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Reinsurance (Notes) | 9 Months Ended
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Sep. 30, 2016
Reinsurance Disclosures [Abstract] |
Reinsurance | (5) Reinsurance We use reinsurance extensively, which has a significant effect on our results of operations. Reinsurance arrangements do not relieve us of our primary obligation to the policyholder. We monitor the concentration of credit risk we have with any reinsurer, as well as the financial condition of the reinsurers. Details on in-force life insurance follow:
|  | September 30, 2016 |  |  | December 31, 2015 |
|  | (Dollars in thousands) |
Direct life insurance in force |  | $ | 725,613,934 |  |  | $ | 696,884,429 |
Amounts ceded to other companies |  |  | (638,417,864 | ) |  |  | (616,252,839 | )
Net life insurance in force |  | $ | 87,196,070 |  |  | $ | 80,631,590 |
Percentage of reinsured life insurance in force |  |  | 88 | % |  |  | 88 | %
Due from reinsurers includes ceded reserve balances and ceded claim liabilities. Reinsurance receivable and financial strength ratings by reinsurer were as follows:
|  | September 30, 2016 |  | December 31, 2015
|  | Reinsurance receivable |  |  | A.M. Best rating |  | Reinsurance receivable |  |  | A.M. Best rating
|  | (In thousands)
Pecan Re Inc.(1) (2) |  | $ | 2,718,356 |  |  | NR |  | $ | - |  |  | -
Prime Reinsurance Company(2) |  |  | - |  |  | - |  |  | 2,692,721 |  |  | NR
SCOR Global Life Reinsurance Companies(3) |  |  | 358,815 |  |  | A |  |  | 362,195 |  |  | A
Munich Re Life Insurance Company of Vermont(2) (5) |  |  | 290,384 |  |  | NR |  |  | 270,306 |  |  | NR
Swiss Re Life & Health America Inc.(4) |  |  | 246,036 |  |  | A+ |  |  | 254,461 |  |  | A+
American Health and Life Insurance Company(2) |  |  | 177,295 |  |  | B |  |  | 176,790 |  |  | B
Munich American Reassurance Company |  |  | 106,446 |  |  | A+ |  |  | 101,466 |  |  | A+
Korean Reinsurance Company |  |  | 96,066 |  |  | A |  |  | 91,605 |  |  | A
RGA Reinsurance Company |  |  | 83,313 |  |  | A+ |  |  | 81,217 |  |  | A+
TOA Reinsurance Company |  |  | 22,339 |  |  | A+ |  |  | 22,242 |  |  | A+
Hannover Life Reassurance Company |  |  | 22,606 |  |  | A+ |  |  | 20,650 |  |  | A+
All other reinsurers |  |  | 39,881 |  |  | - |  |  | 36,975 |  |  | -
Due from reinsurers |  | $ | 4,161,537 |  |  |  |  | $ | 4,110,628 |  |  |
NR – not rated
(1) | Pecan Re Inc. is a wholly owned subsidiary of Swiss Re Life & Health America Inc.
(2) | Includes balances ceded under coinsurance transactions of term life insurance policies that were in force as of December 31, 2009. Amounts shown are net of their share of the reinsurance receivable from other reinsurers.
(3) | Includes amounts ceded to Transamerica Reinsurance Companies and fully retroceded to SCOR Global Life Reinsurance Companies.
(4) | Includes amounts ceded to Lincoln National Life Insurance and fully retroceded to Swiss Re Life & Health America Inc.
(5) | Previously known as Financial Reassurance Company 2010, Ltd. This entity was acquired by Munich American Reassurance Company from Citigroup Inc. (“Citigroup”) as of September 23, 2016 and was subsequently renamed Munich Re Life Insurance Company of Vermont.
Prior to January 1, 2016, Primerica Life had a coinsurance agreement in place with Prime Reinsurance Company (“Prime Re”), an insurance company owned by Citigroup, under which we ceded 80% of the risks and rewards of our U.S. (except New York) term life insurance policies that were in force as of December 31, 2009 (the “80% Coinsurance Agreement”). Beginning on January 1, 2016, Pecan Re Inc. (“Pecan Re”), an insurance company owned by Swiss Re Life & Health America Inc. (“Swiss Re”), assumed Prime Re’s obligations under the 80% Coinsurance Agreement through a novation agreement (the “Novation Agreement”). In addition, the counterparties to the related trust and capital maintenance agreements that provide Primerica Life with statutory reinsurance credit for the 80% Coinsurance Agreement were replaced by Pecan Re and Swiss Re, respectively. No material terms and conditions of the 80% Coinsurance Agreement and the related trust and capital maintenance agreements were modified. A separate 10% coinsurance agreement remains in place between Primerica Life and Prime Re (the “10% Coinsurance Agreement”) that includes an experience refund provision and does not satisfy U.S. GAAP risk transfer rules. In exchange for our consent to the Novation Agreement, the finance charge on the statutory reserves in excess of economic reserves funded by Prime Re in support of the 10% Coinsurance Agreement was reduced from 3.0% to 2.0% beginning on July 1, 2015 and then from 2.0% to 0.5% beginning on January 1, 2016.

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