Life And Annuity Benefits

12 Months Ended

Dec. 31, 2019

Liability for Future Policy Benefit, before Reinsurance [Abstract]

Life and Annuity Benefits

The following table presents life and annuity benefits.



	December 31,
(dollars in thousands)	2019		2018
Life	$	125,094	$	122,798
Annuities	813,476		827,773
Accident and health	47,159		50,882
Total	$	985,729	$	1,001,453

Life and annuity benefits are compiled on a reinsurance contract-by-contract basis and are discounted using standard actuarial techniques and cash flow models. Since the development of the life and annuity reinsurance reserves is based upon cash flow projection models, the Company must make estimates and assumptions based on cedent experience, industry mortality tables, and expense and investment experience, including a provision for adverse deviation. The assumptions used to determine policy benefit reserves are generally locked-in for the life of the contract unless an unlocking event occurs. Loss recognition testing is performed to determine if existing policy benefit reserves, together with the present value of future gross premiums and expected investment income earned thereon, are adequate to cover the present value of future benefits, settlement and maintenance costs. If the existing policy benefit reserves are not sufficient, the locked-in assumptions are revised to current best estimate assumptions and a charge to earnings for life and annuity benefits is recognized at that time.

Life and annuity benefits are also adjusted to the extent unrealized gains on the investments supporting the policy benefit reserves would result in a reserve deficiency if those gains were realized. During 2019, the Company recognized a reserve deficiency resulting from a decrease in the market yield on the investment portfolio supporting the policy benefit reserves by increasing life and annuity benefits by $51.4 million and decreasing the change in net unrealized holding gains included in other comprehensive income by a corresponding amount. As of December 31, 2019, the cumulative adjustment to life and annuity benefits attributable to unrealized gains on the underlying investment portfolio totaled $51.4 million. No adjustment was required for the years ended December 31, 2018 or 2017.

Because of the assumptions and estimates used in establishing the Company's reserves for life and annuity benefit obligations and the long-term nature of these reinsurance contracts, the ultimate liability may be greater or less than the estimates. The average discount rate for the life and annuity benefit reserves was 2.3% as of December 31, 2019.

As of December 31, 2019, the largest life and annuity benefits reserve for a single contract was 32.8% of the total.

None of the annuities included in life and annuity benefits on the consolidated balance sheet are subject to discretionary withdrawal.