Note 11. Reinsurance

9 Months Ended

Sep. 30, 2016

Notes

Note 11. Reinsurance

Note 11.          Reinsurance

            Effective January 1, 2016, all of the in-force stop-loss business of Standard Security Life and Independence American produced by Risk Solutions was co-insured in connection with the Risk Solutions Sale and Coinsurance Transaction (see Note 3). As a result of this transaction, amounts due from reinsurers includes $52,235,000 due from Westport at September 30, 2016; premiums earned from the Medical Stop-Loss segment was $2,668,000 and $10,671,000 for the three months and nine months ended September 30, 2016, respectively, compared to $52,040,000 and $157,029,000 for the comparable periods in 2015; and, insurance benefits, claims and reserves for the Medical Stop-Loss segment were $3,508,000 and $9,875,000 for the three months and nine months ended September 30, 2016, respectively, compared to $37,369,000 and $115,032,000 for the comparable periods in 2015.

            The Company is 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.