Reinsurance

12 Months Ended

Dec. 31, 2020

11. Reinsurance

Reinsurance is used primarily to limit exposure to large losses. We have a retention policy that requires that such arrangements be placed with well-established, highly-rated reinsurers. Coverage is well-diversified and controls are in place to manage exposure to reinsurance counterparties. While reinsurance arrangements provide for the recovery of claims arising from the liabilities ceded, we retain primary responsibility to the policyholders.

11.A Reinsurance Assets

Reinsurance assets are measured using the amounts and assumptions associated with the underlying insurance contracts and in accordance with the terms of each reinsurance contract. Reinsurance assets are comprised of the following:


As at December 31, 2020	Canada			U.S.			Asia		Corporate(1)			Total
Individual participating life		$	57		$	9	$	263		$	—	$	329
Individual non-participating life and health		(636)			882		49			18		313
Group life and health		403			1,920		4			—		2,327
Individual annuities		—			—		—			17		17
Group annuities		140			—		—			—		140
Reinsurance assets before other policy assets		(36)			2,811		316			35		3,126
Add: Other policy assets(2)		104			508		65			40		717
Total Reinsurance assets		$	68		$	3,319	$	381		$	75	$	3,843

(1) Primarily business from the UK and run-off reinsurance operations. Includes UK business of $18 for Individual non-participating life and health, and $17 for Individual annuities.

(2) Consists of amounts on deposit, policy benefits payable, provisions for unreported claims, provisions for policyholder dividends, and provisions for experience rating refunds.


As at December 31, 2019	Canada			U.S.			Asia			Corporate(1)			Total
Individual participating life		$	35		$	10		$	322		$	—	$	367
Individual non-participating life and health		(377)			913			48			20		604
Group life and health		384			1,881			2			—		2,267
Individual annuities		—			—			—			26		26
Group annuities		131			—			—			—		131
Reinsurance assets before other policy assets		173			2,804			372			46		3,395
Add: Other policy assets(2)		73			456			57			43		629
Total Reinsurance assets		$	246		$	3,260		$	429		$	89	$	4,024

(1) Primarily business from the UK and run-off reinsurance operations. Includes UK business of $20 for Individual non-participating life and health, and $26 for Individual annuities.

(2) Consists of amounts on deposit, policy benefits payable, provisions for unreported claims, provisions for policyholder dividends, and provisions for experience rating refunds.

There was no impairment of Reinsurance assets in 2020 or 2019. Changes in Reinsurance assets are included in Note 10.A.iv.

11.B Reinsurance (Expenses) Recoveries

Reinsurance (expenses) recoveries are comprised of the following:


For the years ended December 31,	2020			2019
Recovered claims and benefits		$	2,182		$	1,955
Commissions		69			70
Reserve adjustments		22			26
Operating expenses and other		80			80
Total reinsurance (expenses) recoveries		$	2,353		$	2,131

11.C Reinsurance Gains or Losses

In 2020, we entered into a new reinsurance agreement that resulted in a loss of $66 on inception. We did not enter into reinsurance arrangements that resulted in a gain or loss on inception in 2019.