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Reinsurance (Tables)

3 Months Ended

Mar. 31, 2020

Reinsurance Recoverables by Range of External Credit Rating and Collateral Level

The Company’s reinsurance recoverables are presented in the following table by range of external credit rating and collateral level.


(Dollars in millions)	Fair value of collateral contractually required to meet or exceed carrying value of recoverable		Collateral provisions exist that may mitigate risk of credit loss ⁽³⁾		No collateral		Total
Ongoing Operations
Upper-medium grade and higher ⁽¹⁾	$	—	$	6	$	310	$	316
Lower-medium grade⁽²⁾	—		—		63		63
Not rated	87		15		23		125
Total recoverables related to ongoing operations ⁽³⁾	$	87	$	21	$	396	$	504
Acquisition, disposition or runoff activities
Upper-medium grade and higher ⁽¹⁾
Lincoln National Life and Lincoln Life & Annuity of New York	—		3,137		—		3,137
Berkshire	337		492		—		829
Prudential Retirement Insurance and Annuity	692		—		—		692
Other	248		21		19		288

Not rated	—		40		4		44
Total recoverables related to acquisition, disposition or runoff activities	1,277		3,690		23		4,990
Total	$	1,364	$	3,711	$	419	$	5,494
Allowance for uncollectible reinsurance							(34)
Reinsurance recoverables classified as assets of business held for sale							(175)
Total reinsurance recoverables							$	5,285
⁽¹⁾ Includes A- equivalent and higher current ratings certified by a nationally recognized statistical rating organization ('NRSRO')
⁽²⁾ Includes BBB- to BBB+ equivalent current credit ratings certified by a NRSRO
⁽³⁾ This includes collateral provisions requiring the reinsurer to fully collateralize its obligation if its external credit rating is downgraded to a specified level

Effects of Reinsurance

In the Company’s Consolidated Statements of Income, premiums were reported net of amounts ceded to reinsurers and medical costs and other benefit expenses were reported net of reinsurance recoveries in the following amounts:


	Three Months Ended March 31,
(In millions)	2020		2019
Total ceded premiums	$	128	$	130
Total reinsurance recoveries	$	178	$	59

Account Value, Net Amount at Risk and the Number of Contractholders for Guarantees Assumed in the Event of Death

The following table presents the account value, net amount at risk and the number of contractholders for guarantees assumed by the Company in the event of death. The net amount at risk is the amount that the Company would have to pay if all contractholders died as of the specified date. The Company should be reimbursed in full for these payments unless the Berkshire reinsurance limit is exceeded.


(Dollars in millions, excludes impact of reinsurance ceded)	March 31, 2020		December 31, 2019
Account value	$	7,490	$	9,110
Net amount at risk	$	2,422	$	1,764
Number of contractholders (estimated)	195,000		200,000

GMIB

Effects of Reinsurance [Line Items]

Schedule of Derivative Assets at Fair Value

There were three reinsurers covering 100% of the GMIB exposures as of March 31, 2020 and December 31, 2019 as follows:


(In millions)
Line of Business	Reinsurer	March 31, 2020		December 31, 2019		Collateral and Other Terms at March 31, 2020
GMIB	Berkshire	$	429	$	332	100% were secured by assets in a trust.
	Sun Life Assurance Company of Canada	264		202
	Liberty Re (Bermuda) Ltd.	233		179		73% were secured by assets in a trust.
Total GMIB recoverables reported in Other current assets and Other assets				$	926	$	713