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F-37ASSURANT, INC.2010 Form 10K
14 Reinsurance
Best Ratings of
Reinsurer Ceded future policyholder
benefi ts and expense Ceded unearned
premiums Ceded claims and
benefi ts payable Ceded paid
losses Total
A++ or A+ $ 1,759,490 $ 38,242 $ 558,360 $ 4,054 $ 2,360,146
A or A- 1,540,653 69,631 120,411 4,563 1,735,258
B++ or B+ 39,896 1,432 1,242 170 42,740
B or B- — 19,626 3,937 — 23,563
C and Below 42 — — 88 130
Not Rated 3,985 668,013 139,781 39,335 851,114
Total 3,344,066 796,944 823,731 48,210 5,012,951
Less: Allowance — — — (15,635) (15,635)
NET REINSURANCE RECOVERABLE $ 3,344,066 $ 796,944 $ 823,731 $ 32,575 $ 4,997,316
A.M. Best ratings for  e Hartford and John Hancock, the reinsurers with
the largest reinsurance recoverable balances, are A and A+, respectively.
A.M. Best recently placed a negative outlook on the fi nancial strength
ratings of John Hancock and a stable outlook on the fi nancial strength
ratings of  e Hartford.  e total amount of recoverable for these two
reinsurers is $3,488,908 as of December 31, 2010. Most of the assets
backing reserves relating to reinsurance recoverables from these two
counterparties are held in trust.
A substantial portion of the Not Rated category is related to Assurant
Solutions’ and Assurant Specialty Property’s agreements to reinsure
premiums and risks related to business generated by certain clients
to the clients’ own captive insurance companies or to reinsurance
subsidiaries in which the clients have an ownership interest. To mitigate
exposure to credit risk for these reinsurers, the Company evaluates the
fi nancial condition of the reinsurer and holds substantial collateral (in
the form of funds withheld, trusts, and letters of credit) as security.
e Not Rated category also includes recoverables from the National
Flood Insurance Program and the Florida Hurricane Catastrophe Fund.
An allowance for doubtful accounts related to reinsurance recoverables
is recorded on the basis of periodic evaluations of balances due from
reinsurers (net of collateral), reinsurer solvency, management’s experience
and current economic conditions.  e allowance for doubtful accounts
was $15,635 and $6,254 at December 31, 2010 and 2009, respectively.
Information about the valuation allowance for reinsurance recoverable is as follows:
Years Ended December 31,
2010 2009
Balance as of beginning-of-year $ 6,253 $ 9,680
Provision 9,266 (853)
Other additions 116 257
Direct write-downs charged against the allowance — (2,831)
BALANCE AS OF THE ENDOFYEAR $ 15,635 $ 6,253
e eff ect of reinsurance on premiums earned and benefi ts incurred was as follows:
Years Ended December 31,
2010 2009 2008
Long
Duration Short
Duration Total Long
Duration Short
Duration Total Long
Duration Short
Duration Total
Direct earned premiums
and other considerations $ 641,284 $ 8,664,723 $ 9,306,007 $ 745,625 $ 8,632,312 $ 9,377,937 $ 997,538 $ 8,625,122 $ 9,622,660
Premiums assumed 7,467 317,635 325,102 8,852 222,250 231,102 7,176 343,032 350,208
Premiums ceded (345,837) (1,882,233) (2,228,070) (360,221) (1,698,483) (2,058,704) (379,624) (1,667,896) (2,047,520 )
NET EARNED
PREMIUMS
AND OTHER
CONSIDERATIONS $ 302,914 $ 7,100,125 $ 7,403,039 $ 394,256 $ 7,156,079 $ 7,550,335 $ 625,090 $ 7,300,258 $ 7,925,348
Direct policyholder benefi ts $ 1,634,348 $ 3,465,590 $ 5,099,938 $ 1,166,137 $ 3,690,611 $ 4,856,748 $1,372,998 $ 3,746,597 $ 5,119,595
Policyholder benefi ts
assumed 25,875 209,975 235,850 31,647 153,792 185,439 27,692 220,553 248,245
Policyholder benefi ts ceded (1,284,157) (410,653) (1,694,810) (764,441) (409,764) (1,174,205) (807,896) (540,797) (1,348,693 )
NET POLICYHOLDER
BENEFITS $ 376,066 $ 3,264,912 $ 3,640,978 $ 433,343 $ 3,434,639 $ 3,867,982 $ 592,794 $ 3,426,353 $ 4,019,147
e Company had $1,190,763 and $1,052,007, respectively, of invested
assets held in trusts or by custodians as of December 31, 2010 and
2009, respectively, for the benefi t of others related to certain reinsurance
arrangements.
e Company utilizes ceded reinsurance for loss protection and capital
management, business dispositions, and in Assurant Solutions and
Assurant Specialty Property segments, for client risk and profi t sharing.