Note 9. Reinsurance

6 Months Ended

Jun. 30, 2016

Notes

Note 9. Reinsurance

9.             Reinsurance

Effective January 1, 2016, all of the in-force medical stop-loss business of Independence American produced by Risk Solutions was co-insured in connection with the Risk Solutions Sale and Coinsurance Transaction (see Note 3).  Stop-loss business produced by Risk Solutions was 100% co-insured, accordingly the Condensed Consolidated Statements of Income reflect the co-insurance effective January 1, 2016.  As a result of this transaction and the 100% co-insurance of stop-loss, amounts due from reinsurers increased to $36,161,000 at June 30, 2016. 

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.