REINSURANCE REINSURANCE

12 Months Ended

Dec. 31, 2013

Reinsurance Disclosures [Abstract]

REINSURANCE

REINSURANCE

Effective as of September 30, 2013, we entered into a coinsurance reinsurance transaction whereby we ceded 33.3% of the hospital benefit of one of Aflac Japan's closed medical in-force blocks of business. We recorded the gain related to the transaction as a deferred profit liability on business sold through reinsurance on our consolidated balance sheets. The deferred profit liability of $607 million, as of December 31, 2013, included in future policy benefits in the consolidated balance sheet, is being amortized into income over the expected lives of the policies. The corresponding reinsurance recoverable is included in other assets in the consolidated balance sheet and totaled $612 million as of December 31, 2013.

The following table outlines the effect of reinsurance on premiums written and earned and on benefits and claims for the year ended December 31.

(In millions)	2013
Direct premium income		$	20,211
Reinsurance ceded		(76		)
Net premium income		$	20,135
Direct benefits and claims		$	13,880
Ceded benefits and change in reserves for future benefits		(67		)
Benefits and claims, net		$	13,813

Reinsurance does not relieve us from our obligations to policyholders. In the event that the reinsurer is unable to meet their obligations, we remain liable for the reinsured claims.