Sun Life 2015 Annual Report Download - page 145

The Appointed Actuary is required each year to investigate the financial condition of the Company and prepare a report for the Board.
The 2015 analysis tested our capital adequacy until December 31, 2019, under various adverse economic and business conditions.
The Appointed Actuary reviews the calculation of our Canadian Minimum Continuing Capital and Surplus Requirements (“MCCSR”).
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, 2015 SLF Canada SLF U.S. SLF Asia Corporate(1) Total
Individual participating life $ 26 $ (15) $ 188 $ – $ 199
Individual non-participating life 61 1,971 119 30 2,181
Group life 55 1,469 – – 1,524
Individual annuities – – – 260 260
Group annuities 147 – – – 147
Health insurance 344 156 – 1 501
Reinsurance assets before other policy assets 633 3,581 307 291 4,812
Add: Other policy assets(2) 78 307 14 175 574
Total Reinsurance assets $ 711 $ 3,888 $ 321 $ 466 $ 5,386
(1) Primarily business from the U.K. and run-off reinsurance operations. Includes U.K. business of $30 for Individual non-participating life and $83 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.
As at December 31, 2014 SLF Canada SLF U.S. SLF Asia Corporate(1) Total
Individual participating life $ 14 $ (15) $ 143 $ – $ 142
Individual non-participating life (77) 1,504 96 25(3) 1,548(3)
Group life 59 1,152 – – 1,211
Individual annuities – – – 235(3) 235(3)
Health insurance 411 123 – 1 535
Reinsurance assets before other policy assets 407 2,764 239 261 3,671
Add: Other policy assets(2) 76 275 11 9 371
Total Reinsurance assets $ 483 $ 3,039 $ 250 $ 270 $ 4,042
(1) Primarily business from the U.K. and run-off reinsurance operations. Includes U.K. business of $25 for Individual non-participating life and $74 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) Balances have been changed to conform with current year presentation.
There was no impairment of Reinsurance assets in 2015 and 2014. Changes in Reinsurance assets are included in Note 11.A.iv.
12.B Reinsurance (Expenses) Recoveries
Reinsurance (expenses) recoveries are comprised of the following:
For the years ended December 31, 2015 2014
Recovered claims and benefits $ 5,356 $ 4,629
Commissions 67 55
Reserve adjustments 191 216
Operating expenses and other 532 511
Reinsurance (expenses) recoveries $ 6,146 $ 5,411
12.C Reinsurance Gains or Losses
We entered into a reinsurance arrangement that resulted in a profit on inception of $13 after tax for the year ended December 31, 2015
($nil for the year ended December 31, 2014).
Notes to Consolidated Financial Statements Sun Life Financial Inc. Annual Report 2015 143