Note 5. Reinsurance

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

	September 30, 2015		December 31, 2014
Balance sheets:
Benefit and claim reserves assumed	$	2,763,249	$	2,678,376
Benefit and claim reserves ceded		27,664,804		29,012,678

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Statements of comprehensive income:
Premiums assumed	$	6,162	$	6,504	$	19,830	$	21,777
Premiums ceded		69,005		76,886		226,375		272,370
Benefits assumed		3,206		1,198		55,165		55,592
Benefits ceded		217,543		373,581		750,036		808,667
Commissions assumed		2		33		12		49
Commissions ceded		875		1,510		2,729		5,037

The following table provides a summary of the significant reinsurance balances recoverable on paid and unpaid policy claims by reinsurers along with their respective A.M. Best credit ratings as of September 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
Security National Life	NR	$	-	$	71,960	$	15,609,686	$	53,006	$	15,628,640
Optimum Re Insurance Company	A-		-		16,624		132,288		-		148,912
Sagicor Life Insurance Company	A-		-		318,169		11,800,641		231,558		11,887,252
		$	-	$	406,753	$	27,542,615	$	284,564	$	27,664,804

Capital Reserve has a 100% coinsurance agreement with Security National Life Insurance Corporation (“SNL”) whereby 100% of the business written by Capital Reserve is ceded to SNL. At September 30, 2015 and December 31, 2014, total benefit reserves, policy claims, deposit-type contracts, and due premiums ceded by Capital Reserve to SNL were $15,628,640 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 was ceded to Sagicor. During 2000, Old Reliance coinsured the remaining 25% with Sagicor. At September 30, 2015 and December 31, 2014, total benefit reserves, policy claims, deposit-type contracts, and due premiums ceded for the Old Reliance block of business to Sagicor were $11,887,252 and $12,143,472, respectively. American Life 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 September 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 $15.6 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 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 September 30, 2015 and December 31, 2014, no contingency reserve was established.