9. Reinsurance

The following summarizes reinsurance amounts (in millions) recorded on our Consolidated Statements of Comprehensive Income (Loss), excluding amounts attributable to the indemnity reinsurance transaction with Swiss Re:



	For the Years Ended December 31,
	2017			2016			2015
Direct insurance premiums and fee income	$	10,269		$	9,551		$	9,529
Reinsurance assumed		91			93			73
Reinsurance ceded		(1,485	)		(1,413	)		(1,311	)
Total insurance premiums and fee income	$	8,875		$	8,231		$	8,291

Direct insurance benefits	$	6,770		$	6,195		$	6,420
Reinsurance recoveries netted against benefits		(1,610	)		(1,503	)		(1,376	)
Total benefits	$	5,160		$	4,692		$	5,044

Our insurance companies cede insurance to other companies. The portion of our life insurance and annuity risks exceeding each of our insurance companies’ retention limit is reinsured with other insurers. We seek reinsurance coverage to limit our exposure to mortality losses and to enhance our capital management.

As of December 31, 2017, the policy for our reinsurance program was to retain up to $20 million on a single insured life. As the amount we retain varies by policy, we reinsured approximately 25% of the mortality risk on newly issued life insurance contracts in 2017. Approximately 38% and 41% of our total individual life in-force amount was reinsured as of December 31, 2017 and 2016, respectively. Portions of our deferred annuity business have been reinsured on either a coinsurance or a Modco basis with other companies to limit our exposure to interest rate risks. As of December 31, 2017 and 2016, the reserves associated with these reinsurance arrangements totaled $530 million and $571 million, respectively.

We focus on obtaining reinsurance from a diverse group of reinsurers, and we monitor concentration as well as financial strength ratings of our reinsurers. Our amounts recoverable from reinsurers represent receivables from and reserves ceded to reinsurers. The amounts recoverable from reinsurers were $4.9 billion and $5.3 billion as of December 31, 2017 and 2016, respectively. Our reinsurance operations were acquired by Swiss Re in December 2001 through a series of indemnity reinsurance transactions. As such, Swiss Re reinsured certain liabilities and obligations under the indemnity reinsurance agreements and thereby represents our largest reinsurance exposure. As we are not relieved of our liability to the ceding companies for this business, the liabilities and obligations associated with the reinsured policies remain on our Consolidated Balance Sheets with a corresponding reinsurance receivable from Swiss Re, which totaled $1.8 billion and $2.1 billion as of December 31, 2017 and 2016, respectively. Swiss Re has funded a trust, with a balance of $2.5 billion as of December 31, 2017, to support this business. In addition to various remedies that we would have in the event of a default by Swiss Re, we continue to hold assets in support of certain of the transferred reserves. These assets consist of those reported as trading securities and certain mortgage loans. Our liabilities for funds withheld and embedded derivatives as of December 31, 2017, included $269 million and $46 million, respectively, related to the business sold to Swiss Re.

We recorded the gain related to the indemnity reinsurance transactions with Swiss Re as a deferred gain on business sold through reinsurance on our Consolidated Balance Sheets and amortized the gain over the period which the majority of the earnings were expected to emerge, and the deferred gain was fully amortized in 2017. We amortized $15 million, after-tax, of deferred gain on business sold through reinsurance during 2017 and $48 million during 2016 and 2015, respectively.