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REINSURANCE
 12 Months Ended
Dec. 31, 2022
Insurance [Abstract]  
REINSURANCE REINSURANCE
Global Atlantic maintains a number of reinsurance treaties with third parties whereby Global Atlantic assumes annuity and life policies on a coinsurance, modified coinsurance or funds withheld basis. Global Atlantic also maintains other reinsurance treaties including the cession of certain annuity, life and health policies.
The effects of all reinsurance agreements on the consolidated statements of financial condition were as follows:
December 31, 2022December 31, 2021
Policy liabilities:
Direct$71,758,288 $67,131,818 
Assumed69,464,999 59,388,226 
Total policy liabilities141,223,287 126,520,044 
Ceded(1)
(27,662,874)(25,035,228)
Net policy liabilities$113,560,413 $101,484,816 
(1)Reported within reinsurance recoverable within the consolidated statements of financial condition.
A key credit quality indicator is a counterparty’s A.M. Best financial strength rating. A.M. Best ratings are an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. Global Atlantic mitigates counterparty credit risk by requiring collateral and credit enhancements in various forms including engaging in funds withheld at interest and modified coinsurance transactions. The following shows the amortized cost basis of Global Atlantic’s reinsurance recoverable and funds withheld receivable at interest by credit quality indicator and any associated credit enhancements Global Atlantic has obtained to mitigate counterparty credit risk:
As of December 31, 2022 As of December 31, 2021
A.M. Best Rating(1)
Reinsurance recoverable and funds withheld receivable at interest(2)
Credit enhancements(3)
Net reinsurance credit exposure(4)
Reinsurance recoverable and funds withheld receivable at interest(2)
Credit enhancements(3)
Net reinsurance credit exposure(4)
A++$62,674 $— $62,674 $7,911 $— $7,911 
A+1,849,918 — 1,849,918 1,989,426 — 1,989,426 
A2,491,461 — 2,491,461 2,652,286 — 2,652,286 
A-5,397,767 4,197,739 1,200,028 5,645,633 5,166,559 479,074 
B++37,939 — 37,939 33,410 — 33,410 
B+— — — 1,122 — 1,122 
B— — — 9,227 — 9,227 
B-(221)— — 1,274 — 1,274 
Not rated or private rating(5)
20,994,058 18,541,678 2,452,380 17,698,613 18,323,795 — 
Total$30,833,596 $22,739,417 $8,094,400 $28,038,902 $23,490,354 $5,173,730 
(1)Ratings are periodically updated (at least annually) as A.M. Best issues new ratings.
(2)At amortized cost, excluding any associated embedded derivative assets and liabilities.
(3)Includes funds withheld payable at interest and deferred intangible reinsurance assets and liabilities.
(4)Includes credit loss allowance of $41.2 million and $8.4 million as of December 31, 2022 and 2021, respectively, held against reinsurance recoverable.
(5)Includes $21.0 billion and $17.7 billion as of December 31, 2022 and 2021, respectively, associated with cessions to Ivy Re Limited and Ivy Re II Limited (the “Ivy Vehicles”), which are co-investment vehicles that participate in qualifying reinsurance transactions sourced by Global Atlantic.

As of December 31, 2022 and 2021, Global Atlantic had $2.9 billion and $3.0 billion of funds withheld receivable at interest, with six counterparties related to modified coinsurance and funds withheld contracts, respectively. The assets supporting these receivables were held in trusts and not part of the respective counterparty’s general accounts.
The effects of reinsurance on the consolidated statements of operations were as follows:
Years Ended December 31,
20222021
Net premiums:
Direct$111,602 $107,733 
Assumed(1)
2,413,234 4,573,925 
Ceded(1,342,375)(2,455,580)
Net premiums$1,182,461 $2,226,078 
(1)Includes related party activity of $8.7 million for the year ended December 31, 2021.
Years Ended December 31,
20222021
Policy fees:
Direct$967,716 $860,170 
Assumed(1)
328,528 288,870 
Ceded(17,508)(1,127)
Net policy fees$1,278,736 $1,147,913 
(1)Includes related party activity of $6.2 million for the year ended December 31, 2021.
Years Ended December 31,
20222021
Net policy benefits and claims:
Direct$1,266,262 $2,610,210 
Assumed(1)
3,421,780 5,175,944 
Ceded(1,503,615)(2,730,445)
Net policy benefits and claims$3,184,427 $5,055,709 
(1)Includes related party activity of $76.2 million for the year ended December 31, 2021.

Global Atlantic holds collateral for and provides collateral to our reinsurance clients. Global Atlantic held $26.1 billion and $23.4 billion of collateral in the form of funds withheld payable on behalf of our reinsurers as of December 31, 2022 and 2021, respectively. As of both December 31, 2022 and 2021, reinsurers held collateral of $1.3 billion on behalf of Global Atlantic. A significant portion of the collateral that Global Atlantic provides to its reinsurance clients is provided in the form of assets held in a trust for the benefit of the counterparty. As of December 31, 2022 and 2021, these trusts held in excess of the $65.8 billion and $55.2 billion of assets it is required to hold in order to support reserves of $66.0 billion and $55.8 billion, respectively. Of the cash held in trust, Global Atlantic classified $31.3 million and $149.3 million as restricted as of December 31, 2022 and 2021, respectively.