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Reinsurance and indemnification
 9 Months Ended
Sep. 30, 2020
Reinsurance Disclosures [Abstract]  
Reinsurance and indemnification
Note 9
Reinsurance and indemnification
Effects of reinsurance ceded and indemnification programs on property and casualty premiums earned and life premiums and contract charges
($ in millions)
 
Three months ended September 30,
 
Nine months ended September 30,
 
2020
 
2019
 
2020

2019
Property and casualty insurance premiums earned
 
$
(277
)
 
$
(289
)
 
$
(845
)
 
$
(836
)
Life premiums and contract charges
 
(62
)
 
(68
)
 
(173
)
 
(200
)

Effects of reinsurance ceded and indemnification programs on property and casualty insurance claims and claims expense, life contract benefits and interest credited to contractholder funds
($ in millions)
 
Three months ended September 30,
 
Nine months ended September 30,
 
2020
 
2019
 
2020
 
2019
Property and casualty insurance claims and claims expense (1) (2)
 
$
128

 
$
(216
)
 
$
(213
)
 
$
(465
)
Life contract benefits
 
15

 
(74
)
 
(121
)
 
(92
)
Interest credited to contractholder funds
 
(7
)
 
(6
)
 
(19
)
 
(14
)

(1) 
In the three and nine months ended September 30, 2020, ceded claims and claims expense were reduced by approximately $330 million for amounts returned to reinsurers related to the PG&E subrogation recovery. See Note 8 for further information.
(2) 
Includes $195 million and $205 million of ceded losses related to the Michigan Catastrophic Claims Association (“MCCA”) for the nine months ended September 30, 2020 and 2019, respectively. On May 30, 2019, the Governor of Michigan signed new legislation effective July 2, 2020 to reform Michigan’s no-fault auto insurance system, including implementing mandated rate reductions that correspond to the level of personal injury protection coverage chosen by insureds. At this time it is not possible for the Company to know the full impact the reform will have on its claims and claims expense reserves and corresponding MCCA indemnification recoverables as not all components of reform will be implemented until 2023. For more detail on these changes see the Form 10-K for the year ended December 31, 2019.
Reinsurance and indemnification recoverables
Reinsurance and indemnification recoverables, net
($ in millions)
 
September 30, 2020
 
December 31, 2019
Property and casualty
 
 
 
 
Paid and due from reinsurers and indemnitors
 
$
94

 
$
112

Unpaid losses estimated (including IBNR)
 
6,889

 
6,912

Total property and casualty
 
$
6,983

 
$
7,024

 
 
 
 
 
Annuities
 
1,309

 
1,305

Life insurance
 
718

 
794

Other
 
87

 
88

Total
 
$
9,097

 
$
9,211


Rollforward of credit loss allowance for reinsurance recoverables
 
 
($ in millions)
 
Three months ended September 30, 2020
 
Nine months ended September 30, 2020
Property and casualty (1) (2)
 
 
 
 
Beginning balance
 
$
(59
)
 
$
(60
)
Decrease in the provision for credit losses
 
—

 
1

Ending balance
 
$
(59
)
 
$
(59
)
 
 
 
 
 
Annuities, life insurance and other
 
 
 
 
Beginning balance
 
$
(15
)
 
$
(14
)
Increase in the provision for credit losses
 
(1
)
 
(2
)
Ending balance
 
$
(16
)
 
$
(16
)
(1) 
Primarily related to discontinued lines and coverages reinsurance ceded.
(2) 
Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation.
Allstate Life - Scottish Re (U.S.), Inc. The Company had $62 million and $70 million of life reinsurance recoverables, net of an allowance for estimated uncollectible amounts, related to Scottish Re (U.S.), Inc. as of September 30, 2020 and December 31, 2019. On December 14, 2018, the Delaware Insurance Commissioner placed Scottish Re (U.S.), Inc. under regulatory supervision.  On March 6, 2019, the Chancery Court of the State of Delaware entered a Rehabilitation and Injunction Order in response to a petition filed by the Insurance Commissioner (the “Petition”). 
The Company joined in a joint motion filed on behalf of several affected parties asking the court to allow a specified amount of offsetting claim payments and losses against premiums remitted to Scottish Re (U.S.), Inc. The Company also filed a separate motion related to the reimbursement of claim payments where Scottish Re (U.S.), Inc. is also acting as administrator. The Court has not yet ruled on either of these motions. In the interim, the Company and several other affected parties have been permitted to exercise certain setoff rights while the parties address any potential disputes. On June 30, 2020, pursuant to the Petition, Scottish Re (U.S.), Inc. submitted a proposed Plan of Rehabilitation (“Plan”) for consideration by the Court. On October 9, 2020, Scottish Re (U.S.), Inc. filed a proposed scheduling order that states it intends to file an amended Plan by March 1, 2021, with a hearing date to be determined on or after June 1, 2021. On October 23, 2020, an objection to the proposed Plan was filed based on an absence of a firm commitment from Scottish Re (U.S.), Inc. to produce timely responses to information requests. The Company continues to monitor Scottish Re (U.S.), Inc. for future developments and will reevaluate its allowance for uncollectible amounts as new information becomes available.