Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2024

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 June 30, 2024						As of December 31, 2023
	Notional Amounts		Fair Value				Notional Amounts		Fair Value
			Asset		Liability				Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1,143	$	133	$	17	$	1,698	$	181	$	47
Foreign currency contracts (1)	4,849		511		49		4,662		423		78
Total cash flow hedges	5,992		644		66		6,360		604		125
Fair value hedges:
Interest rate contracts (1)	1,074		4		20		1,081		1		39
Foreign currency contracts (1)	25		1		–		25		–		1
Total fair value hedges	1,099		5		20		1,106		1		40
Non-Qualifying Hedges
Interest rate contracts (1)	73,628		813		1,173		90,829		636		979
Foreign currency contracts (1)	361		15		1		306		11		6
Equity market contracts (1)	255,135		14,180		5,995		225,626		10,244		4,227
Credit contracts (1)	44		–		–		91		–		–
Embedded derivatives:
Reinsurance-related (2)	–		–		155		–		–		552
RILA, fixed indexed annuity and IUL
contracts (3)	–		967		11,417		–		940		9,077
Total derivative instruments	$	336,259	$	16,624	$	18,827	$	324,318	$	12,436	$	15,006

(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.

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

(3) Reported in policyholder account balances and deposit assets 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 June 30, 2024
	Less Than 1 Year		1 – 5 Years		6 - 10 Years		11 - 30 Years		Over 30 Years		Total
Interest rate contracts (1)	$	10,390	$	19,232	$	23,278	$	22,347	$	598	$	75,845
Foreign currency contracts (2)	379		1,028		1,775		2,011		42		5,235
Equity market contracts	209,533		35,253		8,177		8		2,164		255,135
Credit contracts	–		44		–		–		–		44
Total derivative instruments with
notional amounts	$	220,302	$	55,557	$	33,230	$	24,366	$	2,804	$	336,259

(1) As of June 30, 2024, 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 June 30, 2024, 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  June 30, 2024		As of December 31, 2023		As of  June 30, 2024		As of December 31, 2023
Line Item in the Consolidated Balance Sheets in
which the Hedged Item is Included
Fixed maturity AFS securities, at fair value	$	500	$	534	$	14	$	39
Long-term debt (1)	(680)		(703)		195		172

(1) Includes $(318) million and $(326) million of unamortized adjustments from discontinued hedges as of June 30, 2024, and December 31, 2023, respectively.

Change in Our Unrealized Gain on Derivative Instruments in AOCI

The change in our unrealized gain (loss) on derivative instruments within accumulated other comprehensive income (loss) (“AOCI”) (in millions) was as follows:

	For the Six Months Ended June 30,
	2024		2023
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	375	$	388
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period:
Cash flow hedges:
Interest rate contracts	150		150
Foreign currency contracts	28		80
Change in foreign currency exchange rate adjustment	117		(110)
Income tax benefit (expense)	(62)		(26)
Less:
Reclassification adjustment for gains (losses)
included in net income (loss):
Cash flow hedges:
Interest rate contracts (1)	(1)		–
Interest rate contracts (2)	15		13
Foreign currency contracts (1)	29		27
Foreign currency contracts (3)	(1)		3
Income tax benefit (expense)	(9)		(9)
Balance as of end-of-period	$	575	$	448

(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 Three Months Ended June 30,

2024

2023

Realized Gain (Loss)

Net Investment Income

Interest and Debt Expense

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

$

663

$

1,332

$

86

$

(1,784)

$

1,508

$

84

Qualifying Hedges

Gain or (loss) on fair value hedging

relationships:

Interest rate contracts:

Hedged items

–

(7)

6

–

(19)

17

Derivatives designated as hedging

instruments

–

7

(6)

–

19

(17)

Gain or (loss) on cash flow hedging

relationships:

Interest rate contracts:

Amount of gain or (loss) reclassified

from AOCI into income

–

(1)

6

–

–

7

Foreign currency contracts:

Amount of gain or (loss) reclassified

from AOCI into income

(1)

14

–

–

13

–

Non-Qualifying Hedges

Interest rate contracts

(115)

–

–

(319)

–

–

Equity market contracts

817

–

–

809

–

–

Credit contracts

–

–

–

(1)

–

–

Embedded derivatives:

Reinsurance-related

200

–

–

1

–

–

RILA, fixed indexed annuity and IUL

contracts

(328)

–

–

(1,554)

–

–

Gain (Loss) Recognized in Income For the Six Months Ended June 30,

2024

2023

Realized Gain (Loss)

Net Investment Income

Interest and Debt Expense

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

$

230

$

2,679

$

167

$

(2,612)

$

2,974

$

166

Qualifying Hedges

Gain or (loss) on fair value hedging

relationships:

Interest rate contracts:

Hedged items

–

(24)

23

–

(3)

(5)

Derivatives designated as hedging

instruments

–

24

(23)

–

3

5

Foreign currency contracts:

Hedged items

–

(1)

–

–

–

–

Derivatives designated as hedging

instruments

–

1

–

–

–

–

Gain or (loss) on cash flow hedging

relationships:

Interest rate contracts:

Amount of gain or (loss) reclassified

from AOCI into income

–

(1)

15

–

–

13

Foreign currency contracts:

Amount of gain or (loss) reclassified

from AOCI into income

(1)

29

–

3

27

–

Non-Qualifying Hedges

Interest rate contracts

(277)

–

–

12

–

–

Foreign currency contracts

–

–

–

(2)

–

–

Equity market contracts

2,951

–

–

750

–

–

Commodity contracts

–

–

–

11

–

–

Credit contracts

–

–

–

(2)

–

–

Embedded derivatives:

Reinsurance-related

398

–

–

(48)

–

–

RILA, fixed indexed annuity and IUL

contracts

(1,970)

–

–

(2,266)

–

–

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 June 30, 2024				As of December 31, 2023
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-	$	3,170	$	(49)	$	2,378	$	(63)
A+	3,767		–		2,496		(125)
A	70		–		82		–
A-	676		–		273		–
	$	7,683	$	(49)	$	5,229	$	(188)

Schedule of Offsetting Assets

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

	As of June 30, 2024
	Derivative Instruments		Embedded Derivative Instruments		Total
Financial Assets
Gross amount of recognized assets	$	15,659	$	967	$	16,626
Gross amounts offset	(7,051)		–		(7,051)
Net amount of assets	8,608		967		9,575
Gross amounts not offset:
Cash collateral	(7,683)		–		(7,683)
Non-cash collateral (1)	(925)		–		(925)
Net amount	$	–	$	967	$	967
Financial Liabilities
Gross amount of recognized liabilities	$	229	$	11,572	$	11,801
Gross amounts offset	(23)		–		(23)
Net amount of liabilities	206		11,572		11,778
Gross amounts not offset:
Cash collateral	(49)		–		(49)
Non-cash collateral (2)	(157)		–		(157)
Net amount	$	–	$	11,572	$	11,572

(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 $51 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

	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.

Schedule of Offsetting Liabilities

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

	As of June 30, 2024
	Derivative Instruments		Embedded Derivative Instruments		Total
Financial Assets
Gross amount of recognized assets	$	15,659	$	967	$	16,626
Gross amounts offset	(7,051)		–		(7,051)
Net amount of assets	8,608		967		9,575
Gross amounts not offset:
Cash collateral	(7,683)		–		(7,683)
Non-cash collateral (1)	(925)		–		(925)
Net amount	$	–	$	967	$	967
Financial Liabilities
Gross amount of recognized liabilities	$	229	$	11,572	$	11,801
Gross amounts offset	(23)		–		(23)
Net amount of liabilities	206		11,572		11,778
Gross amounts not offset:
Cash collateral	(49)		–		(49)
Non-cash collateral (2)	(157)		–		(157)
Net amount	$	–	$	11,572	$	11,572

(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 $51 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

	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.