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Reinsurance
 12 Months Ended
Dec. 31, 2014
Reinsurance [Abstract]  
Reinsurance

14. REINSURANCE

In order to limit its losses from large claim exposures, the Company enters into reinsurance agreements with other insurance companies. The Company reviews its retention limits based on size and experience. The maximum retention limit per individual for group life and AD&D is $750,000. The Company’s maximum retention limit for group disability insurance is $15,000 of monthly benefit per individual. The Company’s maximum retention limit for individual disability insurance is $7,500 of monthly benefit per individual.

Standard maintains a strategic marketing alliance with Ameritas Life Insurance Corp. (“Ameritas”) that offers Standard’s policyholders flexible dental coverage options and access to Ameritas’ nationwide preferred provider organization panel of dentists. As part of this alliance, Standard and Ameritas entered into a reinsurance agreement. In 2014, the agreement provided for 26.1% of the net dental premiums written by Standard and the risk associated with this premium to be ceded to Ameritas.

Standard participates in a reinsurance and third-party administration arrangement with Northwestern Mutual Life Insurance Company (“Northwestern Mutual”) under which Northwestern Mutual group long term and short term disability products are sold using Northwestern Mutual’s agency distribution system. Generally, Standard assumes 60% of the risk and receives 60% of the premiums for the policies issued. If Standard were to become unable to meet its obligations, Northwestern Mutual would retain the reinsured liabilities. Therefore, in accordance with an agreement with Northwestern Mutual, Standard established a trust for the benefit of Northwestern Mutual with the market value of assets in the trust equal to Northwestern Mutual’s reinsurance receivable from Standard. The market value of assets required to be maintained in the trust at December 31, 2014, was $241.1 million. Premiums assumed by Standard for the Northwestern Mutual business accounted for approximately 3% of the Standard’s total premiums for each of the three years 2014, 2013 and 2012. In addition to assuming risk, Standard provides product design, pricing, underwriting, legal support, claims management and other administrative services under the arrangement.

Effective September 30, 2014, StanCap Insurance Company entered into a reinsurance agreement with Standard to reinsure Standard’s group life and AD&D business. This reinsurance agreement between StanCap Insurance Company and Standard replaced the yearly renewable term group life reinsurance agreement with Canada Life Assurance Company, which was terminated effective September 30, 2014. The intercompany transactions between Standard and StanCap Insurance Company are eliminated in consolidation.

The Company also maintains reinsurance coverage for certain catastrophe losses related to group life and AD&D with partial coverage of nuclear, biological and chemical acts of terrorism and is part of a catastrophe reinsurance pool with other insurance companies.

This pool spreads catastrophe losses from group life and AD&D over 18 participating members. The annual fee paid by the Company to participate in the pool was less than $30,000 for 2014. As a member of the pool, the Company is exposed to maximum potential losses experienced by other participating members of up to $104.6 million for a single event for losses submitted by a single company and a maximum of $261.5 million for a single event for losses submitted by multiple companies. The Company’s percentage share of losses experienced by pool members will change over time as it is a function of the Company’s group life and AD&D in-force relative to the total group life and AD&D in-force for all pool participants. The catastrophe reinsurance pool does not exclude war or nuclear, biological and chemical acts of terrorism. Through a combination of reinsurance and its participation in the catastrophe reinsurance pool, the Company has coverage of up to $484.7 million per catastrophic event. In February 2015, the Company was notified of the termination of the catastrophe reinsurance pool effective June 2015. The Company is exploring its options in the market for catastrophe reinsurance coverage.

The Terrorism Risk Insurance Act of 2002 (“TRIA”), which has been extended through 2020, provides for federal government assistance to property and casualty insurers in the event of material losses due to terrorist acts on behalf of a foreign person or foreign interest. Due to the concentration of risk present in group life insurance and the fact that group life insurance is not covered under TRIA, an occurrence of a significant catastrophe or a change in the on-going nature and availability of reinsurance and catastrophe reinsurance could have a material adverse effect on the Company.

The following table sets forth reinsurance information:

AssumedPercentage of
Ceded toFromAmount
OtherOtherAssumed
(Dollars in millions)Gross AmountCompaniesCompaniesNet Amountto Net
2014:
Life insurance in-force$306,566.0 $6,239.8 $51.5 $300,377.7 ---%
Premiums:
Life insurance and annuities$854.6 $46.3 $---$808.3 ---
Accident and health insurance1,231.5 80.2 92.8 1,244.1 7.5
Total premiums$2,086.1 $126.5 $92.8 $2,052.4 4.5
2013:
Life insurance in-force$321,881.7 $5,966.8 $57.7 $315,972.6 ---%
Premiums:
Life insurance and annuities$898.5 $48.5 $---$850.0 ---
Accident and health insurance1,258.6 81.0 96.7 1,274.3 7.6
Total premiums$2,157.1 $129.5 $96.7 $2,124.3 4.6
2012:
Life insurance in-force$346,814.5 $7,233.1 $65.1 $339,646.5 ---%
Premiums:
Life insurance and annuities$937.9 $51.0 $---$886.9 ---
Accident and health insurance1,263.3 83.7 97.4 1,277.0 7.6
Total premiums$2,201.2 $134.7 $97.4 $2,163.9 4.5

Recoveries recognized under reinsurance agreements were $92.8 million, $79.8 million and $74.0 million for 2014, 2013 and 2012, respectively. Amounts recoverable from reinsurers were $994.2 million and $988.1 million at December 31, 2014 and 2013, respectively. Of these amounts, $781.4 million and $791.0 million for 2014 and 2013, respectively, were from the reinsurance transaction with Protective Life Insurance Company (“Protective Life”) effective January 1, 2001. Effective February 1, 2015, Protective Life was acquired by The Dai-ichi Life Insurance Company, Limited (“Dai-ichi Life”) and is a wholly-owned subsidiary of Dai-ichi Life. ”See “Note 15—Reinsurance of Blocks of Business.”