Note 10. Related Party Transactions

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

The Company is party to a common cost allocation service agreement with 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 services rendered. During 2017, 2016 and 2015, the Company incurred $11,554, $10,223 and $10,818, 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 payable/receivable arrangements with its Parent and affiliates at various times during the year. The $35,000 intercompany short-term note payable to the Parent with an interest rate of 0.83% entered into on May 22, 2017 was settled with payments of $15,000 and $20,000 on August 4, 2017 and August 9, 2017, respectively. The $3,000 intercompany short-term note payable to the Parent with an interest rate of 0.9% that was entered into on June 20, 2017 was settled with a payment of $3,000 on August 9, 2017. On October 20, 2017, the Company entered into a short-term note payable with the Parent for $10,000 with an interest rate of 1.1%, which is still outstanding. On June 18, 2016, the Company settled an intercompany short-term note receivable with AUSA for $25,000 with an interest rate of 0.13% that was entered into on June 19, 2015. Transactions with related parties generate payables to and receivables from the Parent and affiliates and bear interest at the thirty-day commercial paper rate. The balance due to affiliates at December 31, 2017 and 2016 was $6,148 and $5,064, respectively. During 2017, 2016, and 2015, the Company accrued and/or received $7, $31, and $18 of interest, respectively. During 2017, 2016 and 2015, the Company accrued and/or paid $137, $0, and $0 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 2017, 2016 and 2015, the Company incurred $168, $181 and $149, 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 2017, 2016 and 2015, the Company incurred $2,716, $1,927 and $1,709, 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 2017, 2016 and 2015, the Company incurred $23,901, $24,501 and $30,356, 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. These agreements ended as of March 31, 2017. During 2017, 2016 and 2015, the Company incurred $79, $320 and $361, 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 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 2017, 2016 and 2015, the Company received $2,752, $2,199 and $2,381, respectively, in revenue under this agreement. Revenue attributable to this agreement is included in policy charge revenue.

Transamerica Life Insurance Company provides derivative management services for the Company under a derivative management and services agreement. During 2017, the Company incurred $73 in expenses under this agreement.

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 years ended December 31, 2017, 2016 and 2015 were as follows:

	2017		2016		2015
Investments purchased from affiliates:
AFS fixed maturities	$	141,700	$	-	$	30,356
Mortgage loans on real estate		-		-		4,000
Limited partnerships		-		10,000		-
Derivatives		147		-		-
Investments sold to affiliates:
AFS fixed maturities	$	20,962	$	89,820	$	24,878
AFS equities		-		-		-
Mortgage loans on real estate		122,075		-		-
Derivatives		4,440		-		82

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