Overview

RiverSource Life Insurance coverage Firm (“RiverSource Life”) and its subsidiaries are
referred to collectively on this Kind 10-Q because the “Firm”. The next
dialogue and administration’s narrative evaluation of the monetary situation and
outcomes of operations needs to be learn together with the “Ahead-Wanting
Statements” that observe, the Consolidated Monetary Statements and Notes
introduced in Merchandise 1 and its Annual Report on Kind 10-Okay for the yr ended
December 31, 2021 filed with the Securities and Change Fee (“SEC”) on
February 25, 2022 (“2021 10-Okay”), in addition to any present studies on Kind 8-Okay and
different publicly out there info.

The Consolidated Monetary Statements are ready in accordance with U.S.
typically accepted accounting ideas (“GAAP”). Administration’s narrative
evaluation is introduced pursuant to Normal Directions H(2)(a) of Kind 10-Q in
lieu of Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations.

See Observe 1 to the Consolidated Monetary Statements for added info.

The coronavirus illness 2019 (”COVID-19”) pandemic has introduced ongoing
vital financial and societal disruption and market unpredictability, which
has affected the Firm’s enterprise and working setting pushed by what has
been a low rate of interest setting and volatility and adjustments within the fairness
markets and the potential related implications to consumer habits. COVID-19
continues its ongoing affect and has been occurring in a number of waves, so there
are nonetheless no dependable estimates of how lengthy the implications from the pandemic
will final, the results present and different new variants will finally have, how
many individuals are more likely to be affected by it, or its affect on the general
economic system. There’s nonetheless vital uncertainty across the extent to which the
COVID-19 pandemic will proceed to affect the Firm’s enterprise, outcomes of
operations, and monetary situation, which relies on present and future
developments, together with the last word scope, period and severity of the
pandemic, success of worldwide vaccination efforts, a number of mutations of
COVID-19 or comparable ailments, the effectiveness of the Firm’s workplace
reopenings, the extra measures which may be taken by varied governmental
authorities in response to the outbreak, the actions of third events in
response to the pandemic, and the potential additional impacts on the worldwide
economic system. Given the continuing affect of the pandemic, monetary outcomes will not be
corresponding to earlier years and the outcomes introduced on this report might not
essentially be indicative of future working outcomes. For additional info
concerning the affect of the COVID-19 pandemic, and any probably materials
results, see Half 1 – Merchandise 1A “Danger Elements” within the Firm’s 2021 10-Okay.

The Firm consolidates sure variable curiosity entities for which it
offers funding administration companies. These entities are outlined as
consolidated funding entities (“CIEs”). Whereas the consolidation of the CIEs
impacts the Firm’s steadiness sheet and revenue assertion, the publicity to those
entities is unchanged and there’s no affect to the underlying enterprise outcomes.
For additional info on CIEs, see Observe 4 to the Consolidated Monetary
Statements. Modifications within the honest worth of property and liabilities associated to the
CIEs, primarily syndicated loans and debt, are mirrored in web funding
revenue.

Important Accounting Estimates

The accounting and reporting insurance policies that the Firm makes use of have an effect on its
Consolidated Monetary Statements. Sure of the Firm’s accounting and
reporting insurance policies are vital to an understanding of the Firm’s monetary
situation and outcomes of operations. In some circumstances, the appliance of those
insurance policies will be considerably affected by the estimates, judgments and
assumptions made by administration throughout the preparation of the Consolidated
Monetary Statements. These accounting insurance policies are mentioned intimately in
“Administration’s Narrative Evaluation – Important Accounting Estimates” within the
Firm’s 2021 10-Okay.

Latest Accounting Pronouncements

For info concerning latest accounting pronouncements and their anticipated
affect on the Firm’s future consolidated monetary situation or outcomes of
operations, see Observe 2 to the Consolidated Monetary Statements.

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Consolidated Outcomes of Operations for the Three Months Ended March 31, 2022 and
2021

The next desk presents the Firm’s consolidated outcomes of operations:
Three Months Ended March 31,
2022 2021 Change
(in hundreds of thousands)
Revenues
Premiums $ 73$ 78$ (5) (6) %
Internet funding revenue 159 247 (88) (36)
Coverage and contract costs 564 547 17 3
Different revenues 173 128 45 35
Internet realized funding positive factors (losses) 18 48 (30) (63)
Whole revenues 987 1,048 (61) (6)

Advantages and bills
Advantages, claims, losses and settlement bills 210 652 (442) (68)
Curiosity credited to fastened accounts 141 159 (18) (11)
Amortization of deferred acquisition prices 92 2 90 NM
Curiosity and debt expense 19 21 (2) (10)
Different insurance coverage and working bills 171 194 (23) (12)
Whole advantages and bills 633 1,028 (395) (38)
Pretax revenue 354 20 334 NM
Earnings tax provision 39 2 37 NM
Internet revenue $ 315$ 18$ 297 NM
NM Not Significant.

General

Internet revenue elevated $297 million for the three months ended March 31, 2022
in comparison with the prior yr interval. Pretax revenue elevated $334 million, for the
three months ended March 31, 2022 in comparison with the prior yr interval.

The next impacts have been vital drivers of the period-over-period change
in pretax revenue:

•The market affect on non-traditional long-duration merchandise (together with variable
and stuck deferred annuity contracts and common life (“UL”) insurance coverage
contracts), web of hedges and the associated deferred gross sales inducement prices
(“DSIC”) and deferred acquisition prices (“DAC”) amortization, unearned income
amortization and the reinsurance accrual was a advantage of $134 million for the
three months ended March 31, 2022 in comparison with an expense of $396 million for the
prior yr interval.

•The affect on variable annuity and variable common life merchandise for the
distinction between assumed and up to date separate account funding efficiency
on DAC, DSIC, unearned income amortization, reinsurance accrual and extra
insurance coverage profit reserves (“imply reversion associated affect”) was an expense of
$59 million for the three months ended March 31, 2022 in comparison with a advantage of
$56 million for the prior yr interval.

•A $45 million unfavorable affect resulting from extra normalized long run care (“LTC”)
insurance coverage claims within the present interval in comparison with the advantage of COVID-19
associated impacts within the yr in the past interval.

•Internet realized funding positive factors of $18 million for the three months ended March
31, 2022 in comparison with web realized funding positive factors of $48 million for the prior
yr interval.

Variable annuity account balances decreased 1% to $85.8 billion as of March 31,
2022 in comparison with the prior yr interval resulting from web outflows of $1.9 billion,
partially offset by market appreciation. Variable annuity gross sales decreased 27%
in comparison with the prior yr interval reflecting a lower in gross sales of variable
annuities with residing profit ensures. The danger profile of its inforce block
continues to enhance, with account values with residing profit riders right down to 60%
as of March 31, 2022 in comparison with 63% a yr in the past. This development is anticipated to
proceed and meaningfully shift the combo of enterprise away from merchandise with
residing profit ensures over time.

The Firm continues to optimize its danger profile and shift its enterprise combine to
decrease danger choices. Throughout the fourth quarter of 2021, the Firm made the
determination to discontinue new gross sales of considerably all of its variable annuities
with residing profit ensures on the finish of 2021, with a full exit by mid-2022.
As well as, the Firm has discontinued new gross sales of its common life
insurance coverage with secondary ensures and its single-pay fastened common life with
a long run care rider merchandise on the finish of 2021.

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Fastened deferred annuity account balances declined 4% to $7.5 billion as of March
31, 2022 in comparison with the prior yr interval as insurance policies proceed to lapse and the
discontinuance of recent gross sales of fastened deferred annuities and stuck index
annuities. Throughout the third quarter of 2021, the Firm closed on a transaction
to reinsure RiverSource Life’s fastened deferred and fast annuity insurance policies.

Revenues

Internet funding revenue decreased $88 million, or 36%, for the three months ended
March 31, 2022 in comparison with the prior yr interval reflecting decrease common
invested property as a result of sale of investments to a reinsurer on account of the
fastened deferred and fast annuity reinsurance transaction, a lower in
funding revenue on fastened maturities resulting from decrease yields on account of
continued low rates of interest, and decrease web funding revenue of consolidated
CIEs.

Coverage and contract costs elevated $17 million, or 3%, for the three months
ended March 31, 2022 in comparison with the prior yr interval primarily reflecting a
favorable change in unearned income amortization and the reinsurance accrual
offset to the market affect of IUL advantages.

Different revenues elevated $45 million, or 35%, for the three months ended March
31, 2022 in comparison with the prior yr interval primarily reflecting the yield on
deposit receivables arising from reinsurance transactions.

Internet realized funding positive factors have been $18 million for the three months ended March
31, 2022 in comparison with web realized funding positive factors of $48 million for the prior
yr interval. The three months ended March 31, 2022 included web realized positive factors
of $17 million on Accessible-for-Sale securities. The three months ended March
31, 2021 included web realized positive factors of $49 million on Accessible-for-Sale
securities resulting from gross sales, calls and tenders.

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Advantages and Bills

Advantages, claims, losses and settlement bills decreased $442 million, or 68%,
for the three months ended March 31, 2022 in comparison with the prior yr interval
primarily reflecting the next objects:
•A $207 million lower in expense primarily reflecting the affect of
year-over-year adjustments within the unhedged nonperformance credit score unfold danger
adjustment on variable annuity assured advantages. The unfavorable affect of
the nonperformance credit score unfold was $18 million for the three months ended
March 31, 2022 in comparison with an unfavorable affect of $225 million for the prior
yr interval. Because the undiscounted embedded by-product legal responsibility on which the
nonperformance credit score unfold is utilized will increase (decreases), the affect of the
nonperformance credit score unfold on advantages bills is favorable (unfavorable).
Moreover, because the estimate of the nonperformance credit score unfold over the LIBOR
swap curve tightens or widens, the embedded by-product legal responsibility will improve
or lower.

•A $339 million lower in expense from different market impacts on variable
annuity assured advantages, web of hedges in place to offset these dangers and
the associated DSIC amortization. This lower was the results of a positive $1.3
billion change available in the market affect on derivatives hedging the variable annuity
assured advantages, partially offset by an unfavorable $950 million change in
the market affect on variable annuity assured residing advantages reserves. The
foremost market drivers contributing to those adjustments are summarized beneath:

•Fairness market affect on the variable annuity assured residing advantages
legal responsibility web of the affect on the corresponding hedge property resulted in a
profit for the three months ended March 31, 2022 in comparison with an expense for the
prior yr interval.

•Rate of interest affect on the variable annuity assured residing advantages
legal responsibility web of the affect on the corresponding hedge property resulted in a
greater expense for the three months ended March 31, 2022 in comparison with the prior
yr interval.

•Volatility affect on the variable annuity assured residing advantages legal responsibility
web of the affect on the corresponding hedge property resulted in a decrease expense
for the three months ended March 31, 2022 in comparison with the prior yr interval.

•Different unhedged objects, together with the distinction between the assumed and precise
underlying separate account funding efficiency, fastened revenue credit score
exposures, transaction prices and varied behavioral objects, have been a web expense
for the three months ended March 31, 2022 in comparison with a web profit for the
prior yr interval.

•The imply reversion associated affect was an expense of $34 million for the three
months ended March 31, 2022 in comparison with a advantage of $34 million for the prior
yr interval.

•A $41 million improve in expense on LTC insurance coverage as claims returned to extra
normalized ranges in comparison with the prior yr interval which benefited from
COVID-19 associated impacts.

Curiosity credited to fastened accounts decreased $18 million, or 11%, for the three
months ended March 31, 2022 in comparison with the prior yr interval primarily
reflecting the next objects:

•A $29 million lower in expense from the unhedged nonperformance credit score
unfold danger adjustment on IUL advantages. The favorable affect of the
nonperformance credit score unfold was $28 million for the three months ended March
31, 2022 in comparison with an unfavorable affect of $1 million for the prior yr
interval.

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•A $14 million improve in expense from different market impacts on IUL advantages,
web of hedges, which was an expense of $12 million for the three months ended
March 31, 2022 in comparison with a advantage of $2 million for the prior yr interval.
The rise in expense was primarily resulting from a rise within the IUL embedded
by-product within the present interval, which mirrored greater choice prices resulting from a
greater new cash fee.

Amortization of DAC elevated $90 million, for the three months ended March 31,
2022 in comparison with the prior yr interval primarily reflecting the next objects:

•The DAC offset to the market affect on non-traditional long-duration merchandise
was an expense of $11 million for the three months ended March 31, 2022 in contrast
to a advantage of $46 million for the prior yr interval.

•The imply reversion associated affect was an expense of $25 million for the three
months ended March 31, 2022 in comparison with a advantage of $22 million for the prior
yr interval.

•A lower in amortization reflecting decrease than anticipated consumer exit charges.

Different insurance coverage and working bills decreased $23 million, or 12%, for the
three months ended March 31, 2022 in comparison with the prior yr interval primarily
reflecting decrease bills from the consolidation of CIEs.

Earnings Taxes

The Firm’s efficient tax fee was 11.1% for the three months ended March 31,
2022 in comparison with 9.1% for the prior yr interval. The rise within the efficient
tax fee for the three months ended March 31, 2022 in comparison with March 31, 2021 is
primarily the results of greater pretax revenue and a lower in low revenue
housing tax credit, partially offset by a rise in international tax credit in
the present interval in comparison with the prior interval. See Observe 15 to the Consolidated
Monetary Statements for added dialogue on revenue taxes.

Market Danger

The Firm’s main market danger exposures are rate of interest, fairness value and
credit score danger. Fairness value and rate of interest fluctuations can have a big
affect on the Firm’s outcomes of operations, primarily as a result of results on
asset-based charges and bills, the “unfold” revenue generated on its fastened
insurance coverage, fastened portion of its variable annuities and variable insurance coverage
contracts, and the fastened deferred annuities, the worth of DAC and DSIC property,
the worth of liabilities for assured advantages related to its variable
annuities and the worth of derivatives held to hedge these advantages.

The Firm’s earnings from fastened insurance coverage, the fastened portion of variable
annuities and variable insurance coverage contracts, and stuck deferred annuities are
primarily based upon the unfold between charges earned on property held and the charges at which
curiosity is credited to accounts. The Firm primarily invests in fastened fee
securities to fund the speed credited to shoppers. The Firm ensures an
rate of interest to the holders of those merchandise. Funding property and consumer
liabilities typically differ because it pertains to foundation, repricing or maturity
traits. Charges credited to shoppers’ accounts typically reset at shorter
intervals than the yield on the underlying investments. Subsequently, in an
rising rate of interest setting, greater rates of interest could also be mirrored in
crediting charges to shoppers earlier than in charges earned on invested property, which
may lead to a diminished unfold between the 2 charges, diminished earned revenue
and a adverse affect on pretax revenue. Nevertheless, the present low rate of interest
setting is leading to rates of interest beneath the extent of a few of the
Firm’s legal responsibility assured minimal rates of interest (“GMIRs”). Therefore, a modest
rise in rates of interest wouldn’t essentially lead to adjustments to all of the
legal responsibility credited charges whereas projected asset purchases would seize the complete
improve in rates of interest. This dynamic would lead to widening spreads underneath
a modestly rising fee situation given the present relationship between the
present degree of rates of interest and the underlying GMIRs on the enterprise.

Because of the present rate of interest setting, the Firm’s reinvestment
yields are typically decrease than the present portfolio yield. The Firm expects
its portfolio revenue yields to proceed to say no in future intervals ought to
rates of interest stay comparatively low. The carrying worth and weighted common
yield of complete non-structured fastened maturity securities and industrial mortgage
loans within the Firm’s funding portfolio which will generate proceeds to
reinvest by March 31, 2024 resulting from prepayment, maturity or name exercise at
the choice of the issuer, excluding securities with a make-whole provision, have been
$1.0 billion and three.9%, respectively, as of March 31, 2022. As well as,
residential mortgage-backed securities, which might be topic to prepayment
danger if the low rate of interest setting continues, totaled $2.4 billion and
had a weighted common yield of two.1% as of March 31, 2022. Whereas these quantities
characterize investments that might be topic to reinvestment danger, it is usually
potential that these investments will likely be used to fund liabilities or will not be
pay as you go and can stay invested at their present yields. Along with the
rate of interest setting, the combo of profit funds versus product gross sales as
effectively because the timing and volumes related to such combine might affect the Firm’s
funding yield. Moreover, reinvestment actions and the related
funding yield may additionally be impacted by company methods carried out at
administration’s discretion. The common yield for funding purchases throughout the
three months ended March 31, 2022 was roughly 2.9%.

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RIVERSOURCE LIFE INSURANCE COMPANY
The reinvestment of proceeds from maturities, calls and prepayments at charges
beneath the present portfolio yield, which can be beneath the extent of some
legal responsibility GMIRs, can have a adverse affect to future working outcomes. To
mitigate the unfavorable affect that the low rate of interest setting has on
the Firm’s unfold revenue, it assesses reinvestment danger in its funding
portfolio and displays this danger in accordance with its asset/legal responsibility
administration framework. As well as, the Firm might scale back the crediting charges on
its fastened merchandise when warranted, topic to assured minimums.

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Along with the fastened fee exposures famous above, the Firm additionally has the
following variable annuity assure advantages: assured minimal withdrawal
advantages (“GMWB”), assured minimal accumulation advantages (“GMAB”), assured
minimal loss of life advantages (“GMDB”) and assured minimal revenue advantages (“GMIB”).
Every of those advantages ensures payouts to the annuity holder underneath sure
particular situations whatever the efficiency of the underlying invested
property.

The variable annuity ensures proceed to be managed by using a hedging
program which makes an attempt to match the sensitivity of the property with the
sensitivity of the liabilities. This strategy works with the premise that
matched sensitivities will produce a extremely efficient hedging outcome. The
Firm’s complete hedging program focuses primarily on first order
sensitivities of property and liabilities: Fairness Market Stage (Delta), Curiosity
Price Stage (Rho) and Volatility (Vega). Moreover, varied second order
sensitivities are managed. The Firm makes use of varied choices, swaptions, swaps
and futures to handle danger exposures. The exposures are measured and monitored
day by day and changes to the hedge portfolio are made as obligatory.

The Firm has a macro hedge program to offer safety in opposition to the
statutory tail situation danger arising from variable annuity reserves on its
statutory surplus and to cowl a few of the residual dangers not lined by different
hedging actions. The Firm assesses this residual danger underneath a variety of
situations in creating and executing the macro hedge program. As a method of
economically hedging these dangers, the Firm might use a mixture of futures,
choices, swaps and swaptions. Sure of the macro hedge derivatives used
include settlement provisions linked to each fairness returns and rates of interest;
the remaining are rate of interest contracts or fairness contracts. The macro hedge
program may lead to extra earnings volatility as adjustments within the worth
of the macro hedge derivatives, that are designed to scale back statutory capital
volatility, will not be carefully aligned to adjustments within the variable annuity
assure embedded derivatives.

To guage rate of interest and fairness value danger, the Firm performs
sensitivity testing which measures the affect on pretax revenue from the sources
listed beneath for a 12-month interval following a hypothetical 100 foundation level
improve in rates of interest or a hypothetical 10% decline in fairness costs. The
rate of interest danger check assumes a sudden 100 foundation level parallel shift within the
yield curve, with charges then staying at these ranges for the subsequent 12 months. The
fairness value danger check assumes a sudden 10% drop in fairness costs, with fairness
costs then staying at these ranges for the subsequent 12 months. In estimating the
values of variable annuity riders, listed annuities, IUL insurance coverage and the
related hedge property, the Firm assumed no change in implied market
volatility regardless of the ten% drop in fairness costs.

The next tables current the Firm’s estimate of the affect on pretax
revenue from the above outlined hypothetical market actions as of March 31,
2022:

Fairness Worth Publicity to Pretax Earnings
Fairness Worth Decline 10% Earlier than Hedge Impression Hedge Impression Internet Impression
(in hundreds of thousands)
Asset-based charges and bills $ (66) $ – $ (66)
DAC and DSIC amortization (1) (2) (26) – (26)
Variable annuities:
GMDB and GMIB (2) (12) – (12)
GMWB (2) (499) 556 57
GMAB (27) 28 1
Structured variable annuities 397 (365) 32
DAC and DSIC amortization (3) N/A N/A (12)
Whole variable annuities (141) 219 66
Macro hedge program (4) – 119 119

IUL insurance coverage 66 (71) (5)
Whole $ (167) $ 267 $ 88

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RIVERSOURCE LIFE INSURANCE COMPANY

Curiosity Price Publicity to Pretax Earnings
Curiosity Price Enhance 100 Foundation Factors Earlier than Hedge Impression Hedge Impression Internet Impression
(in hundreds of thousands)
Asset-based charges and bills $ (14) $ – $ (14)
Variable annuities:

GMWB 1,031 (1,263) (232)
GMAB 9 (12) (3)
Structured variable annuities (20) 117

97

DAC and DSIC amortization (3) N/A N/A 21
Whole variable annuities 1,020 (1,158) (117)
Macro hedge program (4) – (1) (1)

Fastened annuities, fastened insurance coverage and stuck portion of variable
annuities and variable insurance coverage merchandise

53 – 53
IUL insurance coverage 19 2 21
Whole $ 1,078$ (1,157)$ (58)

N/A Not Relevant.

(1) Market affect on DAC and DSIC amortization ensuing from decrease projected
income.

(2) In estimating the affect to pretax revenue on DAC and DSIC amortization and
extra insurance coverage profit reserves, the assumed fairness asset progress charges
replicate what administration would observe in its imply reversion pointers.

(3) Market affect on DAC and DSIC amortization associated to variable annuity
riders is modeled web of hedge affect.

(4) The market affect of the macro hedge program is modeled web of any associated
affect to DAC and DSIC amortization.

The above outcomes examine to an estimated optimistic web affect to pretax revenue
of $98 million associated to a ten% fairness value decline and an estimated adverse
web affect to pretax revenue of $170 million associated to a 100 foundation level
improve in rates of interest as of December 31, 2021. The change in rate of interest
publicity as of March 31, 2022 in comparison with December 31, 2021 was pushed by
variable annuity riders, particularly GMWB, primarily resulting from adjustments in market
charges.

Internet impacts proven within the above desk from GMWB riders outcome largely from
variations between the legal responsibility valuation foundation and the hedging foundation.
Liabilities are valued utilizing honest worth accounting ideas, with danger margins
included in contractholder habits assumptions and with low cost charges
elevated to replicate a present market estimate of the Firm’s danger of
nonperformance particular to those liabilities. The Firm’s hedging is predicated on
its dedication of financial danger, which excludes sure objects within the
legal responsibility valuation together with the nonperformance unfold danger.

Precise outcomes will differ materially from these illustrated above as they’re
primarily based on numerous estimates and assumptions. These embrace assuming that
implied market volatility doesn’t change when fairness costs fall by 10% and
that the 100 foundation level improve in rates of interest is a parallel shift of the
yield curve. Moreover, the Firm has not tried to anticipate adjustments in
consumer preferences for several types of property or different adjustments in consumer
habits, nor has the Firm tried to anticipate all strategic actions
administration may take to extend revenues or scale back bills in these
situations.

The choice of a 100 foundation level rate of interest improve in addition to a ten%
fairness value decline shouldn’t be construed as a prediction of future market
occasions. Impacts of bigger or smaller adjustments in rates of interest or fairness costs
will not be proportional to these proven for a 100 foundation level improve in
rates of interest or a ten% decline in fairness costs.

Truthful Worth Measurements

The Firm studies sure property and liabilities at honest worth; particularly,
separate account property, derivatives, embedded derivatives, most investments and
money equivalents. Truthful worth assumes the alternate of property or liabilities
happens in orderly transactions and isn’t the results of a compelled liquidation or
distressed sale. The Firm contains precise market costs, or observable
inputs, in its honest worth measurements to the extent out there. Dealer quotes
are obtained when quotes from pricing companies are usually not out there. The Firm
validates costs obtained from third events by a wide range of means reminiscent of:
value variance evaluation, subsequent gross sales testing, stale value evaluation, value
comparability throughout pricing distributors and due diligence opinions of distributors. See Observe
11 to the Consolidated Monetary Statements for added info on the
Firm’s honest worth measurements.

Truthful Worth of Liabilities and Nonperformance Danger

Corporations are required to measure the honest worth of liabilities on the value
that may be obtained to switch the legal responsibility to a market participant (an
exit value). Since there may be not a marketplace for the Firm’s obligations of its
variable annuity riders, fastened deferred listed annuities, structured variable
annuities, and IUL insurance coverage, the Firm considers the assumptions individuals
in a hypothetical market would make to replicate an exit value. In consequence, the
Firm adjusts the valuation of variable annuity riders, fastened deferred listed
annuities, structured variable annuities, and IUL insurance coverage by updating sure
contractholder assumptions,

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RIVERSOURCE LIFE INSURANCE COMPANY
including specific margins to offer for danger, and adjusting the charges used to
low cost anticipated money flows to replicate a present market estimate of the
Firm’s nonperformance danger. The nonperformance danger adjustment is predicated on
observable market information adjusted to estimate the chance of the Firm not
fulfilling these liabilities. In keeping with common market situations, this
estimate resulted in a ramification over the LIBOR swap curve as of March 31, 2022. As
the Firm’s estimate of this unfold widens or tightens, the legal responsibility will
lower or improve. If this nonperformance credit score unfold strikes to a zero
unfold over the LIBOR swap curve, the discount to future web revenue can be
roughly $420 million, web of DAC, DSIC, unearned income amortization, the
reinsurance accrual and revenue taxes (calculated on the statutory tax fee of
21%), primarily based on March 31, 2022 credit score spreads.

Liquidity and Capital Sources

Liquidity Technique

The liquidity necessities of the Firm are typically met by funds offered by
funding revenue, maturities and periodic repayments of investments, premiums
and proceeds from gross sales of investments, fastened annuity and stuck insurance coverage
deposits in addition to capital contributions from its mum or dad, Ameriprise Monetary
Inc. (“Ameriprise Monetary”). Different liquidity sources the Firm has
established are short-term borrowings and out there strains of credit score with
Ameriprise Monetary aggregating $854 million.

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The Firm enters into short-term borrowings, which can embrace repurchase
agreements and Federal Residence Mortgage Financial institution (“FHLB”) advances to scale back reinvestment
danger. Quick-term borrowings permit the Firm to obtain money to reinvest in
longer-duration property, whereas sustaining the flexibleness to pay again the
short-term debt with money flows generated by the fastened revenue portfolio.
RiverSource Life Insurance coverage Firm is a member of the FHLB of Des Moines, which
offers RiverSource Life Insurance coverage Firm entry to collateralized borrowings.
As of each March 31, 2022 and December 31, 2021, the Firm had estimated
most borrowing capability of $4.0 billion underneath the FHLB facility, of which
$200 million was excellent as of each March 31, 2022 and December 31, 2021,
and is collateralized with industrial mortgage backed securities.

There have been no materials adjustments to the Firm’s contractual obligations
disclosed within the Firm’s 2021 10-Okay.

See Observe 10 to the Consolidated Monetary Statements for additional info
concerning the Firm’s long-term debt.

The first makes use of of funds are coverage advantages, commissions, different
product-related acquisition and gross sales inducement prices, working bills,
coverage loans, dividends to Ameriprise Monetary and funding purchases. The
Firm routinely opinions its sources and makes use of of funds so as to meet its
ongoing obligations. The Firm believes these money flows will likely be enough to
fund its short-term and long-term working liquidity wants and dividends to
Ameriprise Monetary.

In 2009, the Firm established an settlement to guard its publicity to
Genworth Life Insurance coverage Firm (“GLIC”) for its reinsured long run care
(“LTC”). In 2016, substantial enhancements to this reinsurance safety
settlement have been finalized. The phrases of those confidential provisions throughout the
settlement have been shared, within the regular course of standard opinions, with the
Firm’s domiciliary regulator and score businesses. GLIC is domiciled in
Delaware, so within the occasion GLIC have been subjected to rehabilitation or insolvency
proceedings, such proceedings can be positioned in (and ruled by) Delaware
legal guidelines. Delaware courts have a protracted custom of respecting industrial and
reinsurance affairs in addition to contracts amongst subtle events. Related
credit score protections to what the Firm has with GLIC have been examined and
revered in Delaware and elsewhere in the USA, and consequently the
Firm believes its credit score protections can be revered even within the unlikely
occasion that GLIC turns into topic to rehabilitation or insolvency proceedings in
Delaware. Accordingly, whereas no credit score protections are excellent, the Firm
believes the right means to consider the dangers represented by its
counterparty credit score publicity to GLIC is just not the complete quantity of the gross
legal responsibility that GLIC reinsures, however a a lot smaller web publicity to GLIC (if any
which may exist after making an allowance for the Firm’s credit score protections).
Thus, administration believes that this settlement and offsetting non LTC legacy
preparations with Genworth will allow the Firm to get better on all web
publicity in all materials respects within the occasion of a rehabilitation or insolvency
of GLIC.

Capital Exercise

Money dividends or distributions paid and obtained by RiverSource Life Insurance coverage
Firm have been as follows:
Three Months Ended March 31,
2022 2021
(in hundreds of thousands)
Paid to Ameriprise Monetary $ 300 $ 250

For dividends or distributions from the life insurance coverage firms, notifications
to state insurance coverage regulators have been made upfront of funds in extra of
statutorily outlined thresholds.

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RIVERSOURCE LIFE INSURANCE COMPANY

Regulatory Capital

RiverSource Life Insurance coverage Firm and RiverSource Lifetime of NY are topic to
regulatory capital necessities. Precise capital, decided on a statutory
foundation, and regulatory capital necessities for every of the life insurance coverage
entities have been as follows:
Regulatory Capital
Precise Capital (1) Necessities (2)
December 31, December 31,
March 31, 2022 2021 2021
(in hundreds of thousands)
RiverSource Life Insurance coverage Firm $ 3,131$ 3,419 $ 502
RiverSource Life Insurance coverage Co. of NY 273 310 42

(1) Precise capital, as outlined by the Nationwide Affiliation of Insurance coverage
Commissioners for functions of assembly regulatory capital necessities, contains
statutory capital and surplus, plus sure statutory valuation reserves.

(2) Regulatory capital requirement is the corporate motion degree and is predicated on
the statutory risk-based capital submitting. The regulatory capital requirement is
solely required to be calculated yearly.

Ahead-Wanting Statements

This report accommodates forward-looking statements that replicate the Firm’s
plans, estimates and beliefs. The Firm’s precise outcomes may differ
materially from these described in these forward-looking statements. Examples of
such forward-looking statements embrace:

•statements of the Firm’s plans, intentions, expectations, targets, or
targets, together with these associated to the introduction, cessation, phrases or pricing
of recent or present services and products and the consolidated tax fee;

•statements of the Firm’s place, future efficiency and skill to pursue
enterprise technique relative to the unfold and affect of the COVID-19 pandemic and
the associated market, financial, consumer, governmental and healthcare system
response;

•statements concerning the anticipated development within the shift to lower-risk merchandise,
together with the exit from variable annuities with residing profit riders and the
discontinuance of recent gross sales of common life insurance coverage with secondary
ensures;

•different statements about future financial efficiency, the efficiency of fairness
markets and rate of interest variations and the financial efficiency of the United
States and of worldwide markets; and

•statements of assumptions underlying such statements.

The phrases “consider,” “count on,” “anticipate,” “optimistic,” “intend,” “plan,”
“goal,” “will,” “might,” “ought to,” “may,” “would,” “probably,” “forecast,” “on
observe,” “challenge,” “proceed,” “in a position to stay,” “resume,” “ship,” “develop,”
“evolve,” “drive,” “allow,” “flexibility,” “situation,” “case” and comparable
expressions are supposed to determine forward-looking statements however are usually not the
unique technique of figuring out such statements. Ahead-looking statements are
topic to dangers and uncertainties which may trigger precise outcomes to vary
materially from such statements.

Such components embrace, however are usually not restricted to:

•the impacts on the Firm’s enterprise of the COVID-19 pandemic and the associated
financial, consumer, governmental and healthcare system responses;

•market fluctuations and common financial and political components, together with
volatility within the U.S. and world market situations, consumer habits and
volatility within the markets for the Firm’s merchandise;

•adjustments in rates of interest and intervals of low rates of interest;

•adversarial capital and credit score market situations or any downgrade within the Firm’s
credit score scores;

•results of competitors and the Firm’s bigger opponents’ economies of
scale;

•declines within the Firm’s funding administration efficiency;

•the Firm’s and its associates’ skill to compete in attracting and
retaining expertise, together with AFS attracting and retaining monetary advisors;

•impairment, adverse efficiency or default by monetary establishments or different
counterparties;

•poor efficiency of the Firm’s variable merchandise;

•adjustments in valuation of securities and investments included within the Firm’s
property;

•results of the elimination of LIBOR on, and worth of, securities and different
property and liabilities tied to LIBOR;

•the dedication of the quantity of allowances taken on loans and investments;

•the illiquidity of the Firm’s investments;

•failures by different insurers that result in greater assessments the Firm owes to
state insurance coverage warranty funds;

•failures or defaults by counterparties to the Firm’s reinsurance
preparations;

•insufficient reserves for future coverage advantages and claims or for future
redemptions and maturities;

•deviations from the Firm’s assumptions concerning morbidity, mortality and
persistency affecting the Firm’s profitability;

•adjustments to the Firm’s or its associates’ repute arising from worker or
agent misconduct or in any other case;

•direct or oblique results of or responses to local weather change;

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RIVERSOURCE LIFE INSURANCE COMPANY

•interruptions or different failures within the Firm’s working programs and
networks, together with errors or failures brought on by third-party service suppliers,
interference or third-party assaults;

•interruptions or different errors within the Firm’s telecommunications or information
processing programs;

•identification and mitigation of danger publicity in market environments, new
merchandise, distributors and different sorts of danger;

•prevalence of pure or man-made disasters and catastrophes;

•authorized and regulatory actions introduced in opposition to the Firm;

•adjustments to legal guidelines and laws that govern operation of the Firm’s
enterprise;

•adjustments in company tax legal guidelines and laws and interpretations and
determinations of tax legal guidelines impacting the Firm’s merchandise;

•safety of the Firm’s mental property and claims the Firm
infringes the mental property of others; and

•adjustments in and the adoption of recent accounting requirements.

The Firm cautions the reader that the foregoing checklist of things is just not
exhaustive. There may additionally be different dangers that the Firm is unable to foretell
right now which will trigger precise outcomes to vary materially from these in
forward-looking statements. Readers are cautioned to not place undue reliance on
these forward-looking statements, which converse solely as of the date on which they
are made. The Firm undertakes no obligation to replace publicly or revise any
forward-looking statements. The foregoing checklist of things needs to be learn in
conjunction with the “Danger Elements” dialogue included in Half I, Merchandise 1A of
the Firm’s 2021 10-Okay.

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