836658--3/31/2009--ING_USA_ANNUITY_&_LIFE_INSURANCE

related topics

{loss, insurance, financial}

{capital, credit, financial}

{condition, economic, financial}

{regulation, government, change}

{regulation, change, law}

{system, service, information}

{operation, natural, condition}

{tax, income, asset}

{customer, product, revenue}

{financial, litigation, operation}

The current financial crisis has reached unprecedented levels of market volatility and has adversely affected and may continue to adversely affect the Company s business and results of operations Continuing adverse financial market conditions may significantly affect the Company s ability to meet liquidity needs, access to capital and cost of capital The amount of statutory capital that the Company must hold to maintain its financial strength and credit ratings can vary significantly from time to time and is sensitive to a number of factors outside of the Company s control The Company has experienced ratings downgrades recently and may experience additional future downgrades in the Company s ratings, which may negatively affect profitability and financial condition Regulatory initiatives intended to alleviate the current financial crisis that have been adopted may not be effective and, in any event, may be accompanied by other initiatives, including new capital requirements or other regulations, that could materially affect the Company s results of operations, financial condition and liquidity The valuation of many of the Company s financial instruments include methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may materially adversely affect results of operations and financial condition If assumptions used in estimating future gross profits differ from actual experience, the Company may be required to accelerate the amortization of Deferred Acquisition Costs ( DAC ), which could have a material adverse effect on results of operations and financial condition If the Company s business does not perform well, the Company may be required to establish an additional valuation allowance against the deferred income tax asset, which could have a material adverse effect on results of operations and financial condition Reinsurance subjects the Company to the credit risk of reinsurers and may not be adequate to protect against losses arising from ceded reinsurance Offshore reinsurance subjects the Company to the risk that the reinsurer is unable to provide letters of credit The inability of counterparties to meet their financial obligations could have an adverse effect on the Company's results of operations. Changes in underwriting and actual experience could materially affect profitability Changes in reserve estimates may reduce profitability A loss of key product distribution relationships could materially affect sales Competition could negatively affect the ability to maintain or increase profitability Changes in federal income tax law or interpretations of existing tax law could affect profitability and financial condition by making some products less attractive to contractowners and increasing tax costs of contractowners or the Company Litigation may adversely affect profitability and financial condition Changes in regulation in the United States and recent regulatory investigations may reduce profitability The Company s products are subject to extensive regulation and failure to meet any of the complex product requirements may reduce profitability A failure of the Company s operating systems or a compromise of security with respect to operating systems or portable electronic devices could adversely affect the Company s results of operations and financial condition The occurrence of natural or man-made disasters may adversely affect the Company s results of operations and financial condition The occurrence of unidentified or unanticipated risks could negatively affect the Company s business or result in losses

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836658--3/31/2009--ING_USA_ANNUITY_&_LIFE_INSURANCE_CO