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RELATED PARTY TRANSACTIONS
6 Months Ended
Jun. 30, 2011
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

 

7)        RELATED PARTY TRANSACTIONS

 

Under its service agreement with AXA Equitable, personnel services, employee benefits, facilities, supplies and equipment are provided to MLOA to conduct its business. The associated costs related to the service agreements are allocated to MLOA based on methods that management believes are reasonable, including a review of the nature of such costs and activities performed to support MLOA. As a result of such allocations, MLOA incurred expenses of $14 million, $26 million, $14 million and $25 million for the second quarter and first six months of 2011 and of 2010, respectively. At June 30, 2011 and December 31, 2010, MLOA reported a payable to AXA Equitable in connection with its service agreement of $12 million and $8 million, respectively.

 

Various AXA affiliates cede a portion of their life, health and catastrophe insurance business through reinsurance agreements to AXA Global Life (and AXA Cessions in 2009 and prior), AXA affiliated reinsurers. AXA Global Life, in turn, retrocedes a quota share portion of these risks to AXA Equitable and MLOA on a one-year term basis. Premiums earned in second quarter and first six months of 2011 and 2010 under this arrangement were $77,000, $117,000, $71,000 and $291,000, respectively. Claims and expenses paid in the second quarter and first six months of 2011 and 2010 were $113,000, $44,000, $146,000 and $174,000, respectively.

 

MLOA ceded new variable life policies on an excess of retention basis with AXA Equitable and reinsured the no lapse guarantee riders through AXA Financial (Bermuda) Ltd. MLOA reported $83,000, $166,000, $83,000 and $178,000 of ceded premiums for the second quarter and first six months of 2011 and of 2010, respectively.

 

In addition to the AXA Equitable service agreement, MLOA has various other service and investment advisory agreements with affiliates. The expenses incurred by MLOA related to these agreements were $480,000, $958,000, $501,000 and $1,003,000 for the second quarter and first six months of 2011 and of 2010, respectively.