REINSURANCE GROUP OF AMERICA INC

For assumed and ceded long-duration reinsurance contracts that transfer significant insurance risk, the difference between the net consideration exchanged and the net liabilities assumed or ceded is considered the net cost of reinsurance at the inception of the reinsurance contract. The net cost of reinsurance may result in a deferred gain or a deferred loss. A deferred gain is recorded in future policy benefits and amortized through other revenues on a basis consistent with the methodologies and assumptions used for amortizing unearned revenue liability. A deferred loss is recorded in deferred policy acquisition costs and other and amortized through policy acquisition costs and other insurance expenses on a basis consistent with the methodologies and assumptions used for amortizing deferred policy acquisition costs.