Note 10. Related Party Transactions

At March 31, 2018, the Company had the following related party agreements in effect:

The Company was 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 the services rendered. During the three months ended March 31, 2018 and 2017, the Company incurred $2,763 and $2,707, 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. At March 31, 2018 and December 31, 2017, there was an intercompany short-term note payable with the Parent for $10,000 with an interest rate of 1.10% entered into on October 20, 2017. 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 March 31, 2018 and December 31, 2017 was $8,514 and $6,148, respectively. During the three months ended March 31, 2018, the Company accrued and/or received $1, and accrued and/or paid $54, of interest. During the three months ended March 31, 2017, the Company accrued and/or received $0, and accrued and/or paid $7, of interest. 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, 2018 and 2017, the Company incurred charges of $11 and $51, 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, 2018 and 2017, the Company incurred $617 and $491, 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, 2018 and 2017, the Company incurred $6,110 and $5,558, 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; therefore no expenses were incurred under this agreement in 2018. During the three months ended March 31, 2017, the Company incurred $79 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, 2018 and 2017, the Company received $811 and $600, 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 the three months ended March 31, 2018, the Company incurred $118 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 three months ended March 31, 2018 and 2017 were as follows:

	Three Months Ended
		March 31,
		2018		2017
Investments sold to related parties:
AFS fixed maturities		$	12,832	$	-

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.