REINSURANCE REINSURANCE

9 Months Ended

Sep. 30, 2013

Reinsurance Disclosures [Abstract]

REINSURANCE

REINSURANCE

Effective as of September 30, 2013, we entered into a coinsurance reinsurance transaction whereby we ceded 33.3% of the hospital benefit of one of Aflac Japan’s closed medical in-force blocks of business. We recorded the gain related to the transaction as a deferred profit liability on business sold through reinsurance on our consolidated balance sheets. The deferred profit liability of $652 million, included in future policy benefits in the consolidated balance sheet, will be amortized into income over the expected lives of the policies. The corresponding reinsurance recoverable is included in other assets in the consolidated balance sheet. As of September 30, 2013, no ceded premiums or claims have been incurred or paid under the transaction. Reinsurance does not relieve us from our obligations to policyholders. In the event that the reinsurer is unable to meet their obligations, we remain liable for the reinsured claims.