Note 5. Reinsurance

A summary of significant reinsurance amounts affecting the accompanying consolidated financial statements as of June 30, 2015 and December 31, 2014 and for the three and six months ended June 30, 2015 and 2014 is as follows:

	June 30, 2015		December 31, 2014
Balance sheets:
Benefit and claim reserves assumed	$	2,669,786	$	2,678,376
Benefit and claim reserves ceded		28,079,244		29,012,678

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Statements of comprehensive income:
Premiums assumed	$	6,417		$	7,104		$	13,668		$	15,573
Premiums ceded		75,748			118,269			157,370			195,484
Benefits assumed		47,370			17,496			51,959			54,394
Benefits ceded		(273,537	)		(224,151	)		(532,493	)		(435,086	)
Commissions assumed		6			7			10			16
Commissions ceded		900			1,654			1,854			3,527

The following table provides a summary of the significant reinsurance balances recoverable on paid and unpaid policy claims by reinsurer along with the A.M. Best credit rating as of June 30, 2015:

							Recoverable on				Total Amount
			Recoverable		Recoverable		Benefit		Ceded		Recoverable
	AM Best		on Paid		on Unpaid		Reserves/Deposit-		Due		from
Reinsurer	Rating		Losses		Losses		type Contracts		Premiums		Reinsurer
SNL	NR	$		-	$	86,650	$	15,803,557	$	59,548	$	15,830,659
Optimum Re Insurance Company	A-			-		16,624		132,288		-		148,912
Sagicor Life Insurance Company	A-			-		472,922		11,856,536		229,785		12,099,673
		$		-	$	576,196	$	27,792,381	$	289,333	$	28,079,244

Capital Reserve has a 100% coinsurance agreement with SNL whereby 100% of the business written by Capital Reserve is ceded to SNL. At June 30, 2015 and December 31, 2014, total benefit reserves, policy claims, deposit-type contracts, and due premiums ceded by Capital Reserve to SNL were $15,830,659 and $16,375,768, respectively. Capital Reserve remains contingently liable on this ceded reinsurance should SNL be unable to meet its obligations.

During 1999, Old Reliance entered into a 75% coinsurance agreement with Sagicor Life (Sagicor) whereby 75% of the business written by Old Reliance is ceded to Sagicor. During 2000, Old Reliance coinsured the remaining 25% with Sagicor. At June 30, 2015 and December 31, 2014, total benefit reserves, policy claims, deposit-type contracts, and due premiums ceded by Old Reliance to Sagicor were $12,099,673 and $12,143,472, respectively. Old Reliance remains contingently liable on this ceded reinsurance should Sagicor be unable to meet their obligations.

The use of reinsurance does not relieve the Company of its primary liability to pay the full amount of the insurance benefit in the event of the failure of a reinsurer to honor its contractual obligation. No reinsurer of business ceded by the Company has failed to pay policy claims (individually or in the aggregate) with respect to our ceded business. At June 30, 2015, the Company had over 98% of its reinsurance recoverable amounts concentrated with two reinsurers, Sagicor and SNL. SNL, who is not rated by A.M. Best, accounted for $15.8 million of reinsurance recoverable.

The Company monitors several factors that it considers relevant to satisfy itself as to the ongoing ability of a reinsurer to meet all obligations of the reinsurance agreements. These factors include the credit rating of the reinsurer, the financial strength of the reinsurer, significant changes or events of the reinsurer, and any other relevant factors. If the Company believes that any reinsurer would not be able to satisfy its obligations with the Company, a separate contingency reserve may be established. At June 30, 2015 and December 31, 2014, no contingency reserve was established.