Reinsurance

12 Months Ended

Dec. 31, 2021

In the normal course of business, the Company reinsures portions of certain policies that we underwrite to limit disproportionate risks. During 2021 and 2020, we retained varying amounts of individual insurance up to a maximum retention of $100,000 on any life. The Company also reinsures 100% of our accidental death benefit rider coverage. Catastrophe reinsurance is in place for our property policies. In both 2021 and 2020, this reinsurance provided $10.5 million of coverage above a $0.5 million deductible. In consideration for a reinstatement premium, second event coverage is provided in excess of a $0.5 million deductible up to $10.5 million. The annual premium was approximately $2.3 million in 2021 and $1.4 million and $0.8 million in 2020 and 2019, respectively. Our health insurance policies are substantially all reinsured on a 100% coinsurance basis. We remain contingently liable to the extent that the reinsuring companies cannot meet their obligations under these reinsurance treaties.

Our amounts recoverable from reinsurers represent receivables from and reserves ceded to reinsurers. We obtain reinsurance from multiple reinsurers, and we monitor concentration as well as financial strength ratings of our principal reinsurers. The ratings by A.M. Best Company range from A (Excellent) to A+ (Superior).

Assumed and ceded life reinsurance activity as of December 31, 2021 and 2020 is summarized as follows:


December 31, (In thousands)	2021		2020
Aggregate assumed life insurance in force	$	4,366	4,615
Aggregate ceded life insurance in force	$	465,954	474,792
Net life insurance in force	$	4,165,921	4,141,968

The Company's reinsurance recoverable on ceded reinsurance was $5.5 million and $5.8 million in 2021 and 2020, respectively. Premiums, claims and surrenders assumed and ceded for all lines of business for these years are summarized as follows:


Years ended December 31, (In thousands)	2021		2020	2019
Premiums from short-duration contracts:
Direct	$	7,631	6,448	6,804
Assumed	—		—	—
Ceded	(2,312)		(1,447)	(808)
Net premiums earned	5,319		5,001	5,996
Premiums from long-duration contracts:
Direct	171,175		172,504	180,205
Assumed	84		91	99
Ceded	(1,850)		(2,267)	(1,953)
Net premiums earned	169,409		170,328	178,351
Total premiums earned	$	174,728	175,329	184,347
Claims and surrenders assumed	$	169	174	141
Claims and surrenders ceded	$	(11,764)	(1,575)	(940)

During the third quarter of 2021, SPFIC was impacted by Hurricane Ida, the second-most damaging and intense hurricane in Louisiana on record, behind Hurricane Katrina in 2005. In addition, during the third and fourth quarters of 2020, SPFIC was impacted by Hurricanes Laura, Delta and Zeta, all of which caused varying levels of damage in Louisiana. The Company has a reinsurance agreement that covers catastrophic events such as these hurricanes. The reinsurance agreement specifies a maximum coverage per event of $10.5 million and a retention level of $0.5 million per event. In consideration for a reinstatement premium, second event coverage is provided in excess of a $0.5 million deductible up to $10.5 million. We expect claims from Hurricane Ida to exceed our reinsurance of $11.0 million by approximately $0.3 million and thus the total claim impact to us is expected to be approximately $0.8 million in 2021. We also paid the $0.5 million retention in claim amounts for Laura and Delta and did not exceed the maximum coverage for either of them. All claims related to Zeta were paid by SPFIC and totaled less than $0.5 million.