The Company utilizes both affiliated and unaffiliated reinsurance arrangements. On its unaffiliated arrangements, the Company uses primarily modified coinsurance reinsurance arrangements whereby the reinsurer shares in the experience of a specified book of business. These reinsurance transactions result in the Company receiving from the reinsurer an upfront ceding commission on the book of business ceded in exchange for the reinsurer receiving in the future, a percentage of the future fees generated from that book of business. Such transfer does not relieve the Company of its primary liability and, as such, failure of reinsurers to honor their obligation could result in losses to the Company. The Company reduces this risk by evaluating the financial condition and credit worthiness of reinsurers.

On its affiliated arrangements, the Company uses automatic coinsurance reinsurance arrangements. These agreements cover all significant risks under features of the policies reinsured. The Company is not relieved of its primary obligation to the policyholder as a result of these reinsurance transactions. These affiliated agreements include the reinsurance of the Company's GMWB, GMIWB and GMAB features. These features are accounted for as embedded derivatives, and changes in the fair value of the embedded derivative are recognized through “Realized investment gains (losses), net.” Please see Note 13 for further details around the affiliated reinsurance agreements.

The effect of reinsurance for the years ended December 31, 2013, 2012 and 2011, was as follows (in thousands):

		Gross		Unaffiliated Ceded		Affiliated Ceded		Net
2013
Policy charges and fee income - Life (1)	$	3,472	$	(1,231)	$	-	$	2,241
Policy charges and fee income - Annuity		809,549		(2,548)		-		807,001
Realized investment gains (losses), net		1,076,184		-		(1,260,535)		(184,351)
Policyholders' benefits		29,874		(147)		-		29,727
General, administrative and other expenses	$	407,365	$	(776)	$	(3,910)	$	402,679

2012
Policy charges and fee income - Life (1)	$	3,522	$	(1,099)	$	-	$	2,423
Policy charges and fee income - Annuity		796,711		(2,139)		-		794,572
Realized investment gains (losses), net		202,568		-		(285,798)		(83,230)
Policyholders' benefits		124,517		(201)		-		124,316
General, administrative and other expenses	$	429,383	$	(784)	$	(3,835)	$	424,764

2011
Policy charges and fee income - Life (1)	$	3,711	$	(439)	$	-	$	3,272
Policy charges and fee income - Annuity		825,000		(3,464)		-		821,536
Realized investment gains (losses), net		(1,224,770)		-		1,296,553		71,783
Policyholders' benefits		128,873		(724)		-		128,149
General, administrative and other expenses	$	446,790	$	(924)	$	(3,804)	$	442,062

The Company's Statements of Financial Position also included reinsurance recoverables from Pruco Re and Prudential Insurance Company of America (“Prudential Insurance”) of $749 million and $1,733 million at December 31, 2013 and 2012, respectively.