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Ameriprise Insurance Company by WinstonVenable

VIEWS: 336 PAGES: 26

									           Report

           of the

       Examination of

Ameriprise Insurance Company

     De Pere, Wisconsin

    As of March 31, 2006
                                                 TABLE OF CONTENTS


                                                                                                                                  Page

   I. INTRODUCTION .................................................................................................................. 1

  II. HISTORY AND PLAN OF OPERATION .............................................................................. 3

  III. MANAGEMENT AND CONTROL ........................................................................................ 5

 IV. AFFILIATED COMPANIES .................................................................................................. 7

  V. REINSURANCE ................................................................................................................. 14

 VI. FINANCIAL DATA .............................................................................................................. 15

VII. SUMMARY OF EXAMINATION RESULTS ....................................................................... 21

VIII. CONCLUSION.................................................................................................................... 22

 IX. SUMMARY OF COMMENTS AND RECOMMENDATIONS.............................................. 23

  X. ACKNOWLEDGMENT ....................................................................................................... 24
                         State of Wisconsin / OFFICE OF THE COMMISSIONER OF INSURANCE
                                                                                                125 South Webster Street • P.O. Box 7873
Jim Doyle, Governor                                                                                       Madison, Wisconsin 53707-7873
Jorge Gomez, Commissioner                                                                     Phone: (608) 266-3585 • Fax: (608) 266-9935
                                                             June 21, 2006                              E-Mail: information@oci.state.wi.us
Wisconsin.gov                                                                                                      Web Address: oci.wi.gov




                Honorable Jorge Gomez
                Commissioner of Insurance
                State of Wisconsin
                125 South Webster Street
                Madison, Wisconsin 53702


                Commissioner Gomez:

                             In accordance with your instructions, a compliance examination has been made of

                the affairs and financial condition of:

                                               AMERIPRISE INSURANCE COMPANY
                                                         De Pere, WI

                and this report is respectfully submitted.



                                                          I. INTRODUCTION

                             This is the first examination of Ameriprise Insurance Company (hereinafter also AIC

                or the company) since it commenced business on January 26, 2006. The current examination

                covered the intervening period ending March 31, 2006, and included a review of such

                subsequent transactions as deemed necessary to complete the examination.

                             The examination consisted of a review of all major phases of the company's

                operations and included the following areas:

                             History
                             Management and Control
                             Corporate Records
                             Conflict of Interest
                             Fidelity Bonds and Other Insurance
                             Employees' Welfare and Pension Plans
                             Territory and Plan of Operations
                             Affiliated Companies
                             Reinsurance
                             Financial Statements
                             Accounts and Records
                             Data Processing
            Emphasis was placed on the audit of those areas of the company's operations

accorded a high priority by the examiner-in-charge when planning the examination.

            The company was audited by an independent public accounting firm prior to the

company’s commencement of business. It plans to be audited going forward on an annual basis

as prescribed by s. Ins 50.05, Wis. Adm. Code. As part of this compliance examination, this

office obtained use of certain of the independent public accounting firm’s work papers from the

company and have incorporated them as part of the examination.




                                                2
                            II. HISTORY AND PLAN OF OPERATION

            The company was organized and incorporated on October 14, 2005, as Ameriprise

Insurance Company. On January 26, 2006, the company was issued a certificate of authority

and was licensed to write business in the state of Wisconsin. The company was created due to

the spin-off of the insurance, mutual fund and related financial service entities of the American

Express Company on September 30, 2005. Under the transaction, these insurance and other

financial service entities have become part of an independent, publicly traded holding company

named Ameriprise Financial, Inc. (hereinafter also AFI). Ameriprise Financial, Inc., is the parent

of IDS Property Casualty Insurance Company (hereinafter also IDSPC) a Wisconsin-domiciled

insurer. IDSPC is the direct parent company of Ameriprise Insurance Company. IDSPC also

owns another property and casualty subsidiary, AMEX Assurance Company (hereinafter also

AMEX Assurance). However, within two years (by September 30, 2007) American Express

Company (hereinafter also American Express) will reacquire AMEX Assurance and focus its

policy issuance upon card-related insurance products such as travel and baggage insurance.

            During this two-year period, the auto, home and excess liability policyholders that are

currently insured by AMEX Assurance will be nonrenewed by AMEX Assurance and offered

replacement policies, predominantly with IDSPC. IDSPC currently assumes this book of

business via a 100% quota share reinsurance agreement with AMEX Assurance. IDSPC has

been expanding the number of states in which it has authority in anticipation of this policyholder

action. While the majority of auto, home and excess liability policyholders will move to IDSPC,

some will be offered renewals with Ameriprise Insurance Company (when it is licensed in the

policyholders’ domicile) because some states do not permit multiple rating plans in the same

insurance company.

            In addition, during this two-year period, the Errors & Omissions Insurance program

for the Ameriprise Financial Advisors currently underwritten by AMEX Assurance Company will

be transferred to Ameriprise Insurance Company. Also, Ameriprise plans to someday write

travel-related insurance coverage in a relationship with an entity that issues credit cards.




                                                  3
             As of March 31, 2006, the company’s capitalization included $8,000,000 in the form

of 3,200,000 common and authorized shares with a par value of $2.50 per share and

$37,726,474 of paid-in and contributed surplus.

             The company has no employees of its own. All day-to-day operations are conducted

with staff provided by IDS Property Casualty Insurance Company in accordance with the

business practices and internal controls of that organization. Expenses are paid by IDSPC on

behalf of the company. Expenses are allocated in accordance with an intercompany service and

cost sharing agreement. Tax allocations are established in accordance with a written

consolidated federal income tax sharing agreement applicable to AFI and certain of its direct and

indirect subsidiaries. Intercompany balances with affiliates are created in the ordinary course of

business with settlements generally made on a quarterly basis. Written agreements with affiliates

are further described in section IV of this report titled “Affiliated Companies.”

             As of March 31, 2006, the company has not written any direct business. Currently

the company only has its license to write business in Wisconsin, but it plans to seek authority in

the remaining 49 states and the District of Columbia.

             In the state of Wisconsin, the company is licensed to transact the following lines of

business as defined by s. Ins 6.75 (2), Wis. Adm. Code:

             (a) Fire, Inland Marine, and Other Property
             (c) Disability
             (d) Liability and Incidental Medical Expense
             (e) Automobile
             (j) Credit
             (m) Credit Unemployment
             (n) Miscellaneous

             In each state, the company will primarily market business through direct channels to

the customers and members of its affinity partners including the clients of American Express and

Ameriprise Financial, Inc., and its family of companies.




                                                   4
                               III. MANAGEMENT AND CONTROL

Board of Directors

            The board of directors consists of ten members. Each of the directors is elected

annually by the sole shareholder to serve a one-year term. In the event of an interim vacancy in

the board, the directors may elect an individual to office to serve until the next annual meeting.

            Directors of the company include active or retired senior executives of Ameriprise

Financial, Inc., and IDS Property Casualty Insurance Company who may also be members of

other boards of directors in the holding company group. All board members, except for

Mr. David Hubers, have executive management positions within the holding company structure

and they receive no distinct and separate compensation for service as directors. Mr. Hubers

retired as president of Ameriprise Financial, Inc., on November 17, 2000, and currently does not

receive any compensation for serving on the company’s board of directors.

            Currently the board of directors consists of the following persons:

Name and Residence                            Principal Occupation                    Term Expires

Kenneth J. Ciak                     President of IDS Property Casualty                       2007
Green Bay, Wisconsin                 Insurance Company
Larry W. Frazier                    Vice President and Controller of IDS                     2007
Green Bay, Wisconsin                 Property Casualty Insurance Company
David R. Hubers                     Retired President of Ameriprise                          2007
Naples, Florida                      Financial, Inc.
Theodore M. Jenkin                  Group Vice President of Ameriprise                       2007
Orange Village, Ohio                 Financial, Inc.
Paul R. Johnston                    Vice President and Group Counsel of                      2007
Excelsior, Minnesota                 Ameriprise Financial, Inc.
Eric L. Marhoun                     Vice President and Group Counsel of                      2007
Ramsey, Minnesota                    Ameriprise Financial, Inc.
Bridget M. Sperl                    Senior Vice President – Service Delivery                 2007
St. Paul, Minnesota                  of Ameriprise Financial, Inc.
Lisa A. Steffes                     Vice President – Financial Services Center               2007
Apple Valley, Minnesota              of Ameriprise Financial, Inc.
John T. Sweeney                     Lead Financial Officer of                                2007
Plymouth, Minnesota                  Ameriprise Financial, Inc.
Dianne L. Wilson                    Senior Vice President of IDS Property                    2007
Green Bay, Wisconsin                 Casualty Insurance Company




                                                  5
Officers of the Company

            The officers serving at the time of this examination are as follows:

                 Name                                   Office

           Kenneth J. Ciak              President
           Paul R. Johnston             Secretary
           Walter S. Berman             Treasurer
           Thomas J. Boogaard           Vice President – Claims
           Thomas S. Botsford           Vice President – Underwriting
           Richard N. Bush              Senior Vice President – Tax
           Debra M. Conrad              Vice President – Client Service
           Larry W. Frazier             Vice President – Controller
           Michelle M. Keeley           Vice President – Investments
           Thomas W. Murphy             Vice President – Investments
           Rebecca A. Nash              Senior Vice President – Operations
           Rebecca L. Roever            Vice President – Actuary
           Dianne L. Wilson             Senior Vice President – Insurance Operations

As of the date of this examination report, no salaries have been allocated to AIC.

Committees of the Board

            The company's bylaws allow for the formation of certain committees by the board of

directors. The company’s sole board appointed committee as of June 21, 2006, is listed below:

                                     Investment Committee
                                     Kenneth J. Ciak, Chair
                                     Larry W. Frazier
                                     Eric L. Marhoun
                                     Jeff A. Williams
                                     Dianne L. Wilson




                                                 6
                                   IV. AFFILIATED COMPANIES

             Ameriprise Insurance Company is a member of a holding company system. The

organizational chart below depicts the relationships among the affiliates in the group. A brief

description of the significant affiliates follows the organizational chart.

                                        Organizational Chart
                                        As of March 31, 2006




                                       Ameriprise Financial, Inc.




                                       IDS Property Casualty                  RiverSource
                                        Insurance Company                     Investments,
                                                                                  LLC


          AMEX Assurance                 Ameriprise Auto &              Ameriprise Insurance
            Company                            Home                          Company
                                       Insurance Agency, Inc.



Note that the above organizational chart is a simplified version of the complete organizational

chart due to the size and complexity of the holding company system. The chart includes only

significant affiliates and ones that directly affect the operations of AIC.




                                                    7
Ameriprise Financial, Inc.

            On September 30, 2005, American Express Company spun-off Ameriprise Financial,

Inc., as an unaffiliated entity. AFI provides financial planning, asset management and insurance

services to individuals, businesses, and institutions. It operates through two segments: Asset

Accumulation and Income, and Protection. The Asset Accumulation and Income segment offers

their own and other companies’ mutual funds as well as their own annuities and other asset

accumulation and income management products and services to retail clients through advisor

network. AFI utilizes three of its wholly owned life insurance companies to offer its annuity

products. It also offers annuity products through outside channels, such as banks and broker-

dealer networks. This segment also serves institutional clients in the separately managed

account, subadvisory, and 401(k) markets. The Protection segment offers various life insurance,

disability income, and long-term care insurance products through advisor network. It also offers

personal auto and home insurance products on a direct basis to retail clients principally through

strategic marketing alliances. AFI was founded in 1894 by John Tappan under the name

Investors' Syndicate and changed its name to Investors Diversified Services, Inc., in 1949.

Subsequently, AFI changed its name to American Express Financial Corporation and to that

presently used in August 2005. The company is headquartered in Minneapolis, Minnesota.

            As of December 31, 2005, the audited financial statements of Ameriprise Financial,

Inc., reported assets of $93,121,000,000, liabilities of $85,434,000,000, and shareholders’ equity

of $7,687,000,000. Operations for 2005 produced net income of $574,000,000.

IDS Property Casualty Insurance Company

            As stated earlier, IDSPC is the direct parent of Ameriprise Insurance Company.

IDSPC was originally organized in 1972 as Wisconsin No-Fault Insurance Company, Inc.

Effective October 1979, Wisconsin Employers Group, Inc. (hereinafter also WEG), acquired

ownership of the company’s common capital stock, and the company’s corporate name was

changed to Wisconsin Employers Casualty Company (hereinafter also WECC). Under the 1979

acquisition by WEG, the WEG subsidiary Fireman’s Fund Employers Insurance Company

became the company’s immediate parent.




                                                 8
            The company was acquired by IDS Reinsurance Company (hereinafter also IDS Re),

a subsidiary of the American Express Company, on December 31, 1986. IDS Re changed its

name to IDSPC on February 6, 1987, and then merged with WECC in May 1987. WECC was the

surviving entity of the 1987 merger. Subsequent to the merger, the name of the company was

changed to IDS Property Casualty Insurance Company.

            In 2002, American Express contributed all of the outstanding shares of AMEX

Assurance Company (an Illinois-domiciled company) to American Express Financial Corporation,

which in turn contributed the shares to IDSPC. In December 2002, the Illinois Director approved

the transaction and AMEX Assurance Company became the wholly owned subsidiary of IDSPC.

            IDSPC was the subject of an examination by this office as of December 31, 2003;

this examination report has been adopted and is a public record.

            As of December 31, 2005, the audited financial statements of IDS Property Casualty

Insurance Company reported assets of $958,302,914, liabilities of $493,993,404, and surplus of

$464,309,510. Operations for 2005 produced net income of $276,177,020.

RiverSource Investments, LLC

            RiverSource Investments, LLC, (hereinafter also RiverSource) manages assets for

foundations, endowments, corporate and public pension funds, union funds and high net worth

individuals. RiverSource offers four basic investment strategies as well as hybrid and alternative

investment strategies. Alternative is the predominant strategy, accounting for 57% of total assets

managed.

            RiverSource’s wholly owned subsidiaries include: IDS Capital Holdings, Inc.,

Advisory Capital Strategies Group, Inc., and American Express Asset Management International

(Japan) Ltd. RiverSource also consolidates a variable interest entity, which is a collateralized

debt obligation, for which it is considered to be the primary beneficiary.

            As of December 31, 2005, the unaudited financial statements of RiverSource

Investments, LLC, reported assets of $471,722,764, liabilities of $426,212,805, and shareholders’

equity of $45,509,959. Operations for 2005 produced net income of $41,059,974.




                                                  9
AMEX Assurance Company

            AMEX Assurance Company is an Illinois-domiciled insurance company and a wholly

owned subsidiary of IDSPC. AMEX Assurance is licensed in all 50 states, the District of

Columbia, Puerto Rico and Canada. The primary business lines written, on a direct basis by

AMEX Assurance, are group accident and health, private passenger auto liability, auto physical

damage, inland marine, homeowner’s, other liability and in 2005 professional liability (securities

broker-dealer errors and omissions).

            Insurance products written by AMEX Assurance are offered primarily to American

Express cardholders. Products underwritten and retained as direct business (prior to July 1,

2005) by AMEX Assurance are various types of insurance coverage that are provided by the

American Express Travel Related Services segment for the benefit of American Express

cardholders. The products include: travel and accident insurance, lost baggage, auto rental

collision damage waiver, and purchase protection and extended warranty insurance. As of July

1, 2005, these polices were reinsured via a 100% quota share reinsurance agreement to Amexco

Insurance Company, a subsidiary of American Express Company domiciled in Vermont. AMEX

Assurance also issues auto, home and excess liability policies in states where IDS Property

Casualty is not currently licensed. Pursuant to an affiliated reinsurance treaty, these policies are

100% ceded to IDSPC. As stated earlier in this report, AMEX Assurance will be reacquired by

American Express by September 30, 2007.

            As of December 31, 2005, the audited financial statements of AMEX Assurance

Company reported assets of $141,439,087, liabilities of $26,206,229, and surplus of

$115,232,858. Operations for 2005 produced net income of $24,869,497.

Ameriprise Auto & Home Insurance Agency, Inc.

            Ameriprise Auto & Home Insurance Agency, Inc., (hereafter also Ameriprise Agency)

was created by IDS Property Casualty Insurance Company to facilitate insurance through

partnerships for client coverages it does not directly write. Ameriprise Agency receives

commission from these other property casualty insurers for the placement of these policies.

These partnerships and the insurance provided are outlined below:




                                                 10
             •   Progressive - commercial auto, recreational vehicles, non-
                 standard auto, classic cars, motorcycles, boats and wave
                 runners, and all other autos that IDSPC elects not to underwrite;

             •   Hartford- flood insurance;

             •   Chubb- high valued homes;

             •   RLI- stand alone umbrella coverage.

             As of January 1, 2006, Ameriprise Agency entered into an intercompany agency

agreement with AIC to produce business for the company. This agreement is described in

greater detail in the following section.

             As of December 31, 2005, the unaudited financial statements of Ameriprise Auto &

Home Insurance Agency, Inc., reported assets of $456,717, liabilities of $230,935, and

shareholders’ equity of $225,782. Operations for 2005 produced net income of $364,045.

Written Agreements with Affiliates

             Ameriprise Insurance Company has no employees of its own. All operations are

conducted by employees of IDS Property Casualty Insurance Company, in accordance with the

business practices and internal controls of that organization. In addition to ongoing common

management and control by this upstream affiliate, various written agreements and undertakings

affect the company’s relationship to its affiliates. Reinsurance agreements are described in

section V of the report titled “Reinsurance.” A brief summary of the other agreements follows:

IDS Property Casualty Insurance Company

Service and Cost Allocation Agreement

             Ameriprise Insurance Company and IDS Property Casualty Insurance Company

entered into a Service and Cost Allocation Agreement effective January 1, 2006. Under this

agreement, IDSPC is to provide all services essential to the day-to-day operation of AIC as

requested by the company, which includes management, policyholder service, actuarial,

accounting, compliance, legal and other administrative services. AIC is to reimburse IDSPC for

expenses calculated to reflect only the actual value and cost to IDSPC for providing such

services. Settlements of fees and expenses are to be made within 30 days of the end of each

quarterly period of the fiscal year.




                                                11
            Either party may terminate this agreement at any time with 60 days’ written notice to

the other. In the event of termination, Ameriprise Insurance Company may demand IDS Property

Casualty Insurance Company continue to provide such services for a six-month period of time

following the notice of termination upon terms and conditions in effect at the time of notice.

Intercompany Tax Allocation Agreement

            Effective January 1, 2006, Ameriprise Insurance Company entered into an affiliated

tax allocation agreement. Under this agreement, Ameriprise Financial, Inc., files a consolidated

U.S. Federal Income Tax Return that includes AIC and other affiliates of the holding company

group, whereby the affiliates shall pay AFI for an amount not to exceed the amount of tax each of

them would have paid had a tax return been filed on a separate return basis. Should any

subsidiary incur a taxable loss, AFI will reimburse that company. All settlements under this

agreement shall be made in cash with 30 days after the filing of the estimated or final federal

income tax return. This agreement shall remain in effect for each year the taxable return is filed

unless the agreement is terminated.

RiverSource Investments, LLC

Investment Management Agreement

            Ameriprise Insurance Company entered into an Investment Management and

Services Agreement with RiverSource Investments, LLC, effective January 1, 2006. Under this

agreement, RiverSource acts as the company’s agent and attorney-in-fact with respect to its

investment portfolio. Subject to AIC’s board of directors, board-appointed investment committee

and investment guidelines, RiverSource has complete day-to-day discretionary control, including

the power to make acquisitions and disposals of investments, and issue instructions to brokers

and custodians. RiverSource also will provide asset-liability services with respect the

investments designed to assist AIC in managing the relationship between its assets and

liabilities. The company is to compensate RiverSource monthly an amount equal to allocated

cost incurred by RiverSource in the performance of its duties under this agreement. Either party

may terminate this agreement at any time upon 60 days’ advance written notice to the other

party.




                                                 12
Ameriprise Auto & Home Insurance Agency, Inc.

Intercompany Agency Agreement

            Effective January 1, 2006, Ameriprise Insurance Company entered into an agency

agreement with Ameriprise Auto & Home Insurance Agency, Inc. Under this agreement

Ameriprise Agency is appointed to act as AIC’s agent for the solicitation of potential insureds for

the purchase of insurance. AIC is to reimburse Ameriprise Agency for expenses calculated to

cover the cost to Ameriprise Agency for providing such services. Settlements of fees and

expenses are to be made within 30 days of the end of each quarterly period of the fiscal year.

Either party may terminate this agreement at any time with 60 days’ written notice to the other or

upon mutual agreement of the parties.




                                                 13
                                        V. REINSURANCE

             The company’s ceded reinsurance treaty with its direct upstream affiliate, IDS

Property Casualty Insurance Company, in force at the time of this examination, is summarized as

follows. The contract did contain proper insolvency provisions.

Affiliated Ceding Contract

Type:                100% Quota Share Reinsurance

Reinsurer:           IDS Property Casualty Insurance Company

Scope:               All business written by the company

Retention:           None

Commission:          None

Effective date:      January 1, 2006, and shall remain continuously in force

Termination:         Upon twelve months prior written notice by either party

             In effect, Ameriprise Insurance Company will not retain any net premiums written, net

premiums earned, net losses incurred, or loss adjustment expenses under this contract and,

therefore, will only incur underwriting expenses as long as this treaty is in force. As mentioned in

section II of this report titled “History and Plan of Operations” expenses are allocated to the

company for services provided by affiliates through various intercompany agreements, which

includes a portion that would be considered and reported as underwriting expenses.




                                                 14
                                      VI. FINANCIAL DATA

            The following financial statements reflect the financial condition of the company as

reported to the Commissioner of Insurance in the March 31, 2006, quarterly statement. Also

included in this section is the compulsory and security surplus calculation. Adjustments made as

a result of the examination are noted at the end of this section in the area captioned

"Reconciliation of Surplus per Examination."




                                                15
                                  Ameriprise Insurance Company
                                              Assets
                                      As of March 31, 2006

                                                                                  Net
                                                                Nonadmitted     Admitted
                                                    Assets        Assets         Assets

Bonds                                             $45,279,529     $       0    $45,279,529
Cash, cash equivalents, and short-term
  investments                                        179,731              0          179,731
Investment income due and accrued                    677,240              0          677,240

Total Assets                                      $46,136,500     $       0    $46,136,500


                                   Ameriprise Insurance Company
                                Liabilities, Surplus, and Other Funds
                                         As of March 31, 2006

Current federal and foreign income taxes                                       $     (14,203)
Payable to parent, subsidiaries, and affiliates                                      124,529

Total Liabilities                                                                    110,326

Common capital stock                                             $ 8,000,000
Gross paid in and contributed surplus                             37,726,474
Unassigned funds (surplus)                                           299,700

Surplus as Regards Policyholders                                                   46,026,174

Total Liabilities and Surplus                                                  $46,136,500




                                                   16
                               Ameriprise Insurance Company
                                  Summary of Operations
                                For the First Quarter of 2006

Underwriting Income
Premiums earned                                                            $      0

Deductions:
   Other underwriting expenses incurred                         $124,529
Total underwriting deductions                                               124,529
Net underwriting gain (loss)                                               (124,529)

Investment Income
Net investment income earned                                     410,026
Net investment gain (loss)                                                  410,026

Net income (loss) before federal and foreign income taxes                   285,497
Federal and foreign income taxes incurred                                   (14,203)

Net Income                                                                 $ 299,700




                                              17
                               Ameriprise Insurance Company
                                         Cash Flow
                                For the First Quarter of 2006

 Net investment income*                                                         $     (237,222)
 Total                                                                                (237,222)
 Commissions, expenses paid, and
  aggregate write-ins for deductions                            $   124,529
 Total deductions                                                                      124,529
 Net cash from operations                                                             (361,751)

 Cost of investments acquired (long-term
  only):
   Bonds                                      $45,309,521
   Total investments acquired                                    45,309,521
 Net cash from investments                                                       (45,309,521)

 Cash from financing and miscellaneous
  sources:
    Capital and paid in surplus less
      treasury stock                                             45,726,474
    Other cash provided (applied)                                   124,529
 Net cash from financing and
  miscellaneous sources                                                             45,851,003
 Reconciliation:
 Net change in cash, cash equivalents,
  and short-term investments                                                          179,731
 Cash, cash equivalents, and short-term
  investments:
    Beginning of year                                                                       0
    End of year                                                                  $    179,731

* The negative cash flow generated from investment income is attributable to the accrued
  interest amount paid for by AIC when bonds were transferred to it from IDSPC as part of AIC’s
  original capitalization.




                                              18
                              Ameriprise Insurance Company
                         Compulsory and Security Surplus Calculation
                                      March 31, 2006

Assets                                                                  $46,136,500
Less liabilities                                                            110,326

Adjusted surplus                                                         46,026,174

Annual premium:
  Lines other than accident and health                        $    0
  Factor                                                          20%

Compulsory surplus (subject to a minimum of
 $2 million)                                                              2,000,000

Compulsory surplus excess (or deficit)                                  $44,026,174

Adjusted surplus (from above)                                           $46,026,174

Security surplus: (140% of compulsory surplus, factor
 reduced 1% for each $33 million in premium written
 in excess of $10 million, with a minimum factor of
 110%)                                                                    2,800,000

Security surplus excess (or deficit)                                    $43,226,174




                                              19
                              Ameriprise Insurance Company
                           Reconciliation and Analysis of Surplus
                     For the Three-Month Period Ending March 31, 2006

            The following schedule is a reconciliation of total surplus during the period under

examination as reported by the company in its filed statement:

                                                                  2006

                       Surplus, beginning of year          $           0
                       Net income                                299,700
                       Capital changes:
                        Paid in                                8,000,000
                       Surplus adjustments:
                        Paid in                             37,726,474

                       Surplus, end the first quarter      $46,026,174


Reconciliation of Surplus per Examination

            No adjustments were made to surplus as a result of the examination. The amount of

surplus reported by the company as of March 31, 2006, of $46,026,174 is accepted.




                                                20
                        VII. SUMMARY OF EXAMINATION RESULTS

Compliance with Prior Examination Report Recommendations

            The current examination is the first examination of the company performed by the

Wisconsin Office of the Commissioner of Insurance since it commenced business on January 26,

2006. Review and evaluation of compliance with prior examination findings is not applicable.

Summary of Current Examination Results

            There were no adverse or material examination findings as a result of the current

examination of the company.




                                               21
                                        VIII. CONCLUSION

            The current examination of Ameriprise Insurance Company is the first examination of

the company performed by the Wisconsin Office of the Commissioner of Insurance since it

commenced business on January 26, 2006. As of March 31, 2006, the company reported

policyholder surplus of $46,026,174. The company was initially capitalized through issuance of

3,200,000 stock shares with a par value of $2.50 per share as well as $36,000,000 in capital

contributions from its direct upstream affiliate, IDS Property Casualty Insurance Company. The

examination of AIC resulted in no recommendations, no adjustments to surplus and no

reclassifications. Currently the company doesn’t write any business and will not commence

doing so until it obtains licenses in those states that do not permit IDS Property Casualty

Company (the company’s direct parent) to offer coverages to certain risk groups because it has

multiple rating plans.

            The company is currently only licensed in Wisconsin. The company intends to apply

for license in the other 49 states and the District of Columbia.




                                                 22
    IX. SUMMARY OF COMMENTS AND RECOMMENDATIONS

There were no recommendations made as a result of this examination.




                                 23
                                    X. ACKNOWLEDGMENT

            The courtesy and cooperation extended during the course of the examination by the

officers and employees of the company are acknowledged.

            In addition to the undersigned, the following representatives of the Office of the

Commissioner of Insurance, State of Wisconsin, participated in the examination:

                   Name                                       Title

            David A. Jensen                 Insurance Financial Examiner

            Frederick H. Thornton           Insurance Financial Examiner Advanced
                                              Exam Planning & Quality Control Specialist


                                                  Respectfully submitted,



                                                  John E. Litweiler
                                                  Examiner-in-Charge




                                                24

								
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