Reinsurance

12 Months Ended

Dec. 31, 2020

In the normal course of business, the Company reinsures portions of certain policies that we underwrite to limit disproportionate risks. During 2020 and 2019, we retained varying amounts of individual insurance up to a maximum retention of $100,000 on any life. The Company also reinsures 100% of our accidental death benefit rider coverage. Catastrophe reinsurance is in place for our property policies. In 2020 and 2019, this reinsurance provided $10.0 million of coverage above a $0.5 million deductible. In consideration for a reinstatement premium, second event coverage is provided in excess of a $0.5 million deductible up to $10.0 million. The annual premium was approximately $1.4 million in 2020 and $0.8 million in 2019 and 2018. Our health insurance policies are substantially all reinsured on a 100% coinsurance basis. We remain contingently liable to the extent that the reinsuring companies cannot meet their obligations under these reinsurance treaties.

Our amounts recoverable from reinsurers represent receivables from and reserves ceded to reinsurers. We obtain reinsurance from multiple reinsurers, and we monitor concentration as well as financial strength ratings of our principal reinsurers. The ratings by A.M. Best Company range from A (Excellent) to A+ (Superior).

Assumed and ceded life reinsurance activity as of December 31, 2020 and 2019 is summarized as follows:


December 31, (In thousands)	2020		2019
Aggregate assumed life insurance in force	$	4,615	4,892
Aggregate ceded life insurance in force	$	474,792	486,937
Net life insurance in force	$	4,141,968	4,246,781

The Company's reinsurance recoverable on ceded reinsurance was $5.8 million and $3.7 million in 2020 and 2019, respectively. Premiums, claims and surrenders assumed and ceded for all lines of business for these years are summarized as follows:


Years ended December 31, (In thousands)	2020		2019	2018
Premiums from short-duration contracts:
Direct	$	6,448	6,804	6,839
Assumed	—		—	—
Ceded	(1,447)		(808)	(804)
Net premiums earned	5,001		5,996	6,035
Premiums from long-duration contracts:
Direct	172,504		180,205	184,722
Assumed	91		99	99
Ceded	(2,267)		(1,953)	(2,996)
Net premiums earned	170,328		178,351	181,825
Total premiums earned	$	175,329	184,347	187,860
Claims and surrenders assumed	$	174	141	159
Claims and surrenders ceded	$	(1,575)	(940)	(705)

During the third and fourth quarters of 2020, SPFIC was impacted by Hurricanes Laura, Delta and Zeta, all of which caused varying levels of damage in Louisiana. The Company has a reinsurance agreement that covers catastrophic events such as these hurricanes. The reinsurance agreement specifies a maximum coverage per event of $10.0 million and a retention level of $0.5 million per event. In consideration for a reinstatement premium, second event coverage is provided in excess of a $0.5 million deductible up to $10.0 million. We have paid the $0.5 million retention in claim amounts for both Laura and Delta and do not believe we will exceed the maximum coverage for either of them; however, any claims in excess of $10.5 million would have to be paid by SPFIC. All claims related to Zeta will be paid by SPFIC. We expect the total of these claims to be less than $0.5 million.