12. Reinsurance The Company reinsures its business through a diversified group of reinsurers (“reinsurance ceded”) and assumes certain business by entering into agreements with third-party insurers (“reinsurance assumed”). Under reinsurance ceded transactions, the Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements. The Company monitors trends in arbitration and any litigation outcomes with its reinsurers. Collectability of reinsurance balances is evaluated by monitoring ratings and the financial strength of its reinsurers. The effect of reinsurance on the applicable line items on our Condensed Consolidated Statements of Operations is as follows: | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended
June 30, | | Six Months Ended
June 30, | | 2026 | | 2025 | | 2026 | | 2025 | | (Dollars in millions) | | Premiums earned: | | | | | | | | | Gross amounts, including reinsurance assumed | $ | 201 | | | $ | 438 | | | $ | 422 | | | $ | 952 | | | Reinsurance ceded | (59) | | | (84) | | | (135) | | | (140) | | | Net amount | $ | 142 | | | $ | 354 | | | $ | 287 | | | $ | 812 | | | | | | | | | | | Other policy revenue: | | | | | | | | | Gross amounts, including reinsurance assumed | $ | 242 | | | $ | 252 | | | $ | 456 | | | $ | 480 | | | Reinsurance ceded | (52) | | | (80) | | | (104) | | | (159) | | | Net amount | $ | 190 | | | $ | 172 | | | $ | 352 | | | $ | 321 | | | | | | | | | | | Policyholder benefits and claims incurred: | | | | | | | | | Gross amounts, including reinsurance assumed | $ | 360 | | | $ | 683 | | | $ | 773 | | | $ | 1,393 | | | Reinsurance ceded | (116) | | | (173) | | | (298) | | | (281) | | | Net amount | $ | 244 | | | $ | 510 | | | $ | 475 | | | $ | 1,112 | | | | | | | | | | | Change in fair value of market risk benefits: | | | | | | | | | Gross amounts, including reinsurance assumed | $ | 119 | | | $ | (26) | | | $ | 247 | | | $ | 366 | | | Reinsurance ceded | (10) | | | (21) | | | 1 | | | (52) | | | Net amount | $ | 109 | | | $ | (47) | | | $ | 248 | | | $ | 314 | | | | | | | | | | | Interest sensitive contract benefits: | | | | | | | | | Gross amounts, including reinsurance assumed | $ | 865 | | | $ | 544 | | | $ | 1,447 | | | $ | 1,094 | | | Reinsurance ceded | (103) | | | (59) | | | (140) | | | (97) | | | Net amount | $ | 762 | | | $ | 485 | | | $ | 1,307 | | | $ | 997 | |
The following summarizes our significant life and annuity reinsurance treaties and related recoverables: | | | | | | | | | | | | | | | | | | | | | | | | | Reinsurance Recoverable | | Agreement Type | | Products Covered | | June 30, 2026 | | December 31, 2025 | | | | | | (Dollars in millions) | | | | | | Principal Reinsurers: | | | | | | | | | Athene Life Re Ltd. | $ | 1,150 | | | $ | 1,367 | | | Coinsurance Funds Withheld, Modified Coinsurance | | Certain Fixed Annuities and Multi-Year Guaranteed Annuities | | AeBe ISA LTD | 3,633 | | | 3,860 | | | Coinsurance Funds Withheld, Coinsurance | | Certain Fixed Index and Fixed Rate Annuities | | Reinsurance Group of America Inc. (RGA) | 3,642 | | | 3,569 | | | Coinsurance | | Certain Term, Whole, Indexed Universal, Universal, and Universal with Secondary Guarantee Life Insurance Policies | | $ | 8,425 | | | $ | 8,796 | | | | | |
There were no significant changes to third party or intercompany reinsurance agreements for the three and six months ended June 30, 2026.
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