Note 14. Reinsurance

12 Months Ended

Dec. 31, 2013

Notes

Note 14. Reinsurance

14.  Reinsurance

Independence American reinsures a portion of its direct business in order to limit the assumption of disproportionate risks.  Amounts not retained are ceded to other companies on an automatic basis.  Independence American is contingently liable with respect to reinsurance in the unlikely event that the assuming reinsurers are unable to meet their obligations.  All of Independence American’s insurance contracts are of short-duration.  The ceding of reinsurance does not discharge the primary liability of the original insurer to the insured.  At December 31, 2013, Independence American ceded to highly rated reinsurers.

The effect of reinsurance on insurance benefits and premiums earned is as follows (in thousands):

				ASSUMED		CEDED
				FROM		TO
		DIRECT		OTHER		OTHER		NET
		AMOUNT		COMPANIES		COMPANIES		AMOUNT
Insurance Benefits:
Year ended December 31, 2013	$	38,367	$	52,992	$	4,241	$	87,118
Year ended December 31, 2012		32,057		31,526		6,734		56,849
Year ended December 31, 2011		26,770		27,238		6,240		47,768

Premiums Earned:
Year ended December 31, 2013	$	55,486	$	75,629	$	3,912	$	127,203
Year ended December 31, 2012		42,318		49,703		8,243		83,778
Year ended December 31, 2011		39,893		42,088		9,533		72,448

All premiums included in Assumed From Other Companies for 2013, 2012 and 2011 were assumed from subsidiaries of IHC.  Included in Ceded To Other Companies for 2013, 2012 and 2011 are premiums of $108,000, $1,835,000, and $1,250,000, respectively, which were ceded to subsidiaries of IHC.