Guarantor obligations, maximum exposure

  
Direct, assumed and ceded premiums earned for the years ended December 31, 2021, 2020 and 2019 were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| In millions | 2021 |  | 2020 |  | 2019 |
| Direct | $ | 76,320  |  |  | $ | 69,711  |  |  | $ | 62,968  |  |
| Assumed | 492  |  |  | 478  |  |  | 2,108  |  |
| Ceded | (680) |  |  | (825) |  |  | (1,954) |  |
| Net premiums | $ | 76,132  |  |  | $ | 69,364  |  |  | $ | 63,122  |  |

  
The impact of reinsurance on benefit costs for the years ended December 31, 2021, 2020 and 2019 were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| In millions | 2021 |  | 2020 |  | 2019 |
| Direct | $ | 64,414  |  |  | $ | 56,077  |  |  | $ | 52,592  |  |
| Assumed | 398  |  |  | 329  |  |  | 1,562  |  |
| Ceded | (552) |  |  | (727) |  |  | (1,625) |  |
| Net benefit costs | $ | 64,260  |  |  | $ | 55,679  |  |  | $ | 52,529  |  |

  
There is not a material difference between premiums on a written basis versus an earned basis.  
The Company also has various agreements with unrelated reinsurers that do not qualify for reinsurance accounting under GAAP, and consequently are accounted for using deposit accounting. The Company entered into these contracts to reduce the risk of catastrophic loss which in turn reduces the Company’s capital and surplus requirements. Total deposit assets and liabilities related to reinsurance agreements that do not qualify for reinsurance accounting under GAAP were not material as of December 31, 2021 or 2020.  
16.Commitments and Contingencies  
COVID-19  
The COVID-19 pandemic continues to evolve. The Company believes COVID-19’s impact on its businesses, operating results, cash flows and/or financial condition primarily will be driven by the geographies impacted and the severity and duration of the pandemic; the pandemic’s impact on the U.S. and global economies and consumer behavior and health care utilization patterns; and the timing, scope and impact of stimulus legislation as well as other federal, state and local governmental responses to the pandemic. Those primary drivers are beyond the Company’s knowledge and control. As a result, the impact COVID-19 will have on the Company’s businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be adverse and material. COVID-19 also may result in legal and regulatory proceedings, investigations and claims against the Company.  
Guarantees  
The Company has the following significant guarantee arrangements at December 31, 2021:  
•ASC Claim Funding Accounts - The Company has arrangements with certain banks for the processing of claim payments for its ASC customers. The banks maintain accounts to fund claims of the Company’s ASC customers. The customer is responsible for funding the amount paid by the bank each day. In these arrangements, the Company guarantees that the banks will not sustain losses if the responsible ASC customer does not properly fund its account. The aggregate maximum exposure under these arrangements is generally limited to $250 million. The Company can limit its exposure to these guarantees by suspending the payment of claims for ASC customers that have not adequately funded the amount paid by the bank. •Separate Accounts Assets - Certain Separate Accounts assets associated with the large case pensions business in the Corporate/Other segment represent funds maintained as a contractual requirement to fund specific pension annuities that the Company has guaranteed. Minimum contractual obligations underlying the guaranteed benefits in these Separate Accounts were approximately $1.3 billion and $1.4 billion at December 31, 2021 and 2020, respectively. See Note 1 ‘‘Significant Accounting Policies’’ for additional information on Separate Accounts. Contract holders assume all investment and mortality risk and are required to maintain Separate Accounts balances at or above a specified level. The level of required funds is a function of the risk underlying the Separate Account’s investment strategy. If contract holders do not maintain the required level of Separate Accounts assets to meet the annuity guarantees, the Company would 163
