Assurant 2010 Annual Report Download - page 104

F-34 ASSURANT, INC.  2010 Form 10K
13 Reserves
Group
Term Life Group Disability Short Duration Medical (2) Long Duration Medical (2) Property and Warranty
Balance as of December 31, 2007, gross of reinsurance (3) $ 281,043 $ 1,524,831 $ 316,799 $ 45,710 $ 504,398
Less: Reinsurance ceded and other (1) (1,350) (36,399) (41,411) (4,046) (119,094)
Balance as of January 1, 2008, net of reinsurance 279,693 1,488,432 275,388 41,664 385,304
Incurred losses related to:
Current year 169,301 342,447 1,194,853 146,873 1,081,244
Prior year’s interest 8,884 65,751 — — —
Prior year (s) (58,480) (94,113) (51,093) (6,737) (55,499)
Total incurred losses 119,705 314,085 1,143,760 140,136 1,025,745
Paid losses related to:
Current year 109,558 83,863 971,781 121,707 807,087
Prior year (s) 35,039 280,767 206,772 30,408 209,506
Total paid losses 144,597 364,630 1,178,553 152,115 1,016,593
Balance as of December 31, 2008, net of reinsurance (3) 254,801 1,437,887 240,595 29,685 394,456
Plus: Reinsurance ceded and other (1) 1,461 35,115 37,265 2,768 167,394
Balance as of December 31, 2008, gross of reinsurance (3) 256,262 1,473,002 277,860 32,453 561,850
Less: Reinsurance ceded and other (1) (1,461) (35,115) (37,265) (2,768) (167,394)
Balance as of January 1, 2009, net of reinsurance 254,801 1,437,887 240,595 29,685 394,456
Incurred losses related to:
Current year 146,638 310,228 1,273,782 118,565 943,054
Prior year’s interest 8,815 63,877 — — —
Prior year (s) (24,801) (79,899) 30,006 7,221 (35,840)
Total incurred losses 130,652 294,206 1,303,788 125,786 907,214
Paid losses related to:
Current year 88,063 71,930 1,003,547 97,780 681,019
Prior year (s) 43,381 279,861 211,638 27,776 226,725
Total paid losses 131,444 351,791 1,215,185 125,556 907,744
Balance as of December 31, 2009, net of reinsurance (3) 254,009 1,380,302 329,198 29,915 393,926
Plus: Reinsurance ceded and other (1) 1,600 37,128 30,428 1,959 147,325
Balance as of December 31, 2009 gross of reinsurance (3) 255,609 1,417,430 359,626 31,874 541,251
Less: Reinsurance ceded and other (1) (1,600) (37,128) (30,428) (1,959) (147,325)
Balance as of January 1, 2010, net of reinsurance 254,009 1,380,302 329,198 29,915 393,926
Incurred losses related to:
Current year 137,345 352,118 1,292,045 98,546 880,347
Prior year’s interest 8,471 60,738 — — —
Prior year (s) (26,994) (85,753) (66,451) (3,051) (46,269)
Total incurred losses 118,822 327,103 1,225,594 95,495 834,078
Paid losses related to:
Current year 83,482 66,570 1,028,147 81,392 608,085
Prior year (s) 46,370 273,743 251,817 26,162 250,520
Total paid losses 129,852 340,313 1,279,964 107,554 858,605
Balance as of December 31, 2010, net of reinsurance (3) 242,979 1,367,092 274,828 17,856 369,399
Plus: Reinsurance ceded and other (1) 3,021 37,182 15,562 703 149,032
Balance as of December 31, 2010 gross of reinsurance (3) $ 246,000 $ 1,404,274 $ 290,390 $ 18,559 $ 518,431
(1) Reinsurance ceded and other includes claims and benefits payable balances that have either been (a) reinsured to third parties, (b) established for claims related expenses whose subsequent
payment is not recorded as a paid claim, or (c) reserves established for obligations that would persist even if contracts were cancelled (such as extension of benefits), which cannot be
analyzed appropriately under a roll-forward approach.
(2) Short duration and long duration medical methodologies used for settling claims and benefits payable are similar.
(3) The majority of the Company’s credit life and disability claims and benefits payable are ceded to reinsurers. The Company’s net retained credit life and disability claims and benefits
payable were $69,127, $87,852 and $77,299 at December 31, 2010, and 2009 and 2008, respectively.
Short Duration Contracts
 e Company’s short duration contracts are comprised of group term life,
group disability, medical, dental, property and warranty, credit life and
disability, extended service contracts and all other.  e principal products
and services included in these categories are described in the summary
of signifi cant accounting polices. See Note 2 for further information.
Case and IBNR reserves are developed using actuarial principles and
assumptions that consider, among other things, contractual requirements,
historical utilization trends and payment patterns, benefi t changes,
medical infl ation, seasonality, membership, product mix, legislative
and regulatory environment, economic factors, disabled life mortality
and claim termination rates and other relevant factors.  e Company
consistently applies the principles and assumptions listed above from year