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Reinsurance | 12 Months Ended
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Dec. 31, 2018
Reinsurance Disclosures [Abstract] |
Reinsurance | Reinsurance The Company utilizes reinsurance agreements primarily to reduce required capital and to facilitate the acquisition or disposition of certain insurance contracts. Ceded reinsurance agreements permit the Company to recover a portion of its losses from reinsurers, although they do not discharge the Company’s primary liability as the direct insurer of the risks reinsured. On November 30, 2018, Aetna completed the sale of its standalone Medicare Part D prescription drug plans to a subsidiary of WellCare, effective December 31, 2018. In connection with that sale, subsidiaries of WellCare and Aetna entered into reinsurance agreements under which WellCare has ceded to Aetna 100% of the insurance risk related to the divested standalone Medicare Part D prescription drug plans for the 2019 PDP plan year. In January 2019, the Company entered into two four-year reinsurance agreements with an unrelated reinsurer that allowed it to reduce required capital and provided collateralized excess of loss reinsurance coverage on a portion of the Health Care Benefits segment’s group Commercial Insured business. Reinsurance recoverables (recorded as other current assets or other assets on the consolidated balance sheets) at December 31, 2018 were as follows:
In millions |
Reinsurer |
Hartford Life and Accident Insurance Company | $ | 3,470 |
Lincoln Life & Annuity Company of New York | 424 |
Constitution Life | 320 |
VOYA Retirement Insurance and Annuity Company | 186 |
All Other | 141 |
Total | $ | 4,541 |
Direct, assumed and ceded premiums earned for the year ended December 31, 2018 were as follows:
In millions |
Direct | $ | 8,365 |
Assumed | 38 |
Ceded | (219 | )
Net premiums | $ | 8,184 |
The impact of reinsurance on benefit costs for the year ended December 31, 2018 was as follows:
In millions |
Direct | $ | 6,773 |
Assumed | 32 |
Ceded | (211 | )
Net benefit costs | $ | 6,594 |
There is not a material difference between premiums on a written basis versus an earned basis. The Company also has various agreements with unrelated reinsurers that do not qualify for reinsurance accounting under GAAP, and consequently are accounted for using deposit accounting. These contracts were entered into to reduce the risk of catastrophic loss which in turn reduces the Company’s capital and surplus requirements for certain portions of its group term life insurance and group accidental death and dismemberment insurance businesses and certain portions of the Health Care Benefits segment’s Medicare Advantage and group Commercial Insured businesses. Total deposit assets and liabilities related to reinsurance agreements that do not qualify for reinsurance accounting under GAAP were not material as of December 31, 2018.

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- Definition The entire disclosure pertaining to the existence, magnitude and information about insurance that has been ceded to or assumed from another insurance company, including the methodologies and assumptions used in determining recorded amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -URI http://asc.fasb.org/topic&trid=2303980 + Details
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