Voya Retirement Insurance and Annuity Co.

08/10/2026 | Press release | Distributed by Public on 08/10/2026 09:36

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Narrative Analysis of the Results of Operations and Financial Condition
For the purposes of this discussion, the terms "VRIAC", "the Company", "we", "our", and "us" refer to Voya Retirement Insurance and Annuity Company and its subsidiaries. We are a direct, wholly owned subsidiary of Voya Holdings Inc., which is a direct, wholly owned subsidiary of Voya Financial, Inc. ("Voya Financial" or "Parent").
The following discussion and analysis presents a review of our condensed consolidated results of operations for the three and six months ended June 30, 2026 and 2025 and financial condition as of June 30, 2026 and December 31, 2025. This item should be read in its entirety and in conjunction with the Condensed Consolidated Financial Statements and related notes contained in Part I, Item 1. of this Quarterly Report on Form 10-Q, as well as "Management's Narrative Analysis of the Results of Operations and Financial Condition" section contained in our Annual Report on Form 10-K.
In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in the forward-looking statements as a result of various factors. See the Note Concerning Forward-Looking Statements.
Overview
VRIAC is a stock life insurance company domiciled in the State of Connecticut. VRIAC and its wholly owned subsidiaries (collectively, the "Company") provide financial products and services in the United States. VRIAC is authorized to conduct its insurance business in all states and in the District of Columbia, Guam, Puerto Rico and the Virgin Islands.
Business Update
On January 2, 2025, our ultimate parent, Voya Financial, acquired the full-service retirement plan business of OneAmerica Financial. This acquisition was accomplished through the purchase of legal entities and an indemnity reinsurance agreement through which we will administer group annuity contracts on behalf of American United Life Insurance Company, an affiliate of OneAmerica Financial. As a result of the application of pushdown accounting associated with the acquisition, we recognized Additional paid-in capital of $175 million in the first quarter of 2025.
Results of Operations
The following table presents our Condensed Consolidated Statements of Operations for the periods indicated:
($ in millions)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Revenues:
Net investment income $ 407 $ 434 $ (27) $ 840 $ 847 $ (7)
Fee income 349 317 32 689 633 56
Premiums (5) (4) (1) (3) (5) 2
Net gains (losses) (56) (50) (6) (107) (69) (38)
Other revenue 26 19 7 46 39 7
Total revenues 721 716 5 1,465 1,445 20
Benefits and expenses:
Interest credited and other benefits to contract owners/policyholders 212 209 3 437 416 21
Operating expenses 345 323 22 681 646 35
Net amortization of DAC and VOBA 25 26 (1) 50 51 (1)
Interest expense 1 - 1 1 1 -
Total benefits and expenses 583 558 25 1,169 1,114 55
Income (loss) before income taxes
138 158 (20) 296 331 (35)
Income tax expense (benefit)
15 20 (5) 34 43 (9)
Net income (loss)
$ 123 $ 138 $ (15) $ 262 $ 288 $ (26)
Three Months Ended June 30, 2026 compared to Three Months Ended June 30, 2025
Total revenues
Total revenues increased $5 million from $716 million to $721 million. The following items contributed to the overall increase.
Net investment income decreased $27 million from $434 million to $407 million primarily due to:
•overall market impacts to limited partnership valuations.
The decrease was partially offset by:
•higher investment income on fixed maturity securities primarily due to prepayments and actions to improve the portfolio yield.
Fee income increased $32 million from $317 million to $349 million primarily due to:
•higher average equity markets; and
•business growth.
Total benefits and expenses
Total benefits and expenses increased $25 million from $558 million to $583 million. The following items contributed to the overall increase.
Operating expenses increased $22 million from $323 million to $345 million primarily due to:
•higher expenses driven by investments and business growth.
The decrease was partially offset by:
•disciplined management of spend.
Six Months Ended June 30, 2026 compared to Six Months Ended June 30, 2025
Total revenues
Total revenues increased $20 million from $1,445 million to $1,465 million. The following items contributed to the overall increase.
Fee income increased $56 million from $633 million to $689 million primarily due to:
•higher average equity markets.
Net gains (losses) worsened $38 million from a loss of $69 million to a loss of $107 million primarily due to:
•an unfavorable change in mark-to-market adjustments on securities subject to fair value option accounting primarily due to interest rate movements.
This was partially offset by:
•net favorable changes in derivative valuations due to interest rate movements.
Total benefits and expenses
Total benefits and expenses increased $55 million from $1,114 million to $1,169 million. The following items contributed to the overall increase.
Interest credited and other benefits to contract owners/policyholders increased $21 million from $416 million to $437 million primarily due to:
•an unfavorable change in market risk benefits driven by equity market performance and interest rate movements.
Operating expenses increased $35 million from $646 million to $681 million primarily due to:
•higher expenses driven by investments and business growth.
This was partially offset by:
•disciplined management of spend.
Liquidity and Capital Resources
Liquidity refers to our ability to access sufficient sources of cash to meet the requirements of our operating, investing and financing activities. Capital refers to our long-term financial resources available to support business operations and future growth. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of the businesses, timing of cash flows on investments and products, general economic conditions and access to the capital markets and the other sources of liquidity and capital described herein.
The following discussion presents an analysis of our sources and uses of liquidity and capital and should be read in its entirety and in conjunction with the Off-Balance Sheet Arrangements discussion included further below.
Liquidity Management
Our principal available sources of liquidity are product charges, investment income, proceeds from the maturity and sale of investments, proceeds from various borrowing channels and facilities, repurchase agreements, contract deposits, securities
lending and capital contributions. Primary uses of these funds are payments of policyholder benefits, commissions and operating expenses, interest credits, investment purchases and contract maturities, withdrawals and surrenders and payment of dividends.
Our liquidity position is managed by maintaining adequate levels of liquid assets, such as cash, cash equivalents and short-term investments. As part of the liquidity management process, different scenarios are modeled to determine whether existing assets are adequate to meet projected cash flows. Key variables in the modeling process include interest rates, equity market movements, quantity and type of interest and equity market hedges, anticipated contract owner behavior, market value of the general account assets, variable separate account performance and implications of rating agency actions.
The fixed account liabilities are supported by a general account portfolio, principally composed of fixed rate investments with matching duration characteristics that can generate predictable, steady rates of return. The portfolio management strategy for the fixed account considers the assets available-for-sale. This strategy enables us to respond to changes in market interest rates, prepayment risk, relative values of asset sectors and individual securities and loans, credit quality outlook and other relevant factors. The objective of portfolio management is to maximize returns, taking into account interest rate and credit risk, as well as other risks. Our asset-liability management discipline includes strategies to minimize exposure to loss as interest rates and economic and market conditions change. In executing this strategy, we use derivative instruments to manage these risks. Our derivative counterparties are of high credit quality.
Additional Sources of Liquidity
Additional sources of liquidity include borrowing facilities to meet short-term cash requirements that arise in the ordinary course of business. For information regarding our reciprocal loan agreement with Voya Financial, see Note 12, Financing Agreements in our Condensed Consolidated Financial Statements in Part I, Item 1. of this Quarterly Report on Form 10-Q.
We hold approximately 40.9% of our assets in marketable securities. These assets include cash, U.S. Treasuries, agencies, corporate bonds, ABS, CMBS and collateralized mortgage obligations ("CMO") and equity securities. In the event of a temporary liquidity need, cash may be raised by entering into repurchase agreements or security lending agreements by temporarily lending securities and receiving cash collateral. Under our Liquidity Plan, up to 12% of our general account statutory invested assets may be allocated to repurchase and securities lending programs. At the time a temporary cash need arises, the actual percentage of statutory invested assets available for repurchase transactions will depend upon outstanding allocations to these programs. As of June 30, 2026, VRIAC had securities lending collateral assets of $602 million, which represents approximately 1.9% of its general account statutory invested assets. Management believes that our sources of liquidity are adequate to meet our short-term cash obligations.
Capital Contributions and Dividends
During the six months ended June 30, 2026, VRIAC received $3 million capital contributions from its Parent. During the six months ended June 30, 2025, VRIAC recognized $175 million in Additional paid-in capital as a result of the application of pushdown accounting associated with the Company's ultimate parent, Voya Financial, acquisition of OneAmerica Financial's full-service retirement plan business. During the six months ended June 30, 2026 and 2025, VRIAC paid ordinary dividends to its Parent of $373 million and $394 million, respectively.
Ratings
Our access to funding and our related cost of borrowing, collateral requirements for derivative instruments and the attractiveness of certain of our products to customers are affected by our credit ratings and insurance financial strength ratings, which are periodically reviewed by the rating agencies. Financial strength ratings and credit ratings are important factors affecting public confidence in an insurer and its competitive position in marketing products. Credit ratings are also important to our ability to raise liquidity through various borrowing channels and facilities, and for the cost of such financing.
A downgrade in our credit ratings or the credit or financial strength ratings of our Parent or rated affiliates could have a material adverse effect on our results of operations and financial condition. See A downgrade or a potential downgrade in our financial strength or credit ratings may result in a loss of business and adversely affect our results of operations and financial condition in Risk Factors in Part I, Item 1A. of our Annual Report on Form 10-K.
Financial strength ratings represent the opinions of rating agencies regarding the financial ability of an insurance company to meet its obligations under an insurance policy. Credit ratings represent the opinions of rating agencies regarding an entity's
ability to repay its indebtedness. These ratings are not a recommendation to buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the rating organization.
Rating agencies use an "outlook" statement for both industry sectors and individual companies. A stable outlook from rating agencies is an opinion generally indicating that the rating is not likely to change over the medium term.
Our financial strength rating as of the date of this Quarterly Report on Form 10-Q are summarized in the following table.
Rating Agency
Fitch, Inc. Moody's Investors Service, Inc. Standard & Poor's
Company
("Fitch")(1)
("Moody's")(2)
("S&P")(3)
Voya Retirement Insurance and Annuity Company
Financial Strength Rating
A+/stable
A2/stable
A+/stable
(1) Fitch's financial strength rating for insurance companies ranges from "AAA (exceptionally strong)" to "C (distressed)." Long-term credit ratings range from "AAA (highest credit quality)," which denotes exceptionally strong capacity for timely payment of financial commitments, to "D (default)."
(2) Moody's financial strength ratings for insurance companies range from "Aaa (exceptional)" to "C (lowest)." Numeric modifiers are used to refer to the ranking within the group with 1 being the highest and 3 being the lowest. These modifiers are used to indicate relative strength within a category. Long-term credit ratings range from "Aaa (highest)" to "C (default)."
(3) S&P's financial strength ratings for insurance companies range from "AAA (extremely strong)" to "D (default)." Long-term credit ratings range from "AAA (extremely strong)" to "D (default)."
In December 2025, Moody's confirmed its outlook for the U.S. life insurance sector as stable and Fitch confirmed its neutral outlook for the North American life insurance sector.
Off-Balance Sheet Arrangements
Off-balance sheet arrangements are mostly related to commitments to either purchase or sell securities, mortgage loans or money market instruments, at a specified future date and at a specified price or yield. In addition, off-balance sheet arrangements include obligations to return non-cash collateral under our securities lending program. Non-cash collateral received in connection with the securities lending program may not be sold or re-pledged by our lending agent, except in the event of default. For information regarding off-balance sheet arrangements, see Note 2, Investments and Note 13, Commitments and Contingencies in our Condensed Consolidated Financial Statements in Part I, Item 1. of this Quarterly Report on Form 10-Q.
Critical Accounting Judgments and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical estimates and assumptions are evaluated on an ongoing basis based on historical developments, market conditions, industry trends and other information that is reasonable under the circumstances. While these estimates are based on management's judgment and current information, actual results may differ, and such differences may require future accounting adjustments to reflect changes in these estimates and assumptions, which could be material to the accompanying Condensed Consolidated Financial Statements.
In developing these accounting estimates, we make subjective and complex judgments that are inherently uncertain and subject to material changes as facts and circumstances develop. Although variability is inherent in these estimates, we believe that the amounts provided are appropriate based on the facts available upon preparation of the Condensed Consolidated Financial Statements.
For further information, refer to the critical accounting estimates described in Note 1, Business, Basis of Presentation and Significant Accounting Policies in our Consolidated Financial Statements in Part II, Item 8. of our Annual Report on Form 10-K.
As of June 30, 2026, there have been no material changes to the disclosures made in Critical Accounting Judgments and Estimates in Part II, Item 7. of our Annual Report on Form 10-K.
Income Taxes
In August 2022, the Inflation Reduction Act of 2022 was signed into law, which includes a 15% corporate alternative minimum tax ("CAMT"). The CAMT is effective in taxable years beginning after December 31, 2022. In September 2024, the Department of Treasury issued proposed regulations providing additional guidance on the CAMT. While we do not expect to be subject to the CAMT for 2026, we are continuing to review the proposed regulations, and our CAMT determination will need to be evaluated in light of future guidance.
See Note 11, Income Taxes to our Condensed Consolidated Financial Statements in Part I, Item 1. of this Quarterly Report on Form 10-Q for more information on income taxes.
Investments
See Note 2, Investments to our Condensed Consolidated Financial Statements in Part I, Item 1. of this Quarterly Report on Form 10-Q for more information on investments. Additionally, see the Condensed Consolidated Balance Sheets to our Condensed Consolidated Financial Statements Part I, Item 1. of this Quarterly Report on Form 10-Q for a composition of our investment portfolio.
Fixed Maturities Credit Quality - Ratings
The following tables present credit quality of fixed maturities, including securities pledged, using NAIC designations as of the dates indicated:
($ in millions) June 30, 2026
NAIC Quality Designation 1 2 3 4 5 6 Total Fair Value
U.S. Treasuries $ 527 $ - $ - $ - $ - $ - $ 527
U.S. Government agencies and authorities 28 - - - - - 28
State, municipalities and political subdivisions 299 17 2 - - - 318
U.S. corporate public securities 2,056 3,960 186 11 - - 6,213
U.S. corporate private securities 1,857 2,314 208 31 12 - 4,422
Foreign corporate public securities and foreign governments(1)
676 1,357 122 1 5 - 2,161
Foreign corporate private securities(1)
472 1,607 70 25 4 - 2,178
Residential mortgage-backed securities 3,065 26 2 2 6 1 3,102
Commercial mortgage-backed securities 1,419 107 57 40 22 4 1,649
Other asset-backed securities 1,564 244 8 4 - 101 1,921
Total fixed maturities $ 11,963 $ 9,632 $ 655 $ 114 $ 49 $ 106 $ 22,519
% of Fair Value 53.1% 42.8% 2.9% 0.5% 0.2% 0.5% 100.0%
(1) Primarily U.S. dollar denominated.
($ in millions) December 31, 2025
NAIC Quality Designation 1 2 3 4 5 6
Total Fair Value
U.S. Treasuries $ 470 $ - $ - $ - $ - $ - $ 470
U.S. Government agencies and authorities 28 - - - - - 28
State, municipalities and political subdivisions 339 18 2 - - - 359
U.S. corporate public securities 1,951 3,882 170 9 - - 6,012
U.S. corporate private securities 1,928 2,251 245 41 8 - 4,473
Foreign corporate public securities and foreign governments(1)
648 1,355 144 10 - - 2,157
Foreign corporate private securities(1)
419 1,737 81 7 4 - 2,248
Residential mortgage-backed securities 3,196 27 3 - 10 1 3,237
Commercial mortgage-backed securities 1,620 142 55 39 20 3 1,879
Other asset-backed securities 1,689 197 9 6 - 74 1,975
Total fixed maturities $ 12,288 $ 9,609 $ 709 $ 112 $ 42 $ 78 $ 22,838
% of Fair Value 53.8% 42.1% 3.1% 0.5% 0.2% 0.3% 100.0%
(1) Primarily U.S. dollar denominated.
The following tables present credit quality of fixed maturities, including securities pledged, using NAIC acceptable rating organizations ("ARO") ratings as of the dates indicated:
($ in millions) June 30, 2026
ARO Quality Ratings AAA AA A BBB BB and Below Total Fair Value
U.S. Treasuries $ - $ 527 $ - $ - $ - $ 527
U.S. Government agencies and authorities - 28 - - - 28
State, municipalities and political subdivisions 18 169 110 17 4 318
U.S. corporate public securities 13 274 1,881 3,848 197 6,213
U.S. corporate private securities 28 231 1,545 2,254 364 4,422
Foreign corporate public securities and foreign governments(1)
- 60 626 1,345 130 2,161
Foreign corporate private securities(1)
- 39 412 1,613 114 2,178
Residential mortgage-backed securities 943 1,996 18 24 121 3,102
Commercial mortgage-backed securities 58 878 265 332 116 1,649
Other asset-backed securities 346 254 931 244 146 1,921
Total fixed maturities $ 1,406 $ 4,456 $ 5,788 $ 9,677 $ 1,192 $ 22,519
% of Fair Value 6.2 % 19.8 % 25.7 % 43.0 % 5.3 % 100.0 %
(1) Primarily U.S. dollar denominated.
($ in millions) December 31, 2025
ARO Quality Ratings AAA AA A BBB BB and Below Total Fair Value
U.S. Treasuries $ - $ 470 $ - $ - $ - $ 470
U.S. Government agencies and authorities - 28 - - - 28
State, municipalities and political subdivisions 15 205 119 18 2 359
U.S. corporate public securities 16 244 1,814 3,761 177 6,012
U.S. corporate private securities 22 223 1,663 2,162 403 4,473
Foreign corporate public securities and foreign governments(1)
- 77 591 1,332 157 2,157
Foreign corporate private securities(1)
- 23 381 1,723 121 2,248
Residential mortgage-backed securities 976 2,117 20 25 99 3,237
Commercial mortgage-backed securities 69 966 298 420 126 1,879
Other asset-backed securities 330 336 999 199 111 1,975
Total fixed maturities $ 1,428 $ 4,689 $ 5,885 $ 9,640 $ 1,196 $ 22,838
% of Fair Value 6.3 % 20.5 % 25.8 % 42.2 % 5.2 % 100.0 %
(1) Primarily U.S. dollar denominated.
Fixed maturities rated BB and below may have speculative characteristics and changes in economic conditions or other circumstances that are more likely to lead to a weakened capacity of the issuer to make principal and interest payments than is the case with higher rated fixed maturities.
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