Reinsurance

In the normal course of business, the Company reinsures portions of certain policies that we underwrite to limit disproportionate risks. During 2013 and 2012, 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 2013 and 2012, this reinsurance provided $10,000,000 of coverage above a $500,000 deductible. 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 B+ (Good) to A+ (Superior). To protect our position, we have established and funded a trust to cover the contingent liabilities related to accident and health reinsurance ceded to Puritan Life Insurance Company of America, which represents $2.6 million of the $4.4 million of reinsurance recoverable at December 31, 2013.

Assumed and ceded life reinsurance activity as of December 31, 2013 and 2012 is summarized as follows:



	At December 31,
	2013			2012
	(In thousands)
Aggregate assumed life insurance in force	$	352,013		801,261
Aggregate ceded life insurance in force	$	(467,491	)	(466,898	)
Net life insurance in force	$	4,616,128		4,976,157

The Company's reinsurance recoveries on ceded reinsurance were $4.4 million in 2013 and $9.7 million in 2012. Premiums, claims and surrenders assumed and ceded for all lines of business for these years are summarized as follows:



	For the Years Ended December 31,
	2013			2012		2011
	(In thousands)
Premiums from short-duration contracts:
Direct	$	7,129		7,274		7,227
Assumed	—			—		—
Ceded	(1,107		)	(1,034	)	(1,128	)
Net premiums earned	6,022			6,240		6,099
Premiums from long-duration contracts:
Direct	172,257			168,272		159,860
Assumed	188			1,275		1,874
Ceded	(2,309		)	(5,914	)	(6,438	)
Net premiums earned	170,136			163,633		155,296
Total premiums earned	$	176,158		169,873		161,395
Claims and surrenders assumed	$	232		1,313		1,865
Claims and surrenders ceded	$	(424	)	(5,486	)	(3,204	)

SPFIC has catastrophe reinsurance that covers the first event in excess of a $500,000 deductible up to $10.0 million. In consideration for a reinstatement premium, second event coverage is provided in excess of a $500,000 deductible up to $10.0 million. The annual premium was approximately $1.1 million in 2013, $1.0 million in 2012 and $1.1 million in 2011.