4. Reinsurance (Tables)

9 Months Ended

Sep. 30, 2012

Reinsurance Tables

Reinsurance activity

Other reinsurance activity is shown below.

Direct Business and Reinsurance:	Three Months Ended						Nine Months Ended
($ in millions)	September 30,						September 30,
	2012			2011			2012			2011
				As restated and amended						As restated and amended
Direct premiums	$	16.7		$	18.0		$	52.8		$	54.1
Premiums ceded to non-affiliate reinsurers(1)		(15.9	)		(16.9	)		(49.6	)		(52.7	)
Premiums	$	0.8		$	1.1		$	3.2		$	1.4
Direct policy benefits incurred	$	75.0		$	28.2		$	214.4		$	117.5
Policy benefits assumed from non-affiliate reinsureds		1.0			0.9			2.5			2.9
Policy benefits ceded to:
Affiliate reinsurers		(6.9	)		—			(9.2	)		(0.3	)
Non-affiliate reinsurers		(20.4	)		(20.2	)		(94.1	)		(60.1	)
Policy benefits ceded to reinsurers		(27.3	)		(20.2	)		(103.3	)		(60.4	)
Premiums paid to:
Affiliate reinsurers		5.5			5.1			15.0			10.9
Non-affiliate reinsurers		18.7			19.4			42.4			28.4
Premiums paid to reinsurers(2)		24.2			24.5			57.4			39.3
Policy benefits(3)	$	72.9		$	33.4		$	171.0		$	99.3

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(1)	Primarily represents premiums ceded to reinsurers related to traditional life and term insurance policies.
(2)	For universal life and variable universal life contracts, premiums paid to reinsurers are reflected within policy benefits. See Note 3 to these financial statements for additional information regarding significant accounting policies.

(3)   Policy benefit amounts above exclude changes in reserves, interest credited to policyholders and withdrawals, which total $84.5 million and $60.5 million, net of reinsurance, for the three months ended September 30, 2012 and 2011, respectively, and $139.8 million and $139.9 million, net of reinsurance, for the nine months ended September 30, 2012 and 2011, respectively.

We remain liable to the extent that reinsuring companies may not be able to meet their obligations under reinsurance agreements in effect. Failure of the reinsurers to honor their obligations could result in losses to the Company. Since we bear the risk of nonpayment, on a quarterly basis we evaluate the financial condition of our reinsurers and monitor concentrations of credit risk. Based on our review of their financial statements, reputation in the reinsurance marketplace and other relevant information, we believe that we have no material exposure to uncollectible life reinsurance. At September 30, 2012, five major reinsurance companies account for approximately 74% of the reinsurance recoverable.