Note 10. Related Party Transactions

At March 31, 2017, the Company had the following related party agreements in effect:

The Company is party to a common cost allocation service agreement between TA Corp companies in which various affiliated companies may perform specified administrative functions in connection with the operation of the Company, in consideration of reimbursement of actual costs related to the services rendered. During the three months ended March 31, 2017 and 2016, the Company incurred $2,707 and $2,414, respectively, in expenses under this agreement. Charges attributable to this agreement are included in insurance, general and administrative expenses, net of amounts capitalized.

The Company was party to intercompany short-term note receivable arrangements with its parent and affiliates at various times during the prior year. At March 31, 2017, there was no outstanding intercompany short term notes receivable. At March 31, 2016, there was an intercompany short-term note receivable with the Parent for $25,000 with an interest rate of 0.36%. This note was repaid by the Parent in the second quarter of 2016. During the three months ended March 31, 2017 and 2016, the Company accrued and/or received $0 and $17 of interest, respectively. Interest related to these arrangements is included in net investment income.

AEGON USA Realty Advisors, LLC acts as the manager and administrator for the Company’s mortgage loans on real estate under an administrative and advisory agreement with the Company. Charges attributable to this agreement are included in net investment income. During the three months ended March 31, 2017 and 2016, the Company incurred $51 and $42, respectively, under this agreement. Mortgage loan origination fees are included in investment expenses.

AEGON USA Investment Management, LLC acts as a discretionary investment manager under an investment management agreement with the Company. During the three months ended March 31, 2017 and 2016, the Company incurred $491 and $493, respectively, in expenses under this agreement. Charges attributable to this agreement are included in net investment income.

Transamerica Capital, Inc. provides underwriting and distribution services for the Company under an underwriting agreement. During the three months ended March 31, 2017 and 2016, the Company incurred $5,558 and $6,152, respectively, in expenses under this agreement. Charges attributable to this agreement are included in insurance, general and administrative expenses, net of amounts capitalized.

Transamerica Asset Management, Inc. acts as the investment advisor for certain related party funds in the Company’s Separate Accounts under multiple service agreements. During the three months ended March 31, 2017 and 2016, the Company incurred $79 and $76, respectively, in expenses under this agreement. Charges attributable to these agreements are included in insurance, general and administrative expenses, net of amounts capitalized.

The Company has a participation agreement with Transamerica Series Trust to offer certain funds in the Company’s Separate Accounts. Transamerica Capital, Inc. acts as the distributor for such related party funds. The Company has entered into a distribution and shareholder services agreement for certain of such funds. During the three months ended March 31, 2017 and 2016, the Company received $600 and $491, respectively, in revenue under this agreement. Revenue attributable to this agreement is included in policy charge revenue.

The Company purchases and sells investments from/to various affiliated companies. The investments are purchased and sold using the fair value on the date of the acquisition or disposition. The purchasing and selling of investments between affiliated companies for the three months ended March 31, 2017 and 2016 were as follows:

	Three Months Ended
		March 31,
		2017		2016
Investments purchased from related parties:
Limited partnerships		$	-	$	10,000
Investments sold to related parties:
Fixed maturity AFS securities		$	-	$	62,859

While management believes that the service agreements referenced above are calculated on a reasonable basis, they may not necessarily be indicative of the costs that would have been incurred with an unrelated third party. Related party agreements generally contain reciprocal indemnity provisions pertaining to each party’s representations and contractual obligations thereunder.