Related Party Transactions

9 Months Ended

Sep. 30, 2011

Related Party Transactions

Related Party Transactions

3.  Related Party Transactions

Included in the condensed consolidated balance sheets at September 30, 2011 and December 31, 2010 are the following related party amounts:

	September 30, 2011		December 31, 2010
Reinsurance receivable	$	503,081	$	483,564
Future policy benefits	2,095,144		2,183,167

Included in the condensed consolidated statements of income for the three and nine-month periods ended September 30, 2011 and 2010 are the following related party amounts:

	Three months ended September 30,					Nine months ended September 30,
	2011		2010			2011		2010
Premium income, net of related party premiums ceded of $1,264, $486, $4,315 and $3,770	$	39,784	$	32,012		$	103,751	$	98,777
Life and other policy benefits, net of reinsurance recoveries of $2,934, $289, $4,165 and $6,961	31,361		30,577			89,649		96,719
Increase (decrease) in future policy benefits	3,448		(20,878		)	54,554		(61,414		)

The Company’s wholly owned subsidiary, Great-West Life & Annuity Insurance Company of South Carolina (“GWSC”), and The Canada Life Assurance Company (“CLAC”), an affiliate, are parties to a reinsurance agreement pursuant to which GWSC assumes term life insurance from CLAC.  GWL&A Financial obtained two letters of credit for the benefit of GWSC as collateral under the reinsurance agreement for balance sheet policy liabilities and capital support.  The first letter of credit is for $1,114,700 and renews annually until it expires on December 31, 2025.  The second letter of credit is for $70,000 and renews annually for an indefinite period of time.  At September 30, 2011 and December 31, 2010, there were no outstanding amounts related to the letters of credit.

A subsidiary of the Company, GW Capital Management, LLC, serves as a Registered Investment Advisor to Maxim Series Fund, Inc., an affiliated open-end management investment company, and to several affiliated insurance company separate accounts.  A subsidiary of the Company, Orchard Trust, serves as trustee to Collective Investment Trusts, an affiliated entity.  Included in fee income in the condensed consolidated statements of income are $17,689 and $14,637 of advisory and management fee income from these affiliated entities for the three-month periods ended September 30, 2011 and 2010, respectively.  Included in fee income in the condensed consolidated statements of income are $51,089 and $43,069 of advisory and management fee income from these affiliated entities for the nine-month periods ended September 30, 2011 and 2010, respectively.

The Company’s separate accounts invest in shares of Maxim Series Fund, Inc. and Putnam Funds, which are affiliates of the Company, and shares of other non-affiliated mutual funds and government and corporate bonds.  The Company’s separate accounts invest in mutual funds or other investment options that purchase guaranteed interest annuity contracts issued by the Company.  During the three-month periods ended September 30, 2011 and 2010, these purchases totaled $20,072 and $28,128, respectively.  During the nine-month periods ended September 30, 2011 and 2010, these purchases totaled $88,407 and $132,346, respectively.  As the general account investment contracts are also included in the separate account balances in the accompanying condensed consolidated balance sheets, the Company has reduced the separate account assets and liabilities by $265,063 and $269,495 at September 30, 2011 and December 31, 2010, respectively, to eliminate these amounts in its consolidated balance sheets at those dates.

The maximum amount of dividends, which can be paid to stockholders by insurance companies domiciled in the State of Colorado, is subject to restrictions relating to statutory capital and surplus and statutory net gain from operations.  Prior to the payment of any dividends, the Company seeks approval from the Colorado Insurance Commissioner.  During the nine-month periods ended September 30, 2011 and 2010, the Company paid dividends of $153,350 and $147,917, respectively, to its parent, GWL&A Financial.