Sun Life 2012 Annual Report Download - page 142

12. Reinsurance
Reinsurance is used primarily to limit exposure to large losses. We have a retention policy that requires that such arrangements be
placed with well-established, highly rated reinsurers. Coverage is well-diversified and controls are in place to manage exposure to
reinsurance counterparties. While reinsurance arrangements provide for the recovery of claims arising from the liabilities ceded, we
retain primary responsibility to the policyholders.
12.A Reinsurance Assets
Reinsurance assets are measured using the amounts and assumptions associated with the underlying insurance contracts and in
accordance with the terms of each reinsurance contract. Reinsurance assets are comprised of the following:
As at December 31, 2012 SLF Canada SLF U.S.(3) SLF Asia Corporate(1) Total
Individual participating life $ (11) $ (15) $ 91 $ – $ 65
Individual non-participating life 92 1,035 61 188 1,376
Group Life 64 870 – – 934
Individual annuities – – – 72 72
Health Insurance 455 81 – 1 537
Reinsurance assets before other policy assets 600 1,971 152 261 2,984
Add: Other policy assets(2) 65 167 15 9 256
Total reinsurance assets(3) $ 665 $ 2,138 $ 167 $ 270 $ 3,240
(1) Primarily business from the U.K. and run-off reinsurance operations. Includes SLF U.K. business of $27 for Individual non-participating life and $72 for Individual annuities.
(2) Consists of amounts on deposit, policy benefits payable, provisions for unreported claims, provisions for policyholder dividends, and provisions for experience rating refunds.
(3) For reinsurance assets categorized as held for sale, see Note 3.
As at December 31, 2011 SLF Canada SLF U.S. SLF Asia Corporate(1) Total
Individual participating life $ 177 $ (16) $ 137 $ – $ 298
Individual non-participating life(2) 312 838 60 204 1,414
Group Life 73 866 – – 939
Individual annuities – 110 – 65 175
Health Insurance 379 69 – 1 449
Reinsurance assets before other policy assets 941 1,867 197 270 3,275
Add: Other policy assets(3) 57 104 11 11 183
Total reinsurance assets $ 998 $ 1,971 $ 208 $ 281 $ 3,458
(1) Primarily business from the U.K. and run-off reinsurance operations. Includes SLF U.K. of $25 for Individual non-participating life and $65 for Individual annuities.
(2) Balances have been restated. Refer to Note 2.
(3) Consists of amounts on deposit, policy benefits payable, provisions for unreported claims, provisions for policyholder dividends, and provisions for experience rating refunds.
No impairment was incurred for fiscal year ended December 31, 2012. See Note 11.A.iv for the Changes in Reinsurance assets for the
period.
12.B Reinsurance (Expenses) Recoveries
Reinsurance (expenses) recoveries are comprised of the following:
For the years ended December 31, 2012 2011
Recovered claims and benefits $ 4,178 $ 3,786
Commissions 54 63
Reserve adjustments 137 251
Operating expenses and other 463 440
Reinsurance (expenses) recoveries $ 4,832 $ 4,540
12.C Reinsurance Gains or Losses
We did not enter into significant reinsurance arrangements which resulted in profits on inception for the year ended December 31, 2012
($46 in 2011).
140 Sun Life Financial Inc. Annual Report 2012 Notes to Consolidated Financial Statements