2   1,282.2
    GMAB/GMWB/GMWBL 2,004.0 2,004.0   2,229.9   2,229.9
    Derivatives 798.6 798.6   604.9   604.9
    Long-term debt 435.0 491.6   435.0   419.3
    Embedded derivative on reinsurance 301.3 301.3   230.9   230.9
    (1) This facility was terminated in November 2012. Refer to the Related Party note for further description of the transaction.
    (2) Certain amounts included in Deferred annuities are also reflected within the Annuity product guarantees section of the table above.

            
    The following disclosures are made in accordance with the requirements of ASC Topic 825 which requires disclosure of fair
    value information about financial instruments, whether or not recognized at fair value on the Balance Sheets, for which it is
    practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates
    using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used,
    including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates, in many cases,
    could not be realized in immediate settlement of the instrument.

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

    The following valuation methods and assumptions were used by the Company in estimating the fair value of the following
    financial instruments, which are not carried at fair value on the Balance Sheets:

    Mortgage loans on real estate: The fair values for mortgage loans on real estate are estimated on a monthly basis using
    discounted cash flow analyses and rates currently being offered in the marketplace for similar loans to borrowers with similar

                                                                                                         C-58

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    credit ratings. Loans with similar characteristics are aggregated for purposes of the calculations. Mortgage loans on real estate
    are classified as Level 3.

    Loan - Dutch State obligation: The fair value of the Dutch State loan obligation is estimated utilizing cash flows net of certain
    contract fees discounted using The Netherlands Strip Yield Curve and is classified as Level 2.

    Policy loans: The fair value of policy loans is equal to the carrying, or cash surrender, value of the loans. Policy loans are fully
    collateralized by the cash surrender value of the associated insurance contracts and are classified as Level 2.

    Limited partnerships/corporations: The fair value for these investments, primarily private equity fund of funds and hedge
    funds, is based on actual or estimated Net Asset Value ("NAV") information as provided by the investee and are classified as
    Level 3.

    Other investments: Federal Home Loan Bank ("FHLB") stock is carried at cost and periodically evaluated for impairment
    based on ultimate recovery of par value and is classified as Level 1. The carrying value of the stock was $78.9 and $80.2 as of
    December 31, 2012 and 2011, respectively.

    Deposits from affiliates: Fair value is estimated based on the fair value of the liabilities for the underlying contracts, plus the
    fair value of the unamortized ceding allowance. The Fair value of the liabilities of the underlying contract is estimated based
    on the mean present value of stochastically modeled cash flows associated with the contract liabilities taking into account
    assumptions about contract holder behavior. The stochastic valuation scenario set is consistent with current market parameters
    and discount is taken using stochastically evolving short risk-free rates plus an adjustment for nonperformance risk. Margins
    for non-financial risks associated with the contract liabilities are also included. The fair value of the unamortized ceding
    allowance is based on the projected release ceding allowances and discounted at risk-free rates plus an adjustment for
    nonperformance risk. These liabilities are classified as Level 3.

    Investment contract liabilities:

    Deferred annuities: Fair value is estimated as the mean present value of stochastically modeled cash flows associated with
    the contract liabilities, taking into account assumptions about contract holder behavior. The stochastic valuation scenario
    set is consistent with current market parameters and discount is taken using stochastically evolving risk-free rates in the
    scenarios plus an adjustment for nonperformance risk. Margins for non-financial risks associated with the contract
    liabilities are also included. These liabilities are classified as Level 3.

    Funding agreements with a fixed maturity and guaranteed investment contracts: Fair value is estimated by discounting
    cash flows, including associated expenses for maintaining the contracts, at rates, which are risk-free rates plus an
    adjustment for nonperformance risk. These liabilities are classified as Level 2.

    Supplementary contracts and immediate annuities: Fair value is estimated as the mean present value of the single
    deterministically modeled cash flows associated with the contract liabilities discounted using stochastically evolving short
    risk-free rates in the scenarios plus an adjustment for nonperformance risk. The valuation is consistent with current market
    parameters. Margins for non-financial risks associated with the contract liabilities are also included. These liabilities are
    classified as Level 3.

    Long-term debt: Estimated fair value of the Company’s notes to affiliates is based upon discounted future cash flows using a
    discount rate approximating the current market rate, incorporating nonperformance risk and is classified as Level 2.

    Fair value estimates are made at a specific point in time, based on available market information and judgments about various
    financial instruments, such as estimates of timing and amounts of future cash flows. Such estimates do not reflect any premium
    or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial
    instrument, nor do they consider the tax impact of the realization of unrealized capital gains (losses). In many cases, the fair
    value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in
    immediate settlement
    of the instruments. In evaluating the Company’s management of interest rate, price and liquidity risks, the fair values of all
    assets and liabilities should be taken into consideration, not only those presented above.

                                                                                                 C-59

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    5.      Deferred Policy Acquisition Costs and Value of Business Acquired

    Activity within DAC was as follows for the years ended December 31, 2012, 2011 and 2010.
      2012   2011   2010
    Balance at January 1 $ 3,326.5 $ 2,758.9 $ 3,322.4
    Deferrals of commissions and expenses 107.8   126.8   171.1
    Amortization:          
    Amortization (582.0 ) 742.6   (570.8 )
    Interest accrued(1) 262.7   169.1   177.2
    Net amortization included in the Statements of Operations (319.3 ) 911.7   (393.6 )
    Change in unrealized capital gains/losses on available-for-sale          
    securities (146.8 ) (470.9 ) (341.0 )
    Balance at December 31 $ 2,968.2 $ 3,326.5 $ 2,758.9
    (1) Interest accrued at 3.0% to 7.0% during 2012, 2011 and 2010.          
     
    Activity within VOBA was as follows for the years ended December 31, 2012, 2011 and 2010.
     
      2012 2011   2010
    Balance at January 1 $ 46.1 $ 66.5 $ 113.2
    Amortization:          
    Amortization (27.5 ) (11.0 ) (28.6 )
    Interest accrued(1) 3.1   3.7   3.9
    Net amortization included in the Statements of Operations (24.4 ) (7.3 ) (24.7 )
    Change in unrealized capital gains/losses on available-for-sale          
    securities 6.7   (13.1 ) (22.0 )
    Balance at December 31 $ 28.4 $ 46.1 $ 66.5
    (1) Interest accrued at 3.0% to 7.0% during 2012, 2011 and 2010.

                
    The estimated amount of VOBA amortization expense, net of interest, is $0.2, $6.4, $6.4, $5.4 and $4.8, for the years 2013,
    2014, 2015, 2016 and 2017, respectively. Actual amortization incurred during these years may vary as assumptions are
    modified to incorporate actual results.

    6.      Sales Inducements

    During the year ended December 31, 2012, 2011 and 2010, the Company capitalized $29.8, $32.2 and $46.9, respectively, of
    sales inducements. During the years ended December 31, 2012, 2011 and 2010, the Company amortized $(303.1), $461.8 and
    $(82.0), respectively, of sales inducements. The unamortized balance of capitalized sales inducements, net of unrealized
    capital gains (losses) on available-for-sale securities, was $741.6, $1,023.9 and $669.9 as of December 31, 2012, 2011 and
    2010, respectively.

    7.      Additional Insurance Benefits and Minimum Guarantees

    Under the requirements of ASC Topic 944, the Company calculates reserve liabilities for certain guaranteed benefits and for
    universal life products with certain patterns of cost of insurance charges and certain other fees.

                                                                                          C-60

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        

    The following assumptions and methodology were used to determine GMDB, GMIB, GMWBL, GMAB and GMWB
    additional reserves at December 31, 2012 and 2011.

    Area Assumptions/Basis for Assumptions
    Data used Based on 1,000 investment performance scenarios

    Mean investment performance

    GMDB: The mean investment performance varies by fund group. In general the Company groups all separate account returns into 6 fund groups and generate stochastic returns for each of these fund groups. The overall mean blended separate account return is 8.1%. The general account fixed portion is a small percentage of the overall total.

    GMIB: the overall blended mean is 8.1% based on a single fund group. GMAB / GMWB / GMWBL: Zero rate curve.

    Volatility

    GMDB: 15.8% for 2012 and 2011.

    GMIB: 15.8% for 2012 and 16.5% for 2011. GMAB / GMWB / GMWBL: Implied volatilities through the first 5 years and then a blend of implied and historical thereafter.

    Mortality

    Depending on the type of benefit and gender, the Company uses Annuity 2000 basic table with mortality improvement through 2011, further adjusted for company experience.

    Lapse rates

    Vary by contract type, share class, time remaining in the surrender charge period and in-the- moneyness.

    Discount rates

    GMDB / GMIB: 5.5% for 2012 and 2011.

    GMAB / GMWB / GMWBL: Zero rate curve plus adjustment for nonperformance risk.

                 
    The calculation of the GMIB and GMWBL liabilities assumes dynamic surrenders and dynamic utilization of the guaranteed
    benefit reserves.

    The separate account liabilities subject to the requirements for additional reserve liabilities under ASC Topic 944 for minimum
    guaranteed benefits and the additional liabilities recognized related to minimum guarantees, by type, as of December 31, 2012
    and 2011, and the paid and incurred amounts by type for the years ended December 31, 2012 and 2011, were as follows:

           
      GMDB   GMAB/GMWB   GMIB GMWBL  
    Separate account liability at December 31, 2012 $ 39,799.1   $ 954.1 $ 14,503.9 $ 15,249.5  
     
    Separate account liability at December 31, 2011 $ 39,356.9   $ 1,105.9 $ 14,208.0 $ 14,743.7  
     
    Additional liability balance:              
    Balance at January 1, 2011 $ 373.9   $ 77.0 $ — $ 217.5  
    Incurred guaranteed benefits 246.7   40.1   — 1,520.6  
    Paid guaranteed benefits (110.3 ) (2.2 ) — —  
    Balance at December 31, 2011 $ 510.3   $ 114.9 $ — $ 1,738.1  
    Incurred guaranteed benefits 94.2   (38.3 ) — (226.3 )
    Paid guaranteed benefits (116.5 ) (0.6 ) — —  
    Balance at December 31, 2012 $ 488.0   $ 76.0 $ — $ 1,511.8  

     

                                                                                                                    C-61

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        

    The net amount at risk, net of reinsurance, and the weighted average attained age of contract owners by type of minimum
    guaranteed benefit, were as follows as of December 31, 2012 and 2011.

      GMDB GMAB/GMWB GMIB   GMWBL
    2012          
    Net amount at risk, net of reinsurance $ 6,920.6 $ 38.4 $ — $ —
    Weighted average attained age 69.0 69.0   — —
     
    2011          
    Net amount at risk, net of reinsurance $ 8,699.0 $ 63.2 $ — $ —
    Weighted average attained age 68.0 68.0   — —

           
    The aggregate fair value of equity securities, including mutual funds, supporting separate accounts with additional insurance
    benefits and minimum investment return guarantees as of December 31, 2012 and 2011 was $39.8 billion and $39.4 billion,
    respectively.

    8.      Reinsurance

    At December 31, 2012, the Company had reinsurance treaties with 15 unaffiliated reinsurers covering a portion of the mortality
    risks and guaranteed death and living benefits under its annuity contracts. The Company, as cedant, also has reinsurance
    treaties with two affiliates, SLD and SLDI, related to GICs, fixed annuities, variable annuities and universal life insurance
    policies. In addition, the Company assumed reinsurance risk under reinsurance treaties with its affiliate, ReliaStar Life
    Insurance Company ("RLI"), related to certain life insurance policies and employee benefit group annual term policies. The
    Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements.

    Reinsurance ceded in force for life mortality risks was $155.1 billion and $147.7 billion at December 31, 2012 and 2011,
    respectively. At December 31, 2012 and 2011, net receivables were comprised of the following:

      2012   2011  
    Claims recoverable from reinsurers $ 8.0 $ 11.0  
    Amounts due to reinsurers (10.8 ) (23.6 )
    Reinsurance reserves ceded 2,585.5   2,188.2  
    Deposits 901.7   1,377.6  
    Reinsurance receivable 523.1   498.1  
    Other 7.2   17.3  
    Total $ 4,014.7 $ 4,068.6  

     

    Premiums and Interest credited and other benefits to contract owners were reduced by the following amounts for reinsurance
    ceded for the years ended December 31, 2012, 2011 and 2010.

      2012   2011   2010
    Premiums:          
    Direct premiums $ 16.3 $ 16.9 $ 17.8
    Reinsurance assumed 480.3   478.4   522.8
    Reinsurance ceded (37.6 ) (39.1 ) (260.0 )
    Net premiums $ 459.0 $ 456.2 $ 280.6

     

                                                                                                          C-62

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    9.      Capital Contributions, Dividends and Statutory Information

    The Company's ability to pay dividends to its parent is subject to the prior approval of the State of Iowa Insurance Division (the
    "Division") for payment of any dividend, which, when combined with other dividends paid within the preceding twelve
    months, exceeds the greater of (1) ten percent (10.0%) of the Company's earned statutory surplus at the prior year end or (2) the
    Company's prior year statutory net gain from operations. Iowa law also prohibits an Iowa insurer from declaring or paying a
    dividend except out of its earned surplus unless prior insurance regulatory approval is obtained.

    During the year ended December 31, 2012, following receipt of required approval from the Division, the Company paid a
    return of capital distribution of $250.0 to its Parent. During the years ended December 31, 2011 and 2010, the Company did
    not pay a dividend or return of capital distribution to its Parent.

    During the year ended December 31, 2012, the Company did not receive any capital contributions from its Parent. During the
    years ended December 31, 2011 and 2010, the Company received $44.0 and $749.0, respectively, in capital contributions from
    its Parent.

    The Company is subject to minimum risk-based capital ("RBC") requirements established by the Division. The formulas for
    determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of
    activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital
    ("TAC"), as defined by the NAIC, to authorized control level RBC, as defined by the NAIC. The Company exceeded the
    minimum RBC requirements that would require any regulatory or corrective action for all periods presented herein.

    The Company is required to prepare statutory financial statements in accordance with statutory accounting practices prescribed
    or permitted by the Division. Such statutory accounting practices primarily differ from U.S. GAAP by charging policy
    acquisition costs to expense as incurred, establishing future policy benefit liabilities and contract owner account balances using
    different actuarial assumptions as well as valuing investments and certain assets and accounting for deferred taxes on a
    different basis. Certain assets that are not admitted under statutory accounting principles are charged directly to surplus.
    Depending on the regulations of the Division, the entire amount or a portion of an insurance company's asset balance can be
    nonadmitted based on the specific rules regarding admissibility.

    Statutory net income (loss) was $(9.1), $386.0 and $(384.4), for the years ended December 31, 2012, 2011 and 2010,
    respectively. Statutory capital and surplus was $2.2 billion as of December 31, 2012 and 2011.

    10.      Accumulated Other Comprehensive Income (Loss)

    Shareholder’s equity included the following components of AOCI as of December 31, 2012, 2011 and 2010.
      2012   2011   2010  
     
    Fixed maturities, net of OTTI $ 2,004.5 $ 1,331.1 $ 682.4  
    Equity securities, available-for-sale 3.4   1.0   6.9  
    Derivatives (0.7 ) (1.1 ) 0.3  
    DAC/VOBA and sales inducements adjustment on available-for-            
    sale securities (1,283.3 ) (1,134.1 ) (510.1 )
    Other investments (35.4 ) (35.7 ) (35.7 )
    Unrealized capital gains (losses), before tax 688.5   161.2   143.8  
    Net deferred income tax asset (liability) (55.3 ) 82.7   9.8  
    Unrealized capital gains (losses), after tax 633.2   243.9   153.6  
    Pension liability, net of tax 1.0   1.2   1.2  
    AOCI $ 634.2 $ 245.1 $ 154.8  

     

                                                                                                                  C-63

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    Changes in AOCI, net of DAC, VOBA and tax, related to changes in unrealized capital gains (losses) on securities, including
    securities pledged, were as follows for the years ended December 31, 2012, 2011 and 2010.
      2012   2011   2010  
    Fixed maturities $ 660.7 $ 619.7 $ 1,244.0  
    Equity securities, available-for-sale 2.4   (5.9 ) 3.4  
    Derivatives 0.4   (1.4 ) 0.3  
    DAC/VOBA and sales inducements adjustment on available-for-            
    sale securities (149.2 ) (624.0 ) (451.7 )
    Other investments 0.3   —   (10.7 )
    Change in unrealized gains/losses on securities, before tax 514.6   (11.6 ) 785.3  
    Deferred income tax asset/liability (133.5 ) 83.1   (101.8 )
    Change in unrealized gains/losses on securities, after tax 381.1   71.5   683.5  
     
    Change in OTTI, before tax 12.7   29.0   (6.9 )
    Deferred income tax asset /liability (4.5 ) (10.2 ) 2.4  
    Change in OTTI, after tax 8.2   18.8   (4.5 )
     
    Pension and other post-employment benefit liability, before tax (0.2 ) —   (0.2 )
    Deferred income tax asset/liability —   —   0.1  
    Pension and other post-employment benefit liability, after tax (0.2 ) —   (0.1 )
     
    Net change in AOCI, after tax $ 389.1 $ 90.3 $ 678.9  

                     
    Changes in unrealized capital gains/losses on securities, including securities pledged and noncredit impairments, as recognized
    in AOCI , reported net of DAC, VOBA and income taxes, were as follows for the years ended December 31, 2012, 2011 and
    2010.

      2012 2011 2010
    Net unrealized capital gains/losses arising during the year(1) $ 447.5 $ 34.0 $ 515.4
    Less: reclassification adjustment for gains (losses) and other items      
    included in Net income (loss)(2) 97.9 22.7 9.4
    Change in deferred tax valuation allowance and other tax      
    adjustments(3) 39.7 79.0 173.0
    Net change in unrealized capital gains/losses on securities $ 389.3 $ 90.3 $ 679.0

    (1) Pretax net unrealized capital gains/losses arising during the year were $674.9, $52.3 and $792.9 for the years ended December 31, 2012, 2011 and 2010,
    respectively.
    (2) Pretax reclassification adjustments for gains (losses) and other items included in Net income (loss) were $147.6, $34.9 and $14.5, for the years ended
    December 31, 2012, 2011 and 2010, respectively.
    (3) These amounts include amounts allocated to Other Comprehensive Income in accordance with the exception described in ASC 740-20-45-7.

                                                                                                      C-64

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    11. Income Taxes

    Income tax expense (benefit) consisted of the following for the years ended December 31, 2012, 2011 and 2010.
      2012   2011 2010
    Current tax expense (benefit):        
    Federal $ 266.6 $ (195.8 ) $ 622.9
    Total current tax expense (benefit) 266.6   (195.8 ) 622.9
    Deferred tax expense (benefit):        
    Federal (84.3 ) 64.5 (665.0 )
    Total deferred tax expense (benefit) (84.3 ) 64.5 (665.0 )
    Total income tax expense (benefit) $ 182.3 $ (131.3 ) $ (42.1 )

                
    Income taxes were different from the amount computed by applying the federal income tax rate to income (loss) before income
    taxes for the following reasons for the years ended December 31, 2012, 2011 and 2010:
                      

      Years Ended December 31,
      2012 2011 2010
    Income (loss) before income taxes $ 5.3 $ 20.8 $ 63.3  
    Tax rate 35.0 % 35.0 % 35.0 %
    Income tax expense (benefit) at federal statutory rate 1.9   7.3   22.2  
    Tax effect of:            
    Dividends received deduction (72.9 ) (30.3 ) (75.9 )
    Valuation allowance 247.9   (109.0 ) 64.0  
    Audit settlements (0.1 ) 3.3   (49.2 )
    Tax credits (2.0 ) (2.0 ) (3.5 )
    Prior year tax 6.9   —   —  
    Other 0.6   (0.6 ) 0.3  
    Income tax expense (benefit) 182.3   (131.3 ) (42.1 )

     

                                                                                                           C-65

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    Temporary Differences

    The tax effects of temporary differences that give rise to Deferred tax assets and Deferred tax liabilities at December 31, 2012
    and 2011, are presented below.
      2012   2011  
    Deferred tax assets:        
    Insurance reserves $ 1,035.9 $ 1,003.3  
    Investments 940.6   662.7  
    Employee compensation and benefits 29.4   50.7  
    Other assets 183.0   172.6  
    Total gross assets before valuation allowance 2,188.9   1,889.3  
    Less: Valuation allowance 220.3   12.1  
    Assets, net of valuation allowance 1,968.6   1,877.2  
     
    Deferred tax liabilities:        
    Deferred policy acquisition costs (1,293.8 ) (1,500.6 )
    Net unrealized investment (gains) losses (652.1 ) (275.2 )
    Value of business acquired (20.6 ) (29.2 )
    Other liabilities (35.0 ) (33.6 )
    Total gross liabilities (2,001.5 ) (1,838.6 )
    Net deferred income tax asset (liability) $ (32.9 )   $ 38.6  

                      
    Valuation allowances are provided when it is considered unlikely that deferred tax assets will be realized. As of December 31,
    2012 and 2011, the Company had a tax valuation allowance of $406.0 and $158.1, respectively, that was allocated to Net
    income (loss) and $(185.7) and $(146.0), respectively, that was allocated to Other comprehensive income. Therefore, after
    consideration of available sources of taxable income required to realize the Company's deferred tax assets in the future, the
    Company had a tax valuation allowance of $220.3 related to deferred tax assets as of December 31, 2012.

    Tax Sharing Agreement

    The Company had a payable to ING U.S., Inc. of $22.6 and receivable of $204.0 as of December 31, 2012 and 2011,
    respectively, for federal income taxes under the intercompany tax sharing agreement.

    The results of the Company's operations are included in the consolidated tax return of ING U.S., Inc. Generally, the
    Company's financial statements recognize the current and deferred income tax consequences that result from the Company's
    activities during the current and preceding periods pursuant to the provisions of Income Taxes (ASC 740) as if the Company
    were a separate taxpayer rather than a member of ING U.S., Inc.'s consolidated income tax return group with the exception of
    any net operating loss carryforwards and capital loss carryforwards, which are recorded pursuant to the tax sharing agreement.
    The Company's tax sharing agreement with ING U.S., Inc. states that for each taxable year prior to January 1, 2013 during
    which the Company is included in a consolidated federal income tax return with ING U.S., Inc., ING U.S., Inc. will pay to the
    Company an amount equal to the tax benefit of the Company's net operating loss carryforwards and capital loss carryforwards
    generated in such year, without regard to whether such net operating loss carryforwards and capital loss carryforwards are
    actually utilized in the reduction of the consolidated federal income tax liability for any consolidated taxable year.

    Effective January 1, 2013, the Company entered into a new tax sharing agreement with ING U.S., Inc. which provides that, for
    2013 and subsequent years, ING U.S., Inc. will pay the Company for the tax benefits of ordinary and capital losses only in the
    event that the consolidated tax group actually uses the tax benefit of losses generated.

                                                                                                       C-66

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    Unrecognized Tax Benefits

    Reconciliations of the change in the unrecognized income tax benefits for the years ended December 31, 2012, 2011and 2010
    are as follows:
      2012   2011   2010  
    Balance at beginning of period $ 2.7 $ 28.0 $ 60.3  
    Additions for tax positions related to prior years   — 6.1   28.0  
    Reductions for tax positions related to prior years   — (6.1 ) (60.2 )
    Reductions for settlements with taxing authorities   — (25.3 ) (0.1 )
    Balance at end of period $ 2.7 $ 2.7 $ 28.0  

            
    The Company had $2.7 of unrecognized tax benefits as of December 31, 2012 and 2011, that would affect the Company's
    effective tax rate if recognized.

    Interest and Penalties

    The Company recognizes accrued interest and penalties related to unrecognized tax benefits in Current income taxes and
    Income tax expense on the Balance Sheets and Statements of Operations, respectively. The Company had no accrued interest
    for the years ended December 31, 2012 and 2011.

    Tax Regulatory Matters

    In March 2012, the Internal Revenue Service ("IRS") completed its examination of the Company's return for tax year 2010.
    The 2010 audit settlement did not have a material impact on the financial statements.

    The Company is currently under audit by the IRS for tax years 2011 and 2012 and it is expected that the examination of tax
    year 2011 will be finalized within the next twelve months. The timing of the payment (if any) of the remaining allowance of
    $2.7 cannot be reliably estimated. The Company and the IRS have agreed to participate in the Compliance Assurance Program
    ("CAP") for the tax years 2011, 2012 and 2013.

    12. Benefit Plans

    Defined Benefit Plan

    ING North America Insurance Corporation ("ING North America") sponsors the ING Americas Retirement Plan (the
    "Retirement Plan"), effective as of December 31, 2001. Substantially all employees of ING North America and its affiliates
    (excluding certain employees) are eligible to participate, including the Company's employees. ING North America filed a
    request for a determination letter on the qualified status of the Retirement Plan, but has not yet received a favorable
    determination letter.

    Beginning January 1, 2012, the Retirement Plan implemented a cash balance pension formula instead of a final average pay
    ("FAP") formula, allowing all eligible employees to participate in the Retirement Plan. Participants will earn an annual credit
    equal to 4% of eligible pay. Interest is credited monthly based on a 30-year U.S. Treasury securities bond rate published by the
    Internal Revenue Service in the preceding August of each year. The accrued vested cash balance benefit is portable;
    participants can take it when they leave the Company's employ. For participants in the Retirement Plan as of December 31,
    2012, there will be a two-year transition period from the Retirement Plan's current FAP formula to the cash balance pension
    formula. Due to ASC Topic 715 requirements, the accounting impact of the change in the Retirement Plan was recognized
    upon Board approval November 10, 2011. This change had no material impact on the financial statements.

    The Retirement Plan is a tax-qualified defined benefit plan, the benefits of which are guaranteed (within certain specified legal
    limits) by the Pension Benefit Guaranty Corporation ("PBGC"). As of January 1, 2002, each participant in the Retirement Plan
    (except for certain specified employees) earns a benefit under a FAP formula. Subsequent to December 31, 2001, ING North

                                                                                                    C-67

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    America is responsible for all Retirement Plan liabilities. The costs allocated to the Company for its employees' participation
    in the Retirement Plan were $7.7, $11.5 and $11.0, for the years ended December 31, 2012, 2011 and 2010, respectively, and
    are included in Operating expenses in the Statements of Operations.

    Defined Contribution Plan

    ING North America sponsors the ING Americas Savings Plan and ESOP (the "Savings Plan"). Substantially all employees of
    ING North America and its affiliates (excluding certain employees) are eligible to participate, including the Company's
    employees other than Company agents. The Savings Plan is a tax-qualified defined contribution retirement plan, which
    includes an employee stock ownership plan ("ESOP") component. The Savings Plan was amended effective January 1, 2011,
    to permit Roth 401(k) contributions to be made to the Plan. ING North America filed a request for a determination letter on the
    qualified status of the Plan and received a favorable determination letter dated May 19, 2009. Savings Plan benefits are not
    guaranteed by the PBGC. The Savings Plan allows eligible participants to defer into the Savings Plan a specified percentage of
    eligible compensation on a pre-tax basis. ING North America matches such pre-tax contributions, up to a maximum of 6.0% of
    eligible compensation. Matching contributions are subject to a 4-year graded vesting schedule, although certain specified
    participants are subject to a 5-year graded vesting schedule. All contributions made to the Savings Plan are subject to certain
    limits imposed by applicable law. The cost allocated to the Company for the Savings Plan were $3.2, $3.3 and $2.4, for the
    years ended December 31, 2012, 2011 and 2010, respectively, and are included in Operating expenses in the Statements of
    Operations.

    Non-Qualified Retirement Plans

    Effective December 31, 2001, the Company, in conjunction with ING North America, offered certain eligible employees (other
    than Career Agents) a Supplemental Executive Retirement Plan and an Excess Plan (collectively, the "SERPs"). Benefits under
    the SERPs are determined based on an eligible employee's years of service and average annual compensation for the highest
    five years during the last ten years of employment.

    Effective January 1, 2012, the Supplemental Executive Retirement Plan was amended to coordinate with the amendment of the
    Retirement Plan from its current final average pay formula to a cash balance formula.

    The SERPs are non-qualified defined benefit pension plans, which means all the SERPs benefits are payable from the general
    assets of the Company. These non-qualified defined benefit pension plans are not guaranteed by the PBGC.

    Obligations and Funded Status

    The following table summarizes the benefit obligations, fair value of plan assets and funded status, for the SERPs for the years
    ended December 31, 2012 and 2011.
      2012 2011
    Change in obligation:        
    Projected benefit obligation, January 1 $ 25.2 $ 25.5  
    Interest cost 1.2   1.3  
    Benefits paid (1.3 ) (1.1 )
    Actuarial gain on obligation (0.2 ) (0.2 )
    Plan adjustments —   (0.3 )
    Benefit obligation, December 31 $ 24.9 $ 25.2  
    Fair Value of Plan Assets:        
    Fair value of plan assets, December 31 $ — $ —  

     

                                                                                                       C-68

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)
        
    Amounts recognized in the Balance Sheets consist of:        
     
      2012   2011  
    Accrued benefit cost $ (24.9 ) $ (25.2 )
    Accumulated other comprehensive loss (income):        
         Prior service cost (0.2 ) (0.3 )
    Net amount recognized $ (25.1 ) $ (25.5 )

                   
    Assumptions

    The weighted-average assumptions used in the measurement of the December 31, 2012 and 2011, benefit obligation for the
    SERPs were as follows:

               
      2012 2011
    Discount rate  4.05 % 4.75 %
    Rate of compensation increase  4.00 % 4.00 %

                
    In determining the discount rate assumption, the Company utilizes current market information provided by its plan actuaries,
    including a discounted cash flow analysis of the Company's pension obligation and general movements in the current market
    environment. The discount rate modeling process involves selecting a portfolio of high quality, noncallable bonds that will
    match the cash flows of the SERP. Based upon all available information, it was determined that 4.05% was the appropriate
    discount rate as of December 31, 2012, to calculate the Company's accrued benefit liability.

    The weighted-average assumptions used in calculating the net pension cost were as follows:

                    
      2012 2011 2010
    Discount rate 4.75 % 5.50 % 6.00 %
    Rate of increase in compensation levels 4.00 % 4.00 % 3.00 %

             
    Since the benefit plans of the Company are unfunded, an assumption for return on plan assets is not required.

    Net Periodic Benefit Costs

    Net periodic benefit costs for the SERPs for the years ended December 31, 2012, 2011 and 2010, were as follows:

                
      2012     2011   2010  
    Interest cost $ 1.2 $ 1.3 $ 1.5  
    Amortization of prior service cost (credit)   (0.1 ) —   —  
    Net loss (gain) recognition   (0.2 ) (0.2 ) (0.8 )
    Net periodic benefit cost $ 0.9 $ 1.1 $ 0.7  

                
    Cash Flows

    In 2012, the employer contributed $1.5 to the SERPs. Future expected benefit payments related to the SERPs for the years
    ended December 31, 2013 through 2017, and thereafter through 2022, are estimated to be $1.5, $1.5, $1.5, $1.5, $1.5 and $7.8,
    respectively.

    Stock Option and Share Plans

    Long-term Equity Ownership Plan: Starting in 2004, ING Group began issuing options under the Long-term Equity Ownership
    Plan (“leo”). Under leo, participants are awarded both stock options and performance shares. Leo options are nonqualified

                                                                                                 C-69

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    options on ING Group shares in the form of American Depository Receipts (“ADRs”). The leo options give the recipient the
    right to purchase an ING Group share in the form of ADRs at a price equal to the fair market value of one ING Group share on
    the date of grant. The options have a ten-year term and vest three years from the grant date subject to the participant meeting
    the three-year service vesting condition. Upon vesting, participants generally have up to seven years in which to exercise their
    vested options. A shorter exercise period applies in the event of termination due to redundancy, business divestiture, voluntary
    termination, or termination for cause.

    Leo performance shares are a contingent grant of ING Group stock and generally vest three years from the grant date, and can
    range from 0-200% of target based on ING’s Total Shareholder Return (“TSR”) relative to a peer group of global financial
    services companies as determined at the end of the vesting period. To vest, a participant must be actively employed on the
    vesting date, although immediate vesting will occur in the event of the participant’s death, disability or retirement. If a
    participant is terminated due to redundancy or business divestiture, vesting will occur but in only a portion of the award.
    Unvested shares are generally subject to forfeiture when an employee voluntarily terminates employment or is terminated for
    cause (as defined in the leo plan document).

    Long-term Sustainable Performance Plan performance shares (“LSPP”) were granted on March 30, 2011 and 2012 with a three
    year graded vesting schedule. Participants were awarded a conditional right to receive a number of ING Group shares in the
    form of ADR's in the future. Awards under the LSPP vest, and shares are delivered 1/3 each of the first, second and third
    anniversary of the award date, provided the participants are still employed by ING. The LSPP performance shares are subject to
    a performance measure. The number of ADR's that would be ultimately granted at the end of each performance period is
    dependent upon a measure of the Company's performance over that period.

    At the end of the specified performance period, the extent to which ING’s performance targets have been met will determine
    the actual number of leo and LSPP performance shares that the participants will receive on the vesting date.

    The Company was allocated from ING compensation expense for the leo options, leo performance shares and LSPP of $5.1,
    $4.2 and $2.6, for the years ended December 31, 2012, 2011 and 2010, respectively.

    For leo, the Company recognized minimal tax benefits in December 31, 2012, 2011 and 2010.

    Other Benefit Plans

    In addition to providing retirement plan benefits, the Company, in conjunction with ING North America, provides certain
    supplemental retirement benefits to eligible employees and health care and life insurance benefits to retired employees and
    other eligible dependents. The supplemental retirement plan includes a non-qualified defined benefit pension plan and a non-
    qualified defined contribution plan, which means all benefits are payable from the general assets of the Company. The post-
    retirement health care plan is contributory, with retiree contribution levels adjusted annually and the Company subsidizes a
    portion of the monthly per-participant premium. Beginning August 1, 2009, the Company moved from self-insuring its
    supplemental health care costs and began to use a private-fee-for-service Medicare Advantage program for post-Medicare
    eligible retired participants. In addition, effective October 1, 2009, the Company no longer subsidizes medical premium costs
    for early retirees. This change does not impact any participant currently retired and receiving coverage under the plan or any
    employee who is eligible for coverage under the plan and whose employment ended before October 1, 2009. The Company
    continues to offer access to medical coverage until retirees become eligible for Medicare. The life insurance plan provides a
    flat amount of noncontributory coverage and optional contributory coverage. The ING Americas Deferred Compensation
    Savings Plan is a deferred compensation plan that includes a 401(k) excess component. The benefits charges allocated to the
    Company related to all of these plans for the years ended December 31, 2012, 2011 and 2010 were $3.5, $3.4 and $2.1,
    respectively.

    13.      Commitments and Contingencies

    Leases

    The Company leases its office space and certain equipment under operating leases, the longest term of which expires in 2017.

                                                                                                        C-70

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    For the years ended December 31, 2012, 2011 and 2010, rent expense for leases was $6.9, $7.7 and $8.4, respectively. The
    future net minimum payments under noncancelable leases for the years ended December 31, 2013 through 2017 are estimated
    to be $7.2, $7.3, $7.2, $6.6 and $5.3, respectively, and $0.0, thereafter. The Company pays substantially all expenses
    associated with its leased and subleased office properties. Expenses not paid directly by the Company were paid for by an
    affiliate and allocated back to the Company.

    Commitments

    Through the normal course of investment operations, the Company commits to either purchase or sell securities, commercial
    mortgage loans, or money market instruments, at a specified future date and at a specified price or yield. The inability of
    counterparties to honor these commitments may result in either a higher or lower replacement cost. Also, there is likely to be a
    change in the value of the securities underlying the commitments.

    As of December 31, 2012 and 2011, the Company had off-balance sheet commitments to purchase investments equal to their
    fair value of $304.7 and $255.3, respectively.

    Collateral

    Under the terms of the Company’s Over-The-Counter Derivative International Swaps and Derivatives Association, Inc.
    Agreements ("ISDA Agreements"), the Company may receive from, or deliver to, counterparties, collateral to assure that all
    terms of the ISDA Agreements will be met with regard to the CSA. The terms of the CSA call for the Company to pay interest
    on any cash received equal to the Federal Funds rate. As of December 31, 2012 and 2011, the Company held $766.7 and
    $821.2, of net cash collateral, respectively, related to derivative contracts, which was included in Payables under securities loan
    agreement, including collateral held, on the Balance Sheets. In addition, as of December 31, 2012 and 2011, the Company
    delivered collateral of $579.3 and $779.8, respectively, in fixed maturities pledged under derivatives contracts, which was
    included in Securities pledged on the Balance Sheets.

    Federal Home Loan Bank Funding

    The Company is a member of the Federal Home Loan Bank of Des Moines ("FHLB") and is required to maintain collateral that
    backs funding agreements issued to the FHLB. As of December 31, 2012 and 2011, the Company had $1,548.0 and $1,579.6,
    respectively, in non-putable funding agreements, including accrued interest, issued to the FHLB. These non-putable funding
    agreements are included in Future policy benefits and contract owner account balances on the Balance Sheets. As of
    December 31, 2012 and 2011, assets with a market value of $1,855.1 and $1,897.9, respectively, collateralized the funding
    agreements to the FHLB. Assets pledged to the FHLB are included in Fixed maturities, available-for-sale, on the Balance
    Sheets.

    Restricted Assets

    The Company is required to maintain assets on deposit with various regulatory authorities to support its insurance operation.
    The Company may also post collateral in connection with certain securities lending, repurchase agreements, funding
    agreement, LOC and derivative transactions as described further in this note. The components of the fair value of the restricted
    assets were as follows as of December 31, 2012 and 2011:
                               
      2012 2011
    Fixed maturity collateral pledged to FHLB $ 1,855.1 $ 1,897.9
    FHLB restricted stock(1) 78.9 80.3
    Other fixed maturities-state deposits 12.1 12.2
    Securities pledged(2) 714.0 1,012.8
    Total restricted assets $ 2,660.1 $ 3,003.2

    (1) Reported in Other investments on the Balance Sheets. Refer to Other investments in Business, Basis of Presentation and Significant Accounting Policies
    note for further discussion.
    (2) Includes the fair value of loaned securities of $134.7 and $233.0 as of December 31, 2012 and 2011, respectively, which is included in Securities pledged on
    the Balance Sheets.

                                                                                       C-71

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    Litigation and Regulatory Matters

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

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

    It is not possible to predict the ultimate outcome or to provide reasonably possible losses or ranges of losses for all pending
    regulatory matters and litigation. While it is possible that an adverse outcome in certain cases could have a material adverse
    effect upon the Company's financial position, based on information currently known, management believes that the outcome of
    pending litigation and regulatory matters is not likely to have such an effect. However, given the large and indeterminate
    amounts sought and the inherent unpredictability of such matters, it is possible that an adverse outcome in certain of the
    Company's litigation or regulatory matters could, from time to time, have a material adverse effect upon the Company's results
    of operations or cash flows in a particular quarterly or annual period.

    For some matters, the Company is able to estimate a possible range of loss. For such matters in which a loss is probable, an
    accrual has been made. For matters where the Company, however, believes a loss is reasonably possible, but not probable, no
    accrual is required to be made. Accordingly, the Company's estimate reflects both types of matters. For matters for which an
    accrual has been made, but there remains a reasonably possible range of loss in excess of the amounts accrued, the estimate
    reflects the reasonably possible range of loss in excess of the accrued amounts. For other matters included within this
    estimation for which a reasonably possible but not probable range of loss exists, the estimate reflects the reasonably possible
    and unaccrued loss or range of loss. As of December 31, 2012, the Company estimates the aggregate range of reasonably
    possible losses in excess of any amounts accrued for these matters as of such date, is not material to the Company.

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

    14.       Related Party Transactions

    Operating Agreements

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

                                                                                                        C-72

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    • Underwriting and distribution agreement with Directed Services LLC ("DSL") (successor by merger to Directed Services,
      Inc.), an affiliated broker-dealer, whereby DSL serves as the principal underwriter for variable insurance       products issued
      by the Company. DSL is authorized to enter into agreements with broker-dealers to distribute the       Company's variable
      products and appoint representatives of the broker-dealers as agents. For the years ended       December 31, 2012, 2011 and
      2010, commissions were incurred in the amounts of $208.0, $201.1 and $204.3,       respectively.
    • Asset management agreement with ING Investment Management LLC ("IIM"), an affiliate, in which IIM provides asset
      management, administration and accounting services for ING USA's general account. The Company records a       fee, which
      is paid quarterly, based on the value of the assets under management. For the years ended December 31,       2012, 2011 and
      2010, expenses were incurred in the amounts of $50.3, $56.2 and $49.0, respectively.
    • Intercompany agreement with DSL pursuant to which DSL agreed, effective January 1, 2010, to pay the Company, on a
      monthly basis, a portion of the revenues DSL earns as investment adviser to certain U.S. registered investment       companies
      that are investment options under certain of the Company's variable insurance products. For the years       ended December 31,
      2012, 2011 and 2010, revenue under the DSL intercompany agreement was $141.1, $143.4 and       $146.9, respectively.
    • Intercompany agreement with IIM pursuant to which IIM agreed, effective January 1, 2010, to pay the Company, on a
      monthly basis, a portion of the revenues IIM earns as investment adviser to certain U.S. registered investment companies
      that are investment options under certain of the Company's variable insurance products. For the years       ended December 31,
      2012, 2011 and 2010, revenue under the IIM intercompany agreement was $33.8, $35.3 and       $32.0, respectively.
    • Services agreements with ING North America, dated September 1, 2000 and January 1, 2001, respectively, for
      administrative, management, financial, information technology and finance and treasury services. For the years ended
      December 31, 2012 2011 and 2010, expenses were incurred in the amounts of $109.3, $110.3 and $91.6, respectively.
      Effective October 1, 2010, the services agreement with ING North America dated January 1, 2001, was amended in order
      for the Company to provide ING North America with use of the corporate office facility at 5780 Powers Ferry       Road,
      N.W., Atlanta, GA (the "Atlanta Office") in exchange for ING North America's payment of the Company's       direct and
      indirect costs for the Atlanta Office.
    • Services agreement between the Company and its U.S. insurance company affiliates dated January 1, 2001, amended
      effective January 1, 2002 and December 31, 2007, for administrative, management, professional, advisory, consulting
      and other services. For the years ended December 31, 2012, 2011 and 2010, expenses related to the agreements were
      incurred in the amount of $16.4, $14.0 and $31.0, respectively.
    • Administrative Services Agreement between the Company, ReliaStar Life Insurance Company of New York ("RLNY"),
      an affiliate and other U.S. insurance company affiliates dated March 1, 2003, amended effective August 1,       2004, in which
      the Company and affiliates provide services to RLNY. For the years ended December 31, 2012, 2011       and 2010, revenue
      related to the agreement was $3.3, $3.1 and $2.1, respectively.
    • Services agreement between the Company, Security Life of Denver Insurance Company ("SLD"), an affiliate, and IIM
      whereby IIM provides administrative, management, professional, advisory, consulting and other services to the Company
      and SLD with respect to its Financial Products unit. For the years ended December 31, 2012, 2011 and       2010, the Company
      incurred expenses of $4.0, $3.6 and $4.8, respectively.

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

    Reinsurance Agreements

    Reinsurance Ceded

    Waiver of Premium - Coinsurance Funds Withheld

    Effective October 1, 2010, the Company entered into a coinsurance funds withheld agreement with its affiliate, Security Life of
    Denver International Limited ("SLDI"). Under the terms of the agreement, the Company ceded to SLDI 100% of the group life
    waiver of premium liability (except for groups covered under rate credit agreements) assumed from RLI, related to the Group
    Annual Term Coinsurance Funds Withheld agreement between the Company and RLI described under "Reinsurance Assumed"
    below.

                                                                                                           C-73

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    Upon inception of the agreement, the Company paid SLDI a premium of $245.6. At the same time, the Company established a
    funds withheld liability for $188.5 to SLDI and SLDI purchased a $65.0 letter of credit to support the ceded Statutory reserves
    of $245.6. In addition, the Company recognized a gain of $17.9 based on the difference between the premium paid and the
    ceded U.S. GAAP reserves of $227.7, which offsets the $57.1 ceding allowance paid by SLDI. The ceding allowance will be
    amortized over the life of the business.

    As of December 31, 2012 and 2011, the value of the funds withheld liability under this agreement was $191.4 and $190.7,
    which is included in Funds held under reinsurance treaties with affiliates on the Balance Sheets. In addition, as of
    December 31, 2012 and 2011, the Company had an embedded derivative under this agreement with a value of $7.7 and $(4.8),
    respectively, which is recorded in Funds held under reinsurance treaties with affiliates on the Balance Sheets.

    Guaranteed Living Benefit - Coinsurance and Coinsurance Funds Withheld

    Effective June 30, 2008, the Company entered into an automatic reinsurance agreement with its affiliate, SLDI, covering 100%
    of the benefits guaranteed under specific variable annuity guaranteed living benefit riders attached to certain variable annuity
    contracts issued by the Company on or after January 1, 2000.

    Also effective June 30, 2008, the Company entered into a services agreement with SLDI, under which the Company provides
    certain actuarial risk modeling consulting services to SLDI with respect to hedge positions undertaken by SLDI in connection
    with the reinsurance agreement. For the years ended December 31, 2012, 2011 and 2010, revenue related to the agreement was
    $12.0, $12.4 and $11.9, respectively.

    Effective July 1, 2009, the reinsurance agreement was amended and restated to change the reinsurance basis from coinsurance
    to a combined coinsurance and coinsurance funds withheld basis. On July 31, 2009, SLDI transferred assets with a market
    value of $3.2 billion to the Company and the Company deposited those assets into a funds withheld trust account. As of
    December 31, 2012, the assets on deposit in the trust account increased to $3.9 billion . The Company also established a
    corresponding funds withheld liability to SLDI, which is included in Funds held under reinsurance treaties with affiliates on the
    Balance Sheets. Funds held under reinsurance treaties with affiliates had a balance of $3.6 billion and $5.0 billion, at
    December 31, 2012 and 2011, respectively. In addition, as of December 31, 2012 and 2011, the Company had an embedded
    derivative with a value of $293.6 and $235.7, respectively, which is recorded in Funds held under reinsurance treaties with
    affiliates on the Balance Sheets.

    Also effective July 1, 2009, the Company and SLDI entered into an asset management services agreement, under which SLDI
    serves as asset manager for the funds withheld account. SLDI has retained its affiliate, ING Investment Management LLC, as
    subadviser for the funds withheld account.

    Effective October 1, 2011, the Company and SLDI entered into an amended and restated automatic reinsurance agreement in
    order to provide more flexibility to the Company and SLDI with respect to the collateralization of the reserves related to the
    variable annuity guaranteed living benefits reinsured under the agreement.

    At December 31, 2012 and 2011, reserves ceded by the Company under this agreement were $2.1 billion and $1.9 billion,
    respectively. In addition, a deferred loss in the amount of $343.9 and $365.3 at December 31, 2012 and 2011, respectively, is
    included in Other assets on the Balance Sheets and is amortized over the reinsurance period of benefit.

    Multi-year Guaranteed Fixed Annuity - Coinsurance

    Effective May 1, 2005, the Company entered into a coinsurance agreement with its affiliate, Security Life of Denver Insurance
    Company ("SLD"). Under the terms of the agreement, SLD assumed and accepted the responsibility for paying, when due,
    100% of the liabilities arising under the multi-year guaranteed fixed annuity contracts issued by the Company between
    January 1, 2001 and December 31, 2003. In addition, the Company assigned to SLD all future premiums received by the
    Company attributable to the ceded contracts.

    Under the terms of the agreement, the Company ceded $2.5 billion in account balances and transferred a ceding commission
    and $2.7 billion in assets to SLD, resulting in a realized capital gain of $47.9 to the Company, which reduced the ceding
    commission.

                                                                                                 C-74

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    The coinsurance agreement is accounted for using the deposit method. As such, $2.7 billion of Deposit receivable from
    affiliate was established on the Balance Sheets. As of December 31, 2012 and 2011, the receivable was $901.7 and $1,377.6,
    respectively, and is adjusted over the life of the agreement based on cash settlements and the experience of the contracts, as
    well as for amortization of the ceding commission. The Company incurred amortization expense of the negative ceding
    commission of $10.8, $7.2 and $21.4, for the years ended December 31, 2012, 2011 and 2010, respectively, which is recorded
    in Other expenses in the Statements of Operations.

    Universal Life - Coinsurance

    Effective January 1, 2000, the Company entered into a 100% coinsurance agreement with its affiliate, SLD, covering certain
    universal life policies which had been issued and in force as of, as well as any such policies issued after, the effective date of
    the agreement. As of December 31, 2012 and 2011, reserves ceded by the Company under this agreement were $19.3 and
    $18.7, respectively.

    Guaranteed Investment Contract - Coinsurance

    Effective August 20, 1999, the Company entered into a Facultative Coinsurance Agreement with its affiliate, SLD. Under the
    terms of the agreement, the Company facultatively cedes, from time to time, certain GICs to SLD on a 100% coinsurance basis.
    The Company utilizes this reinsurance facility primarily for diversification and asset-liability management purposes in
    connection with this business. Senior management of the Company has established a current maximum of $4.0 billion for GIC
    reserves ceded under this agreement.

    GIC reserves ceded by the Company under this agreement were $505.6 and $121.4 at December 31, 2012 and 2011,
    respectively.

    Reinsurance Assumed

    Level Premium Term Life Insurance - Stop-loss

    Effective October 1, 2010, the Company entered into a stop-loss agreement with its affiliate, RLI under which the Company
    agreed to indemnify and reinsure RLI for the aggregate mortality risk under certain level premium term life insurance policies
    issued by RLI between January 1, 2009 and December 31, 2009 and certain level premium term life insurance policies assumed
    by RLI from ReliaStar Life Insurance Company of New York under an Automatic Coinsurance Agreement effective March 1,
    2008. Under the terms of the agreement, the Company will make benefit payments to RLI equal to the amount of claims in
    excess of the attachment point (equal to a percentage of net reinsurance premium) up to the maximum fully covered benefit.

    Effective April 1, 2012, the agreement was recaptured by RLI and terminated, and there was no consideration received by the
    Company upon such recapture and termination.

    Effective January 1, 2012, the Company entered into a stop-loss agreement with RLI, which was amended and restated April 1,
    2012 to include the recaptured business described above, under which the Company agreed to indemnify RLI, and RLI agreed
    to reinsure with the Company, the aggregate mortality risk under the combined blocks of level premium term life insurance
    policies issued by RLI between January 1, 2009 and December 31, 2009 and also between January 1, 2012 and December 31,
    2012. This coverage included certain level premium term life insurance policies assumed by RLI from ReliaStar Life
    Insurance Company of New York under an Automatic Coinsurance Agreement effective March 1, 2008. Under the terms of the
    agreement, the Company will make benefit payments to RLI equal to the amount of claims in excess of the attachment point
    (equal to a percentage of net reinsurance premium) up to the maximum fully covered benefit.

    The stop-loss agreement is accounted for using the deposit method. A fee receivable from affiliate of $0.9 and $0.5 as of
    December 31, 2012 and 2011, respectively, is included in Future policy benefits and contract owner account balances on the
    Balance Sheets. The fee is accrued for and subsequently settled in cash each quarterly accounting period.

    Effective July 1, 2012, the Company entered into a stop-loss agreement with its affiliate, SLD under which the Company
    agrees to indemnify SLD, and SLD agrees to reinsure with the Company, aggregate mortality risk under certain level premium
    term life insurance policies assumed by SLD from RLI and written by either RLI or RLNY with issue dates between January 1,
    2007 and March 31, 2008 and between January 1, 2010 and December 31, 2010. Under the terms of the agreement, the

                                                                                                   C-75

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    Company will make benefit payments to SLD equal to the amount of claims in excess of the attachment point (equal to a
    percentage of net reinsurance premium) up to the maximum fully covered benefit.
    The stop-loss agreement is accounted for using the deposit method. A fee receivable from affiliate of $0.9 as of December 31,
    2012 is included in Future policy benefits and contract owner account balances on the Balance Sheets. The fee is accrued for
    and subsequently settled in cash each quarterly accounting period.

    Group Annual Term - Coinsurance Funds Withheld

    Effective December 31, 2008, the Company entered into a coinsurance funds withheld agreement with RLI for an indefinite
    duration. Under the terms of the agreement, the Company assumed 100% quota share of RLI's net retained liability under
    certain Employee Benefits Group Annual Term policies, including disability waiver of premium.

    The initial premium of $219.9 was equal to the aggregate reserve assumed by the Company. Thereafter, premiums are equal to
    the total earned gross premiums collected by RLI from policyholders. RLI will retain all reinsurance premiums payable to the
    Company as funds withheld, as security for ceded liabilities and against which ceded losses will be offset. Monthly, the
    Company will receive or pay a net settlement. This agreement was amended and restated October 1, 2010 to better reflect the
    current investment environment and to modify the treatment of claims under certain policies under which claims are not paid in
    the form of a single lump sum; the underlying terms described above remained unchanged. (Please see also description of
    Waiver of Premium - Coinsurance Funds Withheld Agreement between the Company and SLDI under "Reinsurance Ceded"
    above).

    As of December 31, 2012 and 2011, reserves assumed by the Company under this agreement were $456.4 and $453.1,
    respectively.

    Reciprocal Loan Agreement

    The Company maintains a reciprocal loan agreement with ING U.S., Inc., an affiliate, to facilitate the handling of unanticipated
    short-term cash requirements that arise in the ordinary course of business. Under this agreement, which became effective in
    January 2004 and expires on January 14, 2014, either party can borrow from the other up to 3.0% of the Company's statutory
    net admitted assets, excluding Separate Accounts, as of the preceding December 31. Interest on any ING USA borrowing is
    charged at the rate of ING U.S., Inc.'s cost of funds for the interest period, plus 0.15%. Interest on any ING U.S., Inc.
    borrowing is charged at a rate based on the prevailing interest rate of U.S. commercial paper available for purchase with a
    similar duration.

    Under this agreement, the Company did not incur interest expense for the year ended December 31, 2012, 2011 and 2010. The
    Company earned interest income of $0.4, $1.0 and $1.2, for the years ended December 31, 2012, 2011 and 2010, respectively.
    Interest expense and income are included in Interest expense and Net investment income, respectively, on the Statements of
    Operations. As of December 31, 2012, the Company did not have any outstanding receivable with ING U.S., Inc. under
    reciprocal loan agreement. As of December 31, 2011, the Company had an outstanding receivable $535.9, with ING U.S., Inc.
    under the reciprocal loan agreement.

    Long-Term Debt with Affiliates

    The Company issued a 30-year surplus note in the principal amount of $35.0 on December 8, 1999, to its affiliate, SLD, which
    matures on December 7, 2029. Interest is charged at an annual rate of 7.98%. Payment of the note and related accrued interest
    is subordinate to payments due to contract owners and claimant and beneficiary claims, as well as debts owed to all other
    classes of debtors, other than surplus note holders. Any payment of principal and/or interest made is subject to the prior
    approval of the Iowa Insurance Commissioner. Interest expense was $2.8 for each of the years ended December 31, 2012, 2011
    and 2010, respectively.

    On December 29, 2004, the Company issued surplus notes in the aggregate principal amount of $400.0 (the "Notes"),
    scheduled to mature on December 29, 2034, to its affiliates, ING Life Insurance and Annuity Company, RLI and SLDI. The
    Notes bear interest at a rate of 6.26% per year. Any payment of principal and/or interest is subject to the prior approval of the
    Iowa Insurance Commissioner. Interest expense was $25.4 for each of the years ended December 31, 2012, 2011 and 2010,
    respectively.

                                                                                                  C-76

     

    ING USA Annuity and Life Insurance Company
    (A wholly owned subsidiary of Lion Connecticut Holdings Inc.)
    Notes to the Financial Statements
    (Dollar amounts in millions, unless otherwise stated)

                                                                                                                                                                                                                        
    Funding Agreement

    On August 10, 2007, the Company issued an extendable funding agreement to its parent, Lion, upon receipt of a single deposit
    in the amount of $500.0. To fund the purchase of the funding agreement, Lion issued a promissory note to its indirect parent
    company, ING Insurance, which has been guaranteed by Lion's immediate parent, ING U.S., Inc.

    The funding agreement was scheduled to mature on August 10, 2012, however it was terminated on September 14, 2011, with
    an early termination fee paid to the Company of $3.2.

    Alt-A Back-up Facility

    On January 26, 2009, ING, for itself and on behalf of certain subsidiaries, including the Company, reached an agreement with
    the Dutch State on an Illiquid Asset Back Up Facility (the "Alt-A Back-up Facility") regarding Alt-A RMBS owned by certain
    subsidiaries of ING U.S., Inc., including the Company. Pursuant to this transaction, the Company transferred all risks and
    rewards on 80% of a $1.6 billion par Alt-A RMBS portfolio to ING Support Holding B.V. ("ING Support Holding"), a wholly
    owned subsidiary of ING Group by means of the granting of a participation interest to ING Support Holding. ING and ING
    Support Holding entered into a back-to-back arrangement with the Dutch State on this 80%. As a result of this first transaction,
    the Company retained 20% of the exposure for any results on the $1.6 billion Alt-A RMBS portfolio.

    The purchase price for the participation payable by the Dutch State was set at 90% of the par value of the 80% interest in the
    securities as of that date. This purchase price was payable in installments, was recognized as a loan granted to the Dutch State
    with a value of $1.2 billion, and was recorded as Loan-Dutch State Obligation on the Balance Sheets (the "Dutch State
    Obligation"). Under the transaction, other fees were payable by both the Company and the Dutch State. The Company
    incurred net fees of $2.3, $3.0 and $3.4 in the years ended December 31, 2012, 2011 and 2010, respectively.

    The Company executed a second transaction effective January 26, 2009, in which an additional $29.8 par Alt-A RMBS
    portfolio owned by the Company were sold to ING Direct Bancorp. ING Direct Bancorp paid cash in the amount of $21.4 for
    80% of the Company's additional $29.8 par Alt-A RMBS and included those purchased securities as part of its Alt-A RMBS
    portfolio sale to the Dutch State. ING Direct Bancorp paid cash in the amount of $3.6 and retained the remaining 20% of this
    Alt-A RMBS portfolio.

    On November 13, 2012, ING, all participating ING U.S., Inc. subsidiaries, including the Company, ING Support Holding and
    ING Bank N.V. ("ING Bank") entered into restructuring arrangements with the Dutch State, which closed the following day
    (the "Termination Agreement"). Pursuant to the restructuring transaction, the Company sold the Dutch State Obligation to ING
    Support Holding at fair value and transferred legal title to 80% of the securities subject to the Alt-A Back-up Facility to ING
    Bank. The restructuring resulted in an immaterial pre-tax loss. Following the restructuring transaction, the Company continues
    to own 20% of the Alt-A RMBS from the first transaction. The Company has the right to sell these securities, subject to a right
    of first refusal granted to ING Bank.

    Derivatives

    As of December 31, 2012 and 2011, the Company had call options with a notional amount of $256.7 and $382.2, respectively,
    and market value of $2.8 and $4.9, respectively, with ING Bank, an affiliate. Each of these contracts was entered into as a
    result of a competitive bid, which included unaffiliated counterparties.

                                                                                                C-77


    SEPARATE ACCOUNT B
    PART C - OTHER INFORMATION
     
    Item 24. Financial Statements and Exhibits
    Financial Statements:
    (a)(1) Included in Part A:
      Condensed Financial Information
    (2) Included in Part B:
      Financial Statements of Separate Account B:
      - Report of Independent Registered Public Accounting Firm
      - Statements of Assets and Liabilities as of December 31, 2012
      - Statements of Operations for the year ended December 31, 2012
      - Statements of Changes in Net Assets for the years ended December 31, 2012
        and 2011
      - Notes to Financial Statements
    Financial Statements of ING USA Annuity and Life Insurance Company:
      - Report of Independent Registered Public Accounting Firm
    - Balance Sheets as of December 31, 2012 and 2011
      - Statements of Operations for the years ended December 31, 2012, 2011 and
        2010
      -

    Statements of Comprehensive Income for the years ended December 31,

    2012, 2011 and 2010
      - Statements of Changes in Shareholder’s Equity for the years ended
        December 31, 2012, 2011 and 2010
      - Statements of Cash Flows for the years ended December 31, 2012, 2011 and
        2010
      - Notes to Financial Statements
     
     
    (b) Exhibits  
    (1)   Resolution of the Board of Directors of ING USA Annuity and Life Insurance
        Company authorizing the establishment of the Registrant • Incorporated by reference
        to the Initial Registration Statement on Form N-4 for Separate Account B filed with
        the Securities and Exchange Commission on October 1, 2001 (File Nos. 333-70600;
        811-5626).
    (2)   Not applicable
    (3.1)   Amendment to and Restatement of the Distribution Agreement between ING USA
        and Directed Services, Inc. effective January 1, 2004 • Incorporated herein by
        reference to Post-Effective Amendment No. 2 to a Registration Statement on Form N-
        4 for ING USA Annuity and Life Insurance Company Separate Account B filed with
        the Securities and Exchange Commission on April 9, 2004 (File Nos. 333-90516).
    (3.2)   Master Selling Agreement • Incorporated by reference to Registration Statement on
        Form N-4 for Separate Account B filed with the Securities and Exchange Commission
        on May 12, 2006 (File Nos. 333-70600).

     

     

    (3.3) Intercompany Agreement dated December 22, 2010 (effective January 1, 2010)
      between Directed Services LLC and ING USA Annuity and Life Insurance Company
      • Incorporated herein by reference to Post-Effective Amendment No. 55 to a
      Registration Statement on Form N-4 (File No 333-28679), as filed on April 6, 2011.
    (3.4) Intercompany Agreement dated December 22, 2010 (effective January 1, 2010)
      between ING Investment Management LLC and ING USA Annuity and Life
      Insurance and Company • Incorporated herein by reference to Post-Effective
      Amendment No. 55 to a Registration Statement on Form N-4 (File No. 333-28679), as
      filed on April 6, 2011.
    (4.1) Variable Annuity Group Master Contract (GA-MA-1102) • Incorporated by reference
      to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4 for
      Separate Account B filed with the Securities and Exchange Commission on December
      11, 2001 (File Nos. 333-70600).
    (4.2) Variable Annuity Contract (GA-IA-1102) • Incorporated by reference to Pre-Effective
      Amendment No. 1 to the Registration Statement on Form N-4 for Separate Account B
      filed with the Securities and Exchange Commission on December 11, 2001 (File No.
      333-70600).
    (4.3) Variable Annuity Certificate (GA-CA-1102) • Incorporated by reference to Pre-
      Effective Amendment No. 1 to the Registration Statement on Form N-4 for Separate
      Account B filed with the Securities and Exchange Commission on December 11, 2001
      (File No. 333-70600).
    (4.4) GET Fund Rider (GA-RA-1085) • Incorporated by reference to Pre-Effective
      Amendment No. 1 to the Registration Statement on Form N-4 for Separate Account B
      filed with the Securities and Exchange Commission on December 11, 2001 (File No.
      333-70600).
    (4.5) Section 72 Rider • Incorporated by reference to Pre-Effective Amendment No. 1 to
      the Registration Statement on Form N-4 for Separate Account B filed with the
      Securities and Exchange Commission on December 11, 2001 (File No. 333-70600).
    (4.6) Waiver of Surrender Charge Rider • Incorporated by reference to Pre-Effective
      Amendment No. 1 to the Registration Statement on Form N-4 for Separate Account B
      filed with the Securities and Exchange Commission on December 11, 2001 (File No.
      333-70600).
    (4.7) Simple Retirement Account Rider • Incorporated herein by reference to Post-Effective
      Amendment No. 34 to a Registration Statement on Form N-4 for Golden American
      Life Insurance Company Separate Account B filed with the Securities and Exchange
      Commission on April 15, 2003 (File No. 033-23351).
    (4.8) 403(b) Rider • Incorporated herein by reference to Post-Effective Amendment No. 34
      to a Registration Statement on Form N-4 for Golden American Life Insurance
      Company Separate Account B filed with the Securities and Exchange Commission on
      April 15, 2003 (File No. 033-23351).

     

     

    (4.9) Individual Retirement Annuity Rider • Incorporated herein by reference to Post-
      Effective Amendment No. 34 to a Registration Statement on Form N-4 for Golden
      American Life Insurance Company Separate Account B filed with the Securities and
      Exchange Commission on April 15, 2003 (File No. 033-23351).
    (4.10) ROTH Individual Retirement Annuity Rider • Incorporated herein by reference to
      Post-Effective Amendment No. 34 to a Registration Statement on Form N-4 for
      Golden American Life Insurance Company Separate Account B filed with the
      Securities and Exchange Commission on April 15, 2003 (File No. 033-23351).
    (4.11) Death Benefit Option Package Endorsement (GA-RA-1117) • Incorporated herein by
      reference to Post-Effective Amendment No. 4 to a Registration Statement on Form N-
      4 for Golden American Life Insurance Company Separate Account B filed with the
      Securities and Exchange Commission on August 1, 2003 (File No. 333-70600).
    (4.12) Company Address and Name Change Endorsement • Incorporated herein by reference
      to Post-Effective Amendment No. 25 to a Registration Statement on Form N-4 for
      ING USA Annuity and Life Insurance Company Separate Account B filed with the
      Securities and Exchange Commission on February 13, 2004 (File No. 333-28679).
    (4.13) Minimum Guaranteed Withdrawal Benefit Rider with Reset Option (ING Life Pay)
      (IU-RA-3023) • Incorporated by reference to Post-Effective Amendment No. 15 to
      Registration Statement on Form N-4 for Separate Account B filed with the Securities
      and Exchange Commission on July 20, 2006 (File No. 333-70600).
    (4.14) Sample Schedule Page Entries for Minimum Guaranteed Withdrawal Benefit Rider
      with Reset (Life Pay) (IU-RA-3023) • Incorporated by reference to Post-Effective
      Amendment No. 15 to Registration Statement on Form N-4 for Separate Account B
      filed with the Securities and Exchange Commission on July 20, 2006 (File No. 333-
      70600).
    (4.15) Minimum Guaranteed Withdrawal Benefit Rider with Reset Option (ING Joint Life
      Pay) (IU-RA-3029) • Incorporated by reference to Post-Effective Amendment No. 15
      to Registration Statement on Form N-4 for Separate Account B filed with the
      Securities and Exchange Commission on July 20, 2006 (File No. 333-70600).
    (4.16) Minimum Guaranteed Withdrawal Benefit Rider with Automatic Reset (ING Joint
      Life Pay) (IU-RA-3061) • Incorporated by reference to Post-Effective Amendment
      No. 20 to Registration Statement on Form N-4 for Separate Account B filed with the
      Securities and Exchange Commission on August 15, 2007 (File No. 333-70600).
    (4.17) Minimum Guaranteed Withdrawal Benefit Rider with Automatic Reset (Life Pay)
      (IU-RA-3062) • Incorporated by reference to Post-Effective Amendment No. 20 to
      Registration Statement on Form N-4 for Separate Account B filed with the Securities
      and Exchange Commission on August 15, 2007 (File No. 333-70600).
    (4.18) Surrender Charge Endorsement (IU-RA-3018) to Contract GA-IA-1102 and
      Certificate GA-CA-1102 and Master Contract GA-MA-1102 • Incorporated by
      reference to Post-Effective Amendment No. 25 to Registration Statement on Form N-
      4 for Separate Account B filed with the Securities and Exchange Commission on
      April 30, 2009 (File No. 333-70600).

     

     

    (4.19) Minimum Guaranteed Income Benefit Rider (IU-RA-3030) • Incorporated by
      reference to Post-Effective Amendment No. 25 to Registration Statement on Form N-
      4 for Separate Account B filed with the Securities and Exchange Commission on
      April 30, 2009 (File No. 333-70600).
    (4.20) Combination Minimum Guaranteed Withdrawal Benefit and Death Benefit Rider (IU-
      RA-3077) • Incorporated by reference to Post-Effective Amendment No. 25 to
      Registration Statement on Form N-4 for Separate Account B filed with the Securities
      and Exchange Commission on April 30, 2009 (File No. 333-70600).
    (4.21) Combination Minimum Guaranteed Withdrawal Benefit and Death Benefit Rider (IU-
      RA-3078) • Incorporated by reference to Post-Effective Amendment No. 25 to
      Registration Statement on Form N-4 for Separate Account B filed with the Securities
      and Exchange Commission on April 30, 2009 (File No. 333-70600).
    (4.22) Combination Minimum Guaranteed Withdrawal Benefit and Death Benefit Rider
      (Life Pay Plus) (IU-RA-4010(DE)(RC)) • Incorporated by reference to Post-Effective
      Amendment No. 25 to Registration Statement on Form N-4 for Separate Account B
      filed with the Securities and Exchange Commission on April 30, 2009 (File No. 333-
      70600).
    (4.23) Combination Minimum Guaranteed Withdrawal Benefit and Death Benefit Rider
      (Life Pay Plus) (IU-RA-4011(DE)(RC)) • Incorporated by reference to Post-Effective
      Amendment No. 25 to Registration Statement on Form N-4 for Separate Account B
      filed with the Securities and Exchange Commission on April 30, 2009 (File No. 333-
      70600).
    (5.1) Variable Annuity Application (GA-CDF-1105(08/06)) • Incorporated by reference to
      Post-Effective Amendment No. 16 to Registration Statement on Form N-4 for
      Separate Account B filed with the Securities and Exchange Commission on August 3,
      2006 (File No. 333-70600).
    (5.2) Variable Annuity Application (GA-CDF-1105(08/07)) • Incorporated by reference to
      Post-Effective Amendment No. 20 to Registration Statement on Form N-4 for
      Separate Account B filed with the Securities and Exchange Commission on August
      15, 2007 (File No. 333-70600).
    (5.3) Deferred Variable Annuity Application (GA-CDF-1105(12/08)) • Incorporated by
      reference to Post-Effective Amendment No. 25 to Registration Statement on Form N-
      4 for Separate Account B filed with the Securities and Exchange Commission on
      April 30, 2009 (File No. 333-70600).
    (6.1) Restated Articles of Incorporation Providing for the Redomestication of Golden
      American Life Insurance Company dated July 2 and 3, 2003, effective January 1,
      2004 • Incorporated by reference to Company's 10-K, as filed with the SEC on March
      29, 2004 (File No. 033-87270).
    (6.2) Amendment to Articles of Incorporation Providing for the Name Change of Golden
      American Life Insurance Company dated November 20, 2003, effective January 1,
      2004 • Incorporated by reference to the Company's 10-K, as filed with the SEC on
      March 29, 2004 (File No. 033-87270).

     

     

    (6.3) Amendment to Articles of Incorporation Providing for the Change in Purpose and
      Powers of ING USA Annuity and Life Insurance Company dated March 3 and 4,
      2004, effective March 11, 2004 • Incorporated by reference to the Company's 10-Q, as
      filed with the SEC on May 17, 2004 (File No. 033-87270).
    (6.4) Amended and Restated By-Laws of ING USA Annuity and Life Insurance Company,
      effective January 1, 2005 • Incorporated by reference to Registrant’s Form 10-K as
      filed with the Securities and Exchange Commission on May 13, 2005 (File No. 33-
      87270).
    (6.5) Resolution of the Board of Directors for Powers of Attorney, dated (04/23/99) •
      Incorporated by reference to Post-Effective Amendment No. 3 to a Registration
      Statement on Form N-4 for Golden American Life Insurance Separate Account B filed
      with the Securities and Exchange Commission on April 23, 1999 (File No. 333-
      28679).
    (7) Not applicable
    (8.1) Amended and Restated Participation Agreement as of June 26, 2009 by and among
      ING Life Insurance and Annuity Company, Fidelity Distributors Corporation,
      Variable Insurance Products Fund, Variable Insurance Products Fund II, Variable
      Insurance Products Fund III, Variable Insurance Products Fund IV and Variable
      Insurance Products Fund V • Incorporated by reference to Post-Effective Amendment
      No. 56 to Registration Statement on Form N-4 (File No. 333-01107), as filed on
      December 18, 2009.
    (8.2) First Amendment as of June 26, 2009 to Participation Agreement as of June 26, 2009
      by and among ING Life Insurance and Annuity Company, Fidelity Distributors
      Corporation, Variable Insurance Products Fund, Variable Insurance Products Fund II,
      Variable Insurance Products Fund III, Variable Insurance Products Fund IV and
      Variable Insurance Products Fund V • Incorporated by reference to Post-Effective
      Amendment No. 56 to Registration Statement on Form N-4 (File No. 333-01107), as
      filed on December 18, 2009.
    (8.3) Letter Agreement dated May 16, 2007 between Reliastar Life Insurance Company of
      New York, Fidelity Distributors Corporation, Variable Insurance Products Fund,
      Variable Insurance Products Fund II and Variable Insurance Products Fund V •
      Incorporated by reference to Pre-Effective Amendment No. 2 to Registration
      Statement on Form N-4 (File No. 333-139695), as filed on September 5, 2007.
    (8.4) Service Agreement effective as of June 1, 2002 by and between Fidelity Investments
      Institutional Operations Company, Inc. and ING Financial Advisers, LLC •
      Incorporated by reference to Post-Effective Amendment No. 33 to Registration
      Statement on Form N-4 (File No. 033-75988), as filed on August 5, 2004.
    (8.5) Service Contract dated June 20, 2003 and effective as of June 1, 2002 by and between
      Directed Services, Inc., ING Financial Advisers, LLC, and Fidelity Distributors
      Corporation • Incorporated by reference to Post-Effective Amendment No. 33 to
      Registration Statement on Form N-4 (File No. 033-75988), as filed on August 5, 2004.

     

     

    (8.6) First Amendment effective as of April 1, 2005 to Service Contract dated June 20,
      2003 between Fidelity Distributors Corporation and ING Financial Advisers, Inc. and
      amended on on April 1, 2006• Incorporated by reference to Post-Effective
      Amendment No. 47 to Registration Statement on Form N-4 (File No. 033-75962), as
      filed on November 21, 2006.
    (8.7) Rule 22c-2 Agreement dated no later than April 16, 2007 and is effective as of
      October 16, 2007 between Fidelity Distributors Corporation, ING Life Insurance and
      Annuity Company, ING National Trust, ING USA Annuity and Life Insurance
      Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of
      New York, Security Life of Denver Insurance Company and Systematized Benefits
      Administrators Inc. • Incorporated by reference to Post-Effective Amendment No. 50
      to Registration Statement on Form N-4 (File No. 033-75962), as filed on June 15,
      2007.
    (8.8) Amended and Restated Participation Agreement as of December 30, 2005 by and
      among Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton
      Distributors, Inc., ING Life Insurance and Annuity Company, ING USA Annuity and
      Life Insurance Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance
      Company of New York and Directed Services, Inc. • Incorporated by reference to
      Post-Effective Amendment No. 17 to Registration Statement on Form N-4 (File No.
      333-85618), as filed on February 1, 2007.
    (8.9) Amendment effective June 5, 2007 to Amended and Restated Participation Agreement
      as of December 30, 2005 by and among Franklin Templeton Variable Insurance
      Products Trust, Franklin/Templeton Distributors, Inc., ING Life Insurance and
      Annuity Company, ING USA Annuity and Life Insurance Company, ReliaStar Life
      Insurance Company, ReliaStar Life Insurance Company of New York and Directed
      Services, LLC and amended on November 17, 2011 • Incorporated by reference to
      Pre-Effective Amendment No. 1 to Registration Statement on Form N-4 (File No.
      333-139695), as filed on July 6, 2007, and by reference to Post-Effective Amendment
      No. 59 to Registration Statement on Form N-4 (File No. 033-75962), as filed on April
      3, 2012.
    (8.10) Amended and Restated Administrative Services Agreement executed as of October 3,
      2005 between Franklin Templeton Services, LLC, ING Life Insurance and Annuity
      Company, ING Insurance Company of America, ING USA Annuity and Life
      Insurance Company and ReliaStar Life Insurance Company • Incorporated by
      reference to Post-Effective Amendment No. 32 to Registration Statement on Form N-
      4 (File No. 033-81216), as filed on April 11, 2006.
    (8.11) Amendment No. 1 dated May 17, 2006 to Amended and Restated Administrative
      Services Agreement dated October 3, 2005 by and among Franklin Templeton
      Services, LLC, ING Life Insurance and Annuity Company, ING USA Annuity and
      Life Insurance Company, ReliaStar Life Insurance Company and ReliaStar Life
      Insurance Company of New York • Incorporated by reference to Post-Effective
      Amendment No. 59 to Registration Statement on Form N-4 (File No. 033-75962), as
      filed on April 3, 2012.

     

     

    (8.12) Rule 22c-2 Shareholder Information Agreement (Franklin Templeton Variable
      Insurance Products Trust) entered into as of April 16, 2007 among
      Franklin/Templeton Distributors, Inc., ING Life Insurance and Annuity Company,
      ING USA Annuity and Life Insurance Company, ReliaStar Life Insurance Company
      and ReliaStar Life Insurance Company of New York • Incorporated by reference to
      Post-Effective Amendment No. 50 to Registration Statement on Form N-4 (File No.
      033-75962), as filed on June 15, 2007.
    (8.13) Participation Agreement dated April 30, 2003 among ING Life Insurance and Annuity
      Company, The GCG Trust and Directed Services, Inc. • Incorporated by reference to
      Post-Effective Amendment No. 54 to Registration Statement on Form N-1A (File No.
      033-23512), as filed on August 1, 2003.
    (8.14) Amendment dated October 9, 2006 to the Participation Agreement dated April 30,
      2003 among ING Life Insurance and Annuity Company, ING Investors Trust and
      Directed Services, Inc. • Incorporated by reference to Post-Effective Amendment No.
      47 to Registration Statement on Form N-4 (File No. 033-75962), as filed on
      November 21, 2006.
    (8.15) Participation Agreement dated as of November 28, 2001 among Portfolio Partners,
      Inc., Aetna Life Insurance and Annuity Company and Aetna Investment Services,
      LLC • Incorporated by reference to Post-Effective Amendment No. 30 to Registration
      Statement on Form N-4 (File No. 033-75962), as filed on April 8, 2002.
    (8.16) Amendment dated March 5, 2002 between Portfolio Partners, Inc. (to be renamed ING
      Partners, Inc. effective May 1, 2002), Aetna Life Insurance and Annuity Company (to
      be renamed ING Life Insurance and Annuity Company effective May 1, 2002) and
      Aetna Investment Services, LLC (to be renamed ING Financial Advisers, LLC) to
      Participation Agreement dated November 28, 2001 and amended on May 1, 2003,
      November 1, 2004, April 29, 2005, August 31, 2005, December 7, 2005 and April 28,
      2006 • Incorporated by reference to Post-Effective Amendment No. 30 to Registration
      Statement on Form N-4 (File No. 033-75962), as filed on April 8, 2002, and by
      reference to Post-Effective Amendment No. 28 (File No. 033-75988), as filed on April
      10, 2003, and by reference to Post-Effective Amendment No. 20 to Registration
      Statement on Form N-1A (File No. 333-32575), as filed on April 1, 2005, and by
      reference to Post-Effective Amendment No. 32 (File No. 033-81216), as filed on April
      11, 2006, and by reference to Initial Registration (File No. 333-134760), as filed on
      June 6, 2006.
    (8.17) Shareholder Servicing Agreement (Service Class Shares) dated as of November 27,
      2001 between Portfolio Partners, Inc. and Aetna Life Insurance and Annuity Company
      • Incorporated by reference to Post-Effective Amendment No. 30 to Registration
      Statement on Form N-4 (File No. 033-75962), as filed on April 8, 2002.

     

     

    (8.18) Amendment dated March 5, 2002 between Portfolio Partners, Inc. (to be renamed ING
      Partners, Inc. effective May 1, 2002) and Aetna Life Insurance and Annuity Company
      (to be renamed ING Life Insurance and Annuity Company effective May 1, 2002) to
      the Shareholder Servicing Agreement (Service Class Shares) dated November 27,
      2001 and amended on May 1, 2003, November 1, 2004, April 29, 2005, December 7,
      2005 and April 28, 2006 • Incorporated by reference to Post-Effective Amendment
      No. 30 to Registration Statement on Form N-4 (File No. 033-75962), as filed on April
      8, 2002, and by reference to Post-Effective Amendment No.28 (File No. 033-75988),
      as filed on April 10, 2003, and by reference to Post-Effective Amendment No. 32
      (File No. 033-81216), as filed on April 11, 2006, and by reference to Initial
      Registration Statement (File No. 333-134760), as filed on June 6, 2006.
    (8.19) Fund Participation Agreement dated as of May 1, 1998 by and among Aetna Life
      Insurance and Annuity Company and Aetna Variable Fund, Aetna Variable Encore
      Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of
      each of its series, Aetna Generation Portfolios, Inc. on behalf of each of its series,
      Aetna Variable Portfolios, Inc. on behalf of each of its series and Aeltus Investment
      Management, Inc. • Incorporated by reference to Registration Statement on Form N-4
      (File No. 333-56297), as filed on June 8, 1998.
    (8.20) Amendment dated November 9, 1998 to Fund Participation Agreement dated as of
      May 1, 1998 by and among Aetna Life Insurance and Annuity Company and Aetna
      Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced
      VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation Portfolios,
      Inc. on behalf of each of its series, Aetna Variable Portfolios, Inc. on behalf of each of
      its series and Aeltus Investment Management, Inc. and amended on December 31,
      1999, February 11, 2000, May 1, 2000, February 27, 2001 and June 19, 2001 •
      Incorporated by reference to Post-Effective Amendment No. 2 to Registration
      Statement on Form N-4 (File No. 333-56297), as filed on December 14, 1998, and by
      reference to Post-Effective Amendment No. 19 (File No. 333-01107), as filed on
      February 16, 2000, and by reference to Post-Effective Amendment No. 20 (File No.
      333-01107), as filed on April 4. 2000, and by reference to Post-Effective Amendment
      No. 24 (File No. 333-01107), as filed on April 13, 2001, and by reference to Post-
      Effective Amendment No. 32 (File No. 033-75988), as filed on April 13, 2004.
    (8.21) Service Agreement effective as of May 1, 1998 between Aeltus Investment
      Management, Inc. and Aetna Life Insurance and Annuity Company in connection with
      the sale of shares of Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income
      Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its series,
      Aetna Generation Portfolios, Inc. on behalf of each of its series and Aetna Variable
      Portfolios, Inc. on behalf of each of its series • Incorporated by reference to
      Registration Statement on Form N-4 (File No. 333-56297), as filed on June 8, 1998.

     

     

    (8.22) Amendment dated November 4, 1998 and effective as of October 15, 1998 to Service
      Agreement effective as of May 1, 1998 between Aeltus Investment Management, Inc.
      and Aetna Life Insurance and Annuity Company in connection with the sale of shares
      of Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna
      Balanced VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation
      Portfolios, Inc. on behalf of each of its series and Aetna Variable Portfolios, Inc. on
      behalf of each of its series and amended February 11, 2000, May 1, 2000 and June 26,
      2001 • Incorporated by reference to Post-Effective Amendment No. 2 to Registration
      Statement on Form N-4 (File No. 333-56297), as filed on December 14, 1998, and by
      reference to Post-Effective Amendment No. 20 (File No. 333-01107), as filed on April
      4, 2000, and by reference to Post-Effective Amendment No. 32 (File No. 033-75988),
      as filed on April 13, 2004.
    (8.23) Fund Participation Agreement dated as of May 1, 2001 among Pilgrim Variable
      Products Trust, Aetna Life Insurance and Annuity Company and ING Pilgrim
      Securities, Inc. • Incorporated by reference to Post-Effective Amendment No. 26 to
      Registration Statement on Form N-4 (File No. 333-01107), as filed on July 13, 2001.
    (8.24) Amendment dated August 30, 2002 between ING Life Insurance and Annuity
      Company, ING Variable Products Trust (formerly known as Pilgrim Variable
      Products Trust) and ING Funds Distributor to Fund Participation Agreement dated
      May 1, 2001 • Incorporated by reference to Post-Effective Amendment No. 28 to
      Registration Statement on Form N-4 (File No. 033-75988), as filed on April 10, 2003.
    (8.25) Administrative and Shareholder Services Agreement dated April 1, 2001 between
      ING Funds Services, LLC and ING Life Insurance and Annuity Company
      (Administrator for ING Variable Products Trust) • Incorporated by reference to Post-
      Effective Amendment No. 28 to Registration Statement on Form N-4 (File No. 033-
      75988), as filed on April 10, 2003.
    (8.26) Rule 22c-2 Agreement dated no later than April 16, 2007 is effective October 16,
      2007 between ING Funds Services, LLC, ING Life Insurance and Annuity Company,
      ING National Trust, ING USA Annuity and Life Insurance Company, ReliaStar Life
      Insurance Company, ReliaStar Life Insurance Company of New York, Security Life
      of Denver Insurance Company and Systematized Benefits Administrators Inc. •
      Incorporated by reference to Post-Effective Amendment No. 50 to Registration
      Statement on Form N-4 (File No. 033-75962), as filed on June 15, 2007.
    (8.27) Fund Participation Agreement dated March 11, 1997 between Aetna Life Insurance
      and Annuity Company, Oppenheimer Variable Annuity Account Funds and
      OppenheimerFunds, Inc. • Incorporated by reference to Post-Effective Amendment
      No. 27 to Registration Statement on Form N-4 (File No. 033-34370), as filed on April
      16, 1997.

     

     

    (8.28) First Amendment dated December 1, 1999 to Fund Participation Agreement between
      Aetna Life Insurance and Annuity Company, Oppenheimer Variable Annuity Account
      Funds and OppenheimerFunds, Inc. dated March 11, 1997 and amended on May 1,
      2004 and August 15, 2007 • Incorporated by reference to Post-Effective Amendment
      No. 19 to Registration Statement on Form N-4 (File No. 333-01107), as filed on
      February 16, 2000, and by reference to Post-Effective Amendment No. 39 (File No.
      033-75988), as filed on April 11, 2007, and by reference to Post-Effective
      Amendment No. 46 (File No. 333-01107), as filed on February 15, 2008.
    (8.29) Service Agreement effective as of March 11, 1997 between OppenheimerFunds, Inc.
      and Aetna Life Insurance and Annuity Company • Incorporated by reference to Post-
      Effective Amendment No. 27 to Registration Statement on Form N-4 (File No. 033-
      34370), as filed on April 16, 1997.
    (8.30) Rule 22c-2 Agreement dated no later than April 16, 2007 and is effective as of
      October 16, 2007 between Oppenheimer Funds Services, ING Life Insurance and
      Annuity Company, ING National Trust, ING USA Annuity and Life Insurance
      Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of
      New York, Security Life of Denver Insurance Company and Systematized Benefits
      Administrators Inc. • Incorporated by reference to Pre-Effective Amendment No. 50
      to Registration Statement on Form N-4 (File No. 033-75962), as filed on June 15,
      2007.
    (8.31) Novation of and Amendment to Participation Agreement dated as of January 26, 2011
      and effective as of February 14, 2011 by and among Allianz Global Investors
      Distributors LLC, PIMCO Investments LLC, PIMCO Variable Insurance Trust, ING
      Life Insurance and Annuity Company, ING USA Annuity and Life Insurance
      Company, ReliaStar Life Insurance Company and ReliaStar Life Insurance Company
      of New York • Incorporated by reference to Post-Effective Amendment No. 15 to
      Registration Statement on Form N-4 (File No. 333-105479), as filed on April 25,
      2012.
    (8.32) Services Agreement dated as of May 1, 2004 between PIMCO Variable Insurance
      Trust (the “Trust”), ING Life Insurance and Annuity Company and ReliaStar Life
      Insurance Company (Administrative) • Incorporated by reference to Post-Effective
      Amendment No. 38 to Registration Statement on Form N-4 (File No. 333-01107), as
      filed on February 11, 2005.
    (8.33) First Amendment dated August 15, 2007 to Services Agreement between PIMCO
      Variable Insurance Trust, ING Life Insurance and Annuity Company and ReliaStar
      Life Insurance Company dated as of May 1, 2004 • Incorporated by reference to Post-
      Effective Amendment No. 51 to Registration Statement on Form N-4 (File No. 333-
      01107), as filed on May 23, 2008.
    (8.34) Services Agreement effective as of May 1, 2004 between Pacific Investment
      Management Company LLC (“PIMCO”), ING Life Insurance and Annuity Company
      and ReliaStar Life Insurance Company • Incorporated by reference to Post-Effective
      Amendment No. 38 to Registration Statement on Form N-4 (File No. 333-01107), as
      filed on February 11, 2005.

     

     

    (8.35) First Amendment dated August 15, 2007 to Services Agreement between Pacific
      Investment Management Company LLC (“PIMCO”), ING Life Insurance and Annuity
      Company, ReliaStar Life Insurance Company and Allianz Global Investors
      Distributors LLC effective as of May 1, 2004 • Incorporated by reference to Post-
      Effective Amendment No. 51 to Registration Statement on Form N-4 (File No. 333-
      01107), as filed on May 23, 2008.
    (8.36) Rule 22c-2 Agreement dated no later than April 16, 2007, is effective as of the 16th
      day of October, 2007 between Allianz Global Investors Distributors LLC, ING Life
      Insurance and Annuity Company, ING National Trust, ING USA Annuity and Life
      Insurance Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance
      Company of New York, Security Life of Denver Insurance Company and
      Systematized Benefits Administrators Inc. • Incorporated by reference to Pre-
      Effective Amendment No. 1 to Registration Statement on Form N-4 (File No. 333-
      139695), as filed on July 6, 2007.
    (8.37) Participation Agreement made and entered into as of July 1, 2001 by and among
      Pioneer Variable Contracts Trust, Aetna Life Insurance and Annuity Company,
      Pioneer Investment Management, Inc. and Pioneer Funds Distributor, Inc. •
      Incorporated by reference to Post-Effective Amendment No. 27 to Registration
      Statement on Form N-4 (File No. 333-01107), as filed on October 26, 2001.
    (8.38) Amendment No. 1 is made and entered into as of May 1, 2004 to Participation
      Agreement between Pioneer Variable Contracts Trust and ING Life Insurance and
      Annuity Company f/k/a Aetna Life Insurance and Annuity Company, Pioneer
      Investment Management, Inc. and Pioneer Funds Distributor, Inc. dated July 1, 2001
      and amended on August 15, 2007 • Incorporated by reference to Post-Effective
      Amendment No. 40 to Registration Statement on Form N-4 (File No. 033- 75962), as
      filed on April 13, 2005, and by reference to Post-Effective Amendment No. 46 (File
      No. 333-01107), as filed on February 15, 2008.
    (8.39) Rule 22c-2 Agreement dated March 1, 2007 and is effective as of October 16, 2007
      between Pioneer Investment Management Shareholder Services, Inc., ING Life
      Insurance and Annuity Company, ING National Trust, ING USA Annuity and Life
      Insurance Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance
      Company of New York, Security Life of Denver Insurance Company and
      Systematized Benefits Administrators Inc. • Incorporated by reference to Post-
      Effective Amendment No. 50 to Registration Statement on Form N-4 (File No. 033-
      75962), as filed on June 15, 2007.
    (9) Opinion and Consent of Counsel
    (10) Consent of Independent Registered Public Accounting Firm
    (11) Not applicable
    (12) Not applicable
    (13) Powers of Attorney

     

     

    Item 25. Directors and Officers of the Depositor*
            
    Name Principal Business Address Positions and Offices with Depositor
                 
    Michael S. Smith 1475 Dunwoody Drive Director and President
      West Chester, PA 19380  
     
    Mary (Maliz) E. Beams    		 One Orange Way Executive Vice President and Director
      Windsor, CT 06095-4774  
     
    Donald W. Britton    		 20 Washington Avenue South Director
      Minneapolis, Minnesota 55401  
     
    Alain M. Karaoglan    		 230 Park Avenue Director
      New York, NY 10169  
     
    Rodney O. Martin    		 230 Park Avenue Director
      New York, NY 10169  
     
    Ewout L. Steenbergen    		 230 Park Avenue Executive Vice President, Finance and
      New York, NY 10169 Director
     
    Boyd G. Combs    		 5780 Powers Ferry Road, N.W. Senior Vice President, Tax
      Atlanta, GA 30327-4390  
     
    Michael J. Gioffre    		 One Orange Way Senior Vice President and Chief
      Windsor, CT 06095-4774 Compliance Officer
     
    Christina K. Hack    		 1475 Dunwoody Drive Senior Vice President and Chief
      West Chester, PA 19380 Financial Officer
     
    Megan A. Huddleston    		 One Orange Way Senior Vice President and Secretary
      Windsor, CT 06095-4774  
     
    Christine L. Hurtsellers    		 5780 Powers Ferry Road, N.W. Senior Vice President
      Atlanta, GA 30327-4390  
     
    Mark B. Kaye    		 One Orange Way Senior Vice President
      Windsor, CT 06095-4774  
     
    Patrick D. Lusk    		 1475 Dunwoody Drive Senior Vice President and Appointed
      West Chester, PA 19380 Actuary
     
    Gilbert E. Mathis    		 5780 Powers Ferry Road, N.W. Senior Vice President
      Atlanta, GA 30327-4390  
     
    Diane M. McCarthy    		 1475 Dunwoody Drive Senior Vice President, Finance
      West Chester, PA 19380  
     
    Daniel P. Mulheran, Sr.    		 20 Washington Avenue South Senior Vice President
      Minneapolis, Minnesota 55401  
     
    David S. Pendergrass    		 5780 Powers Ferry Road, N.W. Senior Vice President and Treasurer
      Atlanta, GA 30327-4390  

     

     

    Name Principal Business Address Positions and Offices with Depositor
     
    Steven T. Pierson 5780 Powers Ferry Road, N.W. Senior Vice President and Chief
      Atlanta, GA 30327-4390 Accounting Officer
     
    Justin Smith 230 Park Avenue Senior Vice President and Deputy
      New York, NY 10169 General Counsel
     
    Kristi L. Cooper 909 Locust Street Vice President and Chief Compliance
      Des Moines, IA 50309 Officer

     

    * These individuals may also be directors and/or officers of other affiliates of the Company.

    Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant

    Incorporated herein by reference to Item 26 in Post-Effective Amendment No. 11 to Registration
    Statement on Form N-4 for Variable Annuity Account I of ING Life Insurance and Annuity
    Company (File No. 333-130822), as filed with the Securities and Exchange Commission on
    April 3, 2013.

    Item 27. Number of Contract Owners

    As of February 28, 2013, there were 269,364 qualified contract owners and 155,113 non-
    qualified contract owners in ING USA’s Separate Account B.

    Item 28. Indemnification

    ING USA Annuity and Life Insurance Company shall indemnify (including therein the
    prepayment of expenses) any person who is or was a director, officer or employee, or who is or
    was serving at the request of ING USA Annuity and Life Insurance Company as a director,
    officer or employee of another corporation, partnership, joint venture, trust or other enterprise for
    expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually
    and reasonably incurred by him with respect to any threatened, pending or completed action, suit
    or proceedings against him by reason of the fact that he is or was such a director, officer or
    employee to the extent and in the manner permitted by law.

    ING USA Annuity and Life Insurance Company may also, to the extent permitted by law,
    indemnify any other person who is or was serving ING USA Annuity and Life Insurance
    Company in any capacity. The Board of Directors shall have the power and authority to
    determine who may be indemnified under this paragraph and to what extent (not to exceed the
    extent provided in the above paragraph) any such person may be indemnified.

    ING USA Annuity and Life Insurance Company or its parents may purchase and maintain
    insurance on behalf of any such person or persons to be indemnified under the provision in the
    above paragraphs, against any such liability to the extent permitted by law.

     

    A corporation may procure indemnification insurance on behalf of an individual who is or was a
    director of the corporation. Consistent with the laws of the State of Connecticut, ING U.S., Inc.
    maintains Professional Liability and fidelity bond insurance policies issued by an international
    insurer. The policies cover ING U.S., Inc. and any company in which ING U.S., Inc. has a
    controlling financial interest of 50% or more. These policies include either or both the principal
    underwriter, the depositor and any/all assets under the care, custody and control of ING U.S.,
    Inc. and/or its subsidiaries. The policies provide for the following types of coverage: errors and
    omissions/professional liability, employment practices liability and fidelity/crime (a.k.a.
    “Financial Institutional Bond”).
     
    Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended,
    may be permitted to directors, officers and controlling persons of the Registrant, as provided
    above or otherwise, the Registrant has been advised that in the opinion of the SEC such
    indemnification by the Depositor is against public policy, as expressed in the Securities Act of
    1933, and therefore may be unenforceable. In the event that a claim of such indemnification
    (except insofar as it provides for the payment by the Depositor of expenses incurred or paid by a
    director, officer or controlling person in the successful defense of any action, suit or proceeding)
    is asserted against the Depositor by such director, officer or controlling person and the SEC is
    still of the same opinion, the Depositor or Registrant 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 of whether such indemnification by the Depositor is against public policy as expressed
    by the Securities Act of 1933 and will be governed by the final adjudication of such issue.
     
    Item 29. Principal Underwriter
     
    (a) In addition to the Registrant, Directed Services LLC serves as principal underwriter for
      all contracts issued by ING USA Annuity and Life Insurance Company through its
      Separate Accounts A, B and EQ and Alger Separate Account A and ReliaStar Life
      Insurance Company of New York through its Separate Account NY-B. Also, Directed
      Services LLC serves as investment advisor to ING Investors Trust and ING Partners,
      Inc.
     
    (b) The following information is furnished with respect to the officers and directors of
      Directed Services LLC, the Registrant’s Distributor.

     

    Name Principal Business Address Positions and Offices with Underwriter
     
    Chad Tope 909 Locust Street President and Director
      Des Moines, IA 50309  
     
    Shaun P. Mathews One Orange Way Executive Vice President
      Windsor, Ct 06095-4774  
     
    Patrick J. Kennedy One Orange Way Director
      Windsor, CT 06095-4774  

     

     

    Name Principal Business Address Positions and Offices with Underwriter
     
    Kimberly Anderson 6450 Rockside Woods Senior Vice President
      Boulevard South  
      Independence, OH 44131  
     
    Michael J. Roland 7337 E. Doubletree Ranch Road Senior Vice President and Investment
      Scottsdale, AZ 85258 Advisory Chief Compliance Officer
     
    Stanley D. Vyner 230 Park Avenue Senior Vice President
      New York, NY 10169  
     
    Richard E. Gelfand 1475 Dunwoody Drive Chief Financial Officer
      West Chester, PA 19380-1478  
     
    Regina Gordon One Orange Way Chief Compliance Officer
      Windsor, CT 06095-4774  
     
    Julius A. Drelick, III 7337 E. Doubletree Ranch Road Vice President
      Scottsdale, AZ 85258  
     
    Heather Hackett 230 Park Avenue Vice President
      New York, NY 10169  
     
    Jody H. Hrazanek 230 Park Avenue Vice President
      New York, NY 10169  
     
    Todd R. Modic 7337 E. Doubletree Ranch Road Vice President
      Scottsdale, AZ 85258  
     
    David S. Pendergrass 5780 Powers Ferry Road, N.W. Vice President and Treasurer
      Atlanta, GA 30327-4390  
     
    Jason Rausch 230 Park Avenue Vice President
      New York, NY 10169  
     
    Stephen Sedmak 230 Park Avenue, 13th Floor Vice President
      New York, NY 10169  
     
    Spencer T. Shell 5780 Powers Ferry Road, N.W. Vice President and Assistant Treasurer
      Atlanta, GA 30327-4390  
     
    May Tong 230 Park Avenue, 13th Floor Vice President
      New York, NY 10169  
     
    Paul L. Zemsky 230 Park Avenue Vice President
      New York, NY 10169  
     
    Megan A. Huddleston One Orange Way Secretary
      Windsor, CT 06095-4774  
     
    Huey P. Falgout, Jr. 7337 E. Doubletree Ranch Road Assistant Secretary
      Scottsdale, AZ 85258  
     
    Tina M. Nelson 20 Washington Avenue South Assistant Secretary
      Minneapolis, MN 55401  

     

     

    Name Principal Business Address Positions and Offices with Underwriter
     
    Melissa A. O’Donnell 20 Washington Avenue South Assistant Secretary
      Minneapolis, MN 55401  
     
    Jennifer M. Ogren 20 Washington Avenue South Assistant Secretary
      Minneapolis, MN 55401  
     
    Randall K. Price 20 Washington Avenue South Assistant Secretary
      Minneapolis, MN 55401  
     
    Susan M. Vega 20 Washington Avenue South Assistant Secretary
      Minneapolis, MN 55401  

     

    (c)      Compensation to Principal Underwriter:
            
    (1) (2) (3) (4) (5)
     
    Name of
    Principal
    Underwriter    		 2012 Net
    Underwriting
    Discounts and
    Commissions    		 Compensation
    on Redemption    		 Brokerage
    Commissions    		 Compensation
     
    Directed $207,972,770.50 $0 $0 $0
    Services LLC        
     
     
    Item 30. Location of Accounts and Records

     

    All accounts, books and other documents required to be maintained by Section 31(a) of the 1940
    Act and the rules under it relating to the securities described in and issued under this Registration
    Statement are maintained by the Depositor and located at 909 Locust Street, Des Moines, Iowa
    50309; 1475 Dunwoody Drive, West Chester, Pennsylvania 19380; 5780 Powers Ferry Road,
    NW, Atlanta, Georgia 30327-4390 and at One Orange Way, Windsor, Connecticut 06156-4774.
     
    Item 31. Management Services
     
    None.
     
    Item 32. Undertakings
     
    Registrant hereby undertakes:
     
    (a) to file a post-effective amendment to this registration statement as frequently as it is
    necessary to ensure that the audited financial statements in the registration statement
    are never more than 16 months old for as long as payments under the variable annuity
    contracts may be accepted;

     

     

    (b)   to include either (1) as part of any application to purchase a contract offered by the
    prospectus, a space that an applicant can check to request a Statement of Additional
    Information, or (2) a post card or similar written communication affixed to or included
    in the prospectus that the applicant can remove to send for a Statement of Additional
    Information; and
     
    (c) to deliver any Statement of Additional Information and any financial statements
    required to be made available under this form N-4 promptly upon written or oral
    request.
     
    The Company hereby represents:
     
    1. The account meets the definition of a “separate account” under federal securities laws.
     
    2. That the fees and charges deducted under the Contract described in the Prospectus, in
      the aggregate, are reasonable in relation to the services rendered, the expenses to be
      incurred and the risks assumed by the Company.

     

     

    SIGNATURES
     
    As required by the Securities Act of 1933 and the Investment Company Act of 1940, the
    Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness
    of this Post-Effective Amendment to its Registration Statement on Form N-4 (File No. 333-
    70600) and has duly caused this Post-Effective Amendment to be signed on its behalf in the
    Town of Windsor, State of Connecticut, on the 16th day of April, 2013.
     
      SEPARATE ACCOUNT B
    (Registrant)
     
      By: ING USA ANNUITY AND LIFE INSURANCE
        COMPANY
        (Depositor)
     
      By: Michael S. Smith*
        Michael S. Smith
    President
        (principal executive officer)
     
    As required by the Securities Act of 1933, this Post-Effective Amendment No. 31 to the
    Registration Statement has been signed by the following persons in the capacities and on the date
    indicated
     
    Signature Title     Date
     
    Michael S. Smith* Director and President )  
    Michael S. Smith (principal executive officer) )  
          )  
    Christina Hack* Senior Vice President and Chief Financial Officer )  
    Christina Hack (principal financial officer) )  
          )  
    Steven T. Pierson* Senior Vice President and Chief Accounting Officer ) April
    Steven T. Pierson (principal account officer) ) 16, 2013
          )  
    Mary (Maliz) E. Beams* Director and Executive Vice President )  
    Mary (Maliz) E. Beams     )  
          )  
    Donald W. Britton* Director   )  
    Donald W. Britton     )  
          )  
    Alain M. Karaoglan* Director   )  
    Alain M. Karaoglan     )  
             
    Rodney O. Martin* Director   )  
    Rodney O. Martin     )  

     

     

        )
    Ewout Steenbergen* Director )
    Ewout Steenbergen   )
     
    By: /s/ Nicholas Morinigo    
          Nicholas Morinigo
          *Attorney-in-Fact
        
    *Executed by Nicholas Morinigo on behalf of those indicated pursuant to Power of Attorney

     

     

    SEPARATE ACCOUNT B
    EXHIBIT INDEX
             
    Exhibit No.    		 Exhibit
      
    24(b)(9)    		 Opinion and Consent of Counsel ______
      
    24(b)(10)    		 Consent of Independent Registered Public Accounting Firm ______
      
    24(b)(13)    		 Powers of Attorney ______