Reinsurance

12 Months Ended

Dec. 31, 2016

Reinsurance Disclosures [Abstract]

Reinsurance

Note 7. Reinsurance

A summary of significant reinsurance amounts affecting the accompanying consolidated financial statements as of December 31, 2016 and 2015 and for the years ended December 31, 2016 and 2015 is as follows:

	Year Ended December 31,
	2016		2015
Balance sheets:
Benefit and claim reserves assumed	$	2,470,063	$	2,763,779
Benefit and claim reserves ceded		11,704,055		12,212,656
	Year Ended December 31,
	2016		2015
Statements of comprehensive income:
Premiums assumed	$	24,064	$	36,777
Premiums ceded		287,780		498,787
Benefits assumed		43,602		57,317
Benefits ceded		696,159		904,867
Commissions assumed		35		21
Commissions ceded		1,649		3,399

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 December 31, 2016:

						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
Optimum Re Insurance Company	A-	$	-	$	77,032	$	180,681	$	-	$	257,713
Sagicor Life Insurance Company	A-		-		284,617		11,403,908		242,183		11,446,342
		$	-	$	361,649	$	11,584,589	$	242,183	$	11,704,055

Effective 1999, American Life entered into a 75% coinsurance agreement with Sagicor Life (“Sagicor”) whereby 75% of certain business is ceded to Sagicor. During 2000, the remaining 25% was coinsured with Sagicor. At December 31, 2016 and 2015, total benefit reserves, policy claims, deposit-type contracts, and due premiums ceded by American Life to Sagicor were $11,446,342 and $11,873,254, 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 American Life 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 American Life has failed to pay policy claims (individually or in the aggregate) with respect to our ceded business.

American Life 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 December 31, 2016 and 2015, no contingency reserve was established.