REINSURANCE BALANCES RECOVERABLE

The following table provides the total reinsurance balances recoverable as at December 31, 2015 and, 2014:



	2015
	Non-life Run-off			Atrium		StarStone			Life and Annuities		Total
Recoverable from reinsurers on unpaid:
Outstanding losses	$	587,164		$	6,772	$	182,076		$	22,786	$	798,798
IBNR	465,211			16,581		123,732			306		605,830
Fair value adjustments	(17,628		)	2,499		(6,025		)	—		(21,154		)
Total reinsurance reserves recoverable	1,034,747			25,852		299,783			23,092		1,383,474
Paid losses recoverable	72,213			430		16,568			1,319		90,530
	$	1,106,960		$	26,282	$	316,351		$	24,411	$	1,474,004



	2014
	Non-life Run-off			Atrium		StarStone			Life and Annuities		Total
Recoverable from reinsurers on unpaid:
Outstanding losses	$	568,386		$	9,582	$	181,067		$	25,125	$	784,160
IBNR	278,696			14,565		154,850			467		448,578
Fair value adjustments	(46,373		)	4,131		(10,708		)	—		(52,950		)
Total reinsurance reserves recoverable	800,709			28,278		325,209			25,592		1,179,788
Paid losses recoverable	129,750			1,289		19,845			883		151,767
	$	930,459		$	29,567	$	345,054		$	26,475	$	1,331,555

Our insurance and reinsurance run-off subsidiaries, prior to acquisition, used retrocessional agreements to reduce their exposure to the risk of insurance and reinsurance assumed. On an annual basis, both Atrium and StarStone purchase a tailored outwards reinsurance program designed to manage their risk profiles. The majority of Atrium’s and StarStone's third-party reinsurance cover is with highly rated reinsurers or is collateralized by letters of credit.

The fair value adjustments, determined on acquisition of insurance and reinsurance subsidiaries, are based on the estimated timing of loss and LAE recoveries and an assumed interest rate equivalent to a risk free rate for securities with similar duration to the reinsurance recoverables acquired plus a spread to reflect credit risk, and are amortized over the estimated recovery period, as adjusted for accelerations in timing of payments as a result of commutation settlements.

As of December 31, 2015 and 2014, we had reinsurance balances recoverable of approximately $1.5 billion and $1.3 billion, respectively. The increase of $141.4 million in reinsurance balances recoverable was primarily a result of the Sussex acquisition, partially offset by commutations and cash collections made during the year ended December 31, 2015 in our Non-life Run-off and StarStone segments.

Top Ten Reinsurers



	December 31, 2015												December 31, 2014
	Non-life Run-off		Atrium		StarStone		Life and Annuities		Total		% of Total		Non-life Run-off		Atrium		StarStone		Life and Annuities		Total		% of Total
Top ten reinsurers	$	713,743	$	21,394	$	155,171	$	13,254	$	903,562	61.3	%	$	667,325	$	23,635	$	158,117	$	15,089	$	864,166	64.9	%
Other reinsurers > $1 million	383,898		4,253		158,417		8,363		554,931		37.6	%	256,929		4,917		181,196		10,692		453,734		34.1	%
Other reinsurers < $1 million	9,319		635		2,763		2,794		15,511		1.1	%	6,205		1,015		5,741		694		13,655		1.0	%
Total	$	1,106,960	$	26,282	$	316,351	$	24,411	$	1,474,004	100.0	%	$	930,459	$	29,567	$	345,054	$	26,475	$	1,331,555	100.0	%

The top ten external reinsurers, as at December 31, 2015 and 2014, were all rated A- or better, with the exception of three non-rated reinsurers from which $337.6 million was recoverable (December 31, 2014: $175.2 million recoverable from one reinsurer). For the three non-rated reinsurers, we hold security in the form of pledged assets in trust or letters of credit issued to us in the full amount of the recoverable. As at December 31, 2015, reinsurance balances recoverable of $165.6 million related to Lloyd’s syndicates and represented 10% or more of total reinsurance balances recoverable. Lloyd’s is rated ‘A+’ by Standard & Poor’s and ‘A’ by A.M. Best. As at December 31, 2014, reinsurance balances recoverable with a carrying value of $314.5 million were associated with two counterparties, each representing 10% or more of total reinsurance balances recoverable.

Provisions for Uncollectible Reinsurance Recoverables

We remain liable to the extent that retrocessionaires do not meet their obligations under these agreements, and therefore, we evaluate and monitor concentration of credit risk among our reinsurers. Provisions are made for amounts considered potentially uncollectible.

The following table shows our reinsurance balances recoverable by rating of reinsurer and our provisions for uncollectible reinsurance balances recoverable ("provisions for bad debt") as at December 31, 2015 and 2014. The provisions for bad debt all relate to the Non-life Run-off segment.



	2015								2014
	Gross		Provisions for Bad Debt		Net		Provisions as a % of Gross		Gross		Provisions for Bad Debt		Net		Provisions as a % of Gross
Reinsurers rated A- or above	$	1,051,927	$	46,969	$	1,004,958	4.5	%	$	1,126,944	$	80,995	$	1,045,949	7.2	%
Reinsurers rated below A-, secured	388,399		—		388,399		—	%	204,544		—		204,544		—	%
Reinsurers rated below A-, unsecured	244,005		163,358		80,647		66.9	%	289,976		208,914		81,062		72.0	%
Total	$	1,684,331	$	210,327	$	1,474,004	12.5	%	$	1,621,464	$	289,909	$	1,331,555	17.9	%