REINSURANCE

3 Months Ended

Mar. 31, 2014

Reinsurance Disclosures [Abstract]

REINSURANCE

REINSURANCE

Effective 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 remaining deferred profit liability of $625 million, as of March 31, 2014, 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 $633 million as of March 31, 2014.

The following table outlines the effect of reinsurance on premiums written and earned and on benefits and claims.

(In millions)	Three Months Ended March 31, 2014
Direct premium income		$	4,933
Ceded to other companies:
Ceded Aflac Japan closed medical block		(73		)
Other		(9		)
Assumed from other companies		3
Net premium income		$	4,854
Direct benefits and claims		$	3,289
Ceded benefits and change in reserves for future benefits:
Ceded Aflac Japan closed medical block		(64		)
Other		(7		)
Assumed from other companies		2
Benefits and claims, net		$	3,220

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.