The Company participates in quota share reinsurance to limit risk and capital requirements and XOL reinsurance to mitigate the exposure of high cost or catastrophic member risk. The quota share reinsurance arrangements are with more than one counterparty with multiple state-level treaties. The XOL reinsurance arrangements are with a private counterparty and federal and state-run programs. A summary of the Company's reinsurance agreements and related accounting treatment is included in “Note 11 - Reinsurance,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

As previously disclosed in “Note 1 - Organization,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, the Company did not renew the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024, and will continue to provide transition and run-off services through December 31, 2026, and share proportionally in all premiums and claims for any Cigna+Oscar Small Group plan sold or issued on or before December 15, 2024, in accordance with the terms of the arrangement.

Reinsurance contracts that do not meet risk transfer requirements are accounted for under the deposit accounting method. Under deposit accounting, the contract is recorded as a financing transaction, with no impact to premium revenues or medical expenses. The premiums earned and claims incurred that would have otherwise been ceded under reinsurance accounting are recorded on a net basis on the Consolidated Balance Sheets as a deposit liability within Accounts payable and other liabilities. As of June 30, 2026 and December 31, 2025, a deposit liability balance of $83.6 million and $140.5 million, respectively, was recorded for the Company's quota share arrangements accounted for under deposit accounting. For the three and six months ended June 30, 2026, the deposit accounting impact, net of ceding commission, was $21.1 million and $43.0 million, respectively. For the three and six months ended June 30, 2025, the deposit accounting impact, net of ceding commission, was $11.5 million and $22.8 million, respectively. These amounts were recognized within Selling, general, and administrative expenses on the Condensed Consolidated Statements of Operations.

The Company applies reinsurance accounting primarily to XOL treaties. The tables below present information for the Company's reinsurance arrangements accounted for under reinsurance accounting. Please see “Note 3 - Revenue Recognition” for total reinsurance premiums ceded and reinsurance premiums assumed, which are included as components of total Premium revenue in the Condensed Consolidated Statements of Operations.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2026		2025		2026		2025
Direct claims incurred	$	3,872,861	$	2,562,117	$	7,166,698	$	4,830,401
Ceded reinsurance claims	(78,390)		(22,203)		(141,074)		(53,215)
Assumed reinsurance claims	(26)		13,059		(1,322)		35,438
Medical expenses	$	3,794,445	$	2,552,973	$	7,024,302	$	4,812,624


(in thousands)	June 30, 2026		December 31, 2025
Reinsurance premium and claim recoverables	$	194,808	$	98,014
Reinsurance ceding commissions	7,002		7,002
Experience refunds on reinsurance agreements	(5,266)		(5,266)
Reinsurance recoverable	$	196,544	$	99,750

The financial condition of the Company's reinsurers is regularly evaluated to minimize exposure to significant losses. A key credit quality indicator for reinsurance is the financial strength ratings issued by the credit rating agencies, which provide an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. The Company’s reinsurers have most recently been issued financial strength ratings of A+ or higher.