Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

Outstanding derivative instruments with off-balance-sheet risks (in millions) were as follows:

	As of December 31, 2023						As of December 31, 2022
	Notional Amounts		Fair Value				Notional Amounts		Fair Value
			Asset		Liability				Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1,698	$	181	$	47	$	2,590	$	123	$	232
Foreign currency contracts (1)	4,662		423		78		4,383		643		18
Total cash flow hedges	6,360		604		125		6,973		766		250
Fair value hedges:
Interest rate contracts (1)	1,081		1		39		1,155		2		44
Foreign currency contracts (1)	25		–		1		–		–		–
Total fair value hedges	1,106		1		40		1,155		2		44
Non-Qualifying Hedges
Interest rate contracts (1)	90,829		636		979		105,977		709		935
Foreign currency contracts (1)	306		11		6		395		27		2
Equity market contracts (1)	225,626		10,244		4,227		142,946		5,135		2,035
Commodity contracts (1)	–		–		–		13		14		3
Credit contracts (1)	91		–		–		–		–		–
Embedded derivatives:
Reinsurance-related (2)	–		–		552		–		416		–
RILA, fixed indexed annuity and IUL contracts (3)	–		940		9,077		–		525		4,783
Total derivative instruments	$	324,318	$	12,436	$	15,006	$	257,459	$	7,594	$	8,052

(1) These asset and liability balances are presented on a gross basis. Amounts are reported in derivative investments and other liabilities on the Consolidated Balance Sheets after the evaluation for right of offset subject to master netting agreements as described in Note 1.

(2) Reported in funds withheld reinsurance liabilities on the Consolidated Balance Sheets.

(3) Reported in policyholder account balances and deposit accounts on the Consolidated Balance Sheets.

Schedule of Derivative Instruments

The maturity of the notional amounts of derivative instruments (in millions) was as follows:

	Remaining Life as of December 31, 2023
	Less Than 1 Year		1 – 5 Years		6 - 10 Years		11 - 30 Years		Over 30 Years		Total
Interest rate contracts (1)	$	22,166	$	25,350	$	22,349	$	22,530	$	1,213	$	93,608
Foreign currency contracts (2)	276		956		1,687		2,032		42		4,993
Equity market contracts	174,805		37,200		6,950		9		6,662		225,626
Credit contracts	–		91		–		–		–		91
Total derivative instruments
with notional amounts	$	197,247	$	63,597	$	30,986	$	24,571	$	7,917	$	324,318

(1) As of December 31, 2023, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was April 20, 2067.

(2) As of December 31, 2023, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was June 16, 2061.

Cumulative Basis Adjustments for Fair Value Hedges

The following amounts (in millions) were recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:

	Amortized Cost of the Hedged Assets / (Liabilities)				Cumulative Fair Value Hedging Adjustment Included in the Amortized Cost of the Hedged Assets / (Liabilities)
	As of December 31, 2023		As of December 31, 2022		As of December 31, 2023		As of December 31, 2022
Line Item in the Consolidated Balance Sheets in
which the Hedged Item is Included
Fixed maturity AFS securities, at fair value	$	534	$	587	$	39	$	44
Long-term debt (1)	(703)		(698)		172		177

(1) Includes $(326) million and $(341) million of unamortized adjustments from discontinued hedges as of December 31, 2023 and 2022, respectively.

Change in Our Unrealized Gain on Derivative Instruments in AOCI

The change in our unrealized gain (loss) on derivative instruments within AOCI (in millions) was as follows:

	For the Years Ended December 31,
	2023		2022		2021
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	388	$	(85)	$	(402)
Cumulative effect from adoption of new accounting standard	–		–		25
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period:
Cash flow hedges:
Interest rate contracts	293		196		116
Foreign currency contracts	(50)		182		130
Change in foreign currency exchange rate adjustment	(169)		312		152
Income tax benefit (expense)	(15)		(144)		(85)
Less:
Reclassification adjustment for gains (losses)
included in net income (loss):
Cash flow hedges:
Interest rate contracts (1)	(1)		2		3
Interest rate contracts (2)	31		(11)		(23)
Foreign currency contracts (1)	54		62		48
Foreign currency contracts (3)	7		39		(2)
Income tax benefit (expense)	(19)		(19)		(5)
Balance as of end-of-year	$	375	$	388	$	(85)

(1) The OCI offset is reported within net investment income on the Consolidated Statements of Comprehensive Income (Loss).

(2) The OCI offset is reported within interest and debt expense on the Consolidated Statements of Comprehensive Income (Loss).

(3) The OCI offset is reported within realized gain (loss) on the Consolidated Statements of Comprehensive Income (Loss).

Effects of Qualifying and Non-Qualifying Hedges

The effects of qualifying and non-qualifying hedges (in millions) on the Consolidated Statements of Comprehensive Income (Loss) were as follows:

	Gain (Loss) Recognized in Income For the Year Ended December 31, 2023
	Realized Gain (Loss)		Net Investment Income		Interest and Debt Expense
Total Line Items in which the Effects of Fair Value or Cash
Flow Hedges are Recorded	$	(4,311)	$	5,879	$	331
Qualifying Hedges
Gain or (loss) on fair value hedging relationships:
Interest rate contracts:
Hedged items	–		(5)		(5)
Derivatives designated as hedging instruments	–		5		5
Gain or (loss) on cash flow hedging relationships:
Interest rate contracts:
Amount of gain or (loss) reclassified from AOCI into income	–		(1)		31
Foreign currency contracts:
Amount of gain or (loss) reclassified from AOCI into income	7		54		–
Non-Qualifying Hedges
Interest rate contracts	(161)		–		–
Foreign currency contracts	(2)		–		–
Equity market contracts	1,387		–		–
Commodity contracts	8		–		–
Credit contracts	(4)		–		–
Embedded derivatives:
Reinsurance-related	(968)		–		–
RILA, fixed indexed annuity and IUL contracts	(3,187)		–		–

	Gain (Loss) Recognized in Income For the Year Ended December 31, 2022
	Realized Gain (Loss)		Net Investment Income		Interest and Debt Expense
Total Line Items in which the Effects of Fair Value or Cash
Flow Hedges are Recorded	$	840	$	5,515	$	283
Qualifying Hedges
Gain or (loss) on fair value hedging relationships:
Interest rate contracts:
Hedged items	–		(167)		156
Derivatives designated as hedging instruments	–		167		(156)
Gain or (loss) on cash flow hedging relationships:
Interest rate contracts:
Amount of gain or (loss) reclassified from AOCI into income	–		2		(11)
Foreign currency contracts:
Amount of gain or (loss) reclassified from AOCI into income	39		62		–
Non-Qualifying Hedges
Interest rate contracts	(2,113)		–		–
Foreign currency contracts	3		–		–
Equity market contracts	(2,075)		–		–
Commodity contracts	11		–		–
Credit contracts	(4)		–		–
Embedded derivatives:
Reinsurance-related	622		–		–
RILA, fixed indexed annuity and IUL contracts	1,760		–		–

	Gain (Loss) Recognized in Income For the Year Ended December 31, 2021
	Realized Gain (Loss)		Net Investment Income		Interest and Debt Expense
Total Line Items in which the Effects of Fair Value or Cash
Flow Hedges are Recorded	$	(867)	$	6,111	$	270
Qualifying Hedges
Gain or (loss) on fair value hedging relationships:
Interest rate contracts:
Hedged items	–		(60)		46
Derivatives designated as hedging instruments	–		60		(46)
Gain or (loss) on cash flow hedging relationships:
Interest rate contracts:
Amount of gain or (loss) reclassified from AOCI into income	–		3		(23)
Foreign currency contracts:
Amount of gain or (loss) reclassified from AOCI into income	(2)		48		–
Non-Qualifying Hedges
Interest rate contracts	(957)		–		–
Foreign currency contracts	(1)		–		–
Equity market contracts	3,354		–		–
Credit contracts	(1)		–		–
Embedded derivatives:
Reinsurance-related	185		–		–
RILA, fixed indexed annuity and IUL contracts	(2,622)		–		–

Schedule of Collateral Amounts With Rights to Reclaim or Obligation to Return Cash

The amounts recognized (in millions) by S&P credit rating of counterparty, for which we had the right to reclaim cash collateral or were obligated to return cash collateral, were as follows:

	As of December 31, 2023				As of December 31, 2022
S&P Credit Rating of Counterparty	Collateral Posted by Counter- Party (Held by LNC)		Collateral Posted by LNC (Held by Counter- Party)		Collateral Posted by Counter- Party (Held by LNC)		Collateral Posted by LNC (Held by Counter- Party)
AA-	$	2,378	$	(63)	$	383	$	(6)
A+	2,496		(125)		1,718		(166)
A	82		–		1,172		–
A-	273		–		–		–
	$	5,229	$	(188)	$	3,273	$	(172)

Schedule of Offsetting Assets

Information related to the effects of offsetting on the Consolidated Balance Sheets (in millions) was as follows:

	As of December 31, 2023
	Derivative Instruments		Embedded Derivative Instruments		Total
Financial Assets
Gross amount of recognized assets	$	10,927	$	940	$	11,867
Gross amounts offset	(4,453)		–		(4,453)
Net amount of assets	6,474		940		7,414
Gross amounts not offset:
Cash collateral	(5,229)		–		(5,229)
Non-cash collateral (1)	(1,245)		–		(1,245)
Net amount	$	–	$	940	$	940
Financial Liabilities
Gross amount of recognized liabilities	$	967	$	9,629	$	10,596
Gross amounts offset	(612)		–		(612)
Net amount of liabilities	355		9,629		9,984
Gross amounts not offset:
Cash collateral	(188)		–		(188)
Non-cash collateral (2)	(167)		–		(167)
Net amount	$	–	$	9,629	$	9,629

(1) Excludes excess non-cash collateral received of $1.3 billion, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

(2) Excludes excess non-cash collateral pledged of $82 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

	As of December 31, 2022
	Derivative Instruments		Embedded Derivative Instruments		Total
Financial Assets
Gross amount of recognized assets	$	6,604	$	941	$	7,545
Gross amounts offset	(3,010)		–		(3,010)
Net amount of assets	3,594		941		4,535
Gross amounts not offset:
Cash collateral	(3,273)		–		(3,273)
Non-cash collateral (1)	(321)		–		(321)
Net amount	$	–	$	941	$	941
Financial Liabilities
Gross amount of recognized liabilities	$	260	$	4,783	$	5,043
Gross amounts offset	(50)		–		(50)
Net amount of liabilities	210		4,783		4,993
Gross amounts not offset:
Cash collateral	(172)		–		(172)
Non-cash collateral (2)	(38)		–		(38)
Net amount	$	–	$	4,783	$	4,783

(1) Excludes excess non-cash collateral received of $1.1 billion, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

(2) Excludes excess non-cash collateral pledged of $8 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

Schedule of Offsetting Liabilities

Information related to the effects of offsetting on the Consolidated Balance Sheets (in millions) was as follows:

	As of December 31, 2023
	Derivative Instruments		Embedded Derivative Instruments		Total
Financial Assets
Gross amount of recognized assets	$	10,927	$	940	$	11,867
Gross amounts offset	(4,453)		–		(4,453)
Net amount of assets	6,474		940		7,414
Gross amounts not offset:
Cash collateral	(5,229)		–		(5,229)
Non-cash collateral (1)	(1,245)		–		(1,245)
Net amount	$	–	$	940	$	940
Financial Liabilities
Gross amount of recognized liabilities	$	967	$	9,629	$	10,596
Gross amounts offset	(612)		–		(612)
Net amount of liabilities	355		9,629		9,984
Gross amounts not offset:
Cash collateral	(188)		–		(188)
Non-cash collateral (2)	(167)		–		(167)
Net amount	$	–	$	9,629	$	9,629

(1) Excludes excess non-cash collateral received of $1.3 billion, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

(2) Excludes excess non-cash collateral pledged of $82 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

	As of December 31, 2022
	Derivative Instruments		Embedded Derivative Instruments		Total
Financial Assets
Gross amount of recognized assets	$	6,604	$	941	$	7,545
Gross amounts offset	(3,010)		–		(3,010)
Net amount of assets	3,594		941		4,535
Gross amounts not offset:
Cash collateral	(3,273)		–		(3,273)
Non-cash collateral (1)	(321)		–		(321)
Net amount	$	–	$	941	$	941
Financial Liabilities
Gross amount of recognized liabilities	$	260	$	4,783	$	5,043
Gross amounts offset	(50)		–		(50)
Net amount of liabilities	210		4,783		4,993
Gross amounts not offset:
Cash collateral	(172)		–		(172)
Non-cash collateral (2)	(38)		–		(38)
Net amount	$	–	$	4,783	$	4,783

(1) Excludes excess non-cash collateral received of $1.1 billion, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

(2) Excludes excess non-cash collateral pledged of $8 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.