TRANSAMERICA LIFE INSURANCE COMPANY A+ TRANSAMERICA ...€¦ · printed june 24, 2016 page 1 of 46...

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TRANSAMERICA LIFE INSURANCE COMPANY A+

TRANSAMERICA PREMIER LIFE INSURANCE COMPANY A+

TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY A+

TRANSAMERICA ADVISORS LIFE INSURANCE COMPANY A+

TRANSAMERICA CASUALTY INSURANCE COMPANY A

A+

Ultimate Parent: Aegon N.V.

TRANSAMERICA LIFE INSURANCE COMPANY4333 Edgewood Road N.E.

Cedar Rapids, IA 52499Web: www.transamerica.com

Tel.: 800-797-2643AMB#: 006095 NAIC#: 86231Ultimate Parent#: 085244 FEIN#: 39-0989781

BEST’S CREDIT RATING

Best’s Financial Strength Rating: A+ Outlook: StableBest’s Financial Size Category: XV

RECENT DEVELOPMENTSEffective October 1, 2015, Stonebridge Life Insurance Company merged

with and into Transamerica Life Insurance Company.

RATING RATIONALE

Rating Rationale: The published ratings of the Aegon USA companiesreflect that they are integral to Aegon’s strategy, fully integrated into thegroup’s operations, a material part of the business profile, significantcontributors to earnings and have received explicit financial support whenneeded.

Transamerica Life Insurance Company (TLIC) sells individualnon-participating whole life, endowment and term contracts, structuredsettlements and pension products, as well as a broad line of single fixed andflexible premium annuity products. In addition, TLIC offers group life,universal life, credit life and individual and specialty health coverages. Thecompany is licensed in 49 states and the District of Columbia, Guam, PuertoRico and US Virgin Islands. Sales of the company’s products are primarilythrough a network of agents, brokers and financial institutions.

The following text is derived from A.M. Best’s Credit Report on AegonUSA Group (AMB# 069707).

The ratings of the life insurance companies of Aegon USA reflect the strongbusiness profile, adequate risk-adjusted capitalization, strong enterprise riskmanagement, and an underlying trend of statutory and IFRS profitability. Theratings also reflect A.M. Best’s assessment of the financial strength andsupport of the parent, Aegon N.V. (Aegon). Partially offsetting these strengthsis the increasing focus on sales of products that have unfavorable riskcharacteristics from a product creditworthiness standpoint, as well as theequity market sensitivity of its earnings and significant reliance on captivereinsurance.

Aegon USA’s business profile is viewed as strong by A.M. Best, withcompetitive market positions in the U.S. life and annuity arenas. The group’smarket positions are supported by a large and diversified distribution systemthat is made up of both independent and career agents, financial institutions,

wirehouses and direct response channels. Aegon USA enjoys the efficienciesand competitive advantages of meaningful economies of scale, which havecontributed favorably to its historical financial performance. Aegon USA’searnings profile is one of the more diversified in the industry. Product linesthat contribute to overall earnings include traditional life, variable life,variable annuities, mutual funds, pensions and accident and health insurance.Additional rating consideration includes A.M. Best’s assessment of thefinancial strength and support of the parent, Aegon. As a result, Aegon USAreceives rating enhancement in consideration of Aegon’s overallcreditworthiness and the strategic and financial importance of the U.S.operations to Aegon.

Several years ago the company pursued a strategic shift to focus on sellingfee-based products, especially variable annuities (VAs), and hasde-emphasized sales of its spread-based products, especially fixed annuities.In a stable equity market, the required capital on VAs is generally less than forfixed annuities and other spread-based products. However, from a productcreditworthiness perspective, A.M. Best views VAs with living benefits asdisplaying some of the highest risk characteristics and being vulnerable to tailrisks, which could lead to an increase in the required capital to support thissegment. The institutional spread-based business (primarily guaranteedinterest contracts, funding agreements and funding agreement-backedsecurities) remains in run-off to reduce exposure to credit risk, lower requiredcapital and to shift to a more balanced mix of business between spread- andfee-based products. The group has executed several fixed annuity coinsurancetransactions, which have released capital and reduced its spread-basedliabilities. A.M. Best also notes that over recent years, Aegon USA has cometo rely heavily on captive reinsurance to fund reserves generated by term lifeand universal life insurance with secondary guarantees. Aegon USA has alsoreduced its exposure to equity market risk by increasing the size of its macroequity hedge covering its variable annuity business. However, while theadditional equity hedging will serve to reduce volatility in some financialmetrics, the group’s earnings via fee income remain somewhat correlated toequity market performance.

While A.M. Best believes that a positive rating action for Aegon USA isunlikely over the near term, factors that could result in a positive rating actioninclude a material improvement in A.M. Best’s view of the credit profile ofAegon. Factors that could result in a negative rating action include asignificant and sustained decline in consolidated risk-adjusted capitalizationas measured by Best’s Capital Adequacy Ratio (BCAR) model, net operatingperformance that does not meet A.M. Best’s expectations, a decline in A.M.Best’s view of Aegon’s credit profile, or a change in A.M. Best’s view of thestrategic importance of Aegon USA to Aegon.

FIVE YEAR RATING HISTORY

DateBest’sFSR Date

Best’sFSR

04/15/16 A+ 04/09/13 A+02/11/15 A+ 04/13/12 A+12/12/13 A+ 04/27/11 A+


KEY FINANCIAL INDICATORS ($000)Total Capital

Year Assets

CapitalSurplusFunds

AssetValuation

Reserve

NetPremiumsWritten

NetInvest

IncomeNet

Income2011 104,467,944 5,282,733 895,202 10,217,710 2,743,595 -2,295,8392012 107,174,159 5,584,309 932,867 12,144,464 3,070,610 1,174,6672013 117,015,919 4,826,304 875,957 15,806,999 2,466,599 141,1082014 126,197,750 5,985,784 747,987 16,191,362 2,354,940 335,4232015 126,035,999 5,458,642 740,321 14,777,001 2,323,782 -250,873

(*) Within several financial tables of this report, this company is compared against the GroupAnnuity Composite.

(*) Data reflected within all tables of this report has been compiled from the company-filedstatutory statement.

Note: Net premiums written include annuity and other fund deposits.

BUSINESS PROFILEThe following text is derived from A.M. Best’s Credit Report on Aegon

USA Group (AMB# 069707).

Aegon USA is one of the leading life insurance organizations in the U.S.with more than twenty million customers and provides a wide range of lifeinsurance, pensions, long-term savings and investment products. Aegon USAwas founded 1989 when Aegon N.V. (Aegon) decided to bring all of itsoperating companies in the U.S. under a single financial services holdingcompany. Business is conducted through five primary insurance subsidiariesand includes Transamerica Life Insurance Company, Transamerica FinancialLife Insurance Company, Transamerica Advisors Life Insurance Company,Transamerica Premier Life Insurance Company, and Transamerica CasualtyInsurance Company. The Aegon USA group of companies is fully integratedand share senior and investment management along with support services.

Aegon USA uses a variety of distribution channels, each of which conductsbusiness through one or more of the Aegon USA life insurance companies.The channels are both owned and non-owned and include career agents as wellas financial planners, banks, brokers and independent consultants. It is alsoprominent in the home service market and in the direct marketing of life andsupplemental accidental death and dismemberment (AD&D) insurance.Through 2015, the Aegon USA companies were divisionally organized intotwo primary business divisions: Life & Protection (L&P) and Investments &Retirement (I&R).

The Life & Protection (L&P) division included the Agency Group sellingindividual life and supplemental health products to the middle income market.Also included in the L&P division were the Brokerage Group, TransamericaEmployee Benefits, Long Term Care and the Affinity Group. The BrokerageGroup marketed life insurance in the retail high net worth market throughindependent general agents and contract producers. The Affinity Groupspecialized in marketing life insurance and supplemental health insuranceproducts to consumers through direct channels such as telemarketing, directmail, television advertising and the Internet. This group also marketed creditlife, mortgage life and other life insurance and supplemental health products.Transamerica Long Term Care offered products and services aimed at meetingthe long-term care insurance needs of its customers. Policies were sold

through independent brokerage and at the worksite to individuals and groups.Through Transamerica Employee Benefits, L&P offered voluntary payrolldeduction life and supplemental health insurance to employees at their placeof work which are designed to supplement employees’existing benefit plans.

The Investment & Retirement (I&R) division offered a wide range ofsavings and retirement products, including mutual funds, investment advice aswell as fixed and variable annuities. Transamerica Capital Management(TCM) is the underwriting and wholesaling broker/dealer for variableannuities and mutual funds. TCM builds relationships with independentfinancial professionals, agents affiliated with regional broker/dealers or majorwirehouse firms and representatives through a large bank network. TCMserves these distribution channels through company-owned and externalwholesalers. In 2007, Aegon USA acquired Merrill Lynch Life InsuranceCompany and ML Life Insurance Company of New York (renamedTransamerica Advisors Life Insurance Company and Transamerica AdvisorsLife Insurance Company of New York. Transamerica Advisors Life InsuranceCompany of New York was later merged with and into Transamerica FinancialLife Insurance Company, effective 7/1/14) as part of a strategic distributionrelationship with Merrill Lynch with respect to variable annuities. Theacquisition of the Merrill Lynch insurance companies served to place AegonUSA in the top ten of variable annuity sellers in the wirehouse andbroker/dealer channels. In late 2009, I&R reduced its sales of fixed annuitiesin response to lower market interest rates and lower investment returnsavailable in the environment. Similar market conditions have continued overrecent years and restricted sales of fixed annuities. As a result, I&Rde-emphasized the sale of fixed annuities and executed several large fixedannuity coinsurance transactions in recent years.

Incorporated within the I&R division was the former Employer Solutionsand Pensions (ES&P) division. This business included full-service retirementplan investments and services in addition to guaranteed savings andinvestment products directed at various segments of the pension industry. Thegroup sold a full range of products and services to small and mid-sizecorporate, non-profit and government sponsored plans through brokers,agents, consultants, third-party administrators and accounting firms. Effective12/31/2015, Aegon USA acquired the defined contribution administrationbook of business of Mercer HR Services, LLC. The transaction propelled thecompany to a top ten defined contribution record-keeper based on planparticipants and assets, adding 917,000 and $71 billion, respectively.Transamerica Retirement Solutions (TRS) served mid-sized to largecompanies and small to mid-sized companies across the U.S. TRS offered anumber of specialized services, including innovative plan design, a wide arrayof investment choices, extensive education programs and online investmenteducation. In addition, ES&P provided synthetic guaranteed investmentcontracts primarily to various retirement plans. ES&P was also a leadingprovider of single premium group annuities (Terminal Funding), which areused by companies to decrease the liability of the defined benefit plans.BOLI/COLI products were distributed through a select number of nichebrokers (including an affiliate, Clark Consulting, which was sold inSeptember 2015); however, in December 2010, ES&P discontinued new salesin the executive non-qualified benefits market and related BOLI/COLIbusiness.

The former Institutional Markets Division offered institutional spreadproducts such as traditional fixed rate guarantee investment contracts (GICs),


funding agreements (FAs), FA-backed notes as well as fee-based productssuch as synthetic GICs. In 2009, Aegon announced its plan to run-off itsinstitutional spread based business to reduce capital requirements and creditrisk. The institutional line of business also included structured producttransactions, such as credit default swaps, synthetic collateralized debtobligations, affordable housing tax credit guarantees and hedge fund principalprotection. Going forward, Aegon USA will only continue to offer affordablehousing tax credit guarantees.

Beginning in 2016, Aegon USA has restructured into a functionallyorganized business centered around the Transamerica brand. As a result, thecompany has eliminated its previous divisional alignment and created aunified organization that is functionally aligned (i.e. distribution, operations,finance, etc.). As a result of its recently implemented reorganization in theU.S., there has been a delayering of management via the elimination ofredundant processes and a restructuring of its U.S. distribution footprint.

TOTAL PREMIUM COMPOSITION & GROWTH ANALYSISReinsurance

Period ————DPW———— ——Prem Assumed——Ending ($000) (% Chg) ($000) (% Chg)2011 13,765,720 22.5 1,982,197 -6.92012 13,872,056 0.8 1,986,361 0.22013 17,300,088 24.7 1,570,937 -20.92014 18,819,013 8.8 1,576,452 0.42015 17,589,954 -6.5 1,488,964 -5.5

5-Yr CAGR … 9.4 … -6.9

ReinsurancePeriod ———Prem Ceded——— —NPW & Deposits—Ending ($000) (% Chg) ($000) (% Chg)2011 5,530,206 22.6 10,383,432 8.42012 3,713,954 -32.8 12,315,714 18.62013 3,064,026 -17.5 16,969,081 37.82014 4,204,103 37.2 16,494,852 -2.82015 4,301,055 2.3 15,352,173 -6.9

5-Yr CAGR … -0.9 … 9.9

Territory: The company is licensed in the District of Columbia, Guam, PuertoRico, U.S. Virgin Islands, AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID,IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH,NJ, NM, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA,WV, WI and WY.

2015 BY-LINE BUSINESS ($000)

——DPW——Reinsurance

—Prem Assumed—Product Line ($000) (%) ($000) (%)Ordinary life 2,344,949 13.3 1,348,742 90.6Group life 226,251 1.3 2,404 0.2Credit life 22,366 0.1 1,779 0.1Individual annuities 6,568,619 37.3 92,853 6.2Group annuities 7,083,200 40.3 … …Individual A&H 674,821 3.8 9,325 0.6Credit A&H 31,153 0.2 1,935 0.1Group A&H 638,595 3.6 31,926 2.1

Total 17,589,954 100.0 1,488,964 100.0Reinsurance

——Prem Ceded—— ——NPW——Product Line ($000) (%) ($000) (%)Ordinary life 2,767,537 64.3 926,154 6.3Group life 88,664 2.1 139,990 0.9Credit life 3,580 0.1 20,565 0.1Individual annuities 791,262 18.4 5,870,210 39.7Group annuities 35,048 0.8 7,048,152 47.7Individual A&H 464,210 10.8 219,074 1.5Credit A&H 4,638 0.1 28,450 0.2Group A&H 146,115 3.4 524,406 3.5

Total 4,301,055 100.0 14,777,001 100.0

BY-LINE RESERVES ($000)Product Line 2015 2014 2013 2012 2011Ordinary life 13,870,106 13,649,443 13,872,004 13,521,586 13,498,336Group life 1,013,137 1,112,446 1,120,835 1,113,029 1,102,371Credit life 6,436 153 222 321 453Supplementary contr 404,720 420,196 425,559 397,031 411,778Individual annuities 9,572,989 10,921,943 9,314,992 9,885,783 10,585,234Group annuities 5,182,270 5,431,048 5,752,137 5,985,678 6,055,890Deposit type contracts 2,738,140 3,068,610 3,736,779 5,203,952 6,015,476Individual A&H 3,910,450 3,565,465 3,428,931 3,294,574 3,132,193Credit A&H 16,335 12,114 13,669 15,836 18,129Group A&H 897,261 943,395 934,973 929,071 913,632

Total 37,611,842 39,124,813 38,600,102 40,346,862 41,733,492

LIFE POLICIES STATISTICS-Ordinary Policies- -Group Policies- -Group Certificates-

Year Issued In Force Issued In Force Issued In Force2011 153,169 13,383,007 1,058 15,162 115,495 1,874,0872012 162,539 9,304,293 728 15,258 127,968 856,4832013 168,634 7,732,441 728 15,325 138,394 810,3542014 186,637 6,719,736 … 12,567 134,322 825,4662015 176,544 6,524,240 7 12,496 86,689 777,213


LIFE INSURANCE IN FORCE ($000)

Year

Whole LifeEndow. &

Adds Term Credit Group Industrial

TotalInsuranceIn Force

2011 146,402,657 1,046,574,859 2,169,331 28,136,369 … 1,223,283,2172012 145,975,069 972,133,271 1,922,238 22,475,181 … 1,142,505,7592013 192,781,220 878,655,801 1,995,292 21,222,988 … 1,094,655,3012014 141,973,255 908,808,833 1,906,359 20,706,698 … 1,073,395,1442015 147,841,621 896,434,256 1,659,326 22,077,653 … 1,068,012,856

NEW LIFE BUSINESS ISSUED ($000)

YearWhole Life& Endow. Term Credit Group

Indus-trial

TotalInsurance

Issued

Non-Par(%)

Par(%)

2011 13,069,728 22,609,797 12,610,958 1,749,255 … 50,039,738 100.0 0.02012 27,050,694 10,828,261 1,535,279 2,192,903 … 41,607,138 100.0 0.02013 41,851,810 260,567 1,749,800 1,818,139 … 45,680,317 100.0 0.02014 5,994,741 38,941,352 1,675,613 2,792,910 … 49,404,614 100.0 …2015 2,603,553 41,091,411 1,546,200 2,736,141 … 47,977,305 100.0 …

ORDINARY LIFE STATISTICSOrd. Renew Average 1st Yr 1st Yr Gen.

Lapse Premium Ord. Policy Avg Prem / Comm / Exp. /Ratio Persist (in dollars) Prem Total 1st Yr Policies

Year % % Issued In Force ($/M) Prem Prem In Force2011 6.1 83.6 232,942 89,141 3.42 14.4 62.9 26.792012 6.4 84.9 233,045 120,171 3.75 18.0 64.9 32.562013 4.8 82.8 249,726 138,564 3.49 12.9 83.9 41.722014 5.8 92.2 240,767 156,373 3.83 18.2 60.9 51.482015 4.7 80.3 247,502 160,061 3.54 10.9 100.9 51.31

First Year Gen’l Exp/ Return onNumber of Policies Premium Reserves Reserves

Year Issued In Force (000) (%) (%)2011 153,169 13,383,007 337,426 2.64 -17.662012 162,539 9,304,293 436,570 2.22 1.292013 168,634 7,732,441 298,100 2.31 0.182014 186,637 6,719,736 474,727 2.52 0.282015 176,544 6,524,240 254,734 2.40 -7.56

INDIVIDUAL ANNUITY STATISTICS

YearNPW(000)

Res(000)

Exp toRes(%)

Comm &Exp toNPW(%)

Benefits &Wdrwls toNPW (%)

Benefits &Wdrwls to

Res (%)2011 3,492,459 10,997,012 0.9 20.8 84.8 26.92012 4,424,963 10,282,814 0.9 11.3 46.8 20.22013 7,190,145 9,740,551 1.3 8.6 32.4 23.92014 10,683,497 11,342,139 1.4 6.8 27.2 25.62015 5,870,210 9,977,708 1.6 11.8 59.8 35.2

GROUP ANNUITY STATISTICS

YearNPW(000)

Res(000)

Exp toRes (%)

Comm &Exp toNPW(%)


Benefits &Wdrwls to

Res (%)2011 5,352,645 6,055,890 2.5 3.7 80.2 70.82012 5,523,123 5,985,678 2.5 3.5 78.8 72.72013 6,303,280 5,752,137 3.0 3.4 80.5 88.32014 5,967,566 5,431,048 2.9 3.5 97.0 106.52015 7,048,152 5,182,270 3.0 2.9 98.0 133.2

TOTAL ANNUITY ACTUARIAL RESERVESBY WITHDRAWAL CHARACTERISTICS

YearTotal Annuity

Res (000)

Min or NoSurrender

Charge (%)

WithSurrenderCharge 5%or more (%)

WithMVA (%)

NoSurrender

Allowed (%)2011 17,052,902 70.2 4.7 2.4 22.72012 16,268,491 77.6 0.7 2.0 19.62013 15,492,688 82.9 0.9 1.9 14.32014 16,773,187 85.4 0.3 1.8 12.52015 15,159,978 86.0 0.3 1.4 12.4

SEPARATE ACCOUNT DATA

2015 2014 2013 2012 2011Sep Acct Assets 72,130,155 70,574,605 61,020,158 48,684,223 41,473,473% Growth 2.2 15.7 25.3 17.4 8.1S/A Assets/Adm Assets 57.2 55.9 52.1 45.4 39.7

Sep Acct Reserves 67,204,016 65,776,928 57,186,910 44,062,076 39,007,225% Ordinary Life 5.6 5.8 6.6 8.1 15.0% Individual Annuities 59.8 58.9 56.1 54.3 50.6% Group Annuities 34.6 35.4 37.3 37.6 34.4Deposit Type Liabilities 79,241 108,540 124,775 150,693 151,407Other Liabilities 4,709,929 4,557,832 3,586,424 4,371,546 2,223,583Sep Acct Surplus 116,718 109,905 99,918 75,685 67,364

S/A Prems & Deposits 12,177,702 13,103,887 12,426,910 9,333,304 9,372,736% Ordinary Life 0.2 0.1 0.1 0.2 0.2% Individual Annuities 46.3 57.5 53.0 46.7 48.0% Group Annuities 53.6 42.4 46.9 53.1 51.7

Sep Acct Fees & Charges 1,282,183 1,087,005 867,298 712,130 613,693% Ordinary Life 3.9 4.0 5.0 7.1 8.9% Individual Annuities 80.0 78.1 75.5 72.6 69.1% Group Annuities 16.2 17.8 19.6 20.3 22.0Fees & Chgs to Assets% 1.8 1.7 1.6 1.6 1.5

Sep Acct Ben & Wdrwls 9,291,246 7,244,498 5,875,731 6,949,613 4,566,708% Ordinary Life 0.6 1.0 0.3 28.1 2.2% Individual Annuities 36.7 33.1 32.4 24.9 32.9% Group Annuities 62.6 65.9 67.3 47.0 64.9Ben & Wdrwl to Assets% 13.0 11.0 10.7 15.4 11.4


GEOGRAPHIC BREAKDOWN BYDIRECT PREMIUM WRITINGS ($000)

2015 2014 2013 2012 2011Iowa 2,522,242 1,835,123 2,978,227 1,187,129 1,076,764California 2,036,986 1,896,548 1,853,495 1,746,660 2,032,422North Carolina 1,951,291 1,727,491 1,500,415 1,309,242 1,277,742Florida 1,166,509 1,394,369 1,260,808 937,668 1,034,282Texas 993,017 965,641 931,426 796,441 741,649Pennsylvania 711,481 790,116 689,381 517,948 470,613New Jersey 635,830 918,930 979,571 570,718 554,104Illinois 604,055 648,436 589,842 537,889 547,742Michigan 533,479 640,251 577,392 387,681 345,450Ohio 434,909 479,993 467,151 435,450 361,030All Other 6,543,059 7,695,508 6,501,327 5,515,479 5,319,272

Total 18,132,858 18,992,408 18,329,037 13,942,303 13,761,069

RISK MANAGEMENTThe following text is derived from A.M. Best’s Credit Report on Aegon


Aegon USA has a fully integrated enterprise risk management (ERM)structure/program in place to assess current and emerging risk, as well governfuture decisions. The company’s risk management framework is representedacross all levels of the organization. This ensures a coherent and integratedapproach to risk management throughout the company. Within this program,objectives and risk tolerances are set and roles and responsibilities are clearlydefined across all levels of the organization. Aegon USA’s ERM program isoverseen by a governance structure that has three basic layers: A SupervisoryBoard Risk Committee, the Executive Board and an ERM & Group Risk &Capital Committee. A.M. Best views Aegon USA’s ERM capabilities to bestrong for its size and business profile.

Country Risk: Aegon USA has a limited amount of country risk exposure asthe company’s operations are based in the U.S. However, Aegon Americas —which includes all of the North American and Latin American operations ofAegon — has a modest amount of country risk exposure with its life insuranceoperations in Canada (through Canadian Premier Life and Transamerica LifeCanada (sold in July 2015)) and Latin America with Mexico and Brazil. In2006, Aegon acquired a 49% interest in Seguros Argos, a Mexican lifeinsurance company. As part of the joint venture, Aegon and Seguros Argos setup a jointly owned pension fund company, Afore Argos. In 2009, Aegonacquired a 50% interest in Mongeral S.A. Seguros e Previdencia, Brazil’s 6thlargest independent life insurer. The U.S. and Canada are considered “Tier 1"by A.M. Best’s Country Risk Group with Mexico and Brazil both considered”Tier 3".

OPERATING PERFORMANCEThe following text is derived from A.M. Best’s Credit Report on Aegon


Operating Results: Aegon USA Group has one of the more diversifiedearnings profiles in the industry with earnings being generated from lifeinsurance products and increasingly from fee-based income from variable and

investment-type products. Aegon USA Group reported a pre-tax statutoryoperating gain of approximately $0.6 billion in 2015 as compared to a 2014pre-tax statutory operating gain of approximately $1.0 billion. 2015’s resultswere impacted by a decline in top-line growth compared to 2014’s strongtop-line growth which was the strongest in recent history. Higher underwritinglosses along with lower investment income drove the year-over-year change.Adverse claims experience and the impact on recurring earnings of theactuarial assumption changes and model updates implemented over the pastyear and a half were the primary drivers behind the decline in pre-tax earnings.

Aegon Americas segment (which is largely made up of Aegon USA, butalso includes operations in Canada (sold in July 2015) and Mexico) hasrecorded 2015 IFRS underlying earnings before tax of approximately $1.3billion compared with $1.5 billion in 2014 and approximately $1.7 billion2013. 2015 earnings were marginally lower compared to the previous year.

A.M. Best expects that Aegon USA Group will continue to maintain anunderlying trend of profitability on both a Statutory and IFRS basis. However,margins may be challenged by the low interest rate environment.

PROFITABILITY ANALYSIS ($000)————————Company————————

Pre-tax NetPeriod Net Oper Operating Net TotalEnding Income Gain Income Return2011 -2,889,091 -2,718,152 -2,295,839 -1,711,0402012 1,407,726 1,556,695 1,174,667 1,176,7012013 1,143,403 1,422,552 141,108 -190,5092014 297,584 47,019 335,423 1,237,5972015 59,517 91,795 -250,873 -155,000

5-Yr Total 19,140 399,910 -895,514 357,750

———Company——— —Industry Composite—Period Operating Operating Operating OperatingEnding ROR (%) ROE (%) ROR (%) ROE (%)2011 -22.1 -54.6 -2.5 -6.82012 10.7 28.6 4.3 15.22013 7.1 27.3 7.7 22.52014 0.2 0.9 0.4 1.32015 0.5 1.6 6.6 11.7

5-Yr Avg 0.4 1.5 3.3 9.0


PROFITABILITY TESTSComm & Pre-tax

Ben Paid Exp to NOG Operating Investto NPW NPW to Tot NOG to Return on Net Total

Year & Dep & Dep Assets Tot Rev Equity Yield Return2011 90.5 35.5 -2.5 -22.1 -54.6 4.36 6.532012 71.1 12.3 1.5 10.7 28.6 5.39 4.922013 56.6 10.1 1.3 7.1 27.3 4.58 1.292014 67.6 15.1 0.0 0.2 0.9 4.51 7.542015 83.1 11.6 0.1 0.5 1.6 4.56 4.01

5-Year Avg 72.3 15.7 0.1 0.4 1.5 4.68 4.90

(*) Pre-Tax Invest Total Return quarterly calculation based on more limited quarterly data - seeCalculation Specifications.

NET OPERATING GAIN ($000)Product Line 2015 2014 2013 2012 2011Ordinary life -1,056,567 38,105 24,455 175,691 -2,401,912Group life 182,993 -38,332 -39,058 50,763 19,093Credit life -4,171 806 -2,278 1,729 1,721Supplementary contr -48,588 8,526 -50,979 -46,307 -34,160Individual annuities 691,468 -129,230 1,224,249 860,936 -585,121Group annuities -5,890 -4,310 56,814 56,705 -25,930Individual A&H 79,408 77,946 108,377 164,626 107,359Credit A&H 1,414 -1,534 5,275 14,109 22,065Group A&H 77,359 95,043 95,696 278,444 178,732Other 174,370 … … … …

Total 91,795 47,019 1,422,552 1,556,695 -2,718,152

ACCIDENT & HEALTH STATISTICS ($000)Net Premiums Net Premiums Loss Exp. Underwriting

Year Written Earned Ratio Ratio Results2011 966,612 979,683 68.4 32.6 -11,2172012 996,766 996,302 74.6 35.7 -102,2252013 1,041,484 1,039,379 74.6 37.0 -121,1092014 -2,794,008 -2,798,628 -31.8 -27.8 -550,4052015 762,990 765,201 92.6 42.5 -267,581Current Year Experience:Group 525,181 524,562 37.5 37.6 130,037Credit 28,450 24,410 36.7 56.0 -477Non-can. 17,196 17,164 -11.8 0.4 19,116Guarant renew 184,783 192,651 261.9 29.7 -366,705Non-renew, S.R. -78 -72 25.4 999.9 3,626Other accident 6,684 5,711 5.4 48.4 2,166Other 775 775 24.7 999.9 -55,343

INVESTMENT GAINS ($000)—————————Company—————————Net Realized UnrealizedInv Capital Capital

Year Income Gains Gains2011 2,743,595 422,313 584,8002012 3,070,610 -382,029 2,0352013 2,466,599 -1,281,444 -331,6172014 2,354,940 288,404 902,1742015 2,323,782 -342,668 95,872

5-Year Total 12,959,527 -1,295,424 1,253,264——————Company—————— -Industry Composite-

Pre-taxInvest

Inv Inc Inv Return on Total Inv Inc InvGrowth Yield Inv Assets Return Growth Yield

Year (%) (%) (%) (%) (%) (%)2011 -9.0 4.4 5.4 6.5 1.9 5.22012 11.9 5.4 4.8 4.9 0.0 5.02013 -19.7 4.6 2.2 1.3 2.4 4.92014 -4.5 4.5 5.7 7.5 2.6 4.82015 -1.3 4.6 3.8 4.0 -4.8 4.7

5-Yr Avg -5.1 4.7 4.4 4.9 0.4 4.9


BALANCE SHEET STRENGTHThe following text is derived from A.M. Best’s Credit Report on Aegon


Capitalization: Aegon USA’s overall risk-based capitalization is adequate tosupport its current insurance and investment risks. A.M. Best believes thatAegon USA has good statutory earnings capacity to support its capitalposition going forward. A.M. Best also notes that over recent years, AegonUSA has come to rely heavily on captive reinsurance to fund its reservesassociated with term life insurance and universal life with secondaryguarantees. Financing provided to these captives include, but are not limitedto, surplus notes, letters of credit and parental guarantees. As part of ourassessment of a rating unit’s balance sheet strength, A.M. Best considers notonly the capital adequacy ratios, but also the quality of capital supporting suchratios. A.M. Best believes that the quality of capital for an operating companythat has ceded XXX and/or AXXX reserves to a domestic or offshore captiveas not as strong as for an operating company with similar risk-adjusted capitalratios that self-funds its XXX and AXXX reserves.

Finally, Aegon USA has received capital contributions in the past from itsultimate parent, Aegon N.V. Given that Aegon USA is such an integral part ofAegon N.V., A.M. Best believes that they would likely provide additionalcapital if needed in the future. A.M. Best views the capital profile to be amaterial supporting factor to the rating of the group.

Current BCAR: 217


CAPITAL GENERATION ANALYSIS ($000)——————Source of Surplus Growth——————

Pre-Tax Net Realized UnrealizedAdjusted Capital Income Capital

Year Gain Gains Taxes Gains2011 -2,889,091 422,313 -170,939 584,8002012 1,407,726 -382,029 -148,969 2,0352013 1,143,403 -1,281,444 -279,149 -331,6172014 297,584 288,404 250,565 902,1742015 59,517 -342,668 -32,278 95,872

5-Yr Total 19,140 -1,295,424 -380,771 1,253,264—————Source of Surplus Growth—————Change Change % Chg

in Other in inYear AVR Changes C&S C&S2011 16,493 2,310,623 616,077 13.22012 -37,665 -837,460 301,576 5.72013 56,911 -624,407 -758,005 -13.62014 127,970 -206,087 1,159,480 24.02015 7,665 -393,153 -540,488 -8.8

5-Yr Total 171,374 249,516 778,639 3.2

QUALITY OF SURPLUS ($000)Surplus Other Contributed Unassigned

Year Notes Debt Capital Surplus2011 150,000 1,597 3,801,814 1,329,3222012 150,000 1,597 3,330,410 2,102,3022013 150,000 1,597 3,359,296 1,315,4112014 150,000 1,597 3,364,848 2,469,3392015 150,000 1,597 3,051,463 2,255,582

Year-End Asset Valuation AdjustedYear C&S Reserve C&S2011 5,282,733 895,202 6,177,9352012 5,584,309 932,867 6,517,1762013 4,826,304 875,957 5,702,2602014 5,985,784 747,987 6,733,7712015 5,458,642 740,321 6,198,963

LEVERAGE ANALYSIS————————Company———————— -Industry Composite-C&S NPW & Dep Change C&S

to Surplus to Total in NPW to SurplusYear Liab(%) Relief(%) Capital & Dep(%) Liab(%) Relief(%)2011 10.9 -29.4 1.7 8.4 9.5 -0.42012 12.5 10.0 1.9 18.6 10.0 4.62013 11.3 12.5 3.0 37.8 9.8 7.12014 13.7 1.5 2.4 -2.8 9.9 3.62015 13.0 10.7 2.5 -6.9 10.8 5.8

CEDED REINSURANCE ANALYSIS—————————Company————————— -Industry Composite-

Face Affil Unaffil Total TotalAmount Reins Reins Reins Surplus Reins Reins Reins

Year Reins Ceded Rec/C&S Rec/C&S Rec/C&S Relief Leverage Rec/C&S Leverage2011 1,111,080,915 3.2 12.1 15.3 -29.4 713.1 5.5 206.92012 1,005,507,465 2.7 10.3 13.0 10.0 653.3 5.1 205.32013 909,761,589 3.2 11.3 14.5 12.5 700.7 4.4 203.92014 939,175,408 3.1 8.6 11.7 1.5 536.0 4.8 199.82015 883,895,940 3.5 10.9 14.4 10.7 611.5 6.1 306.4

Loss Reserves: While loss reserving practices has not been a material concernfrom a ratings perspective, Aegon USA’s reserve profile changing as thecompany focuses on selling fee-based products, especially variable annuitieswith living benefit riders, while de-emphasizing spread-based products,especially tradition fixed annuities. An additional aspect of this shift is thatmortality reserves also are playing a less dominant role than in the past.

Some positive trends as it relates to the improved risk profile of thecompany’s legacy block of variable annuities with living benefit riders arenoted. Management actions, such as buyouts of variable annuities that are inthe money, has caused the related net amount at risk, before hedging andreinsurance, as a percent of account value and surplus to decline significantlyover the past several years.


Liquidity: Aegon USA has adequate cash and liquid assets to protect againstadverse liquidity scenarios. The company manages so that liquidityrequirements could be met in stress scenarios which factor in a combination ofevents over monthly horizon points over an extended period of time. Liquidityimpacts due to rating downgrades are also factored into the company’s stresstesting. The company manages liquidity so that a positive cash balance can bemaintained during the first 6 months of a modeled scenario with illiquid assetsales not allowed during this period. The company also forecasts liquidity tobe positive over a two year period. Aegon USA’s liquidity is also supported by$1.1 billion in available syndicated borrowings for emergency use only. TheGroup also has available to them the ability to access the FHLB as well asother normal operating lines of credit outside of emergency use funding.Liquidity is considered adequate and supports the level business complexity inwhich the company operates in.

LIQUIDITY ANALYSIS———————————Company———————————

Operating Non-Inv Delnq &Cash Quick Current Grade Bonds Foreclsd

Year Flow ($000) Liquidity Liquidity to Capital Mtg to Capital2011 -75,008 45.1 90.3 70.7 0.12012 298,887 49.1 91.2 60.8 0.12013 -79,671 45.1 86.0 54.5 …2014 2,083,357 48.4 82.2 37.2 0.32015 -1,470,829 43.8 80.6 35.5 0.5


————Company———— ——Industry Composite——Mtg & Cred Affil

Ten Lns Invest Quick CurrentYear & RE to Cap to Capital Liquidity Liquidity2011 115.0 49.1 38.7 74.12012 91.8 46.1 38.3 73.32013 102.6 57.3 37.8 71.82014 83.8 51.3 36.6 70.42015 88.6 68.5 34.9 69.3


Investments: Aegon USA employs an Asset Liability Management focusedinvestment strategy utilizing fixed income securities for a majority of itsinvested general account assets. However, a small portion of the investmentsare managed on a total return basis utilizing hedge funds for the most part.Almost the entire investment portfolio is managed in-house by Aegon AssetManagement.

As of year-end 2015, bonds represent 69.3% of Aegon USA’s investmentportfolio and 93.8% are of investment grade quality. Common stock accountsfor about 2.7% of the portfolio, of which a large portion is affiliated. Directcommercial mortgage loans comprise approximately 10% of invested assetsand are backed principally by office, retail, industrial and apartmentproperties. The commercial loan portfolio is performing well, with the vastmajority of loans in good standing. Aegon USA’s exposure to alternativeassets, which consists of investments in higher risk and less liquid assets, suchas hedge funds, private equity, mezzanine debt and real estate. A.M. Best notesthat the alternative asset exposure is less than 5% of the investment portfolio.

Over recent years, Aegon has taken steps to improve the risk profile of itsinvestment portfolio with below investment grade (BIG) bonds and what A.M.Best deems as high risk assets playing less of a role. BIGs as a percent ofcapital declined to about 38% as of year-end 2015, similar to year-end 2014,from the highs of over 70% in 2013.

INVESTMENT YIELDSCash & Invest.

Net Short- —Real Estate— Exp.Year Yield Bonds Stocks Mortgages Term Gross Net Ratio2011 4.36 4.96 7.00 6.29 0.21 17.64 -1.76 4.492012 5.39 5.00 24.71 6.55 0.20 18.77 1.08 3.612013 4.58 4.92 1.09 6.76 0.13 16.42 -3.86 4.532014 4.51 4.89 1.98 6.21 0.12 17.38 -2.28 4.652015 4.56 4.94 0.49 5.77 0.24 17.46 -2.41 5.44

INVESTMENTS - SECURITIESCurrent Year Distribution of Bonds By Maturity

————Years———— Yrs-Avg0-1 1-5 5-10 10-20 20+ Maturity

Government 0.8 1.3 1.8 0.9 14.4 20Gov’t Agencies & Muni 0.1 0.5 0.1 0.2 1.9 19Industrial & Misc 6.2 13.9 14.1 16.1 26.0 14Hybrid Securities 0.0 0.0 0.1 0.5 0.9 19Affiliated … … 0.2 … … 8

Total 7.1 15.7 16.4 17.7 43.2 15

2015 2014 2013 2012 2011Bonds (000) 34,097,070 35,685,611 37,493,217 37,957,060 41,023,829US Government 18.8 14.0 12.0 10.5 10.0Foreign Government 1.2 1.3 1.5 1.4 1.3Foreign - All Other 15.2 16.7 15.6 15.5 14.9State/Special Revenue - US 3.0 2.3 2.0 2.0 2.3Industrial & Misc - US 60.0 63.4 66.4 67.9 68.8Hybrid Securities 1.6 2.1 2.4 2.5 2.6Affiliated 0.2 0.2 0.1 0.1 0.2

Private Issues 25.0 24.7 23.9 28.0 25.6Public Issues 75.0 75.3 76.1 72.0 74.4

Bond Quality (%) 2015 2014 2013 2012 2011Class 1 64.0 63.4 59.3 61.1 61.1Class 2 29.9 30.0 32.6 29.5 28.8Class 3 3.5 3.6 4.2 4.2 4.6Class 4 1.7 2.0 2.7 3.4 3.2Class 5 0.7 0.6 0.9 1.7 2.0Class 6 0.3 0.4 0.2 0.3 0.3

INVESTMENTS - EQUITIES2015 2014 2013 2012 2011

Stocks (000) 2,193,931 2,074,898 1,770,537 1,780,784 1,805,653Unaffiliated Common 5.8 6.5 9.8 12.2 12.7Affiliated Common 89.4 87.7 82.1 80.9 79.2Unaffiliated Preferred 4.5 5.5 7.7 6.4 7.7Affiliated Preferred 0.3 0.3 0.4 0.4 0.4

INVESTMENTS - MORTGAGE LOANS & REAL ESTATE2015 2014 2013 2012 2011

Mortgages (000) 5,363,099 5,544,697 5,740,912 5,868,661 6,978,729Commercial 98.8 99.0 98.1 96.7 96.5Residential … … … … 0.0Farm 1.2 1.0 1.9 3.3 3.5Mortgage Quality (%) 2015 2014 2013 2012 201190 Days Delinquent … 0.2 … … 0.0In Process of Foreclosure 0.1 … … … …Total Delinquencies 0.1 0.2 … … 0.0


2015 2014 2013 2012 2011Real Estate (000) 131,514 100,655 106,908 112,161 125,933Property Occupied by Co 71.7 85.6 86.3 89.1 78.6Property Held for Inc 6.2 8.0 6.2 7.2 16.3Property Held for Sale 22.1 6.4 7.5 3.7 5.1

Investments - Other Invested Assets: Aegon uses derivatives, such as swaps,options, futures and forward contracts to hedge some of the exposures relatedto both investments backing insurance products and company borrowings.A.M. Best notes as a positive Aegon’s use of equity futures contracts to hedgeliability risk with the equity sensitive products, such as variable annuities.While this strategy may help mitigate some of the tail risk associated withthese liabilities, there is still the presence of policyholder behavior risk, whichcannot be hedged. As a result, there is the possibility of hedge breakage in astressed market environment.

INVESTMENTS - OTHER INVESTED ASSETS2015 2014 2013 2012 2011

Other Inv Assets (000) 9,519,130 9,537,707 8,435,556 10,280,936 10,243,491Cash 10.8 13.6 8.1 29.5 21.7Short-Term 13.0 19.7 15.8 13.9 9.4Schedule BA Assets 27.9 18.2 24.0 22.4 24.2All Other 48.4 48.5 52.1 34.3 44.8

HISTORYDate Incorporated: 04/19/1961 Date Commenced: 03/19/1962

Domicile: IA

Originally incorporated as American Public Life Insurance Company, Inc.,the company was renamed NN Investors Life Insurance Company, Inc. in1968. In early 1991, as part of the assumption of essentially all the assets,liabilities and operations of Pacific Fidelity Life Insurance Company andNational Old Line Insurance Company, the company was renamed PFL LifeInsurance Company. During 2001, the present title was adopted.

Mergers: Investors Fidelity Life Insurance Company, Alabama, 1982;Investors Life of Florida Insurance Company, 1986; Transamerica AssuranceCompany, Missouri, 2004; Transamerica Life Insurance & Annuity Company,North Carolina, 2005; Transamerica Occidental Life Insurance Company,Iowa, 2008; Life Investors Insurance Company of America, Iowa, 2008.

Reinsurances: United Group Insurance Company, Texas, 1983.

MANAGEMENT

Officers: Chairman of the Board, Mark W. Mullin; President, Blake S.Bostwick; Chief Investment Officer, Joel L. Coleman; Senior Vice President,Treasurer and Chief Financial Officer, C. Michiel van Katwijk; Senior VicePresident and Chief Risk Officer, Todd Fuhs (Corporate); Senior VicePresident, Secretary and General Counsel, Jay Orlandi.

Directors: Blake S. Bostwick, Mark W. Mullin, Jay Orlandi, David Schulz, C.Michiel van Katwijk.

REGULATORYAn examination of the financial condition is being made as of December

31, 2014, by the insurance department of Iowa. The 2015 annual independentaudit of the company was conducted by PricewaterhouseCoopers LLP. Theannual statement of actuarial opinion is provided by Donald Krouse.

Reserve basis: (Current ordinary business): 1980 CSO 3%, 4%, and 4 1/2%;CRVM and Net Level valuation. (Current annuity business): 5.50%. 6.25%,6.75%; 83a, 6.35% immediate.

REINSURANCEMaximum net retention on any one life is $500,000 for ordinary life

business and $500,000 for group life contracts.

FINANCIAL INFORMATIONBALANCE SHEET ($000) - YE 2015

Assets LiabilitiesTotal bonds 34,097,070 +Net policy reserves 34,873,702Total preferred stocks 106,264 Policy claims 601,632Total common stocks 2,087,667 Accounts payable 1,057,984Mortgage loans 5,363,099 Deposit type contracts 2,738,140Real estate 131,514 Interest maint reserve 967,414Contract loans 649,738 Comm taxes expenses 237,870Cash & short-term inv 2,260,958 Asset val reserve 740,321Derivatives 1,157,993 Funds held reinsurance 2,977,378Securities-colltrl assts 2,760,922 Funds held coinsur 1,237,394Other invested assets 2,653,261 Payable for securities lending 2,760,922Prems and consids due 139,516 Other liabilities 372,544Accrued invest income 474,170Other assets 2,025,054 Tot liab w/o sep accts 48,565,302

Separate account bus 72,012,055Tot assets w/o sep accts 53,907,227

Separate account bus 72,128,772 Total liabilities 120,577,357Common stock 6,762Preferred stock 1,597Treas stock preferred -58,000Surplus notes 150,000Paid in & contrib surpl 3,102,701Unassigned surplus 2,253,290Other surplus 2,292

Assets 126,035,999 Total 126,035,999

+Analysis of reserves; Life $14,354,681; annuities $14,745,474; supplementary contractswith life contingencies $414,505; accidental death benefits $7,176; disability active lives$11,201; disability disabled lives $43,866; miscellaneous reserves $472,755; accident & health$4,824,046.


SUMMARY OF OPERATIONS ($000)Premiums: Death benefits 1,376,211Ordinary life 926,154 Matured endowments 10Individual annuities 5,870,210 Annuity benefits 1,163,511Credit life 20,565 Coup endow/similar ben 18Group life 139,990 Surrender benefits 9,667,641Group annuities 7,048,152 Acc & health benefits 427,224Acc & health group 524,406 Int on policy funds 44,541Acc & health credit 28,450 Supplementary contracts 75,522Acc & health other 219,074 Incr life reserves -1,455,241Total premiums 14,777,001 Incr a & h reserves 304,113

Supplementary contracts 32,015 Res adj reins assumed -228,984Net investment income 2,323,782 Commissions 1,242,518Amort interest maint res 93,679 Comm exp reins assumed 81,625Net gain from sep acct 0 Interest expenses 9,000Comm & exp reins ceded 581,925 Insur taxes lic & fees 127,045Res adj on reins ceded -193,428 General ins expenses 907,695Reinsurance income 310 Net transf to sep acct 5,151,857Other income 1,456,352 Other expenses -1,163Mgt and/or service fee 6,697 Misc operating expense 2

Other disbursements 119,776

Total 19,078,332 Total 19,012,921

Gain from operations before FIT & div to policyholders....................................... 65,411

Dividends to policyholders: life......................................................................... 5,894

Gains from operations after dividends to policyholders........................................ 59,517

Federal income taxes incurred........................................................................... -32,278

Net gain from operations after FIT and dividends................................................ 91,795

CASH FLOW ANALYSIS ($000)

Funds Provided Funds AppliedGross cash from oper 18,883,209 Benefits paid 12,619,288Long-term bond proceeds 13,571,823 Comm, taxes, expenses 2,260,757Other invest proceeds 1,713,108 Transfer to sep account 5,214,382Other cash provided 888,446 Long-term bonds acquired 11,977,145Decr cash & short-term 915,403 Other cash applied 3,900,417

Total 35,971,989 Total 35,971,989

—— ♦ ——


TRANSAMERICA PREMIER LIFE INSURANCECOMPANY

4333 Edgewood Road N.E.Cedar Rapids, IA 52499

Web: www.transamerica.comTel.: 800-797-2643AMB#: 006742 NAIC#: 66281Ultimate Parent#: 085244 FEIN#: 52-0419790



RECENT DEVELOPMENTSEffective July 31, 2014, the company changed its name from Monumental

Life Insurance Company to Transamerica Premier Life Insurance Company.Effective October 1, 2014, Western Reserve Life Assurance Co. of Ohio

merged with and into Transamerica Premier Life Insurance Company.

RATING RATIONALE


Transamerica Premier Life Insurance Company sells a full line of insuranceproducts, including individual, credit, and group coverages under life, annuityand accident and health policies as well as various investment products. Thecompany is licensed in 49 states, the District of Columbia, Guam and PuertoRico. Sales of the company’s products are primarily through agents, brokers,financial institutions and direct response methods.



Aegon USA’s business profile is viewed as strong by A.M. Best, withcompetitive market positions in the U.S. life and annuity arenas. The group’smarket positions are supported by a large and diversified distribution system


that is made up of both independent and career agents, financial institutions,wirehouses and direct response channels. Aegon USA enjoys the efficienciesand competitive advantages of meaningful economies of scale, which havecontributed favorably to its historical financial performance. Aegon USA’searnings profile is one of the more diversified in the industry. Product linesthat contribute to overall earnings include traditional life, variable life,variable annuities, mutual funds, pensions and accident and health insurance.Additional rating consideration includes A.M. Best’s assessment of thefinancial strength and support of the parent, Aegon. As a result, Aegon USAreceives rating enhancement in consideration of Aegon’s overallcreditworthiness and the strategic and financial importance of the U.S.operations to Aegon.





Best’sFSR

04/15/16 A+ 04/09/13 A+02/11/15 A+ 04/13/12 A+12/12/13 A+ 04/27/11 A+


Year Assets

CapitalSurplusFunds

AssetValuation

Reserve

NetPremiumsWritten

NetInvest

IncomeNet

Income2011 39,530,492 1,256,051 191,362 1,871,383 922,073 469,7612012 39,658,008 1,130,555 204,031 1,984,545 904,043 273,5422013 41,280,035 1,345,916 261,614 2,124,691 821,819 326,6842014 42,248,242 1,774,705 247,773 6,292,481 825,970 350,7312015 41,649,416 1,507,978 270,586 3,095,725 840,834 213,824

(*) Within several financial tables of this report, this company is compared against theMultiple Lines Composite.






The Life & Protection (L&P) division included the Agency Group sellingindividual life and supplemental health products to the middle income market.Also included in the L&P division were the Brokerage Group, TransamericaEmployee Benefits, Long Term Care and the Affinity Group. The BrokerageGroup marketed life insurance in the retail high net worth market throughindependent general agents and contract producers. The Affinity Groupspecialized in marketing life insurance and supplemental health insuranceproducts to consumers through direct channels such as telemarketing, directmail, television advertising and the Internet. This group also marketed creditlife, mortgage life and other life insurance and supplemental health products.Transamerica Long Term Care offered products and services aimed at meetingthe long-term care insurance needs of its customers. Policies were soldthrough independent brokerage and at the worksite to individuals and groups.


Through Transamerica Employee Benefits, L&P offered voluntary payrolldeduction life and supplemental health insurance to employees at their placeof work which are designed to supplement employees’existing benefit plans.







Period ————DPW———— ——Prem Assumed——Ending ($000) (% Chg) ($000) (% Chg)2011 2,452,513 2.9 213,696 -33.02012 2,530,167 3.2 207,470 -2.92013 2,675,486 5.7 157,040 -24.32014 2,895,644 8.2 4,061,709 999.92015 3,175,792 9.7 499,472 -87.7

5-Yr CAGR … 5.9 … 9.4

ReinsurancePeriod ———Prem Ceded——— —NPW & Deposits—Ending ($000) (% Chg) ($000) (% Chg)2011 794,827 -4.2 1,906,248 -2.52012 753,092 -5.3 2,022,933 6.12013 707,835 -6.0 2,189,829 8.32014 664,872 -6.1 6,330,921 189.12015 580,402 -12.7 3,143,871 -50.3

5-Yr CAGR … -6.9 … 10.0

Territory: The company is licensed in the District of Columbia, Guam, PuertoRico, AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY,LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NC, ND,OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI and WY.The company is also licensed on United States military installations in foreigncountries.




—Prem Assumed—Product Line ($000) (%) ($000) (%)Industrial life 980 0.0 … …Ordinary life 1,595,438 50.2 8,040 1.6Group life 47,372 1.5 3,353 0.7Credit life 10,530 0.3 657 0.1Individual annuities 676,665 21.3 17,765 3.6Group annuities 116,616 3.7 213 0.0Individual A&H 135,451 4.3 389,785 78.0Credit A&H 9,987 0.3 -1,071 -0.2Group A&H 582,754 18.3 80,731 16.2

Total 3,175,792 100.0 499,472 100.0Reinsurance

——Prem Ceded—— ——NPW——Product Line ($000) (%) ($000) (%)Industrial life 970 0.2 10 0.0Ordinary life 459,641 79.2 1,143,837 36.9Group life 7,126 1.2 43,599 1.4Credit life 4,060 0.7 7,127 0.2Individual annuities 32,942 5.7 661,488 21.4Group annuities 182 0.0 116,647 3.8Individual A&H 95 0.0 526,003 17.0Credit A&H 4,625 0.8 4,291 0.1Group A&H 70,762 12.2 592,722 19.1

Total 580,402 100.0 3,095,725 100.0

BY-LINE RESERVES ($000)Product Line 2015 2014 2013 2012 2011Industrial life 312,048 317,404 332,598 340,278 455,291Ordinary life 6,840,164 6,445,573 6,204,623 5,958,837 6,169,203Group life 544,119 573,759 598,213 613,408 628,799Credit life 4,173 1,551 1,572 2,493 2,852Supplementary contr 185,877 191,971 174,515 105,323 85,577Individual annuities 2,743,628 2,998,977 3,095,639 3,363,035 3,386,664Group annuities 658,922 702,049 761,542 869,246 1,014,341Deposit type contracts 639,671 673,282 697,414 903,992 930,293Individual A&H 896,587 562,028 634,420 474,385 431,747Credit A&H 8,719 6,826 6,755 7,328 8,266Group A&H 72,480 79,772 76,341 81,521 81,140

Total 12,906,389 12,553,191 12,583,633 12,719,845 13,194,173


Year Issued In Force Issued In Force Issued In Force2011 191,065 3,121,435 1,744 6,961 9,380 252,0062012 212,828 3,084,049 200 6,750 11,209 226,2582013 191,240 3,003,593 68 6,505 7,438 210,3952014 179,608 2,916,443 59 6,295 13,475 190,8742015 213,294 2,888,190 54 5,976 3,398 177,912


Year

Whole LifeEndow. &



2011 112,117,633 57,795,764 2,139,276 7,231,378 726,666 180,010,7172012 115,785,949 57,032,652 1,775,979 6,899,267 697,647 182,191,4942013 119,577,179 54,609,020 1,377,379 6,548,163 669,721 182,781,4632014 129,023,692 53,674,900 1,320,702 5,888,874 635,610 190,543,7772015 144,657,463 51,933,209 1,151,499 5,832,080 606,985 204,181,235



Indus-trial

TotalInsurance

Issued

Non-Par(%)

Par(%)

2011 12,059,051 5,937,654 1,678,479 1,009,545 … 20,684,729 100.0 0.02012 12,330,228 5,125,200 736,844 562,220 … 18,754,491 100.0 …2013 14,631,762 2,865,605 648,069 283,243 … 18,428,679 100.0 0.02014 18,956,933 3,681,393 643,544 214,863 … 23,496,733 100.0 0.02015 25,351,097 2,920,889 663,676 157,987 … 29,093,649 100.0 …





Year Issued In Force (000) (%) (%)2011 191,065 3,121,435 165,211 3.05 5.592012 212,828 3,084,049 199,804 2.64 1.542013 191,240 3,003,593 197,415 2.50 0.442014 179,608 2,916,443 229,335 2.57 0.592015 213,294 2,888,190 344,535 3.12 1.46


YearNPW(000)

Res(000)

Exp toRes(%)

Comm &Exp toNPW(%)


Benefits &Wdrwls to

Res (%)2011 445,592 3,472,242 0.9 6.6 297.8 38.22012 503,232 3,468,357 1.1 7.4 242.1 35.12013 585,703 3,270,154 1.2 7.5 213.3 38.22014 628,532 3,190,948 0.9 5.7 199.0 39.22015 661,488 2,929,506 1.0 5.5 179.8 40.6



YearNPW(000)

Res(000)

Exp toRes (%)

Comm &Exp toNPW(%)


Benefits &Wdrwls to

Res (%)2011 123,131 1,014,341 1.1 -2.4 184.2 22.42012 127,747 869,246 1.1 -1.5 193.4 28.42013 128,675 761,542 1.5 0.9 319.6 54.02014 126,632 702,049 1.5 0.6 145.0 26.22015 116,647 658,922 1.3 -0.5 76.5 13.5


YearTotal Annuity

Res (000)

Min or NoSurrender

Charge (%)


WithMVA (%)

NoSurrender

Allowed (%)2011 4,486,583 68.3 1.6 0.3 29.72012 4,337,603 72.3 0.2 0.3 27.22013 4,031,696 78.8 0.1 0.2 20.92014 3,892,997 82.5 0.1 0.2 17.22015 3,588,428 82.4 0.0 0.2 17.3


2015 2014 2013 2012 2011Sep Acct Assets 21,319,849 22,071,958 21,495,480 19,146,751 17,989,634% Growth -3.4 2.7 12.3 6.4 -4.9S/A Assets/Adm Assets 51.2 52.2 52.1 48.3 45.5

Sep Acct Reserves 21,195,146 21,889,351 21,227,957 18,841,272 17,587,589% Ordinary Life 14.9 15.4 15.8 15.5 15.4% Individual Annuities 74.8 74.8 74.4 73.6 74.7% Group Annuities 10.3 9.7 9.8 10.9 10.0% Group Life 0.0 0.0 0.0 0.0 0.0Deposit Type Liabilities 215 191 96 39 39Other Liabilities 124,488 182,416 267,427 305,440 402,007

S/A Prems & Deposits 908,008 888,874 852,772 771,537 751,860% Ordinary Life 25.5 26.9 29.2 35.2 40.6% Individual Annuities 74.3 72.9 70.6 64.3 58.7% Group Annuities 0.1 0.2 0.2 0.4 0.7% Group Life 0.0 0.0 0.0 0.0 0.0

Sep Acct Fees & Charges 338,083 350,946 353,854 359,547 370,870% Ordinary Life 71.5 71.2 72.1 73.0 72.8% Individual Annuities 28.4 28.7 27.7 26.8 27.0% Group Annuities 0.1 0.1 0.1 0.2 0.2% Group Life 0.0 0.0 0.0 0.0 0.0Fees & Chgs to Assets% 1.6 1.6 1.7 1.9 2.0

Sep Acct Ben & Wdrwls 1,386,011 1,284,825 1,505,935 1,286,646 1,199,731% Ordinary Life 16.6 15.3 21.2 13.9 14.9% Individual Annuities 83.1 84.4 71.6 84.9 83.6% Group Annuities 0.3 0.3 7.2 1.1 1.5% Group Life 0.0 0.0 0.0 0.0 0.0Ben & Wdrwl to Assets% 6.4 5.9 7.4 6.9 6.5


2015 2014 2013 2012 2011California 568,672 451,279 404,452 373,157 358,449Texas 226,973 205,059 177,724 152,956 147,854Florida 205,141 190,676 181,599 165,585 157,776Pennsylvania 146,557 129,646 121,348 116,707 107,510New Jersey 140,050 139,215 139,964 131,969 139,613Illinois 124,302 129,959 119,568 117,662 111,983Kentucky 117,406 118,992 119,076 119,544 121,013Virginia 115,340 112,257 103,774 108,634 109,109Maryland 113,118 107,567 113,490 101,659 94,355North Carolina 107,307 99,964 93,228 85,768 84,424All Other 1,309,728 1,190,073 1,107,866 1,055,883 1,024,540

Total 3,174,594 2,874,688 2,682,089 2,529,524 2,456,626








Operating Results: Aegon USA Group has one of the more diversifiedearnings profiles in the industry with earnings being generated from lifeinsurance products and increasingly from fee-based income from variable andinvestment-type products. Aegon USA Group reported a pre-tax statutoryoperating gain of approximately $0.6 billion in 2015 as compared to a 2014pre-tax statutory operating gain of approximately $1.0 billion. 2015’s resultswere impacted by a decline in top-line growth compared to 2014’s strongtop-line growth which was the strongest in recent history. Higher underwritinglosses along with lower investment income drove the year-over-year change.Adverse claims experience and the impact on recurring earnings of theactuarial assumption changes and model updates implemented over the pastyear and a half were the primary drivers behind the decline in pre-tax earnings.




Pre-tax NetPeriod Net Oper Operating Net TotalEnding Income Gain Income Return2011 551,994 511,035 469,761 453,2102012 403,081 286,009 273,542 239,0222013 369,164 326,932 326,684 427,8292014 531,209 335,069 350,731 267,4752015 205,108 234,856 213,824 201,332

5-Yr Total 2,060,555 1,693,900 1,634,542 1,588,869

———Company——— —Industry Composite—Period Operating Operating Operating OperatingEnding ROR (%) ROE (%) ROR (%) ROE (%)2011 14.6 34.7 5.6 10.52012 9.9 24.0 5.6 10.52013 9.6 26.4 6.1 9.52014 4.5 21.5 4.1 7.42015 5.7 14.3 6.9 11.3

5-Yr Avg 8.0 23.8 5.7 9.8



Year & Dep & Dep Assets Tot Rev Equity Yield Return2011 119.2 17.7 1.2 14.6 34.7 4.38 3.722012 107.8 22.4 0.7 9.9 24.0 4.60 5.992013 117.2 30.0 0.8 9.6 26.4 4.36 4.692014 35.7 12.3 0.8 4.5 21.5 4.45 3.882015 81.1 33.8 0.6 5.7 14.3 4.46 4.21

5-Year Avg 75.8 21.1 0.8 8.0 23.8 4.45 4.50


NET OPERATING GAIN ($000)Product Line 2015 2014 2013 2012 2011Industrial life -4,678 -3,299 -7,167 32,081 -1,041Ordinary life 100,248 38,047 27,424 91,972 345,076Group life 4,466 2,292 -2,090 -2,904 -2,792Credit life 1,798 -2,982 856 587 14,006Supplementary contr -20,570 -9,166 -13,248 -14,320 -18,133Individual annuities 46,140 48,685 217,536 47,722 -86,802Group annuities 91,813 59,912 140,163 73,382 182,059Individual A&H -211,878 174,431 -91,011 19,886 33,052Credit A&H -227 -1,708 127 2,263 7,245Group A&H 142,483 28,858 54,341 35,339 38,366Other 85,259 … … … …

Total 234,856 335,069 326,932 286,009 511,035



Year Written Earned Ratio Ratio Results2011 595,278 608,068 55.1 37.6 49,0972012 582,695 584,960 55.9 33.9 60,6782013 558,099 565,128 77.0 37.4 -78,4912014 4,585,713 4,583,207 5.2 3.6 267,7062015 1,128,875 1,124,991 96.5 34.9 -368,627Current Year Experience:Group 597,523 605,126 52.0 41.3 115,704Credit 4,291 2,151 80.5 26.7 -727Coll renew. 0 0 … 41.4 0Non-can. 20,818 21,125 58.4 36.6 1,178Guarant renew 498,780 489,141 154.8 23.5 -471,209Non-renew, S.R. 112 113 … 36.4 72Other accident 6,617 6,592 10.9 36.2 3,475Other 734 743 -99.9 999.9 -17,119


Year Income Gains Gains2011 922,073 -41,273 -16,5512012 904,043 -12,467 -34,5202013 821,819 -249 101,1462014 825,970 15,663 -83,2562015 840,834 -21,032 -12,492

5-Year Total 4,314,739 -59,358 -45,673——————Company—————— -Industry Composite-

Pre-taxInvest


Year (%) (%) (%) (%) (%) (%)2011 -5.4 4.4 4.0 3.7 2.0 5.22012 -2.0 4.6 5.7 6.0 0.2 5.02013 -9.1 4.4 4.1 4.7 -2.2 4.82014 0.5 4.5 4.6 3.9 0.3 4.82015 1.8 4.5 4.3 4.2 3.3 4.8

5-Yr Avg -3.0 4.5 4.5 4.5 0.7 4.9




Capitalization: Aegon USA’s overall risk-based capitalization is adequate tosupport its current insurance and investment risks. A.M. Best believes that

Aegon USA has good statutory earnings capacity to support its capitalposition going forward. A.M. Best also notes that over recent years, AegonUSA has come to rely heavily on captive reinsurance to fund its reservesassociated with term life insurance and universal life with secondaryguarantees. Financing provided to these captives include, but are not limitedto, surplus notes, letters of credit and parental guarantees. As part of ourassessment of a rating unit’s balance sheet strength, A.M. Best considers notonly the capital adequacy ratios, but also the quality of capital supporting suchratios. A.M. Best believes that the quality of capital for an operating companythat has ceded XXX and/or AXXX reserves to a domestic or offshore captiveas not as strong as for an operating company with similar risk-adjusted capitalratios that self-funds its XXX and AXXX reserves.


Current BCAR: 217



Year Gain Gains Taxes Gains2011 551,994 -41,273 40,959 -16,5512012 403,081 -12,467 117,072 -34,5202013 369,164 -249 42,232 101,1462014 531,209 15,663 196,140 -83,2562015 205,108 -21,032 -29,748 -12,492

5-Yr Total 2,060,555 -59,358 366,655 -45,673—————Source of Surplus Growth—————Change Change % Chg

in Other in inYear AVR Changes C&S C&S2011 -30,468 -852,378 -429,636 -25.52012 -12,668 -351,849 -125,496 -10.02013 -57,583 -154,885 215,361 19.02014 13,841 116,717 398,033 31.92015 -12,997 -455,062 -266,727 -15.0

5-Yr Total -99,876 -1,697,458 -208,465 -2.2


Year Notes Debt Capital Surplus2011 160,000 … 971,679 124,3722012 160,000 … 783,537 187,0182013 160,000 … 919,463 266,4532014 160,000 … 920,182 694,5232015 160,000 … 720,517 627,461


Year-End Asset Valuation AdjustedYear C&S Reserve C&S2011 1,256,051 191,362 1,447,4142012 1,130,555 204,031 1,334,5862013 1,345,916 261,614 1,607,5302014 1,774,705 247,773 2,022,4782015 1,507,978 270,586 1,778,564


to Surplus to Total in NPW to SurplusYear Liab(%) Relief(%) Capital & Dep(%) Liab(%) Relief(%)2011 7.2 38.9 1.3 -2.5 12.1 3.12012 7.0 33.1 1.5 6.1 12.2 2.62013 8.8 14.6 1.4 8.3 12.5 3.12014 11.1 2.6 3.1 189.1 13.1 2.32015 9.6 10.8 1.8 -50.3 13.1 2.4



Year Reins Ceded Rec/C&S Rec/C&S Rec/C&S Relief Leverage Rec/C&S Leverage2011 106,704,014 2.7 2.5 5.2 38.9 417.7 4.3 76.62012 103,286,687 2.6 2.1 4.7 33.1 456.5 4.2 71.72013 92,104,550 2.0 1.9 3.9 14.6 347.8 4.0 84.22014 84,926,052 1.4 1.3 2.7 2.6 252.2 3.7 81.72015 77,398,265 1.3 1.5 2.8 10.8 295.6 3.7 79.7




Liquidity: Aegon USA has adequate cash and liquid assets to protect againstadverse liquidity scenarios. The company manages so that liquidityrequirements could be met in stress scenarios which factor in a combination ofevents over monthly horizon points over an extended period of time. Liquidityimpacts due to rating downgrades are also factored into the company’s stresstesting. The company manages liquidity so that a positive cash balance can bemaintained during the first 6 months of a modeled scenario with illiquid asset

sales not allowed during this period. The company also forecasts liquidity tobe positive over a two year period. Aegon USA’s liquidity is also supported by$1.1 billion in available syndicated borrowings for emergency use only. TheGroup also has available to them the ability to access the FHLB as well asother normal operating lines of credit outside of emergency use funding.Liquidity is considered adequate and supports the level business complexity inwhich the company operates in.



Year Flow ($000) Liquidity Liquidity to Capital Mtg to Capital2011 799,464 42.9 110.1 100.7 0.62012 23,196 45.1 107.7 91.7 0.52013 436,424 43.7 104.2 67.8 0.52014 962,648 45.8 105.2 48.9 0.32015 141,940 46.1 103.7 53.0 0.2









Net Short- —Real Estate— Exp.Year Yield Bonds Stocks Mortgages Term Gross Net Ratio2011 4.38 4.86 19.03 5.56 0.23 13.00 -0.22 4.492012 4.60 5.02 14.00 5.96 0.21 12.94 -1.39 4.552013 4.36 4.85 17.37 5.50 0.14 14.18 -0.94 4.792014 4.45 4.81 17.23 5.36 0.11 14.01 -3.02 4.982015 4.46 4.77 17.35 5.44 0.16 22.94 2.80 7.81



Government 0.3 1.0 0.7 0.6 3.3 17Gov’t Agencies & Muni 0.1 0.8 0.7 0.2 1.3 14Industrial & Misc 8.9 18.6 20.6 16.8 21.5 12Hybrid Securities 0.1 … 0.1 1.7 2.5 20

Total 9.4 20.4 22.2 19.3 28.7 12

2015 2014 2013 2012 2011Bonds (000) 14,471,372 14,275,747 13,830,053 13,565,102 14,814,606US Government 4.7 5.4 5.9 4.3 5.3Foreign Government 1.5 1.5 1.5 1.6 1.5Foreign - All Other 20.0 21.1 19.9 20.9 18.9State/Special Revenue - US 3.3 4.2 3.0 2.6 1.6Industrial & Misc - US 65.9 62.8 64.4 65.0 66.9Hybrid Securities 4.7 5.0 4.9 5.1 5.3Affiliated … … 0.4 0.4 0.4




Stocks (000) 118,566 132,904 107,156 145,256 159,163Unaffiliated Common 42.6 32.2 42.6 54.5 51.4Affiliated Common 52.0 38.0 48.5 39.7 33.2Unaffiliated Preferred 5.4 29.9 8.9 5.8 15.4


Mortgages (000) 1,687,756 1,903,557 1,770,664 1,915,565 2,180,770Commercial 97.7 97.8 97.0 95.8 95.9Residential 0.2 0.2 0.3 0.3 0.4Farm 2.1 2.0 2.7 3.9 3.7Mortgage Quality (%) 2015 2014 2013 2012 201190 Days Delinquent 0.0 0.0 0.0 0.1 0.0In Process of Foreclosure 0.0 0.0 0.0 0.0 0.0Total Delinquencies 0.0 0.0 0.1 0.1 0.1

2015 2014 2013 2012 2011Real Estate (000) 227,312 38,795 40,926 40,412 43,447Property Occupied by Co 11.3 68.9 66.9 87.1 82.9Property Held for Inc 84.1 0.9 0.9 1.0 1.0Property Held for Sale 4.5 30.2 32.2 11.9 16.1



Other Inv Assets (000) 2,854,163 2,882,832 2,988,055 3,862,452 3,133,002Cash 13.0 12.7 11.1 30.1 14.3Short-Term 17.9 13.3 11.3 9.8 13.0Schedule BA Assets 22.7 29.8 26.8 22.1 29.8All Other 46.4 44.2 50.8 38.0 42.9


Domicile: IA

Originally incorporated as a mutual company under the title MarylandMutual Life and Fire Insurance Company, the title was changed in 1870 toMutual Life Insurance Company of Baltimore. In 1928, the company wasconverted to the stock basis. During 1935 the title was changed toMonumental Life Insurance Company. The company redomesticated fromMaryland to Iowa during 2007. During 2014, the present title was adopted.

Mergers: Capital Security Life Insurance Company, North Carolina, 1998;Commonwealth Life Insurance Company, Kentucky, 1998; Peoples SecurityLife Insurance Company, North Carolina, 1998; Pension Life InsuranceCompany of America, New Jersey, 2004; Peoples Benefit Life InsuranceCompany, Iowa, 2007; Western Reserve Life Assurance Company of Ohio,2014.


MANAGEMENT

Officers: Chairman of the Board, President and Chief Executive Officer,Blake S. Bostwick; Chief Investment Officer, Joel L. Coleman; Senior VicePresident and Chief Risk Officer, Todd Fuhs; Senior Vice President, Secretaryand General Counsel, Jay Orlandi; Senior Vice President, Treasurer and ChiefFinancial Officer, C. Michiel van Katwijk.

Directors: Blake Bostwick, Mark W. Mullin, Jay Orlandi, David Schulz, C.Michiel van Katwijk.

REGULATORYAn examination of the financial condition is being made as of July 31, 2014,

by the insurance departments of Iowa, Maryland, Ohio and Vermont. The 2015annual independent audit of the company was conducted byPricewaterhouseCoopers LLP. The annual statement of actuarial opinion isprovided by Donald Krouse.

Reserve basis: (Current ordinary business): 1980 CSO 4%, 4 1/2% and 5%;CRVM and Net Level valuation. (Current annuity business): 5.50% and 5.75%CARVM deferred; 83a 6%, 6.25% and 6.50% CARVM immediate; A20006.5% both, 5.50% and 5.75% deferred; Greater of AV or CARVM.


Assets LiabilitiesTotal bonds 14,471,372 +Net policy reserves 12,266,718Total preferred stocks 6,428 Policy claims 266,664Total common stocks 112,138 Deposit type contracts 639,671Mortgage loans 1,687,756 Interest maint reserve 283,137Real estate 227,312 Comm taxes expenses 95,890Contract loans 925,179 Asset val reserve 270,586Cash & short-term inv 883,173 Funds held reinsurance 4,020,770Other invested assets 647,640 Other liabilities 978,153Prems and consids due 194,807Accrued invest income 185,526 Tot liab w/o sep accts 18,821,589Other assets 988,235 Separate account bus 21,319,849

Tot assets w/o sep accts 20,329,567 Total liabilities 40,141,438Separate account bus 21,319,849 Common stock 10,137

Surplus notes 160,000Paid in & contrib surpl 710,380Unassigned surplus 625,304Other surplus 2,158

Assets 41,649,416 Total 41,649,416

+Analysis of reserves; Life $7,421,482; annuities $3,363,955; supplementary contracts withlife contingencies $224,473; accidental death benefits $18,691; disability active lives $22,208;disability disabled lives $115,049; miscellaneous reserves $123,075; accident & health$977,785.

SUMMARY OF OPERATIONS ($000)Premiums: Death benefits 284,437Ordinary life 1,143,837 Matured endowments 8,491Individual annuities 661,488 Annuity benefits 344,697Credit life 7,127 Surrender benefits 1,110,799Group life 43,599 Acc & health benefits 732,800Group annuities 116,647 Int on policy funds 23,763Acc & health group 592,722 Supplementary contracts 43,194Acc & health credit 4,291 Incr life reserves 60,841Acc & health other 526,003 Incr a & h reserves 90,920Industrial 10 Res adj reins assumed 13,925Total premiums 3,095,725 Commissions 716,320

Supplementary contracts 22,453 Comm exp reins assumed 112,474Net investment income 840,834 Interest expenses 9,600Amort interest maint res 24,669 Insur taxes lic & fees 54,384Comm & exp reins ceded 162,538 General ins expenses 331,106Res adj on reins ceded -397,377 Net transf to sep acct -228,324Reinsurance income 329 Other expenses -141Other income 367,924 Misc operating expense 76Mgt and/or service fee 3,979 Other disbursements 205,469

Total 4,121,072 Total 3,914,830


Dividends to policyholders: life......................................................................... 1,134

Gains from operations after dividends to policyholders........................................ 205,108


Net gain from operations after FIT and dividends................................................ 234,856


Funds Provided Funds AppliedGross cash from oper 4,064,519 Benefits paid 2,600,351Long-term bond proceeds 3,804,173 Comm, taxes, expenses 1,462,818Mortgage loan proceeds 586,271 Long-term bonds acquired 4,025,603Other invest proceeds 558,305 Other cash applied 1,275,904Other cash provided 484,695 Incr cash & short-term 133,287

Total 9,497,962 Total 9,497,962

—— ♦ ——



TRANSAMERICA FINANCIAL LIFE INSURANCECOMPANY

440 Mamaroneck AvenueHarrison, NY 10528

Exec. Office: 4333 Edgewood Road, N.E., Cedar Rapids, IA 52499Web: www.transamerica.com




RECENT DEVELOPMENTSEffective July 1, 2014, Transamerica Advisors Life Insurance Company of

New York was merged with and into Transamerica Financial Life InsuranceCompany.

RATING RATIONALE


Transamerica Financial Life Insurance Company primarily sells fixed andvariable pension and annuity products, group life coverages, life insurance,investment contracts and structured settlements. The company is licensed in50 states and the District of Columbia. Sales of the company’s products areprimarily through brokers.



Aegon USA’s business profile is viewed as strong by A.M. Best, withcompetitive market positions in the U.S. life and annuity arenas. The group’smarket positions are supported by a large and diversified distribution system

that is made up of both independent and career agents, financial institutions,wirehouses and direct response channels. Aegon USA enjoys the efficienciesand competitive advantages of meaningful economies of scale, which havecontributed favorably to its historical financial performance. Aegon USA’searnings profile is one of the more diversified in the industry. Product linesthat contribute to overall earnings include traditional life, variable life,variable annuities, mutual funds, pensions and accident and health insurance.Additional rating consideration includes A.M. Best’s assessment of thefinancial strength and support of the parent, Aegon. As a result, Aegon USAreceives rating enhancement in consideration of Aegon’s overallcreditworthiness and the strategic and financial importance of the U.S.operations to Aegon.





Best’sFSR

04/15/16 A+ 04/09/13 A+02/11/15 A+ 04/13/12 A+12/12/13 A+ 04/27/11 A+



Year Assets

CapitalSurplusFunds

AssetValuation

Reserve

NetPremiumsWritten

NetInvest

IncomeNet

Income2011 26,238,186 750,251 102,582 4,425,013 471,426 -279,7932012 27,709,677 913,478 118,837 4,935,636 434,681 216,8192013 30,176,766 1,027,026 136,048 5,239,588 414,751 245,0382014 31,099,280 957,697 112,004 5,434,251 410,350 23,9292015 31,535,277 1,167,385 117,572 5,807,554 401,084 259,876

(*) Within several financial tables of this report, this company is compared against the GroupAnnuity Composite.






The Life & Protection (L&P) division included the Agency Group sellingindividual life and supplemental health products to the middle income market.Also included in the L&P division were the Brokerage Group, TransamericaEmployee Benefits, Long Term Care and the Affinity Group. The BrokerageGroup marketed life insurance in the retail high net worth market throughindependent general agents and contract producers. The Affinity Groupspecialized in marketing life insurance and supplemental health insuranceproducts to consumers through direct channels such as telemarketing, directmail, television advertising and the Internet. This group also marketed creditlife, mortgage life and other life insurance and supplemental health products.Transamerica Long Term Care offered products and services aimed at meetingthe long-term care insurance needs of its customers. Policies were soldthrough independent brokerage and at the worksite to individuals and groups.

Through Transamerica Employee Benefits, L&P offered voluntary payrolldeduction life and supplemental health insurance to employees at their placeof work which are designed to supplement employees’existing benefit plans.








Period ————DPW———— ——Prem Assumed——Ending ($000) (% Chg) ($000) (% Chg)2011 4,949,497 1.1 621,657 -4.12012 4,956,005 0.1 633,557 1.92013 5,262,374 6.2 531,963 -16.02014 5,447,514 3.5 550,478 3.52015 5,815,647 6.8 510,557 -7.3

5-Yr CAGR … 3.5 … -4.7

ReinsurancePeriod ———Prem Ceded——— —NPW & Deposits—Ending ($000) (% Chg) ($000) (% Chg)2011 1,146,141 181.4 4,429,649 -14.02012 653,926 -42.9 4,943,752 11.62013 554,749 -15.2 5,246,790 6.12014 563,742 1.6 5,440,740 3.72015 518,650 -8.0 5,812,959 6.8

5-Yr CAGR … 5.0 … 2.4

Territory: The company is licensed in the District of Columbia and all states.



—Prem Assumed—Product Line ($000) (%) ($000) (%)Ordinary life 153,657 2.6 500,719 98.1Group life 14,011 0.2 1,395 0.3Credit life 4,374 0.1 299 0.1Individual annuities 620,756 10.7 6,635 1.3Group annuities 4,896,476 84.2 573 0.1Individual A&H 52,841 0.9 48 0.0Credit A&H 6,221 0.1 -2 0.0Group A&H 67,310 1.2 889 0.2

Total 5,815,647 100.0 510,557 100.0

Reinsurance——Prem Ceded—— ——NPW——

Product Line ($000) (%) ($000) (%)Ordinary life 515,268 99.3 139,108 2.4Group life 514 0.1 14,892 0.3Credit life 399 0.1 4,275 0.1Individual annuities 376 0.1 627,014 10.8Group annuities 19 0.0 4,897,030 84.3Individual A&H … … 52,889 0.9Credit A&H 822 0.2 5,397 0.1Group A&H 1,252 0.2 66,948 1.2

Total 518,650 100.0 5,807,554 100.0

BY-LINE RESERVES ($000)Product Line 2015 2014 2013 2012 2011Ordinary life 1,010,629 949,486 892,667 839,292 791,514Group life 54,740 49,920 45,944 41,373 37,777Credit life 3,467 4,512 6,205 8,178 10,644Supplementary contr 28,687 27,443 27,545 23,727 22,435Individual annuities 1,406,091 1,626,929 1,718,014 1,985,729 2,190,802Group annuities 4,388,949 4,450,140 4,570,629 4,729,414 4,751,536Deposit type contracts 59,701 62,204 65,525 69,414 71,628Individual A&H 58,010 38,307 33,797 29,468 26,026Credit A&H 6,954 7,542 8,369 8,889 9,250Group A&H 87,792 88,710 88,910 87,189 85,377

Total 7,105,021 7,305,192 7,457,606 7,822,673 7,996,988


Year Issued In Force Issued In Force Issued In Force2011 11,508 2,935,126 4 110 1,563 24,3512012 10,416 2,629,984 1 111 1,676 22,4592013 12,215 2,264,006 2 112 1,571 22,1732014 13,246 2,002,433 1 118 1,200 21,2432015 14,639 1,743,524 … 115 1,141 20,418


Year

Whole LifeEndow. &



2011 8,579,645 266,113,244 693,764 1,135,416 … 276,522,0692012 9,016,581 253,487,089 449,360 1,102,831 … 264,055,8612013 10,574,930 211,187,766 604,641 1,129,913 … 223,497,2502014 10,397,347 200,836,306 636,971 1,126,556 … 212,997,1802015 11,749,242 188,807,365 472,069 1,128,210 … 202,156,886




Indus-trial

TotalInsurance

Issued

Non-Par(%)

Par(%)

2011 1,077,965 1,672,394 2,545,376 103,406 … 5,399,141 100.0 …2012 876,990 651,561 251,034 114,330 … 1,893,915 100.0 …2013 1,190,088 771,795 386,258 101,517 … 2,449,659 100.0 …2014 1,412,359 1,086,434 437,687 84,912 … 3,021,392 100.0 …2015 1,903,711 897,216 306,173 80,894 … 3,187,994 100.0 …





Year Issued In Force (000) (%) (%)2011 11,508 2,935,126 18,483 2.02 -32.602012 10,416 2,629,984 15,599 1.40 -0.412013 12,215 2,264,006 15,790 1.54 0.942014 13,246 2,002,433 19,448 2.08 -9.922015 14,639 1,743,524 27,578 1.91 3.52


YearNPW(000)

Res(000)

Exp toRes(%)

Comm &Exp toNPW(%)


Benefits &Wdrwls to

Res (%)2011 303,799 2,213,237 1.9 21.3 95.3 13.12012 408,080 2,009,456 1.7 15.7 87.3 17.72013 683,077 1,745,560 1.9 11.7 56.8 22.22014 827,977 1,654,372 2.1 11.3 52.8 26.42015 627,014 1,434,778 2.2 12.9 59.7 26.1


YearNPW(000)

Res(000)

Exp toRes (%)

Comm &Exp toNPW(%)


Benefits &Wdrwls to

Res (%)2011 4,435,225 4,751,536 1.9 2.6 79.8 74.52012 4,325,210 4,729,414 1.7 2.6 88.9 81.32013 4,340,191 4,570,629 1.8 2.7 92.5 87.92014 4,352,038 4,450,140 2.1 3.0 118.0 115.42015 4,897,030 4,388,949 2.1 2.7 96.9 108.1


YearTotal Annuity

Res (000)

Min or NoSurrender

Charge (%)


WithMVA (%)

NoSurrender

Allowed (%)2011 6,964,773 47.8 6.4 4.6 41.22012 6,738,871 52.7 4.1 4.1 39.12013 6,316,189 58.5 3.6 3.5 34.42014 6,104,512 64.0 3.4 3.3 29.42015 5,823,727 66.0 3.2 3.1 27.7


2015 2014 2013 2012 2011Sep Acct Assets 22,369,554 21,835,303 20,880,027 18,154,416 16,459,576% Growth 2.4 4.6 15.0 10.3 10.1S/A Assets/Adm Assets 70.9 70.2 69.2 65.5 62.7

Sep Acct Reserves 22,092,855 21,592,569 20,585,509 17,834,036 15,905,709% Ordinary Life 1.1 1.2 1.2 1.3 1.4% Individual Annuities 16.9 16.1 13.3 10.8 8.3% Group Annuities 82.0 82.8 85.5 88.0 90.4Other Liabilities 238,985 189,472 246,207 243,629 513,137Sep Acct Surplus 1 8 8 6 61

S/A Prems & Deposits 4,948,770 4,687,989 4,482,210 4,163,654 4,220,322% Ordinary Life 0.1 0.2 0.2 0.2 0.2% Individual Annuities 12.5 17.3 14.8 9.3 6.7% Group Annuities 87.4 82.5 85.0 90.5 93.1

Sep Acct Fees & Charges 178,533 168,948 150,472 136,445 126,332% Ordinary Life 5.9 6.2 6.8 7.5 8.3% Individual Annuities 43.0 35.0 26.8 20.3 16.1% Group Annuities 51.2 58.8 66.4 72.2 75.6Fees & Chgs to Assets% 0.8 0.8 0.8 0.8 0.8

Sep Acct Ben & Wdrwls 4,211,412 4,557,533 3,324,936 3,299,713 3,045,164% Ordinary Life 0.3 0.3 0.6 0.4 0.5% Individual Annuities 5.0 3.6 3.9 3.5 3.6% Group Annuities 94.7 96.1 95.5 96.0 95.8Ben & Wdrwl to Assets% 19.1 21.3 17.0 19.1 19.4



2015 2014 2013 2012 2011New York 1,519,270 1,582,707 1,451,187 1,389,598 1,067,735California 865,068 515,531 479,252 389,009 365,701Florida 569,201 832,927 866,983 760,455 1,101,892New Jersey 323,679 164,431 183,108 133,660 139,745Georgia 261,676 225,740 277,527 206,350 118,465Missouri 214,961 248,520 263,710 224,770 182,100Iowa 206,392 155,347 163,441 151,762 107,614Colorado 195,276 39,131 32,616 63,821 38,389Texas 164,076 194,601 153,403 135,451 128,661Massachusetts 158,777 200,336 79,508 94,966 75,667All Other 1,332,008 1,286,201 1,311,404 1,403,230 1,621,428

Total 5,810,385 5,445,470 5,262,140 4,953,071 4,947,397












Pre-tax NetPeriod Net Oper Operating Net TotalEnding Income Gain Income Return2011 -191,946 -236,198 -279,793 -230,9922012 320,003 208,887 216,819 169,4022013 330,820 314,063 245,038 200,5742014 130,531 57,503 23,929 65,7732015 345,325 290,360 259,876 262,289

5-Yr Total 934,732 634,615 465,869 467,046

———Company——— —Industry Composite—Period Operating Operating Operating OperatingEnding ROR (%) ROE (%) ROR (%) ROE (%)2011 -4.6 -28.8 -2.5 -6.82012 3.7 25.1 4.3 15.22013 5.3 32.4 7.7 22.52014 0.9 5.8 0.4 1.32015 4.4 27.3 6.6 11.7

5-Yr Avg 2.2 13.6 3.3 9.0




Year & Dep & Dep Assets Tot Rev Equity Yield Return2011 90.9 8.6 -0.9 -4.6 -28.8 4.93 5.552012 87.4 5.0 0.8 3.7 25.1 4.73 4.532013 86.9 4.7 1.1 5.3 32.4 4.62 3.162014 105.2 5.6 0.2 0.9 5.8 4.61 4.712015 91.2 4.8 0.9 4.4 27.3 4.54 4.16

5-Year Avg 92.5 5.6 0.4 2.2 13.6 4.69 4.44


NET OPERATING GAIN ($000)Product Line 2015 2014 2013 2012 2011Ordinary life 35,618 -94,165 8,426 -3,423 -258,044Group life 3,930 2,701 1,360 2,469 3,674Credit life 1,565 1,040 2,382 1,426 3,177Supplementary contr 67 460 859 1,057 585Individual annuities 138,142 81,938 146,251 -29,872 -118,510Group annuities 62,932 59,620 144,038 227,450 131,134Individual A&H -12,108 1,069 1,889 3,545 -3,078Credit A&H 560 23 -204 66 437Group A&H 9,283 4,817 9,063 6,168 4,428Other 50,370 … … … …

Total 290,360 57,503 314,063 208,887 -236,198


Year Written Earned Ratio Ratio Results2011 65,974 66,937 53.0 52.1 -2,8842012 79,889 80,016 57.4 33.6 7,2442013 83,248 82,539 61.5 34.6 2,9552014 114,061 113,486 59.2 37.2 3,9052015 125,454 125,234 74.4 37.3 -14,705Current Year Experience:Group 67,023 66,855 55.5 36.6 5,213Credit 5,397 5,738 60.6 38.8 166Non-can. 201 199 73.1 8.0 37Guarant renew 51,736 51,322 100.8 31.3 -16,607Non-renew, S.R. 717 739 73.5 52.8 -182Other accident 376 378 52.6 11.5 136Other 4 4 -84.3 999.9 -3,468


Year Income Gains Gains2011 471,426 -43,595 48,8012012 434,681 7,932 -47,4172013 414,751 -69,024 -44,4642014 410,350 -33,574 41,8442015 401,084 -30,483 2,413

5-Year Total 2,132,292 -168,745 1,177——————Company—————— -Industry Composite-

Pre-taxInvest


Year (%) (%) (%) (%) (%) (%)2011 -8.3 4.9 4.7 5.6 1.9 5.22012 -7.8 4.7 5.2 4.5 0.0 5.02013 -4.6 4.6 3.9 3.2 2.4 4.92014 -1.1 4.6 4.3 4.7 2.6 4.82015 -2.3 4.5 4.2 4.2 -4.8 4.7

5-Yr Avg -5.0 4.7 4.5 4.4 0.4 4.9






Current BCAR: 217




Year Gain Gains Taxes Gains2011 -191,946 -43,595 44,251 48,8012012 320,003 7,932 111,116 -47,4172013 330,820 -69,024 16,757 -44,4642014 130,531 -33,574 73,027 41,8442015 345,325 -30,483 54,965 2,413

5-Yr Total 934,732 -168,745 300,117 1,177—————Source of Surplus Growth—————Change Change % Chg

in Other in inYear AVR Changes C&S C&S2011 1,799 89,275 -139,917 -15.72012 -16,254 10,078 163,226 21.82013 -12,133 -74,893 113,549 12.42014 24,045 -159,748 -69,930 -6.82015 -5,569 -47,032 209,689 21.9

5-Yr Total -8,111 -182,319 276,616 5.6


Year Notes Debt Capital Surplus2011 150,000 442 969,428 -369,6182012 150,000 442 935,820 -172,7842013 150,000 442 935,820 -59,2362014 150,000 460 935,802 -128,5652015 150,000 460 935,802 81,123

Year-End Asset Valuation AdjustedYear C&S Reserve C&S2011 750,251 102,582 852,8342012 913,478 118,837 1,032,3142013 1,027,026 136,048 1,163,0742014 957,697 112,004 1,069,7002015 1,167,385 117,572 1,284,958


to Surplus to Total in NPW to SurplusYear Liab(%) Relief(%) Capital & Dep(%) Liab(%) Relief(%)2011 9.6 -7.0 5.2 -14.0 9.5 -0.42012 12.1 6.4 4.8 11.6 10.0 4.62013 14.3 5.9 4.5 6.1 9.8 7.12014 13.1 5.2 5.1 3.7 9.9 3.62015 16.3 6.5 4.5 6.8 10.8 5.8



Year Reins Ceded Rec/C&S Rec/C&S Rec/C&S Relief Leverage Rec/C&S Leverage2011 260,584,470 7.4 14.1 21.5 -7.0 300.5 5.5 206.92012 247,627,359 5.6 12.0 17.6 6.4 260.1 5.1 205.32013 205,474,553 4.4 10.0 14.4 5.9 211.5 4.4 203.92014 193,135,173 4.7 10.2 14.9 5.2 232.9 4.8 199.82015 180,500,389 4.6 9.2 13.8 6.5 193.1 6.1 306.4







Year Flow ($000) Liquidity Liquidity to Capital Mtg to Capital2011 -74,209 57.1 90.7 49.4 …2012 -69,892 60.8 94.4 41.1 …2013 -162,003 54.9 95.7 37.5 …2014 -163,267 51.8 92.4 45.7 …2015 19,635 47.6 88.6 42.3 …









Net Short- —Real Estate— Exp.Year Yield Bonds Stocks Mortgages Term Gross Net Ratio2011 4.93 5.00 10.98 6.40 0.56 … … 2.722012 4.73 4.90 14.03 6.75 0.20 … … 3.312013 4.62 4.79 1.16 5.96 0.12 … … 3.122014 4.61 4.77 2.45 5.82 0.12 … … 3.422015 4.54 4.70 2.66 4.43 0.16 … … 4.12



Government 0.4 0.6 3.0 0.8 5.7 17Gov’t Agencies & Muni 0.1 0.3 0.1 0.0 1.8 20Industrial & Misc 7.4 30.7 30.3 6.5 10.4 8Hybrid Securities 0.1 0.0 0.3 0.1 1.2 20

Total 8.1 31.6 33.8 7.5 19.0 9

2015 2014 2013 2012 2011Bonds (000) 6,851,703 7,325,741 7,720,515 7,511,135 7,892,263US Government 9.1 9.9 9.6 8.3 6.2Foreign Government 1.6 1.9 2.1 2.3 1.8Foreign - All Other 22.2 21.0 19.1 18.3 17.5State/Special Revenue - US 2.4 1.6 1.5 1.9 2.2Industrial & Misc - US 62.9 64.2 66.3 67.9 70.7Hybrid Securities 1.8 1.5 1.4 1.4 1.6




Stocks (000) 6,966 7,951 7,878 13,259 12,723Unaffiliated Common 1.8 4.2 24.8 38.6 32.9Affiliated Common 51.3 48.9 53.5 49.6 44.8Unaffiliated Preferred 46.9 46.9 21.7 11.9 22.3


Mortgages (000) 950,309 730,305 551,082 544,544 625,301Commercial 98.9 98.5 95.1 92.6 91.8Farm 1.1 1.5 4.9 7.4 8.2




Other Inv Assets (000) 1,142,560 970,751 805,028 1,114,595 993,744Cash 2.7 18.7 2.8 39.7 10.9Short-Term 25.3 8.3 15.5 14.7 7.8Schedule BA Assets 16.8 7.4 12.1 8.6 9.3All Other 55.2 65.6 69.7 37.0 72.0


Domicile: NY

Originally incorporated as Zurich Life Insurance Company, in 1982 thename was changed to Dreyfus Life Insurance Company. During 1993, thename was changed to AUSA Life Insurance Company, Inc., and, in 2003, thepresent title was adopted. During 2014, Transamerica Advisors Life InsuranceCompany of New York was merged with and into Transamerica Financial LifeInsurance Company.

Mergers: International Life Investors Insurance Company, New York, 1996;First Providian Life and Health Insurance Company, New York, 1998;Transamerica Life Insurance Company of New York, New York, 2003;Transamerica Advisors Life Insurance Company of New York, New York,2014.

MANAGEMENT

Officers: Chairman of the Board and President, Blake S. Bostwick; ChiefInvestment Officer, Joel L. Coleman; Senior Vice President and Chief RiskOfficer, Todd Fuhs; Senior Vice President, Secretary and General Counsel,Jay Orlandi; Senior Vice President and Treasurer, C. Michiel van Katwijk.

Directors: Blake S. Bostwick, William Brown, Jr., Mark W. Mullin, JayOrlandi, Peter P. Post, Richard M. Schapiro, David Schulz, C. Michiel vanKatwijk.


31, 2014, by the insurance department of New York. The 2015 annualindependent audit of the company was conducted by PricewaterhouseCoopersLLP. The annual statement of actuarial opinion is provided by Donald Krouse.

Reserve basis: (Current ordinary business): 1980 CSO 3%, 4% and 4 1/2%;CRVM valuation. (Current annuity business): 5.25% CARVM Deferred.


Assets LiabilitiesTotal bonds 6,851,692 +Net policy reserves 7,045,320Total preferred stocks 3,269 Policy claims 50,883Total common stocks 3,697 Deposit type contracts 59,701Mortgage loans 950,309 Interest maint reserve 68,341Contract loans 119,525 Comm taxes expenses 25,496Cash & short-term inv 319,700 Asset val reserve 117,572Securities-colltrl assts 433,653 Payable for securities lending 433,653Other invested assets 192,035 Other liabilities 197,374Prems and consids due 16,461Accrued invest income 86,000 Tot liab w/o sep accts 7,998,339Other assets 189,383 Separate account bus 22,369,552

Tot assets w/o sep accts 9,165,723 Total liabilities 30,367,892Separate account bus 22,369,554 Common stock 2,143

Preferred stock 460Surplus notes 150,000Paid in & contrib surpl 933,659Contingency reserve 8,599Unassigned surplus 72,471Other surplus 53

Assets 31,535,277 Total 31,535,277

+Analysis of reserves; Life $1,038,983; annuities $5,775,613; supplementary contracts withlife contingencies $28,814; accidental death benefits $939; disability active lives $499;disability disabled lives $2,670; miscellaneous reserves $45,046; accident & health $152,756.


SUMMARY OF OPERATIONS ($000)Premiums: Death benefits 76,149Ordinary life 139,108 Matured endowments 31Individual annuities 627,014 Annuity benefits 127,894Credit life 4,275 Surrender benefits 5,009,782Group life 14,892 Acc & health benefits 74,781Group annuities 4,897,030 Int on policy funds 4,121Acc & health group 66,948 Supplementary contracts 5,805Acc & health credit 5,397 Incr life reserves -214,624Acc & health other 52,889 Incr a & h reserves 15,812Total premiums 5,807,554 Res adj reins assumed -5,049

Supplementary contracts 5,440 Commissions 144,414Net investment income 401,084 Comm exp reins assumed 41,392Amort interest maint res 14,464 Interest expenses 9,375Net gain from sep acct 2 Insur taxes lic & fees 13,337Comm & exp reins ceded 76,294 General ins expenses 148,223Res adj on reins ceded -5,049 Net transf to sep acct 783,118Other income 220,910 Other expenses 100Mgt and/or service fee 60,121 Misc operating expense 832

Total 6,580,820 Total 6,235,495


Federal income taxes incurred........................................................................... 54,965

Net gain from operations after federal income taxes............................................. 290,360


Funds Provided Funds AppliedGross cash from oper 6,533,444 Benefits paid 5,288,477Long-term bond proceeds 2,273,822 Comm, taxes, expenses 352,330Other invest proceeds 309,940 Transfer to sep account 806,817

Long-term bonds acquired 1,819,135Other cash applied 792,747Incr cash & short-term 57,703

Total 9,117,207 Total 9,117,207

—— ♦ ——


TRANSAMERICA ADVISORS LIFE INSURANCECOMPANY

425 West Capitol Avenue, Suite 1800Little Rock, AR 72201

Exec. Office: 4333 Edgewood Road N.E., Cedar Rapids, IA 52499Web: www.transamerica.com




RATING RATIONALE


Transamerica Advisors Life Insurance Company has sold non-participatingannuity products, including variable annuities, modified guaranteed annuitiesand immediate annuities. The company’s annuity products were sold bylicensed agents of Merrill Lynch Life Agency, Inc. (MLLA), pursuant to ageneral agency agreement by and between the company and MLLA.



Aegon USA’s business profile is viewed as strong by A.M. Best, withcompetitive market positions in the U.S. life and annuity arenas. The group’smarket positions are supported by a large and diversified distribution systemthat is made up of both independent and career agents, financial institutions,wirehouses and direct response channels. Aegon USA enjoys the efficienciesand competitive advantages of meaningful economies of scale, which havecontributed favorably to its historical financial performance. Aegon USA’searnings profile is one of the more diversified in the industry. Product lines


that contribute to overall earnings include traditional life, variable life,variable annuities, mutual funds, pensions and accident and health insurance.Additional rating consideration includes A.M. Best’s assessment of thefinancial strength and support of the parent, Aegon. As a result, Aegon USAreceives rating enhancement in consideration of Aegon’s overallcreditworthiness and the strategic and financial importance of the U.S.operations to Aegon.





Best’sFSR

04/15/16 A+ 04/09/13 A+02/11/15 A+ 04/13/12 A+12/12/13 A+ 04/27/11 A+


Year Assets

CapitalSurplusFunds

AssetValuation

Reserve

NetPremiumsWritten

NetInvest

IncomeNet

Income2011 10,050,750 438,047 12,023 16,195 121,006 -340,2182012 10,031,805 636,158 12,246 17,940 121,458 178,1892013 10,135,218 733,415 10,710 18,031 116,754 196,6122014 9,692,474 912,090 14,139 9,293 138,627 201,4792015 8,752,551 790,252 17,111 11,142 98,353 -24,119

(*) Within several financial tables of this report, this company is compared against theIndividual Life Composite.


BUSINESS PROFILEOn December 28, 2007, Merrill Lynch Life Insurance Company and its

affiliate, ML Life Insurance Company of New York (since renamedTransamerica Advisors Life Insurance Company and Transamerica AdvisorsLife Insurance Company of New York), were acquired by AEGON USA, Inc.for $1.12 billion and $130 million, respectively. Transamerica Advisors LifeInsurance Company is licensed to sell life insurance and annuity contracts inall states except New York, as well as the District of Columbia, Guam and theU.S. Virgin Islands. Life insurance and annuity products sold in New Yorkwere marketed exclusively through Transamerica Advisors Life InsuranceCompany of New York until 2014, when the company was merged with andinto Transamerica Financial Life Insurance Company. The companiesprimarily market variable annuities and distribute their products exclusivelythrough Merrill Lynch’s network of over 15,000 financial advisors.



Aegon USA uses a variety of distribution channels, each of which conductsbusiness through one or more of the Aegon USA life insurance companies.The channels are both owned and non-owned and include career agents as wellas financial planners, banks, brokers and independent consultants. It is alsoprominent in the home service market and in the direct marketing of life andsupplemental accidental death and dismemberment (AD&D) insurance.Through 2015, the Aegon USA companies were divisionally organized into


two primary business divisions: Life & Protection (L&P) and Investments &Retirement (I&R).

The Life & Protection (L&P) division included the Agency Group sellingindividual life and supplemental health products to the middle income market.Also included in the L&P division were the Brokerage Group, TransamericaEmployee Benefits, Long Term Care and the Affinity Group. The BrokerageGroup marketed life insurance in the retail high net worth market throughindependent general agents and contract producers. The Affinity Groupspecialized in marketing life insurance and supplemental health insuranceproducts to consumers through direct channels such as telemarketing, directmail, television advertising and the Internet. This group also marketed creditlife, mortgage life and other life insurance and supplemental health products.Transamerica Long Term Care offered products and services aimed at meetingthe long-term care insurance needs of its customers. Policies were soldthrough independent brokerage and at the worksite to individuals and groups.Through Transamerica Employee Benefits, L&P offered voluntary payrolldeduction life and supplemental health insurance to employees at their placeof work which are designed to supplement employees’existing benefit plans.


Incorporated within the I&R division was the former Employer Solutionsand Pensions (ES&P) division. This business included full-service retirementplan investments and services in addition to guaranteed savings andinvestment products directed at various segments of the pension industry. Thegroup sold a full range of products and services to small and mid-sizecorporate, non-profit and government sponsored plans through brokers,agents, consultants, third-party administrators and accounting firms. Effective12/31/2015, Aegon USA acquired the defined contribution administrationbook of business of Mercer HR Services, LLC. The transaction propelled thecompany to a top ten defined contribution record-keeper based on planparticipants and assets, adding 917,000 and $71 billion, respectively.

Transamerica Retirement Solutions (TRS) served mid-sized to largecompanies and small to mid-sized companies across the U.S. TRS offered anumber of specialized services, including innovative plan design, a wide arrayof investment choices, extensive education programs and online investmenteducation. In addition, ES&P provided synthetic guaranteed investmentcontracts primarily to various retirement plans. ES&P was also a leadingprovider of single premium group annuities (Terminal Funding), which areused by companies to decrease the liability of the defined benefit plans.BOLI/COLI products were distributed through a select number of nichebrokers (including an affiliate, Clark Consulting, which was sold inSeptember 2015); however, in December 2010, ES&P discontinued new salesin the executive non-qualified benefits market and related BOLI/COLIbusiness.

The former Institutional Markets Division offered institutional spreadproducts such as traditional fixed rate guarantee investment contracts (GICs),funding agreements (FAs), FA-backed notes as well as fee-based productssuch as synthetic GICs. In 2009, Aegon announced its plan to run-off itsinstitutional spread based business to reduce capital requirements and creditrisk. The institutional line of business also included structured producttransactions, such as credit default swaps, synthetic collateralized debtobligations, affordable housing tax credit guarantees and hedge fund principalprotection. Going forward, Aegon USA will only continue to offer affordablehousing tax credit guarantees.



Period ————DPW———— ——Prem Assumed——Ending ($000) (% Chg) ($000) (% Chg)2011 27,599 -32.3 159 -53.62012 28,818 4.4 … -99.92013 26,609 -7.7 … …2014 14,716 -44.7 … …2015 15,552 5.7 … …

5-Yr CAGR … -17.5 … -99.9

ReinsurancePeriod ———Prem Ceded——— —NPW & Deposits—Ending ($000) (% Chg) ($000) (% Chg)2011 11,563 -10.1 36,346 -19.22012 10,878 -5.9 36,001 -0.92013 8,578 -21.1 40,384 12.22014 5,423 -36.8 27,868 -31.02015 4,410 -18.7 24,254 -13.0

5-Yr CAGR … -19.3 … -11.6


Territory: The company is licensed in the District of Columbia, Guam, U.S.Virgin Islands, AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA,KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM,NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WIand WY.



—Prem Assumed—Product Line ($000) (%) ($000) (%)Ordinary life 10,008 64.4 … …Individual annuities 5,544 35.6 … …

Total 15,552 100.0 … …Reinsurance

——Prem Ceded—— ——NPW——Product Line ($000) (%) ($000) (%)Ordinary life 1,605 36.4 8,402 75.4Individual annuities 2,805 63.6 2,739 24.6

Total 4,410 100.0 11,142 100.0

BY-LINE RESERVES ($000)Product Line 2015 2014 2013 2012 2011Ordinary life 1,076,937 1,122,445 1,172,504 1,241,663 1,302,921Supplementary contr 112,628 111,952 113,149 107,536 111,414Individual annuities 402,024 303,802 283,457 610,356 724,036Group annuities 15,137 17,598 19,467 21,677 23,103Deposit type contracts 70,346 77,163 79,742 83,970 87,112

Total 1,677,072 1,632,960 1,668,320 2,065,202 2,248,586


Year Issued In Force Issued In Force Issued In Force2011 3 24,592 … … … …2012 3 22,640 … … … …2013 2 20,897 … … … …2014 1 19,367 … … … …2015 … 18,011 … … … …


Year

Whole LifeEndow. &



2011 6,212,855 4,236 … … … 6,217,0912012 5,803,549 3,909 … … … 5,807,4582013 5,549,471 3,689 … … … 5,553,1592014 5,287,198 3,097 … … … 5,290,2952015 4,957,615 2,505 … … … 4,960,120



Indus-trial

TotalInsurance

Issued

Non-Par(%)

Par(%)

2011 1,050 … … … … 1,050 100.0 …2012 456 … … … … 456 100.0 …2013 5,300 … … … … 5,300 100.0 …2014 86 … … … … 86 100.0 …2015 … … … … … … … …



Year % % Issued In Force ($/M) Prem Prem In Force2011 5.7 93.8 350,000 252,809 1.67 2.9 … 55.612012 3.7 91.8 152,000 256,513 1.70 2.8 … 67.742013 1.3 98.0 2,650,000 265,740 1.76 1.0 … 65.572014 1.8 94.6 86,000 273,160 1.75 0.7 … 66.602015 3.1 107.5 … 275,394 2.02 0.7 … 66.72


Year Issued In Force (000) (%) (%)2011 3 24,592 300 0.10 3.402012 3 22,640 280 0.12 2.522013 2 20,897 99 0.12 4.762014 1 19,367 69 0.11 19.052015 … 18,011 67 0.11 2.11


YearNPW(000)

Res(000)

Exp toRes(%)

Comm &Exp toNPW(%)


Benefits &Wdrwls to

Res (%)2011 13,055 835,450 1.1 371.0 999.9 101.82012 15,151 717,891 1.7 296.4 999.9 89.42013 13,284 396,607 3.6 348.9 999.9 176.02014 2,327 415,754 2.5 999.9 999.9 182.02015 2,739 514,652 2.3 999.9 999.9 124.2


YearNPW(000)

Res(000)

Exp toRes (%)

Comm &Exp toNPW(%)


Benefits &Wdrwls to

Res (%)2011 … 23,103 0.7 … … 113.02012 … 21,677 0.8 … … 85.82013 … 19,467 0.8 … … 85.42014 … 17,598 0.6 … … 72.72015 … 15,137 0.8 … … 48.9



YearTotal Annuity

Res (000)

Min or NoSurrender

Charge (%)


WithMVA (%)

NoSurrender

Allowed (%)2011 858,553 84.4 … 1.7 14.02012 739,568 86.3 … 1.4 12.42013 416,074 91.6 … 1.1 7.32014 433,351 90.8 … 1.0 8.22015 529,789 88.2 … 0.9 10.9


2015 2014 2013 2012 2011Sep Acct Assets 5,992,871 6,832,781 7,417,777 7,062,393 7,124,732% Growth -12.3 -7.9 5.0 -0.9 -14.2S/A Assets/Adm Assets 68.5 70.5 73.2 70.4 70.9

Sep Acct Reserves 5,957,127 6,787,034 7,356,212 6,985,497 7,024,585% Ordinary Life 22.9 22.1 21.0 20.7 21.1% Individual Annuities 76.3 77.1 78.1 78.2 77.5% Group Annuities 0.8 0.8 0.9 1.2 1.4Deposit Type Liabilities … 4 14 15 19Other Liabilities 35,744 45,743 61,551 76,881 100,127

S/A Prems & Deposits 14,830 14,033 25,865 27,872 26,444% Ordinary Life 62.9 61.3 35.0 32.5 36.1% Individual Annuities 37.1 38.7 65.0 67.5 63.9

Sep Acct Fees & Charges 151,272 160,465 162,514 165,390 174,039% Ordinary Life 38.2 36.0 35.4 35.9 35.5% Individual Annuities 61.8 64.0 64.6 64.1 64.5Fees & Chgs to Assets% 2.4 2.3 2.2 2.3 2.3

Sep Acct Ben & Wdrwls 686,822 822,951 775,681 730,461 929,147% Ordinary Life 13.7 13.9 15.3 17.7 15.5% Individual Annuities 85.2 84.6 82.5 79.8 81.7% Group Annuities 1.1 1.6 2.1 2.5 2.8Ben & Wdrwl to Assets% 10.7 11.5 10.7 10.3 12.0


2015 2014 2013 2012 2011Florida 2,698 3,603 6,500 6,455 6,768California 1,049 1,000 1,527 2,552 2,759Illinois 1,025 1,708 2,418 2,525 1,552Pennsylvania 926 697 850 767 948North Carolina 761 387 573 663 625Ohio 697 873 641 446 1,032New Jersey 688 1,579 839 1,281 1,338Maryland 649 410 353 348 359Texas 555 -20 3,199 3,929 2,264Massachusetts 506 201 293 294 352All Other 6,022 4,294 9,400 9,558 9,592

Total 15,575 14,731 26,592 28,817 27,588













Pre-tax NetPeriod Net Oper Operating Net TotalEnding Income Gain Income Return2011 -324,331 -321,551 -340,218 -339,4702012 216,138 215,566 178,189 171,6292013 434,278 438,122 196,612 184,9682014 124,978 309,501 201,479 208,0822015 -4,659 21,192 -24,119 -11,421

5-Yr Total 446,405 662,831 211,943 213,787

———Company——— —Industry Composite—Period Operating Operating Operating OperatingEnding ROR (%) ROE (%) ROR (%) ROE (%)2011 -90.7 -51.4 5.4 7.22012 62.9 40.1 6.1 7.02013 127.5 64.0 8.4 9.32014 87.0 37.6 12.9 13.02015 7.1 2.5 5.8 8.8

5-Yr Avg 39.1 18.8 7.5 9.2



Year & Dep & Dep Assets Tot Rev Equity Yield Return2011 999.9 139.6 -3.0 -90.7 -51.4 4.45 3.992012 999.9 138.2 2.1 62.9 40.1 4.38 2.752013 999.9 126.4 4.3 127.5 64.0 4.32 -5.362014 999.9 161.2 3.1 87.0 37.6 5.21 1.542015 999.9 178.8 0.2 7.1 2.5 3.66 2.68

5-Year Avg 999.9 145.5 1.3 39.1 18.8 4.40 1.13


NET OPERATING GAIN ($000)Product Line 2015 2014 2013 2012 2011Ordinary life 22,696 213,853 55,807 31,245 44,237Supplementary contr -623 30,730 7,484 2,802 3,449Individual annuities -43,094 60,039 372,605 177,063 -374,963Group annuities 1,411 4,879 2,227 4,455 5,726Other 40,802 … … … …

Total 21,192 309,501 438,122 215,566 -321,551


Year Income Gains Gains2011 121,006 -18,668 7482012 121,458 -37,377 -6,5602013 116,754 -241,510 -11,6452014 138,627 -108,023 6,6032015 98,353 -45,311 12,698

5-Year Total 596,199 -450,888 1,844——————Company—————— -Industry Composite-

Pre-taxInvest


Year (%) (%) (%) (%) (%) (%)2011 1.4 4.5 4.0 4.0 5.4 5.32012 0.4 4.4 3.1 2.8 -6.8 5.02013 -3.9 4.3 -4.5 -5.4 3.9 5.32014 18.7 5.2 1.1 1.5 15.7 5.92015 -29.1 3.7 1.9 2.7 -11.7 5.0

5-Yr Avg -3.4 4.4 1.1 1.1 0.8 5.3







Current BCAR: 217



Year Gain Gains Taxes Gains2011 -324,331 -18,668 -2,780 7482012 216,138 -37,377 572 -6,5602013 434,278 -241,510 -3,844 -11,6452014 124,978 -108,023 -184,523 6,6032015 -4,659 -45,311 -25,851 12,698

5-Yr Total 446,405 -450,888 -216,427 1,844—————Source of Surplus Growth—————Change Change % Chg

in Other in inYear AVR Changes C&S C&S2011 -451 -35,175 -375,096 -46.12012 -223 26,706 198,112 45.22013 1,537 -89,247 97,257 15.32014 -3,430 -25,977 178,675 24.42015 -2,972 -107,444 -121,838 -13.4

5-Yr Total -5,539 -231,139 -22,890 -0.6


Year Notes Debt Capital Surplus2011 … … 434,778 3,2692012 … … 417,198 218,9602013 … … 417,198 316,2172014 … … 417,198 494,8922015 … … 317,198 473,055

Year-End Asset Valuation AdjustedYear C&S Reserve C&S2011 438,047 12,023 450,0702012 636,158 12,246 648,4042013 733,415 10,710 744,1252014 912,090 14,139 926,2292015 790,252 17,111 807,363


to Surplus to Total in NPW to SurplusYear Liab(%) Relief(%) Capital & Dep(%) Liab(%) Relief(%)2011 18.2 0.0 0.1 -19.2 14.6 2.72012 27.9 0.0 0.1 -0.9 17.8 2.32013 37.7 0.0 0.1 12.2 18.0 2.72014 47.9 0.0 0.0 -31.0 17.7 2.52015 41.4 0.0 0.0 -13.0 17.7 2.8



Year Reins Ceded Rec/C&S Rec/C&S Rec/C&S Relief Leverage Rec/C&S Leverage2011 1,222,740 … 0.3 0.3 0.0 0.7 2.2 70.22012 1,100,998 … 0.4 0.4 0.0 0.5 2.2 74.22013 399,736 … 0.0 0.0 0.0 0.1 2.2 86.42014 196,752 … 0.0 0.0 0.0 0.2 2.4 93.42015 188,584 … 0.0 0.0 0.0 0.3 2.4 100.8








Year Flow ($000) Liquidity Liquidity to Capital Mtg to Capital2011 65,415 50.8 70.5 10.5 …2012 43,036 55.7 78.7 7.5 …2013 80,397 59.6 84.6 4.0 …2014 272,464 56.7 86.8 5.8 …2015 135,754 58.4 83.1 9.0 …


Ten Lns Invest Quick CurrentYear & RE to Cap to Capital Liquidity Liquidity2011 9.9 … 49.7 83.52012 6.5 … 47.6 82.32013 5.0 … 46.1 81.52014 6.3 … 45.1 80.72015 10.7 3.1 44.7 80.3



As of year-end 2015, bonds represent 69.3% of Aegon USA’s investmentportfolio and 93.8% are of investment grade quality. Common stock accountsfor about 2.7% of the portfolio, of which a large portion is affiliated. Directcommercial mortgage loans comprise approximately 10% of invested assetsand are backed principally by office, retail, industrial and apartmentproperties. The commercial loan portfolio is performing well, with the vast

majority of loans in good standing. Aegon USA’s exposure to alternativeassets, which consists of investments in higher risk and less liquid assets, suchas hedge funds, private equity, mezzanine debt and real estate. A.M. Best notesthat the alternative asset exposure is less than 5% of the investment portfolio.



Net Short- —Real Estate— Exp.Year Yield Bonds Stocks Mortgages Term Gross Net Ratio2011 4.45 4.96 6.49 6.24 0.22 … … 1.892012 4.38 4.87 2.66 6.40 0.18 … … 2.542013 4.32 4.77 6.16 6.53 0.21 … … 3.902014 5.21 4.57 7.57 5.01 0.17 … … 1.812015 3.66 4.45 7.32 5.42 0.18 … … 3.56



Government 0.3 3.2 2.1 0.3 16.6 20Gov’t Agencies & Muni 0.1 0.4 0.1 0.0 0.3 10Industrial & Misc 11.1 34.5 14.0 4.9 10.4 7Hybrid Securities … … … 0.2 1.6 24

Total 11.5 38.1 16.2 5.3 28.9 10

2015 2014 2013 2012 2011Bonds (000) 1,505,652 1,623,727 1,560,730 1,670,188 1,576,709US Government 23.4 21.8 18.7 19.5 20.9Foreign Government 0.4 0.6 0.6 0.5 0.5Foreign - All Other 9.6 9.5 10.7 10.1 10.7State/Special Revenue - US 1.0 0.7 0.9 3.3 2.6Industrial & Misc - US 63.6 65.4 67.0 64.6 64.8Hybrid Securities 1.9 2.0 2.0 2.0 0.5


Bond Quality (%) 2015 2014 2013 2012 2011Class 1 74.6 72.0 71.9 75.5 81.3Class 2 20.9 24.8 26.3 21.8 15.9Class 3 3.2 1.9 1.3 1.6 1.4Class 4 1.1 0.9 0.4 0.8 0.8Class 5 0.2 0.4 0.1 0.3 0.4Class 6 0.1 … … 0.1 0.1



Stocks (000) 7,411 7,561 7,637 10,466 34,292Unaffiliated Common … … 1.0 1.1 …Unaffiliated Preferred 100.0 100.0 99.0 98.9 100.0


Mortgages (000) 86,057 58,551 37,170 42,294 44,355Commercial 100.0 100.0 100.0 100.0 100.0



Other Inv Assets (000) 1,068,543 1,045,460 1,048,831 1,096,313 1,150,237Cash -0.2 -0.4 -0.6 6.6 3.7Short-Term 10.6 2.5 7.6 4.2 5.5Schedule BA Assets 5.9 6.2 0.5 0.6 0.7All Other 83.6 91.8 92.5 88.6 90.1


Domicile: AR

Originally incorporated in Washington, the company redomesticated toArkansas in 1991 just prior to merging with Tandem Insurance Group, Inc.Prior to 1988, activities of Merrill Lynch Life had involved the sale of anominal volume of ordinary life insurance, but beginning in 1989, substantialgrowth in net premium income resulted from a new corporate emphasis on thesale of single premium deferred annuities and modified guaranteed annuities.During 1990, MLLIC assumption reinsured all of Family Life InsuranceCompany’s (its former parent and a then indirect wholly owned subsidiary ofML & Co.) life insurance and annuity business which had been marketedthrough the ML & Co. retail distribution network. This transaction occurred inanticipation of the June 1991 sale of Family Life and its traditional mortgageprotection business to Financial Industries Corporation. During October 1991,MLLIC and Tandem Insurance Group, Inc., merged, with the former being thesurviving entity. These transactions, combined with the assumption of a largeblock of ML & Co. sold variable life insurance business from Monarch Life,contributed significantly to the growth in company assets from 1989 to 1991.The general account asset base has experienced declines since 1991 resultingfrom a significant part of MLLIC’s general account annuity contracts reaching

the end of their initial interest rate guarantee periods. MLLIC has offset thisdecline by conversion of a large portion of this business into its modifiedguaranteed annuity and variable annuity products. During the first quarter of2003 MLLIC discontinued manufacturing and selling single premiumvariable life insurance products. In 2010, the present title was adopted.

Mergers: Tandem Insurance Group, Inc., Illinois, 1991.

MANAGEMENT

Officers: President, Blake S. Bostwick; Chief Investment Officer, Joel L.Coleman; Senior Vice President and Chief Risk Officer, Todd Fuhs; SeniorVice President, Secretary and General Counsel, Jay Orlandi; Vice President,Treasurer and Chief Financial Officer, David W. Hopewell.

Directors: Blake S. Bostwick, Mark W. Mullin, Jay Orlandi, David Schulz,Katherine A. Schulze, C. Michiel van Katwijk.


31, 2014, by the insurance department of Arkansas. The 2015 annualindependent audit of the company was conducted by PricewaterhouseCoopersLLP. The annual statement of actuarial opinion is provided by Donald Krouse.

Reserve basis: (Current ordinary business): None. (Individual annuitybusiness): Deferred variable annuities Market Value CSV. Immediateannuities 2000 Table “a” 5.5%. (Modified Guarantee Annuity): Market valueCARVM.

REINSURANCEThe maximum net retention on any one life is $500,000 for ordinary and

variable life business.



Assets LiabilitiesTotal bonds 1,505,652 +Net policy reserves 1,606,726Total preferred stocks 7,411 Policy claims 30,156Mortgage loans 86,057 Deposit type contracts 70,346Contract loans 661,466 Interest maint reserve 4,411Cash & short-term inv 111,851 Comm taxes expenses 37,999Securities-colltrl assts 194,463 Asset val reserve 17,111Other invested assets 63,489 Payable for securities lending 194,463Prems and consids due 55 Other liabilities 8,216Accrued invest income 35,972Other assets 93,264 Tot liab w/o sep accts 1,969,428

Separate account bus 5,992,871Tot assets w/o sep accts 2,759,680

Separate account bus 5,992,871 Total liabilities 7,962,299Common stock 2,500Paid in & contrib surpl 314,698Unassigned surplus 473,055

Assets 8,752,551 Total 8,752,551

+Analysis of reserves; Life $1,072,635; annuities $402,438; supplementary contracts withlife contingencies $127,351; disability active lives $5; disability disabled lives $21;miscellaneous reserves $4,277.

SUMMARY OF OPERATIONS ($000)Premiums: Death benefits 162,472Ordinary life 8,402 Annuity benefits 148,167Individual annuities 2,739 Surrender benefits 533,890Total premiums 11,142 Int on policy funds 4,948

Supplementary contracts 17,404 Supplementary contracts 23,127Net investment income 98,353 Incr life reserves 54,729Amort interest maint res 2,190 Commissions 30,443Comm & exp reins ceded 1 Insur taxes lic & fees -66Other income 171,073 General ins expenses 12,985

Net transf to sep acct -665,890Misc operating expense 16

Total 300,162 Total 304,822

Gain from operations before FIT & div to policyholders....................................... -4,659


Net gain from operations after federal income taxes............................................. 21,192


Funds Provided Funds AppliedGross cash from oper 303,037 Benefits paid 866,358Transf from sep account 674,385 Comm, taxes, expenses 43,802Long-term bond proceeds 290,043 Return of cap & surp 100,000Other cash provided 173,699 Long-term bonds acquired 177,390

Other invest acquired 92,039Other cash applied 71,224Incr cash & short-term 90,350

Total 1,441,164 Total 1,441,164

—— ♦ ——


TRANSAMERICA CASUALTY INSURANCE COMPANYColumbus, OH

4333 Edgewood Road N.E., Cedar Rapids, IA 52499Web: www.transamerica.com

Tel: 800-797-2643AMB#: 000323 NAIC#: 10952Ultimate Parent#: 085244 FEIN#: 31-4423946


Best’s Financial Strength Rating: A Outlook: StableBest’s Financial Size Category: VIII

RATING RATIONALE

Rating Rationale: The ratings reflect Transamerica Casualty InsuranceCompany’s solid risk-adjusted capitalization, sustained profitability, its role,strategic importance and synergies gained as a member of Aegon N.V.’s U.S.operations. The ratings also recognize management’s knowledge, specialtyniche expertise, and the company’s established market position as one of theleading providers of travel insurance. Offsetting factors include the company’svariable underwriting performance, elevated underwriting leverage, and anexpense ratio disadvantage driven by high commissions. Historically, thecompany has at times terminated unprofitable lines of business and has takenadvantage of growth opportunities in other lines. The recent shifts in premiumare primarily attributed to the addition and loss of producers in the core travelinsurance book. The outlooks reflect A.M. Best’s expectation of continuedprofitability and the commitment by Aegon to maintain a level ofcapitalization for Transamerica that remains supportive of the ratings.

Factors that could lead to a positive rating action would be improvement inunderwriting and overall profitability, strengthened risk-adjusted capital from


improved retained earnings, and becoming more strongly affiliated with, orgaining more importance to, the parent.

Negative rating action could occur if risk-adjusted capital or operatingperformance falls markedly short of management’s expectations, there is asignificant increase in competition that erodes market conditions, or a changein the business profile of the company leads to adverse financial results.Because of the partial enhancement from the relationship with AEGON N.V.,changes in the rating or outlook of the parent company may impact the publicratings of Transamerica Casualty. Also, any change in the implicit or explicitsupport provided by the parent also will be a factor in the published ratings.

FIVE-YEAR RATING HISTORY


Best’sFSR

04/15/16 A 04/09/13 A02/11/15 A 06/19/12 A12/12/13 A 06/16/11 A-

KEY FINANCIAL INDICATORS ($000)————————————Statutory Data————————————

PeriodEnding

DirectPremiumsWritten

NetPremiumsWritten

Pre-taxOperating

IncomeNet

Income

TotalAdmitted

Assets

Policy-holders’Surplus

2011 223,790 122,975 14,024 10,238 275,775 89,8122012 293,630 175,265 25,162 17,031 304,317 105,6532013 291,843 236,046 8,887 4,064 324,587 118,1222014 311,395 275,000 21,923 13,546 314,275 130,3262015 351,640 317,960 19,497 12,883 355,567 166,529

——Profitability—— ———Leverage——— ——Liquidity——

PeriodEnding

Comb.Ratio

Inv.Yield(%)

Pre-taxROR(%)

NAInvLev

NPWto

PHSNetLev.

OverallLiq.(%)

Oper.Cash

flow (%)2011 97.4 3.9 11.4 33.8 1.4 3.3 156.0 104.32012 90.0 4.0 14.9 23.5 1.7 3.4 162.3 115.82013 99.7 3.9 3.9 28.3 2.0 3.7 162.3 107.22014 97.9 4.4 7.8 19.6 2.1 3.5 179.3 107.62015 96.3 3.6 6.3 11.4 1.9 3.0 196.4 104.3

5-Yr 96.6 4.0 8.1 … … … … …

(*) Within several financial tables of this report, this company is compared against theCommercial Property Composite.


BUSINESS PROFILE

Transamerica Casualty Insurance Company (Transamerica) is anOhio-domiciled property and casualty company licensed in 50 states and theDistrict of Columbia. It is directly owned by Aegon USA, LLC, which in turnis ultimately owned by Aegon N.V., a publicly held international insuranceorganization that provides life and health insurance, pension-related products,and financial service products through its affiliates in The Netherlands, theUnited States and in other parts of the world. Transamerica does not have any

employees, and is party to a cost-sharing agreement among the Aegon USA,LLC, companies, which are fully integrated and share senior and investmentmanagement, as well as support services.

Transamerica primarily writes travel insurance (inland marine). Travelinsurance provides coverage for trip interruption, cancellation, delay, baggagedamage and medical assistance excess of the insured’s primary insurance. Themajority of the travel premium is produced by managing general agents(MGAs) that have authority to underwrite and administer policies, and tosettle claims. The company also provides both credit unemployment and creditdisability insurance marketed through credit card issuers, and throughoperations of Stonebridge Life Insurance Company, an affiliate. In addition,Transamerica writes Guaranteed Auto Protection (GAP) coverage (credit).GAP provides reimbursement to an individual insured in the event that theremaining amount of an outstanding auto loan exceeds the funds paid by autoinsurance in the event of a total loss. In 2009, the company ended its sales ofcredit products in the auto dealer market. A small number of producerscontinue to sell the GAP product through banks and credit unions utilizing aTPA. In 2012, Transamerica entered into the vehicle service contract businesssold through credit unions where product administration is performed by aTPA having extensive experience with this product.

On October 1, 2009, the company issued a catastrophic asset loss contract toan affiliate, Transamerica Premier Life Insurance Company, which is reportedas financial guaranty insurance. This policy covers realized losses in excess ofdefined limits on a portfolio of investment securities matched to reserve levelsof a closed in-force block of business. The policy covers realized losses inexcess of 1.5% of aggregate book value over a one-year period or 2% of theaggregate book value over a two-year period. The policy ends when no assetsremain in the referenced portfolio.

In 2004, Transamerica entered into an assumption reinsurance agreementwith a former affiliate, Monumental General Casualty Insurance Company(Monumental General). The transaction resulted in Transamerica assuming allin-force travel, GAP, and workers’ compensation policies from MonumentalGeneral, along with all of the assets, liabilities, and supporting capital relatedto those policies.

In 2014, Transamerica entered into a Loss Portfolio Transfer agreementwith White Shoals Reinsurance Ltd. The transaction resulted in the transfer ofall run-off asbestos and environmental claims assumed through the 2003merger with CORPA Reinsruance Company.

TOTAL PREMIUM COMPOSITION & GROWTH ANALYSIS

PeriodEnding

———DPW———Reinsurance

—Prem Assumed—Reinsurance

—Prem Ceded—($000) (% Chg) ($000) (% Chg) ($000) (% Chg)

2011 223,790 16.3 -296 29.8 100,518 90.12012 293,630 31.2 -108 63.5 118,257 17.62013 291,843 -0.6 -65 39.6 55,732 -52.92014 311,395 6.7 -22 66.0 36,373 -34.72015 351,640 12.9 -19 16.1 33,662 -7.5

5-Yr CAGR … 12.8 … -46.5 … -8.6


PeriodEnding

————NPW———— ————NPE————($000) (% Chg) ($000) (% Chg)

2011 122,975 -11.6 123,139 -9.42012 175,265 42.5 169,421 37.62013 236,046 34.7 227,011 34.02014 275,000 16.5 280,265 23.52015 317,960 15.6 311,853 11.3

5-Yr CAGR … 18.0 … 18.1

Territory: The company is licensed in the District of Columbia, Guam and allstates.

2015 BY-LINE BUSINESS ($000)Reinsurance Reinsurance

———DPW——— —Prem Assumed— —Prem Ceded—Product Line ($000) (%) ($000) (%) ($000) (%)Inland Marine 307,255 87.4 … … 18,737 55.7Credit 26,806 7.6 … … 13,038 38.7Oth Liab Occur 11,496 3.3 0 0.2 706 2.1All Other 6,083 1.7 -19 99.8 1,181 3.5

Total 351,640 100.0 -19 100.0 33,662 100.0

Business———NPW——— Retention

Product Line ($000) (%) (%)Inland Marine 288,518 90.7 93.9Credit 13,768 4.3 51.4Oth Liab Occur 10,790 3.4 93.9All Other 4,884 1.5 80.5

Total 317,960 100.0 90.4

BY-LINE RESERVES ($000)Product Line 2015 2014 2013 2012 2011Inland Marine 37,231 35,532 28,969 18,066 16,459Credit 1,682 1,229 990 823 1,082Oth Liab Occur 24,097 26,467 27,747 23,701 24,552All Other 11,603 14,959 12,793 13,825 15,122

Total 74,613 78,186 70,500 56,414 57,216


2015 2014 2013 2012 2011California 44,501 40,902 38,436 35,602 32,106New York 35,294 31,823 29,706 30,748 23,435Florida 28,997 25,645 24,320 25,840 17,102Massachusetts 25,199 22,239 20,177 19,747 16,740Texas 24,660 21,972 18,741 17,142 9,592New Jersey 11,244 10,462 10,803 13,667 11,092Illinois 10,925 9,517 8,686 8,253 6,010Pennsylvania 10,785 9,691 11,258 12,379 10,273Virginia 10,320 9,523 9,395 9,088 6,885Ohio 9,495 8,520 8,051 7,993 6,414All Other 140,221 121,101 112,270 113,170 84,140

Total 351,640 311,395 291,843 293,630 223,790

RISK MANAGEMENT

Aegon USA’s ERM program has evolved via a flattening of risk structure;moving strategic business units (SBUs) from a risk compliance culture to arisk management culture. The organization considers each SBU as a liabilityexpert and is engaging each Chief Risk Officer (CRO) globally as it movesoperational risk from Internal Audit to the CROs. The Group Risk and CapitalCommittee (GRCC) provides independent oversight of the group’s operations.The GRCC covers all risk types, including credit and market risk, pricing andunderwriting risk, operational risk, corporate risk as well as the managementof the overall capital position, and reports to the group’s executive board.

OPERATING PERFORMANCE

Operating Results: Positive operating results have been generated over thelast decade, as demonstrated by net income in nine out of the last ten years.Despite these favorable results, performance ratios, namely the return onrevenue and combined ratio, trail the commercial property industry compositeon both a five-year and ten-year basis. While the company’s loss ratiooutperforms the industry composite, the expense ratio is significantly higherdriven by the elevated commission expense. Variability in these measures arecaused by fluctuating premium volume, poor performance in the travel line,drag from legacy business and volatility in expenses other than commissionexpenses.

Underwriting results have been historically volatile, as evidenced bysignificant year-to-year underwriting losses or profits over recent periods.Underwriting losses in certain years are partially due to increased tripcancellation claim frequency as a result of weather related activity.Unfavorable loss ratios during older years in the GAP business were due toinadequate pricing. Corrective action was taken to enhance pricing, leading toimproved loss experience on the GAP line of business. Underwriting gains inthe years prior to 2009 were positively impacted by a delayed earning patternof GAP premium over the policy term despite lower sales. An underwritingloss in 2009 primarily resulted from the sharp decline in premium volume.More recent underwriting gains have been recorded as travel premium has


substantially increased. Net income was reduced in 2013, following a ten-yearhigh in 2012, due to higher claims activity in certain lines and the expecteddecline in travel production. Underwriting results for 2014 adn 2015 returnedto profitability as strong growth in premium levels exceeded claim weatherrelated claim activity in the travel business.

Investment performance, as measured by the five-year net investment yieldand total return on invested assets, outperforms the industry composite. This isdue in part to Transamerica’s portfolio mix, which is comprised mainly ofhigh-yield bonds, cash equivalents and short-term investments. Overallinvestment results are favorably influenced by the benefits derived from thecompany’s affiliation with Aegon USA, which integrates the investmentmanagement of all its member companies. Additionally, premium on GAPproducts have an extended earn-in period, allowing for investmentopportunities with longer duration periods and higher return rates.

PROFITABILITY ANALYSIS ($000)———————————Company———————————

Pre-tax After-taxPeriod Operating Operating Net TotalEnding Income Income Income Return2011 14,024 10,097 10,238 10,6802012 25,162 16,942 17,031 17,9932013 8,887 4,229 4,064 4,6542014 21,923 13,832 13,546 13,8272015 19,497 12,951 12,883 11,878

5-Yr Total 89,494 58,051 57,762 59,031

————Company———— ——Industry Composite——Period Pre-tax Return Operating Pre-tax Return OperatingEnding ROR (%) on PHS (%) Ratio (%) ROR (%) on PHS (%) Ratio (%)2011 11.4 10.8 89.1 3.0 1.6 95.92012 14.9 18.4 83.9 7.3 4.4 93.82013 3.9 4.2 94.9 10.8 11.1 89.62014 7.8 11.1 93.5 13.8 7.6 86.42015 6.3 8.0 92.9 14.0 4.1 86.9

5-Yr Avg 8.1 10.1 91.7 9.7 5.7 90.6

UNDERWRITING EXPERIENCE

PeriodEnding

Net UndrwIncome($000)

—Loss Ratios— —Expense Ratios— IndPureLoss LAE

Loss &LAE

NetComm.

OtherExp.

TotalExp.

Div.Pol.

Comb.Ratio

Comb.Ratio

2011 3,308 57.6 2.1 59.7 28.6 9.1 37.7 … 97.4 102.82012 14,725 51.9 0.7 52.6 29.7 7.7 37.4 … 90.0 100.92013 -2,649 61.7 0.8 62.5 30.5 6.6 37.2 … 99.7 96.02014 7,924 61.1 0.6 61.8 28.8 7.3 36.1 … 97.9 93.02015 9,250 59.4 0.3 59.7 29.5 7.1 36.6 … 96.3 94.0

5-Yr Total/Avg 32,557 59.0 0.7 59.7 29.5 7.4 36.8 … 96.6 97.4

BY-LINE LOSS RATIOProduct Line 2015 2014 2013 2012 2011 5-Yr AvgInland Marine 60.5 63.6 61.1 55.8 61.3 60.8Credit 93.3 45.7 66.8 43.4 48.4 60.4Oth Liab Occur 36.1 35.4 101.9 38.5 35.8 50.3All Other -46.8 48.0 9.4 7.2 44.0 17.3

Total 59.4 61.1 61.7 51.9 57.6 59.0

DIRECT LOSS RATIO BY STATE2015 2014 2013 2012 2011 5-Yr Avg

California 57.2 60.5 57.0 54.9 54.0 57.0New York 53.5 60.3 59.5 54.8 68.0 58.6Florida 62.6 68.3 62.1 60.5 69.6 64.3Massachusetts 85.4 58.1 41.1 33.7 21.9 51.1Texas 53.1 48.4 39.2 23.0 15.9 32.7New Jersey 59.9 61.6 64.3 43.8 58.9 57.1Illinois 53.0 60.7 57.1 52.6 51.6 55.3Pennsylvania 61.0 62.5 49.7 48.4 62.4 56.4Virginia 39.1 56.4 59.9 35.9 96.9 55.1Ohio 57.3 61.9 64.2 57.5 69.9 61.6All Other 61.4 53.9 49.5 42.0 49.9 51.8

Total 60.2 57.3 52.2 43.9 47.8 52.6

INVESTMENT GAINS ($000)——————————Company——————————

Net Realized UnrealizedInv Capital Capital

Year Income Gains Gains2011 10,173 141 4412012 10,400 89 9622013 10,796 -165 5902014 12,152 -286 2812015 10,632 -68 -1,006

5-Yr Total 54,153 -289 1,269

———————Company——————— Industry CompositePre-taxInvest


Year (%) (%) (%) (%) (%) (%)2011 -2.6 3.9 4.0 4.2 -44.6 2.32012 2.2 4.0 4.1 4.6 8.3 2.52013 3.8 3.9 3.8 4.1 -11.7 2.22014 12.6 4.4 4.3 4.3 -0.2 2.22015 -12.5 3.6 3.6 3.0 2.2 2.1

5-Yr Avg 0.3 4.0 3.9 4.0 -14.3 2.3


BALANCE SHEET STRENGTH

Capitalization: As measured by Best’s Capital Adequacy Ratio (BCAR),Transamerica maintains risk-adjusted capitalization supportive of its currentratings. Recent variability in premium levels primarily attributed to the coretravel insurance book has led to volatility in risk-adjusted capital. Over the lastten years, policyholders’ surplus levels have been impacted by capitalcontributions and operating earnings. Surplus position is net of dividends andreturn of capital payments to the parent. The most recent transactions totaled$25 million in 2015. Surplus strengthening in 2013, 2014, and 2015 is creditedto retained earnings, net contributions and other surplus gains. The ultimateparent, Aegon N.V., has committed to maintain capitalization at Transamericathat remains supportive of its business risks, which have varied historically.This was exhibited by annual capital contributions to the company earlier inthe decade.

The company maintains low loss reserve leverage driven by the short-termnature of the core book of travel business. This benefit is offset by highpremium leverage, as the company retains a higher percentage of its business.The credit risk associated with any third-party reinsurance is largely mitigatedby its use of collateral.

Current BCAR: 194.8

CAPITAL GENERATION ANALYSIS ($000)————————Source of Surplus Growth————————

Pre-tax Realized UnrealizedOperating Capital Income Capital

Year Income Gains Taxes Gains2011 14,024 141 3,927 4412012 25,162 89 8,220 9622013 8,887 -165 4,658 5902014 21,923 -286 8,092 2812015 19,497 -68 6,547 -1,006

5-Yr Total 89,494 -289 31,443 1,269—————Source of Surplus Growth—————

Net Change % ChgContrib. Other in in

Year Capital Changes PHS PHS2011 -30,000 280 -19,040 -17.52012 … -2,152 15,841 17.62013 … 7,815 12,469 11.82014 … -1,623 12,204 10.32015 25,000 -675 36,203 27.8

5-Yr Total -5,000 3,645 57,676 8.9


Year Notes Debt Capital Surplus2011 … … 77,911 11,9012012 … … 75,941 29,7112013 … … 75,941 42,1802014 … … 75,941 54,3852015 … … 100,941 65,587

Year-End Conditional AdjustedYear PHS Reserves PHS2011 89,812 9,139 98,9512012 105,653 11,147 116,7992013 118,122 6,478 124,5992014 130,326 8,682 139,0082015 166,529 8,008 174,536

LEVERAGE ANALYSIS

PeriodEnding

—————Company———— ————Industry Composite————

NPW toPHS

Res.to

PHSNetLev.

GrossLev.

NPW toPHS

Res.to

PHSNetLev.

GrossLev.

2011 1.4 0.6 3.3 6.2 0.6 0.4 1.8 2.72012 1.7 0.5 3.4 5.6 0.6 0.5 1.9 3.02013 2.0 0.6 3.7 4.7 0.6 0.4 1.8 2.62014 2.1 0.6 3.5 4.0 0.5 0.4 1.6 2.52015 1.9 0.4 3.0 3.4 0.4 0.3 1.4 2.3

CEDED REINSURANCE ANALYSIS ($000)

PeriodEnding

——————Company—————— ——Industry Composite——

CededReins. Total

Bus.Ret.(%)

Reins.Recov. toPHS (%)

CededReins. toPHS (%)

Bus.Ret.(%)

Reins.Recov. toPHS (%)

CededReins. toPHS (%)

2011 253,991 55.0 170.9 282.8 49.7 51.1 96.62012 228,647 59.7 104.5 216.4 51.5 61.8 107.32013 119,244 80.9 53.8 101.0 50.8 44.1 85.62014 77,429 88.3 31.5 59.4 50.4 44.1 84.72015 65,642 90.4 19.2 39.4 44.7 40.9 82.8

2015 REINSURANCE RECOVERABLES ($000)Paid &UnpaidLosses IBNR

UnearnedPremiums

OtherRecov*

TotalReinsRecov

US Insurers ..................... 26,535 12,102 123 … 38,760Other Non-US................. 2,790 6,941 22,039 -38,549 -6,780

Total (ex US Affils) ...... 29,325 19,043 22,162 -38,549 31,980Grand Total.................... 29,324 19,043 22,162 -38,549 31,980

* Includes Commissions less Funds Withheld


LOSS & ALAE RESERVE DEVELOP.: CALENDAR YEAR ($000)

CalendarYear

Orig.Loss

Reserves

DevelopedReservesThru ’15

Develop.to

Orig. (%)

Develop.to

PHS (%)

Develop.to

NPE (%)

UnpaidReserves@12/15

UnpaidRes. to

Develop. (%)2010 58,759 58,884 0.2 0.1 43.2 31,283 53.12011 55,308 53,357 -3.5 -2.2 43.3 31,283 58.62012 54,619 61,461 12.5 6.5 36.3 31,287 50.92013 68,761 64,289 -6.5 -3.8 28.3 31,295 48.72014 76,346 74,080 -3.0 -1.7 26.4 32,287 43.62015 72,921 72,921 … … 23.4 72,921 100.0

LOSS & ALAE RESERVE DEVELOP.: ACCIDENT YEAR ($000)

AccidentYear

Orig.Loss

Reserves

DevelopedReservesThru ’15

Develop.to

Orig. (%)

UnpaidReserves@12/15

Acc. YrLoss

Ratio

Acc. YrComb.Ratio

2010 23,510 15,842 -32.6 … 53.6 90.32011 19,583 12,987 -33.7 … 55.3 93.02012 20,856 23,022 10.4 4 56.8 94.32013 31,984 28,148 -12.0 8 56.5 93.72014 38,543 39,765 3.2 992 62.0 98.12015 40,634 40,634 … 40,634 60.0 96.6

ASBESTOS & ENVIRONMENTAL (A&E) RESERVE ANALYSIS

Year

———————Company——————— —Industry Composite—

Net A&EReserve($000)

ReserveReten-

tion(%)

NetIBNRMix(%)

SurvivalRatio(3yr)

Comb.Ratio

Impact(1 yr)

Comb.Ratio

Impact(3 yr)

SurvivalRatio(3 yr)

Comb.Ratio

Impact(1 yr)

Comb.Ratio

Impact(3 yr)

2011 26,857 86.0 85.1 XX 3.1 XX XX -0.1 XX2012 25,447 87.1 81.5 XX 0.1 XX XX 0.1 XX2013 27,616 99.8 80.2 13.2 1.9 1.6 16.6 1.5 0.52014 29,114 100.0 80.9 15.5 1.2 1.2 16.7 0.2 0.62015 24,388 100.0 78.1 11.3 -0.7 0.7 19.8 0.9 0.9

Liquidity: The company’s current liquidity ratio exceeds the industrycomposite while the quick liquidity measure trails the composite. Thedisparity is a product of distribution of the investment portfolio and theamount of funds held against reinsurance recoverable amounts. Theinvestment portfolio remains quite liquid as an adequate level of cashequivalents and other short-term investments is maintained to match thepattern of payouts from travel policy claims. Additionally, as a member of theAegon USA group of companies, Transamerica has access to cash viashort-term intercompany loans as well as $1.5 billion in committed bank linesthrough Aegon N.V.

LIQUIDITY ANALYSIS

PeriodEnding

—————Company————— ————Industry Composite————

QuickLiq. (%)

CurrentLiq. (%)

OverallLiq. (%)

GrossAgents Bal.to PHS (%)

QuickLiq. (%)

CurrentLiq. (%)

OverallLiq. (%)

GrossAgents Bal.to PHS (%)

2011 21.0 158.5 156.0 6.4 49.2 114.5 182.5 21.42012 38.7 167.4 162.3 4.4 53.1 112.1 173.2 24.02013 10.9 158.2 162.3 10.9 54.9 123.1 180.5 22.62014 20.3 181.1 179.3 10.8 61.0 125.3 189.3 19.22015 33.1 209.4 196.4 9.5 59.2 125.5 198.9 17.6

CASH FLOW ANALYSIS ($000)—————————Company————————— Industry CompositeUnderw Oper Net Underw Oper Underw Oper

Cash Cash Cash Cash Cash Cash CashYear Flow Flow Flow Flow (%) Flow (%) Flow (%) Flow (%)2011 -306 5,621 -14,832 99.8 104.3 101.2 105.52012 21,963 25,366 11,990 114.4 115.8 100.2 104.62013 12,237 16,119 -17,721 105.7 107.2 99.1 102.32014 8,722 20,471 6,601 103.3 107.6 120.3 123.02015 10,870 13,358 23,396 103.6 104.3 106.0 106.8

5-Yr Total 53,487 80,934 9,434 … … … …

INVESTMENT LEVERAGE ANALYSIS (% OF PHS)

PeriodEnding

—————————Company—————————Industry

—Composite—Class3-6

Bonds

RealEstate/Mtg.

OtherInvestedAssets

CommonStocks

Non-Affil.Inv.Lev.

Affil.Inv.

Class3-6

BondsCommon

Stocks2011 9.3 … 24.5 … 33.8 … 1.6 …2012 6.7 … 16.9 … 23.5 … 1.9 …2013 7.0 … 21.3 … 28.3 … 1.9 …2014 5.2 … 14.4 … 19.6 … 2.0 …2015 4.1 … 7.3 … 11.4 … 2.0 …


————————Years———————— Yrs-Avg0-1 1-5 5-10 10-20 20+ Maturity

Government 0.1 1.6 3.2 0.2 … 6Gov’t Agencies & Muni 0.2 2.9 0.0 … 3.2 14Industrial & Misc 18.5 19.4 33.9 6.3 8.1 7Hybrid Securities 0.3 … … … 2.1 22

Total 19.1 23.9 37.1 6.5 13.4 8


2015 2014 2013 2012 2011Bonds (000) 273,057 249,458 254,902 234,126 211,968US Government 4.2 4.3 12.1 5.7 15.8Foreign Government 1.6 1.2 1.1 1.1 …Foreign - All Other 12.9 14.7 10.5 10.5 9.5State/Special Revenue - US 7.4 8.0 9.6 11.7 0.2Industrial & Misc - US 73.9 71.8 66.6 71.1 74.5


Bond Quality (%) 2015 2014 2013 2012 2011Class 1 69.0 60.6 61.8 74.6 67.7Class 2 28.8 37.0 35.2 22.9 28.9Class 3 1.7 … 0.4 … 1.3Class 4 0.4 0.8 1.0 1.1 …Class 5 … … 0.1 0.1 1.6Class 6 … 1.6 1.5 1.3 0.6


Other Inv Assets (000) 51,367 34,586 34,403 44,764 36,986Cash 9.6 -22.2 -1.8 -6.0 -1.9Short-Term 66.8 68.0 28.6 66.2 42.4Schedule BA Assets 1.0 0.3 0.3 0.2 0.1All Other 22.6 54.0 72.9 39.6 59.5

HISTORY

The company was incorporated on November 15, 1957, under the laws ofOhio and began business on April 15, 1958. Operations were conducted underthe title Educator & Executive Insurers, Inc., until January 1, 1976, when thename was changed to J.C. Penney Casualty Insurance Company. The nameStonebridge Casualty Insurance Company was adopted on April 1, 2002.Ultimate ownership of the company was transferred to Aegon N.V. through itsacquisition of J.C. Penney Direct Marketing Services in June of 2001. CorpaReinsurance Company was merged with and into Stonebridge effectiveDecember 31, 2003. On July 31, 2014, the name was changed to TransamericaCasualty Insurance Company.

Paid-up capital of $8,724,386 consists of 396,563 shares of $22 par valuecommon stock. There are 500,645 authorized common shares. All outstandingshares are owned by Aegon USA, LLC. Prior to June 30, 2006, all outstandingshares were owned by Aegon USA (60.5%) and Aegon U.S. Corporation(39.5%), both holding companies domiciled in the state of Iowa.

MANAGEMENT

The administration of the company’s affairs is under the direction of thepresident, Blake S. Bostwick. Transamerica is party to a common cost

allocation service arrangement between Aegon USA, LLC companies.Various affiliated companies perform specified administrative functions inconnection with the operation of Transamerica, in consideration ofreimbursement of actual costs of services rendered. Aegon USA InvestmentManagement, LLC acts as the company’s discretionary investment managerunder an investment management agreement.

Officers: President, Blake S. Bostwick; Senior Vice President and ChiefFinancial Officer, C. Michiel van Katwijk; Senior Vice President and GeneralCounsel, Jay Orlandi.

Directors: Todd M. Bergen, Blake S. Bostwick, Mark W. Mullin, Jay Orlandi,David Schultz, Katherine A. Schulze, C. Michiel van Katwijk.

REGULATORY

An examination of the financial condition is being made as of December31, 2014, by the insurance departments of Arkansas, Iowa, New York, Ohioand Vermont. The 2015 annual independent audit of the company wasconducted by PricewaterhouseCoopers LLP. The annual statement of actuarialopinion is provided by Ann M. Conway, FCAS, MAAA, Towers Watson.

REINSURANCE

Historically, catastrophe losses in excess of $2.5 million up to $10.0 millionper occurrence are reinsured to an affiliate, Stonebridge Life InsuranceCompany, subject to an annual limit of two times the per occurrence limits.This coverage was terminated in 2014. Most workers’ compensation, GAP,and vehicle service contract exposures are 100% reinsured by quota shareagreements with various reinsurers.

BALANCE SHEET

ADMITTED ASSETS ($000)12/31/15 12/31/14 ’15% ’14%

Bonds .............................................. 273,057 249,458 76.8 79.4Cash & short-term invest .................... 39,218 15,822 11.0 5.0Other non-affil inv asset ..................... 12,149 18,764 3.4 6.0

Total invested assets....................... 324,424 284,044 91.2 90.4Premium balances ............................. 15,831 14,031 4.5 4.5Accrued interest ................................ 2,781 2,574 0.8 0.8All other assets.................................. 12,531 13,626 3.5 4.3

Total assets................................... 355,567 314,275 100.0 100.0


LIABILITIES & SURPLUS ($000)12/31/15 12/31/14 ’15% ’14%

Loss & LAE reserves .......................... 74,613 78,186 21.0 24.9Unearned premiums........................... 42,889 36,782 12.1 11.7Conditional reserve funds ................... 8,008 8,682 2.3 2.8All other liabilities ............................ 63,528 60,298 17.9 19.2

Total liabilities ............................. 189,038 183,949 53.2 58.5Capital & assigned surplus.................. 100,941 75,941 28.4 24.2Unassigned surplus............................ 65,587 54,385 18.4 17.3

Total policyholders’ surplus............ 166,529 130,326 46.8 41.5

Total liabilities & surplus ............... 355,567 314,275 100.0 100.0

SUMMARY OF 2015 OPERATIONS ($000)

Statement of Income 12/31/15Funds Provided from

Operations 12/31/15Premiums earned............ 311,853 Premiums collected......... 315,884

Losses incurred ............ 185,394Benefit & loss-related pmts

187,103LAE incurred .............. 879Undrw expenses incurred

116,331LAE & undrw expenses paid

117,910

Net underwriting income 9,250 Undrw cash flow ............ 10,870Net investment income.... 10,632 Investment income.......... 10,795

Other income/expense ... -384 Other income/expense ... 307

Pre-tax oper income ... 19,497Pre-tax cash operations

21,971Realized capital gains...... -68Income taxes incurred ..... 6,547 Income taxes pd (recov)... 8,613

Net income................ 12,883 Net oper cash flow...... 13,358


Why is this Best’s® Rating Report important to you?

A Best’s Rating Report from the A.M. Best Company showcases theopinion from the leading provider of insurer ratings of a company’sfinancial strength and ability to meet its obligations to policyholders,as well as its relative credit risk.

The A.M. Best Company is the oldest, most experienced ratingagency in the world and has been reporting on the financial conditionof the insurance companies since 1899.

A Best’s Financial Strength Rating is an independent opinion of aninsurer’s financial strength and ability to meet its ongoing insurancepolicy and contract obligations.

The Financial Strength Rating opinion addresses the relative abilityof an insurer to meet its ongoing insurance policy and contractobligations. The rating is not assigned to specific insurance policiesor contracts and does not address any other risk, including, but notlimited to, an insurer’s claims-payment policies or procedures; theability of the insurer to dispute or deny claims payment on grounds ofmisrepresentation or fraud; or any specific liability contractuallyborne by the policy or contract holder. The rating is not arecommendation to purchase, hold or terminate any insurance

policy, contract or any other financial obligation issued by aninsurer, nor does it address the suitability of any particular policyor contract for a specific purpose or purchaser.

In arriving at a rating decision, A.M. Best relies on third-partyaudited financial data and/or other information provided to it.While this information is believed to be reliable, A.M. Best doesnot independently verify the accuracy or reliability of theinformation.

The company information appearing in this pamphlet is an extractfrom the complete company report prepared by the A.M. BestCompany or A.M. Best Europe – Rating Services Limited.

For the latest Best’s Financial Strength Ratings along with theirdefinitions and A.M. Best’s Terms of Use, visit the A.M. Bestwebsite at www.ambest.com. You may also obtain AMB CreditReports by visiting our site or calling our Customer Servicedepartment at +1-908-439-2200, ext. 5472. To expedite yourrequest, please provide the company’s identification number(AMB#).

Copyright © 2016 A.M. Best Company, Inc. and/or its affiliates. All rights reserved.No part of this report may be reproduced, distributed, or stored in a database or retrieval system, or transmitted in any form or by any means without the priorwritten permission of the A.M. Best Company. While the data in this report was obtained from sources believed to be reliable, its accuracy is not guaranteed.

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