# TRANSAMERICA INVESTORS SECURITIES CORPORATION X-17A-5 (2021-03-01) — Broker-dealer annual report - Company: TRANSAMERICA INVESTORS SECURITIES CORPORATION - Form: X-17A-5 - Filed: 2021-03-01 - Period: 2020-12-31 - Accession: 0000902909-21-000002 - CIK: 902909 - File #: 8-45671 - Material weakness: No - Auditor: Pricewaterhouse Coopers, LLC - Auditor location: Chicago, NY - Contact: Enna M Calvi - Phone: 914-627-3649 - Signed by: Enna M Calvi (Financial & Operations Principal) Original filing: https://www.sec.gov/Archives/edgar/data/902909/000090290921000002/tiscnc.pdf --- {0}------------------------------------------------ ## FINANCIAL STATEMENT Transamerica Investors Securities Corporation Year Ended December 31 , 2020 With Report of Independent Registered Public Accounting Firm *(Pursuant to Rule 17a-5(e)(3) under the Securities Exchange Act of 1934)* {1}------------------------------------------------ #### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** | 0MB APPROVAL | | | | |---------------------------|-----------------|--|--| | OMBNumber: | 3235-0123 | | | | Expires: | March 31 , 2021 | | | | Estimated average burden | | | | | hours perresponse 12.00 | | | | SEC FILE NUMBER **8-45671** | ANNUAL AUDITED REPORT | |-----------------------| | FORM X-17A-5 | | PART III | **FACING PAGE** ## **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | REPORT FOR THE PERIOD BEGINNING | 01/01/20 | AND ENDING | 12/31/20 | | | | | |-----------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|--------------------------------------------------------|---------------------|-----------------------------------|--|--|--| | A. REGISTRANT IDENTIFICATION | | | | | | | | | NAME OF BROKER-DEALER:
Transamerica Investors Securities Corporation
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | OFFICIAL USE ONLY
FIRMI.D. NO. | | | | | 440 Mamaroneck A venue | | (No. and Street) | | | | | | | Harrison
(City) | NY | (State) | 10528 | (Zip Code) | | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | | | | | Enna M. Calvi | (914) 627-3649 | | | | | | | | | | B. ACCOUNTANT IDENTIFICATION | | (Area Code - Telephone Number) | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
PricewaterhouseCoopers LLP | | | | | | | | | | | (Name - if individual, state last, first, middle name) | | | | | | | 1 N. Wacker Drive,
(Address) | Chicago
(City) | | Illinois
(State) | 60606
(Zip Code) | | | | | CHECK ONE:
(X) Certified Public Accountant
( ) Public Accountant
( ) Accountant not resident in United States or any of its possessions. | | FOR OFFICIAL USE ONLY | | | | | | | *Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant | | | | | | | | *must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2)* **Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid 0MB control number.** SEC 1410 (06-02) {2}------------------------------------------------ #### **Oath or Affirmation** I, E1111a M. Calvi, swear(or affinn) that, to the best ofmy knowledge and belief the accompanying financial statement and supporting schedules pertaining to the finn of Transamerica Investors Securities Corporation as of December 31, 2020, are true and correct. I further swear (or affinn) that neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer. **THERESA J. FAHEY** Notary Public, State of New York No. 01 FA6350554 Qualified in Westchester County l / Term Expires November 14, ~ 0;;)7 ![](_page_2_Picture_3.jpeg) Notary Public E1111a M. Calvi Financial Principal This report\*\* contains (check all applicable boxes): - (X) ... (a) Facing Page. - **(X) ...** (b) Statement of Financial Condition. - ( ) ... (c) Statement of Income. - ( ) ... ( d) Statement of Cash Flows. - ( ) ... ( e) Statement of Changes in Stockholder's Equity or Partners' or Sole Proprietors' Capital. - ( ) .. . (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. - ( ) ... (g) Computation of Net Capital. - ( ) ... (h) Statement regarding SEC Rule 15c3-3 . - ( ) ... ( i) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. - ( ) ... U) Information Relating to the Possession or Control Requirements Under Rule 15c3-3 . - ( ) .. . (k) A Reconciliation, including appropriate explanation of the Computation ofNet Capital Under Rule 15c3-I and the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. - ( ) .. . (I) A Reconciliation between the audited and unaudited Statement of Financial Condition with respect to methods of consolidation. - (X) ... (m) An Oath or Affirmation . - ( ) ... (n) A copy of the SIPC Supplemental Report. - ( ) .. . (o) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. - ( ) .. . (p) Exemption Report required by SEC Rule 17a-5(d)( I). - **(X) .. .** ( q) Report of Independent Registered Public Accounting Firm. \*\* *For conditions of confidential treatment of certain portions of this filing, see section 240. l 7a-5 (e}(3).* {3}------------------------------------------------ # **TRANSAMERICA INVESTORS SECURITIES CORPORATION FINANCIAL STATEMENT Year Ended December 31, 2020** ## **Contents** | Report oflndependent Registered Public Accounting Firm l | | |------------------------------------------------------------------------|--| | Financial Statement | | | Statement of Financial Condition 2
Notes to Financial Statement 3 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **Report of Independent Registered Public Accounting Firm** To the Board of Directors and Stockholder of Transamerica Investors Securities Corporation ## *Opinion on the Financial Statement* **-** *Statement of Financial Condition* We have audited the accompanying statement of financial condition of Transamerica Investors Securities Corporation (the "Company") as of December 31, 2020, including the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. #### *Basis for Opinion* The financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit of this financial statement in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. Chicago, Illinois March 1, 2021 We have served as the Company's auditor since 2014. {5}------------------------------------------------ # **TRANSAMERICA INVESTORS SECURITIES CORPORATION STATEMENT OF FINANCIAL CONDITION** *(Dollars in thousands, except for share data)* **December 31, 2020** | Assets | | |--------------------------------------------------------|--------------| | Cash | \$
19,449 | | Commissions and concessions receivable | 4,595 | | Commissions and concessions receivable from affiliates | 1,452 | | Prepaid expenses and other assets | 672 | | Def erred tax asset | 78 | | Total assets | \$
26,246 | | Liabilities and stockholder's equity | | | Liabilities | | | Marketing and distribution expenses payable | 1,067 | | Payable to Parent under tax allocation agreement | 433 | | Due to affiliates | 79 | | Other liabilities | 589 | | Total liabilities | 2,168 | | Stockholder's equity | | | Common stock, one dollar par value, 1,000 shares | | | authorized, issued and outstanding | 1 | | Additional paid-in capital | 9,266 | | Retained earnings | 14,811 | | Total stockholder's equity | 24,078 | | Total liabilities and stockholder's equity | \$
26,246 | *The accompany ing notes are an integral part of the financial statement* {6}------------------------------------------------ ## **1. Organization** Transamerica Investors Securities Corporation (the "Company") is a wholly owned subsidiary of Transamerica Retirement Solutions LLC ("Transamerica"), an indirect wholly owned subsidiary of Transamerica Corporation (the "Parent"), which is an indirect wholly owned subsidiary of AEGON N.V., a public limited liability company organized under Dutch law. The Company is a limited purpose broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company offers shares of mutual funds and variable annuity contracts to Transamerica's retirement plan customers. ## **2. Summary of Significant Accounting Policies** ## **Basis of Accounting** The accompanying financial statement has been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP"). ## **Estimates** The preparation of financial statement in conformity with U.S. GAAP requires management to make estimates and assumptions affecting the reported amounts of assets, liabilities, revenues, and expenses and the disclosures of contingent assets and liabilities. Those estimates are inherently subject to change and actual results could differ from those estimates. #### **Cash** Cash consists of cash on deposit. Bank overdrafts and certain short-term borrowings are classified as liabilities. At December 31 , 2020, the Company had cash accounts, which exceeded federally insured limits, and are therefore not subject to FDIC insurance. #### **Commissions and Concessions Receivable** Commissions and concessions receivable represent the accruals for the distribution of non-affiliated mutual fund contracts and l 2b-l or other service fees on non-affiliated mutual funds earned but not yet received. #### **Commissions and Concessions Receivable from Affiliates** Commissions and concessions receivable from affiliates represents the accruals for 12b-l or other service fees on affiliated mutual funds earned but yet not received. Included also is the reimbursement from Transamerica Financial Life Insurance Company ("TFLIC") and Transamerica Life Insurance Company ("TLIC") for affiliated variable annuities commissions paid on their behalf by Transamerica in terms of the paymaster agreement. The Company reimburses Transamerica the full amount of the commissions at the time of payment. TFLIC and TLIC also reimburses the Company for a portion of the commissions related to insurance products paid on the respective insurer's behalf. {7}------------------------------------------------ #### **Prepaid Expenses and Other Assets** Prepaid expenses consists of FINRA renewals where these fees are amortized over the term of the coverage period. Whereas other assets consist of monthly FINRA licensing fees paid directly through the FINRA Central Registration Depository account. #### **Def erred Tax Asset** State and federal deferred income tax assets or liabilities are computed based on the difference between the financial statement and income tax bases of assets and liabilities, using the enacted statutory tax rate. Deferred income tax expenses or benefits are based on the changes in the asset or liability from period to period. #### **Marketing and Distribution Expenses Payable** Marketing and distribution expenses payable represents the accruals from commissions to brokers due but not yet paid. #### **Due to Affiliates** The Company is a party to a cost sharing agreement with affiliates in order to facilitate payments associated with employee costs, accounts payable services, underwriting services, distribution services, marketing services, and other miscellaneous expenses. The Company incurs affiliated interest expenses on these balances, which is included in part of the settlement. The Company settles with the Parent regularly based on net capital positions in order to keep these liabilities current. #### **Other Liabilities** Other liabilities consist of audit accruals, FINRA advertising, and revenue assessment accruals as expenses incurred but not yet paid. Outstanding drafts are uncashed commission payments to brokers. These are considered other liabilities. #### **Current Expected Credit Losses** On January **1,** 2020, the Company adopted FASB Accounting Standards Codification ("ASC") 326-20, *Financial Instruments* - *Credit Losses,* which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. For financial assets measured at amortized cost basis the Company estimates expected credit losses over the life of the financial assets as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts. This estimate of expected credit losses is recorded as an allowance for credit losses and is reported as a valuation adjustment on the balance sheet that is deducted from the asset's amortized cost basis. Financial assets measured at amortized cost include cash and commissions and concessions receivable in the statement of financial condition. {8}------------------------------------------------ Amounts owed to the Company related to these balances are settled within a maximum of six months, with most settling in less than three months. It is the Company's policy to review, as necessary, the credit standing of the counterparties, and the Company has had no historical experience of credit loss. As of December 31 , 2020, risk of credit loss is considered remote, therefore an allowance for credit losses on the financial assets measured at amortized cost would be immaterial and no allowance was recorded. ## **3. Receivable from Contracts with Customers** ## *Brokerage Commissions Receivable* The beginning balance of receivables related to brokerage commissions was \$98 whereas the ending receivable balance of \$224 was reflected under commissions and concessions receivable and commissions and concessions receivable from affiliates on the Statement of Financial Condition. ## *Distribution Fees Receivable* The beginning balance of the receivables related to distribution fees was \$7,076 whereas the ending receivable balance of \$5,823 was reflected under commissions and concessions receivable and commissions and concessions receivable from affiliates on the Statement of Financial Condition. ## **4. Income Taxes** At December 31 , 2020, the Company recorded deferred tax assets of \$78 which consist of compensation and benefit accruals. The Company settles all accrued income taxes that are not cash settled under the tax sharing agreement through a capital contribution or dividend with its parent company. The following table summarizes the tax related contributions and/or dividends for the current year. | | 2020 | | |-------------------------------|------|-----| | Federal | \$ | 37 | | State | | 173 | | Total contribution (dividend) | \$ | 173 | The Company's federal and state (where applicable) income tax returns are consolidated with other includible affiliated companies. The method of allocation between the companies is subject to a written tax allocation agreement. Under the terms of the tax allocation agreement, allocations are based on separate income tax return calculations. The Company is entitled to recoup federal income taxes paid in the event the future losses and credits reduce the greater of the Company's separately computed income tax liability or the consolidated group's income tax liability in the year generated. The Company is also entitled to recoup federal income taxes paid in the event the losses and credits reduce the greater of the Company's separately computed income tax liability or the consolidated group's income tax liability in any carryback or carry forward year when so applied. State tax allocations do not consider the effects of state tax attribute carryovers and carrybacks in jurisdictions where the company files a consolidated state tax return. The company recognized no penalty or interest expense in its financial statement for the year ended December 31 , 2020. {9}------------------------------------------------ The Company has no federal income tax returns currently under examination. The Internal Revenue Service completed its examination for years 2009 through 2013 resulting in tax return adjustments for which an appeals conference was requested. Federal income tax returns filed in 2017 through 2019 remain open, subject to potential future examination. The Company believes that there are adequate defenses against or sufficient provisions established related to any open or contested tax positions. A tax return has not yet been filed for 2020. ## **5. Related Party Transactions** The Company has an agreement with Transamerica Capital, Inc. ("TCI") to receive l 2b-l fees with respect to certain series of Transamerica Funds, an affiliated mutual fund group which are advised by Transamerica Asset Management, Inc. ("TAM") and distributed by TCI, both affiliates. The Company has a \$1,347 due but not received l 2b-l fees as of year ended December 31 , 2020 reflected in commissions and concessions receivable from affiliates on the Statement of Financial Condition. The Company is a party to a commission reimbursement agreement with affiliated companies, TFLIC and TLIC where the insurance companies agree to reimburse expenses incurred by the Company in the payment of registered variable annuity commissions. The Company has \$105 of amounts commissions and concessions receivable from affiliates on the Statement of Financial Condition, which have been paid but are not yet reimbursed by insurance comp am es. The Company is a party to a cost-sharing agreement between the Parent and affiliated companies, providing general administrative services as needed. A portion of the Company's operating expenses is paid to subsidiaries of the Parent and represents an allocation of shared expenses among several affiliates. The Company has a \$79 payable related to shared expenses as of year ended December 31 , 2020 reflected in due to affiliates on the Statement of Financial Condition. The Company incurred sales bonus and incentive compensation expenses related to Transamerica and TLIC registered representatives. The Company has \$310 due but unpaid expenses as of year ended December 31 , 2020 reflected in marketing and distribution expenses payable on the Statement of Financial Condition. The Company recorded marketing and distribution expense related to commissions paid to affiliated companies, TFLIC and TLIC in payment of registered variable annuity commissions. The Company has \$105 due but unpaid expenses as of year ended December 31 , 2020 reflected in marketing and distribution expenses payable on the Statement of Financial Condition. The Company is party to an agreement with Transamerica Funds, affiliated mutual fund groups which are advised by TAM. The Company has \$39 due but unpaid expenses for the year ended December 31 , 2020 reflected in marketing and distribution expenses payable on the Statement of Financial Condition. During 2020, the Company paid dividends of \$15,000 to its Parent. The Company received state tax capital contributions of \$173, as well as federal tax capital contributions of \$3 7 from its Parent, respectively, pursuant to the tax sharing agreement, which the Company earned a benefit based off the participation of the consolidated tax return with the {10}------------------------------------------------ #### **6. Commitments and Contingencies** The Company may, at times, be involved in litigation (including arbitrations), regulatory exams, investigations, actions, and inquiries in the normal course of business. The Company assesses its liabilities and contingencies utilizing available information. For those matters where it is probable that the Company will incur a loss and the amount of the loss is reasonably estimated, in accordance with F ASB ASC No. 450, Contingencies, an accrued liability has been established. These reserves represent the Company's aggregate estimate of the potential loss contingency at December 31 , 2020 and are believed to be sufficient. Such liabilities may be adjusted from time to time to reflect any relevant developments. The Company does not have an existing liability for pending legal and regulatory matters in other liabilities on the Statement of Financial Condition. ## **7. Subsequent Events** The financial statement is adjusted to reflect events that occurred through 3/1/2021 , provided they give evidence of conditions that existed at the balance sheet date. Events that are indicative of conditions that arose after the balance sheet are disclosed, but do not result in an adjustment of the financial statement themselves. No subsequent events have been identified that require adjustment to or disclosure in the financial statement. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.