Note 13. Reinsurance

12 Months Ended

Dec. 31, 2014

Notes

Note 13. Reinsurance

13.  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, 2014, Independence American ceded to highly rated reinsurers.

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

				ASSUMED		CEDED
				FROM		TO
		DIRECT		OTHER		OTHER		NET
		AMOUNT		COMPANIES		COMPANIES		AMOUNT
Premiums Earned:
Successor
Year ended December 31, 2014	$	63,007	$	74,934	$	4,335	$	133,606
Year ended December 31, 2013		55,486		75,629		3,912		127,203
Predecessor
Year ended December 31, 2012		42,318		49,703		8,243		83,778

Insurance Benefits:
Successor
Year ended December 31, 2014	$	40,572	$	50,886	$	2,571	$	88,887
Year ended December 31, 2013		38,367		52,992		4,241		87,118
Predecessor
Year ended December 31, 2012		32,057		31,526		6,734		56,849

All premiums included in Assumed From Other Companies for 2014, 2013 and 2012 were assumed from subsidiaries of IHC.  Included in Ceded To Other Companies for 2014, 2013 and 2012 are premiums of $1,300,000, $108,000, and $1,835,000, respectively, which were ceded to subsidiaries of IHC.