Note 21 Reinsurance

12 Months Ended

Dec. 31, 2011

Financial Services, Insurance

Reinsurance [Text Block]

Note 21.          Reinsurance

            Standard Security Life, Madison National Life and Independence American reinsure portions of certain business in order to limit the assumption of disproportionate risks. Standard Security Life, Madison National Life and Independence American retain varying amounts of individual life or group life insurance. Amounts not retained are ceded to other companies on an automatic or facultative basis.  In addition, Standard Security Life, Madison National Life and Independence American participate in various coinsurance treaties on a quota share basis. Standard Security Life, Madison National Life and Independence American are contingently liable with respect to reinsurance in the unlikely event that the assuming reinsurers are unable to meet their obligations.  The ceding of reinsurance does not discharge the primary liability of the original insurer to the insured.

Madison National Life entered into a reinsurance treaty with an unaffiliated reinsurer to cede $48,837,000 of life reserves, effective April 1, 2009, in exchange for transferring $40,639,000 in cash to such reinsurer. Madison National Life recorded a net deferred gain of $8,198,000 which will be amortized over the life of the contract. In accordance with the terms of the agreement, Madison National Life will continue to administer this block of business.

The effect of reinsurance on life insurance in-force, benefits to policyholders and premiums earned is as follows:

										PERCENTAGE
					ASSUMED		CEDED			OF AMOUNT
			GROSS		FROM OTHER		TO OTHER		NET	ASSUMED
			AMOUNT		COMPANIES		COMPANIES		AMOUNT	TO NET
			(In thousands)
Life Insurance In-Force:
December 31, 2011		$	11,322,537	$	236,650	$	6,207,385	$	5,351,802	4.4%
December 31, 2010		$	11,253,298	$	291,467	$	5,797,444	$	5,747,321	5.1%
December 31, 2009		$	11,091,711	$	703,045	$	6,173,559	$	5,621,197	12.5%
Benefits to Policyholders:
December 31, 2011		$	272,128	$	53,929	$	101,994	$	224,063	24.1%
December 31, 2010		$	307,988	$	65,624	$	132,936	$	240,676	27.3%
December 31, 2009		$	302,785	$	93,307	$	176,301	$	219,791	42.5%
Premiums Earned:
December 31, 2011
	Health	$	377,294	$	51,703	$	130,451	$	298,546	17.3%
	Life and annuity		48,881		7,663		18,676		37,868	20.2%
		$	426,175	$	59,366	$	149,127	$	336,414	17.6%
December 31, 2010
	Health	$	394,446	$	55,036	$	159,896	$	289,586	19.0%
	Life and annuity		48,280		8,712		20,432		36,560	23.8%
		$	442,726	$	63,748	$	180,328	$	326,146	19.5%
December 31, 2009
	Health	$	376,139	$	97,527	$	215,567	$	258,099	37.8%
	Life and annuity		39,285		14,595		17,180		36,700	39.8%
		$	415,424	$	112,122	$	232,747	$	294,799	38.0%

Included in Gross Amount in 2010 and 2009, respectively, are $8,452,000 and $62,259,000 of premiums written through AMIC subsidiaries prior to its consolidation in 2010. Included in Ceded to Other Companies in 2010 and 2009, respectively, are $5,867,000 and $45,519,000 of Premiums Earned and $3,020,000 and $31,009,000 of Benefits to Policyholders for business ceded to Independence American, a subsidiary of AMIC prior to its consolidation in 2010.

In the fourth quarter of 2011, Standard Security Life entered into a coinsurance agreement with an unaffiliated reinsurer effective January 26, 2012 and transferred approximately $143,421,000 of group annuity reserves in the first quarter of 2012. As a result of such agreement, the Company wrote-off $4,568,000 of deferred acquisition costs at December 31, 2011.