Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Illiquid Assets Back-Up Facility

In the first quarter of 2009, ING reached an agreement, for itself and on behalf of certain ING affiliates including the Company, with the Dutch State on the Illiquid Assets Back-Up Facility (the “Back-Up Facility”) covering 80% of ING's Alt-A RMBS. Under the terms of the Back-Up Facility, a full credit risk transfer to the Dutch State was realized on 80% of ING's Alt-A RMBS owned by ING Bank, FSB and certain subsidiaries of ING U.S., Inc., including the Company with an aggregate book value of $36.0 billion, including book value of $802.5 of the Alt-A RMBS portfolio owned by the Company (with respect to the Company's portfolio, the “Designated Securities Portfolio”) (the “ING-Dutch State Transaction”). As a result of the risk transfer, the Dutch State participates in 80% of any results of the ING Alt-A RMBS portfolio. The risk transfer to the Dutch State took place at a discount of approximately 10% of par value. In addition, under the Back-Up Facility, other fees are paid by the Company and the Dutch State. Each ING company participating in the ING-Dutch State Transaction, including the Company remains the legal owner of 100% of its Alt-A RMBS portfolio and remains exposed to 20% of any results on its portfolio. The ING-Dutch State Transaction closed on March 31, 2009, with the risk transfer to the Dutch State taking effect as of January 26, 2009.

In order to implement that portion of the ING-Dutch State Transaction related to the Company's Designated Securities Portfolio, the Company entered into a participation agreement with its affiliates, ING Support Holding B.V. (“ING Support Holding”) and ING pursuant to which the Company conveyed to ING Support Holding an 80% participation interest in its Designated Securities Portfolio and agreed to pay a periodic transaction fee, and received, as consideration for the participation, an assignment by ING Support Holding of its right to receive payments from the Dutch State under the Illiquid Assets Back-Up Facility related to the Company's Designated Securities Portfolio among, ING, ING Support Holding and the Dutch State (the “Company Back-Up Facility”). Under the Company Back-Up Facility, the Dutch State is obligated to pay certain periodic fees and make certain periodic payments with respect to the Company's Designated Securities Portfolio, and ING Support Holding is obligated to pay a periodic guarantee fee and make periodic payments to the Dutch State equal to the distributions it receives with respect to the 80% participation interest in the Company's Designated Securities Portfolio. The Dutch State payment obligation to the Company under the Company Back-Up Facility is accounted for as a loan receivable for U.S. GAAP and is reported in Loan - Dutch State obligation on the Condensed Consolidated Balance Sheets (the "Dutch State Obligation"). The Company incurred net fees of $0.4 and $1.3 for the three and nine months ended September 30, 2012, respectively, and $0.5 and $1.5 for the three and nine months ended September 30, 2011, respectively.

On or around November 13, 2012, ING, all participating ING U.S., Inc. subsidiaries, including the Company, ING Support Holding, ING Bank N.V. (“ING Bank”) and the Dutch State expect to enter into agreements to restructure the Back-up Facility and terminate the participation of all participating ING U.S., Inc. subsidiaries in the Back-up Facility as another step in furtherance of the anticipated separation of ING U.S., Inc. and its subsidiaries, including the Company, from ING. The restructure transaction is expected to close on November 14, 2012 and is anticipated to be immaterial to the results of operations and financial position of the Company. At closing, the Company will sell the Dutch State Obligation with a carrying value of approximately $353.9 as of September 30, 2012 to ING Support Holding for cash at fair value, and, at the same time, will transfer legal title to 80% of the Company's Designated Securities Portfolio to ING Bank, which securities will be held by ING Bank in a custody account for the benefit of the Dutch State. Following the closing, the Company will continue to own 20% of its Designated Securities Portfolio (the “Retained 20%”) and going forward will have the right to sell the Retained 20% subject to a right of first refusal granted to ING Bank.