10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________

FORM 10-Q

_________________

(Mark One)

☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2018

OR

☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to . 

Commission File Number 1-6028

_________________

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

(Exact name of registrant as specified in its charter)

_________________

Indiana	35-0472300
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1300 South Clinton Street, Fort Wayne, Indiana	46802
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (260) 455-2000

_________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐Accelerated filer ☐

Non-accelerated filer ☒Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐    No  ☒

As of November 2, 2018, 10,000,000 shares of common stock of the registrant ($2.50 par value) were outstanding, all of which were directly owned by Lincoln National Corporation.

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a) AND (b) OF

FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE FORMAT.

The Lincoln National Life Insurance Company

Table of Contents

Item		Page
PART I
1.	Financial Statements	1
2.	Management’s Narrative Analysis of The Results of Operations	48
	Forward-Looking Statements – Cautionary Language	48
	Critical Accounting Policies and Estimates	49
	Results of Consolidated Operations	51
	Results of Annuities	52
	Results of Retirement Plan Services	54
	Results of Life Insurance	55
	Results of Group Protection	56
	Results of Other Operations	57
	Realized Gain (Loss)	58
	Review of Consolidated Financial Condition	59
	Liquidity and Capital Resources	59
3.	Quantitative and Qualitative Disclosures About Market Risk	61
4.	Controls and Procedures	61
PART II
1.	Legal Proceedings	62
2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
6.	Exhibits	62
	Exhibit Index for the Report on Form 10-Q	63
	Signatures	64

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

		As of			As of
	September 30,			December 31,
		2018			2017
	(Unaudited)
ASSETS
Investments:
Available-for-sale securities, at fair value:
Fixed maturity securities (amortized cost:  2018 – $89,642; 2017 – $85,802)		$	91,940		$	93,340
Equity securities (cost:  2017 – $247)			-			246
Trading securities			1,358			1,533
Equity securities			112			-
Mortgage loans on real estate			12,482			10,662
Real estate			11			11
Policy loans			2,471			2,379
Derivative investments			645			845
Other investments			1,963			2,006
Total investments			110,982			111,022
Cash and invested cash			1,207			947
Deferred acquisition costs and value of business acquired			10,012			8,408
Premiums and fees receivable			591			394
Accrued investment income			1,141			1,052
Reinsurance recoverables			20,040			6,515
Reinsurance related embedded derivatives			148			-
Funds withheld reinsurance assets			572			598
Goodwill			1,757			1,368
Other assets			10,813			7,349
Separate account assets			147,692			144,219
Total assets		$	304,955		$	281,872
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities
Future contract benefits		$	33,209		$	22,063
Other contract holder funds			89,226			79,481
Short-term debt			226			10
Long-term debt			2,388			2,374
Reinsurance related embedded derivatives			-			51
Funds withheld reinsurance liabilities			3,920			4,348
Deferred gain on business sold through reinsurance			37			41
Payables for collateral on investments			4,168			4,354
Other liabilities			7,138			6,486
Separate account liabilities			147,692			144,219
Total liabilities			288,004			263,427
Contingencies and Commitments (See Note 10)
Stockholder’s Equity
Common stock – 10,000,000 shares authorized, issued and outstanding			11,229			10,713
Retained earnings			4,740			4,405
Accumulated other comprehensive income (loss)			982			3,327
Total stockholder’s equity			16,951			18,445
Total liabilities and stockholder’s equity		$	304,955		$	281,872

See accompanying Notes to Consolidated Financial Statements

1

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in millions)

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues
Insurance premiums	$	1,258		$	724		$	3,070		$	2,190
Fee income		1,487			1,339			4,282			3,965
Net investment income		1,207			1,182			3,560			3,564
Realized gain (loss):
Total other-than-temporary impairment losses on securities		(2	)		(9	)		(5	)		(17	)
Portion of loss recognized in other comprehensive income		-			1			-			1
Net other-than-temporary impairment losses on securities
recognized in earnings		(2	)		(8	)		(5	)		(16	)
Realized gain (loss), excluding other-than-temporary
impairment losses on securities		(60	)		(93	)		(2	)		(314	)
Total realized gain (loss)		(62	)		(101	)		(7	)		(330	)
Amortization of deferred gain (loss) on business sold through reinsurance		(1	)		(1	)		(3	)		19
Other revenues		150			126			393			327
Total revenues		4,039			3,269			11,295			9,735
Expenses
Interest credited		645			639			1,930			1,916
Benefits		1,586			1,159			4,354			3,576
Commissions and other expenses		1,335			969			3,463			2,910
Interest and debt expense		35			32			101			95
Strategic digitization expense		18			10			49			33
Total expenses		3,619			2,809			9,897			8,530
Income (loss) before taxes		420			460			1,398			1,205
Federal income tax expense (benefit)		42			75			194			150
Net income (loss)		378			385			1,204			1,055
Other comprehensive income (loss), net of tax:		(385	)		138			(2,989	)		1,225
Comprehensive income (loss)	$	(7	)	$	523		$	(1,785	)	$	2,280

See accompanying Notes to Consolidated Financial Statements

2

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY

(Unaudited, in millions)

	For the Nine
	Months Ended
	September 30,
	2018			2017
Common Stock
Balance as of beginning-of-year	$	10,713		$	10,696
Capital contributions from Lincoln National Corporation		500			-
Stock compensation/issued for benefit plans		16			11
Balance as of end-of-period		11,229			10,707
Retained Earnings
Balance as of beginning-of-year		4,405			3,342
Cumulative effect from adoption of new accounting standards		(644	)		-
Net income (loss)		1,204			1,055
Dividends declared		(225	)		(754	)
Balance as of end-of-period		4,740			3,643
Accumulated Other Comprehensive Income (Loss)
Balance as of beginning-of-year		3,327			1,782
Cumulative effect from adoption of new accounting standards		644			-
Other comprehensive income (loss), net of tax		(2,989	)		1,225
Balance as of end-of-period		982			3,007
Total stockholder’s equity as of end-of-period	$	16,951		$	17,357

See accompanying Notes to Consolidated Financial Statements

3

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)

	For the Nine
	Months Ended
	September 30,
	2018			2017
Cash Flows from Operating Activities
Net income (loss)	$	1,204		$	1,055
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Deferred acquisition costs, value of business acquired, deferred sales inducements
and deferred front-end loads deferrals and interest, net of amortization		65			9
Trading securities purchases, sales and maturities, net		160			83
Change in premiums and fees receivable		(110	)		59
Change in accrued investment income		(50	)		(76	)
Change in future contract benefits and other contract holder funds		(352	)		(1,330	)
Change in reinsurance related assets and liabilities		(188	)		664
Change in federal income tax accruals		87			(2	)
Realized (gain) loss		7			330
Amortization of deferred (gain) loss on business sold through reinsurance		3			(19	)
Change in cash management agreement		95			(82	)
Other		223			77
Net cash provided by (used in) operating activities		1,144			768
Cash Flows from Investing Activities
Purchases of available-for-sale securities and equity securities		(8,307	)		(7,231	)
Sales of available-for-sale securities and equity securities		2,299			1,276
Maturities of available-for-sale securities		4,626			4,030
Purchase of common stock in acquisition, net of cash acquired		(1,410	)		-
Sale of business, net		(12	)		-
Purchases of alternative investments		(234	)		(228	)
Sales and repayments of alternative investments		115			140
Proceeds from affiliate transfer of alternative investments		-			66
Issuance of mortgage loans on real estate		(2,029	)		(1,331	)
Repayment and maturities of mortgage loans on real estate		815			823
Issuance and repayment of policy loans, net		39			33
Net change in collateral on investments, derivatives and related settlements		(138	)		143
Other		(142	)		(80	)
Net cash provided by (used in) investing activities		(4,378	)		(2,359	)
Cash Flows from Financing Activities
Capital contribution from parent company		500			-
Payment of long-term debt, including current maturities		-			(240	)
Issuance of long-term debt, net of issuance costs		-			25
Issuance (payment) of short-term debt		216			(277	)
Proceeds from sales leaseback transaction		51			45
Deposits of fixed account values, including the fixed portion of variable		9,409			7,609
Withdrawals of fixed account values, including the fixed portion of variable		(4,427	)		(4,264	)
Transfers to and from separate accounts, net		(2,008	)		(1,183	)
Common stock issued for benefit plans		(22	)		(24	)
Dividends paid		(225	)		(754	)
Net cash provided by (used in) financing activities		3,494			937
Net increase (decrease) in cash, invested cash and restricted cash		260			(654	)
Cash, invested cash and restricted cash as of beginning-of-year		947			2,057
Cash, invested cash and restricted cash as of end-of-period	$	1,207		$	1,403

See accompanying Notes to Consolidated Financial Statements

4

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.  Nature of Operations and Basis of Presentation

Nature of Operations

The Lincoln National Life Insurance Company (“LNL” or the “Company,” which also may be referred to as “we,” “our” or “us”), a wholly-owned subsidiary of Lincoln National Corporation (“LNC” or the “Parent Company”), is domiciled in the state of Indiana.  We own 100% of the outstanding common stock of Lincoln Life & Annuity Company of New York (“LLANY”) and Liberty Life Assurance Company of Boston (“Liberty Life”), our insurance company subsidiaries.  See Note 3 for information on the acquisition of Liberty Life.  We also own several non-insurance companies, including Lincoln Financial Distributors and Lincoln Financial Advisors, LNC’s wholesaling and retailing business units, respectively.  Through our business segments, we sell a wide range of wealth protection, accumulation and retirement income products and solutions.  These products primarily include fixed and indexed annuities, variable annuities, universal life insurance (“UL”), variable universal life insurance (“VUL”), linked-benefit UL, indexed universal life insurance (“IUL”), term life insurance, employer-sponsored retirement plans and services, and group life, disability and dental.  LNL is licensed and sells its products throughout the U.S. and several U.S. territories.  See Note 14 for additional information.

Basis of Presentation

The accompanying unaudited consolidated financial statements are prepared in accordance with United States of America generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for the Securities and Exchange Commission (“SEC”) Quarterly Report on Form 10-Q, including Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  As discussed in Note 3, on May 1, 2018, LNC and LNL completed the acquisition of Liberty Life.  The information contained in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”), should be read in connection with the reading of these interim unaudited consolidated financial statements.

Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized in our 2017 Form 10-K.

In the opinion of management, these statements include all normal recurring adjustments necessary for a fair presentation of the Company’s results.  Operating results for the nine months ended September 30, 2018, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018.  All material inter-company accounts and transactions have been eliminated in consolidation.

5

2.  New Accounting Standards

Adoption of New Accounting Standards

The following table provides a description of our adoption of new Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board and the impact of the adoption on our financial statements.  ASUs not listed below were assessed and determined to be either not applicable or not material in presentation or amount.

Standard	Description	Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2014-09, Revenue from Contracts with Customers and all related amendments	This standard establishes the core principle of recognizing revenue to depict the transfer of promised goods and services and defines a five-step process that systematically identifies the various components of the revenue recognition process, culminating with the recognition of revenue upon satisfaction of an entity’s performance obligation.  Although the standard and all related amendments supersede nearly all existing revenue recognition guidance under GAAP, the guidance does not amend the accounting for insurance and investment contracts recognized in accordance with Accounting Standards Codification ™ (“ASC”) Topic 944, Financial Services – Insurance, leases, financial instruments and guarantees.	January 1, 2018	We adopted the standard and all related amendments using the modified retrospective method.  Our primary sources of revenue are recognized in accordance with ASC Topic 944, Financial Services – Insurance; as such, revenue within the scope of the new standard primarily includes commissions and advisory fees earned by our broker dealer operation.  The adoption did not have a material impact on our consolidated financial condition, results of operations, stockholder's equity or cash flows.  There were no material changes in the timing or measurement of revenues based upon the guidance.  As a result, there is no cumulative effect on retained earnings.  For more information, see Note 14.

6

Standard	Description	Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities	These amendments require, among other things, the fair value measurement of investments in equity securities and certain other ownership interests that do not result in consolidation and are not accounted for under the equity method of accounting.  The change in fair value of the impacted investments in equity securities must be recognized in net income in the period of the change in fair value.  In addition, the amendments include certain enhancements to the presentation and disclosure requirements for financial assets and financial liabilities.  The guidance does not apply to Federal Home Loan Bank (“FHLB”) stock.  Early adoption of the ASU is generally not permitted, except as defined in the ASU.  The amendments were adopted in the financial statements through a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption.	January 1, 2018	At the time of adoption, we had equity securities classified as available-for-sale (“AFS”) with a total carrying value of $246 million.  We classified, prospectively, $110 million of equity securities within the scope of this ASU in a separate line on our Consolidated Balance Sheets.  The remaining securities, consisting of $136 million of FHLB stock, are classified in other investments on our Consolidated Balance Sheets and carried at cost. The cumulative-effect adjustment of adopting this ASU did not have a material impact on our consolidated financial condition or results of operations.
ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income	These amendments require a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects associated with the change in the federal corporate income tax rate in the Tax Cuts and Jobs Act (“Tax Act”) of 2017.  The amount of the reclassification is equal to the impact of the change in deferred taxes related to amounts recorded in AOCI resulting from the change in the statutory corporate tax rate from 35% to 21%.  Early adoption is permitted and retrospective application is required.	January 1, 2018	We retrospectively reclassified $644 million of stranded tax effects from AOCI to retained earnings in the period of adoption.

Future Adoption of New Accounting Standards

The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted:

Standard	Description	Projected Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2016-02, Leases	This standard establishes a new accounting model for leases.  Lessees will recognize most leases on the balance sheet as a right-of-use asset and a related lease liability.  The lease liability is measured as the present value of the lease payments over the lease term with the right-of-use asset measured at the lease liability amount and including adjustments for certain lease incentives and initial direct costs.  Lease expense recognition will continue to differentiate between finance leases and operating leases resulting in a similar pattern of lease expense recognition as under current GAAP.  This ASU permits a modified retrospective adoption approach that includes a number of optional practical expedients that entities may elect upon adoption.  Early adoption is permitted.	January 1, 2019	We continue to gather information to determine our leases that are within the scope of this standard.  We do not expect there to be a significant difference in our pattern of lease expense recognition under this ASU.

7

Standard	Description	Projected Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2016-13, Measurement of Credit Losses on Financial Instruments	These amendments adopt a new model to measure and recognize credit losses for most financial assets.  The method used to measure estimated credit losses for AFS debt securities will be unchanged from current GAAP; however, the amendments require credit losses to be recognized through an allowance rather than as a reduction to the amortized cost of those debt securities.  The amendments will permit entities to recognize improvements in credit loss estimates on AFS debt securities by reducing the allowance account immediately through earnings.  The amendments will be adopted through a cumulative effect adjustment to the beginning balance of retained earnings as of the first reporting period in which the amendments are effective.  Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein.	January 1, 2020	We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations, with a primary focus on our fixed maturity securities, mortgage loans and reinsurance recoverables.
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities	These amendments require an entity to shorten the amortization period for certain callable debt securities held at a premium so that the premium is amortized to the earliest call date.  Early adoption is permitted, and the ASU requires adoption under a modified retrospective basis through a cumulative-effect adjustment to the beginning balance of retained earnings.	January 1, 2019	We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations.
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities	These amendments change both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results.  These amendments retain the threshold of highly effective for hedging relationships, remove the requirement to bifurcate between the portions of the hedging relationship that are effective and ineffective, record hedge item and hedging instrument results in the same financial statement line item, require quantitative assessment initially for all hedging relationships unless the hedging relationship meets the definition of either the shortcut method or critical terms match method and allow the contractual specified index rate to be designated as the hedged risk in a cash flow hedge of interest rate risk of a variable rate financial instrument.  These amendments also eliminate the benchmark interest rate concept for variable rate instruments.  Early adoption is permitted.	January 1, 2019	We do not currently expect the adoption of this guidance to have a material impact on our consolidated financial condition and results of operations.

8

Standard	Description	Projected Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts	These amendments make changes to the accounting and reporting for long-duration contracts issued by an insurance entity that will significantly change how insurers account for long-duration contracts, including how they measure, recognize and make disclosures about insurance liabilities and deferred acquisition costs (“DAC”).  Under this ASU insurers will be required to review cash flow assumptions at least annually and update them if necessary.  They also will have to make quarterly updates to the discount rate assumptions they use to measure the liability for future policyholder benefits.  The ASU creates a new category of market risk benefits (i.e., features that protect the contract holder from capital market risk and expose the insurer to that risk) that insurers will have to measure at fair value.  The ASU provides various transition methods by topic that entities may elect upon adoption.  Early adoption is permitted.	January 1, 2021	We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations.

3. Acquisition

As previously announced, on May 1, 2018, we completed the acquisition of 100% of the capital stock of Liberty Life, which operates a group benefits business (“Liberty Group Business”) and individual life and individual and group annuity business (the “Liberty Life Business”), from Liberty Mutual Insurance Company in a transaction accounted for under the acquisition method of accounting pursuant to Business Combinations Topic 805 (“Topic 805”).  The acquisition enables us to increase our market share within the group protection marketplace.

In connection with the acquisition and pursuant to the Master Transaction Agreement (“MTA”), dated January 18, 2018, which was attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on January 22, 2018, Liberty Life sold the Liberty Life Business on May 1, 2018, by entering into reinsurance agreements and related ancillary documents (including administrative services agreements and transition services agreements) with Protective Life Insurance Company and its wholly-owned subsidiary, Protective Life and Annuity Insurance Company (together with Protective Life Insurance Company, “Protective”), providing for the reinsurance and administration of the Liberty Life Business.

Liberty Life’s excess capital of $1.8 billion was paid to Liberty Mutual Insurance Company through an extraordinary dividend at the acquisition date.  We paid $1.5 billion of cash to Liberty Mutual Insurance Company to acquire the Liberty Group Business.

We recognized $10 million and $60 million of acquisition-related costs, pre-tax, for the three and nine months ended September 30, 2018, respectively.  These costs are included in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

9

The acquisition date fair values of certain assets and liabilities, including future contract benefits, intangible assets and related weighted average expected lives, commercial mortgage loans, reinsurance recoverables and deferred income taxes, are provisional and subject to revision within one year of the acquisition date.  Under the terms of the MTA, a final balance sheet will be agreed upon at a later date.  As such, our estimates of fair values are pending finalization, which may result in adjustments to goodwill.  The following table presents the preliminary fair values (in millions) of the net assets acquired related to the Liberty Group Business as of the acquisition date:

	Preliminary
	Fair Value
Assets
Investments	$	2,493
Mortgage loans on real estate		658
Cash and invested cash		107
Reinsurance recoverables		76
Premiums and fees receivable		83
Accrued investment income		24
Other intangible assets acquired		640
Other assets acquired		142
Separate account assets		99
Total assets acquired	$	4,322
Liabilities
Future contract benefits	$	2,930
Other contract holder funds		46
Other liabilities acquired		120
Separate account liabilities		99
Total liabilities assumed	$	3,195
Net identifiable assets acquired	$	1,127
Goodwill		390
Net assets acquired	$	1,517

Identifiable Intangible Assets

The following table presents the fair value of identifiable intangible assets acquired (dollars in millions):

			Weighted-
			Average
			Amortization
	Fair Value		Period
Value of customer relationships acquired	$	576	20
Value of distribution agreements		31	13
Value of business acquired		30	3
Insurance licenses		3	N/A
Total identifiable intangible assets	$	640

The value of customer relationships acquired (“VOCRA”) and value of distribution agreements (“VODA”), included in other assets on our Consolidated Balance Sheets, reflects the estimated fair value of the customer relationships acquired and distribution agreements of the Liberty Group Business as of May 1, 2018.  The value of the identifiable intangible assets was estimated using a discounted cash flow method.  Significant inputs to the valuation models include estimates of expected premiums, persistency rates, investment returns, claim costs, expenses and discount rates based on a weighted average cost of capital.  Similar to other specifically identifiable intangible assets, the carrying values of VOCRA and VODA will be amortized using a straight-line method and reviewed at least annually for indicators of impairment in value that are other-than-temporary. 

For information on value of business acquired (“VOBA”), see Notes 1 and 8 in our 2017 Form 10-K.

The value of insurance licenses was estimated using the comparable transaction method under the market approach based on arms-length transactions in which certificate authority companies with life and health insurance licenses were purchased.  The value of insurance licenses has an indefinite useful life.

10

Goodwill

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from assets acquired and liabilities assumed that could not be individually identified.  The goodwill recorded as part of the acquisition includes the expected synergies and other benefits that management believes will result from the acquisition, including an increase in distribution strength.  The goodwill resulting from the acquisition was allocated to the Group Protection segment.  The goodwill is not expected to be deductible for income tax purposes.  For more information on goodwill, see Notes 1 and 10 in our 2017 Form 10-K.

Future Contract Benefits

Unpaid claims acquired reflected within future contract benefits were recorded at estimated fair value.  The reserve discount rate was based on the investment yield of the assets acquired with adjustments for risk margin.  The actuarial classifications and methodologies were adjusted to be consistent with our accounting policies and reserve methodologies.

Financial Information

Since the acquisition date of May 1, 2018, the revenues and net income of the business acquired have been included in our Consolidated Statements of Comprehensive Income (Loss) in the Group Protection segment and were $929 million and $26 million, respectively. 

The following unaudited pro forma condensed consolidated results of operations of the Company assume that the acquisition of Liberty Life was completed on January 1, 2017 (in millions):

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenue	$	4,038	$	3,747	$	12,034	$	11,177
Net income		385		370		1,253		1,013

Pro forma adjustments include the revenue and net income of the acquired business for each period as well as amortization of identifiable intangible assets acquired and the fair value adjustment to acquired insurance reserves and investments.  Other pro forma adjustments include the impact of reflecting acquisition and integration costs and investment expenses directly attributable to the business combination in 2017 instead of in 2018.  Pro forma adjustments do not include retrospective adjustments to defer and amortize acquisition costs as would be recorded under our accounting policy.

Reinsurance

Pursuant to the reinsurance agreements, we sold the Liberty Life Business to Protective for a ceding commission of $423 million.   Our amounts recoverable from reinsurers increased significantly to $20.0 billion as of September 30, 2018, from $6.5 billion as of December 31, 2017, primarily as a result of this reinsurance transaction.  As such, Protective now represents our largest reinsurance exposure.  As we are not relieved of our liability, the liabilities and obligations associated with the reinsured policies remain on our Consolidated Balance Sheets with a corresponding reinsurance recoverable from Protective.  To support its obligations under the reinsurance agreements, Protective has established trust accounts for our benefit that fully collateralize the related reinsurance recoverable.  We recorded a deferred tax asset attributed to a tax loss carryforward arising from the reinsurance transaction with Protective.

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4.  Variable Interest Entities

Consolidated VIEs

See Note 4 in our 2017 Form 10-K for a detailed discussion of our consolidated variable interest entities (“VIEs”), which information is incorporated herein by reference.

Unconsolidated VIEs

See Note 4 in our 2017 Form 10-K for a detailed discussion of our unconsolidated VIEs, which information is incorporated herein by reference.

Limited Partnerships and Limited Liability Companies

We invest in certain limited partnerships (“LPs”) and limited liability companies (“LLCs”), including qualified affordable housing projects, that we have concluded are VIEs.  We do not hold any substantive kick-out or participation rights in the LPs and LLCs, and we do not receive any performance fees or decision maker fees from the LPs and LLCs.  Based on our analysis of the LPs and LLCs, we are not the primary beneficiary of the VIEs as we do not have the power to direct the most significant activities of the LPs and LLCs. 

The carrying amounts of our investments in the LPs and LLCs are recognized in other investments on our Consolidated Balance Sheets and were $1.6 billion and $1.4 billion as of September 30, 2018 and December 31, 2017, respectively.  Included in these carrying amounts are our investments in qualified affordable housing projects, which were $25 million and $31 million as of September 30, 2018, and December 31, 2017, respectively.  We do not have any contingent commitments to provide additional capital funding to these qualified affordable housing projects.  We received returns from these qualified affordable housing projects in the form of income tax credits and other tax benefits that were $1 million and $2 million for the nine months ended September 30, 2018 and 2017, respectively, which were recognized in federal income tax expense (benefit) on our Consolidated Statements of Comprehensive Income (Loss).

Our exposure to loss is limited to the capital we invest in the LPs and LLCs, and there have been no indicators of impairment that would require us to recognize an impairment loss related to the LPs and LLCs as of September 30, 2018.

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5.  Investments

AFS Securities

See Note 1 in our 2017 Form 10-K for information regarding our accounting policy relating to AFS securities, which also includes additional disclosures regarding our fair value measurements.  In addition, we adopted ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, in 2018 that resulted in a new classification and measurement of our equity securities.  See Note 2 for additional information.

The amortized cost, gross unrealized gains, losses and other-than-temporary impairment (“OTTI”) and fair value of AFS securities (in millions) were as follows:

	As of September 30, 2018
	Amortized		Gross Unrealized							Fair
	Cost		Gains		Losses		OTTI (1)			Value
Fixed maturity AFS securities:
Corporate bonds	$	77,732	$	3,182	$	1,654	$	(9	)	$	79,269
Asset-backed securities ("ABS")		915		41		6		(17	)		967
U.S. government bonds		363		21		6		-			378
Foreign government bonds		415		40		-		-			455
Residential mortgage-backed securities ("RMBS")		3,073		108		103		(20	)		3,098
Commercial mortgage-backed securities ("CMBS")		764		2		22		(3	)		747
Collateralized loan obligations ("CLOs")		1,371		-		14		(5	)		1,362
State and municipal bonds		4,447		644		25		-			5,066
Hybrid and redeemable preferred securities		562		60		24		-			598
Total AFS securities	$	89,642	$	4,098	$	1,854	$	(54	)	$	91,940

	As of December 31, 2017
	Amortized		Gross Unrealized							Fair
	Cost		Gains		Losses		OTTI (1)			Value
Fixed maturity AFS securities:
Corporate bonds	$	74,921	$	6,573	$	341	$	(7	)	$	81,160
ABS		882		51		6		(26	)		953
U.S. government bonds		497		37		1		-			533
Foreign government bonds		391		55		-		-			446
RMBS		3,125		148		36		(21	)		3,258
CMBS		589		10		2		(2	)		599
CLOs		803		2		2		(5	)		808
State and municipal bonds		4,033		932		6		-			4,959
Hybrid and redeemable preferred securities		561		85		22		-			624
Total fixed maturity securities		85,802		7,893		416		(61	)		93,340
Equity AFS securities		247		16		17		-			246
Total AFS securities	$	86,049	$	7,909	$	433	$	(61	)	$	93,586

⁽¹⁾ Includes unrealized (gains) and losses on impaired securities related to changes in the fair value of such securities subsequent to the impairment measurement date.

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The amortized cost and fair value of fixed maturity AFS securities by contractual maturities (in millions) as of September 30, 2018, were as follows:

	Amortized		Fair
	Cost		Value
Due in one year or less	$	3,562	$	3,599
Due after one year through five years		16,817		16,894
Due after five years through ten years		17,617		17,561
Due after ten years		45,523		47,712
Subtotal		83,519		85,766
Structured securities (ABS, MBS, CLOs)		6,123		6,174
Total fixed maturity AFS securities	$	89,642	$	91,940

Actual maturities may differ from contractual maturities because issuers may have the right to call or pre-pay obligations.

The fair value and gross unrealized losses, including the portion of OTTI recognized in other comprehensive income (loss) (“OCI”), of AFS securities (dollars in millions), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

	As of September 30, 2018
	Less Than or Equal					Greater Than
	to Twelve Months					Twelve Months					Total
				Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
	Fair		Losses and			Fair		Losses and			Fair		Losses and
	Value			OTTI		Value			OTTI		Value			OTTI
Fixed maturity AFS securities:
Corporate bonds	$	31,706		$	1,142	$	4,520		$	513	$	36,226		$	1,655
ABS		246			2		122			12		368			14
U.S. government bonds		168			4		18			2		186			6
RMBS		776			38		557			66		1,333			104
CMBS		624			18		57			5		681			23
CLOs		1,062			14		34			-		1,096			14
State and municipal bonds		694			14		71			11		765			25
Hybrid and redeemable
preferred securities		31			2		131			22		162			24
Total AFS securities	$	35,307		$	1,234	$	5,510		$	631	$	40,817		$	1,865
Total number of AFS securities in an unrealized loss position															3,432

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	As of December 31, 2017
	Less Than or Equal					Greater Than
	to Twelve Months					Twelve Months					Total
				Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
	Fair		Losses and			Fair		Losses and			Fair		Losses and
	Value			OTTI		Value			OTTI		Value			OTTI
Fixed maturity AFS securities:
Corporate bonds	$	4,726		$	67	$	4,706		$	276	$	9,432		$	343
ABS		56			-		143			15		199			15
U.S. government bonds		156			-		19			1		175			1
RMBS		277			4		599			33		876			37
CMBS		113			-		60			3		173			3
CLOs		281			2		72			-		353			2
State and municipal bonds		33			-		89			5		122			5
Hybrid and redeemable
preferred securities		20			-		124			22		144			22
Total fixed maturity securities		5,662			73		5,812			355		11,474			428
Equity AFS securities		22			14		8			3		30			17
Total AFS securities	$	5,684		$	87	$	5,820		$	358	$	11,504		$	445
Total number of AFS securities in an unrealized loss position															1,095

The fair value, gross unrealized losses, the portion of OTTI recognized in OCI (in millions) and number of AFS securities where the fair value had declined and remained below amortized cost by greater than 20% were as follows:

	As of September 30, 2018
								Number
	Fair		Gross Unrealized					of
	Value		Losses		OTTI		Securities (1)
Less than six months	$	130	$	47	$	-			20
Six months or greater, but less than nine months		21		16		-			3
Nine months or greater, but less than twelve months		39		15		-			4
Twelve months or greater		118		47		8			29
Total	$	308	$	125	$	8			56

	As of December 31, 2017
								Number
	Fair		Gross Unrealized					of
	Value		Losses		OTTI		Securities (1)
Less than six months	$	156	$	57	$	1			26
Six months or greater, but less than nine months		2		1		-			4
Nine months or greater, but less than twelve months		12		6		-			7
Twelve months or greater		209		77		10			49
Total	$	379	$	141	$	11			86

⁽¹⁾ We may reflect a security in more than one aging category based on various purchase dates. 

We regularly review our investment holdings for OTTI.  Our gross unrealized losses, including the portion of OTTI recognized in OCI, on fixed maturity AFS securities increased by $1.4 billion for the nine months ended September 30, 2018.  As discussed further below, we believe the unrealized loss position as of September 30, 2018, did not represent OTTI as (i) we did not intend to sell these fixed maturity AFS securities; (ii) it is not more likely than not that we will be required to sell these fixed maturity AFS securities before recovery of their amortized cost basis; and (iii) the estimated future cash flows were equal to or greater than the amortized cost basis of the debt securities. 

Based upon this evaluation as of September 30, 2018, management believes we have the ability to generate adequate amounts of cash from our normal operations (e.g., insurance premiums and fees and investment income) to meet cash requirements with a prudent margin of safety without requiring the sale of our temporarily-impaired securities.

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As of September 30, 2018, the unrealized losses associated with our corporate bond securities were attributable primarily to widening credit spreads and rising interest rates since purchase.  We performed a detailed analysis of the financial performance of the underlying issuers and determined that we expected to recover the entire amortized cost for each temporarily-impaired security.

As of September 30, 2018, the unrealized losses associated with our mortgage-backed securities (“MBS”) and ABS were attributable primarily to widening credit spreads and rising interest rates since purchase.  We assessed for credit impairment using a cash flow model that incorporates key assumptions including default rates, severities and prepayment rates.  We estimated losses for a security by forecasting the underlying loans in each transaction.  The forecasted loan performance was used to project cash flows to the various tranches in the structure, as applicable.  Our forecasted cash flows also considered, as applicable, independent industry analyst reports and forecasts and other independent market data.  Based upon our assessment of the expected credit losses of the security given the performance of the underlying collateral compared to our subordination or other credit enhancement, we expected to recover the entire amortized cost of each temporarily-impaired security.

As of September 30, 2018, the unrealized losses associated with our hybrid and redeemable preferred securities were attributable primarily to wider credit spreads caused by illiquidity in the market and subordination within the capital structure, as well as credit risk of underlying issuers.  For our hybrid and redeemable preferred securities, we evaluated the financial performance of the underlying issuers based upon credit performance and investment ratings and determined that we expected to recover the entire amortized cost of each temporarily-impaired security.

Changes in the amount of credit loss of OTTI recognized in net income (loss) where the portion related to other factors was recognized in OCI (in millions) on fixed maturity AFS securities were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Balance as of beginning-of-period	$	356		$	370		$	358		$	411
Increases attributable to:
Credit losses on securities for which an
OTTI was not previously recognized		2			8			4			13
Credit losses on securities for which an
OTTI was previously recognized		-			1			1			4
Decreases attributable to:
Securities sold, paid down or matured		(5	)		(20	)		(10	)		(69	)
Balance as of end-of-period	$	353		$	359		$	353		$	359

During the nine months ended September 30, 2018 and 2017, we recorded credit losses on securities for which an OTTI was not previously recognized as we determined the cash flows expected to be collected would not be sufficient to recover the entire amortized cost basis of the debt security.  The credit losses we recorded on securities for which an OTTI was not previously recognized were attributable primarily to one or a combination of the following reasons:

· Failure of the issuer of the security to make scheduled payments;

· Deterioration of creditworthiness of the issuer;

· Deterioration of conditions specifically related to the security;

· Deterioration of fundamentals of the industry in which the issuer operates; and

· Deterioration of the rating of the security by a rating agency.

We recognize the OTTI attributed to the noncredit portion as a separate component in OCI referred to as unrealized OTTI on fixed maturity AFS securities. 

Mortgage Loans on Real Estate

See Note 1 in our 2017 Form 10-K for information regarding our accounting policy relating to mortgage loans on real estate.

Mortgage loans on real estate principally involve commercial real estate.  The commercial loans are geographically diversified throughout the U.S. with the largest concentrations in California, which accounted for 22% and 21% of mortgage loans on real estate as of September 30, 2018, and December 31, 2017, respectively, and Texas which accounted for 12% of mortgage loans on real estate as of September 30, 2018, and December 31, 2017.

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The following provides the current and past due composition of our mortgage loans on real estate (in millions):

	As of				As of
	September 30,				December 31,
		2018				2017
Current		$	12,498			$	10,662
60 to 90 days past due			-				-
Greater than 90 days past due			1				3
Valuation allowance associated with impaired mortgage loans on real estate			(1	)			(3	)
Unamortized premium (discount)			(16	)			-
Total carrying value		$	12,482			$	10,662

The number of impaired mortgage loans on real estate, each of which had an associated specific valuation allowance, and the carrying value of impaired mortgage loans on real estate (dollars in millions) were as follows:

	As of				As of
	September 30,				December 31,
		2018				2017
Number of impaired mortgage loans on real estate		1				3
Principal balance of impaired mortgage loans on real estate		$	4			$	11
Valuation allowance associated with impaired mortgage loans on real estate			(1	)			(3	)
Carrying value of impaired mortgage loans on real estate		$	3			$	8

The changes in the valuation allowance associated with impaired mortgage loans on real estate (in millions) were as follows:

	For the Three					For the Nine
	Months Ended					Months Ended
	September 30,					September 30,
	2018			2017		2018			2017
Balance as of beginning-of-period	$	2		$	2	$	3		$	2
Additions		-			-		-			-
Charge-offs, net of recoveries		(1	)		-		(2	)		-
Balance as of end-of-period	$	1		$	2	$	1		$	2

Additional information related to impaired mortgage loans on real estate (in millions) was as follows:

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Average carrying value for impaired mortgage loans on real estate	$	5	$	5	$	6	$	5
Interest income recognized on impaired mortgage loans on real estate		-		-		-		-
Interest income collected on impaired mortgage loans on real estate		-		-		-		-

As described in Note 1 in our 2017 Form 10-K, we use the loan-to-value and debt-service coverage ratios as credit quality indicators for our mortgage loans on real estate, which were as follows (dollars in millions):

	As of September 30, 2018				As of December 31, 2017
				Debt-				Debt-
				Service				Service
	Carrying		% of	Coverage	Carrying		% of	Coverage
Loan-to-Value Ratio	Value		Total	Ratio	Value		Total	Ratio
Less than 65%	$	11,230	90.0%	2.31	$	9,563	89.7%	2.27
65% to 74%		1,183	9.5%	1.79		1,000	9.4%	1.94
75% to 100%		66	0.5%	1.03		91	0.8%	0.97
Greater than 100%		3	0.0%	0.21		8	0.1%	0.82
Total mortgage loans on real estate	$	12,482	100.0%		$	10,662	100.0%

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Alternative Investments 

As of September 30, 2018, and December 31, 2017, alternative investments included investments in 236 and221 different partnerships, respectively, and the portfolios represented approximately  1% of our overall invested assets.

Realized Gain (Loss) Related to Certain Investments

The detail of the realized gain (loss) related to certain investments (in millions) was as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Fixed maturity AFS securities: (1)
Gross gains	$	14		$	7		$	29		$	18
Gross losses		(21	)		(22	)		(65	)		(46	)
Equity AFS securities:
Gross gains		-			-			-			1
Gain (loss) on other investments (2)		1			-			4			(4	)
Associated amortization of DAC, VOBA, DSI and DFEL
and changes in other contract holder funds		(5	)		(4	)		(16	)		(17	)
Total realized gain (loss) related to certain investments, pre-tax	$	(11	)	$	(19	)	$	(48	)	$	(48	)

⁽¹⁾ These amounts are represented net of related fair value hedging activity.  See Note 6 for more information.

⁽²⁾ Includes market adjustments on equity securities still held of less than $1 million and $2 million for the three and nine months ended September 30, 2018, respectively.

Details underlying write-downs taken as a result of OTTI (in millions) that were recognized in net income (loss) and included in realized gain (loss) on AFS securities above, were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
OTTI Recognized in Net Income (Loss)
Fixed maturity AFS securities:
Corporate bonds	$	(2	)	$	(8	)	$	(4	)	$	(13	)
ABS		-			(1	)		-			(2	)
RMBS		-			-			(1	)		(1	)
State and municipal bonds		-			-			-			(1	)
Gross OTTI recognized in net income (loss)		(2	)		(9	)		(5	)		(17	)
Associated amortization of DAC, VOBA, DSI and DFEL		-			1			-			1
Net OTTI recognized in net income (loss), pre-tax	$	(2	)	$	(8	)	$	(5	)	$	(16	)

We recognized less than $1 million of OTTI in OCI for the three and nine months ended September 30, 2018.  We recognized $1 million of OTTI in OCI for the three and nine months ended September 30, 2017. 

Determination of Credit Losses on Corporate Bonds and ABS

As of September 30, 2018, and December 31, 2017, we reviewed our corporate bond and ABS portfolios for potential shortfall in contractual principal and interest based on numerous subjective and objective inputs.  The factors used to determine the amount of credit loss for each individual security, include, but are not limited to, near term risk, substantial discrepancy between book and market value, sector or company-specific volatility, negative operating trends and trading levels wider than peers.

Credit ratings express opinions about the credit quality of a security.  Securities rated investment grade, that is those rated BBB- or higher by Standard & Poor’s (“S&P”) Rating Services or Baa3 or higher by Moody’s Investors Service (“Moody’s”), are generally considered by the rating agencies and market participants to be low credit risk.  As of September 30, 2018, and December 31, 2017,  96% of the fair value of our corporate bond portfolio was rated investment grade.  As of September 30, 2018, and December 31, 2017, the portion of our corporate bond portfolio rated below investment grade had an amortized cost of $3.2 billion and $3.4 billion, respectively, and a fair value of $3.1 billion and $3.4 billion, respectively.  As of September 30, 2018, and December 31, 2017, 98% of the fair value of our ABS portfolio was rated investment grade.  As of September 30, 2018, and December 31, 2017, the portion of our ABS portfolio rated below investment grade had an amortized cost of $43 million and a fair value of $41 million.  Based upon the analysis discussed above, we

18

believe as of  September 30, 2018, and December 31, 2017, that we would recover the amortized cost of each investment grade corporate bond and ABS security.

Determination of Credit Losses on MBS

As of September 30, 2018, and December 31, 2017, default rates were projected by considering underlying MBS loan performance and collateral type.  Projected default rates on existing delinquencies vary between 10% to 100% depending on loan type and severity of delinquency status.  In addition, we estimate the potential contributions of currently performing loans that may become delinquent in the future based on the change in delinquencies and loan liquidations experienced in the recent history.  Finally, we develop a default rate timing curve by aggregating the defaults for all loans in the pool (delinquent loans, foreclosure and real estate owned and new delinquencies from currently performing loans) and the associated loan-level loss severities. 

We use certain available loan characteristics such as lien status, loan sizes and occupancy to estimate the loss severity of loans.  Second lien loans are assigned 100% severity, if defaulted.  For first lien loans, we assume a minimum of 30% severity with higher severity assumed for investor properties and further adjusted by housing price assumptions.  With the default rate timing curve and loan-level loss severity, we derive the future expected credit losses.

Payables for Collateral on Investments

The carrying value of the payables for collateral on investments (in millions) included on our Consolidated Balance Sheets and the fair value of the related investments or collateral consisted of the following:

	As of September 30, 2018				As of December 31, 2017
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Collateral payable for derivative investments (1)	$	319	$	319	$	701	$	701
Securities pledged under securities lending agreements (2)		117		113		222		213
Securities pledged under repurchase agreements (3)		152		158		531		554
Investments pledged for Federal Home Loan Bank of
Indianapolis (“FHLBI”) (4)		3,580		5,413		2,900		4,235
Total payables for collateral on investments	$	4,168	$	6,003	$	4,354	$	5,703

⁽¹⁾ We obtain collateral based upon contractual provisions with our counterparties.  These agreements take into consideration the counterparties’ credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that if exceeded result in the receipt of cash that is typically invested in cash and invested cash.  See Note 6 for additional information.

⁽²⁾ Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively.  We value collateral daily and obtain additional collateral when deemed appropriate.  The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities.

⁽³⁾ Our pledged securities under repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We generally obtain collateral in an amount between 80% to 95% of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary.  The cash received in our repurchase program is typically invested in fixed maturity AFS securities.

⁽⁴⁾ Our pledged investments for FHLBI are included in fixed maturity AFS securities and mortgage loans on real estate on our Consolidated Balance Sheets.  The collateral requirements are generally 105% to 115% of the fair value for fixed maturity AFS securities and 155% to 175% of the fair value for mortgage loans on real estate.  The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities.

Increase (decrease) in payables for collateral on investments (in millions) consisted of the following:

	For the Nine
	Months Ended
	September 30,
	2018			2017
Collateral payable for derivative investments	$	(382	)	$	52
Securities pledged under securities lending agreements		(105	)		(17	)
Securities pledged under repurchase agreements		(379	)		1
Investments pledged for FHLBI		680			(50	)
Total increase (decrease) in payables for collateral on investments	$	(186	)	$	(14	)

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We have elected not to offset our repurchase agreements and securities lending transactions in our financial statements.  The remaining contractual maturities of repurchase agreements and securities lending transactions accounted for as secured borrowings (in millions) were as follows:

	As of September 30, 2018
	Overnight and Continuous		Up to 30 Days		30 –  90 Days		Greater Than 90 Days		Total
Repurchase Agreements
Corporate bonds	$	-	$	-	$	-	$	152	$	152
Total		-		-		-		152		152
Securities Lending
Corporate bonds		117		-		-		-		117
Total		117		-		-		-		117
Total gross secured borrowings	$	117	$	-	$	-	$	152	$	269

	As of December 31, 2017
	Overnight and Continuous		Up to 30 Days		30 –  90 Days		Greater Than 90 Days		Total
Repurchase Agreements
Corporate bonds	$	-	$	100	$	281	$	150	$	531
Total		-		100		281		150		531
Securities Lending
Corporate bonds		222		-		-		-		222
Total		222		-		-		-		222
Total gross secured borrowings	$	222	$	100	$	281	$	150	$	753

We accept collateral in the form of securities in connection with repurchase agreements.  In instances where we are permitted to sell or re-pledge the securities received, we report the fair value of the collateral received and a related obligation to return the collateral in the financial statements.  In addition, we receive securities in connection with securities borrowing agreements, which we are permitted to sell or re-pledge.  As of  September 30, 2018, the fair value of all collateral received that we are permitted to sell or re-pledge was $528 million.  As of September 30, 2018, we have re-pledged $502 million of this collateral to cover initial margin on certain derivative investments.

Investment Commitments

As of September 30, 2018, our investment commitments were $1.5 billion, which included $815 million of LPs, $317 million of mortgage loans on real estate and $331 million of private placement securities.

Concentrations of Financial Instruments

As of  September 30, 2018, and December 31, 2017, our most significant investments in one issuer were our investments in securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $1.4 billion and $1.2 billion, respectively, or 1% of our invested assets portfolio, and our investments in securities issued by the Federal National Mortgage Association with a fair value of $1.2 billion and $930 million, respectively, or 1% of our invested assets portfolio.  These concentrations include fixed maturity AFS, trading and equity securities.  

As of  September 30, 2018, our most significant investments in one industry were our investments in securities in the financial services industry and the consumer non-cyclical industry with a fair value of $15.5 billion and $13.8 billion, respectively, or 14% and 12%, respectively, of our invested assets portfolio.  As of December 31, 2017, our most significant investments in one industry were our investments in securities in the consumer non-cyclical industry and the utilities industry with a fair of $14.3 billion and $13.8 billion, respectively, or 13% and 12%, respectively, of our invested assets portfolio.  These concentrations include fixed maturity AFS, trading and equity securities.

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6.  Derivative Instruments

We maintain an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings that are caused by interest rate risk, foreign currency exchange risk, equity market risk, basis risk and credit risk.  See Note 1 in our 2017 Form 10-K for a detailed discussion of the accounting treatment for derivative instruments.  See Note 6 in our 2017 Form 10-K for a detailed discussion of our derivative instruments and use of them in our overall risk management strategy, which information is incorporated herein by reference.  See Note 13 for additional disclosures related to the fair value of our derivative instruments.

We have derivative instruments with off-balance-sheet risks whose notional or contract amounts exceed the related credit exposure.  Outstanding derivative instruments with off-balance-sheet risks (in millions) were as follows:

	As of September 30, 2018						As of December 31, 2017
	Notional		Fair Value				Notional		Fair Value
	Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1,614	$	5	$	42	$	1,544	$	45	$	16
Foreign currency contracts (1)		2,085		104		71		1,804		79		79
Total cash flow hedges		3,699		109		113		3,348		124		95
Fair value hedges:
Interest rate contracts (1)		553		-		113		563		-		174
Non-Qualifying Hedges
Interest rate contracts (1)		90,138		318		233		72,937		657		127
Foreign currency contracts (1)		87		-		-		22		-		-
Equity market contracts (1)		24,753		536		139		30,918		562		557
Credit contracts (1)		-		-		-		52		-		-
Embedded derivatives:
Guaranteed living benefit ("GLB")
direct (2)		-		1,648		-		-		903		-
GLB ceded (2) (3)		-		35		1,681		-		51		954
Reinsurance related (4)		-		148		-		-		-		51
Indexed annuity and IUL contracts (2) (5)		-		44		1,571		-		11		1,418
Total derivative instruments	$	119,230	$	2,838	$	3,850	$	107,840	$	2,308	$	3,376

⁽¹⁾ Reported in derivative investments and other liabilities on our Consolidated Balance Sheets.

⁽²⁾ Reported in other assets on our Consolidated Balance Sheets.

⁽³⁾ Reported in other liabilities on our Consolidated Balance Sheets.

⁽⁴⁾ Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets.

⁽⁵⁾ Reported in future contract benefits on our Consolidated Balance Sheets.

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

	Remaining Life as of September 30, 2018
	Less Than		1 – 5		6 – 10		11 – 30		Over 30
	1 Year		Years		Years		Years		Years		Total
Interest rate contracts (1)	$	10,907	$	14,802	$	47,193	$	19,403	$	-	$	92,305
Foreign currency contracts (2)		141		256		635		1,130		10		2,172
Equity market contracts		18,103		3,401		115		14		3,120		24,753
Total derivative instruments
with notional amounts	$	29,151	$	18,459	$	47,943	$	20,547	$	3,130	$	119,230

⁽¹⁾ As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was February 2027.

⁽²⁾ As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049.

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

	For the Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	27		$	93
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period:
Cumulative effect from adoption of
new accounting standard		6			-
Cash flow hedges:
Interest rate contracts		(67	)		19
Foreign currency contracts		(19	)		46
Change in foreign currency exchange rate adjustment		69			(119	)
Change in DAC, VOBA, DSI and DFEL		4			(3	)
Income tax benefit (expense)		3			20
Less:
Reclassification adjustment for gains (losses)
included in net income (loss):
Cash flow hedges:
Interest rate contracts (1)		3			3
Foreign currency contracts (1)		18			12
Foreign currency contracts (2)		-			5
Associated amortization of DAC, VOBA, DSI and DFEL		(5	)		(1	)
Income tax benefit (expense)		(3	)		(7	)
Balance as of end-of-period	$	10		$	44

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

⁽²⁾ The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

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The gains (losses) on derivative instruments (in millions) recorded within income (loss) from continuing operations on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1		$	1		$	3		$	3
Foreign currency contracts (1)		7			4			18			12
Foreign currency contracts (2)		-			-			-			5
Total cash flow hedges		8			5			21			20
Fair value hedges:
Interest rate contracts (1)		(2	)		(6	)		(11	)		(18	)
Interest rate contracts (2)		17			2			64			2
Total fair value hedges		15			(4	)		53			(16	)
Non-Qualifying Hedges
Interest rate contracts (2)		(167	)		18			(577	)		161
Foreign currency contracts (2)		-			1			2			1
Equity market contracts (2)		(199	)		(347	)		(280	)		(1,163	)
Equity market contracts (3)		9			6			10			20
Embedded derivatives:
GLB(2)		2			-			2			-
Reinsurance related (2)		26			(24	)		234			(113	)
Indexed annuity and IUL contracts (2)		(164	)		(46	)		(175	)		(230	)
Total derivative instruments	$	(470	)	$	(391	)	$	(710	)	$	(1,320	)

⁽¹⁾ Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

⁽²⁾ Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

⁽³⁾ Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

Gains (losses) recognized as a component of OCI (in millions) on derivative instruments designated and qualifying as cash flow hedges were as follows:

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Offset to net investment income	$	8	$	5	$	21	$	15
Offset to realized gain (loss)		-		-		-		5

As of September 30, 2018,  $34 million of the deferred net gains (losses) on derivative instruments in AOCI were expected to be reclassified to earnings during the next 12 months.  This reclassification would be due primarily to interest rate variances related to our interest rate swap agreements.

For the nine months ended September 30, 2018 and 2017, there were no material reclassifications to earnings due to hedged firm commitments no longer deemed probable or due to hedged forecasted transactions that had not occurred by the end of the originally specified time period.

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As of September 30, 2018, we did not have any exposure related to credit default swaps for which we are the seller.

As of December 31, 2017, information related to our credit default swaps for which we are the seller (dollars in millions) was as follows:

As of December 31, 2017
					Credit
		Reason	Nature		Rating of	Number			Maximum
		for	of	Underlying		of	Fair		Potential
Credit Contract Type	Maturity	Entering	Recourse		Obligation (1)	Instruments	Value (2)		Payout
Basket credit default swaps	12/20/2022	(3)	(4)		BBB+	1	$	1	$	52
						1	$	1	$	52

⁽¹⁾ Represents average credit ratings based on the midpoint of the applicable ratings among Moody’s, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings.

⁽²⁾ Broker quotes are used to determine the market value of our credit default swaps.

⁽³⁾ Credit default swaps were entered into in order to hedge the liability exposure on certain variable annuity products.

⁽⁴⁾ Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract.

Details underlying the associated collateral of our credit default swaps for which we are the seller if credit risk-related contingent features were triggered (in millions) were as follows:

		As of			As of
	September 30,			December 31,
		2018			2017
Maximum potential payout		$	-		$	52
Less:  Counterparty thresholds			-			-
Maximum collateral potentially required to post		$	-		$	52

Certain of our credit default swap agreements contain contractual provisions that allow for the netting of collateral with our counterparties related to all of our collateralized financing transactions that we have outstanding.  If these netting agreements were not in place, we would have been required to post collateral if the market value was less than zero.

Credit Risk

We are exposed to credit losses in the event of non-performance by our counterparties on various derivative contracts and reflect assumptions regarding the credit or non-performance risk (“NPR”).  The NPR is based upon assumptions for each counterparty’s credit spread over the estimated weighted average life of the counterparty exposure less collateral held. As of September 30, 2018, the NPR adjustment was zero.  The credit risk associated with such agreements is minimized by entering into agreements with financial institutions with long-standing, superior performance records.  Additionally, we maintain a policy of requiring derivative contracts to be governed by an International Swaps and Derivatives Association (“ISDA”) Master Agreement.  We are required to maintain minimum ratings as a matter of routine practice in negotiating ISDA agreements.  Under some ISDA agreements, we and our insurance subsidiary have agreed to maintain certain financial strength or claims-paying ratings.  A downgrade below these levels could result in termination of derivative contracts, at which time any amounts payable by us would be dependent on the market value of the underlying derivative contracts.  In certain transactions, we and the counterparty have entered into a credit support annex requiring either party to post collateral when net exposures exceed pre-determined thresholds.  These thresholds vary by counterparty and credit rating.  The amount of such exposure is essentially the net replacement cost or market value less collateral held for such agreements with each counterparty if the net market value is in our favor.  As of September 30, 2018, and December 31, 2017, our exposure was zero.

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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 September 30, 2018					As of December 31, 2017
	Collateral		Collateral			Collateral		Collateral
	Posted by		Posted by			Posted by		Posted by
S&P	Counter-		LNL			Counter-		LNL
Credit	Party		(Held by			Party		(Held by
Rating of	(Held by		Counter-			(Held by		Counter-
Counterparty	LNL)		Party)			LNL)		Party)
AA-	$	36	$	(21	)	$	116	$	(1	)
A+		166		(78	)		178		(453	)
A		40		(1	)		170		(48	)
A-		76		-			237		-
BBB+		-		-			-		(4	)
	$	318	$	(100	)	$	701	$	(506	)

Balance Sheet Offsetting

Information related to the effects of offsetting (in millions) was as follows: 

		As of September 30, 2018
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total
Financial Assets
Gross amount of recognized assets		$	843			$	1,875	$	2,718
Gross amounts offset			(198	)			-		(198	)
Net amount of assets			645				1,875		2,520
Gross amounts not offset:
Cash collateral			(318	)			-		(318	)
Non-cash collateral			(80	)			-		(80	)
Net amount		$	247			$	1,875	$	2,122
Financial Liabilities
Gross amount of recognized liabilities		$	932			$	3,252	$	4,184
Gross amounts offset			(119	)			-		(119	)
Net amount of liabilities			813				3,252		4,065
Gross amounts not offset:
Cash collateral			(100	)			-		(100	)
Non-cash collateral			(420	)			-		(420	)
Net amount		$	293			$	3,252	$	3,545

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		As of December 31, 2017
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total
Financial Assets
Gross amount of recognized assets		$	1,082			$	965	$	2,047
Gross amounts offset			(237	)			-		(237	)
Net amount of assets			845				965		1,810
Gross amounts not offset:
Cash collateral			(701	)			-		(701	)
Net amount		$	144			$	965	$	1,109
Financial Liabilities
Gross amount of recognized liabilities		$	1,037			$	2,423	$	3,460
Gross amounts offset			(261	)			-		(261	)
Net amount of liabilities			776				2,423		3,199
Gross amounts not offset:
Cash collateral			(506	)			-		(506	)
Net amount		$	270			$	2,423	$	2,693

7.  Federal Income Taxes

The effective tax rate is the ratio of tax expense over pre-tax income (loss).  The effective tax rate was 10% and 14% for the three and nine months ended September 30, 2018, respectively, compared to 16% and 12% for the corresponding periods in 2017.  The effective tax rate on pre-tax income was lower than the prevailing corporate federal income tax rate.  Differences in the effective rates and the U.S. statutory rates of 21% and 35% for the three and nine months ended September 30, 2018 and 2017, respectively, were the result of the separate account dividends-received deduction, certain tax preferred investment income, foreign tax credits and other tax preference items.  The current quarter also includes a tax benefit to net income from the impact of the reduced corporate tax rate under the Tax Act on our adoption of a recent Internal Revenue Service pronouncement related to variable annuity contracts.

The SEC previously issued rules that allow for a one year measurement period after the enactment of the Tax Act to finalize calculations and recording of the related tax impacts.  Subsequent to the Tax Act, we have continued to review and analyze the provisions of the Tax Act, including the actual and potential impact of the reduction in the U.S. federal corporate income tax rate and the impact of specific life insurance provisions on our financial statements.  While we do not anticipate any significant changes to amounts currently recorded, any additional adjustments to amounts recorded as a result of the Tax Act will be made during 2018.

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8.  Guaranteed Benefit Features

Information on the guaranteed death benefit (“GDB”) features outstanding (dollars in millions) was as follows:

	As of			As of
	September 30,			December 31,
		2018 (1)			2017 (1)
Return of Net Deposits
Total account value		$	98,623		$	96,941
Net amount at risk (2)			93			81
Average attained age of contract holders			64 years			64 years
Minimum Return
Total account value		$	103		$	108
Net amount at risk (2)			16			18
Average attained age of contract holders			76 years			76 years
Guaranteed minimum return			5%			5%
Anniversary Contract Value
Total account value		$	26,308		$	26,596
Net amount at risk (2)			438			417
Average attained age of contract holders			71 years			70 years

⁽¹⁾ Our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive.

⁽²⁾ Represents the amount of death benefit in excess of the account balance that is subject to market fluctuations.

The determination of GDB liabilities is based on models that involve a range of scenarios and assumptions, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience.  The following summarizes the balances of and changes in the liabilities for GDBs (in millions), which were recorded in future contract benefits on our Consolidated Balance Sheets:

	For the Nine
	Months Ended
	September 30,
	2018			2017
Balance as of beginning-of-year	$	100		$	110
Changes in reserves		18			4
Benefits paid		(11	)		(14	)
Balance as of end-of-period	$	107		$	100

Variable Annuity Contracts

Account balances of variable annuity contracts, including those with guarantees, (in millions) were invested in separate account investment options as follows:

		As of			As of
	September 30,			December 31,
		2018			2017
Asset Type
Domestic equity		$	61,732		$	59,647
International equity			20,598			20,837
Fixed income			40,529			40,626
Total		$	122,859		$	121,110
Percent of total variable annuity
separate account values			98%			99%

Secondary Guarantee Products

Future contract benefits and other contract holder funds include reserves for our secondary guarantee products sold through our Life Insurance segment.  These UL and VUL products with secondary guarantees represented 32% of total life insurance in-force reserves as of September 30, 2018, and December 31, 2017.  UL and VUL products with secondary guarantees represented 38% and 34% of total sales for the three and nine months ended September 30, 2018, respectively, compared to 26% and 27% for the corresponding periods in 2017.

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9.  Liability for Unpaid Claims

Changes in the liability for unpaid claims (in millions), were as follows:

	For the Nine
	Months Ended
	September 30,
	2018			2017
Balance as of beginning-of-year	$	2,222		$	2,242
Reinsurance recoverable		57			69
Net balance as of beginning-of-year		2,165			2,173
Business acquired (1)		2,842			-
Incurred related to:
Current year		1,640			909
Prior years
Interest		85			53
All other incurred		(159	)		(85	)
Total incurred		1,566			877
Paid related to:
Current year		(663	)		(458	)
Prior years		(796	)		(440	)
Total paid		(1,459	)		(898	)
Net balance as of end-of-period		5,114			2,152
Reinsurance recoverable		141			57
Balance as of end-of-period	$	5,255		$	2,209

⁽¹⁾ Represents Liberty group life and disability reserves, net, as of May 1, 2018, subject to finalization of acquisition date fair values.  See Note 3 for additional information.

The majority of the reserves included in the roll forward are for long-term disability claims.  The interest rate assumption is an important part of the reserving process due to the long benefit period for these claims.  Interest accrued on prior year reserves has been calculated on the opening reserve balance less one-half of the prior year incurred period’s claim payments at our average reserve discount rate for the respective periods.

“Incurred related to prior years - All other incurred” reflected in the preceding table is primarily impacted by the level of claim resolutions in the period compared to that which is expected by the reserve assumption. A negative number implies a favorable result where claim resolutions were more favorable than assumed.  Our claim resolution rate assumption used in determining reserves is our expectation of the resolution rate we will experience over the long-term life of the block of claims.  It will vary from actual experience in any one period, both favorably and unfavorably.

 

A reconciliation of future contract benefits as reported in our Consolidated Balance Sheets to the liability for unpaid claims (in millions), was as follows:

	As of September 30,
	2018		2017
Future contract benefits	$	33,209	$	21,703
Less:
Life and annuity reserves and claims due		26,580		18,030
Accident and health active life reserves		1,374		1,464
Liability for unpaid claims	$	5,255	$	2,209

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10.  Contingencies and Commitments

Regulatory bodies, such as state insurance departments, the SEC, Financial Industry Regulatory Authority and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, laws governing the activities of broker-dealers, registered investment advisors and unclaimed property laws.

LNL and its affiliates are involved in various pending or threatened legal or regulatory proceedings, including purported class actions, arising from the conduct of business both in the ordinary course and otherwise.  In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought.  Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief.  Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court.  In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding verdicts obtained in the jurisdiction for similar matters.  This variability in pleadings, together with the actual experiences of LNL in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.

Due to the unpredictable nature of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time is normally difficult to ascertain.  Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal.  Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

We establish liabilities for litigation and regulatory loss contingencies when information related to the loss contingencies shows both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as of September 30, 2018.  While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on LNL’s financial condition.

For some matters, the Company is able to estimate a reasonably possible range of loss.  For such matters in which a loss is probable, an accrual has been made.  For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made.  Accordingly, the estimate contained in this paragraph reflects two types of matters.  For some matters included within this estimate, an accrual has been made, but there is a reasonable possibility that an exposure exists in excess of the amount accrued.  In these cases, the estimate reflects the reasonably possible range of loss in excess of the accrued amount.  For other matters included within this estimation, no accrual has been made because a loss, while potentially estimable, is believed to be reasonably possible but not probable.  In these cases, the estimate reflects the reasonably possible loss or range of loss.  As of September 30, 2018, we estimate the aggregate range of reasonably possible losses to be up to approximately $50million.

For other matters, we are not currently able to estimate the reasonably possible loss or range of loss.  We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts and the progress of settlement negotiations.  On a quarterly and annual basis, we review relevant information with respect to litigation contingencies and update our accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.

Certain reinsurers have sought rate increases on certain yearly renewable term treaties.  We are disputing the requested rate increases under these treaties.  We have initiated and will initiate arbitration proceedings, as necessary, under these treaties in order to protect our contractual rights.  Additionally, reinsurers may initiate arbitration proceedings against us.  We believe it is unlikely the outcome of these disputes will have a material adverse effect on our financial condition.  For more information about reinsurance, see Note 9 in our 2017 Form 10-K.

See Note 13 in our 2017 Form 10-K and Note 9 and Note 10 in our Form 10-Q for the quarters ended March 31, 2018, and June 30, 2018, respectively, for additional discussion of commitments and contingencies, which information is incorporated herein by reference.

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11.  Shares and Stockholder’s Equity

All authorized and issued shares of LNL are owned by LNC.

AOCI

The following summarizes the components and changes in AOCI (in millions):

	For the Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on AFS Securities
Balance as of beginning-of-year	$	3,283		$	1,687
Cumulative effect from adoption of new accounting standards		634			-
Unrealized holding gains (losses) arising during the period		(5,268	)		2,261
Change in foreign currency exchange rate adjustment		(68	)		112
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds		1,542			(467	)
Income tax benefit (expense)		804			(674	)
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(36	)		(27	)
Associated amortization of DAC, VOBA, DSI and DFEL		(11	)		(16	)
Income tax benefit (expense)		10			15
Balance as of end-of-period	$	964		$	2,947
Unrealized OTTI on AFS Securities
Balance as of beginning-of-year	$	39		$	22
(Increases) attributable to:
Cumulative effect from adoption of new accounting standards		9			-
Gross OTTI recognized in OCI during the period		-			(1	)
Decreases attributable to:
Changes in fair value, sales, maturities or other settlements of AFS securities		(7	)		28
Change in DAC, VOBA, DSI and DFEL		(9	)		(5	)
Income tax benefit (expense)		3			(8	)
Balance as of end-of-period	$	35		$	36
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	27		$	93
Cumulative effect from adoption of new accounting standard		6			-
Unrealized holding gains (losses) arising during the period		(86	)		65
Change in foreign currency exchange rate adjustment		69			(119	)
Change in DAC, VOBA, DSI and DFEL		4			(3	)
Income tax benefit (expense)		3			20
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		21			20
Associated amortization of DAC, VOBA, DSI and DFEL		(5	)		(1	)
Income tax benefit (expense)		(3	)		(7	)
Balance as of end-of-period	$	10		$	44
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year	$	(22	)	$	(20	)
Cumulative effect from adoption of new accounting standard		(5	)		-
Balance as of end-of-period	$	(27	)	$	(20	)

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The following summarizes the reclassifications out of AOCI (in millions) and the associated line item in the Consolidated Statements of Comprehensive Income (Loss):

	For the Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on AFS Securities
Gross reclassification	$	(36	)	$	(27	)	Total realized gain (loss)
Associated amortization of DAC,
VOBA, DSI and DFEL		(11	)		(16	)	Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		(47	)		(43	)	operations before taxes
Income tax benefit (expense)		10			15		Federal income tax expense (benefit)
Reclassification, net of income tax	$	(37	)	$	(28	)	Net income (loss)
Unrealized OTTI on AFS Securities
Gross reclassification	$	(1	)	$	6		Total realized gain (loss)
Change in DAC, VOBA, DSI and DFEL		-			(1	)	Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		(1	)		5		operations before taxes
Income tax benefit (expense)		-			(2	)	Federal income tax expense (benefit)
Reclassification, net of income tax	$	(1	)	$	3		Net income (loss)
Unrealized Gain (Loss) on Derivative Instruments
Gross reclassifications:
Interest rate contracts	$	3		$	3		Net investment income
Foreign currency contracts		18			12		Net investment income
Foreign currency contracts		-			5		Total realized gain (loss)
Total gross reclassifications		21			20
Associated amortization of DAC,
VOBA, DSI and DFEL		(5	)		(1	)	Commissions and other expenses
Reclassifications before income							Income (loss) from continuing
tax benefit (expense)		16			19		operations before taxes
Income tax benefit (expense)		(3	)		(7	)	Federal income tax expense (benefit)
Reclassifications, net of income tax	$	13		$	12		Net income (loss)

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12.  Realized Gain (Loss)

Details underlying realized gain (loss) (in millions) reported on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Total realized gain (loss) related to certain investments (1)	$	(11	)	$	(19	)	$	(48	)	$	(48	)
Realized gain (loss) on the mark-to-market on certain instruments (2)		13			(28	)		219			(110	)
Indexed annuity and IUL contracts net derivatives results: (3)
Gross gain (loss)		(7	)		-			(14	)		(17	)
Associated amortization of DAC, VOBA, DSI and DFEL		(2	)		(1	)		(2	)		(1	)
GLB fees ceded to LNBAR and attributed fees:
Gross gain (loss)		(47	)		(45	)		(138	)		(130	)
Associated amortization of DAC, VOBA, DSI and DFEL		(8	)		(8	)		(24	)		(24	)
Total realized gain (loss)	$	(62	)	$	(101	)	$	(7	)	$	(330	)

⁽¹⁾ See “Realized Gain (Loss) Related to Certain Investments” section in Note 5.

⁽²⁾ Represents changes in the fair values of certain derivative investments (not including those associated with our variable and indexed annuity and IUL contracts net derivatives results), reinsurance related embedded derivatives and trading securities.

⁽³⁾ Represents the net difference between the change in the fair value of the S&P 500 Index ® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products.

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13.  Fair Value of Financial Instruments

The carrying values and estimated fair values of our financial instruments (in millions) were as follows:

	As of September 30, 2018						As of December 31, 2017
	Carrying			Fair			Carrying			Fair
	Value			Value			Value			Value
Assets
AFS securities:
Fixed maturity securities	$	91,940		$	91,940		$	93,340		$	93,340
Equity securities		-			-			246			246
Trading securities		1,358			1,358			1,533			1,533
Equity securities		112			112			-			-
Mortgage loans on real estate		12,482			12,158			10,662			10,773
Derivative investments (1)		645			645			845			845
Other investments		1,963			1,963			2,006			2,006
Cash and invested cash		1,207			1,207			947			947
Reinsurance related embedded derivatives		148			148			-			-
Other assets:
GLB direct embedded derivatives		1,648			1,648			903			903
GLB ceded embedded derivatives		35			35			51			51
Indexed annuity ceded embedded derivatives		44			44			11			11
Separate account assets		147,692			147,692			144,219			144,219
Liabilities
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(1,571	)		(1,571	)		(1,418	)		(1,418	)
Other contract holder funds:
Remaining guaranteed interest and similar contracts		(562	)		(562	)		(592	)		(592	)
Account values of certain investment contracts		(33,648	)		(34,540	)		(32,332	)		(36,161	)
Short-term debt		(226	)		(226	)		(10	)		(10	)
Long-term debt		(2,388	)		(2,565	)		(2,374	)		(2,677	)
Reinsurance related embedded derivatives		-			-			(51	)		(51	)
Other liabilities:
Derivative liabilities (1)		(280	)		(280	)		(455	)		(455	)
GLB ceded embedded derivatives		(1,681	)		(1,681	)		(954	)		(954	)

⁽¹⁾ We have master netting agreements with each of our derivative counterparties, which allow for the netting of our derivative asset and liability positions by counterparty.

Valuation Methodologies and Associated Inputs for Financial Instruments Not Carried at Fair Value

The following discussion outlines the methodologies and assumptions used to determine the fair value of our financial instruments not carried at fair value on our Consolidated Balance Sheets.  Considerable judgment is required to develop these assumptions used to measure fair value.  Accordingly, the estimates shown are not necessarily indicative of the amounts that would be realized in a one-time, current market exchange of all of our financial instruments.

Mortgage Loans on Real Estate

The fair value of mortgage loans on real estate is established using a discounted cash flow method based on credit rating, maturity and future income.  The ratings for mortgages in good standing are based on property type, location, market conditions, occupancy, debt-service coverage, loan-to-value, quality of tenancy, borrower and payment record.  The fair value for impaired mortgage loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s market price or the fair value of the collateral if the loan is collateral dependent.  The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 2 within the fair value hierarchy.

33

Other Investments

The carrying value of our assets classified as other investments approximates fair value.  Other investments includes primarily LPs and other privately held investments that are accounted for using the equity method of accounting and the carrying value is based on our proportional share of the net assets of the LPs.  Other investments also include FHLB stock carried at cost and periodically evaluated for impairment based on ultimate recovery of par value.  The inputs used to measure the fair value of our LPs, other privately held investments and FHLB stock are classified as Level 3 within the fair value hierarchy.  The remaining assets in other investments include cash collateral receivables and securities that are not LPs or other privately held investments. The inputs used to measure the fair value of these assets are classified as Level 1 within the fair value hierarchy.

Separate Account Assets

Separate account assets are primarily carried at fair value.  A portion of our separate account assets includes LPs, which are accounted for using the equity method of accounting and the carrying value is based on our proportional share of the net assets of the LPs. The inputs used to measure the fair value of the separate account asset LPs are classified as Level 3 within the fair value hierarchy.

Other Contract Holder Funds

Other contract holder funds include remaining guaranteed interest and similar contracts and account values of certain investment contracts.  The fair value for the remaining guaranteed interest and similar contracts is estimated using discounted cash flow calculations as of the balance sheet date.  These calculations are based on interest rates currently offered on similar contracts with maturities that are consistent with those remaining for the contracts being valued.  As of September 30, 2018, and December 31, 2017, the remaining guaranteed interest and similar contracts carrying value approximated fair value.  The fair value of the account values of certain investment contracts is based on their approximate surrender value as of the balance sheet date.  The inputs used to measure the fair value of our other contract holder funds are classified as Level 3 within the fair value hierarchy.

Short-Term and Long-Term Debt

The fair value of short-term and long-term debt is based on quoted market prices.  The inputs used to measure the fair value of our short-term and long-term debt are classified as Level 2 within the fair value hierarchy.   

Financial Instruments Carried at Fair Value

We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of September 30, 2018, or December 31, 2017, and we noted no changes in our valuation methodologies between these periods.

34

The following summarizes our financial instruments carried at fair value (in millions) on a recurring basis by the fair value hierarchy levels described in “Summary of Significant Accounting Policies” in Note 1 of our 2017 Form 10-K:

		As of September 30, 2018
		Quoted
		Prices
		in Active
	Markets for			Significant				Significant
		Identical		Observable				Unobservable				Total
		Assets			Inputs				Inputs			Fair
		(Level 1)			(Level 2)				(Level 3)			Value
Assets
Investments:
Fixed maturity AFS securities:
Corporate bonds		$	-		$	73,698			$	5,571		$	79,269
ABS			-			936				31			967
U.S. government bonds			360			18				-			378
Foreign government bonds			-			347				108			455
RMBS			-			3,091				7			3,098
CMBS			-			724				23			747
CLOs			-			1,311				51			1,362
State and municipal bonds			-			5,066				-			5,066
Hybrid and redeemable preferred securities			73			448				77			598
Trading securities			43			1,297				18			1,358
Equity securities			28			58				26			112
Derivative investments (1)			-			426				535			961
Cash and invested cash			-			1,207				-			1,207
Reinsurance related embedded derivatives			-			148				-			148
Other assets:
GLB direct embedded derivatives			-			-				1,648			1,648
GLB ceded embedded derivatives			-			-				35			35
Indexed annuity ceded embedded derivatives			-			-				44			44
Separate account assets			764			146,894				-			147,658
Total assets		$	1,268		$	235,669			$	8,174		$	245,111
Liabilities
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		$	-		$	-			$	(1,571	)	$	(1,571	)
Other liabilities:
Derivative liabilities (1)			-			(415	)			(181	)		(596	)
GLB ceded embedded derivatives			-			-				(1,681	)		(1,681	)
Total liabilities		$	-		$	(415	)		$	(3,433	)	$	(3,848	)

35

		As of December 31, 2017
		Quoted
		Prices
		in Active
	Markets for			Significant				Significant
		Identical		Observable				Unobservable				Total
		Assets			Inputs				Inputs			Fair
		(Level 1)			(Level 2)				(Level 3)			Value
Assets
Investments:
Fixed maturity AFS securities:
Corporate bonds		$	-		$	75,810			$	5,350		$	81,160
ABS			-			927				26			953
U.S. government bonds			522			6				5			533
Foreign government bonds			-			336				110			446
RMBS			-			3,246				12			3,258
CMBS			-			593				6			599
CLOs			-			717				91			808
State and municipal bonds			-			4,959				-			4,959
Hybrid and redeemable preferred securities			70			478				76			624
Equity AFS securities			28			57				161			246
Trading securities			73			1,411				49			1,533
Derivative investments (1)			-			740				603			1,343
Cash and invested cash			-			947				-			947
Other assets:
GLB direct embedded derivatives			-			-				903			903
GLB ceded embedded derivatives			-			-				51			51
Indexed annuity ceded embedded derivatives			-			-				11			11
Separate account assets			814			143,405				-			144,219
Total assets		$	1,507		$	233,632			$	7,454		$	242,593
Liabilities
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		$	-		$	-			$	(1,418	)	$	(1,418	)
Reinsurance related embedded derivatives			-			(51	)			-			(51	)
Other liabilities:
Derivative liabilities (1)			-			(380	)			(573	)		(953	)
GLB ceded embedded derivatives			-			-				(954	)		(954	)
Total liabilities		$	-		$	(431	)		$	(2,945	)	$	(3,376	)

⁽¹⁾ Derivative investment assets and liabilities presented within the fair value hierarchy are presented on a gross basis by derivative type and not on a master netting basis by counterparty.

36

The following summarizes changes to our financial instruments carried at fair value (in millions) and classified within Level 3 of the fair value hierarchy.  This summary excludes any effect of amortization of DAC, VOBA, deferred sales inducements (“DSI”) and deferred front-end loads (“DFEL”).  The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.

	For the Three Months Ended September 30, 2018
							Gains		Issuances,				Transfers
				Items			(Losses)			Sales,			Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (3)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	5,522		$	1		$	(30	)	$	109		$	(31	)	$	5,571
ABS		31			-			-			-			-			31
Foreign government bonds		108			-			-			-			-			108
RMBS		-			-			-			7			-			7
CMBS		5			-			-			18			-			23
CLOs		145			-			-			17			(111	)		51
Hybrid and redeemable
preferred securities		78			-			(1	)		-			-			77
Trading securities		22			-			-			2			(6	)		18
Equity securities		26			-			-			-			-			26
Derivative investments		93			(115	)		(55	)		431			-			354
Other assets: (6)
GLB direct embedded derivatives		1,248			400			-			-			-			1,648
GLB ceded embedded derivatives		41			(6	)		-			-			-			35
Indexed annuity ceded embedded derivatives		29			4			-			11			-			44
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,400	)		(164	)		-			(7	)		-			(1,571	)
Other liabilities – GLB ceded embedded
derivatives (6)		(1,288	)		(393	)		-			-			-			(1,681	)
Total, net	$	4,660		$	(273	)	$	(86	)	$	588		$	(148	)	$	4,741

37

	For the Three Months Ended September 30, 2017
							Gains		Issuances,				Transfers
				Items			(Losses)			Sales			Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (3)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	4,953		$	4		$	34		$	(236	)	$	59		$	4,814
ABS		42			-			-			-			(15	)		27
U.S. government bonds		5			-			-			-			-			5
Foreign government bonds		109			-			1			-			-			110
RMBS		7			-			-			6			-			13
CMBS		21			-			-			(1	)		(14	)		6
CLOs		28			-			-			15			(28	)		15
Hybrid and redeemable
preferred securities		82			-			3			-			(9	)		76
Equity AFS securities		183			-			(1	)		9			(1	)		190
Trading securities		59			(1	)		-			(10	)		1			49
Derivative investments		155			(14	)		7			(85	)		-			63
Other assets: (6)
GLB direct embedded derivatives		298			272			-			-			-			570
GLB ceded embedded derivatives		85			(32	)		-			-			-			53
Indexed annuity ceded embedded derivatives		-			-			-			3			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,268	)		(47	)		-			(3	)		-			(1,318	)
Other liabilities – GLB ceded embedded
derivatives (6)		(383	)		(240	)		-			-			-			(623	)
Total, net	$	4,376		$	(58	)	$	44		$	(302	)	$	(7	)	$	4,053

38

	For the Nine Months Ended September 30, 2018
							Gains		Issuances,				Transfers
				Items			(Losses)		Sales,				Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net (2)			Net (3)(4)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	5,350		$	7		$	(136	)	$	411		$	(61	)	$	5,571
ABS		26			-			-			5			-			31
U.S. government bonds		5			-			-			(5	)		-			-
Foreign government bonds		110			-			(2	)		-			-			108
RMBS		12			-			-			7			(12	)		7
CMBS		6			1			-			37			(21	)		23
CLOs		91			-			-			164			(204	)		51
Hybrid and redeemable
preferred securities		76			-			1			-			-			77
Equity AFS securities		161			-			-			-			(161	)		-
Trading securities		49			(5	)		-			(20	)		(6	)		18
Equity securities		-			-			-			-			26			26
Derivative investments		30			106			(119	)		337			-			354
Other assets: (6)
GLB direct embedded derivatives		903			745			-			-			-			1,648
GLB ceded embedded derivatives		51			(16	)		-			-			-			35
Indexed annuity ceded embedded derivatives		11			4			-			29			-			44
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,418	)		(175	)		-			22			-			(1,571	)
Other liabilities – GLB ceded embedded
derivatives (6)		(954	)		(727	)		-			-			-			(1,681	)
Total, net	$	4,509		$	(60	)	$	(256	)	$	987		$	(439	)	$	4,741

39

	For the Nine Months Ended September 30, 2017
							Gains		Issuances,				Transfers
				Items			(Losses)		Sales,				Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (3)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	4,809		$	14		$	152		$	(350	)	$	189		$	4,814
ABS		33			-			1			-			(7	)		27
U.S. government bonds		-			-			-			-			5			5
Foreign government bonds		111			-			(1	)		-			-			110
RMBS		3			-			-			10			-			13
CMBS		7			-			1			54			(56	)		6
CLOs		68			-			-			33			(86	)		15
State and municipal bonds		-			(1	)		-			-			1			-
Hybrid and redeemable
preferred securities		76			-			14			-			(14	)		76
Equity AFS securities		177			1			(2	)		15			(1	)		190
Trading securities		65			1			8			(26	)		1			49
Derivative investments		(93	)		(25	)		94			87			-			63
Other assets: (6)
GLB direct embedded derivatives		-			570			-			-			-			570
GLB ceded embedded derivatives		371			(318	)		-			-			-			53
Indexed annuity ceded embedded derivatives		-			-			-			3			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,139	)		(230	)		-			51			-			(1,318	)
Other liabilities: (6)
GLB direct embedded derivatives		(371	)		371			-			-			-			-
GLB ceded embedded derivatives		-			(623	)		-			-			-			(623	)
Total, net	$	4,117		$	(240	)	$	267		$	(123	)	$	32		$	4,053

⁽¹⁾ The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 6).

⁽²⁾ Net issuances, sales, maturities, settlements, calls, net include financial instruments acquired from Liberty Life as follows: corporate bonds of $67million and ABS of$17 million.

⁽³⁾ Transfers into or out of Level 3 for AFS and trading securities are displayed at amortized cost as of the beginning-of-year.  For AFS and trading securities, the difference between beginning-of-period amortized cost and beginning-of-period fair value was included in OCI and earnings, respectively, in the prior period.

⁽⁴⁾ Transfers into or out of Level 3 for FHLB stock between equity securities and other investments at cost on our Consolidated Balance Sheets.

⁽⁵⁾ Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss).  Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

⁽⁶⁾ Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

40

The following provides the components of the items included in issuances, sales, maturities, settlements and calls, net, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, (in millions) as reported above:

	For the Three Months Ended September 30, 2018
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	186		$	(3	)	$	(1	)	$	(65	)	$	(8	)	$	109
RMBS		7			-			-			-			-			7
CMBS		18			-			-			-			-			18
CLOs		17			-			-			-			-			17
Trading securities		2			-			-			-			-			2
Derivative investments		96			455			(120	)		-			-			431
Other assets – indexed annuity ceded
embedded derivatives		11			-			-			-			-			11
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(83	)		-			-			76			-			(7	)
Total, net	$	254		$	452		$	(121	)	$	11		$	(8	)	$	588

	For the Three Months Ended September 30, 2017
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	206		$	(354	)	$	(19	)	$	(43	)	$	(26	)	$	(236	)
RMBS		6			-			-			-			-			6
CMBS		-			-			-			(1	)		-			(1	)
CLOs		15			-			-			-			-			15
Equity AFS securities		10			(1	)		-			-			-			9
Trading securities		-			(10	)		-			-			-			(10	)
Derivative investments		50			(23	)		(112	)		-			-			(85	)
Other assets – indexed annuity ceded
embedded derivatives		3			-			-			-			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(14	)		-			-			11			-			(3	)
Total, net	$	276		$	(388	)	$	(131	)	$	(33	)	$	(26	)	$	(302	)

	For the Nine Months Ended September 30, 2018
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	882		$	(163	)	$	(3	)	$	(236	)	$	(69	)	$	411
ABS		22			(17	)		-			-			-			5
U.S. government bonds		-			(5	)		-			-			-			(5	)
RMBS		7			-			-			-			-			7
CMBS		39			-			-			(2	)		-			37
CLOs		164			-			-			-			-			164
Trading securities		4			(24	)		-			-			-			(20	)
Equity securities		1			(1	)		-			-			-			-
Derivative investments		225			460			(348	)		-			-			337
Other assets – indexed annuity ceded
embedded derivatives		29			-			-			-			-			29
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(158	)		-			-			180			-			22
Total, net	$	1,215		$	250		$	(351	)	$	(58	)	$	(69	)	$	987

41

	For the Nine Months Ended September 30, 2017
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	438		$	(419	)	$	(66	)	$	(169	)	$	(134	)	$	(350	)
RMBS		10			-			-			-			-			10
CMBS		55			-			-			(1	)		-			54
CLOs		33			-			-			-			-			33
Equity AFS securities		18			(3	)		-			-			-			15
Trading securities		2			(27	)		-			(1	)		-			(26	)
Derivative investments		145			243			(301	)		-			-			87
Other assets – indexed annuity ceded
embedded derivatives		3			-			-			-			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(45	)		-			-			96			-			51
Total, net	$	659		$	(206	)	$	(367	)	$	(75	)	$	(134	)	$	(123	)

The following summarizes changes in unrealized gains (losses) included in net income, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, related to financial instruments carried at fair value classified within Level 3 that we still held (in millions):

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Derivative investments	$	(1	)	$	(83	)	$	105		$	(159	)
Embedded derivatives:
Indexed annuity and IUL contracts		(11	)		2			(18	)		(13	)
Other assets – GLB direct and ceded		576			428			1,264			1,340
Other liabilities – GLB ceded		(576	)		(428	)		(1,264	)		(1,340	)
Total, net (1)	$	(12	)	$	(81	)	$	87		$	(172	)

⁽¹⁾ Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

The following provides the components of the transfers into and out of Level 3 (in millions) as reported above:

	For the Three								For the Three
	Months Ended								Months Ended
	September 30, 2018								September 30, 2017
	Transfers		Transfers						Transfers		Transfers
	Into		Out of						Into		Out of
	Level 3		Level 3			Total			Level 3		Level 3			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	11	$	(42	)	$	(31	)	$	116	$	(57	)	$	59
ABS		-		-			-			-		(15	)		(15	)
CMBS		-		-			-			-		(14	)		(14	)
CLOs		-		(111	)		(111	)		-		(28	)		(28	)
Hybrid and redeemable preferred
securities		-		-			-			-		(9	)		(9	)
Equity AFS securities		-		-			-			-		(1	)		(1	)
Trading securities		-		(6	)		(6	)		1		-			1
Total, net	$	11	$	(159	)	$	(148	)	$	117	$	(124	)	$	(7	)

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	For the Nine								For the Nine
	Months Ended								Months Ended
	September 30, 2018								September 30, 2017
	Transfers		Transfers						Transfers		Transfers
	Into		Out of						Into		Out of
	Level 3		Level 3			Total			Level 3		Level 3			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	54	$	(115	)	$	(61	)	$	277	$	(88	)	$	189
ABS		-		-			-			14		(21	)		(7	)
U.S. government bonds		-		-			-			5		-			5
RMBS		-		(12	)		(12	)		-		-			-
CMBS		-		(21	)		(21	)		3		(59	)		(56	)
CLOs		-		(204	)		(204	)		30		(116	)		(86	)
State and municipal bonds		-		-			-			2		(1	)		1
Hybrid and redeemable preferred
securities		-		-			-			-		(14	)		(14	)
Equity AFS securities		-		(161	)		(161	)		-		(1	)		(1	)
Trading securities		-		(6	)		(6	)		4		(3	)		1
Equity securities		26		-			26			-		-			-
Total, net	$	80	$	(519	)	$	(439	)	$	335	$	(303	)	$	32

Transfers into and out of Level 3 are generally the result of observable market information on a security no longer being available or becoming available to our pricing vendors.  For the three and nine months ended September 30, 2018 and 2017, transfers in and out of Level 3 were attributable primarily to the securities’ observable market information no longer being available or becoming available.  In 2018, transfers into or out of Level 3 also include FHLB stock between equity securities and other investments at cost on our Consolidated Balance Sheets.  Transfers into and out of Levels 1 and 2 are generally the result of a change in the type of input used to measure the fair value of an asset or liability at the end of the reporting period.  When quoted prices in active markets become available, transfers from Level 2 to Level 1 will result.  When quoted prices in active markets become unavailable, but we are able to employ a valuation methodology using significant observable inputs, transfers from Level 1 to Level 2 will result.  For the three and nine months ended September 30, 2018 and 2017, the transfers between Levels 1 and 2 of the fair value hierarchy were less than $1 million for our financial instruments carried at fair value.

43

The following summarizes the fair value (in millions), valuation techniques and significant unobservable inputs of the Level 3 fair value measurements as of September 30, 2018:

	Fair			Valuation	Significant	Assumption or
	Value			Technique	Unobservable Inputs	Input Ranges
Assets
Investments:
Fixed maturity AFS and trading
securities:
Corporate bonds	$	2,445		Discounted cash flow	Liquidity/duration adjustment (1)	0.5	%	-	24.8	%
ABS		23		Discounted cash flow	Liquidity/duration adjustment (1)	3.0	%	-	3.0	%
Foreign government bonds		78		Discounted cash flow	Liquidity/duration adjustment (1)	1.1	%	-	2.8	%
Hybrid and redeemable
preferred securities		4		Discounted cash flow	Liquidity/duration adjustment (1)	1.8	%	-	1.8	%
Equity securities		21		Discounted cash flow	Liquidity/duration adjustment (1)	4.5	%	-	5.1	%
Other assets:
GLB direct and ceded
embedded derivatives		1,683		Discounted cash flow	Long-term lapse rate (2)	1	%	-	30	%
					Utilization of guaranteed withdrawals (3)	85	%	-	100	%
					Claims utilization factor (4)	60	%	-	100	%
					Premiums utilization factor (4)	80	%	-	115	%
					NPR (5)	0.01	%	-	0.32	%
					Mortality rate (6)				(8)
					Volatility (7)	1	%	-	29	%
Indexed annuity ceded
embedded derivatives		44		Discounted cash flow	Lapse rate (2)	1	%	-	9	%
					Mortality rate (6)				(8)
Liabilities
Future contract benefits – indexed
annuity and IUL contracts
embedded derivatives	$	(1,571	)	Discounted cash flow	Lapse rate (2)	1	%	-	9	%
					Mortality rate (6)				(8)
Other liabilities – GLB ceded
embedded derivatives		(1,681	)	Discounted cash flow	Long-term lapse rate (2)	1	%	-	30	%
					Utilization of guaranteed withdrawals (3)	85	%	-	100	%
					Claims utilization factor (4)	60	%	-	100	%
					Premiums utilization factor (4)	80	%	-	115	%
					NPR (5)	0.01	%	-	0.32	%
					Mortality rate (6)				(8)
					Volatility (7)	1	%	-	29	%

⁽¹⁾ The liquidity/duration adjustment input represents an estimated market participant composite of adjustments attributable to liquidity premiums, expected durations, structures and credit quality that would be applied to the market observable information of an investment.

⁽²⁾ The lapse rate input represents the estimated probability of a contract surrendering during a year, and thereby forgoing any future benefits.  The range for indexed annuity and IUL contracts represents the lapse rates during the surrender charge period.

⁽³⁾ The utilization of guaranteed withdrawals input represents the estimated percentage of contract holders that utilize the guaranteed withdrawal feature.

⁽⁴⁾ The utilization factors are applied to the present value of claims or premiums, as appropriate, in the GLB reserve calculation to estimate the impact of inefficient withdrawal behavior, including taking less than or more than the maximum guaranteed withdrawal.

⁽⁵⁾ The NPR input represents the estimated additional credit spread that market participants would apply to the market observable discount rate when pricing a contract.

⁽⁶⁾ The mortality rate input represents the estimated probability of when an individual belonging to a particular group, categorized according to age or some other factor such as gender, will die.

⁽⁷⁾ The volatility input represents overall volatilities assumed for the underlying variable annuity funds, which include a mixture of equity and fixed-income assets.  Fair value of the variable annuity GLB embedded derivatives would increase if higher volatilities were used for valuation.

⁽⁸⁾ The mortality rate is based on a combination of company and industry experience, adjusted for improvement factors.

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From the table above, we have excluded Level 3 fair value measurements obtained from independent, third-party pricing sources.  We do not develop the significant inputs used to measure the fair value of these assets and liabilities, and the information regarding the significant inputs is not readily available to us.  Independent broker-quoted fair values are non-binding quotes developed by market makers or broker-dealers obtained from third-party sources recognized as market participants.  The fair value of a broker-quoted asset or liability is based solely on the receipt of an updated quote from a single market maker or a broker-dealer recognized as a market participant as we do not adjust broker quotes when used as the fair value measurement for an asset or liability.  Significant increases or decreases in any of the quotes received from a third-party broker-dealer may result in a significantly higher or lower fair value measurement. 

Changes in any of the significant inputs presented in the table above may result in a significant change in the fair value measurement of the asset or liability as follows:

· Investments – An increase in the liquidity/duration adjustment input would result in a decrease in the fair value measurement.

· Indexed annuity and IUL contracts embedded derivatives – For direct embedded derivatives, an increase in the lapse rate or mortality rate inputs would result in a decrease in the fair value measurement. 

· GLB embedded derivatives – Assuming our GLB direct embedded derivatives are in a liability position: an increase in our lapse rate, NPR or mortality rate inputs would result in a decrease in the fair value measurement; and an increase in the utilization of guaranteed withdrawal or volatility inputs would result in an increase in the fair value measurement.

For each category discussed above, the unobservable inputs are not inter-related; therefore, a directional change in one input will not affect the other inputs. 

As part of our ongoing valuation process, we assess the reasonableness of our valuation techniques or models and make adjustments as necessary.  For more information, see “Summary of Significant Accounting Policies” in Note 1 of our 2017 Form 10-K.

14.  Segment Information

We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments.  As discussed in Note 3, we completed the acquisition of Liberty Life during the second quarter of 2018.  Related results are included within the Group Protection segment.  We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments.  Our reporting segments reflect the manner by which our chief operating decision makers view and manage the business.  See Note 21 of our 2017 Form 10-K for a brief description of these segments and Other Operations.

Segment operating revenues and income (loss) from operations are internal measures used by our management and Board of Directors to evaluate and assess the results of our segments.  Income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:

· Realized gains and losses associated with the following (“excluded realized gain (loss)”):

§ Sales or disposals and impairments of securities;

§ Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities;

§ GLB rider fees ceded to Lincoln National Reinsurance Company (Barbados) Limited (“LNBAR”);

§ The net valuation premium of the GLB attributed rider fees;

§ Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for at fair value; and

§ Changes in the fair value of equity securities;

· Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;

· Gains (losses) on early extinguishment of debt;

· Losses from the impairment of intangible assets;

· Income (loss) from discontinued operations;

· Acquisition and integration costs related to mergers and acquisitions; and

· Income (loss) from the initial adoption of new accounting standards, regulations, and policy changes including the net impact from the Tax Cuts and Jobs Act.

Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:

· Excluded realized gain (loss);

· Revenue adjustments from the initial adoption of new accounting standards;

· Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and

· Amortization of deferred gains arising from reserve changes on business sold through reinsurance.

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We use our prevailing corporate federal income tax rates of 21% and 35%, where applicable, while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.  Operating revenues and income (loss) from operations do not replace revenues and net income as the GAAP measures of our consolidated results of operations.

Segment information (in millions) was as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues
Operating revenues:
Annuities	$	1,031		$	986		$	3,032		$	2,954
Retirement Plan Services		290			288			867			853
Life Insurance		1,647			1,515			4,770			4,537
Group Protection		1,128			564			2,617			1,646
Other Operations		50			60			158			204
Excluded realized gain (loss), pre-tax		(107	)		(144	)		(149	)		(459	)
Total revenues	$	4,039		$	3,269		$	11,295		$	9,735

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Net Income (Loss)
Income (loss) from operations:
Annuities	$	265		$	288		$	824		$	813
Retirement Plan Services		37			33			118			103
Life Insurance		143			119			395			372
Group Protection		62			41			136			82
Other Operations		(46	)		-			(100	)		(14	)
Excluded realized gain (loss), after-tax		(84	)		(93	)		(118	)		(298	)
Gain (loss) on early extinguishment of debt, after-tax		-			(3	)		-			(3	)
Net impact from the Tax Cuts and Jobs Act		9			-			(4	)		-
Acquisition and integration costs related to mergers
and acquisitions, after-tax		(8	)		-			(47	)		-
Net income (loss)	$	378		$	385		$	1,204		$	1,055

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Revenue from Contracts with Customers

As discussed in Note 2, we adopted ASU 2014-09, Revenue from Contracts with Customers, as of January 1, 2018, that applies primarily to commissions and advisory fees earned by our broker dealer operation.  The following table illustrates the revenue recognized from contracts with customers reported within fee income and other revenues on our Consolidated Statements of Comprehensive Income (Loss) and timing of revenue recognition by segment (in millions):

	For the Three Months Ended September 30, 2018
			Retirement
			Plan		Life		Group		Other
	Annuities		Services		Insurance		Protection		Operations		Total
Revenue from Contracts with Customers
Fee income	$	137	$	42	$	6	$	-	$	-	$	185
Other revenues		93		5		2		41		-		141
Total revenue from contracts
with customers	$	230	$	47	$	8	$	41	$	-	$	326
Timing of Revenue Recognition
Satisfaction of performance obligation:
Transferred at a point in time	$	-	$	1	$	1	$	-	$	-	$	2
Transferred over time		230		46		7		41		-		324
Total revenue from contracts
with customers	$	230	$	47	$	8	$	41	$	-	$	326

	For the Nine Months Ended September 30, 2018
			Retirement
			Plan		Life		Group		Other
	Annuities		Services		Insurance		Protection		Operations		Total
Revenue from Contracts with Customers
Fee income	$	403	$	126	$	17	$	-	$	-	$	546
Other revenues		278		14		7		73		-		372
Total revenue from contracts
with customers	$	681	$	140	$	24	$	73	$	-	$	918
Timing of Revenue Recognition
Satisfaction of performance obligation:
Transferred at a point in time	$	3	$	4	$	5	$	-	$	-	$	12
Transferred over time		678		136		19		73		-		906
Total revenue from contracts
with customers	$	681	$	140	$	24	$	73	$	-	$	918

Revenue recognized from contracts with customers included in fee income consists primarily of wholesaling-related 12b-1 fees and net investment advisory fees.  The 12b-1 fees are received from separate account fund sponsors as compensation for servicing the underlying mutual funds.  The net investment advisory fees are related to asset management of certain separate account funds.  Such revenues are recorded based on a contractual percentage of the market value of mutual fund assets over the period shares are owned by customers, and on a contractual percentage of the customer’s managed assets over the period advisory services are provided, respectively. 

Revenue recognized from contracts with customers included in other revenues primarily relates to our retail sales network and consists of commission revenue for the sale of non-affiliated securities recorded on a trade-date basis and advisory fee income.  Advisory fee income is asset-based revenues recorded as earned based on a contractual percentage of customer account values.

47

Item 2.  Management’s Narrative Analysis of the Results of Operations

The Lincoln National Life Insurance Company (“LNL”) and its subsidiaries are referred to collectively in this Form 10-Q as the “Company,” “we,” “our” and “us.” LNL is a wholly-owned subsidiary of Lincoln National Corporation (“LNC”).  Beginning on May 1, 2018, the results of operations and financial condition of Liberty Life Assurance Company of Boston (“Liberty Life”), were consolidated with LNL.  Accordingly, all financial information presented herein for the three and nine months ended September 30, 2018, includes the accounts of LNL for these periods and the accounts of Liberty Life since May 1, 2018.  Management’s narrative analysis (“MNA”) of the results of operations for the three and nine months ended September 30, 2018, compared with the corresponding periods in 2017 of LNL and its consolidated subsidiaries should be read in conjunction with our consolidated financial statements and the accompanying notes to the consolidated financial statements (“Notes”) presented in “Part I – Item 1. Financial Statements,” as well as “Forward-Looking Statements – Cautionary Language,” the Company’s consolidated financial statements included elsewhere herein, our Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”), including the sections entitled “Part I – Item 1A. Risk Factors,” “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations,” “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk” and “Part II – Item 8. Financial Statements and Supplementary Data,” and our quarterly reports on Form 10-Q filed in 2018.

In this report, in addition to providing consolidated revenues and net income (loss) that are United States of America generally accepted accounting principles (“GAAP”) financial measures, we also provide certain non-GAAP financial measures as we believe they are meaningful to evaluate and assess the results of our operating segments.  Operating revenues and income (loss) from operations are the primary non-GAAP financial measures our management believes that explain the results of our ongoing businesses in a manner that allows for a better understanding of the underlying trends in our current businesses. We have excluded certain GAAP items that are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in many instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.  In addition, we believe that our definitions of operating revenues and income (loss) from operations will provide investors with a more valuable measure of our performance because it better reveals trends in our business.  These non-GAAP financial measures should not be viewed as a substitute for GAAP financial measures.  For additional information see Note 14.

Management’s narrative analysis is presented pursuant to General Instructions H(2) (a) of Form 10-Q in lieu of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

See “Part I – Item 1. Business” and Note 1 in our 2017 Form 10-K for a description of the business.

FORWARD-LOOKING STATEMENTS –  CAUTIONARY LANGUAGE

This Quarterly Report on Form 10-Q, including “Risk Factors” and “Management’s Narrative Analysis of the Results of Operations,” contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”).  A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like:  “believe,” “anticipate,” “expect,” “estimate,” “project,” “will,” “shall” and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance.  In particular, these include statements relating to future actions, trends in our businesses, prospective services or products, future performance or financial results and the outcome of contingencies, such as legal proceedings. We claim the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the results contained in the forward-looking statements. Risks and uncertainties that may cause actual results to vary materially, some of which are described within the forward-looking statements, include, among others:

· Deterioration in general economic and business conditions that may affect account values, investment results and claims experience;

· Adverse capital and credit market conditions could affect our ability to raise capital, if necessary, and may cause us to realize impairments on investments;

· Legislative, regulatory or tax changes that affect:  the cost of, or demand for, our products; our ability to conduct business; the impact of U.S. federal tax reform legislation on our business, earnings and capital; and the impact of the decision vacating the Department of Labor’s fiduciary regulation as well as any “best interest” standards of care adopted by the Securities and Exchange Commission (“SEC”) or other state regulators;

· Actions taken by reinsurers to raise rates on in-force business;

· Declines in or sustained low interest rates causing a reduction in investment income, the interest margins of our businesses, and demand for our products;

· Rapidly increasing interest rates causing contract holders to surrender life insurance and annuity policies, thereby causing realized investment losses, and reduced hedge performance related to variable annuities;

· The initiation of legal or regulatory proceedings against us, and the outcome of any legal or regulatory proceedings, such as:  adverse actions related to present or past business practices common in businesses in which we compete; adverse decisions in significant actions including, but not limited to, actions brought by federal and state authorities and class action cases; new decisions that result in changes in law; and unexpected trial court rulings;

48

· A decline in the equity markets causing a reduction in the sales of our products; a reduction of asset-based fees that we charge on various investment and insurance products; and an increase in liabilities related to guaranteed benefit features of our variable annuity products;

· Changes in our assumptions related to deferred acquisition costs (“DAC”) or value of business acquired (“VOBA”);

· Ineffectiveness of our risk management policies and procedures;

· A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market returns from the assumptions used in pricing our products;

· Changes in accounting principles, practices or policies;

· Lowering of one or more of our financial strength ratings;

· Inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others;

· Interruption in telecommunication, information technology or other operational systems or failure to safeguard the confidentiality or privacy of sensitive data on such systems from cyberattacks or other breaches of our data security systems;

· The adequacy and collectability of reinsurance that we have purchased;

· Acts of terrorism, a pandemic, war or other man-made and natural catastrophes that may adversely affect our businesses and the cost and availability of reinsurance;

· Competitive conditions, including pricing pressures, new product offerings and the emergence of new competitors, that may affect the level of premiums and fees that our subsidiaries can charge for their products;

· The unknown effect on our businesses resulting from evolving market preferences and the changing demographics of our client base;

· Possible difficulties in executing, integrating and realizing projected results of acquisitions, divestitures and restructurings; and

· The unanticipated loss of key management, financial planners or wholesalers.

The risks included here are not exhaustive.  Our annual report on Form 10-K, quarterly reports on Form 10-Q, and other documents filed with the SEC include additional factors that could affect our businesses and financial performance.  Moreover, we operate in a rapidly changing and competitive environment.  New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.

We do not intend, and are under no obligation, to update any particular forward-looking statement included in this document.  See “Risk Factors” included in “Part I – Item 1A. Risk Factors” in our 2017 Form 10-K as updated by “Part II – Item 1A. Risk Factors” in our first and second quarter 2018 Forms 10-Q for a discussion of certain risks relating to our business and investment in our securities.   

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The MNA included in our 2017 Form 10-K contains a detailed discussion of our critical accounting policies and estimates.  The following information updates the “Critical Accounting Policies and Estimates” provided in our 2017 Form 10-K, and therefore, should be read in conjunction with that disclosure.

DAC, VOBA, DSI and DFEL

Unlocking

As stated in “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Critical Accounting Policies and Estimates – Unlocking” in our 2017 Form 10-K, we conduct our annual comprehensive review of the assumptions and projection models underlying the amortization of DAC, VOBA, deferred sales inducements (“DSI”), deferred front-end loads (“DFEL”), embedded derivatives and reserves for life insurance and annuity products in the third quarter of each year.  As a result of this review, we recorded unlocking that resulted in increases and decreases to the carrying values of these items.  See “DAC, VOBA, DSI and DFEL” in Note 1 of our 2017 Form 10-K for a detailed discussion of our unlocking process.

49

Details underlying the effect to net income (loss) from our unlocking as a result of our annual comprehensive review (in millions) were as follows:

	For the Three
	Months Ended
	September 30,
	2018			2017
Income (loss) from operations:
Annuities	$	(12	)	$	31
Retirement Plan Services		(2	)		(1	)
Life Insurance		(20	)		(16	)
Net income (loss)	$	(34	)	$	14

Unlocking was driven primarily by the following:

2018

· For Annuities, unfavorable unlocking was driven by updates to ourinterest rate and policyholder behavior assumptions.

· For Retirement Plan Services, unfavorable unlocking was driven by updates to our interest rate and maintenance expense assumptions, partially offset by favorable updates to our policyholder behavior assumptions and other items.

· For Life Insurance, unfavorable unlocking was driven by updates to our mortality margin and reinsurance assumptions and other items, partially offset by favorable updates to our investment allocation and performance, morbidity and policyholder behavior assumptions.

2017

· For Annuities, favorable unlocking was driven by updates to our policyholder behavior and separate account fees assumptions and other items, partially offset by unfavorable updates to our interest rate assumptions.

· For Retirement Plan Services, unfavorable unlocking was driven by updates to our interest rate and separate account fees assumptions, partially offset by favorable updates to our maintenance expense assumptions and other items.

· For Life Insurance, unfavorable unlocking was driven by updates to our mortality margin and interest rate assumptions, partially offset by favorable updates to our policyholder behavior, morbidity and maintenance expense assumptions and other items.

Reversion to the Mean

As variable fund returns do not move in a systematic manner, we reset the baseline of account values from which estimated gross profits are projected, which we refer to as our reversion to the mean (“RTM”) process, as discussed in our 2017 Form 10-K. If we had unlocked our RTM assumption as of September 30, 2018, we would have recorded a favorable unlocking of approximately $215 million, pre-tax, for Annuities, approximately $50 million, pre-tax, for Life Insurance and approximately $30 million, pre-tax, for Retirement Plan Services. 

Investments

Investment Valuation

For more information about the valuation of our financial instruments carried at fair value, see “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Critical Accounting Policies and Estimates – Investments – Investment Valuation” in our 2017 Form 10-K and Note 13 herein.

Derivatives

Our accounting policies for derivatives and the potential effect on interest spreads in a falling rate environment are discussed in Note 6 of this report and “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our 2017 Form 10-K.

Guaranteed Living Benefits

For information on our estimates of the potential instantaneous effect to net income (loss) that could result from sudden changes that may occur in equity markets, interest rates and implied market volatilities, see our discussion in “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Critical Accounting Policies and Estimates – Derivatives – GLB” in our 2017 Form 10-K.

ACQUISITIONS AND DISPOSITIONS

For information about acquisitions and divestitures, see Notes 3 and 25 in our 2017 Form 10-K and Note 3 herein.

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RESULTS OF CONSOLIDATED OPERATIONS

Details underlying the consolidated results (in millions) were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Net Income (Loss)
Income (loss) from operations:
Annuities	$	265		$	288		$	824		$	813
Retirement Plan Services		37			33			118			103
Life Insurance		143			119			395			372
Group Protection		62			41			136			82
Other Operations		(46	)		-			(100	)		(14	)
Excluded realized gain (loss), after-tax		(84	)		(93	)		(118	)		(298	)
Gain (loss) on early extinguishment of debt, after-tax		-			(3	)		-			(3	)
Net impact from the Tax Cuts and Jobs Act		9			-			(4	)		-
Acquisition and integration costs related to mergers
and acquisitions, after-tax		(8	)		-			(47	)		-
Net income (loss)	$	378		$	385		$	1,204		$	1,055

Comparison of the Three Months Ended September 30, 2018 to 2017

Net income decreased due primarily to the following:

· The effect of unlocking.

· Acquisition and integration costs incurred as part of our acquisition and higher strategic digitization expense.

· Lower prepayment and bond make-whole premiums.

· Spread compression due to average new money rates trailing our current portfolio yields, partially offset by actions implemented to

reduce interest crediting rates.

The decrease in net income was partially offset by the following:

· Growth in average account values, business in force and group earned premiums.

· Lower realized losses in 2018 as compared to 2017.

· Lower federal income tax expense.

· The acquisition of Liberty Life effective May 1, 2018.

· More favorable investment income on alternative investments.

Comparison of the Nine Months Ended September 30, 2018 to 2017

Net income increased due primarily to the following:

· Lower realized losses in 2018 as compared to 2017.

· Growth in average account values, business in force and group earned premiums.

· Lower federal income tax expense.

· The acquisition of Liberty Life effective May 1, 2018.

The increase in net income was partially offset by the following:

· Acquisition and integration costs incurred as part of our acquisition and higher strategic digitization expense.

· The effect of unlocking.

· Less favorable investment income on alternative investments and lower prepayment and bond make-whole premiums.

· Lower amortization of deferred gain on business sold through reinsurance in 2018 as a gain was fully amortized during the second quarter of 2017.

· Spread compression due to average new money rates trailing our current portfolio yields, partially offset by actions implemented to

reduce interest crediting rates.

See “Critical Accounting Policies and Estimates – DAC, VOBA, DSI and DFEL – Unlocking” above for more information about unlocking.

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We provide information about our segments’ and Other Operations’ operating revenue and expense line items and realized gain (loss), key drivers of changes and historical details underlying the line items below.  As discussed in Note 3, on May 1, 2018, we completed our acquisition of 100% of the capital stock of Liberty Life, which operates a group benefits business and individual life and individual and group annuity business in a transaction accounted for under the acquisition method of accounting.  We ceded insurance policies relating to individual life and individual and group annuity business to third-party reinsurers.  The operating results of Liberty Life are included in our Group Protection segment beginning on May 1, 2018.  The acquisition enables us to increase our market share within the group protection marketplace.For factors that could cause actual results to differ materially from those set forth, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2017 Form 10-K as updated by “Part II – Item 1A. Risk Factors” in our first and second quarter 2018 Form 10-Q.

For information on our strategic digitization initiative and the Tax Cuts and Jobs Act (“Tax Act”), see “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Results of Consolidated Operations” in our 2017 Form 10-K.

RESULTS OF ANNUITIES

Details underlying the results for Annuities (in millions) were as follows:

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Operating Revenues
Insurance premiums (1)	$	102	$	82	$	282	$	312
Fee income		552		529		1,627		1,526
Net investment income		237		246		703		738
Operating realized gain (loss) (2)		46		44		142		135
Other revenues (3)		94		85		278		243
Total operating revenues		1,031		986		3,032		2,954
Operating Expenses
Interest credited		145		145		434		436
Benefits (1)		122		61		338		323
Commissions and other expenses		462		413		1,301		1,248
Total operating expenses		729		619		2,073		2,007
Income (loss) from operations before taxes		302		367		959		947
Federal income tax expense (benefit)		37		79		135		134
Income (loss) from operations	$	265	$	288	$	824	$	813

⁽¹⁾ Insurance premiums include primarily our income annuities that have a corresponding offset in benefits.  Benefits include changes in income annuity reserves driven by premiums.

⁽²⁾ See “Realized Gain (Loss)” below.

⁽³⁾ Consists primarily of revenues attributable to broker-dealer services that are subject to market volatility.

Comparison of the Three Months Ended September 30, 2018 to 2017

Income from operations for this segment decreased due primarily to the following:

· Higher benefits due to the effect of unlocking.

· Higher commissions and other expenses due tothe effect of unlocking and higher average account values, resulting in higher trail commissions.

· Lower net investment income, net of interest credited, driven by lower prepayments and bond make-whole premiums.

The decrease in income from operations was partially offset by the following:

· Lower federal income tax expense due to the change in the marginal corporate income tax rate, partially offset by changes to the separate account dividends-received deduction (“DRD”), as a result of the Tax Act.

· Higher fee income driven by higher average daily variable account values, partially offset by the effect of unlocking.

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Comparison of the Nine Months Ended September 30, 2018 to 2017

Income from operations for this segment increased due primarily to higher fee income driven by higher average daily variable account values, partially offset by the effect of unlocking.

The increase in income from operations was partially offset by the following:

· Higher commissions and other expenses due to higher average account values, resulting in higher trail commissions, and the effect of unlocking.

· Lower net investment income, net of interest credited, driven by spread compression due to average new money rates trailing our current portfolio yields, lower prepayments and bond make-whole premiums and less favorable investment income on alternative investments within our surplus portfolio.

· Higher benefits due to the effect of unlocking.

See “Critical Accounting Policies and Estimates – DAC, VOBA, DSI and DFEL – Unlocking” above for more information about unlocking.

Additional Information

For the nine months ended September 30, 2018, the federal income tax expense was primarily impacted by the lower marginal corporate income tax rate and tax law changes to the separate account DRD as a result of the Tax Act and other items.  For the nine months ended September 30, 2017, the federal income tax expense was driven by one-time and run-rate adjustments primarily associated with our separate account DRD.

New deposits are an important component of net flows and key to our efforts to grow our business.  Although deposits do not significantly affect current period income from operations, they can significantly impact future income from operations. 

The other component of net flows relates to the retention of the business.  An important measure of retention is the reduction in account values caused by full surrenders, deaths and other contract benefits.  These outflows as a percentage of average account values were 9% for the three and nine months ended September 30, 2018, compared to 8% for the corresponding periods in 2017.

Our fixed annuity business includes products with discretionary crediting rates that are reset on an annual basis and are not subject to surrender charges.  Our ability to retain annual reset annuities will be subject to current competitive conditions at the time interest rates for these products reset.  We expect to manage the effects of spreads on near-term income from operations through portfolio management and, to a lesser extent, crediting rate actions, which assumes no significant changes in net flows into or out of our fixed accounts or other changes that may cause interest rate spreads to differ from our expectations.  For information on interest rate spreads and interest rate risk, see “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” and “Part I – Item 1A. Risk Factors – Market Conditions – Changes in interest rates and sustained low interest rates may cause interest rate spreads to decrease and changes in interest rates may also result in increased contract withdrawals” in our 2017 Form 10-K.

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RESULTS OF RETIREMENT PLAN SERVICES

Details underlying the results for Retirement Plan Services (in millions) were as follows:

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Operating Revenues
Insurance premiums and fee income (1)	$	62	$	61	$	189	$	178
Net investment income		222		222		662		661
Other revenues (2)		6		5		16		14
Total operating revenues		290		288		867		853
Operating Expenses
Interest credited		140		136		414		401
Benefits		-		-		1		1
Commissions and other expenses		106		106		316		313
Total operating expenses		246		242		731		715
Income (loss) from operations before taxes		44		46		136		138
Federal income tax expense (benefit)		7		13		18		35
Income (loss) from operations	$	37	$	33	$	118	$	103

⁽¹⁾ Includes amounts ceded to Lincoln National Reinsurance Company (Barbados) Limited (“LNBAR”).

⁽²⁾ Consists primarily of mutual fund account program revenues from mid to large employers.

Comparison of the Three and Nine Months Ended September 30, 2018 to 2017

Income from operations for this segment increased due primarily to the following:

· Lower federal income tax expense due to the change in the marginal corporate income tax rate as a result of the Tax Act.

· Higher insurance premiums and fee income driven by higher average daily variable account values. 

The increase in income from operations was partially offset by lower net investment income, net of interest credited, driven by lower prepayment and bond make-whole premiums and spread compression due to average new money rates trailing our current portfolio yields.

When comparing the nine months ended September 30, 2018 to 2017, the increase in income from operations was also partially offset by less favorable investment income on alternative investments within our surplus portfolio.

See “Critical Accounting Policies and Estimates – DAC, VOBA, DSI and DFEL – Unlocking” above for information about unlocking.

Additional Information

Net flows in this business fluctuate based on the timing of larger plans being implemented on our platform and terminating over the course of the year.

New deposits are an important component of net flows and key to our efforts to grow our business.  Although deposits do not significantly affect current period income from operations, they can significantly impact future income from operations.  The other component of net flows relates to the retention of the business.  An important measure of retention is the reduction in account values caused primarily by plan sponsor terminations and participant withdrawals.  These outflows as a percentage of average account values were 11% for the three and nine months ended September 30, 2018 compared to 9% and 11% for the corresponding periods in 2017. 

Our net flows are negatively affected by the continued net outflows from our oldest blocks of annuities business, which are among our higher margin product lines in this segment, due to the fact that they are mature blocks with low distribution and servicing costs.  The proportion of these products to our total account values was 23% and 26% as of September 30, 2018 and 2017, respectively.  Due to this expected overall shift in business mix toward products with lower returns, new deposit production continues to be necessary to maintain earnings at current levels.

Our fixed annuity business includes products with discretionary and index-based crediting rates that are reset on either a quarterly or semi-annual basis.  Our ability to retain quarterly or semi-annual reset annuities will be subject to current competitive conditions at the time interest rates for these products reset.  We expect to manage the effects of spreads on near-term income from operations through portfolio management and, to a lesser extent, crediting rate actions, which assumes no significant changes in net flows into or out of our fixed accounts or other changes that may cause interest rate spreads to differ from our expectations.  For information on interest rate

54

spreads and interest rate risk, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” and “Part I – Item 1A. Risk Factors – Market Conditions – Changes in interest rates and sustained low interest rates may cause interest rate spreads to decrease and changes in interest rates may also result in increased contract withdrawals” in our 2017 Form 10-K.

RESULTS OF LIFE INSURANCE

Details underlying the results for Life Insurance (in millions) were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Operating Revenues
Insurance premiums (1)	$	145		$	144		$	423		$	396
Fee income		872			748			2,465			2,255
Net investment income		626			617			1,869			1,871
Operating realized gain (loss) (2)		(1	)		(1	)		-			(6	)
Amortization of deferred gain on
business sold through reinsurance		(1	)		(1	)		(4	)		(4	)
Other revenues		6			8			17			25
Total operating revenues		1,647			1,515			4,770			4,537
Operating Expenses
Interest credited		345			343			1,036			1,026
Benefits		683			732			2,249			2,167
Commissions and other expenses		444			268			1,007			807
Total operating expenses		1,472			1,343			4,292			4,000
Income (loss) from operations before taxes		175			172			478			537
Federal income tax expense (benefit)		32			53			83			165
Income (loss) from operations	$	143		$	119		$	395		$	372

⁽¹⁾ Includes term insurance premiums, which have a corresponding partial offset in benefits for changes in reserves.

⁽²⁾ See “Realized Gain (Loss)” below.

Comparison of the Three Months Ended September 30, 2018 to 2017

Income from operations for this segment increased due primarily to the following:

· Higher fee income due to growth in business in force and the effect of unlocking.

· Lower benefits due to the effect of unlocking, partially offset by growth in business in force.

· Lower federal income tax expense due to the change in the marginal corporate income tax rate as a result of the Tax Act.

· Higher net investment income, net of interest credited, driven by favorable investment income on alternative investments, partially offset by spread compression due to average new money rates trailing our current portfolio yields.

The increase in income from operations was partially offset by higher commissions and other expenses due to the effect of unlocking.

Comparison of the Nine Months Ended September 30, 2018 to 2017

Income from operations for this segment increased due primarily to the following:

· Higher fee income due to growth in business in force and the effect of unlocking. 

· Lower federal income tax expense due to the change in the marginal corporate income tax rate as a result of the Tax Act.

The increase in income from operations was partially offset by the following:

· Higher commissions and other expenses due to the effect of unlocking.

· Higher benefits due to growth in business in force, partially offset by the effect of unlocking.

· Lower net investment income, net of interest credited, driven by less favorable investment income on alternative investments and spread compression due to average new money rates trailing our current portfolio yields.

See “Critical Accounting Policies and Estimates – DAC, VOBA, DSI and DFEL – Unlocking” above for more information about

unlocking.

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Strategies to Address Statutory Reserve Strain

We and Lincoln Life & Annuity Company of New York (“LLANY”) have statutory surplus and risk-based capital levels above current regulatory required levels.  Term products and UL products containing secondary guarantees require reserves calculated pursuant to the Valuation of Life Insurance Policies Model Regulation (“XXX”) and Actuarial Guideline 38 (“AG38”).  For information on strategies we use to reduce the statutory reserve strain caused by XXX and AG38, see “Review of Consolidated Financial Condition – Liquidity and Capital Resources – Sources of Liquidity and Cash Flow – Statutory Capital and Surplus” below.

Additional Information

During the third quarter of 2018, we experienced favorable mortality relative to our expectations for claims seasonality.  Generally, we have higher mortality in the first quarter of the year due to the seasonality of claims.

Generally, we have higher sales during the second half of the year with the fourth quarter being our strongest.

For information on interest rate spreads and interest rate risk, see “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” and “Part I – Item 1A. Risk Factors – Market Conditions – Changes in interest rates and sustained low interest rates may cause interest rate spreads to decrease and changes in interest rates may also result in increased contract withdrawals” in our 2017 Form 10-K.

RESULTS OF GROUP PROTECTION

Details underlying the results for Group Protection (in millions) were as follows:

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Operating Revenues
Insurance premiums	$	1,011	$	500	$	2,366	$	1,488
Net investment income		76		41		178		127
Other revenues (1)		41		23		73		31
Total operating revenues		1,128		564		2,617		1,646
Operating Expenses
Interest credited		1		-		3		1
Benefits		744		334		1,686		1,009
Commissions and other expenses		304		167		756		509
Total operating expenses		1,049		501		2,445		1,519
Income (loss) from operations before taxes		79		63		172		127
Federal income tax expense (benefit)		17		22		36		45
Income (loss) from operations	$	62	$	41	$	136	$	82

(1) Consists of revenue from third-parties for administrative services performed, which has a corresponding partial offset in commissions and other expenses.

Comparison of the Three and Nine Months Ended September 30, 2018 to 2017

Income from operations for this segment increased due primarily to the acquisition of Liberty Life (see “Additional Information” below for more information) and lower federal income tax expense due to the change in the marginal corporate income tax rate as a result of the Tax Act.

Additional Information

Income from operations for the nine months ended September 30, 2018, includes five months of activity from Liberty Life due to the

acquisition that closed on May 1, 2018.  The acquisition resulted in increases in all pre-tax line items presented in the table above.  For more information about our acquisition, see Note 25 in our 2017 Form 10-K and Note 3 herein.

The increase in our life and disability loss ratios from 2017 to 2018 was driven primarily by our acquisition as we combined two blocks of business with loss ratios that are different based on case sizes.  For information about the effect of the loss ratio sensitivity on our income (loss) from operations, see “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Results of Group Protection – Additional Information” in our 2017 Form 10-K.

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During the third quarter of 2017, we had higher other revenues due to the recapture of certain long-term disability business that was originally ceded to a reinsurer.

Generally, we have higher mortality in the first quarter of the year due to seasonality of claims.

Generally, we have higher DAC and VOBA amortization in the first quarter of the year due to a significant number of policies renewing in the quarter.

For information on the effects of current interest rates on our long-term disability claim reserves, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Effect of Interest Rate Sensitivity” in our 2017 Form 10-K.

RESULTS OF OTHER OPERATIONS

Details underlying the results for Other Operations (in millions) were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Operating Revenues
Insurance premiums (1)	$	1		$	(1	)	$	-		$	(2	)
Net investment income		46			56			148			168
Amortization of deferred gain on
business sold through reinsurance		-			-			1			22
Other revenues		3			5			9			16
Total operating revenues		50			60			158			204
Operating Expenses
Interest credited		14			15			43			51
Benefits		37			32			80			77
Other expenses		10			10			25			28
Interest and debt expense		35			32			101			95
Strategic digitization expense		18			10			49			33
Total operating expenses		114			99			298			284
Income (loss) from operations before taxes		(64	)		(39	)		(140	)		(80	)
Federal income tax expense (benefit)		(18	)		(39	)		(40	)		(66	)
Income (loss) from operations	$	(46	)	$	-		$	(100	)	$	(14	)

⁽¹⁾ Includes our disability income business, which has a corresponding offset in benefits for changes in reserves.

Comparison of the Three and Nine Months Ended September 30, 2018 to 2017

Loss from operations for Other Operations increased due primarily to the following:

· Less favorable federal income tax benefit due to the change in the marginal corporate income tax rate as a result of the Tax Act.

· Higher strategic digitization expense as part of our strategic digitization initiative.

· Lower net investment income, net of interest credited, related to lower average invested assets driven by distributable earnings to our segments.

When comparing the nine months ended September 30, 2018 to 2017, the increase in loss from operations was also driven by a decrease in amortization of deferred gain on business sold through reinsurance as a gain was fully amortized during the second quarter of 2017.

Additional Information

Benefits for the three and nine months ended September 30, 2018 and 2017, were elevated due to modifying certain assumptions on the reserves supporting our run-off institutional pension business.

For information on our strategic digitization initiative, see “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Results of Consolidated Operations – Additional Information” in our 2017 Form 10-K.

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REALIZED GAIN (LOSS)

Details underlying realized gain (loss), after-DAC(1) (in millions) were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Components of Realized Gain (Loss), Pre-Tax
Total operating realized gain (loss)	$	45		$	43		$	142		$	129
Total excluded realized gain (loss)		(107	)		(144	)		(149	)		(459	)
Total realized gain (loss), pre-tax	$	(62	)	$	(101	)	$	(7	)	$	(330	)
Components of Excluded Realized Gain (Loss),
After-Tax
Realized gain (loss) related to certain investments	$	(8	)	$	(12	)	$	(41	)	$	(31	)
Gain (loss) on the mark-to-market on certain instruments (2)		10			(17	)		175			(72	)
GLB fees ceded to LNBAR and attributed fees		(81	)		(64	)		(239	)		(187	)
Indexed annuity forward-starting option		(5	)		-			(13	)		(8	)
Total excluded realized gain (loss), after-tax	$	(84	)	$	(93	)	$	(118	)	$	(298	)

⁽¹⁾ DAC refers to the associated amortization of DAC, VOBA, DSI and DFEL and changes in other contract holder funds and funds withheld reinsurance assets and liabilities.

⁽²⁾ Includes activity with LNBAR.

Comparison of the Three and Nine Months Ended September 30, 2018 to 2017

We had lower realized losses due primarily to gains on the mark-to-market on certain instruments due primarily to favorable mark-to-market changes between the investments supporting our modified coinsurance arrangements and the reinsurance related embedded derivatives.

When comparing the nine months ended September 30, 2018 to 2017, we also had lower realized losses due to favorable mark-to-market changes on certain derivative instruments due to an increase in interest rates and greater interest rate volatility.

See “Critical Accounting Policies and Estimates – DAC, VOBA, DSI and DFEL – Unlocking” above for more information about

unlocking.

For factors that could cause actual results to differ materially from those set forth in this section, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2017 Form 10-K as updated by “Part II – Item 1A. Risk Factors” below.

Operating Realized Gain (Loss)

See “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Realized Gain (Loss) – Operating Realized Gain (Loss)” in our 2017 Form 10-K for a discussion of our operating realized gain (loss).

Realized Gain (Loss) Related to Certain Investments

See “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Realized Gain (Loss) – Realized Gain (Loss) Related to Certain Investments” in our 2017 Form 10-K for a discussion of our realized gain (loss) related to certain investments.  In addition, we adopted Accounting Standards Update 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, in 2018 that resulted in a new classification and measurement of our equity securities.  See Note 2 for additional information.

Gain (Loss) on the Mark-to-Market on Certain Instruments

See “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Realized Gain (Loss) – Gain (Loss) on the Mark-to-Market on Certain Instruments” in our 2017 Form 10-K for a discussion of the mark-to-market on certain instruments and Note 4 for information about consolidated variable interest entities (“VIEs”).

GLB Fees Ceded to LNBAR and Attributed Fees

See “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Realized Gain (Loss) – GLB Fees Ceded to LNBAR and Attributed Fees” in our 2017 Form 10-K for a discussion of our guaranteed living benefit (“GLB”) fees ceded to LNBAR and attributed fees.

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Indexed Annuity Forward-Starting Option

See “Part II – Item 7. Management’s Narrative Analysis of the Results of Operations – Realized Gain (Loss) – Indexed Annuity Forward-Starting Option” in our 2017 Form 10-K for a discussion of our indexed annuity forward-starting option.

REVIEW OF CONSOLIDATED FINANCIAL CONDITION

Liquidity and Capital Resources

Sources of Liquidity and Cash Flow

Liquidity refers to the ability of an enterprise to generate adequate amounts of cash from its normal operations to meet cash requirements with a prudent margin of safety.  Our principal sources of cash flow from operating activities are insurance premiums and fees and investment income, while sources of cash flows from investing activities result from maturities and sales of invested assets.  Our operating activities provided cash of $1.1 billion and $768 million for the nine months ended September 30, 2018 and 2017, respectively.  In addition, on April 25, 2018, we received a capital contribution from LNC in the amount of $500 million to help fund the Liberty Life acquisition.  When considering our liquidity and cash flow, it is important to distinguish between our needs, the needs of our insurance subsidiaries and the needs of the holding company, LNC.  As a holding company with no operations of its own, LNC derives its cash primarily from its operating subsidiaries. 

Statutory Capital and Surplus

Our regulatory capital levels are also affected by statutory accounting rules, which are subject to change by each applicable insurance regulator.  Our term products and UL products containing secondary guarantees require reserves calculated pursuant to XXX and AG38, respectively.  As discussed in “Part I – Item 1A Risk Factors – Legislative, Regulatory, and Tax – Attempts to mitigate the impact of Regulation XXX and Actuarial Guideline 38 may fail in whole or in part resulting in an adverse effect on our financial condition and result of operations” in our 2017 Form 10-K, we employ strategies to reduce the strain caused by XXX and AG38 by reinsuring the business to reinsurance captives.  Our captive reinsurance subsidiaries and LNBAR provide a mechanism for financing a portion of the excess reserve amounts in a more efficient manner.  We use long-dated letters of credit (“LOCs”) and debt financing as well as other financing strategies to finance those reserves.  Included in the LOCs issued as of September 30, 2018, was approximately $2.3 billion of long-dated LOCs issued to support inter-company and affiliate reinsurance arrangements for UL products containing secondary guarantees ($350 million will expire in 2019 and $1.9 billion relates to arrangements that will expire by 2031). For information on the LOCs, see the credit facilities table in Note 12 in our 2017 Form 10-K.  Our captive reinsurance subsidiaries and LNBAR have also issued long-term notes of $3.1 billion to finance a portion of the excess reserves as of September 30, 2018; of this amount, $602 million involve exposure to VIEs.  For information on these long-term notes issued by our captive reinsurance and reinsurance subsidiaries, see Note 4 in our 2017 Form 10-K.  We have also used the proceeds from LNC’s senior note issuances of $875 million to execute long-term structured solutions primarily supporting reinsurance of UL products containing secondary guarantees.  LOCs and related capital market solutions lower the capital effect of term products and UL products containing secondary guarantees.  An inability to obtain appropriate capital market solutions could affect our returns on our in-force term products and UL products containing secondary guarantees.  However, we believe that we have sufficient capital to support the increase in statutory reserves, based on our current reserve projections, if such structures were no longer available.

Our captive reinsurance subsidiaries and LNBAR free up capital we can use for any number of purposes, including paying dividends to LNC, our Parent Company.  The National Association of Insurance Commissioners’ (“NAIC”) adoption of the new Valuation Manual that defines a principles-based reserving framework for newly issued life insurance policies was effective January 1, 2017.  Principles-based reserving places a greater weight on our past experience and anticipated future experience as well as considers current economic conditions in calculating life insurance product reserves in accordance with statutory accounting principles.  We adopted the new framework for our newly issued term business in 2017 and will phase in the framework prior to January 1, 2020, for all other newly issued life insurance products.  We believe that these changes may reduce our future use of captive reinsurance subsidiaries and LNBAR for reserve financing transactions for our life insurance business.  For more information on principles-based reserving, see “Part I – Item 1. Business – Regulatory – Insurance Regulation” in our 2017 Form 10-K.

Statutory reserves established for variable annuity contracts and riders are sensitive to changes in the equity markets and are affected by the level of account values relative to the level of any guarantees, product design and reinsurance arrangements.  As a result, the relationship between reserve changes and equity market performance is non-linear during any given reporting period.  Market conditions greatly influence the ultimate capital required due to its effect on the valuation of reserves and derivative assets hedging these reserves.  We also utilize inter-company reinsurance arrangements to manage our hedge program for variable annuity guarantees.  The NAIC is expected to adopt changes to the statutory reserving, capital and accounting framework for variable annuities that will go into effect as of January 1, 2020.

We continue to analyze the use of our existing captive reinsurance structures, as well as additional third-party reinsurance arrangements, and our current hedging strategies relative to managing the effects of equity markets and interest rates on the statutory reserves, statutory capital and the dividend capacity of LNL and LLANY.

59

Financing Activities

For information about our short-term and long-term debt and our credit facilities and LOCs, see Note 12 in our 2017 Form 10-K.

We have not accounted for repurchase agreements, securities lending transactions, or other transactions involving the transfer of financial assets with an obligation to repurchase the transferred assets as sales.  For information about our collateralized financing transactions on our investments, see “Payables for Collateral on Investments” in Note 5.

If current claims-paying ratings were downgraded in the future, terms in our derivative agreements may be triggered, which could negatively affect overall liquidity.  For the majority of our counterparties, there is a termination event if our financial strength ratings drop below BBB-/Baa3 (Standard &Poor/Moody’s Investors Service).  In addition, contractual selling agreements with intermediaries could be negatively affected, which could have an adverse effect on overall sales of annuities, life insurance and investment products.  See “Part I – Item 1A. Risk Factors – Liquidity and Capital Position – A decrease in our capital and surplus may result in a downgrade to our insurer financial strength ratings” and “Part I – Item 1A. Risk Factors –Covenants and Ratings – A downgrade in our financial strength could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors” in our 2017 Form 10-K for more information.  See “Part I – Item 1. Business – Financial Strength Ratings” in our 2017 Form 10-K for additional information on our current financial strength ratings.

Alternative Sources of Liquidity

In order to manage our capital more efficiently, we have an inter-company cash management program where LNL, and certain of our subsidiaries, can lend to or borrow from the holding company to meet short-term borrowing needs.  The cash management program is essentially a series of demand loans between LNC and participating subsidiaries that reduces overall borrowing costs by allowing LNC and its subsidiaries to access internal resources instead of incurring third-party transaction costs.  As of September 30, 2018, we had a net outstanding receivable (payable) of $120 million from (to) certain subsidiaries and affiliates resulting from loans made by subsidiaries and affiliates in excess of amounts placed (borrowed) by the holding company and subsidiaries in the inter-company cash management account.  Any change in holding company cash management program balances is offset by the immediate and equal change in holding company cash and invested cash.  Loans under the cash management program are permitted under applicable insurance laws subject to certain restrictions.  Our borrowing and lending limit is currently 3% of the insurance company’s admitted assets as of its most recent year end.  For our New York-domiciled insurance subsidiary, it may borrow from LNC less than 2% of its admitted assets as of the last year end but may not lend any amounts to LNC.

We, by virtue of our general account fixed-income investment holdings, can access liquidity through securities lending programs and repurchase agreements.  We are a member of the Federal Home Loan Bank of Indianapolis (“FHLBI”).  Membership allows us access to the FHLBI’s financial services, including the ability to obtain loans and to issue funding agreements as an alternative source of liquidity that are collateralized by qualifying mortgage-related assets, agency securities or U.S. Treasury securities.  We had an estimated maximum borrowing capacity of $5.0 billion under the FHLBI facility as of September 30, 2018.  Borrowings under this facility are subject to the FHLBI’s discretion and require the availability of qualifying assets at LNL.  As of September 30, 2018, we had investments with a carrying value of $3.8 billion out on loan or subject to repurchase agreements.  The cash received in our securities lending programs and repurchase agreements is typically invested in cash equivalents, short-term investments or fixed maturity securities.  For additional details, see “Payables for Collateral on Investments” in Note 5.

Cash Flows from Collateral on Derivatives

Our cash flows associated with collateral received from and posted with counterparties change as the market value of the underlying derivative contract changes.  As the value of a derivative asset decreases (or increases), the collateral required to be posted by our counterparties would also decrease (or increase).  Likewise, when the value of a derivative liability decreases (or increases), the collateral we are required to post to our counterparties would also decrease (or increase).  For the nine months ended September 30, 2018, our collateral payable for derivative investments decreased due primarily to increasing interest rates that decreased the fair values of our associated derivative investments.  In the event of adverse changes in fair value of our derivative instruments, we may need to post collateral with a counterparty if our net derivative liability position reaches certain contractual levels.  If we do not have sufficient high quality securities or cash and invested cash to provide as collateral, we have liquidity sources, as discussed above, to leverage that would be eligible for collateral posting.  For additional information, see “Credit Risk” in Note 6.

Uses of Capital

Our principal uses of cash are to pay policy claims and benefits, operating expenses, commissions and taxes, to purchase new investments, to purchase reinsurance, to fund policy surrenders and withdrawals, to pay dividends to our Parent Company and to repay debt.

We used cash on hand and other arrangements to fund our acquisition as described in Note 3.

60

Item 3.Quantitative and Qualitative Disclosures About Market Risk

We analyze and manage the risks arising from market exposures of financial instruments, as well as other risks, in an integrated asset-liability management process that considers diversification.  We have exposures to several market risks including interest rate risk, equity market risk, credit risk and, to a lesser extent, foreign currency exchange risk.  As of September 30, 2018, there have been no material changes in our economic exposure to these market risks since December 31, 2017.  For information on these market risks, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our 2017 Form 10-K.

Item 4.Controls and Procedures

Conclusions Regarding Disclosure Controls and Procedures

We maintain disclosure controls and procedures, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including our President (the principal executive officer) and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.  As of the end of the period required by this report, we, under the supervision and with the participation of our President and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act).  Based on that evaluation, our President and Chief Financial Officer have concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us and our consolidated subsidiaries required to be disclosed in our periodic reports under the Exchange Act.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2018, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  We acquired Liberty Life Assurance Company of Boston (“Liberty Life”) on May 1, 2018, and have not yet included Liberty Life in our assessment of the effectiveness of our internal control over financial reporting.  Accordingly, pursuant to the SEC’s general guidance that an assessment of a recently acquired business may be omitted from the scope of an assessment in the year of acquisition, the scope of our assessment of the effectiveness of our disclosure controls and procedures does not include Liberty Life.  See Note 3 for additional information.

A control system, no matter how well designed and operated, can provide only reasonable assurance that the control system’s objectives will be met.  Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected.  Projections of any evaluation of controls effectiveness to future periods are subject to risks.  Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

61

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding reportable legal proceedings is contained in Note 10 in “Part I – Item 1.”

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 6.  Exhibits

The Exhibits included in this report are listed in the Exhibit Index beginning on page 63, which is incorporated herein by reference.

62

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

Exhibit Index for the Report on Form 10-Q

For the Quarter Ended September 30, 2018

31.1	Certification of the President pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the President pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

63

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Dated:  November 6, 2018	By:	/s/ Christine A. Janofsky
		Christine A. Janofsky
		Senior Vice President and Controller
		(Authorized Signatory and Principal Accounting Officer)

64

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Dennis R. Glass, President, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Lincoln National Life Insurance Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  November 6, 2018	/s/ Dennis R. Glass
	Name:  Dennis R. Glass
	Title:  President

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Randal J. Freitag, Executive Vice President and Chief Financial Officer, certify that:

1.I have reviewed this quarterly report on Form 10-Q of The Lincoln National Life Insurance Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  November 6, 2018	/s/ Randal J. Freitag
	Name:  Randal J. Freitag
	Title:  Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, the undersigned officer of The Lincoln National Life Insurance Company (the “Company”), hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018,  (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 6, 2018	/s/ Dennis R. Glass
	Name:  Dennis R. Glass
	Title:  President

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required under Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, the undersigned officer of The Lincoln National Life Insurance Company (the “Company”), hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 6, 2018	/s/ Randal J. Freitag
	Name:  Randal J. Freitag
	Title:  Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required under Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 02, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018
Entity Registrant Name	LINCOLN NATIONAL LIFE INSURANCE CO /IN/
Entity Central Index Key	0000726865
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		10,000,000

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Available-for-sale securities, at fair value:
Fixed maturity securities (amortized cost: 2018 – $89,642; 2017 – $85,802)	$ 91,940	$ 93,340
Equity securities (cost: 2017 – $247)		246
Trading securities	1,358	1,533
Equity securities	112
Mortgage loans on real estate	12,482	10,662
Real estate	11	11
Policy loans	2,471	2,379
Derivative investments	645	845
Other investments	1,963	2,006
Total investments	110,982	111,022
Cash and invested cash	1,207	947
Deferred acquisition costs and value of business acquired	10,012	8,408
Premiums and fees receivable	591	394
Accrued investment income	1,141	1,052
Reinsurance recoverables	20,040	6,515
Reinsurance related embedded derivatives	148
Funds withheld reinsurance assets	572	598
Goodwill	1,757	1,368
Other assets	10,813	7,349
Separate account assets	147,692	144,219
Total assets	304,955	281,872
Liabilities
Future contract benefits	33,209	22,063
Other contract holder funds	89,226	79,481
Short-term debt	226	10
Long-term debt	2,388	2,374
Reinsurance related embedded derivatives		51
Funds withheld reinsurance liabilities	3,920	4,348
Deferred gain on business sold through reinsurance	37	41
Payables for collateral on investments	4,168	4,354
Other liabilities	7,138	6,486
Separate account liabilities	147,692	144,219
Total liabilities	288,004	263,427
Contingencies and Commitments (See Note 10)
Stockholders' Equity
Common stock – 10,000,000 shares authorized, issued and outstanding	11,229	10,713
Retained earnings	4,740	4,405
Accumulated other comprehensive income (loss)	982	3,327
Total stockholders' equity	16,951	18,445
Total liabilities and stockholders' equity	$ 304,955	$ 281,872

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Available-for-sale securities, at fair value:
Fixed maturity securities (amortized cost)	$ 89,642	$ 85,802
Equity securities (cost)		$ 247
Stockholders' Equity
Common stock - shares authorized (in shares)	10,000,000	10,000,000
Common stock - shares issued (in shares)	10,000,000	10,000,000
Common stock - shares outstanding (in shares)	10,000,000	10,000,000

XML

Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues
Insurance premiums	$ 1,258	$ 724	$ 3,070	$ 2,190
Fee income	1,487	1,339	4,282	3,965
Net investment income	1,207	1,182	3,560	3,564
Realized gain (loss):
Total other-than-temporary impairment losses on securities	(2)	(9)	(5)	(17)
Portion of loss recognized in other comprehensive income		1		1
Net other-than-temporary impairment losses on securities recognized in earnings	(2)	(8)	(5)	(16)
Realized gain (loss), excluding other-than-temporary impairment losses on securities	(60)	(93)	(2)	(314)
Total realized gain (loss)	(62)	(101)	(7)	(330)
Amortization of deferred gain (loss) on business sold through reinsurance	(1)	(1)	(3)	19
Other revenues	150	126	393	327
Total revenues	4,039	3,269	11,295	9,735
Expenses
Interest credited	645	639	1,930	1,916
Benefits	1,586	1,159	4,354	3,576
Commissions and other expenses	1,335	969	3,463	2,910
Interest and debt expense	35	32	101	95
Strategic digitization expense	18	10	49	33
Total expenses	3,619	2,809	9,897	8,530
Income (loss) before taxes	420	460	1,398	1,205
Federal income tax expense (benefit)	42	75	194	150
Net income (loss)	378	385	1,204	1,055
Other comprehensive income (loss), net of tax	(385)	138	(2,989)	1,225
Comprehensive income (loss)	$ (7)	$ 523	$ (1,785)	$ 2,280

XML

Consolidated Statements Of Stockholders' Equity - USD ($) $ in Millions	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance as of beginning-of-year at Dec. 31, 2016	$ 10,696	$ 3,342	$ 1,782
Stock compensation/issued for benefit plans	11
Net income (loss)		1,055		$ 1,055
Dividends declared		(754)
Other comprehensive income (loss), net of tax			1,225	1,225
Balance as of end-of-period at Sep. 30, 2017	10,707	3,643	3,007	17,357
Balance as of beginning-of-year at Dec. 31, 2017	10,713	4,405	3,327	18,445
Cumulative effect from adoption of new accounting standards at Dec. 31, 2017		(644)	644
Capital contributions from Lincoln National Corporation	500
Stock compensation/issued for benefit plans	16
Net income (loss)		1,204		1,204
Dividends declared		(225)
Other comprehensive income (loss), net of tax			(2,989)	(2,989)
Balance as of end-of-period at Sep. 30, 2018	$ 11,229	$ 4,740	$ 982	$ 16,951

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash Flows from Operating Activities
Net income (loss)	$ 1,204	$ 1,055
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Deferred acquisition costs, value of business acquired, deferred sales inducements and deferred front-end loads deferrals and interest, net of amortization	65	9
Trading securities purchases, sales and maturities, net	160	83
Change in premiums and fees receivable	(110)	59
Change in accrued investment income	(50)	(76)
Change in future contract benefits and other contract holder funds	(352)	(1,330)
Change in reinsurance related assets and liabilities	(188)	664
Change in federal income tax accruals	87	(2)
Realized (gain) loss	7	330
Amortization of deferred (gain) loss on business sold through reinsurance	3	(19)
Change in cash management agreement	95	(82)
Other	223	77
Net cash provided by (used in) operating activities	1,144	768
Cash Flows from Investing Activities
Purchases of available-for-sale securities and equity securities	(8,307)	(7,231)
Sales of available-for-sale securities and equity securities	2,299	1,276
Maturities of available-for-sale securities	4,626	4,030
Purchase of common stock in acquisition, net of cash acquired	(1,410)
Sale of business, net	(12)
Purchases of alternative investments	(234)	(228)
Sales and repayments of alternative investments	115	140
Proceeds from affiliate transfer of alternative investments		66
Issuance of mortgage loans on real estate	(2,029)	(1,331)
Repayment and maturities of mortgage loans on real estate	815	823
Issuance and repayment of policy loans, net	39	33
Net change in collateral on investments, derivatives and related settlements	(138)	143
Other	(142)	(80)
Net cash provided by (used in) investing activities	(4,378)	(2,359)
Cash Flows from Financing Activities
Capital contribution from parent company	500
Payment of long-term debt, including current maturities		(240)
Issuance of long-term debt, net of issuance costs		25
Issuance (payment) of short-term debt	216	(277)
Proceeds from sales leaseback transaction	51	45
Deposits of fixed account values, including the fixed portion of variable	9,409	7,609
Withdrawals of fixed account values, including the fixed portion of variable	(4,427)	(4,264)
Transfers to and from separate accounts, net	(2,008)	(1,183)
Common stock issued for benefit plans	(22)	(24)
Dividends paid	(225)	(754)
Net cash provided by (used in) financing activities	3,494	937
Net increase (decrease) in cash, invested cash and restricted cash	260	(654)
Cash, invested cash and restricted cash as of beginning-of-year	947	2,057
Cash, invested cash and restricted cash as of end-of-period	$ 1,207	$ 1,403

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Nature of Operations and Basis of Presentation

9 Months Ended

Sep. 30, 2018

Nature of Operations and Basis of Presentation [Abstract]

Nature of Operations and Basis of Presentation

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.  Nature of Operations and Basis of Presentation

Nature of Operations

The Lincoln National Life Insurance Company (“LNL” or the “Company,” which also may be referred to as “we,” “our” or “us”), a wholly-owned subsidiary of Lincoln National Corporation (“LNC” or the “Parent Company”), is domiciled in the state of Indiana.  We own 100% of the outstanding common stock of Lincoln Life & Annuity Company of New York (“LLANY”) and Liberty Life Assurance Company of Boston (“Liberty Life”), our insurance company subsidiaries.  See Note 3 for information on the acquisition of Liberty Life.  We also own several non-insurance companies, including Lincoln Financial Distributors and Lincoln Financial Advisors, LNC’s wholesaling and retailing business units, respectively.  Through our business segments, we sell a wide range of wealth protection, accumulation and retirement income products and solutions.  These products primarily include fixed and indexed annuities, variable annuities, universal life insurance (“UL”), variable universal life insurance (“VUL”), linked-benefit UL, indexed universal life insurance (“IUL”), term life insurance, employer-sponsored retirement plans and services, and group life, disability and dental.  LNL is licensed and sells its products throughout the U.S. and several U.S. territories.  See Note 14 for additional information.

Basis of Presentation

The accompanying unaudited consolidated financial statements are prepared in accordance with United States of America generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for the Securities and Exchange Commission (“SEC”) Quarterly Report on Form 10-Q, including Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  As discussed in Note 3, on May 1, 2018, LNC and LNL completed the acquisition of Liberty Life.  The information contained in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”), should be read in connection with the reading of these interim unaudited consolidated financial statements.

Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized in our 2017 Form 10-K.

In the opinion of management, these statements include all normal recurring adjustments necessary for a fair presentation of the Company’s results.  Operating results for the nine months ended September 30, 2018, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018.  All material inter-company accounts and transactions have been eliminated in consolidation.

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New Accounting Standards

9 Months Ended

Sep. 30, 2018

New Accounting Standards [Abstract]

New Accounting Standards

2.  New Accounting Standards

Adoption of New Accounting Standards

The following table provides a description of our adoption of new Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board and the impact of the adoption on our financial statements.  ASUs not listed below were assessed and determined to be either not applicable or not material in presentation or amount.

Standard	Description	Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2014-09, Revenue from Contracts with Customers and all related amendments	This standard establishes the core principle of recognizing revenue to depict the transfer of promised goods and services and defines a five-step process that systematically identifies the various components of the revenue recognition process, culminating with the recognition of revenue upon satisfaction of an entity’s performance obligation.  Although the standard and all related amendments supersede nearly all existing revenue recognition guidance under GAAP, the guidance does not amend the accounting for insurance and investment contracts recognized in accordance with Accounting Standards Codification ™ (“ASC”) Topic 944, Financial Services – Insurance, leases, financial instruments and guarantees.	January 1, 2018	We adopted the standard and all related amendments using the modified retrospective method.  Our primary sources of revenue are recognized in accordance with ASC Topic 944, Financial Services – Insurance; as such, revenue within the scope of the new standard primarily includes commissions and advisory fees earned by our broker dealer operation.  The adoption did not have a material impact on our consolidated financial condition, results of operations, stockholder's equity or cash flows.  There were no material changes in the timing or measurement of revenues based upon the guidance.  As a result, there is no cumulative effect on retained earnings.  For more information, see Note 14.
Standard	Description	Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities	These amendments require, among other things, the fair value measurement of investments in equity securities and certain other ownership interests that do not result in consolidation and are not accounted for under the equity method of accounting.  The change in fair value of the impacted investments in equity securities must be recognized in net income in the period of the change in fair value.  In addition, the amendments include certain enhancements to the presentation and disclosure requirements for financial assets and financial liabilities.  The guidance does not apply to Federal Home Loan Bank (“FHLB”) stock.  Early adoption of the ASU is generally not permitted, except as defined in the ASU.  The amendments were adopted in the financial statements through a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption.	January 1, 2018	At the time of adoption, we had equity securities classified as available-for-sale (“AFS”) with a total carrying value of $246 million.  We classified, prospectively, $110 million of equity securities within the scope of this ASU in a separate line on our Consolidated Balance Sheets.  The remaining securities, consisting of $136 million of FHLB stock, are classified in other investments on our Consolidated Balance Sheets and carried at cost. The cumulative-effect adjustment of adopting this ASU did not have a material impact on our consolidated financial condition or results of operations.
ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income	These amendments require a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects associated with the change in the federal corporate income tax rate in the Tax Cuts and Jobs Act (“Tax Act”) of 2017.  The amount of the reclassification is equal to the impact of the change in deferred taxes related to amounts recorded in AOCI resulting from the change in the statutory corporate tax rate from 35% to 21%.  Early adoption is permitted and retrospective application is required.	January 1, 2018	We retrospectively reclassified $644 million of stranded tax effects from AOCI to retained earnings in the period of adoption.

Future Adoption of New Accounting Standards

The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted:

Standard	Description	Projected Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2016-02, Leases	This standard establishes a new accounting model for leases.  Lessees will recognize most leases on the balance sheet as a right-of-use asset and a related lease liability.  The lease liability is measured as the present value of the lease payments over the lease term with the right-of-use asset measured at the lease liability amount and including adjustments for certain lease incentives and initial direct costs.  Lease expense recognition will continue to differentiate between finance leases and operating leases resulting in a similar pattern of lease expense recognition as under current GAAP.  This ASU permits a modified retrospective adoption approach that includes a number of optional practical expedients that entities may elect upon adoption.  Early adoption is permitted.	January 1, 2019	We continue to gather information to determine our leases that are within the scope of this standard.  We do not expect there to be a significant difference in our pattern of lease expense recognition under this ASU.
Standard	Description	Projected Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2016-13, Measurement of Credit Losses on Financial Instruments	These amendments adopt a new model to measure and recognize credit losses for most financial assets.  The method used to measure estimated credit losses for AFS debt securities will be unchanged from current GAAP; however, the amendments require credit losses to be recognized through an allowance rather than as a reduction to the amortized cost of those debt securities.  The amendments will permit entities to recognize improvements in credit loss estimates on AFS debt securities by reducing the allowance account immediately through earnings.  The amendments will be adopted through a cumulative effect adjustment to the beginning balance of retained earnings as of the first reporting period in which the amendments are effective.  Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein.	January 1, 2020	We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations, with a primary focus on our fixed maturity securities, mortgage loans and reinsurance recoverables.
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities	These amendments require an entity to shorten the amortization period for certain callable debt securities held at a premium so that the premium is amortized to the earliest call date.  Early adoption is permitted, and the ASU requires adoption under a modified retrospective basis through a cumulative-effect adjustment to the beginning balance of retained earnings.	January 1, 2019	We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations.
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities	These amendments change both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results.  These amendments retain the threshold of highly effective for hedging relationships, remove the requirement to bifurcate between the portions of the hedging relationship that are effective and ineffective, record hedge item and hedging instrument results in the same financial statement line item, require quantitative assessment initially for all hedging relationships unless the hedging relationship meets the definition of either the shortcut method or critical terms match method and allow the contractual specified index rate to be designated as the hedged risk in a cash flow hedge of interest rate risk of a variable rate financial instrument.  These amendments also eliminate the benchmark interest rate concept for variable rate instruments.  Early adoption is permitted.	January 1, 2019	We do not currently expect the adoption of this guidance to have a material impact on our consolidated financial condition and results of operations.
Standard	Description	Projected Date of Adoption	Effect on Financial Statements or Other Significant Matters
ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts	These amendments make changes to the accounting and reporting for long-duration contracts issued by an insurance entity that will significantly change how insurers account for long-duration contracts, including how they measure, recognize and make disclosures about insurance liabilities and deferred acquisition costs (“DAC”).  Under this ASU insurers will be required to review cash flow assumptions at least annually and update them if necessary.  They also will have to make quarterly updates to the discount rate assumptions they use to measure the liability for future policyholder benefits.  The ASU creates a new category of market risk benefits (i.e., features that protect the contract holder from capital market risk and expose the insurer to that risk) that insurers will have to measure at fair value.  The ASU provides various transition methods by topic that entities may elect upon adoption.  Early adoption is permitted.	January 1, 2021	We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations.

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Acquisition

9 Months Ended

Sep. 30, 2018

Acquisition [Abstract]

Acquisition

3. Acquisition

As previously announced, on May 1, 2018, we completed the acquisition of 100% of the capital stock of Liberty Life, which operates a group benefits business (“Liberty Group Business”) and individual life and individual and group annuity business (the “Liberty Life Business”), from Liberty Mutual Insurance Company in a transaction accounted for under the acquisition method of accounting pursuant to Business Combinations Topic 805 (“Topic 805”).  The acquisition enables us to increase our market share within the group protection marketplace.

In connection with the acquisition and pursuant to the Master Transaction Agreement (“MTA”), dated January 18, 2018, which was attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on January 22, 2018, Liberty Life sold the Liberty Life Business on May 1, 2018, by entering into reinsurance agreements and related ancillary documents (including administrative services agreements and transition services agreements) with Protective Life Insurance Company and its wholly-owned subsidiary, Protective Life and Annuity Insurance Company (together with Protective Life Insurance Company, “Protective”), providing for the reinsurance and administration of the Liberty Life Business.

Liberty Life’s excess capital of $1.8 billion was paid to Liberty Mutual Insurance Company through an extraordinary dividend at the acquisition date.  We paid $1.5 billion of cash to Liberty Mutual Insurance Company to acquire the Liberty Group Business.

We recognized $10 million and $60 million of acquisition-related costs, pre-tax, for the three and nine months ended September 30, 2018, respectively.  These costs are included in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

The acquisition date fair values of certain assets and liabilities, including future contract benefits, intangible assets and related weighted average expected lives, commercial mortgage loans, reinsurance recoverables and deferred income taxes, are provisional and subject to revision within one year of the acquisition date.  Under the terms of the MTA, a final balance sheet will be agreed upon at a later date.  As such, our estimates of fair values are pending finalization, which may result in adjustments to goodwill.  The following table presents the preliminary fair values (in millions) of the net assets acquired related to the Liberty Group Business as of the acquisition date:

	Preliminary
	Fair Value
Assets
Investments	$	2,493
Mortgage loans on real estate		658
Cash and invested cash		107
Reinsurance recoverables		76
Premiums and fees receivable		83
Accrued investment income		24
Other intangible assets acquired		640
Other assets acquired		142
Separate account assets		99
Total assets acquired	$	4,322
Liabilities
Future contract benefits	$	2,930
Other contract holder funds		46
Other liabilities acquired		120
Separate account liabilities		99
Total liabilities assumed	$	3,195
Net identifiable assets acquired	$	1,127
Goodwill		390
Net assets acquired	$	1,517

Identifiable Intangible Assets

The following table presents the fair value of identifiable intangible assets acquired (dollars in millions):

			Weighted-
			Average
			Amortization
	Fair Value		Period
Value of customer relationships acquired	$	576	20
Value of distribution agreements		31	13
Value of business acquired		30	3
Insurance licenses		3	N/A
Total identifiable intangible assets	$	640

The value of customer relationships acquired (“VOCRA”) and value of distribution agreements (“VODA”), included in other assets on our Consolidated Balance Sheets, reflects the estimated fair value of the customer relationships acquired and distribution agreements of the Liberty Group Business as of May 1, 2018.  The value of the identifiable intangible assets was estimated using a discounted cash flow method.  Significant inputs to the valuation models include estimates of expected premiums, persistency rates, investment returns, claim costs, expenses and discount rates based on a weighted average cost of capital.  Similar to other specifically identifiable intangible assets, the carrying values of VOCRA and VODA will be amortized using a straight-line method and reviewed at least annually for indicators of impairment in value that are other-than-temporary. 

For information on value of business acquired (“VOBA”), see Notes 1 and 8 in our 2017 Form 10-K.

The value of insurance licenses was estimated using the comparable transaction method under the market approach based on arms-length transactions in which certificate authority companies with life and health insurance licenses were purchased.  The value of insurance licenses has an indefinite useful life.

Goodwill

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from assets acquired and liabilities assumed that could not be individually identified.  The goodwill recorded as part of the acquisition includes the expected synergies and other benefits that management believes will result from the acquisition, including an increase in distribution strength.  The goodwill resulting from the acquisition was allocated to the Group Protection segment.  The goodwill is not expected to be deductible for income tax purposes.  For more information on goodwill, see Notes 1 and 10 in our 2017 Form 10-K.

Future Contract Benefits

Unpaid claims acquired reflected within future contract benefits were recorded at estimated fair value.  The reserve discount rate was based on the investment yield of the assets acquired with adjustments for risk margin.  The actuarial classifications and methodologies were adjusted to be consistent with our accounting policies and reserve methodologies.

Financial Information

Since the acquisition date of May 1, 2018, the revenues and net income of the business acquired have been included in our Consolidated Statements of Comprehensive Income (Loss) in the Group Protection segment and were $929 million and $26 million, respectively. 

The following unaudited pro forma condensed consolidated results of operations of the Company assume that the acquisition of Liberty Life was completed on January 1, 2017 (in millions):

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenue	$	4,038	$	3,747	$	12,034	$	11,177
Net income		385		370		1,253		1,013

Pro forma adjustments include the revenue and net income of the acquired business for each period as well as amortization of identifiable intangible assets acquired and the fair value adjustment to acquired insurance reserves and investments.  Other pro forma adjustments include the impact of reflecting acquisition and integration costs and investment expenses directly attributable to the business combination in 2017 instead of in 2018.  Pro forma adjustments do not include retrospective adjustments to defer and amortize acquisition costs as would be recorded under our accounting policy.

Reinsurance

Pursuant to the reinsurance agreements, we sold the Liberty Life Business to Protective for a ceding commission of $423 million.   Our amounts recoverable from reinsurers increased significantly to $20.0 billion as of September 30, 2018, from $6.5 billion as of December 31, 2017, primarily as a result of this reinsurance transaction.  As such, Protective now represents our largest reinsurance exposure.  As we are not relieved of our liability, the liabilities and obligations associated with the reinsured policies remain on our Consolidated Balance Sheets with a corresponding reinsurance recoverable from Protective.  To support its obligations under the reinsurance agreements, Protective has established trust accounts for our benefit that fully collateralize the related reinsurance recoverable.  We recorded a deferred tax asset attributed to a tax loss carryforward arising from the reinsurance transaction with Protective.

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Variable Interest Entities

9 Months Ended

Sep. 30, 2018

Variable Interest Entities [Abstract]

Variable Interest Entities

4.  Variable Interest Entities

Consolidated VIEs

See Note 4 in our 2017 Form 10-K for a detailed discussion of our consolidated variable interest entities (“VIEs”), which information is incorporated herein by reference.

Unconsolidated VIEs

See Note 4 in our 2017 Form 10-K for a detailed discussion of our unconsolidated VIEs, which information is incorporated herein by reference.

Limited Partnerships and Limited Liability Companies

We invest in certain limited partnerships (“LPs”) and limited liability companies (“LLCs”), including qualified affordable housing projects, that we have concluded are VIEs.  We do not hold any substantive kick-out or participation rights in the LPs and LLCs, and we do not receive any performance fees or decision maker fees from the LPs and LLCs.  Based on our analysis of the LPs and LLCs, we are not the primary beneficiary of the VIEs as we do not have the power to direct the most significant activities of the LPs and LLCs. 

The carrying amounts of our investments in the LPs and LLCs are recognized in other investments on our Consolidated Balance Sheets and were $1.6 billion and $1.4 billion as of September 30, 2018 and December 31, 2017, respectively.  Included in these carrying amounts are our investments in qualified affordable housing projects, which were $25 million and $31 million as of September 30, 2018, and December 31, 2017, respectively.  We do not have any contingent commitments to provide additional capital funding to these qualified affordable housing projects.  We received returns from these qualified affordable housing projects in the form of income tax credits and other tax benefits that were $1 million and $2 million for the nine months ended September 30, 2018 and 2017, respectively, which were recognized in federal income tax expense (benefit) on our Consolidated Statements of Comprehensive Income (Loss).

Our exposure to loss is limited to the capital we invest in the LPs and LLCs, and there have been no indicators of impairment that would require us to recognize an impairment loss related to the LPs and LLCs as of September 30, 2018.

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Investments

9 Months Ended

Sep. 30, 2018

Investments [Abstract]

Investments

5.  Investments

AFS Securities

See Note 1 in our 2017 Form 10-K for information regarding our accounting policy relating to AFS securities, which also includes additional disclosures regarding our fair value measurements.  In addition, we adopted ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, in 2018 that resulted in a new classification and measurement of our equity securities.  See Note 2 for additional information.

The amortized cost, gross unrealized gains, losses and other-than-temporary impairment (“OTTI”) and fair value of AFS securities (in millions) were as follows:

	As of September 30, 2018
	Amortized		Gross Unrealized							Fair
	Cost		Gains		Losses		OTTI (1)			Value
Fixed maturity AFS securities:
Corporate bonds	$	77,732	$	3,182	$	1,654	$	(9	)	$	79,269
Asset-backed securities ("ABS")		915		41		6		(17	)		967
U.S. government bonds		363		21		6		-			378
Foreign government bonds		415		40		-		-			455
Residential mortgage-backed securities ("RMBS")		3,073		108		103		(20	)		3,098
Commercial mortgage-backed securities ("CMBS")		764		2		22		(3	)		747
Collateralized loan obligations ("CLOs")		1,371		-		14		(5	)		1,362
State and municipal bonds		4,447		644		25		-			5,066
Hybrid and redeemable preferred securities		562		60		24		-			598
Total AFS securities	$	89,642	$	4,098	$	1,854	$	(54	)	$	91,940

	As of December 31, 2017
	Amortized		Gross Unrealized							Fair
	Cost		Gains		Losses		OTTI (1)			Value
Fixed maturity AFS securities:
Corporate bonds	$	74,921	$	6,573	$	341	$	(7	)	$	81,160
ABS		882		51		6		(26	)		953
U.S. government bonds		497		37		1		-			533
Foreign government bonds		391		55		-		-			446
RMBS		3,125		148		36		(21	)		3,258
CMBS		589		10		2		(2	)		599
CLOs		803		2		2		(5	)		808
State and municipal bonds		4,033		932		6		-			4,959
Hybrid and redeemable preferred securities		561		85		22		-			624
Total fixed maturity securities		85,802		7,893		416		(61	)		93,340
Equity AFS securities		247		16		17		-			246
Total AFS securities	$	86,049	$	7,909	$	433	$	(61	)	$	93,586

⁽¹⁾ Includes unrealized (gains) and losses on impaired securities related to changes in the fair value of such securities subsequent to the impairment measurement date.

The amortized cost and fair value of fixed maturity AFS securities by contractual maturities (in millions) as of September 30, 2018, were as follows:

	Amortized		Fair
	Cost		Value
Due in one year or less	$	3,562	$	3,599
Due after one year through five years		16,817		16,894
Due after five years through ten years		17,617		17,561
Due after ten years		45,523		47,712
Subtotal		83,519		85,766
Structured securities (ABS, MBS, CLOs)		6,123		6,174
Total fixed maturity AFS securities	$	89,642	$	91,940

Actual maturities may differ from contractual maturities because issuers may have the right to call or pre-pay obligations.

The fair value and gross unrealized losses, including the portion of OTTI recognized in other comprehensive income (loss) (“OCI”), of AFS securities (dollars in millions), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

	As of September 30, 2018
	Less Than or Equal					Greater Than
	to Twelve Months					Twelve Months					Total
				Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
	Fair		Losses and			Fair		Losses and			Fair		Losses and
	Value			OTTI		Value			OTTI		Value			OTTI
Fixed maturity AFS securities:
Corporate bonds	$	31,706		$	1,142	$	4,520		$	513	$	36,226		$	1,655
ABS		246			2		122			12		368			14
U.S. government bonds		168			4		18			2		186			6
RMBS		776			38		557			66		1,333			104
CMBS		624			18		57			5		681			23
CLOs		1,062			14		34			-		1,096			14
State and municipal bonds		694			14		71			11		765			25
Hybrid and redeemable
preferred securities		31			2		131			22		162			24
Total AFS securities	$	35,307		$	1,234	$	5,510		$	631	$	40,817		$	1,865
Total number of AFS securities in an unrealized loss position															3,432

	As of December 31, 2017
	Less Than or Equal					Greater Than
	to Twelve Months					Twelve Months					Total
				Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
	Fair		Losses and			Fair		Losses and			Fair		Losses and
	Value			OTTI		Value			OTTI		Value			OTTI
Fixed maturity AFS securities:
Corporate bonds	$	4,726		$	67	$	4,706		$	276	$	9,432		$	343
ABS		56			-		143			15		199			15
U.S. government bonds		156			-		19			1		175			1
RMBS		277			4		599			33		876			37
CMBS		113			-		60			3		173			3
CLOs		281			2		72			-		353			2
State and municipal bonds		33			-		89			5		122			5
Hybrid and redeemable
preferred securities		20			-		124			22		144			22
Total fixed maturity securities		5,662			73		5,812			355		11,474			428
Equity AFS securities		22			14		8			3		30			17
Total AFS securities	$	5,684		$	87	$	5,820		$	358	$	11,504		$	445
Total number of AFS securities in an unrealized loss position															1,095

The fair value, gross unrealized losses, the portion of OTTI recognized in OCI (in millions) and number of AFS securities where the fair value had declined and remained below amortized cost by greater than 20% were as follows:

	As of September 30, 2018
								Number
	Fair		Gross Unrealized					of
	Value		Losses		OTTI		Securities (1)
Less than six months	$	130	$	47	$	-			20
Six months or greater, but less than nine months		21		16		-			3
Nine months or greater, but less than twelve months		39		15		-			4
Twelve months or greater		118		47		8			29
Total	$	308	$	125	$	8			56

	As of December 31, 2017
								Number
	Fair		Gross Unrealized					of
	Value		Losses		OTTI		Securities (1)
Less than six months	$	156	$	57	$	1			26
Six months or greater, but less than nine months		2		1		-			4
Nine months or greater, but less than twelve months		12		6		-			7
Twelve months or greater		209		77		10			49
Total	$	379	$	141	$	11			86

⁽¹⁾ We may reflect a security in more than one aging category based on various purchase dates.

We regularly review our investment holdings for OTTI.  Our gross unrealized losses, including the portion of OTTI recognized in OCI, on fixed maturity AFS securities increased by $1.4 billion for the nine months ended September 30, 2018.  As discussed further below, we believe the unrealized loss position as of September 30, 2018, did not represent OTTI as (i) we did not intend to sell these fixed maturity AFS securities; (ii) it is not more likely than not that we will be required to sell these fixed maturity AFS securities before recovery of their amortized cost basis; and (iii) the estimated future cash flows were equal to or greater than the amortized cost basis of the debt securities. 

Based upon this evaluation as of September 30, 2018, management believes we have the ability to generate adequate amounts of cash from our normal operations (e.g., insurance premiums and fees and investment income) to meet cash requirements with a prudent margin of safety without requiring the sale of our temporarily-impaired securities.

As of September 30, 2018, the unrealized losses associated with our corporate bond securities were attributable primarily to widening credit spreads and rising interest rates since purchase.  We performed a detailed analysis of the financial performance of the underlying issuers and determined that we expected to recover the entire amortized cost for each temporarily-impaired security.

As of September 30, 2018, the unrealized losses associated with our mortgage-backed securities (“MBS”) and ABS were attributable primarily to widening credit spreads and rising interest rates since purchase.  We assessed for credit impairment using a cash flow model that incorporates key assumptions including default rates, severities and prepayment rates.  We estimated losses for a security by forecasting the underlying loans in each transaction.  The forecasted loan performance was used to project cash flows to the various tranches in the structure, as applicable.  Our forecasted cash flows also considered, as applicable, independent industry analyst reports and forecasts and other independent market data.  Based upon our assessment of the expected credit losses of the security given the performance of the underlying collateral compared to our subordination or other credit enhancement, we expected to recover the entire amortized cost of each temporarily-impaired security.

As of September 30, 2018, the unrealized losses associated with our hybrid and redeemable preferred securities were attributable primarily to wider credit spreads caused by illiquidity in the market and subordination within the capital structure, as well as credit risk of underlying issuers.  For our hybrid and redeemable preferred securities, we evaluated the financial performance of the underlying issuers based upon credit performance and investment ratings and determined that we expected to recover the entire amortized cost of each temporarily-impaired security.

Changes in the amount of credit loss of OTTI recognized in net income (loss) where the portion related to other factors was recognized in OCI (in millions) on fixed maturity AFS securities were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Balance as of beginning-of-period	$	356		$	370		$	358		$	411
Increases attributable to:
Credit losses on securities for which an
OTTI was not previously recognized		2			8			4			13
Credit losses on securities for which an
OTTI was previously recognized		-			1			1			4
Decreases attributable to:
Securities sold, paid down or matured		(5	)		(20	)		(10	)		(69	)
Balance as of end-of-period	$	353		$	359		$	353		$	359

During the nine months ended September 30, 2018 and 2017, we recorded credit losses on securities for which an OTTI was not previously recognized as we determined the cash flows expected to be collected would not be sufficient to recover the entire amortized cost basis of the debt security.  The credit losses we recorded on securities for which an OTTI was not previously recognized were attributable primarily to one or a combination of the following reasons:

· Failure of the issuer of the security to make scheduled payments;

· Deterioration of creditworthiness of the issuer;

· Deterioration of conditions specifically related to the security;

· Deterioration of fundamentals of the industry in which the issuer operates; and

· Deterioration of the rating of the security by a rating agency.

We recognize the OTTI attributed to the noncredit portion as a separate component in OCI referred to as unrealized OTTI on fixed maturity AFS securities. 

Mortgage Loans on Real Estate

See Note 1 in our 2017 Form 10-K for information regarding our accounting policy relating to mortgage loans on real estate.

Mortgage loans on real estate principally involve commercial real estate.  The commercial loans are geographically diversified throughout the U.S. with the largest concentrations in California, which accounted for 22% and 21% of mortgage loans on real estate as of September 30, 2018, and December 31, 2017, respectively, and Texas which accounted for 12% of mortgage loans on real estate as of September 30, 2018, and December 31, 2017.

The following provides the current and past due composition of our mortgage loans on real estate (in millions):

	As of				As of
	September 30,				December 31,
		2018				2017
Current		$	12,498			$	10,662
60 to 90 days past due			-				-
Greater than 90 days past due			1				3
Valuation allowance associated with impaired mortgage loans on real estate			(1	)			(3	)
Unamortized premium (discount)			(16	)			-
Total carrying value		$	12,482			$	10,662

The number of impaired mortgage loans on real estate, each of which had an associated specific valuation allowance, and the carrying value of impaired mortgage loans on real estate (dollars in millions) were as follows:

	As of				As of
	September 30,				December 31,
		2018				2017
Number of impaired mortgage loans on real estate		1				3
Principal balance of impaired mortgage loans on real estate		$	4			$	11
Valuation allowance associated with impaired mortgage loans on real estate			(1	)			(3	)
Carrying value of impaired mortgage loans on real estate		$	3			$	8

The changes in the valuation allowance associated with impaired mortgage loans on real estate (in millions) were as follows:

	For the Three					For the Nine
	Months Ended					Months Ended
	September 30,					September 30,
	2018			2017		2018			2017
Balance as of beginning-of-period	$	2		$	2	$	3		$	2
Additions		-			-		-			-
Charge-offs, net of recoveries		(1	)		-		(2	)		-
Balance as of end-of-period	$	1		$	2	$	1		$	2

Additional information related to impaired mortgage loans on real estate (in millions) was as follows:

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Average carrying value for impaired mortgage loans on real estate	$	5	$	5	$	6	$	5
Interest income recognized on impaired mortgage loans on real estate		-		-		-		-
Interest income collected on impaired mortgage loans on real estate		-		-		-		-

As described in Note 1 in our 2017 Form 10-K, we use the loan-to-value and debt-service coverage ratios as credit quality indicators for our mortgage loans on real estate, which were as follows (dollars in millions):

	As of September 30, 2018				As of December 31, 2017
				Debt-				Debt-
				Service				Service
	Carrying		% of	Coverage	Carrying		% of	Coverage
Loan-to-Value Ratio	Value		Total	Ratio	Value		Total	Ratio
Less than 65%	$	11,230	90.0%	2.31	$	9,563	89.7%	2.27
65% to 74%		1,183	9.5%	1.79		1,000	9.4%	1.94
75% to 100%		66	0.5%	1.03		91	0.8%	0.97
Greater than 100%		3	0.0%	0.21		8	0.1%	0.82
Total mortgage loans on real estate	$	12,482	100.0%		$	10,662	100.0%

Alternative Investments 

As of September 30, 2018, and December 31, 2017, alternative investments included investments in 236 and221 different partnerships, respectively, and the portfolios represented approximately  1% of our overall invested assets.

Realized Gain (Loss) Related to Certain Investments

The detail of the realized gain (loss) related to certain investments (in millions) was as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Fixed maturity AFS securities: (1)
Gross gains	$	14		$	7		$	29		$	18
Gross losses		(21	)		(22	)		(65	)		(46	)
Equity AFS securities:
Gross gains		-			-			-			1
Gain (loss) on other investments (2)		1			-			4			(4	)
Associated amortization of DAC, VOBA, DSI and DFEL
and changes in other contract holder funds		(5	)		(4	)		(16	)		(17	)
Total realized gain (loss) related to certain investments, pre-tax	$	(11	)	$	(19	)	$	(48	)	$	(48	)

⁽¹⁾ These amounts are represented net of related fair value hedging activity.  See Note 6 for more information.

⁽²⁾ Includes market adjustments on equity securities still held of less than $1 million and $2 million for the three and nine months ended September 30, 2018, respectively.

Details underlying write-downs taken as a result of OTTI (in millions) that were recognized in net income (loss) and included in realized gain (loss) on AFS securities above, were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
OTTI Recognized in Net Income (Loss)
Fixed maturity AFS securities:
Corporate bonds	$	(2	)	$	(8	)	$	(4	)	$	(13	)
ABS		-			(1	)		-			(2	)
RMBS		-			-			(1	)		(1	)
State and municipal bonds		-			-			-			(1	)
Gross OTTI recognized in net income (loss)		(2	)		(9	)		(5	)		(17	)
Associated amortization of DAC, VOBA, DSI and DFEL		-			1			-			1
Net OTTI recognized in net income (loss), pre-tax	$	(2	)	$	(8	)	$	(5	)	$	(16	)

We recognized less than $1 million of OTTI in OCI for the three and nine months ended September 30, 2018.  We recognized $1 million of OTTI in OCI for the three and nine months ended September 30, 2017. 

Determination of Credit Losses on Corporate Bonds and ABS

As of September 30, 2018, and December 31, 2017, we reviewed our corporate bond and ABS portfolios for potential shortfall in contractual principal and interest based on numerous subjective and objective inputs.  The factors used to determine the amount of credit loss for each individual security, include, but are not limited to, near term risk, substantial discrepancy between book and market value, sector or company-specific volatility, negative operating trends and trading levels wider than peers.

Credit ratings express opinions about the credit quality of a security.  Securities rated investment grade, that is those rated BBB- or higher by Standard & Poor’s (“S&P”) Rating Services or Baa3 or higher by Moody’s Investors Service (“Moody’s”), are generally considered by the rating agencies and market participants to be low credit risk.  As of September 30, 2018, and December 31, 2017,  96% of the fair value of our corporate bond portfolio was rated investment grade.  As of September 30, 2018, and December 31, 2017, the portion of our corporate bond portfolio rated below investment grade had an amortized cost of $3.2 billion and $3.4 billion, respectively, and a fair value of $3.1 billion and $3.4 billion, respectively.  As of September 30, 2018, and December 31, 2017, 98% of the fair value of our ABS portfolio was rated investment grade.  As of September 30, 2018, and December 31, 2017, the portion of our ABS portfolio rated below investment grade had an amortized cost of $43 million and a fair value of $41 million.  Based upon the analysis discussed above, we believe as of  September 30, 2018, and December 31, 2017, that we would recover the amortized cost of each investment grade corporate bond and ABS security.

Determination of Credit Losses on MBS

As of September 30, 2018, and December 31, 2017, default rates were projected by considering underlying MBS loan performance and collateral type.  Projected default rates on existing delinquencies vary between 10% to 100% depending on loan type and severity of delinquency status.  In addition, we estimate the potential contributions of currently performing loans that may become delinquent in the future based on the change in delinquencies and loan liquidations experienced in the recent history.  Finally, we develop a default rate timing curve by aggregating the defaults for all loans in the pool (delinquent loans, foreclosure and real estate owned and new delinquencies from currently performing loans) and the associated loan-level loss severities. 

We use certain available loan characteristics such as lien status, loan sizes and occupancy to estimate the loss severity of loans.  Second lien loans are assigned 100% severity, if defaulted.  For first lien loans, we assume a minimum of 30% severity with higher severity assumed for investor properties and further adjusted by housing price assumptions.  With the default rate timing curve and loan-level loss severity, we derive the future expected credit losses.

Payables for Collateral on Investments

The carrying value of the payables for collateral on investments (in millions) included on our Consolidated Balance Sheets and the fair value of the related investments or collateral consisted of the following:

	As of September 30, 2018				As of December 31, 2017
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Collateral payable for derivative investments (1)	$	319	$	319	$	701	$	701
Securities pledged under securities lending agreements (2)		117		113		222		213
Securities pledged under repurchase agreements (3)		152		158		531		554
Investments pledged for Federal Home Loan Bank of
Indianapolis (“FHLBI”) (4)		3,580		5,413		2,900		4,235
Total payables for collateral on investments	$	4,168	$	6,003	$	4,354	$	5,703

⁽¹⁾ We obtain collateral based upon contractual provisions with our counterparties.  These agreements take into consideration the counterparties’ credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that if exceeded result in the receipt of cash that is typically invested in cash and invested cash.  See Note 6 for additional information.

⁽²⁾ Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively.  We value collateral daily and obtain additional collateral when deemed appropriate.  The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities.

⁽³⁾ Our pledged securities under repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We generally obtain collateral in an amount between 80% to 95% of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary.  The cash received in our repurchase program is typically invested in fixed maturity AFS securities.

⁽⁴⁾ Our pledged investments for FHLBI are included in fixed maturity AFS securities and mortgage loans on real estate on our Consolidated Balance Sheets.  The collateral requirements are generally 105% to 115% of the fair value for fixed maturity AFS securities and 155% to 175% of the fair value for mortgage loans on real estate.  The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities.

Increase (decrease) in payables for collateral on investments (in millions) consisted of the following:

	For the Nine
	Months Ended
	September 30,
	2018			2017
Collateral payable for derivative investments	$	(382	)	$	52
Securities pledged under securities lending agreements		(105	)		(17	)
Securities pledged under repurchase agreements		(379	)		1
Investments pledged for FHLBI		680			(50	)
Total increase (decrease) in payables for collateral on investments	$	(186	)	$	(14	)

We have elected not to offset our repurchase agreements and securities lending transactions in our financial statements.  The remaining contractual maturities of repurchase agreements and securities lending transactions accounted for as secured borrowings (in millions) were as follows:

	As of September 30, 2018
	Overnight and Continuous		Up to 30 Days		30 –  90 Days		Greater Than 90 Days		Total
Repurchase Agreements
Corporate bonds	$	-	$	-	$	-	$	152	$	152
Total		-		-		-		152		152
Securities Lending
Corporate bonds		117		-		-		-		117
Total		117		-		-		-		117
Total gross secured borrowings	$	117	$	-	$	-	$	152	$	269

	As of December 31, 2017
	Overnight and Continuous		Up to 30 Days		30 –  90 Days		Greater Than 90 Days		Total
Repurchase Agreements
Corporate bonds	$	-	$	100	$	281	$	150	$	531
Total		-		100		281		150		531
Securities Lending
Corporate bonds		222		-		-		-		222
Total		222		-		-		-		222
Total gross secured borrowings	$	222	$	100	$	281	$	150	$	753

We accept collateral in the form of securities in connection with repurchase agreements.  In instances where we are permitted to sell or re-pledge the securities received, we report the fair value of the collateral received and a related obligation to return the collateral in the financial statements.  In addition, we receive securities in connection with securities borrowing agreements, which we are permitted to sell or re-pledge.  As of  September 30, 2018, the fair value of all collateral received that we are permitted to sell or re-pledge was $528 million.  As of September 30, 2018, we have re-pledged $502 million of this collateral to cover initial margin on certain derivative investments.

Investment Commitments

As of September 30, 2018, our investment commitments were $1.5 billion, which included $815 million of LPs, $317 million of mortgage loans on real estate and $331 million of private placement securities.

Concentrations of Financial Instruments

As of  September 30, 2018, and December 31, 2017, our most significant investments in one issuer were our investments in securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $1.4 billion and $1.2 billion, respectively, or 1% of our invested assets portfolio, and our investments in securities issued by the Federal National Mortgage Association with a fair value of $1.2 billion and $930 million, respectively, or 1% of our invested assets portfolio.  These concentrations include fixed maturity AFS, trading and equity securities.  

As of  September 30, 2018, our most significant investments in one industry were our investments in securities in the financial services industry and the consumer non-cyclical industry with a fair value of $15.5 billion and $13.8 billion, respectively, or 14% and 12%, respectively, of our invested assets portfolio.  As of December 31, 2017, our most significant investments in one industry were our investments in securities in the consumer non-cyclical industry and the utilities industry with a fair of $14.3 billion and $13.8 billion, respectively, or 13% and 12%, respectively, of our invested assets portfolio.  These concentrations include fixed maturity AFS, trading and equity securities.

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Derivative Instruments

9 Months Ended

Sep. 30, 2018

Derivative Instruments [Abstract]

Derivative Instruments

6.  Derivative Instruments

We maintain an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings that are caused by interest rate risk, foreign currency exchange risk, equity market risk, basis risk and credit risk.  See Note 1 in our 2017 Form 10-K for a detailed discussion of the accounting treatment for derivative instruments.  See Note 6 in our 2017 Form 10-K for a detailed discussion of our derivative instruments and use of them in our overall risk management strategy, which information is incorporated herein by reference.  See Note 13 for additional disclosures related to the fair value of our derivative instruments.

We have derivative instruments with off-balance-sheet risks whose notional or contract amounts exceed the related credit exposure.  Outstanding derivative instruments with off-balance-sheet risks (in millions) were as follows:

	As of September 30, 2018						As of December 31, 2017
	Notional		Fair Value				Notional		Fair Value
	Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1,614	$	5	$	42	$	1,544	$	45	$	16
Foreign currency contracts (1)		2,085		104		71		1,804		79		79
Total cash flow hedges		3,699		109		113		3,348		124		95
Fair value hedges:
Interest rate contracts (1)		553		-		113		563		-		174
Non-Qualifying Hedges
Interest rate contracts (1)		90,138		318		233		72,937		657		127
Foreign currency contracts (1)		87		-		-		22		-		-
Equity market contracts (1)		24,753		536		139		30,918		562		557
Credit contracts (1)		-		-		-		52		-		-
Embedded derivatives:
Guaranteed living benefit ("GLB")
direct (2)		-		1,648		-		-		903		-
GLB ceded (2) (3)		-		35		1,681		-		51		954
Reinsurance related (4)		-		148		-		-		-		51
Indexed annuity and IUL contracts (2) (5)		-		44		1,571		-		11		1,418
Total derivative instruments	$	119,230	$	2,838	$	3,850	$	107,840	$	2,308	$	3,376

⁽¹⁾ Reported in derivative investments and other liabilities on our Consolidated Balance Sheets.

⁽²⁾ Reported in other assets on our Consolidated Balance Sheets.

⁽³⁾ Reported in other liabilities on our Consolidated Balance Sheets.

⁽⁴⁾ Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets.

⁽⁵⁾ Reported in future contract benefits on our Consolidated Balance Sheets.

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

	Remaining Life as of September 30, 2018
	Less Than		1 – 5		6 – 10		11 – 30		Over 30
	1 Year		Years		Years		Years		Years		Total
Interest rate contracts (1)	$	10,907	$	14,802	$	47,193	$	19,403	$	-	$	92,305
Foreign currency contracts (2)		141		256		635		1,130		10		2,172
Equity market contracts		18,103		3,401		115		14		3,120		24,753
Total derivative instruments
with notional amounts	$	29,151	$	18,459	$	47,943	$	20,547	$	3,130	$	119,230

⁽¹⁾ As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was February 2027.

⁽²⁾ As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049.

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

	For the Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	27		$	93
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period:
Cumulative effect from adoption of
new accounting standard		6			-
Cash flow hedges:
Interest rate contracts		(67	)		19
Foreign currency contracts		(19	)		46
Change in foreign currency exchange rate adjustment		69			(119	)
Change in DAC, VOBA, DSI and DFEL		4			(3	)
Income tax benefit (expense)		3			20
Less:
Reclassification adjustment for gains (losses)
included in net income (loss):
Cash flow hedges:
Interest rate contracts (1)		3			3
Foreign currency contracts (1)		18			12
Foreign currency contracts (2)		-			5
Associated amortization of DAC, VOBA, DSI and DFEL		(5	)		(1	)
Income tax benefit (expense)		(3	)		(7	)
Balance as of end-of-period	$	10		$	44

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

⁽²⁾ The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

The gains (losses) on derivative instruments (in millions) recorded within income (loss) from continuing operations on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1		$	1		$	3		$	3
Foreign currency contracts (1)		7			4			18			12
Foreign currency contracts (2)		-			-			-			5
Total cash flow hedges		8			5			21			20
Fair value hedges:
Interest rate contracts (1)		(2	)		(6	)		(11	)		(18	)
Interest rate contracts (2)		17			2			64			2
Total fair value hedges		15			(4	)		53			(16	)
Non-Qualifying Hedges
Interest rate contracts (2)		(167	)		18			(577	)		161
Foreign currency contracts (2)		-			1			2			1
Equity market contracts (2)		(199	)		(347	)		(280	)		(1,163	)
Equity market contracts (3)		9			6			10			20
Embedded derivatives:
GLB(2)		2			-			2			-
Reinsurance related (2)		26			(24	)		234			(113	)
Indexed annuity and IUL contracts (2)		(164	)		(46	)		(175	)		(230	)
Total derivative instruments	$	(470	)	$	(391	)	$	(710	)	$	(1,320	)

⁽¹⁾ Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

⁽²⁾ Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

⁽³⁾ Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

Gains (losses) recognized as a component of OCI (in millions) on derivative instruments designated and qualifying as cash flow hedges were as follows:

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Offset to net investment income	$	8	$	5	$	21	$	15
Offset to realized gain (loss)		-		-		-		5

As of September 30, 2018,  $34 million of the deferred net gains (losses) on derivative instruments in AOCI were expected to be reclassified to earnings during the next 12 months.  This reclassification would be due primarily to interest rate variances related to our interest rate swap agreements.

For the nine months ended September 30, 2018 and 2017, there were no material reclassifications to earnings due to hedged firm commitments no longer deemed probable or due to hedged forecasted transactions that had not occurred by the end of the originally specified time period.

As of September 30, 2018, we did not have any exposure related to credit default swaps for which we are the seller.

As of December 31, 2017, information related to our credit default swaps for which we are the seller (dollars in millions) was as follows:

As of December 31, 2017
					Credit
		Reason	Nature		Rating of	Number			Maximum
		for	of	Underlying		of	Fair		Potential
Credit Contract Type	Maturity	Entering	Recourse		Obligation (1)	Instruments	Value (2)		Payout
Basket credit default swaps	12/20/2022	(3)	(4)		BBB+	1	$	1	$	52
						1	$	1	$	52

⁽¹⁾ Represents average credit ratings based on the midpoint of the applicable ratings among Moody’s, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings.

⁽²⁾ Broker quotes are used to determine the market value of our credit default swaps.

⁽³⁾ Credit default swaps were entered into in order to hedge the liability exposure on certain variable annuity products.

⁽⁴⁾ Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract.

Details underlying the associated collateral of our credit default swaps for which we are the seller if credit risk-related contingent features were triggered (in millions) were as follows:

		As of			As of
	September 30,			December 31,
		2018			2017
Maximum potential payout		$	-		$	52
Less:  Counterparty thresholds			-			-
Maximum collateral potentially required to post		$	-		$	52

Certain of our credit default swap agreements contain contractual provisions that allow for the netting of collateral with our counterparties related to all of our collateralized financing transactions that we have outstanding.  If these netting agreements were not in place, we would have been required to post collateral if the market value was less than zero.

Credit Risk

We are exposed to credit losses in the event of non-performance by our counterparties on various derivative contracts and reflect assumptions regarding the credit or non-performance risk (“NPR”).  The NPR is based upon assumptions for each counterparty’s credit spread over the estimated weighted average life of the counterparty exposure less collateral held. As of September 30, 2018, the NPR adjustment was zero.  The credit risk associated with such agreements is minimized by entering into agreements with financial institutions with long-standing, superior performance records.  Additionally, we maintain a policy of requiring derivative contracts to be governed by an International Swaps and Derivatives Association (“ISDA”) Master Agreement.  We are required to maintain minimum ratings as a matter of routine practice in negotiating ISDA agreements.  Under some ISDA agreements, we and our insurance subsidiary have agreed to maintain certain financial strength or claims-paying ratings.  A downgrade below these levels could result in termination of derivative contracts, at which time any amounts payable by us would be dependent on the market value of the underlying derivative contracts.  In certain transactions, we and the counterparty have entered into a credit support annex requiring either party to post collateral when net exposures exceed pre-determined thresholds.  These thresholds vary by counterparty and credit rating.  The amount of such exposure is essentially the net replacement cost or market value less collateral held for such agreements with each counterparty if the net market value is in our favor.  As of September 30, 2018, and December 31, 2017, our exposure was zero.

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 September 30, 2018					As of December 31, 2017
	Collateral		Collateral			Collateral		Collateral
	Posted by		Posted by			Posted by		Posted by
S&P	Counter-		LNL			Counter-		LNL
Credit	Party		(Held by			Party		(Held by
Rating of	(Held by		Counter-			(Held by		Counter-
Counterparty	LNL)		Party)			LNL)		Party)
AA-	$	36	$	(21	)	$	116	$	(1	)
A+		166		(78	)		178		(453	)
A		40		(1	)		170		(48	)
A-		76		-			237		-
BBB+		-		-			-		(4	)
	$	318	$	(100	)	$	701	$	(506	)

Balance Sheet Offsetting

Information related to the effects of offsetting (in millions) was as follows: 

		As of September 30, 2018
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total
Financial Assets
Gross amount of recognized assets		$	843			$	1,875	$	2,718
Gross amounts offset			(198	)			-		(198	)
Net amount of assets			645				1,875		2,520
Gross amounts not offset:
Cash collateral			(318	)			-		(318	)
Non-cash collateral			(80	)			-		(80	)
Net amount		$	247			$	1,875	$	2,122
Financial Liabilities
Gross amount of recognized liabilities		$	932			$	3,252	$	4,184
Gross amounts offset			(119	)			-		(119	)
Net amount of liabilities			813				3,252		4,065
Gross amounts not offset:
Cash collateral			(100	)			-		(100	)
Non-cash collateral			(420	)			-		(420	)
Net amount		$	293			$	3,252	$	3,545

		As of December 31, 2017
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total
Financial Assets
Gross amount of recognized assets		$	1,082			$	965	$	2,047
Gross amounts offset			(237	)			-		(237	)
Net amount of assets			845				965		1,810
Gross amounts not offset:
Cash collateral			(701	)			-		(701	)
Net amount		$	144			$	965	$	1,109
Financial Liabilities
Gross amount of recognized liabilities		$	1,037			$	2,423	$	3,460
Gross amounts offset			(261	)			-		(261	)
Net amount of liabilities			776				2,423		3,199
Gross amounts not offset:
Cash collateral			(506	)			-		(506	)
Net amount		$	270			$	2,423	$	2,693

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Federal Income Taxes

9 Months Ended

Sep. 30, 2018

Federal Income Taxes [Abstract]

Federal Income Taxes

7.  Federal Income Taxes

The effective tax rate is the ratio of tax expense over pre-tax income (loss).  The effective tax rate was 10% and 14% for the three and nine months ended September 30, 2018, respectively, compared to 16% and 12% for the corresponding periods in 2017.  The effective tax rate on pre-tax income was lower than the prevailing corporate federal income tax rate.  Differences in the effective rates and the U.S. statutory rates of 21% and 35% for the three and nine months ended September 30, 2018 and 2017, respectively, were the result of the separate account dividends-received deduction, certain tax preferred investment income, foreign tax credits and other tax preference items.  The current quarter also includes a tax benefit to net income from the impact of the reduced corporate tax rate under the Tax Act on our adoption of a recent Internal Revenue Service pronouncement related to variable annuity contracts.

The SEC previously issued rules that allow for a one year measurement period after the enactment of the Tax Act to finalize calculations and recording of the related tax impacts.  Subsequent to the Tax Act, we have continued to review and analyze the provisions of the Tax Act, including the actual and potential impact of the reduction in the U.S. federal corporate income tax rate and the impact of specific life insurance provisions on our financial statements.  While we do not anticipate any significant changes to amounts currently recorded, any additional adjustments to amounts recorded as a result of the Tax Act will be made during 2018.

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Guaranteed Benefit Features

9 Months Ended

Sep. 30, 2018

Guaranteed Benefit Features [Abstract]

Guaranteed Benefit Features

8.  Guaranteed Benefit Features

Information on the guaranteed death benefit (“GDB”) features outstanding (dollars in millions) was as follows:

	As of			As of
	September 30,			December 31,
		2018 (1)			2017 (1)
Return of Net Deposits
Total account value		$	98,623		$	96,941
Net amount at risk (2)			93			81
Average attained age of contract holders			64 years			64 years
Minimum Return
Total account value		$	103		$	108
Net amount at risk (2)			16			18
Average attained age of contract holders			76 years			76 years
Guaranteed minimum return			5%			5%
Anniversary Contract Value
Total account value		$	26,308		$	26,596
Net amount at risk (2)			438			417
Average attained age of contract holders			71 years			70 years

⁽¹⁾ Our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive.

⁽²⁾ Represents the amount of death benefit in excess of the account balance that is subject to market fluctuations.

The determination of GDB liabilities is based on models that involve a range of scenarios and assumptions, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience.  The following summarizes the balances of and changes in the liabilities for GDBs (in millions), which were recorded in future contract benefits on our Consolidated Balance Sheets:

	For the Nine
	Months Ended
	September 30,
	2018			2017
Balance as of beginning-of-year	$	100		$	110
Changes in reserves		18			4
Benefits paid		(11	)		(14	)
Balance as of end-of-period	$	107		$	100

Variable Annuity Contracts

Account balances of variable annuity contracts, including those with guarantees, (in millions) were invested in separate account investment options as follows:

		As of			As of
	September 30,			December 31,
		2018			2017
Asset Type
Domestic equity		$	61,732		$	59,647
International equity			20,598			20,837
Fixed income			40,529			40,626
Total		$	122,859		$	121,110
Percent of total variable annuity
separate account values			98%			99%

Secondary Guarantee Products

Future contract benefits and other contract holder funds include reserves for our secondary guarantee products sold through our Life Insurance segment.  These UL and VUL products with secondary guarantees represented 32% of total life insurance in-force reserves as of September 30, 2018, and December 31, 2017.  UL and VUL products with secondary guarantees represented 38% and 34% of total sales for the three and nine months ended September 30, 2018, respectively, compared to 26% and 27% for the corresponding periods in 2017.

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Liability For Unpaid Claims

9 Months Ended

Sep. 30, 2018

Liability For Unpaid Claims [Abstract]

Liability For Unpaid Claims

9.  Liability for Unpaid Claims

Changes in the liability for unpaid claims (in millions), were as follows:

	For the Nine
	Months Ended
	September 30,
	2018			2017
Balance as of beginning-of-year	$	2,222		$	2,242
Reinsurance recoverable		57			69
Net balance as of beginning-of-year		2,165			2,173
Business acquired (1)		2,842			-
Incurred related to:
Current year		1,640			909
Prior years
Interest		85			53
All other incurred		(159	)		(85	)
Total incurred		1,566			877
Paid related to:
Current year		(663	)		(458	)
Prior years		(796	)		(440	)
Total paid		(1,459	)		(898	)
Net balance as of end-of-period		5,114			2,152
Reinsurance recoverable		141			57
Balance as of end-of-period	$	5,255		$	2,209

⁽¹⁾ Represents Liberty group life and disability reserves, net, as of May 1, 2018, subject to finalization of acquisition date fair values.  See Note 3 for additional information.

The majority of the reserves included in the roll forward are for long-term disability claims.  The interest rate assumption is an important part of the reserving process due to the long benefit period for these claims.  Interest accrued on prior year reserves has been calculated on the opening reserve balance less one-half of the prior year incurred period’s claim payments at our average reserve discount rate for the respective periods.

“Incurred related to prior years - All other incurred” reflected in the preceding table is primarily impacted by the level of claim resolutions in the period compared to that which is expected by the reserve assumption. A negative number implies a favorable result where claim resolutions were more favorable than assumed.  Our claim resolution rate assumption used in determining reserves is our expectation of the resolution rate we will experience over the long-term life of the block of claims.  It will vary from actual experience in any one period, both favorably and unfavorably.

 

A reconciliation of future contract benefits as reported in our Consolidated Balance Sheets to the liability for unpaid claims (in millions), was as follows:

	As of September 30,
	2018		2017
Future contract benefits	$	33,209	$	21,703
Less:
Life and annuity reserves and claims due		26,580		18,030
Accident and health active life reserves		1,374		1,464
Liability for unpaid claims	$	5,255	$	2,209

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Contingencies and Commitments

9 Months Ended

Sep. 30, 2018

Contingencies and Commitments [Abstract]

Contingencies and Commitments

10.  Contingencies and Commitments

Regulatory bodies, such as state insurance departments, the SEC, Financial Industry Regulatory Authority and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, laws governing the activities of broker-dealers, registered investment advisors and unclaimed property laws.

LNL and its affiliates are involved in various pending or threatened legal or regulatory proceedings, including purported class actions, arising from the conduct of business both in the ordinary course and otherwise.  In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought.  Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief.  Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court.  In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding verdicts obtained in the jurisdiction for similar matters.  This variability in pleadings, together with the actual experiences of LNL in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.

Due to the unpredictable nature of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time is normally difficult to ascertain.  Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal.  Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

We establish liabilities for litigation and regulatory loss contingencies when information related to the loss contingencies shows both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as of September 30, 2018.  While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on LNL’s financial condition.

For some matters, the Company is able to estimate a reasonably possible range of loss.  For such matters in which a loss is probable, an accrual has been made.  For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made.  Accordingly, the estimate contained in this paragraph reflects two types of matters.  For some matters included within this estimate, an accrual has been made, but there is a reasonable possibility that an exposure exists in excess of the amount accrued.  In these cases, the estimate reflects the reasonably possible range of loss in excess of the accrued amount.  For other matters included within this estimation, no accrual has been made because a loss, while potentially estimable, is believed to be reasonably possible but not probable.  In these cases, the estimate reflects the reasonably possible loss or range of loss.  As of September 30, 2018, we estimate the aggregate range of reasonably possible losses to be up to approximately $50million.

For other matters, we are not currently able to estimate the reasonably possible loss or range of loss.  We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts and the progress of settlement negotiations.  On a quarterly and annual basis, we review relevant information with respect to litigation contingencies and update our accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.

Certain reinsurers have sought rate increases on certain yearly renewable term treaties.  We are disputing the requested rate increases under these treaties.  We have initiated and will initiate arbitration proceedings, as necessary, under these treaties in order to protect our contractual rights.  Additionally, reinsurers may initiate arbitration proceedings against us.  We believe it is unlikely the outcome of these disputes will have a material adverse effect on our financial condition.  For more information about reinsurance, see Note 9 in our 2017 Form 10-K.

See Note 13 in our 2017 Form 10-K and Note 9 and Note 10 in our Form 10-Q for the quarters ended March 31, 2018, and June 30, 2018, respectively, for additional discussion of commitments and contingencies, which information is incorporated herein by reference.

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Shares and Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Shares and Stockholders' Equity [Abstract]

Shares and Stockholders' Equity

11.  Shares and Stockholder’s Equity

All authorized and issued shares of LNL are owned by LNC.

AOCI

The following summarizes the components and changes in AOCI (in millions):

	For the Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on AFS Securities
Balance as of beginning-of-year	$	3,283		$	1,687
Cumulative effect from adoption of new accounting standards		634			-
Unrealized holding gains (losses) arising during the period		(5,268	)		2,261
Change in foreign currency exchange rate adjustment		(68	)		112
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds		1,542			(467	)
Income tax benefit (expense)		804			(674	)
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(36	)		(27	)
Associated amortization of DAC, VOBA, DSI and DFEL		(11	)		(16	)
Income tax benefit (expense)		10			15
Balance as of end-of-period	$	964		$	2,947
Unrealized OTTI on AFS Securities
Balance as of beginning-of-year	$	39		$	22
(Increases) attributable to:
Cumulative effect from adoption of new accounting standards		9			-
Gross OTTI recognized in OCI during the period		-			(1	)
Decreases attributable to:
Changes in fair value, sales, maturities or other settlements of AFS securities		(7	)		28
Change in DAC, VOBA, DSI and DFEL		(9	)		(5	)
Income tax benefit (expense)		3			(8	)
Balance as of end-of-period	$	35		$	36
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	27		$	93
Cumulative effect from adoption of new accounting standard		6			-
Unrealized holding gains (losses) arising during the period		(86	)		65
Change in foreign currency exchange rate adjustment		69			(119	)
Change in DAC, VOBA, DSI and DFEL		4			(3	)
Income tax benefit (expense)		3			20
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		21			20
Associated amortization of DAC, VOBA, DSI and DFEL		(5	)		(1	)
Income tax benefit (expense)		(3	)		(7	)
Balance as of end-of-period	$	10		$	44
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year	$	(22	)	$	(20	)
Cumulative effect from adoption of new accounting standard		(5	)		-
Balance as of end-of-period	$	(27	)	$	(20	)

The following summarizes the reclassifications out of AOCI (in millions) and the associated line item in the Consolidated Statements of Comprehensive Income (Loss):

	For the Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on AFS Securities
Gross reclassification	$	(36	)	$	(27	)	Total realized gain (loss)
Associated amortization of DAC,
VOBA, DSI and DFEL		(11	)		(16	)	Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		(47	)		(43	)	operations before taxes
Income tax benefit (expense)		10			15		Federal income tax expense (benefit)
Reclassification, net of income tax	$	(37	)	$	(28	)	Net income (loss)
Unrealized OTTI on AFS Securities
Gross reclassification	$	(1	)	$	6		Total realized gain (loss)
Change in DAC, VOBA, DSI and DFEL		-			(1	)	Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		(1	)		5		operations before taxes
Income tax benefit (expense)		-			(2	)	Federal income tax expense (benefit)
Reclassification, net of income tax	$	(1	)	$	3		Net income (loss)
Unrealized Gain (Loss) on Derivative Instruments
Gross reclassifications:
Interest rate contracts	$	3		$	3		Net investment income
Foreign currency contracts		18			12		Net investment income
Foreign currency contracts		-			5		Total realized gain (loss)
Total gross reclassifications		21			20
Associated amortization of DAC,
VOBA, DSI and DFEL		(5	)		(1	)	Commissions and other expenses
Reclassifications before income							Income (loss) from continuing
tax benefit (expense)		16			19		operations before taxes
Income tax benefit (expense)		(3	)		(7	)	Federal income tax expense (benefit)
Reclassifications, net of income tax	$	13		$	12		Net income (loss)

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Realized Gain (Loss)

9 Months Ended

Sep. 30, 2018

Realized Gain (Loss) [Abstract]

Realized Gain (Loss)

12.  Realized Gain (Loss)

Details underlying realized gain (loss) (in millions) reported on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Total realized gain (loss) related to certain investments (1)	$	(11	)	$	(19	)	$	(48	)	$	(48	)
Realized gain (loss) on the mark-to-market on certain instruments (2)		13			(28	)		219			(110	)
Indexed annuity and IUL contracts net derivatives results: (3)
Gross gain (loss)		(7	)		-			(14	)		(17	)
Associated amortization of DAC, VOBA, DSI and DFEL		(2	)		(1	)		(2	)		(1	)
GLB fees ceded to LNBAR and attributed fees:
Gross gain (loss)		(47	)		(45	)		(138	)		(130	)
Associated amortization of DAC, VOBA, DSI and DFEL		(8	)		(8	)		(24	)		(24	)
Total realized gain (loss)	$	(62	)	$	(101	)	$	(7	)	$	(330	)

⁽¹⁾ See “Realized Gain (Loss) Related to Certain Investments” section in Note 5.

⁽²⁾ Represents changes in the fair values of certain derivative investments (not including those associated with our variable and indexed annuity and IUL contracts net derivatives results), reinsurance related embedded derivatives and trading securities.

⁽³⁾ Represents the net difference between the change in the fair value of the S&P 500 Index ® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2018

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

13.  Fair Value of Financial Instruments

The carrying values and estimated fair values of our financial instruments (in millions) were as follows:

	As of September 30, 2018						As of December 31, 2017
	Carrying			Fair			Carrying			Fair
	Value			Value			Value			Value
Assets
AFS securities:
Fixed maturity securities	$	91,940		$	91,940		$	93,340		$	93,340
Equity securities		-			-			246			246
Trading securities		1,358			1,358			1,533			1,533
Equity securities		112			112			-			-
Mortgage loans on real estate		12,482			12,158			10,662			10,773
Derivative investments (1)		645			645			845			845
Other investments		1,963			1,963			2,006			2,006
Cash and invested cash		1,207			1,207			947			947
Reinsurance related embedded derivatives		148			148			-			-
Other assets:
GLB direct embedded derivatives		1,648			1,648			903			903
GLB ceded embedded derivatives		35			35			51			51
Indexed annuity ceded embedded derivatives		44			44			11			11
Separate account assets		147,692			147,692			144,219			144,219
Liabilities
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(1,571	)		(1,571	)		(1,418	)		(1,418	)
Other contract holder funds:
Remaining guaranteed interest and similar contracts		(562	)		(562	)		(592	)		(592	)
Account values of certain investment contracts		(33,648	)		(34,540	)		(32,332	)		(36,161	)
Short-term debt		(226	)		(226	)		(10	)		(10	)
Long-term debt		(2,388	)		(2,565	)		(2,374	)		(2,677	)
Reinsurance related embedded derivatives		-			-			(51	)		(51	)
Other liabilities:
Derivative liabilities (1)		(280	)		(280	)		(455	)		(455	)
GLB ceded embedded derivatives		(1,681	)		(1,681	)		(954	)		(954	)

⁽¹⁾ We have master netting agreements with each of our derivative counterparties, which allow for the netting of our derivative asset and liability positions by counterparty.

Valuation Methodologies and Associated Inputs for Financial Instruments Not Carried at Fair Value

The following discussion outlines the methodologies and assumptions used to determine the fair value of our financial instruments not carried at fair value on our Consolidated Balance Sheets.  Considerable judgment is required to develop these assumptions used to measure fair value.  Accordingly, the estimates shown are not necessarily indicative of the amounts that would be realized in a one-time, current market exchange of all of our financial instruments.

Mortgage Loans on Real Estate

The fair value of mortgage loans on real estate is established using a discounted cash flow method based on credit rating, maturity and future income.  The ratings for mortgages in good standing are based on property type, location, market conditions, occupancy, debt-service coverage, loan-to-value, quality of tenancy, borrower and payment record.  The fair value for impaired mortgage loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s market price or the fair value of the collateral if the loan is collateral dependent.  The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 2 within the fair value hierarchy.

Other Investments

The carrying value of our assets classified as other investments approximates fair value.  Other investments includes primarily LPs and other privately held investments that are accounted for using the equity method of accounting and the carrying value is based on our proportional share of the net assets of the LPs.  Other investments also include FHLB stock carried at cost and periodically evaluated for impairment based on ultimate recovery of par value.  The inputs used to measure the fair value of our LPs, other privately held investments and FHLB stock are classified as Level 3 within the fair value hierarchy.  The remaining assets in other investments include cash collateral receivables and securities that are not LPs or other privately held investments. The inputs used to measure the fair value of these assets are classified as Level 1 within the fair value hierarchy.

Separate Account Assets

Separate account assets are primarily carried at fair value.  A portion of our separate account assets includes LPs, which are accounted for using the equity method of accounting and the carrying value is based on our proportional share of the net assets of the LPs. The inputs used to measure the fair value of the separate account asset LPs are classified as Level 3 within the fair value hierarchy.

Other Contract Holder Funds

Other contract holder funds include remaining guaranteed interest and similar contracts and account values of certain investment contracts.  The fair value for the remaining guaranteed interest and similar contracts is estimated using discounted cash flow calculations as of the balance sheet date.  These calculations are based on interest rates currently offered on similar contracts with maturities that are consistent with those remaining for the contracts being valued.  As of September 30, 2018, and December 31, 2017, the remaining guaranteed interest and similar contracts carrying value approximated fair value.  The fair value of the account values of certain investment contracts is based on their approximate surrender value as of the balance sheet date.  The inputs used to measure the fair value of our other contract holder funds are classified as Level 3 within the fair value hierarchy.

Short-Term and Long-Term Debt

The fair value of short-term and long-term debt is based on quoted market prices.  The inputs used to measure the fair value of our short-term and long-term debt are classified as Level 2 within the fair value hierarchy.   

Financial Instruments Carried at Fair Value

We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of September 30, 2018, or December 31, 2017, and we noted no changes in our valuation methodologies between these periods.

The following summarizes our financial instruments carried at fair value (in millions) on a recurring basis by the fair value hierarchy levels described in “Summary of Significant Accounting Policies” in Note 1 of our 2017 Form 10-K:

		As of September 30, 2018
		Quoted
		Prices
		in Active
	Markets for			Significant				Significant
		Identical		Observable				Unobservable				Total
		Assets			Inputs				Inputs			Fair
		(Level 1)			(Level 2)				(Level 3)			Value
Assets
Investments:
Fixed maturity AFS securities:
Corporate bonds		$	-		$	73,698			$	5,571		$	79,269
ABS			-			936				31			967
U.S. government bonds			360			18				-			378
Foreign government bonds			-			347				108			455
RMBS			-			3,091				7			3,098
CMBS			-			724				23			747
CLOs			-			1,311				51			1,362
State and municipal bonds			-			5,066				-			5,066
Hybrid and redeemable preferred securities			73			448				77			598
Trading securities			43			1,297				18			1,358
Equity securities			28			58				26			112
Derivative investments (1)			-			426				535			961
Cash and invested cash			-			1,207				-			1,207
Reinsurance related embedded derivatives			-			148				-			148
Other assets:
GLB direct embedded derivatives			-			-				1,648			1,648
GLB ceded embedded derivatives			-			-				35			35
Indexed annuity ceded embedded derivatives			-			-				44			44
Separate account assets			764			146,894				-			147,658
Total assets		$	1,268		$	235,669			$	8,174		$	245,111
Liabilities
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		$	-		$	-			$	(1,571	)	$	(1,571	)
Other liabilities:
Derivative liabilities (1)			-			(415	)			(181	)		(596	)
GLB ceded embedded derivatives			-			-				(1,681	)		(1,681	)
Total liabilities		$	-		$	(415	)		$	(3,433	)	$	(3,848	)

		As of December 31, 2017
		Quoted
		Prices
		in Active
	Markets for			Significant				Significant
		Identical		Observable				Unobservable				Total
		Assets			Inputs				Inputs			Fair
		(Level 1)			(Level 2)				(Level 3)			Value
Assets
Investments:
Fixed maturity AFS securities:
Corporate bonds		$	-		$	75,810			$	5,350		$	81,160
ABS			-			927				26			953
U.S. government bonds			522			6				5			533
Foreign government bonds			-			336				110			446
RMBS			-			3,246				12			3,258
CMBS			-			593				6			599
CLOs			-			717				91			808
State and municipal bonds			-			4,959				-			4,959
Hybrid and redeemable preferred securities			70			478				76			624
Equity AFS securities			28			57				161			246
Trading securities			73			1,411				49			1,533
Derivative investments (1)			-			740				603			1,343
Cash and invested cash			-			947				-			947
Other assets:
GLB direct embedded derivatives			-			-				903			903
GLB ceded embedded derivatives			-			-				51			51
Indexed annuity ceded embedded derivatives			-			-				11			11
Separate account assets			814			143,405				-			144,219
Total assets		$	1,507		$	233,632			$	7,454		$	242,593
Liabilities
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		$	-		$	-			$	(1,418	)	$	(1,418	)
Reinsurance related embedded derivatives			-			(51	)			-			(51	)
Other liabilities:
Derivative liabilities (1)			-			(380	)			(573	)		(953	)
GLB ceded embedded derivatives			-			-				(954	)		(954	)
Total liabilities		$	-		$	(431	)		$	(2,945	)	$	(3,376	)

⁽¹⁾ Derivative investment assets and liabilities presented within the fair value hierarchy are presented on a gross basis by derivative type and not on a master netting basis by counterparty.

The following summarizes changes to our financial instruments carried at fair value (in millions) and classified within Level 3 of the fair value hierarchy.  This summary excludes any effect of amortization of DAC, VOBA, deferred sales inducements (“DSI”) and deferred front-end loads (“DFEL”).  The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.

	For the Three Months Ended September 30, 2018
							Gains		Issuances,				Transfers
				Items			(Losses)			Sales,			Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (3)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	5,522		$	1		$	(30	)	$	109		$	(31	)	$	5,571
ABS		31			-			-			-			-			31
Foreign government bonds		108			-			-			-			-			108
RMBS		-			-			-			7			-			7
CMBS		5			-			-			18			-			23
CLOs		145			-			-			17			(111	)		51
Hybrid and redeemable
preferred securities		78			-			(1	)		-			-			77
Trading securities		22			-			-			2			(6	)		18
Equity securities		26			-			-			-			-			26
Derivative investments		93			(115	)		(55	)		431			-			354
Other assets: (6)
GLB direct embedded derivatives		1,248			400			-			-			-			1,648
GLB ceded embedded derivatives		41			(6	)		-			-			-			35
Indexed annuity ceded embedded derivatives		29			4			-			11			-			44
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,400	)		(164	)		-			(7	)		-			(1,571	)
Other liabilities – GLB ceded embedded
derivatives (6)		(1,288	)		(393	)		-			-			-			(1,681	)
Total, net	$	4,660		$	(273	)	$	(86	)	$	588		$	(148	)	$	4,741

	For the Three Months Ended September 30, 2017
							Gains		Issuances,				Transfers
				Items			(Losses)			Sales			Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (3)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	4,953		$	4		$	34		$	(236	)	$	59		$	4,814
ABS		42			-			-			-			(15	)		27
U.S. government bonds		5			-			-			-			-			5
Foreign government bonds		109			-			1			-			-			110
RMBS		7			-			-			6			-			13
CMBS		21			-			-			(1	)		(14	)		6
CLOs		28			-			-			15			(28	)		15
Hybrid and redeemable
preferred securities		82			-			3			-			(9	)		76
Equity AFS securities		183			-			(1	)		9			(1	)		190
Trading securities		59			(1	)		-			(10	)		1			49
Derivative investments		155			(14	)		7			(85	)		-			63
Other assets: (6)
GLB direct embedded derivatives		298			272			-			-			-			570
GLB ceded embedded derivatives		85			(32	)		-			-			-			53
Indexed annuity ceded embedded derivatives		-			-			-			3			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,268	)		(47	)		-			(3	)		-			(1,318	)
Other liabilities – GLB ceded embedded
derivatives (6)		(383	)		(240	)		-			-			-			(623	)
Total, net	$	4,376		$	(58	)	$	44		$	(302	)	$	(7	)	$	4,053

	For the Nine Months Ended September 30, 2018
							Gains		Issuances,				Transfers
				Items			(Losses)		Sales,				Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net (2)			Net (3)(4)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	5,350		$	7		$	(136	)	$	411		$	(61	)	$	5,571
ABS		26			-			-			5			-			31
U.S. government bonds		5			-			-			(5	)		-			-
Foreign government bonds		110			-			(2	)		-			-			108
RMBS		12			-			-			7			(12	)		7
CMBS		6			1			-			37			(21	)		23
CLOs		91			-			-			164			(204	)		51
Hybrid and redeemable
preferred securities		76			-			1			-			-			77
Equity AFS securities		161			-			-			-			(161	)		-
Trading securities		49			(5	)		-			(20	)		(6	)		18
Equity securities		-			-			-			-			26			26
Derivative investments		30			106			(119	)		337			-			354
Other assets: (6)
GLB direct embedded derivatives		903			745			-			-			-			1,648
GLB ceded embedded derivatives		51			(16	)		-			-			-			35
Indexed annuity ceded embedded derivatives		11			4			-			29			-			44
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,418	)		(175	)		-			22			-			(1,571	)
Other liabilities – GLB ceded embedded
derivatives (6)		(954	)		(727	)		-			-			-			(1,681	)
Total, net	$	4,509		$	(60	)	$	(256	)	$	987		$	(439	)	$	4,741

	For the Nine Months Ended September 30, 2017
							Gains		Issuances,				Transfers
				Items			(Losses)		Sales,				Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (3)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	4,809		$	14		$	152		$	(350	)	$	189		$	4,814
ABS		33			-			1			-			(7	)		27
U.S. government bonds		-			-			-			-			5			5
Foreign government bonds		111			-			(1	)		-			-			110
RMBS		3			-			-			10			-			13
CMBS		7			-			1			54			(56	)		6
CLOs		68			-			-			33			(86	)		15
State and municipal bonds		-			(1	)		-			-			1			-
Hybrid and redeemable
preferred securities		76			-			14			-			(14	)		76
Equity AFS securities		177			1			(2	)		15			(1	)		190
Trading securities		65			1			8			(26	)		1			49
Derivative investments		(93	)		(25	)		94			87			-			63
Other assets: (6)
GLB direct embedded derivatives		-			570			-			-			-			570
GLB ceded embedded derivatives		371			(318	)		-			-			-			53
Indexed annuity ceded embedded derivatives		-			-			-			3			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,139	)		(230	)		-			51			-			(1,318	)
Other liabilities: (6)
GLB direct embedded derivatives		(371	)		371			-			-			-			-
GLB ceded embedded derivatives		-			(623	)		-			-			-			(623	)
Total, net	$	4,117		$	(240	)	$	267		$	(123	)	$	32		$	4,053

⁽¹⁾ The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 6).

⁽²⁾ Net issuances, sales, maturities, settlements, calls, net include financial instruments acquired from Liberty Life as follows: corporate bonds of $67million and ABS of$17 million.

⁽³⁾ Transfers into or out of Level 3 for AFS and trading securities are displayed at amortized cost as of the beginning-of-year.  For AFS and trading securities, the difference between beginning-of-period amortized cost and beginning-of-period fair value was included in OCI and earnings, respectively, in the prior period.

⁽⁴⁾ Transfers into or out of Level 3 for FHLB stock between equity securities and other investments at cost on our Consolidated Balance Sheets.

⁽⁵⁾ Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss).  Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

⁽⁶⁾ Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

The following provides the components of the items included in issuances, sales, maturities, settlements and calls, net, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, (in millions) as reported above:

	For the Three Months Ended September 30, 2018
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	186		$	(3	)	$	(1	)	$	(65	)	$	(8	)	$	109
RMBS		7			-			-			-			-			7
CMBS		18			-			-			-			-			18
CLOs		17			-			-			-			-			17
Trading securities		2			-			-			-			-			2
Derivative investments		96			455			(120	)		-			-			431
Other assets – indexed annuity ceded
embedded derivatives		11			-			-			-			-			11
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(83	)		-			-			76			-			(7	)
Total, net	$	254		$	452		$	(121	)	$	11		$	(8	)	$	588

	For the Three Months Ended September 30, 2017
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	206		$	(354	)	$	(19	)	$	(43	)	$	(26	)	$	(236	)
RMBS		6			-			-			-			-			6
CMBS		-			-			-			(1	)		-			(1	)
CLOs		15			-			-			-			-			15
Equity AFS securities		10			(1	)		-			-			-			9
Trading securities		-			(10	)		-			-			-			(10	)
Derivative investments		50			(23	)		(112	)		-			-			(85	)
Other assets – indexed annuity ceded
embedded derivatives		3			-			-			-			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(14	)		-			-			11			-			(3	)
Total, net	$	276		$	(388	)	$	(131	)	$	(33	)	$	(26	)	$	(302	)

	For the Nine Months Ended September 30, 2018
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	882		$	(163	)	$	(3	)	$	(236	)	$	(69	)	$	411
ABS		22			(17	)		-			-			-			5
U.S. government bonds		-			(5	)		-			-			-			(5	)
RMBS		7			-			-			-			-			7
CMBS		39			-			-			(2	)		-			37
CLOs		164			-			-			-			-			164
Trading securities		4			(24	)		-			-			-			(20	)
Equity securities		1			(1	)		-			-			-			-
Derivative investments		225			460			(348	)		-			-			337
Other assets – indexed annuity ceded
embedded derivatives		29			-			-			-			-			29
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(158	)		-			-			180			-			22
Total, net	$	1,215		$	250		$	(351	)	$	(58	)	$	(69	)	$	987

	For the Nine Months Ended September 30, 2017
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	438		$	(419	)	$	(66	)	$	(169	)	$	(134	)	$	(350	)
RMBS		10			-			-			-			-			10
CMBS		55			-			-			(1	)		-			54
CLOs		33			-			-			-			-			33
Equity AFS securities		18			(3	)		-			-			-			15
Trading securities		2			(27	)		-			(1	)		-			(26	)
Derivative investments		145			243			(301	)		-			-			87
Other assets – indexed annuity ceded
embedded derivatives		3			-			-			-			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(45	)		-			-			96			-			51
Total, net	$	659		$	(206	)	$	(367	)	$	(75	)	$	(134	)	$	(123	)

The following summarizes changes in unrealized gains (losses) included in net income, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, related to financial instruments carried at fair value classified within Level 3 that we still held (in millions):

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Derivative investments	$	(1	)	$	(83	)	$	105		$	(159	)
Embedded derivatives:
Indexed annuity and IUL contracts		(11	)		2			(18	)		(13	)
Other assets – GLB direct and ceded		576			428			1,264			1,340
Other liabilities – GLB ceded		(576	)		(428	)		(1,264	)		(1,340	)
Total, net (1)	$	(12	)	$	(81	)	$	87		$	(172	)

⁽¹⁾ Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

The following provides the components of the transfers into and out of Level 3 (in millions) as reported above:

	For the Three								For the Three
	Months Ended								Months Ended
	September 30, 2018								September 30, 2017
	Transfers		Transfers						Transfers		Transfers
	Into		Out of						Into		Out of
	Level 3		Level 3			Total			Level 3		Level 3			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	11	$	(42	)	$	(31	)	$	116	$	(57	)	$	59
ABS		-		-			-			-		(15	)		(15	)
CMBS		-		-			-			-		(14	)		(14	)
CLOs		-		(111	)		(111	)		-		(28	)		(28	)
Hybrid and redeemable preferred
securities		-		-			-			-		(9	)		(9	)
Equity AFS securities		-		-			-			-		(1	)		(1	)
Trading securities		-		(6	)		(6	)		1		-			1
Total, net	$	11	$	(159	)	$	(148	)	$	117	$	(124	)	$	(7	)

	For the Nine								For the Nine
	Months Ended								Months Ended
	September 30, 2018								September 30, 2017
	Transfers		Transfers						Transfers		Transfers
	Into		Out of						Into		Out of
	Level 3		Level 3			Total			Level 3		Level 3			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	54	$	(115	)	$	(61	)	$	277	$	(88	)	$	189
ABS		-		-			-			14		(21	)		(7	)
U.S. government bonds		-		-			-			5		-			5
RMBS		-		(12	)		(12	)		-		-			-
CMBS		-		(21	)		(21	)		3		(59	)		(56	)
CLOs		-		(204	)		(204	)		30		(116	)		(86	)
State and municipal bonds		-		-			-			2		(1	)		1
Hybrid and redeemable preferred
securities		-		-			-			-		(14	)		(14	)
Equity AFS securities		-		(161	)		(161	)		-		(1	)		(1	)
Trading securities		-		(6	)		(6	)		4		(3	)		1
Equity securities		26		-			26			-		-			-
Total, net	$	80	$	(519	)	$	(439	)	$	335	$	(303	)	$	32

Transfers into and out of Level 3 are generally the result of observable market information on a security no longer being available or becoming available to our pricing vendors.  For the three and nine months ended September 30, 2018 and 2017, transfers in and out of Level 3 were attributable primarily to the securities’ observable market information no longer being available or becoming available.  In 2018, transfers into or out of Level 3 also include FHLB stock between equity securities and other investments at cost on our Consolidated Balance Sheets.  Transfers into and out of Levels 1 and 2 are generally the result of a change in the type of input used to measure the fair value of an asset or liability at the end of the reporting period.  When quoted prices in active markets become available, transfers from Level 2 to Level 1 will result.  When quoted prices in active markets become unavailable, but we are able to employ a valuation methodology using significant observable inputs, transfers from Level 1 to Level 2 will result.  For the three and nine months ended September 30, 2018 and 2017, the transfers between Levels 1 and 2 of the fair value hierarchy were less than $1 million for our financial instruments carried at fair value.

The following summarizes the fair value (in millions), valuation techniques and significant unobservable inputs of the Level 3 fair value measurements as of September 30, 2018:

	Fair			Valuation	Significant	Assumption or
	Value			Technique	Unobservable Inputs	Input Ranges
Assets
Investments:
Fixed maturity AFS and trading
securities:
Corporate bonds	$	2,445		Discounted cash flow	Liquidity/duration adjustment (1)	0.5	%	-	24.8	%
ABS		23		Discounted cash flow	Liquidity/duration adjustment (1)	3.0	%	-	3.0	%
Foreign government bonds		78		Discounted cash flow	Liquidity/duration adjustment (1)	1.1	%	-	2.8	%
Hybrid and redeemable
preferred securities		4		Discounted cash flow	Liquidity/duration adjustment (1)	1.8	%	-	1.8	%
Equity securities		21		Discounted cash flow	Liquidity/duration adjustment (1)	4.5	%	-	5.1	%
Other assets:
GLB direct and ceded
embedded derivatives		1,683		Discounted cash flow	Long-term lapse rate (2)	1	%	-	30	%
					Utilization of guaranteed withdrawals (3)	85	%	-	100	%
					Claims utilization factor (4)	60	%	-	100	%
					Premiums utilization factor (4)	80	%	-	115	%
					NPR (5)	0.01	%	-	0.32	%
					Mortality rate (6)				(8)
					Volatility (7)	1	%	-	29	%
Indexed annuity ceded
embedded derivatives		44		Discounted cash flow	Lapse rate (2)	1	%	-	9	%
					Mortality rate (6)				(8)
Liabilities
Future contract benefits – indexed
annuity and IUL contracts
embedded derivatives	$	(1,571	)	Discounted cash flow	Lapse rate (2)	1	%	-	9	%
					Mortality rate (6)				(8)
Other liabilities – GLB ceded
embedded derivatives		(1,681	)	Discounted cash flow	Long-term lapse rate (2)	1	%	-	30	%
					Utilization of guaranteed withdrawals (3)	85	%	-	100	%
					Claims utilization factor (4)	60	%	-	100	%
					Premiums utilization factor (4)	80	%	-	115	%
					NPR (5)	0.01	%	-	0.32	%
					Mortality rate (6)				(8)
					Volatility (7)	1	%	-	29	%

⁽¹⁾ The liquidity/duration adjustment input represents an estimated market participant composite of adjustments attributable to liquidity premiums, expected durations, structures and credit quality that would be applied to the market observable information of an investment.

⁽²⁾ The lapse rate input represents the estimated probability of a contract surrendering during a year, and thereby forgoing any future benefits.  The range for indexed annuity and IUL contracts represents the lapse rates during the surrender charge period.

⁽³⁾ The utilization of guaranteed withdrawals input represents the estimated percentage of contract holders that utilize the guaranteed withdrawal feature.

⁽⁴⁾ The utilization factors are applied to the present value of claims or premiums, as appropriate, in the GLB reserve calculation to estimate the impact of inefficient withdrawal behavior, including taking less than or more than the maximum guaranteed withdrawal.

⁽⁵⁾ The NPR input represents the estimated additional credit spread that market participants would apply to the market observable discount rate when pricing a contract.

⁽⁶⁾ The mortality rate input represents the estimated probability of when an individual belonging to a particular group, categorized according to age or some other factor such as gender, will die.

⁽⁷⁾ The volatility input represents overall volatilities assumed for the underlying variable annuity funds, which include a mixture of equity and fixed-income assets.  Fair value of the variable annuity GLB embedded derivatives would increase if higher volatilities were used for valuation.

⁽⁸⁾ The mortality rate is based on a combination of company and industry experience, adjusted for improvement factors.

From the table above, we have excluded Level 3 fair value measurements obtained from independent, third-party pricing sources.  We do not develop the significant inputs used to measure the fair value of these assets and liabilities, and the information regarding the significant inputs is not readily available to us.  Independent broker-quoted fair values are non-binding quotes developed by market makers or broker-dealers obtained from third-party sources recognized as market participants.  The fair value of a broker-quoted asset or liability is based solely on the receipt of an updated quote from a single market maker or a broker-dealer recognized as a market participant as we do not adjust broker quotes when used as the fair value measurement for an asset or liability.  Significant increases or decreases in any of the quotes received from a third-party broker-dealer may result in a significantly higher or lower fair value measurement. 

Changes in any of the significant inputs presented in the table above may result in a significant change in the fair value measurement of the asset or liability as follows:

· Investments – An increase in the liquidity/duration adjustment input would result in a decrease in the fair value measurement.

· Indexed annuity and IUL contracts embedded derivatives – For direct embedded derivatives, an increase in the lapse rate or mortality rate inputs would result in a decrease in the fair value measurement. 

· GLB embedded derivatives – Assuming our GLB direct embedded derivatives are in a liability position: an increase in our lapse rate, NPR or mortality rate inputs would result in a decrease in the fair value measurement; and an increase in the utilization of guaranteed withdrawal or volatility inputs would result in an increase in the fair value measurement.

For each category discussed above, the unobservable inputs are not inter-related; therefore, a directional change in one input will not affect the other inputs. 

As part of our ongoing valuation process, we assess the reasonableness of our valuation techniques or models and make adjustments as necessary.  For more information, see “Summary of Significant Accounting Policies” in Note 1 of our 2017 Form 10-K.

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Segment Information

9 Months Ended

Sep. 30, 2018

Segment Information [Abstract]

Segment Information

14.  Segment Information

We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments.  As discussed in Note 3, we completed the acquisition of Liberty Life during the second quarter of 2018.  Related results are included within the Group Protection segment.  We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments.  Our reporting segments reflect the manner by which our chief operating decision makers view and manage the business.  See Note 21 of our 2017 Form 10-K for a brief description of these segments and Other Operations.

Segment operating revenues and income (loss) from operations are internal measures used by our management and Board of Directors to evaluate and assess the results of our segments.  Income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:

· Realized gains and losses associated with the following (“excluded realized gain (loss)”):

§ Sales or disposals and impairments of securities;

§ Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities;

§ GLB rider fees ceded to Lincoln National Reinsurance Company (Barbados) Limited (“LNBAR”);

§ The net valuation premium of the GLB attributed rider fees;

§ Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for at fair value; and

§ Changes in the fair value of equity securities;

· Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;

· Gains (losses) on early extinguishment of debt;

· Losses from the impairment of intangible assets;

· Income (loss) from discontinued operations;

· Acquisition and integration costs related to mergers and acquisitions; and

· Income (loss) from the initial adoption of new accounting standards, regulations, and policy changes including the net impact from the Tax Cuts and Jobs Act.

Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:

· Excluded realized gain (loss);

· Revenue adjustments from the initial adoption of new accounting standards;

· Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and

· Amortization of deferred gains arising from reserve changes on business sold through reinsurance.

We use our prevailing corporate federal income tax rates of 21% and 35%, where applicable, while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.  Operating revenues and income (loss) from operations do not replace revenues and net income as the GAAP measures of our consolidated results of operations.

Segment information (in millions) was as follows:

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues
Operating revenues:
Annuities	$	1,031		$	986		$	3,032		$	2,954
Retirement Plan Services		290			288			867			853
Life Insurance		1,647			1,515			4,770			4,537
Group Protection		1,128			564			2,617			1,646
Other Operations		50			60			158			204
Excluded realized gain (loss), pre-tax		(107	)		(144	)		(149	)		(459	)
Total revenues	$	4,039		$	3,269		$	11,295		$	9,735

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Net Income (Loss)
Income (loss) from operations:
Annuities	$	265		$	288		$	824		$	813
Retirement Plan Services		37			33			118			103
Life Insurance		143			119			395			372
Group Protection		62			41			136			82
Other Operations		(46	)		-			(100	)		(14	)
Excluded realized gain (loss), after-tax		(84	)		(93	)		(118	)		(298	)
Gain (loss) on early extinguishment of debt, after-tax		-			(3	)		-			(3	)
Net impact from the Tax Cuts and Jobs Act		9			-			(4	)		-
Acquisition and integration costs related to mergers
and acquisitions, after-tax		(8	)		-			(47	)		-
Net income (loss)	$	378		$	385		$	1,204		$	1,055

Revenue from Contracts with Customers

As discussed in Note 2, we adopted ASU 2014-09, Revenue from Contracts with Customers, as of January 1, 2018, that applies primarily to commissions and advisory fees earned by our broker dealer operation.  The following table illustrates the revenue recognized from contracts with customers reported within fee income and other revenues on our Consolidated Statements of Comprehensive Income (Loss) and timing of revenue recognition by segment (in millions):

	For the Three Months Ended September 30, 2018
			Retirement
			Plan		Life		Group		Other
	Annuities		Services		Insurance		Protection		Operations		Total
Revenue from Contracts with Customers
Fee income	$	137	$	42	$	6	$	-	$	-	$	185
Other revenues		93		5		2		41		-		141
Total revenue from contracts
with customers	$	230	$	47	$	8	$	41	$	-	$	326
Timing of Revenue Recognition
Satisfaction of performance obligation:
Transferred at a point in time	$	-	$	1	$	1	$	-	$	-	$	2
Transferred over time		230		46		7		41		-		324
Total revenue from contracts
with customers	$	230	$	47	$	8	$	41	$	-	$	326

	For the Nine Months Ended September 30, 2018
			Retirement
			Plan		Life		Group		Other
	Annuities		Services		Insurance		Protection		Operations		Total
Revenue from Contracts with Customers
Fee income	$	403	$	126	$	17	$	-	$	-	$	546
Other revenues		278		14		7		73		-		372
Total revenue from contracts
with customers	$	681	$	140	$	24	$	73	$	-	$	918
Timing of Revenue Recognition
Satisfaction of performance obligation:
Transferred at a point in time	$	3	$	4	$	5	$	-	$	-	$	12
Transferred over time		678		136		19		73		-		906
Total revenue from contracts
with customers	$	681	$	140	$	24	$	73	$	-	$	918

Revenue recognized from contracts with customers included in fee income consists primarily of wholesaling-related 12b-1 fees and net investment advisory fees.  The 12b-1 fees are received from separate account fund sponsors as compensation for servicing the underlying mutual funds.  The net investment advisory fees are related to asset management of certain separate account funds.  Such revenues are recorded based on a contractual percentage of the market value of mutual fund assets over the period shares are owned by customers, and on a contractual percentage of the customer’s managed assets over the period advisory services are provided, respectively. 

Revenue recognized from contracts with customers included in other revenues primarily relates to our retail sales network and consists of commission revenue for the sale of non-affiliated securities recorded on a trade-date basis and advisory fee income.  Advisory fee income is asset-based revenues recorded as earned based on a contractual percentage of customer account values.

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Nature of Operations and Basis of Presentation (Policy)

9 Months Ended

Sep. 30, 2018

Nature of Operations and Basis of Presentation [Abstract]

Nature Of Operations

Nature of Operations

The Lincoln National Life Insurance Company (“LNL” or the “Company,” which also may be referred to as “we,” “our” or “us”), a wholly-owned subsidiary of Lincoln National Corporation (“LNC” or the “Parent Company”), is domiciled in the state of Indiana.  We own 100% of the outstanding common stock of Lincoln Life & Annuity Company of New York (“LLANY”) and Liberty Life Assurance Company of Boston (“Liberty Life”), our insurance company subsidiaries.  See Note 3 for information on the acquisition of Liberty Life.  We also own several non-insurance companies, including Lincoln Financial Distributors and Lincoln Financial Advisors, LNC’s wholesaling and retailing business units, respectively.  Through our business segments, we sell a wide range of wealth protection, accumulation and retirement income products and solutions.  These products primarily include fixed and indexed annuities, variable annuities, universal life insurance (“UL”), variable universal life insurance (“VUL”), linked-benefit UL, indexed universal life insurance (“IUL”), term life insurance, employer-sponsored retirement plans and services, and group life, disability and dental.  LNL is licensed and sells its products throughout the U.S. and several U.S. territories.  See Note 14 for additional information.

Basis Of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements are prepared in accordance with United States of America generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for the Securities and Exchange Commission (“SEC”) Quarterly Report on Form 10-Q, including Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  As discussed in Note 3, on May 1, 2018, LNC and LNL completed the acquisition of Liberty Life.  The information contained in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10-K”), should be read in connection with the reading of these interim unaudited consolidated financial statements.

Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized in our 2017 Form 10-K.

In the opinion of management, these statements include all normal recurring adjustments necessary for a fair presentation of the Company’s results.  Operating results for the nine months ended September 30, 2018, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018.  All material inter-company accounts and transactions have been eliminated in consolidation.

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Acquisition (Tables)

9 Months Ended

Sep. 30, 2018

Acquisition [Abstract]

Schedule Of Fair Value Of Net Assets Acquired

	Preliminary
	Fair Value
Assets
Investments	$	2,493
Mortgage loans on real estate		658
Cash and invested cash		107
Reinsurance recoverables		76
Premiums and fees receivable		83
Accrued investment income		24
Other intangible assets acquired		640
Other assets acquired		142
Separate account assets		99
Total assets acquired	$	4,322
Liabilities
Future contract benefits	$	2,930
Other contract holder funds		46
Other liabilities acquired		120
Separate account liabilities		99
Total liabilities assumed	$	3,195
Net identifiable assets acquired	$	1,127
Goodwill		390
Net assets acquired	$	1,517

Schedule Of Fair Value Of Identifiable Intangible Assets Acquired

			Weighted-
			Average
			Amortization
	Fair Value		Period
Value of customer relationships acquired	$	576	20
Value of distribution agreements		31	13
Value of business acquired		30	3
Insurance licenses		3	N/A
Total identifiable intangible assets	$	640

Schedule Of Pro Forma Information

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenue	$	4,038	$	3,747	$	12,034	$	11,177
Net income		385		370		1,253		1,013

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Investments (Tables)

9 Months Ended

Sep. 30, 2018

Investments [Abstract]

Reconciliation Of Available-For-Sale Securities From Cost Basis To Fair Value

	As of September 30, 2018
	Amortized		Gross Unrealized							Fair
	Cost		Gains		Losses		OTTI (1)			Value
Fixed maturity AFS securities:
Corporate bonds	$	77,732	$	3,182	$	1,654	$	(9	)	$	79,269
Asset-backed securities ("ABS")		915		41		6		(17	)		967
U.S. government bonds		363		21		6		-			378
Foreign government bonds		415		40		-		-			455
Residential mortgage-backed securities ("RMBS")		3,073		108		103		(20	)		3,098
Commercial mortgage-backed securities ("CMBS")		764		2		22		(3	)		747
Collateralized loan obligations ("CLOs")		1,371		-		14		(5	)		1,362
State and municipal bonds		4,447		644		25		-			5,066
Hybrid and redeemable preferred securities		562		60		24		-			598
Total AFS securities	$	89,642	$	4,098	$	1,854	$	(54	)	$	91,940

	As of December 31, 2017
	Amortized		Gross Unrealized							Fair
	Cost		Gains		Losses		OTTI (1)			Value
Fixed maturity AFS securities:
Corporate bonds	$	74,921	$	6,573	$	341	$	(7	)	$	81,160
ABS		882		51		6		(26	)		953
U.S. government bonds		497		37		1		-			533
Foreign government bonds		391		55		-		-			446
RMBS		3,125		148		36		(21	)		3,258
CMBS		589		10		2		(2	)		599
CLOs		803		2		2		(5	)		808
State and municipal bonds		4,033		932		6		-			4,959
Hybrid and redeemable preferred securities		561		85		22		-			624
Total fixed maturity securities		85,802		7,893		416		(61	)		93,340
Equity AFS securities		247		16		17		-			246
Total AFS securities	$	86,049	$	7,909	$	433	$	(61	)	$	93,586

⁽¹⁾ Includes unrealized (gains) and losses on impaired securities related to changes in the fair value of such securities subsequent to the impairment measurement date.

Available-For-Sale Securities By Contractual Maturities

	Amortized		Fair
	Cost		Value
Due in one year or less	$	3,562	$	3,599
Due after one year through five years		16,817		16,894
Due after five years through ten years		17,617		17,561
Due after ten years		45,523		47,712
Subtotal		83,519		85,766
Structured securities (ABS, MBS, CLOs)		6,123		6,174
Total fixed maturity AFS securities	$	89,642	$	91,940

Fair Value And Gross Unrealized Losses In A Continuous Unrealized Loss Position

	As of September 30, 2018
	Less Than or Equal					Greater Than
	to Twelve Months					Twelve Months					Total
				Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
	Fair		Losses and			Fair		Losses and			Fair		Losses and
	Value			OTTI		Value			OTTI		Value			OTTI
Fixed maturity AFS securities:
Corporate bonds	$	31,706		$	1,142	$	4,520		$	513	$	36,226		$	1,655
ABS		246			2		122			12		368			14
U.S. government bonds		168			4		18			2		186			6
RMBS		776			38		557			66		1,333			104
CMBS		624			18		57			5		681			23
CLOs		1,062			14		34			-		1,096			14
State and municipal bonds		694			14		71			11		765			25
Hybrid and redeemable
preferred securities		31			2		131			22		162			24
Total AFS securities	$	35,307		$	1,234	$	5,510		$	631	$	40,817		$	1,865
Total number of AFS securities in an unrealized loss position															3,432

	As of December 31, 2017
	Less Than or Equal					Greater Than
	to Twelve Months					Twelve Months					Total
				Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
	Fair		Losses and			Fair		Losses and			Fair		Losses and
	Value			OTTI		Value			OTTI		Value			OTTI
Fixed maturity AFS securities:
Corporate bonds	$	4,726		$	67	$	4,706		$	276	$	9,432		$	343
ABS		56			-		143			15		199			15
U.S. government bonds		156			-		19			1		175			1
RMBS		277			4		599			33		876			37
CMBS		113			-		60			3		173			3
CLOs		281			2		72			-		353			2
State and municipal bonds		33			-		89			5		122			5
Hybrid and redeemable
preferred securities		20			-		124			22		144			22
Total fixed maturity securities		5,662			73		5,812			355		11,474			428
Equity AFS securities		22			14		8			3		30			17
Total AFS securities	$	5,684		$	87	$	5,820		$	358	$	11,504		$	445
Total number of AFS securities in an unrealized loss position															1,095

Schedule Of Available-For-Sale Securities Whose Value Is Below Amortized Cost

	As of September 30, 2018
								Number
	Fair		Gross Unrealized					of
	Value		Losses		OTTI		Securities (1)
Less than six months	$	130	$	47	$	-			20
Six months or greater, but less than nine months		21		16		-			3
Nine months or greater, but less than twelve months		39		15		-			4
Twelve months or greater		118		47		8			29
Total	$	308	$	125	$	8			56

	As of December 31, 2017
								Number
	Fair		Gross Unrealized					of
	Value		Losses		OTTI		Securities (1)
Less than six months	$	156	$	57	$	1			26
Six months or greater, but less than nine months		2		1		-			4
Nine months or greater, but less than twelve months		12		6		-			7
Twelve months or greater		209		77		10			49
Total	$	379	$	141	$	11			86

⁽¹⁾ We may reflect a security in more than one aging category based on various purchase dates.

Schedule Of Changes In Amount Of Credit Losses Of OTTI Recognized In Net Income (Loss)

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Balance as of beginning-of-period	$	356		$	370		$	358		$	411
Increases attributable to:
Credit losses on securities for which an
OTTI was not previously recognized		2			8			4			13
Credit losses on securities for which an
OTTI was previously recognized		-			1			1			4
Decreases attributable to:
Securities sold, paid down or matured		(5	)		(20	)		(10	)		(69	)
Balance as of end-of-period	$	353		$	359		$	353		$	359

Composition Of Current And Past Due Mortgage Loans On Real Estate

	As of				As of
	September 30,				December 31,
		2018				2017
Current		$	12,498			$	10,662
60 to 90 days past due			-				-
Greater than 90 days past due			1				3
Valuation allowance associated with impaired mortgage loans on real estate			(1	)			(3	)
Unamortized premium (discount)			(16	)			-
Total carrying value		$	12,482			$	10,662

Schedule Of Impaired Mortgage Loans

	As of				As of
	September 30,				December 31,
		2018				2017
Number of impaired mortgage loans on real estate		1				3
Principal balance of impaired mortgage loans on real estate		$	4			$	11
Valuation allowance associated with impaired mortgage loans on real estate			(1	)			(3	)
Carrying value of impaired mortgage loans on real estate		$	3			$	8

Changes In The Valuation Allowance Of Impaired Mortgage Loans On Real Estate

	For the Three					For the Nine
	Months Ended					Months Ended
	September 30,					September 30,
	2018			2017		2018			2017
Balance as of beginning-of-period	$	2		$	2	$	3		$	2
Additions		-			-		-			-
Charge-offs, net of recoveries		(1	)		-		(2	)		-
Balance as of end-of-period	$	1		$	2	$	1		$	2

Schedule Of Average Carrying Value Of Impaired Mortgage Loans On Real Estate

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Average carrying value for impaired mortgage loans on real estate	$	5	$	5	$	6	$	5
Interest income recognized on impaired mortgage loans on real estate		-		-		-		-
Interest income collected on impaired mortgage loans on real estate		-		-		-		-

Credit Quality Indicators For Mortgage Loans

	As of September 30, 2018				As of December 31, 2017
				Debt-				Debt-
				Service				Service
	Carrying		% of	Coverage	Carrying		% of	Coverage
Loan-to-Value Ratio	Value		Total	Ratio	Value		Total	Ratio
Less than 65%	$	11,230	90.0%	2.31	$	9,563	89.7%	2.27
65% to 74%		1,183	9.5%	1.79		1,000	9.4%	1.94
75% to 100%		66	0.5%	1.03		91	0.8%	0.97
Greater than 100%		3	0.0%	0.21		8	0.1%	0.82
Total mortgage loans on real estate	$	12,482	100.0%		$	10,662	100.0%

Realized Gain (Loss) Related To Certain Investments

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Fixed maturity AFS securities: (1)
Gross gains	$	14		$	7		$	29		$	18
Gross losses		(21	)		(22	)		(65	)		(46	)
Equity AFS securities:
Gross gains		-			-			-			1
Gain (loss) on other investments (2)		1			-			4			(4	)
Associated amortization of DAC, VOBA, DSI and DFEL
and changes in other contract holder funds		(5	)		(4	)		(16	)		(17	)
Total realized gain (loss) related to certain investments, pre-tax	$	(11	)	$	(19	)	$	(48	)	$	(48	)

⁽¹⁾ These amounts are represented net of related fair value hedging activity.  See Note 6 for more information.

⁽²⁾ Includes market adjustments on equity securities still held of less than $1 million and $2 million for the three and nine months ended September 30, 2018, respectively.

OTTI Recognized In Net Income (Loss) And OCI

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
OTTI Recognized in Net Income (Loss)
Fixed maturity AFS securities:
Corporate bonds	$	(2	)	$	(8	)	$	(4	)	$	(13	)
ABS		-			(1	)		-			(2	)
RMBS		-			-			(1	)		(1	)
State and municipal bonds		-			-			-			(1	)
Gross OTTI recognized in net income (loss)		(2	)		(9	)		(5	)		(17	)
Associated amortization of DAC, VOBA, DSI and DFEL		-			1			-			1
Net OTTI recognized in net income (loss), pre-tax	$	(2	)	$	(8	)	$	(5	)	$	(16	)

Payables For Collateral On Investments

	As of September 30, 2018				As of December 31, 2017
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Collateral payable for derivative investments (1)	$	319	$	319	$	701	$	701
Securities pledged under securities lending agreements (2)		117		113		222		213
Securities pledged under repurchase agreements (3)		152		158		531		554
Investments pledged for Federal Home Loan Bank of
Indianapolis (“FHLBI”) (4)		3,580		5,413		2,900		4,235
Total payables for collateral on investments	$	4,168	$	6,003	$	4,354	$	5,703

⁽¹⁾ We obtain collateral based upon contractual provisions with our counterparties.  These agreements take into consideration the counterparties’ credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that if exceeded result in the receipt of cash that is typically invested in cash and invested cash.  See Note 6 for additional information.

⁽²⁾ Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively.  We value collateral daily and obtain additional collateral when deemed appropriate.  The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities.

⁽³⁾ Our pledged securities under repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We generally obtain collateral in an amount between 80% to 95% of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary.  The cash received in our repurchase program is typically invested in fixed maturity AFS securities.

⁽⁴⁾ Our pledged investments for FHLBI are included in fixed maturity AFS securities and mortgage loans on real estate on our Consolidated Balance Sheets.  The collateral requirements are generally 105% to 115% of the fair value for fixed maturity AFS securities and 155% to 175% of the fair value for mortgage loans on real estate.  The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities.

Schedule Of Increase (Decrease) In Payables For Collateral On Investments

	For the Nine
	Months Ended
	September 30,
	2018			2017
Collateral payable for derivative investments	$	(382	)	$	52
Securities pledged under securities lending agreements		(105	)		(17	)
Securities pledged under repurchase agreements		(379	)		1
Investments pledged for FHLBI		680			(50	)
Total increase (decrease) in payables for collateral on investments	$	(186	)	$	(14	)

Schedule Of Securities Pledged By Contractual Maturity

	As of September 30, 2018
	Overnight and Continuous		Up to 30 Days		30 –  90 Days		Greater Than 90 Days		Total
Repurchase Agreements
Corporate bonds	$	-	$	-	$	-	$	152	$	152
Total		-		-		-		152		152
Securities Lending
Corporate bonds		117		-		-		-		117
Total		117		-		-		-		117
Total gross secured borrowings	$	117	$	-	$	-	$	152	$	269

	As of December 31, 2017
	Overnight and Continuous		Up to 30 Days		30 –  90 Days		Greater Than 90 Days		Total
Repurchase Agreements
Corporate bonds	$	-	$	100	$	281	$	150	$	531
Total		-		100		281		150		531
Securities Lending
Corporate bonds		222		-		-		-		222
Total		222		-		-		-		222
Total gross secured borrowings	$	222	$	100	$	281	$	150	$	753

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments [Abstract]

Outstanding Derivative Instruments With Off-Balance-Sheet Risks

	As of September 30, 2018						As of December 31, 2017
	Notional		Fair Value				Notional		Fair Value
	Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1,614	$	5	$	42	$	1,544	$	45	$	16
Foreign currency contracts (1)		2,085		104		71		1,804		79		79
Total cash flow hedges		3,699		109		113		3,348		124		95
Fair value hedges:
Interest rate contracts (1)		553		-		113		563		-		174
Non-Qualifying Hedges
Interest rate contracts (1)		90,138		318		233		72,937		657		127
Foreign currency contracts (1)		87		-		-		22		-		-
Equity market contracts (1)		24,753		536		139		30,918		562		557
Credit contracts (1)		-		-		-		52		-		-
Embedded derivatives:
Guaranteed living benefit ("GLB")
direct (2)		-		1,648		-		-		903		-
GLB ceded (2) (3)		-		35		1,681		-		51		954
Reinsurance related (4)		-		148		-		-		-		51
Indexed annuity and IUL contracts (2) (5)		-		44		1,571		-		11		1,418
Total derivative instruments	$	119,230	$	2,838	$	3,850	$	107,840	$	2,308	$	3,376

⁽¹⁾ Reported in derivative investments and other liabilities on our Consolidated Balance Sheets.

⁽²⁾ Reported in other assets on our Consolidated Balance Sheets.

⁽³⁾ Reported in other liabilities on our Consolidated Balance Sheets.

⁽⁴⁾ Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets.

⁽⁵⁾ Reported in future contract benefits on our Consolidated Balance Sheets.

Maturity Of The Notional Amounts Of Derivative Financial Instruments

	Remaining Life as of September 30, 2018
	Less Than		1 – 5		6 – 10		11 – 30		Over 30
	1 Year		Years		Years		Years		Years		Total
Interest rate contracts (1)	$	10,907	$	14,802	$	47,193	$	19,403	$	-	$	92,305
Foreign currency contracts (2)		141		256		635		1,130		10		2,172
Equity market contracts		18,103		3,401		115		14		3,120		24,753
Total derivative instruments
with notional amounts	$	29,151	$	18,459	$	47,943	$	20,547	$	3,130	$	119,230

⁽¹⁾ As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was February 2027.

⁽²⁾ As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049.

Change In Unrealized Gain On Derivative Instruments In Accumulated OCI

	For the Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	27		$	93
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period:
Cumulative effect from adoption of
new accounting standard		6			-
Cash flow hedges:
Interest rate contracts		(67	)		19
Foreign currency contracts		(19	)		46
Change in foreign currency exchange rate adjustment		69			(119	)
Change in DAC, VOBA, DSI and DFEL		4			(3	)
Income tax benefit (expense)		3			20
Less:
Reclassification adjustment for gains (losses)
included in net income (loss):
Cash flow hedges:
Interest rate contracts (1)		3			3
Foreign currency contracts (1)		18			12
Foreign currency contracts (2)		-			5
Associated amortization of DAC, VOBA, DSI and DFEL		(5	)		(1	)
Income tax benefit (expense)		(3	)		(7	)
Balance as of end-of-period	$	10		$	44

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

⁽²⁾ The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

Gains (Losses) On Derivative Instruments Recorded Within Income (Loss) From Continuing Operations

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1		$	1		$	3		$	3
Foreign currency contracts (1)		7			4			18			12
Foreign currency contracts (2)		-			-			-			5
Total cash flow hedges		8			5			21			20
Fair value hedges:
Interest rate contracts (1)		(2	)		(6	)		(11	)		(18	)
Interest rate contracts (2)		17			2			64			2
Total fair value hedges		15			(4	)		53			(16	)
Non-Qualifying Hedges
Interest rate contracts (2)		(167	)		18			(577	)		161
Foreign currency contracts (2)		-			1			2			1
Equity market contracts (2)		(199	)		(347	)		(280	)		(1,163	)
Equity market contracts (3)		9			6			10			20
Embedded derivatives:
GLB(2)		2			-			2			-
Reinsurance related (2)		26			(24	)		234			(113	)
Indexed annuity and IUL contracts (2)		(164	)		(46	)		(175	)		(230	)
Total derivative instruments	$	(470	)	$	(391	)	$	(710	)	$	(1,320	)

⁽¹⁾ Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

⁽²⁾ Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

⁽³⁾ Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

Gains (Losses) On Derivative Instruments Designated As Cash Flow Hedges

	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Offset to net investment income	$	8	$	5	$	21	$	15
Offset to realized gain (loss)		-		-		-		5

Open Credit Default Swap Liabilities

As of December 31, 2017
					Credit
		Reason	Nature		Rating of	Number			Maximum
		for	of	Underlying		of	Fair		Potential
Credit Contract Type	Maturity	Entering	Recourse		Obligation (1)	Instruments	Value (2)		Payout
Basket credit default swaps	12/20/2022	(3)	(4)		BBB+	1	$	1	$	52
						1	$	1	$	52

⁽¹⁾ Represents average credit ratings based on the midpoint of the applicable ratings among Moody’s, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings.

⁽²⁾ Broker quotes are used to determine the market value of our credit default swaps.

⁽³⁾ Credit default swaps were entered into in order to hedge the liability exposure on certain variable annuity products.

⁽⁴⁾ Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract.

Collateral Support Agreements

		As of			As of
	September 30,			December 31,
		2018			2017
Maximum potential payout		$	-		$	52
Less:  Counterparty thresholds			-			-
Maximum collateral potentially required to post		$	-		$	52

Schedule Of Collateral Amounts With Rights To Reclaim Or Obligation To Return Cash

	As of September 30, 2018					As of December 31, 2017
	Collateral		Collateral			Collateral		Collateral
	Posted by		Posted by			Posted by		Posted by
S&P	Counter-		LNL			Counter-		LNL
Credit	Party		(Held by			Party		(Held by
Rating of	(Held by		Counter-			(Held by		Counter-
Counterparty	LNL)		Party)			LNL)		Party)
AA-	$	36	$	(21	)	$	116	$	(1	)
A+		166		(78	)		178		(453	)
A		40		(1	)		170		(48	)
A-		76		-			237		-
BBB+		-		-			-		(4	)
	$	318	$	(100	)	$	701	$	(506	)

Schedule Of Offsetting Assets And Liabilities

		As of September 30, 2018
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total
Financial Assets
Gross amount of recognized assets		$	843			$	1,875	$	2,718
Gross amounts offset			(198	)			-		(198	)
Net amount of assets			645				1,875		2,520
Gross amounts not offset:
Cash collateral			(318	)			-		(318	)
Non-cash collateral			(80	)			-		(80	)
Net amount		$	247			$	1,875	$	2,122
Financial Liabilities
Gross amount of recognized liabilities		$	932			$	3,252	$	4,184
Gross amounts offset			(119	)			-		(119	)
Net amount of liabilities			813				3,252		4,065
Gross amounts not offset:
Cash collateral			(100	)			-		(100	)
Non-cash collateral			(420	)			-		(420	)
Net amount		$	293			$	3,252	$	3,545

		As of December 31, 2017
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total
Financial Assets
Gross amount of recognized assets		$	1,082			$	965	$	2,047
Gross amounts offset			(237	)			-		(237	)
Net amount of assets			845				965		1,810
Gross amounts not offset:
Cash collateral			(701	)			-		(701	)
Net amount		$	144			$	965	$	1,109
Financial Liabilities
Gross amount of recognized liabilities		$	1,037			$	2,423	$	3,460
Gross amounts offset			(261	)			-		(261	)
Net amount of liabilities			776				2,423		3,199
Gross amounts not offset:
Cash collateral			(506	)			-		(506	)
Net amount		$	270			$	2,423	$	2,693

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Guaranteed Benefit Features (Tables)

9 Months Ended

Sep. 30, 2018

Guaranteed Benefit Features [Abstract]

Information On Guaranteed Death Benefit Features

	As of			As of
	September 30,			December 31,
		2018 (1)			2017 (1)
Return of Net Deposits
Total account value		$	98,623		$	96,941
Net amount at risk (2)			93			81
Average attained age of contract holders			64 years			64 years
Minimum Return
Total account value		$	103		$	108
Net amount at risk (2)			16			18
Average attained age of contract holders			76 years			76 years
Guaranteed minimum return			5%			5%
Anniversary Contract Value
Total account value		$	26,308		$	26,596
Net amount at risk (2)			438			417
Average attained age of contract holders			71 years			70 years

⁽¹⁾ Our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive.

⁽²⁾ Represents the amount of death benefit in excess of the account balance that is subject to market fluctuations.

Summary Of Guaranteed Death Benefit Liabilities

	For the Nine
	Months Ended
	September 30,
	2018			2017
Balance as of beginning-of-year	$	100		$	110
Changes in reserves		18			4
Benefits paid		(11	)		(14	)
Balance as of end-of-period	$	107		$	100

Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts

		As of			As of
	September 30,			December 31,
		2018			2017
Asset Type
Domestic equity		$	61,732		$	59,647
International equity			20,598			20,837
Fixed income			40,529			40,626
Total		$	122,859		$	121,110
Percent of total variable annuity
separate account values			98%			99%

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Liability For Unpaid Claims (Tables)

9 Months Ended

Sep. 30, 2018

Liability For Unpaid Claims [Abstract]

Changes In Liability For Unpaid Claims

Changes in the liability for unpaid claims (in millions), were as follows:

	For the Nine
	Months Ended
	September 30,
	2018			2017
Balance as of beginning-of-year	$	2,222		$	2,242
Reinsurance recoverable		57			69
Net balance as of beginning-of-year		2,165			2,173
Business acquired (1)		2,842			-
Incurred related to:
Current year		1,640			909
Prior years
Interest		85			53
All other incurred		(159	)		(85	)
Total incurred		1,566			877
Paid related to:
Current year		(663	)		(458	)
Prior years		(796	)		(440	)
Total paid		(1,459	)		(898	)
Net balance as of end-of-period		5,114			2,152
Reinsurance recoverable		141			57
Balance as of end-of-period	$	5,255		$	2,209

⁽¹⁾ Represents Liberty group life and disability reserves, net, as of May 1, 2018, subject to finalization of acquisition date fair values.  See Note 3 for additional information.

Schedule Of Reconciliation

	As of September 30,
	2018		2017
Future contract benefits	$	33,209	$	21,703
Less:
Life and annuity reserves and claims due		26,580		18,030
Accident and health active life reserves		1,374		1,464
Liability for unpaid claims	$	5,255	$	2,209

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Shares and Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2018

Shares and Stockholders' Equity [Abstract]

Components And Changes In Accumulated OCI

	For the Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on AFS Securities
Balance as of beginning-of-year	$	3,283		$	1,687
Cumulative effect from adoption of new accounting standards		634			-
Unrealized holding gains (losses) arising during the period		(5,268	)		2,261
Change in foreign currency exchange rate adjustment		(68	)		112
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds		1,542			(467	)
Income tax benefit (expense)		804			(674	)
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(36	)		(27	)
Associated amortization of DAC, VOBA, DSI and DFEL		(11	)		(16	)
Income tax benefit (expense)		10			15
Balance as of end-of-period	$	964		$	2,947
Unrealized OTTI on AFS Securities
Balance as of beginning-of-year	$	39		$	22
(Increases) attributable to:
Cumulative effect from adoption of new accounting standards		9			-
Gross OTTI recognized in OCI during the period		-			(1	)
Decreases attributable to:
Changes in fair value, sales, maturities or other settlements of AFS securities		(7	)		28
Change in DAC, VOBA, DSI and DFEL		(9	)		(5	)
Income tax benefit (expense)		3			(8	)
Balance as of end-of-period	$	35		$	36
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	27		$	93
Cumulative effect from adoption of new accounting standard		6			-
Unrealized holding gains (losses) arising during the period		(86	)		65
Change in foreign currency exchange rate adjustment		69			(119	)
Change in DAC, VOBA, DSI and DFEL		4			(3	)
Income tax benefit (expense)		3			20
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		21			20
Associated amortization of DAC, VOBA, DSI and DFEL		(5	)		(1	)
Income tax benefit (expense)		(3	)		(7	)
Balance as of end-of-period	$	10		$	44
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year	$	(22	)	$	(20	)
Cumulative effect from adoption of new accounting standard		(5	)		-
Balance as of end-of-period	$	(27	)	$	(20	)

Schedule of Reclassifications Out Of AOCI

	For the Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on AFS Securities
Gross reclassification	$	(36	)	$	(27	)	Total realized gain (loss)
Associated amortization of DAC,
VOBA, DSI and DFEL		(11	)		(16	)	Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		(47	)		(43	)	operations before taxes
Income tax benefit (expense)		10			15		Federal income tax expense (benefit)
Reclassification, net of income tax	$	(37	)	$	(28	)	Net income (loss)
Unrealized OTTI on AFS Securities
Gross reclassification	$	(1	)	$	6		Total realized gain (loss)
Change in DAC, VOBA, DSI and DFEL		-			(1	)	Total realized gain (loss)
Reclassification before income							Income (loss) from continuing
tax benefit (expense)		(1	)		5		operations before taxes
Income tax benefit (expense)		-			(2	)	Federal income tax expense (benefit)
Reclassification, net of income tax	$	(1	)	$	3		Net income (loss)
Unrealized Gain (Loss) on Derivative Instruments
Gross reclassifications:
Interest rate contracts	$	3		$	3		Net investment income
Foreign currency contracts		18			12		Net investment income
Foreign currency contracts		-			5		Total realized gain (loss)
Total gross reclassifications		21			20
Associated amortization of DAC,
VOBA, DSI and DFEL		(5	)		(1	)	Commissions and other expenses
Reclassifications before income							Income (loss) from continuing
tax benefit (expense)		16			19		operations before taxes
Income tax benefit (expense)		(3	)		(7	)	Federal income tax expense (benefit)
Reclassifications, net of income tax	$	13		$	12		Net income (loss)

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Realized Gain (Loss) (Tables)

9 Months Ended

Sep. 30, 2018

Realized Gain (Loss) [Abstract]

Details underlying realized (gain) loss

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Total realized gain (loss) related to certain investments (1)	$	(11	)	$	(19	)	$	(48	)	$	(48	)
Realized gain (loss) on the mark-to-market on certain instruments (2)		13			(28	)		219			(110	)
Indexed annuity and IUL contracts net derivatives results: (3)
Gross gain (loss)		(7	)		-			(14	)		(17	)
Associated amortization of DAC, VOBA, DSI and DFEL		(2	)		(1	)		(2	)		(1	)
GLB fees ceded to LNBAR and attributed fees:
Gross gain (loss)		(47	)		(45	)		(138	)		(130	)
Associated amortization of DAC, VOBA, DSI and DFEL		(8	)		(8	)		(24	)		(24	)
Total realized gain (loss)	$	(62	)	$	(101	)	$	(7	)	$	(330	)

⁽¹⁾ See “Realized Gain (Loss) Related to Certain Investments” section in Note 5.

⁽²⁾ Represents changes in the fair values of certain derivative investments (not including those associated with our variable and indexed annuity and IUL contracts net derivatives results), reinsurance related embedded derivatives and trading securities.

⁽³⁾ Represents the net difference between the change in the fair value of the S&P 500 Index ® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products.

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value of Financial Instruments [Abstract]

Carrying And Estimated Fair Values Of Financial Instruments

	As of September 30, 2018						As of December 31, 2017
	Carrying			Fair			Carrying			Fair
	Value			Value			Value			Value
Assets
AFS securities:
Fixed maturity securities	$	91,940		$	91,940		$	93,340		$	93,340
Equity securities		-			-			246			246
Trading securities		1,358			1,358			1,533			1,533
Equity securities		112			112			-			-
Mortgage loans on real estate		12,482			12,158			10,662			10,773
Derivative investments (1)		645			645			845			845
Other investments		1,963			1,963			2,006			2,006
Cash and invested cash		1,207			1,207			947			947
Reinsurance related embedded derivatives		148			148			-			-
Other assets:
GLB direct embedded derivatives		1,648			1,648			903			903
GLB ceded embedded derivatives		35			35			51			51
Indexed annuity ceded embedded derivatives		44			44			11			11
Separate account assets		147,692			147,692			144,219			144,219
Liabilities
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(1,571	)		(1,571	)		(1,418	)		(1,418	)
Other contract holder funds:
Remaining guaranteed interest and similar contracts		(562	)		(562	)		(592	)		(592	)
Account values of certain investment contracts		(33,648	)		(34,540	)		(32,332	)		(36,161	)
Short-term debt		(226	)		(226	)		(10	)		(10	)
Long-term debt		(2,388	)		(2,565	)		(2,374	)		(2,677	)
Reinsurance related embedded derivatives		-			-			(51	)		(51	)
Other liabilities:
Derivative liabilities (1)		(280	)		(280	)		(455	)		(455	)
GLB ceded embedded derivatives		(1,681	)		(1,681	)		(954	)		(954	)

⁽¹⁾ We have master netting agreements with each of our derivative counterparties, which allow for the netting of our derivative asset and liability positions by counterparty.

Fair Value Of Assets And Liabilities On A Recurring Basis

		As of September 30, 2018
		Quoted
		Prices
		in Active
	Markets for			Significant				Significant
		Identical		Observable				Unobservable				Total
		Assets			Inputs				Inputs			Fair
		(Level 1)			(Level 2)				(Level 3)			Value
Assets
Investments:
Fixed maturity AFS securities:
Corporate bonds		$	-		$	73,698			$	5,571		$	79,269
ABS			-			936				31			967
U.S. government bonds			360			18				-			378
Foreign government bonds			-			347				108			455
RMBS			-			3,091				7			3,098
CMBS			-			724				23			747
CLOs			-			1,311				51			1,362
State and municipal bonds			-			5,066				-			5,066
Hybrid and redeemable preferred securities			73			448				77			598
Trading securities			43			1,297				18			1,358
Equity securities			28			58				26			112
Derivative investments (1)			-			426				535			961
Cash and invested cash			-			1,207				-			1,207
Reinsurance related embedded derivatives			-			148				-			148
Other assets:
GLB direct embedded derivatives			-			-				1,648			1,648
GLB ceded embedded derivatives			-			-				35			35
Indexed annuity ceded embedded derivatives			-			-				44			44
Separate account assets			764			146,894				-			147,658
Total assets		$	1,268		$	235,669			$	8,174		$	245,111
Liabilities
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		$	-		$	-			$	(1,571	)	$	(1,571	)
Other liabilities:
Derivative liabilities (1)			-			(415	)			(181	)		(596	)
GLB ceded embedded derivatives			-			-				(1,681	)		(1,681	)
Total liabilities		$	-		$	(415	)		$	(3,433	)	$	(3,848	)

		As of December 31, 2017
		Quoted
		Prices
		in Active
	Markets for			Significant				Significant
		Identical		Observable				Unobservable				Total
		Assets			Inputs				Inputs			Fair
		(Level 1)			(Level 2)				(Level 3)			Value
Assets
Investments:
Fixed maturity AFS securities:
Corporate bonds		$	-		$	75,810			$	5,350		$	81,160
ABS			-			927				26			953
U.S. government bonds			522			6				5			533
Foreign government bonds			-			336				110			446
RMBS			-			3,246				12			3,258
CMBS			-			593				6			599
CLOs			-			717				91			808
State and municipal bonds			-			4,959				-			4,959
Hybrid and redeemable preferred securities			70			478				76			624
Equity AFS securities			28			57				161			246
Trading securities			73			1,411				49			1,533
Derivative investments (1)			-			740				603			1,343
Cash and invested cash			-			947				-			947
Other assets:
GLB direct embedded derivatives			-			-				903			903
GLB ceded embedded derivatives			-			-				51			51
Indexed annuity ceded embedded derivatives			-			-				11			11
Separate account assets			814			143,405				-			144,219
Total assets		$	1,507		$	233,632			$	7,454		$	242,593
Liabilities
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		$	-		$	-			$	(1,418	)	$	(1,418	)
Reinsurance related embedded derivatives			-			(51	)			-			(51	)
Other liabilities:
Derivative liabilities (1)			-			(380	)			(573	)		(953	)
GLB ceded embedded derivatives			-			-				(954	)		(954	)
Total liabilities		$	-		$	(431	)		$	(2,945	)	$	(3,376	)

⁽¹⁾ Derivative investment assets and liabilities presented within the fair value hierarchy are presented on a gross basis by derivative type and not on a master netting basis by counterparty.

Fair Value Measured On A Recurring Basis Reconciliation

	For the Three Months Ended September 30, 2018
							Gains		Issuances,				Transfers
				Items			(Losses)			Sales,			Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (3)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	5,522		$	1		$	(30	)	$	109		$	(31	)	$	5,571
ABS		31			-			-			-			-			31
Foreign government bonds		108			-			-			-			-			108
RMBS		-			-			-			7			-			7
CMBS		5			-			-			18			-			23
CLOs		145			-			-			17			(111	)		51
Hybrid and redeemable
preferred securities		78			-			(1	)		-			-			77
Trading securities		22			-			-			2			(6	)		18
Equity securities		26			-			-			-			-			26
Derivative investments		93			(115	)		(55	)		431			-			354
Other assets: (6)
GLB direct embedded derivatives		1,248			400			-			-			-			1,648
GLB ceded embedded derivatives		41			(6	)		-			-			-			35
Indexed annuity ceded embedded derivatives		29			4			-			11			-			44
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,400	)		(164	)		-			(7	)		-			(1,571	)
Other liabilities – GLB ceded embedded
derivatives (6)		(1,288	)		(393	)		-			-			-			(1,681	)
Total, net	$	4,660		$	(273	)	$	(86	)	$	588		$	(148	)	$	4,741

	For the Three Months Ended September 30, 2017
							Gains		Issuances,				Transfers
				Items			(Losses)			Sales			Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (3)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	4,953		$	4		$	34		$	(236	)	$	59		$	4,814
ABS		42			-			-			-			(15	)		27
U.S. government bonds		5			-			-			-			-			5
Foreign government bonds		109			-			1			-			-			110
RMBS		7			-			-			6			-			13
CMBS		21			-			-			(1	)		(14	)		6
CLOs		28			-			-			15			(28	)		15
Hybrid and redeemable
preferred securities		82			-			3			-			(9	)		76
Equity AFS securities		183			-			(1	)		9			(1	)		190
Trading securities		59			(1	)		-			(10	)		1			49
Derivative investments		155			(14	)		7			(85	)		-			63
Other assets: (6)
GLB direct embedded derivatives		298			272			-			-			-			570
GLB ceded embedded derivatives		85			(32	)		-			-			-			53
Indexed annuity ceded embedded derivatives		-			-			-			3			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,268	)		(47	)		-			(3	)		-			(1,318	)
Other liabilities – GLB ceded embedded
derivatives (6)		(383	)		(240	)		-			-			-			(623	)
Total, net	$	4,376		$	(58	)	$	44		$	(302	)	$	(7	)	$	4,053

	For the Nine Months Ended September 30, 2018
							Gains		Issuances,				Transfers
				Items			(Losses)		Sales,				Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net (2)			Net (3)(4)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	5,350		$	7		$	(136	)	$	411		$	(61	)	$	5,571
ABS		26			-			-			5			-			31
U.S. government bonds		5			-			-			(5	)		-			-
Foreign government bonds		110			-			(2	)		-			-			108
RMBS		12			-			-			7			(12	)		7
CMBS		6			1			-			37			(21	)		23
CLOs		91			-			-			164			(204	)		51
Hybrid and redeemable
preferred securities		76			-			1			-			-			77
Equity AFS securities		161			-			-			-			(161	)		-
Trading securities		49			(5	)		-			(20	)		(6	)		18
Equity securities		-			-			-			-			26			26
Derivative investments		30			106			(119	)		337			-			354
Other assets: (6)
GLB direct embedded derivatives		903			745			-			-			-			1,648
GLB ceded embedded derivatives		51			(16	)		-			-			-			35
Indexed annuity ceded embedded derivatives		11			4			-			29			-			44
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,418	)		(175	)		-			22			-			(1,571	)
Other liabilities – GLB ceded embedded
derivatives (6)		(954	)		(727	)		-			-			-			(1,681	)
Total, net	$	4,509		$	(60	)	$	(256	)	$	987		$	(439	)	$	4,741

	For the Nine Months Ended September 30, 2017
							Gains		Issuances,				Transfers
				Items			(Losses)		Sales,				Into or
				Included			in		Maturities,				Out
	Beginning			in			OCI		Settlements,				of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (3)			Value
Investments: (5)
Fixed maturity AFS securities:
Corporate bonds	$	4,809		$	14		$	152		$	(350	)	$	189		$	4,814
ABS		33			-			1			-			(7	)		27
U.S. government bonds		-			-			-			-			5			5
Foreign government bonds		111			-			(1	)		-			-			110
RMBS		3			-			-			10			-			13
CMBS		7			-			1			54			(56	)		6
CLOs		68			-			-			33			(86	)		15
State and municipal bonds		-			(1	)		-			-			1			-
Hybrid and redeemable
preferred securities		76			-			14			-			(14	)		76
Equity AFS securities		177			1			(2	)		15			(1	)		190
Trading securities		65			1			8			(26	)		1			49
Derivative investments		(93	)		(25	)		94			87			-			63
Other assets: (6)
GLB direct embedded derivatives		-			570			-			-			-			570
GLB ceded embedded derivatives		371			(318	)		-			-			-			53
Indexed annuity ceded embedded derivatives		-			-			-			3			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives (6)		(1,139	)		(230	)		-			51			-			(1,318	)
Other liabilities: (6)
GLB direct embedded derivatives		(371	)		371			-			-			-			-
GLB ceded embedded derivatives		-			(623	)		-			-			-			(623	)
Total, net	$	4,117		$	(240	)	$	267		$	(123	)	$	32		$	4,053

⁽¹⁾ The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 6).

⁽²⁾ Net issuances, sales, maturities, settlements, calls, net include financial instruments acquired from Liberty Life as follows: corporate bonds of $67million and ABS of$17 million.

⁽³⁾ Transfers into or out of Level 3 for AFS and trading securities are displayed at amortized cost as of the beginning-of-year.  For AFS and trading securities, the difference between beginning-of-period amortized cost and beginning-of-period fair value was included in OCI and earnings, respectively, in the prior period.

⁽⁴⁾ Transfers into or out of Level 3 for FHLB stock between equity securities and other investments at cost on our Consolidated Balance Sheets.

⁽⁵⁾ Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss).  Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

⁽⁶⁾ Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

Schedule Of Investment Holdings Movements

	For the Three Months Ended September 30, 2018
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	186		$	(3	)	$	(1	)	$	(65	)	$	(8	)	$	109
RMBS		7			-			-			-			-			7
CMBS		18			-			-			-			-			18
CLOs		17			-			-			-			-			17
Trading securities		2			-			-			-			-			2
Derivative investments		96			455			(120	)		-			-			431
Other assets – indexed annuity ceded
embedded derivatives		11			-			-			-			-			11
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(83	)		-			-			76			-			(7	)
Total, net	$	254		$	452		$	(121	)	$	11		$	(8	)	$	588

	For the Three Months Ended September 30, 2017
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	206		$	(354	)	$	(19	)	$	(43	)	$	(26	)	$	(236	)
RMBS		6			-			-			-			-			6
CMBS		-			-			-			(1	)		-			(1	)
CLOs		15			-			-			-			-			15
Equity AFS securities		10			(1	)		-			-			-			9
Trading securities		-			(10	)		-			-			-			(10	)
Derivative investments		50			(23	)		(112	)		-			-			(85	)
Other assets – indexed annuity ceded
embedded derivatives		3			-			-			-			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(14	)		-			-			11			-			(3	)
Total, net	$	276		$	(388	)	$	(131	)	$	(33	)	$	(26	)	$	(302	)

	For the Nine Months Ended September 30, 2018
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	882		$	(163	)	$	(3	)	$	(236	)	$	(69	)	$	411
ABS		22			(17	)		-			-			-			5
U.S. government bonds		-			(5	)		-			-			-			(5	)
RMBS		7			-			-			-			-			7
CMBS		39			-			-			(2	)		-			37
CLOs		164			-			-			-			-			164
Trading securities		4			(24	)		-			-			-			(20	)
Equity securities		1			(1	)		-			-			-			-
Derivative investments		225			460			(348	)		-			-			337
Other assets – indexed annuity ceded
embedded derivatives		29			-			-			-			-			29
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(158	)		-			-			180			-			22
Total, net	$	1,215		$	250		$	(351	)	$	(58	)	$	(69	)	$	987

	For the Nine Months Ended September 30, 2017
	Issuances			Sales			Maturities		Settlements				Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	438		$	(419	)	$	(66	)	$	(169	)	$	(134	)	$	(350	)
RMBS		10			-			-			-			-			10
CMBS		55			-			-			(1	)		-			54
CLOs		33			-			-			-			-			33
Equity AFS securities		18			(3	)		-			-			-			15
Trading securities		2			(27	)		-			(1	)		-			(26	)
Derivative investments		145			243			(301	)		-			-			87
Other assets – indexed annuity ceded
embedded derivatives		3			-			-			-			-			3
Future contract benefits – indexed annuity
and IUL contracts embedded derivatives		(45	)		-			-			96			-			51
Total, net	$	659		$	(206	)	$	(367	)	$	(75	)	$	(134	)	$	(123	)

Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Derivative investments	$	(1	)	$	(83	)	$	105		$	(159	)
Embedded derivatives:
Indexed annuity and IUL contracts		(11	)		2			(18	)		(13	)
Other assets – GLB direct and ceded		576			428			1,264			1,340
Other liabilities – GLB ceded		(576	)		(428	)		(1,264	)		(1,340	)
Total, net (1)	$	(12	)	$	(81	)	$	87		$	(172	)

⁽¹⁾ Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

Components Of The Transfers In And Out Of Level 3

	For the Three								For the Three
	Months Ended								Months Ended
	September 30, 2018								September 30, 2017
	Transfers		Transfers						Transfers		Transfers
	Into		Out of						Into		Out of
	Level 3		Level 3			Total			Level 3		Level 3			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	11	$	(42	)	$	(31	)	$	116	$	(57	)	$	59
ABS		-		-			-			-		(15	)		(15	)
CMBS		-		-			-			-		(14	)		(14	)
CLOs		-		(111	)		(111	)		-		(28	)		(28	)
Hybrid and redeemable preferred
securities		-		-			-			-		(9	)		(9	)
Equity AFS securities		-		-			-			-		(1	)		(1	)
Trading securities		-		(6	)		(6	)		1		-			1
Total, net	$	11	$	(159	)	$	(148	)	$	117	$	(124	)	$	(7	)

	For the Nine								For the Nine
	Months Ended								Months Ended
	September 30, 2018								September 30, 2017
	Transfers		Transfers						Transfers		Transfers
	Into		Out of						Into		Out of
	Level 3		Level 3			Total			Level 3		Level 3			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	54	$	(115	)	$	(61	)	$	277	$	(88	)	$	189
ABS		-		-			-			14		(21	)		(7	)
U.S. government bonds		-		-			-			5		-			5
RMBS		-		(12	)		(12	)		-		-			-
CMBS		-		(21	)		(21	)		3		(59	)		(56	)
CLOs		-		(204	)		(204	)		30		(116	)		(86	)
State and municipal bonds		-		-			-			2		(1	)		1
Hybrid and redeemable preferred
securities		-		-			-			-		(14	)		(14	)
Equity AFS securities		-		(161	)		(161	)		-		(1	)		(1	)
Trading securities		-		(6	)		(6	)		4		(3	)		1
Equity securities		26		-			26			-		-			-
Total, net	$	80	$	(519	)	$	(439	)	$	335	$	(303	)	$	32

Fair Value Inputs Quantitative Information

	Fair			Valuation	Significant	Assumption or
	Value			Technique	Unobservable Inputs	Input Ranges
Assets
Investments:
Fixed maturity AFS and trading
securities:
Corporate bonds	$	2,445		Discounted cash flow	Liquidity/duration adjustment (1)	0.5	%	-	24.8	%
ABS		23		Discounted cash flow	Liquidity/duration adjustment (1)	3.0	%	-	3.0	%
Foreign government bonds		78		Discounted cash flow	Liquidity/duration adjustment (1)	1.1	%	-	2.8	%
Hybrid and redeemable
preferred securities		4		Discounted cash flow	Liquidity/duration adjustment (1)	1.8	%	-	1.8	%
Equity securities		21		Discounted cash flow	Liquidity/duration adjustment (1)	4.5	%	-	5.1	%
Other assets:
GLB direct and ceded
embedded derivatives		1,683		Discounted cash flow	Long-term lapse rate (2)	1	%	-	30	%
					Utilization of guaranteed withdrawals (3)	85	%	-	100	%
					Claims utilization factor (4)	60	%	-	100	%
					Premiums utilization factor (4)	80	%	-	115	%
					NPR (5)	0.01	%	-	0.32	%
					Mortality rate (6)				(8)
					Volatility (7)	1	%	-	29	%
Indexed annuity ceded
embedded derivatives		44		Discounted cash flow	Lapse rate (2)	1	%	-	9	%
					Mortality rate (6)				(8)
Liabilities
Future contract benefits – indexed
annuity and IUL contracts
embedded derivatives	$	(1,571	)	Discounted cash flow	Lapse rate (2)	1	%	-	9	%
					Mortality rate (6)				(8)
Other liabilities – GLB ceded
embedded derivatives		(1,681	)	Discounted cash flow	Long-term lapse rate (2)	1	%	-	30	%
					Utilization of guaranteed withdrawals (3)	85	%	-	100	%
					Claims utilization factor (4)	60	%	-	100	%
					Premiums utilization factor (4)	80	%	-	115	%
					NPR (5)	0.01	%	-	0.32	%
					Mortality rate (6)				(8)
					Volatility (7)	1	%	-	29	%

⁽¹⁾ The liquidity/duration adjustment input represents an estimated market participant composite of adjustments attributable to liquidity premiums, expected durations, structures and credit quality that would be applied to the market observable information of an investment.

⁽²⁾ The lapse rate input represents the estimated probability of a contract surrendering during a year, and thereby forgoing any future benefits.  The range for indexed annuity and IUL contracts represents the lapse rates during the surrender charge period.

⁽³⁾ The utilization of guaranteed withdrawals input represents the estimated percentage of contract holders that utilize the guaranteed withdrawal feature.

⁽⁴⁾ The utilization factors are applied to the present value of claims or premiums, as appropriate, in the GLB reserve calculation to estimate the impact of inefficient withdrawal behavior, including taking less than or more than the maximum guaranteed withdrawal.

⁽⁵⁾ The NPR input represents the estimated additional credit spread that market participants would apply to the market observable discount rate when pricing a contract.

⁽⁶⁾ The mortality rate input represents the estimated probability of when an individual belonging to a particular group, categorized according to age or some other factor such as gender, will die.

⁽⁷⁾ The volatility input represents overall volatilities assumed for the underlying variable annuity funds, which include a mixture of equity and fixed-income assets.  Fair value of the variable annuity GLB embedded derivatives would increase if higher volatilities were used for valuation.

⁽⁸⁾ The mortality rate is based on a combination of company and industry experience, adjusted for improvement factors.

XML

Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Information [Abstract]

Reconciliation Of Revenue From Segments To Consolidated

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues
Operating revenues:
Annuities	$	1,031		$	986		$	3,032		$	2,954
Retirement Plan Services		290			288			867			853
Life Insurance		1,647			1,515			4,770			4,537
Group Protection		1,128			564			2,617			1,646
Other Operations		50			60			158			204
Excluded realized gain (loss), pre-tax		(107	)		(144	)		(149	)		(459	)
Total revenues	$	4,039		$	3,269		$	11,295		$	9,735

Reconciliation Of Income (Loss) From Operations By Segment To Consolidated Net Income (Loss)

	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Net Income (Loss)
Income (loss) from operations:
Annuities	$	265		$	288		$	824		$	813
Retirement Plan Services		37			33			118			103
Life Insurance		143			119			395			372
Group Protection		62			41			136			82
Other Operations		(46	)		-			(100	)		(14	)
Excluded realized gain (loss), after-tax		(84	)		(93	)		(118	)		(298	)
Gain (loss) on early extinguishment of debt, after-tax		-			(3	)		-			(3	)
Net impact from the Tax Cuts and Jobs Act		9			-			(4	)		-
Acquisition and integration costs related to mergers
and acquisitions, after-tax		(8	)		-			(47	)		-
Net income (loss)	$	378		$	385		$	1,204		$	1,055

Schedule Of Revenue From Contracts With Customers

	For the Three Months Ended September 30, 2018
			Retirement
			Plan		Life		Group		Other
	Annuities		Services		Insurance		Protection		Operations		Total
Revenue from Contracts with Customers
Fee income	$	137	$	42	$	6	$	-	$	-	$	185
Other revenues		93		5		2		41		-		141
Total revenue from contracts
with customers	$	230	$	47	$	8	$	41	$	-	$	326
Timing of Revenue Recognition
Satisfaction of performance obligation:
Transferred at a point in time	$	-	$	1	$	1	$	-	$	-	$	2
Transferred over time		230		46		7		41		-		324
Total revenue from contracts
with customers	$	230	$	47	$	8	$	41	$	-	$	326

	For the Nine Months Ended September 30, 2018
			Retirement
			Plan		Life		Group		Other
	Annuities		Services		Insurance		Protection		Operations		Total
Revenue from Contracts with Customers
Fee income	$	403	$	126	$	17	$	-	$	-	$	546
Other revenues		278		14		7		73		-		372
Total revenue from contracts
with customers	$	681	$	140	$	24	$	73	$	-	$	918
Timing of Revenue Recognition
Satisfaction of performance obligation:
Transferred at a point in time	$	3	$	4	$	5	$	-	$	-	$	12
Transferred over time		678		136		19		73		-		906
Total revenue from contracts
with customers	$	681	$	140	$	24	$	73	$	-	$	918

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Nature of Operations and Basis of Presentation (Details)	9 Months Ended
	Sep. 30, 2018
Lincoln Life & Annuity Company of New York [Member]
Product Information [Line Items]
Ownership percent	100.00%

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New Accounting Standards (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
AFS Equity securities					$ 246
Equity Securities, FV-NI	$ 112		$ 112
Federal rate	21.00%	35.00%	21.00%	35.00%	35.00%
Accounting Standards Update 2016-01 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
AFS Equity securities					$ 246
Equity Securities, FV-NI					110
Accounting Standards Update 2016-01 [Member] | Scenario, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
AFS Equity securities					136
Accounting Standards Update 2018-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reclassification from AOCI to retained earnings					$ 644

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Acquisition (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		5 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Business Acquisition [Line Items]
Cash received from sale				$ 423
Acquisition related costs	$ 10			60
Revenues	4,039	$ 3,269		11,295	$ 9,735
Net income (loss)	$ 378	$ 385		$ 1,204	$ 1,055
Reinsurance ceded			$ 20,000			$ 6,500
Liberty Transaction [Member]
Business Acquisition [Line Items]
Acquisition agreement date				May 01, 2018
Capital stock acquired, percent	100.00%		100.00%	100.00%
Excess capital in Liberty Life (extraordinary dividend)				$ 1,800
Purchase price				$ 1,500
Revenues			$ 929
Net income (loss)			$ 26

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Acquisition (Schedule Of Fair Value Of Net Assets Acquired) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Goodwill	$ 1,757	$ 1,368
Liberty Transaction [Member]
Business Acquisition [Line Items]
Investments	2,493
Mortgage loans on real estate	658
Cash and invested cash	107
Reinsurance recoverables	76
Premiums and fees receivable	83
Accrued investment income	24
Other intangible assets acquired	640
Other assets acquired	142
Separate account assets	99
Total assets acquired	4,322
Future contract benefits	2,930
Other contract holder funds	46
Other liabilities acquired	120
Separate account liabilities	99
Total liabilities assumed	3,195
Net identifiable assets acquired	1,127
Goodwill	390
Net assets acquired	$ 1,517

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Acquisition (Schedule Of Fair Value Of Identifiable Intangible Assets Acquired) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Schedule Of Intangibles Acquired [Line Items]
Total identifiable intangible assets	$ 640
Insurance Licenses [Member]
Schedule Of Intangibles Acquired [Line Items]
Indefinite intangibles acquired	3
Customer Relationships [Member]
Schedule Of Intangibles Acquired [Line Items]
Finite intangibles acquired	$ 576
Weighted Average Amortization Period	20 years
Distribution Agreements [Member]
Schedule Of Intangibles Acquired [Line Items]
Finite intangibles acquired	$ 31
Weighted Average Amortization Period	13 years
Business Acquired [Member]
Schedule Of Intangibles Acquired [Line Items]
Finite intangibles acquired	$ 30
Weighted Average Amortization Period	3 years

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Acquisition (Schedule Of Pro Forma Information) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Acquisition [Abstract]
Revenue	$ 4,038	$ 3,747	$ 12,034	$ 11,177
Net Income	$ 385	$ 370	$ 1,253	$ 1,013

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Variable Interest Entities (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Variable Interest Entity [Line Items]
Carrying Amounts of our Investments in LPs and LLCs, As Recognized In Other Investments on our Consolidated Balance Sheets	$ 1,963		$ 2,006
Income Tax Credits And Other Tax Benefits From Qualified Affordable Housing Projects	1	$ 2
Limited Partnerships and Limited Liability Companies [Member]
Variable Interest Entity [Line Items]
Carrying Amounts of our Investments in LPs and LLCs, As Recognized In Other Investments on our Consolidated Balance Sheets	1,600		1,400
Carrying Amount Of Investments In Qualified Affordable Housing Projects	$ 25		$ 31

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Investments (Narrative) (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018 USD ($) item	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) item	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) item
Investment [Line Items]
Increase (decrease) in gross AFS securities unrealized losses			$ 1,400
Number of partnerships in alternative investment portfolio | item	236		236		221
Alternative investments as a percentage of overall invested assets			1.00%		1.00%
Portion of loss recognized in other comprehensive income		$ 1		$ 1
Fair value of collateral received that we are permitted to sell or re-pledge	528		528
Securities that have been re-pledged	502		502
Investment commitments	1,500		1,500
Investment commitments for limited partnerships	815		815
Investment commitments for mortgage loans on real estate	317		317
Investment commitments for private placements	331		331
Maximum [Member]
Investment [Line Items]
Portion of loss recognized in other comprehensive income	1		1
Federal Home Loan Mortgage Corporation [Member] | Invested Assets [Member]
Investment [Line Items]
Fair value	1,400		$ 1,400		$ 1,200
Concentration risk, percentage			1.00%		1.00%
Fannie Mae [Member] | Invested Assets [Member]
Investment [Line Items]
Fair value	1,200		$ 1,200		$ 930
Concentration risk, percentage			1.00%		1.00%
Banking Industry [Member] | Invested Assets [Member]
Investment [Line Items]
Fair value	15,500		$ 15,500
Concentration risk, percentage			14.00%
Consumer Non-Cyclical Industry [Member] | Invested Assets [Member]
Investment [Line Items]
Fair value	$ 13,800		$ 13,800		$ 14,300
Concentration risk, percentage			12.00%		13.00%
Utilities Industry [Member] | Invested Assets [Member]
Investment [Line Items]
Fair value					$ 13,800
Concentration risk, percentage					12.00%
Mortgage Loans On Real Estate [Member] | Geographic Concentration Risk [Member] | California [Member]
Investment [Line Items]
Concentration risk, percentage			22.00%		21.00%
Mortgage Loans On Real Estate [Member] | Geographic Concentration Risk [Member] | Texas [Member]
Investment [Line Items]
Concentration risk, percentage			12.00%		12.00%
Corporate Bonds [Member]
Investment [Line Items]
Percentage of fair value rated as investment grade	96.00%		96.00%		96.00%
Amortized cost of portfolio rated below investment grade	$ 3,200		$ 3,200		$ 3,400
Fair value of portfolio rated below investment grade	$ 3,100		$ 3,100		$ 3,400
ABS [Member]
Investment [Line Items]
Percentage of fair value rated as investment grade	98.00%		98.00%		98.00%
Amortized cost of portfolio rated below investment grade	$ 43		$ 43		$ 43
Fair value of portfolio rated below investment grade	$ 41		$ 41		$ 41
MBS [Member]
Investment [Line Items]
Projected default rate on existing delinquencies on MBS (low end of range)	10.00%		10.00%		10.00%
Projected default rate on existing delinquencies on MBS (high end of range)	100.00%		100.00%		100.00%
Severity of second lien loans	100.00%		100.00%		100.00%
Severity of first lien loans	30.00%		30.00%		30.00%

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Investments (Reconciliation Of Available-For-Sale Securities From Cost Basis To Fair Value) (Details) - USD ($) $ in Millions		Sep. 30, 2018	Dec. 31, 2017
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		$ 89,642	$ 86,049
Gross unrealized gains		4,098	7,909
Gross unrealized losses		1,854	433
OTTI	[1]	(54)	(61)
Fair value		91,940	93,586
Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		89,642	85,802
Gross unrealized gains			7,893
Gross unrealized losses			416
OTTI	[1]		(61)
Fair value		91,940	93,340
Equity AFS Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost			247
Gross unrealized gains			16
Gross unrealized losses			17
Fair value			246
Corporate Bonds [Member] | Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		77,732	74,921
Gross unrealized gains		3,182	6,573
Gross unrealized losses		1,654	341
OTTI	[1]	(9)	(7)
Fair value		79,269	81,160
ABS [Member] | Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		915	882
Gross unrealized gains		41	51
Gross unrealized losses		6	6
OTTI	[1]	(17)	(26)
Fair value		967	953
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		363	497
Gross unrealized gains		21	37
Gross unrealized losses		6	1
Fair value		378	533
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		415	391
Gross unrealized gains		40	55
Fair value		455	446
RMBS [Member] | Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		3,073	3,125
Gross unrealized gains		108	148
Gross unrealized losses		103	36
OTTI	[1]	(20)	(21)
Fair value		3,098	3,258
CMBS [Member] | Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		764	589
Gross unrealized gains		2	10
Gross unrealized losses		22	2
OTTI	[1]	(3)	(2)
Fair value		747	599
CLOs [Member] | Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		1,371	803
Gross unrealized gains			2
Gross unrealized losses		14	2
OTTI	[1]	(5)	(5)
Fair value		1,362	808
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		4,447	4,033
Gross unrealized gains		644	932
Gross unrealized losses		25	6
Fair value		5,066	4,959
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost		562	561
Gross unrealized gains		60	85
Gross unrealized losses		24	22
Fair value		$ 598	$ 624

[1] Includes unrealized (gains) and losses on impaired securities related to changes in the fair value of such securities subsequent to the impairment measurement date.

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Investments (Available-For-Sale Securities By Contractual Maturities) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Available-for-sale Securities, Debt Maturities, Amortized Cost
Amortized cost	$ 89,642	$ 86,049
Available-for-sale Securities, Debt Maturities, Fair Value
Fair Value	91,940	93,586
Fixed Maturity Securities [Member]
Available-for-sale Securities, Debt Maturities, Amortized Cost
Amortized cost	89,642	85,802
Available-for-sale Securities, Debt Maturities, Fair Value
Fair Value	91,940	$ 93,340
Fixed Maturity AFS Securities Excluding Structured Securities [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Debt Maturities, Amortized Cost
Due in one year or less	3,562
Due after one year through five years	16,817
Due after five years through ten years	17,617
Due after ten years	45,523
Amortized cost	83,519
Available-for-sale Securities, Debt Maturities, Fair Value
Due in one year or less	3,599
Due after one year through five years	16,894
Due after five years through ten years	17,561
Due after ten years	47,712
Fair Value	85,766
Structured Securities [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Debt Maturities, Amortized Cost
Amortized cost	6,123
Available-for-sale Securities, Debt Maturities, Fair Value
Fair Value	$ 6,174

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Investments (Fair Value And Gross Unrealized Losses In A Continuous Unrealized Loss Position) (Details) $ in Millions	Sep. 30, 2018 USD ($) security	Dec. 31, 2017 USD ($) security
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	$ 35,307	$ 5,684
Greater Than Twelve Months	5,510	5,820
Fair Value - Total	40,817	11,504
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	1,234	87
Greater Than Twelve Months	631	358
Gross Unrealized Losses - Total	$ 1,865	$ 445
Total number of AFS securities in an unrealized loss position | security	3,432	1,095
Fixed Maturity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months		$ 5,662
Greater Than Twelve Months		5,812
Fair Value - Total		11,474
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months		73
Greater Than Twelve Months		355
Gross Unrealized Losses - Total		428
Equity AFS Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months		22
Greater Than Twelve Months		8
Fair Value - Total		30
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months		14
Greater Than Twelve Months		3
Gross Unrealized Losses - Total		17
Corporate Bonds [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	$ 31,706	4,726
Greater Than Twelve Months	4,520	4,706
Fair Value - Total	36,226	9,432
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	1,142	67
Greater Than Twelve Months	513	276
Gross Unrealized Losses - Total	1,655	343
ABS [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	246	56
Greater Than Twelve Months	122	143
Fair Value - Total	368	199
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	2
Greater Than Twelve Months	12	15
Gross Unrealized Losses - Total	14	15
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	168	156
Greater Than Twelve Months	18	19
Fair Value - Total	186	175
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	4
Greater Than Twelve Months	2	1
Gross Unrealized Losses - Total	6	1
RMBS [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	776	277
Greater Than Twelve Months	557	599
Fair Value - Total	1,333	876
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	38	4
Greater Than Twelve Months	66	33
Gross Unrealized Losses - Total	104	37
CMBS [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	624	113
Greater Than Twelve Months	57	60
Fair Value - Total	681	173
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	18
Greater Than Twelve Months	5	3
Gross Unrealized Losses - Total	23	3
CLOs [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	1,062	281
Greater Than Twelve Months	34	72
Fair Value - Total	1,096	353
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	14	2
Gross Unrealized Losses - Total	14	2
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	694	33
Greater Than Twelve Months	71	89
Fair Value - Total	765	122
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	14
Greater Than Twelve Months	11	5
Gross Unrealized Losses - Total	25	5
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	31	20
Greater Than Twelve Months	131	124
Fair Value - Total	162	144
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	2
Greater Than Twelve Months	22	22
Gross Unrealized Losses - Total	$ 24	$ 22

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Investments (Schedule Of Available-For-Sale Securities Whose Value Is Below Amortized Cost) (Details) $ in Millions		Sep. 30, 2018 USD ($) security	Dec. 31, 2017 USD ($) security
Schedule of Available-for-sale Securities [Line Items]
Fair Value - Nine months or greater, but less than twelve months		$ 35,307	$ 5,684
Fair Value - Twelve months or greater		5,510	5,820
Fair Value - Total		40,817	11,504
Losses - Nine months or greater, but less than twelve months		1,234	87
Losses - Twelve months or greater		631	358
Gross Unrealized Losses - Total		$ 1,865	$ 445
Number of Securities - Total | security		3,432	1,095
Fair Value Decline, Greater Than 20% [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value - Less than six months		$ 130	$ 156
Fair Value - Six months or greater, but less than nine months		21	2
Fair Value - Nine months or greater, but less than twelve months		39	12
Fair Value - Twelve months or greater		118	209
Fair Value - Total		308	379
Losses - Less than six months		47	57
Losses - Six months or greater, but less than nine months		16	1
Losses - Nine months or greater, but less than twelve months		15	6
Losses - Twelve months or greater		47	77
Gross Unrealized Losses - Total		125	141
OTTI - Less than six months			1
OTTI - Twelve months or greater		8	10
OTTI - Total		$ 8	$ 11
Number of Securities - Less than six months | security	[1]	20	26
Number of Securities - Six months or greater, but less than nine months | security	[1]	3	4
Number of Securities - Nine months or greater, but less than twelve months | security	[1]	4	7
Number of Securities - Twelve months or greater | security	[1]	29	49
Number of Securities - Total | security	[1]	56	86

[1] We may reflect a security in more than one aging category based on various purchase dates.

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Investments (Schedule Of Changes in Amount Of Credit Losses Of OTTI Recognized In Net Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Investments [Abstract]
Balance as of beginning-of-period	$ 356	$ 370	$ 358	$ 411
Increases attributable to:
Credit losses on securities for which an OTTI was not previously recognized	2	8	4	13
Credit losses on securities for which an OTTI was previously recognized		1	1	4
Decreases attributable to:
Securities sold, paid down or matured	(5)	(20)	(10)	(69)
Balance as of end-of-year	$ 353	$ 359	$ 353	$ 359

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Investments (Composition Of Current And Past Due Mortgage Loans On Real Estate) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Mortgage Loans On Real Estate Aging [Abstract]
Current	$ 12,498		$ 10,662
60 to 90 days past due
Greater than 90 days past due	1		3
Valuation allowance associated with impaired mortgage loans on real estate	(1)	$ (2)	(3)	$ (2)	$ (2)	$ (2)
Unamortized premium (discount)	(16)
Total carrying value	$ 12,482		$ 10,662

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Investments (Schedule Of Impaired Mortgage Loans) (Details) $ in Millions	Sep. 30, 2018 USD ($) item	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($) item	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Information about impaired mortgage loans on real estate
Number of impaired mortgage loans on real estate | item	1		3
Principal balance of impaired mortgage loans on real estate	$ 4		$ 11
Valuation allowance associated with impaired mortgage loans on real estate	(1)	$ (2)	(3)	$ (2)	$ (2)	$ (2)
Carrying value of impaired mortgage loans on real estate	$ 3		$ 8

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Investments (Changes In The Valuation Allowance Of Impaired Mortgage Loans On Real Estate (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Allowance for Losses
Balance as of beginning-of-year	$ 2	$ 2	$ 3	$ 2
Additions
Charge-offs, net of recoveries	(1)		(2)
Balance as of end-of-period	$ 1	$ 2	$ 1	$ 2

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Investments (Schedule Of Average Carrying Value Of Impaired Mortgage Loans On Real Estate) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Information about impaired mortgage loans on real estate
Average carrying value for impaired mortgage loans on real estate	$ 5	$ 5	$ 6	$ 5
Interest income recognized on impaired mortgage loans on real estate
Interest income collected on impaired mortgage loans on real estate

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Investments (Credit Quality Indicators For Mortgage Loans) (Details) $ in Millions	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Mortgage Loans Credit Quality [Line Items]
Carrying value of mortgage loans on real estate	$ 12,482	$ 10,662
Percentage of total mortgage loans on real estate	100.00%	100.00%
Loan-to-value ratio, less than 65% [Member]
Mortgage Loans Credit Quality [Line Items]
Carrying value of mortgage loans on real estate	$ 11,230	$ 9,563
Percentage of total mortgage loans on real estate	90.00%	89.70%
Debt-service coverage ratio	2.31	2.27
Loan-to-value ratio, 65% to 74% [Member]
Mortgage Loans Credit Quality [Line Items]
Carrying value of mortgage loans on real estate	$ 1,183	$ 1,000
Percentage of total mortgage loans on real estate	9.50%	9.40%
Debt-service coverage ratio	1.79	1.94
Loan-to-value ratio, 75% to 100% [Member]
Mortgage Loans Credit Quality [Line Items]
Carrying value of mortgage loans on real estate	$ 66	$ 91
Percentage of total mortgage loans on real estate	0.50%	0.80%
Debt-service coverage ratio	1.03	0.97
Loan-To-Value Ratio, Greater Than 100% [Member]
Mortgage Loans Credit Quality [Line Items]
Carrying value of mortgage loans on real estate	$ 3	$ 8
Percentage of total mortgage loans on real estate	0.00%	0.10%
Debt-service coverage ratio	0.21	0.82

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Investments (Realized Gain (Loss) Related To Certain Investments) (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Realized gain (loss) related to certain investments
Gain (loss) on other investments	[1]	$ 1		$ 4	$ (4)
Associated amortization of DAC, VOBA, DSI and DFEL and changes in other contract holder funds		(5)	$ (4)	(16)	(17)
Total realized gain (loss) related to certain investments, pre-tax	[2]	(11)	(19)	(48)	(48)
Fixed Maturity Securities [Member]
Realized gain (loss) related to certain investments
AFS securities. Gross gains	[3]	14	7	29	18
AFS securities. Gross losses	[3]	(21)	$ (22)	(65)	(46)
Equity AFS Securities [Member]
Realized gain (loss) related to certain investments
AFS securities. Gross gains					$ 1
Equity Securities [Member]
Realized gain (loss) related to certain investments
Gain (loss) on other investments		$ 1		$ 2

[1] Includes market adjustments on equity securities still held of less than $1 million and $2 million for the three and nine months ended September 30, 2018, respectively.

[2] See "Realized Gain (Loss) Related to Certain Investments" section in Note 5.

[3] These amounts are represented net of related fair value hedging activity. See Note 6 for more information.

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Investments (OTTI Recognized In Net Income (Loss) And OCI) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
OTTI Recognized in Net Income (Loss)
Associated amortization of DAC, VOBA, DSI and DFEL		$ 1		$ 1
Net OTTI recognized in net income (loss), pre-tax	(2)	(8)	(5)	(16)
Fixed Maturity Securities [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)	(2)	(9)	(5)	(17)
Fixed Maturity Securities [Member] | Corporate Bonds [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)	$ (2)	(8)	(4)	(13)
Fixed Maturity Securities [Member] | ABS [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)		$ (1)		(2)
Fixed Maturity Securities [Member] | RMBS [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)			$ (1)	(1)
Fixed Maturity Securities [Member] | State And Municipal Bonds [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)				$ (1)

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Investments (Payables For Collateral On Investments) (Details) - USD ($) $ in Millions		9 Months Ended
		Sep. 30, 2018	Dec. 31, 2017
Carrying Value Of Payables For Collateral On Investments [Abstract]
Collateral payable for derivative investments	[1]	$ 319	$ 701
Securities pledged under securities lending agreements	[2]	117	222
Securities pledged under repurchase agreements	[3]	152	531
Investments pledged for Federal Home Loan Bank of Indianapolis ('FHLBI')	[4]	3,580	2,900
Total payables for collateral on investments		4,168	4,354
Fair Value Of Related Investments Or Collateral [Abstract]
Collateral payable for derivative investments	[1]	319	701
Securities pledged under securities lending agreements	[2]	113	213
Securities pledged under repurchase agreements	[3]	158	554
Investments pledged for Federal Home Loan Bank of Indianapolis('FHLBI')	[4]	5,413	4,235
Total payables for collateral on investments		$ 6,003	$ 5,703
Percentage of the fair value of domestic securities obtained as collateral under securities lending agreements.		102.00%
Percentage of the fair value of foreign securities obtained as collateral under securities lending agreements.		105.00%
Maximum [Member]
Fair Value Of Related Investments Or Collateral [Abstract]
Percentage of the fair value of securities obtained as collateral under reverse repurchase agreements.		95.00%
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI for AFS Securities		115.00%
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI for mortgage loan		175.00%
Minimum [Member]
Fair Value Of Related Investments Or Collateral [Abstract]
Percentage of the fair value of securities obtained as collateral under reverse repurchase agreements.		80.00%
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI for AFS Securities		105.00%
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI for mortgage loan		155.00%

[1] We obtain collateral based upon contractual provisions with our counterparties. These agreements take into consideration the counterparties' credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that if exceeded result in the receipt of cash that is typically invested in cash and invested cash. See Note 6 for additional information.

[2] Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. We value collateral daily and obtain additional collateral when deemed appropriate. The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities.

[3] Our pledged securities under repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We generally obtain collateral in an amount between 80% to 95% of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary. The cash received in our repurchase program is typically invested in fixed maturity AFS securities.

[4] Our pledged investments for FHLBI are included in fixed maturity AFS securities and mortgage loans on real estate on our Consolidated Balance Sheets. The collateral requirements are generally 105% to 115% of the fair value for fixed maturity AFS securities and 155% to 175% of the fair value for mortgage loans on real estate. The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities.

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Investments (Schedule Of Increase (Decrease) In Payables For Collateral On Investments) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Increase (decrease) in payables for collateral on investments
Collateral payable for derivative investments	$ (382)	$ 52
Securities pledged under securities lending agreements	(105)	(17)
Securities pledged under repurchase agreements	(379)	1
Investments pledged for FHLBI	680	(50)
Total increase (decrease) in payables for collateral on investments	$ (186)	$ (14)

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Investments (Schedule of Securities Pledged by Contractual Maturity) (Details) - USD ($) $ in Millions		9 Months Ended	12 Months Ended
		Sep. 30, 2018	Dec. 31, 2017
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase Agreements		$ 152	$ 531
Securities Lending	[1]	117	222
Total gross secured borrowings		269	753
Corporate Bonds [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase Agreements		152	531
Securities Lending		117	222
Overnight and Continuous [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities Lending		117	222
Total gross secured borrowings		117	222
Overnight and Continuous [Member] | Corporate Bonds [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities Lending		117	222
Up to 30 days [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase Agreements			100
Total gross secured borrowings			100
Up to 30 days [Member] | Corporate Bonds [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase Agreements			100
30 to 90 Days [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase Agreements			281
Total gross secured borrowings			281
30 to 90 Days [Member] | Corporate Bonds [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase Agreements			281
Greater than 90 days [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase Agreements		152	150
Total gross secured borrowings		152	150
Greater than 90 days [Member] | Corporate Bonds [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase Agreements		$ 152	$ 150

[1] Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. We value collateral daily and obtain additional collateral when deemed appropriate. The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities.

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Derivative Instruments (Narrative) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Derivative Instruments [Abstract]
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months	$ 34,000,000
Cash flow hedge, reclassified to earnings, net	0	$ 0
Non-performance Risk Adjustment	0
Exposure Associated With Collateralization Events	$ 0		$ 0

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Derivative Instruments (Outstanding Derivative Instruments With Off-Balance-Sheet Risks) (Details) - USD ($) $ in Millions		Sep. 30, 2018	Dec. 31, 2017
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts		$ 119,230
Interest rate contracts [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	[1]	92,305
Foreign currency contracts [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	[2]	2,172
Equity market contracts [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts		24,753
Total Derivative Instruments [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts		119,230	$ 107,840
Asset Fair Value		2,838	2,308
Liability Fair Value		3,850	3,376
Derivative investments [Member] | Interest rate contracts [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	[3]	90,138	72,937
Asset Fair Value	[3]	318	657
Liability Fair Value	[3]	233	127
Derivative investments [Member] | Foreign currency contracts [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	[3]	87	22
Derivative investments [Member] | Equity market contracts [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	[3]	24,753	30,918
Asset Fair Value	[3]	536	562
Liability Fair Value	[3]	139	557
Derivative investments [Member] | Credit contracts [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	[3]		52
Derivative investments [Member] | Cash Flow Hedges [Member] | Designated as Hedging Instrument [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts		3,699	3,348
Asset Fair Value		109	124
Liability Fair Value		113	95
Derivative investments [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member] | Designated as Hedging Instrument [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	[3]	1,614	1,544
Asset Fair Value	[3]	5	45
Liability Fair Value	[3]	42	16
Derivative investments [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member] | Designated as Hedging Instrument [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	[3]	2,085	1,804
Asset Fair Value	[3]	104	79
Liability Fair Value	[3]	71	79
Derivative investments [Member] | Fair Value Hedges [Member] | Interest rate contracts [Member] | Designated as Hedging Instrument [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	[3]	553	563
Liability Fair Value	[3]	113	174
Other Assets [Member] | GLB Direct Embedded Derivatives [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]
Outstanding derivative instruments with off-balance-sheet risks
Asset Fair Value	[4]	1,648	903
Other Liabilities [Member] | GLB Ceded Embedded Derivatives [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]
Outstanding derivative instruments with off-balance-sheet risks
Asset Fair Value	[4],[5]	35	51
Liability Fair Value	[4],[5]	1,681	954
Reinsurance Related Embedded Derivatives [Member] | Embedded derivatives - Reinsurance related [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]
Outstanding derivative instruments with off-balance-sheet risks
Asset Fair Value	[6]	148
Liability Fair Value	[6]		51
Future Contract Benefits [Member] | Indexed Annuity And Embedded Derivatives [Member] | Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]
Outstanding derivative instruments with off-balance-sheet risks
Asset Fair Value	[4],[7]	44	11
Liability Fair Value	[4],[7]	$ 1,571	$ 1,418

[1] As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was February 2027.

[2] As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049.

[3] Reported in derivative investments and other liabilities on our Consolidated Balance Sheets.

[4] Reported in other assets on our Consolidated Balance Sheets.

[5] Reported in other liabilities on our Consolidated Balance Sheets.

[6] Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets.

[7] Reported in future contract benefits on our Consolidated Balance Sheets.

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Derivative Instruments (Maturity Of The Notional Amounts Of Derivative Financial Instruments) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Maturity of the notional amounts of derivative financial instruments
Remaining Life Less Than 1 Year	$ 29,151
Remaining Life - 1 - 5 Years	18,459
Remaining Life - 6 - 10 Years	47,943
Remaining Life - 11 - 30 Years	20,547
Remaining Life Over - 30 Years	3,130
Remaining Life - Total Years	119,230
Interest rate contracts [Member]
Maturity of the notional amounts of derivative financial instruments
Remaining Life Less Than 1 Year	10,907	[1]
Remaining Life - 1 - 5 Years	14,802	[1]
Remaining Life - 6 - 10 Years	47,193	[1]
Remaining Life - 11 - 30 Years	19,403	[1]
Remaining Life - Total Years	$ 92,305	[1]
Derivative maturity date	Feb. 01, 2027
Foreign currency contracts [Member]
Maturity of the notional amounts of derivative financial instruments
Remaining Life Less Than 1 Year	$ 141	[2]
Remaining Life - 1 - 5 Years	256	[2]
Remaining Life - 6 - 10 Years	635	[2]
Remaining Life - 11 - 30 Years	1,130	[2]
Remaining Life Over - 30 Years	10	[2]
Remaining Life - Total Years	$ 2,172	[2]
Derivative maturity date	Sep. 01, 2049
Equity market contracts [Member]
Maturity of the notional amounts of derivative financial instruments
Remaining Life Less Than 1 Year	$ 18,103
Remaining Life - 1 - 5 Years	3,401
Remaining Life - 6 - 10 Years	115
Remaining Life - 11 - 30 Years	14
Remaining Life Over - 30 Years	3,120
Remaining Life - Total Years	$ 24,753

[1] As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was February 2027.

[2] As of September 30, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049.

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Derivative Instruments (Change In Unrealized Gain On Derivative Instruments In Accumulated OCI) (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Change in our unrealized gain on derivative instruments in accumulated OCI
Balance as of beginning-of-year				$ 3,327
Income tax expense (benefit)		$ 42	$ 75	194	$ 150
Balance as of end-of-period		982		982
Unrealized Gain (Loss) on Derivative Instruments [Member]
Change in our unrealized gain on derivative instruments in accumulated OCI
Balance as of beginning-of-year				27	93
Cumulative effect from adoption of new accounting standard						$ 6
Change in foreign currency exchange rate adjustment				69	(119)
Change in DAC, VOBA, DSI and DFEL				4	(3)
Income tax benefit (expense)				3	20
Associated amortization of DAC, VOBA, DSI and DFEL				(5)	(1)
Income tax expense (benefit)				(3)	(7)
Balance as of end-of-period		$ 10	$ 44	10	44
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member]
Change in our unrealized gain on derivative instruments in accumulated OCI
Unrealized holding gains (losses) arising during the period				(67)	19
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member] | Net Investment Income [Member]
Change in our unrealized gain on derivative instruments in accumulated OCI
Transfers from derivative instruments to bonds through basis adjustment	[1]			3	3
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member]
Change in our unrealized gain on derivative instruments in accumulated OCI
Unrealized holding gains (losses) arising during the period				(19)	46
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member] | Net Investment Income [Member]
Change in our unrealized gain on derivative instruments in accumulated OCI
Transfers from derivative instruments to bonds through basis adjustment	[1]			$ 18	12
Unrealized Gain (Loss) on Derivative Instruments [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member] | Realized Gain (Loss) [Member]
Change in our unrealized gain on derivative instruments in accumulated OCI
Transfers from derivative instruments to bonds through basis adjustment	[2]				$ 5

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

[2] The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

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Derivative Instruments (Gains (Losses) On Derivative Instruments Recorded Within Income (Loss) From Continuing Operations) (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Gains (losses)
Gains (losses)		$ (470)	$ (391)	$ (710)	$ (1,320)
Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member]
Gains (losses)
Gains (losses)		8	5	21	20
Designated as Hedging Instrument [Member] | Fair Value Hedges [Member]
Gains (losses)
Gains (losses)		15	(4)	53	(16)
Designated as Hedging Instrument [Member] | Net Investment Income [Member] | Cash Flow Hedges [Member] | Interest rate contracts [Member]
Gains (losses)
Gains (losses)	[1]	1	1	3	3
Designated as Hedging Instrument [Member] | Net Investment Income [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member]
Gains (losses)
Gains (losses)	[1]	7	4	18	12
Designated as Hedging Instrument [Member] | Net Investment Income [Member] | Fair Value Hedges [Member] | Interest rate contracts [Member]
Gains (losses)
Gains (losses)	[1]	(2)	(6)	(11)	(18)
Designated as Hedging Instrument [Member] | Realized Gain (Loss) [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member]
Gains (losses)
Gains (losses)	[2]				5
Designated as Hedging Instrument [Member] | Realized Gain (Loss) [Member] | Fair Value Hedges [Member] | Interest rate contracts [Member]
Gains (losses)
Gains (losses)	[2]	17	2	64	2
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Interest rate contracts [Member]
Gains (losses)
Gains (losses)	[2]	(167)	18	(577)	161
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Foreign currency contracts [Member]
Gains (losses)
Gains (losses)	[2]		1	2	1
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Equity market contracts [Member]
Gains (losses)
Gains (losses)	[2]	(199)	(347)	(280)	(1,163)
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | GLB Direct And Ceded Embedded Derivative [Member]
Gains (losses)
Gains (losses)	[2]	2		2
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Embedded derivatives - Reinsurance related [Member]
Gains (losses)
Gains (losses)	[2]	26	(24)	234	(113)
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Realized Gain (Loss) [Member] | Indexed Annuity And Embedded Derivatives [Member]
Gains (losses)
Gains (losses)	[2]	(164)	(46)	(175)	(230)
Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] | Commissions And Other Expenses [Member] | Equity market contracts [Member]
Gains (losses)
Gains (losses)	[3]	$ 9	$ 6	$ 10	$ 20

[1] Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

[2] Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

[3] Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

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Derivative Instruments (Gains (Losses) On Derivative Instruments Designated As Cash Flow Hedges) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Gains (losses) on derivative instruments designated and qualifying as cash flow hedges
Offset to net investment income	$ 1,207	$ 1,182	$ 3,560	$ 3,564
Offset to realized gain (loss)	(62)	(101)	(7)	(330)
Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | Other Comprehensive Income (Loss) [Member]
Gains (losses) on derivative instruments designated and qualifying as cash flow hedges
Offset to net investment income	$ 8	$ 5	$ 21	15
Offset to realized gain (loss)				$ 5

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Derivative Instruments (Open Credit Default Swap Liabilities) (Details) - Open Credit Default Swap Liabilities [Member] $ in Millions	12 Months Ended
	Dec. 31, 2017 USD ($) item
Summary Of Credit Derivatives
Number of instruments | item	1
Fair value	$ 1	[1]
Maximum potential payout	$ 52
12/20/2022 Maturity [Member]
Summary Of Credit Derivatives
Maturity	Dec. 20, 2022
Credit rating of underlying obligation	BBB+	[2]
Number of instruments | item	1
Fair value	$ 1	[1]
Maximum potential payout	$ 52

[1] Broker quotes are used to determine the market value of our credit default swaps.

[2] Represents average credit ratings based on the midpoint of the applicable ratings among Moody’s, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings.

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Derivative Instruments (Collateral Support Agreements) (Details) - Open Credit Default Swap Liabilities [Member] - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Credit risk related contingent features collateral
Maximum potential payout		$ 52
Less: Counterparty thresholds
Maximum collateral potentially required to post		$ 52

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Derivative Instruments (Schedule Of Collateral Amounts With Rights To Reclaim Or Obligation To Return Cash) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Credit Derivatives [Line Items]
Collateral Posted by Counter-Party (Held by LNL)	$ 318	$ 701
Collateral Posted by LNL (Held by Counter-Party)	(100)	(506)
AA- [Member]
Credit Derivatives [Line Items]
Collateral Posted by Counter-Party (Held by LNL)	36	116
Collateral Posted by LNL (Held by Counter-Party)	(21)	(1)
A+ [Member]
Credit Derivatives [Line Items]
Collateral Posted by Counter-Party (Held by LNL)	166	178
Collateral Posted by LNL (Held by Counter-Party)	(78)	(453)
A [Member]
Credit Derivatives [Line Items]
Collateral Posted by Counter-Party (Held by LNL)	40	170
Collateral Posted by LNL (Held by Counter-Party)	(1)	(48)
A- [Member]
Credit Derivatives [Line Items]
Collateral Posted by Counter-Party (Held by LNL)	76	237
Collateral Posted by LNL (Held by Counter-Party)
BBB+ [Member]
Credit Derivatives [Line Items]
Collateral Posted by Counter-Party (Held by LNL)
Collateral Posted by LNL (Held by Counter-Party)		$ (4)

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Derivative Instruments (Schedule Of Offsetting Assets And Liabilities) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Financial Assets
Derivative Instruments, Gross amount of recognized assets	$ 843	$ 1,082
Derivative Instruments, Gross amounts offset	(198)	(237)
Derivative Instruments, Net amount of assets	645	845
Derivative Instruments, Cash collateral	(318)	(701)
Derivative Instruments, Non-cash collateral	(80)
Derivative Instruments, Net amount	247	144
Embedded Derivative Instruments, Gross amount of recognized assets	1,875	965
Embedded Derivative Instruments, Gross amounts offset
Embedded Derivative Instruments, Net amount of assets	1,875	965
Embedded Derivative Instruments, Cash collateral
Embedded Derivative Instruments, Non-cash collateral
Embedded Derivative Instruments, Net amount	1,875	965
Total, Gross amount of recognized assets	2,718	2,047
Total, Gross amounts offset	(198)	(237)
Total, Net amount of assets	2,520	1,810
Total, Cash collateral	(318)	(701)
Total, Non-cash collateral	(80)
Total, Net amount	2,122	1,109
Financial Liabilities
Derivative Instruments, Gross amount of recognized liabilities	932	1,037
Derivative Instruments, Gross amounts offset	(119)	(261)
Derivative Instruments, Net amount of liabilities	813	776
Derivative Instruments, Cash collateral	(100)	(506)
Derivative Instruments, Non-cash collateral	(420)
Derivative Instruments, Net amount	293	270
Embedded Derivative Instruments, Gross amount of recognized liabilities	3,252	2,423
Embedded Derivative Instruments, Gross amounts offset
Embedded Derivative Instruments, Net amount of liabilities	3,252	2,423
Embedded Derivative Instruments, Cash collateral
Embedded Derivative Instruments, Non-cash collateral
Embedded Derivative Instruments, Net amount	3,252	2,423
Total, Gross amount of recognized liabilities	4,184	3,460
Total, Gross amounts offset	(119)	(261)
Total, Net amount of liabilities	4,065	3,199
Total, Cash collateral	(100)
Total, Non-cash collateral	(420)	(506)
Total, Net amount	$ 3,545	$ 2,693

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Federal Income Taxes (Narrative) (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Federal Income Taxes [Abstract]
Effective tax rate	10.00%	16.00%	14.00%	12.00%
Federal rate	21.00%	35.00%	21.00%	35.00%	35.00%

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Guaranteed Benefit Features (Narrative) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Guaranteed Benefit Features [Abstract]
Percent of permanent life insurance in force	32.00%		32.00%		32.00%
Percent of permanent life insurance sales	38.00%	26.00%	34.00%	27.00%

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Guaranteed Benefit Features (Information On Guaranteed Death Benefit Features) (Details) - USD ($) $ in Millions		9 Months Ended	12 Months Ended
		Sep. 30, 2018	Dec. 31, 2017
Return of Net Deposits [Member]
Net Amount at Risk by Product and Guarantee [Line Items]
Total account value	[1]	$ 98,623	$ 96,941
Net amount at risk	[1],[2]	$ 93	$ 81
Average attained age of contract holders	[1]	64 years	64 years
Minimum Return [Member]
Net Amount at Risk by Product and Guarantee [Line Items]
Total account value	[1]	$ 103	$ 108
Net amount at risk	[1],[2]	$ 16	$ 18
Average attained age of contract holders	[1]	76 years	76 years
Guaranteed minimum return	[1]	5.00%	5.00%
Anniversary Contract Value [Member]
Net Amount at Risk by Product and Guarantee [Line Items]
Total account value	[1]	$ 26,308	$ 26,596
Net amount at risk	[1],[2]	$ 438	$ 417
Average attained age of contract holders	[1]	71 years	70 years

[1] Our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive.

[2] Represents the amount of death benefit in excess of the account balance that is subject to market fluctuations.

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Guaranteed Benefit Features (Summary Of Guaranteed Death Benefit Liabilities) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Guaranteed Benefit Features [Abstract]
Balance as of beginning-of-year	$ 100	$ 110
Changes in reserves	18	4
Benefits paid	(11)	(14)
Balance as of end-of-period	$ 107	$ 100

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Guaranteed Benefit Features (Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts) (Details) - Variable Annuity [Member] - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts [Line Items]
Total	$ 122,859	$ 121,110
Percent of total variable annuity separate account values	98.00%	99.00%
Domestic Equity [Member]
Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts [Line Items]
Total	$ 61,732	$ 59,647
International Equity [Member]
Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts [Line Items]
Total	20,598	20,837
Fixed Income [Member]
Account Balances Of Variable Annuity Contracts With Guarantees Invested In Separate Accounts [Line Items]
Total	$ 40,529	$ 40,626

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Liability For Unpaid Claims (Changes In Liability For Unpaid Claims) (Details) - USD ($) $ in Millions		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017
Liability For Unpaid Claims [Abstract]
Balance as of beginning-of-year		$ 2,222	$ 2,242
Reinsurance recoverable		57	69
Net balance as of beginning-of-year		2,165	2,173
Business acquired	[1]	2,842
Incurred related to:
Current year		1,640	909
Interest		85	53
All other incurred		(159)	(85)
Total incurred		1,566	877
Paid related to:
Current year		(663)	(458)
Prior years		(796)	(440)
Total paid		(1,459)	(898)
Net balance as of end-of-period		5,114	2,152
Reinsurance recoverable		141	57
Balance as of end-of-period		$ 5,255	$ 2,209

[1] Represents Liberty group life and disability reserves, net, as of May 1, 2018, subject to finalization of acquisition date fair values. See Note 3 for additional information.

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Liability For Unpaid Claims (Schedule Of Reconciliation) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Liability for Future Policy Benefit, by Product Segment [Line Items]
Future contract benefits	$ 33,209		$ 21,703
Liability for unpaid claims	5,255	$ 2,222	2,209	$ 2,242
Life And Annuity Reserves And Claims Due [Member]
Liability for Future Policy Benefit, by Product Segment [Line Items]
Less adjustments	26,580		18,030
Accident And Health Active Life Reserves [Member]
Liability for Future Policy Benefit, by Product Segment [Line Items]
Less adjustments	$ 1,374		$ 1,464

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Contingencies And Commitments (Narrative) (Details) $ in Millions	Sep. 30, 2018 USD ($)
Pending Litigation [Member]
Loss Contingencies [Line Items]
Loss contingency, estimate	$ 50

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Shares and Stockholders' Equity (Components And Changes In Accumulated OCI) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of beginning-of-year	$ 3,327
Less:
Balance as of end-of-period	982
Unrealized Gain (Loss) on AFS Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of beginning-of-year	3,283	$ 1,687
Cumulative effect from adoption of new accounting standard			$ 634
Unrealized holding gains (losses) arising during the period	(5,268)	2,261
Change in foreign currency exchange rate adjustment	(68)	112
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds	1,542	(467)
Income tax benefit (expense)	804	(674)
Less:
Reclassification adjustment for gains (losses) included in net income (loss)	(36)	(27)
Associated amortization of DAC, VOBA, DSI, and DFEL	(11)	(16)
Income tax benefit (expense)	10	15
Less:
Balance as of end-of-period	964	2,947
Unrealized OTTI on AFS Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of beginning-of-year	39	22
Cumulative effect from adoption of new accounting standard			9
(Increases) attributable to:
Gross OTTI recognized in OCI during the period		(1)
Decreases attributable to
Changes in fair value, sales, maturities or other settlements of AFS securities	(7)	28
Change in DAC, VOBA, DSI, and DFEL	(9)	(5)
Income tax benefit (expense)	3	(8)
Less:
Balance as of end-of-period	35	36
Unrealized Gain (Loss) on Derivative Instruments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of beginning-of-year	27	93
Cumulative effect from adoption of new accounting standard			6
Unrealized holding gains (losses) arising during the period	(86)	65
Change in foreign currency exchange rate adjustment	69	(119)
Decreases attributable to
Change in DAC, VOBA, DSI and DFEL	4	(3)
Income tax benefit (expense)	3	20
Less:
Reclassification adjustment for gains (losses) included in net income (loss)	21	20
Associated amortization of DAC, VOBA, DSI and DFEL	(5)	(1)
Income tax benefit (expense)	(3)	(7)
Balance as of end-of-period	10	44
Funded Status of Employee Benefit Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of beginning-of-year	(22)	(20)
Cumulative effect from adoption of new accounting standard			$ (5)
Less:
Balance as of end-of-period	$ (27)	$ (20)

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Shares And Stockholders' Equity (Schedule of Reclassifications Out Of AOCI) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net investment income	$ 1,207	$ 1,182	$ 3,560	$ 3,564
Total realized gain (loss)	(62)	(101)	(7)	(330)
Interest and debt expense	(35)	(32)	(101)	(95)
Commissions and other expenses	$ (1,335)	$ (969)	(3,463)	(2,910)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on AFS Securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total realized gain (loss)			(36)	(27)
Reclassifications before income tax benefit (expense)			(47)	(43)
Income tax benefit (expense)			10	15
Reclassifications, net of income tax			(37)	(28)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on AFS Securities [Member] | Associated amortization of DAC, VOBA, DSI and DFEL [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total realized gain (loss)			(11)	(16)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized OTTI on AFS Securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total realized gain (loss)			(1)	6
Reclassifications before income tax benefit (expense)			(1)	5
Income tax benefit (expense)				(2)
Reclassifications, net of income tax			(1)	3
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized OTTI on AFS Securities [Member] | Change In DAC, VOBA, DSI, And DFEL [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total realized gain (loss)				(1)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on Derivative Instruments [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total gross reclassifications			21	20
Reclassifications before income tax benefit (expense)			16	19
Income tax benefit (expense)			(3)	(7)
Reclassifications, net of income tax			13	12
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on Derivative Instruments [Member] | Interest rate contracts [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net investment income			3	3
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on Derivative Instruments [Member] | Foreign currency contracts [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net investment income			18	12
Total realized gain (loss)				5
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Loss) on Derivative Instruments [Member] | Associated amortization of DAC, VOBA, DSI and DFEL [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Commissions and other expenses			$ (5)	$ (1)

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Realized (Gain) Loss (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Details underlying realized gain (loss)
Total realized gain (loss) related to certain investments	[1]	$ (11)	$ (19)	$ (48)	$ (48)
Realized gain (loss) on the mark-to-market on certain instruments	[2]	13	(28)	219	(110)
Indexed annuity and IUL contracts net derivatives results:
Gross gain (loss)	[3]	(7)		(14)	(17)
Associated amortization of DAC, VOBA, DSI, and DFEL	[3]	(2)	(1)	(2)	(1)
GLB Fees Ceded To LNBAR And Attributed Fees:
Gross gain (loss)		(47)	(45)	(138)	(130)
Associated amortization of DAC, VOBA, DSI, and DFEL		(8)	(8)	(24)	(24)
Total realized gain (loss)		$ (62)	$ (101)	$ (7)	$ (330)

[1] See "Realized Gain (Loss) Related to Certain Investments" section in Note 5.

[2] Represents changes in the fair values of certain derivative investments (not including those associated with our variable and indexed annuity and IUL contracts net derivatives results), reinsurance related embedded derivatives and trading securities.

[3] Represents the net difference between the change in the fair value of the S&P 500 Index ® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products.

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Fair Value of Financial Instruments (Narrative) (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Fair Value, Measurements, Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 0	$ 0
Liabilities measured at fair value	0	$ 0
Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount	1		$ 1
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount	1		1
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount	1		1
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount	$ 1		$ 1

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Fair Value of Financial Instruments (Carrying and Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Millions		Sep. 30, 2018	Dec. 31, 2017
AFS securities:
AFS Fixed Maturity Securities		$ 91,940	$ 93,340
AFS Equity securities			246
Trading securities		1,358	1,533
Equity securities		112
Mortgage loans on real estate		12,482	10,662
Derivative investments		645	845
Other investments		1,963	2,006
Carrying Value [Member]
AFS securities:
Trading securities		1,358	1,533
Equity securities		112
Mortgage loans on real estate		12,482	10,662
Derivative investments	[1]	645	845
Other investments		1,963	2,006
Cash and invested cash		1,207	947
Reinsurance related embedded derivatives		148
Indexed annuity ceded embedded derivatives		44	11
Separate account assets		147,692	144,219
Future contract benefits:
Indexed annuity and IUL contracts embedded derivatives		(1,571)	(1,418)
Other contract holder funds:
Remaining guaranteed interest and similar contracts		(562)	(592)
Account values of certain investment contracts		(33,648)	(32,332)
Short-term debt		(226)	(10)
Long-term debt		(2,388)	(2,374)
Reinsurance related embedded derivatives			(51)
Other liabilities - derivative liabilities	[1]	(280)	(455)
Other liabilities - GLB ceded embedded derivatives		(1,681)	(954)
Fair Value [Member]
AFS securities:
Trading securities		1,358	1,533
Equity securities		112
Mortgage loans on real estate		12,158	10,773
Derivative investments	[1]	645	845
Other investments		1,963	2,006
Cash and invested cash		1,207	947
Reinsurance related embedded derivatives		148
Indexed annuity ceded embedded derivatives		44	11
Separate account assets		147,692	144,219
Future contract benefits:
Indexed annuity and IUL contracts embedded derivatives		(1,571)	(1,418)
Other contract holder funds:
Remaining guaranteed interest and similar contracts		(562)	(592)
Account values of certain investment contracts		(34,540)	(36,161)
Short-term debt		(226)	(10)
Long-term debt		(2,565)	(2,677)
Reinsurance related embedded derivatives			(51)
Other liabilities - derivative liabilities	[1]	(280)	(455)
Other liabilities - GLB ceded embedded derivatives		(1,681)	(954)
Equity AFS Securities [Member] | Carrying Value [Member]
AFS securities:
AFS Equity securities			246
Equity AFS Securities [Member] | Fair Value [Member]
AFS securities:
AFS Equity securities			246
Fixed Maturity Securities [Member] | Carrying Value [Member]
AFS securities:
AFS Fixed Maturity Securities		91,940	93,340
Fixed Maturity Securities [Member] | Fair Value [Member]
AFS securities:
AFS Fixed Maturity Securities		91,940	93,340
GLB Direct Embedded Derivatives [Member] | Carrying Value [Member]
AFS securities:
Other assets - GLB embedded derivatives		1,648	903
GLB Direct Embedded Derivatives [Member] | Fair Value [Member]
AFS securities:
Other assets - GLB embedded derivatives		1,648	903
GLB Ceded Embedded Derivatives [Member] | Carrying Value [Member]
AFS securities:
Other assets - GLB embedded derivatives		35	51
GLB Ceded Embedded Derivatives [Member] | Fair Value [Member]
AFS securities:
Other assets - GLB embedded derivatives		$ 35	$ 51

[1] We have master netting agreements with each of our derivative counterparties, which allow for the netting of our derivative asset and liability positions by counterparty.

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Fair Value of Financial Instruments (Fair Value Of Assets And Liabilities On A Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions		Sep. 30, 2018	Dec. 31, 2017
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		$ 245,111	$ 242,593
Liabilities measured at fair value		(3,848)	(3,376)
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		1,268	1,507
Significant Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		235,669	233,632
Liabilities measured at fair value		(415)	(431)
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		8,174	7,454
Liabilities measured at fair value		(3,433)	(2,945)
Corporate Bonds [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		79,269	81,160
Corporate Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		73,698	75,810
Corporate Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		5,571	5,350
ABS [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		967	953
ABS [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		936	927
ABS [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		31	26
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		378	533
U.S. Government Bonds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		360	522
U.S. Government Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		18	6
U.S. Government Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value			5
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		455	446
Foreign Government Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		347	336
Foreign Government Bonds [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		108	110
RMBS [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		3,098	3,258
RMBS [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		3,091	3,246
RMBS [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		7	12
CMBS [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		747	599
CMBS [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		724	593
CMBS [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		23	6
CLOs [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		1,362	808
CLOs [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		1,311	717
CLOs [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		51	91
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		5,066	4,959
State And Municipal Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		5,066	4,959
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		598	624
Hybrid And Redeemable Preferred Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		73	70
Hybrid And Redeemable Preferred Securities [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		448	478
Hybrid And Redeemable Preferred Securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Maturity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		77	76
Equity AFS Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value			246
Equity AFS Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value			28
Equity AFS Securities [Member] | Significant Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value			57
Equity AFS Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value			161
Trading Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		1,358	1,533
Trading Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		43	73
Trading Securities [Member] | Significant Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		1,297	1,411
Trading Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		18	49
Equity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		112
Equity Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		28
Equity Securities [Member] | Significant Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		58
Equity Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		26
Derivative Investments [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value	[1]	961	1,343
Derivative Investments [Member] | Significant Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value	[1]	426	740
Derivative Investments [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value	[1]	535	603
Cash And Invested Cash [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		1,207	947
Cash And Invested Cash [Member] | Significant Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		1,207	947
GLB Direct Embedded Derivatives [Member] | Other Assets [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		1,648	903
GLB Direct Embedded Derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Assets [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		1,648	903
GLB Ceded Embedded Derivatives [Member] | Other Assets [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		35	51
GLB Ceded Embedded Derivatives [Member] | Other Liabilities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Liabilities measured at fair value		(1,681)	(954)
GLB Ceded Embedded Derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Assets [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		35	51
GLB Ceded Embedded Derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Liabilities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Liabilities measured at fair value		(1,681)	(954)
Separate Account Assets [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		147,658	144,219
Separate Account Assets [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		764	814
Separate Account Assets [Member] | Significant Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		146,894	143,405
Indexed Annuity And Embedded Derivatives [Member] | Other Assets [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		44	11
Indexed Annuity And Embedded Derivatives [Member] | Future Contract Benefits [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Liabilities measured at fair value		(1,571)	(1,418)
Indexed Annuity And Embedded Derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Assets [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		44	11
Indexed Annuity And Embedded Derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member] | Future Contract Benefits [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Liabilities measured at fair value		(1,571)	(1,418)
Reinsurance Related Embedded Derivatives [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		148
Liabilities measured at fair value			(51)
Reinsurance Related Embedded Derivatives [Member] | Significant Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Assets measured at fair value		148
Liabilities measured at fair value			(51)
Derivative Financial Instruments, Liabilities [Member] | Other Liabilities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Liabilities measured at fair value	[1]	(596)	(953)
Derivative Financial Instruments, Liabilities [Member] | Significant Observable Inputs (Level 2) [Member] | Other Liabilities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Liabilities measured at fair value	[1]	(415)	(380)
Derivative Financial Instruments, Liabilities [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Liabilities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items]
Liabilities measured at fair value	[1]	$ (181)	$ (573)

[1] Derivative investment assets and liabilities presented within the fair value hierarchy are presented on a gross basis by derivative type and not on a master netting basis by counterparty.

XML

Fair Value of Financial Instruments (Fair Value Measured On A Recurring Basis Reconciliation) (Details) - USD ($) $ in Millions		3 Months Ended				9 Months Ended
		Sep. 30, 2018		Sep. 30, 2017		Sep. 30, 2018		Sep. 30, 2017
Level 3 Unobservable Input Reconciliation
Beginning Fair Value		$ 4,660		$ 4,376		$ 4,509		$ 4,117
Items Included in Net Income		(273)		(58)		(60)		(240)
Gains (Losses) in OCI and Other	[1]	(86)		44		(256)		267
Issuances, Sales, Maturities, Settlements, Calls, Net		588	[2]	(302)		987	[2]	(123)
Transfers Into or Out of Level 3, Net	[3]	(148)	[4]	(7)		(439)	[4]	32
Ending Fair Value		4,741		4,053		4,741		4,053
Corporate Bonds [Member] | Liberty Transaction [Member]
Level 3 Unobservable Input Reconciliation
Issuances, Sales, Maturities, Settlements, Calls, Net						67
Corporate Bonds [Member] | Fixed Maturity Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]	5,522		4,953		5,350		4,809
Items Included in Net Income	[5]	1		4		7		14
Gains (Losses) in OCI and Other	[1],[5]	(30)		34		(136)		152
Issuances, Sales, Maturities, Settlements, Calls, Net	[5]	109	[2]	(236)		411	[2]	(350)
Transfers Into or Out of Level 3, Net	[3],[5]	(31)	[4]	59		(61)	[4]	189
Ending Fair Value	[5]	5,571		4,814		5,571		4,814
ABS [Member] | Liberty Transaction [Member]
Level 3 Unobservable Input Reconciliation
Issuances, Sales, Maturities, Settlements, Calls, Net						17
ABS [Member] | Fixed Maturity Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]	31		42		26		33
Gains (Losses) in OCI and Other	[1],[5]							1
Issuances, Sales, Maturities, Settlements, Calls, Net	[2],[5]					5
Transfers Into or Out of Level 3, Net	[3],[5]			(15)				(7)
Ending Fair Value	[5]	31		27		31		27
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]			5		5
Issuances, Sales, Maturities, Settlements, Calls, Net	[2],[5]					(5)
Transfers Into or Out of Level 3, Net	[3],[5]							5
Ending Fair Value	[5]			5				5
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]	108		109		110		111
Gains (Losses) in OCI and Other	[1],[5]			1		(2)		(1)
Ending Fair Value	[5]	108		110		108		110
RMBS [Member] | Fixed Maturity Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]			7		12		3
Issuances, Sales, Maturities, Settlements, Calls, Net		7	[2]	6	[5]	7	[2],[5]	10	[5]
Transfers Into or Out of Level 3, Net	[3],[4],[5]					(12)
Ending Fair Value	[5]	7		13		7		13
CMBS [Member] | Fixed Maturity Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]	5		21		6		7
Items Included in Net Income	[5]					1
Gains (Losses) in OCI and Other	[1],[5]							1
Issuances, Sales, Maturities, Settlements, Calls, Net	[5]	18	[2]	(1)		37	[2]	54
Transfers Into or Out of Level 3, Net	[3],[5]			(14)		(21)	[4]	(56)
Ending Fair Value	[5]	23		6		23		6
CLOs [Member] | Fixed Maturity Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]	145		28		91		68
Issuances, Sales, Maturities, Settlements, Calls, Net	[5]	17	[2]	15		164	[2]	33
Transfers Into or Out of Level 3, Net	[3],[5]	(111)	[4]	(28)		(204)	[4]	(86)
Ending Fair Value	[5]	51		15		51		15
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member]
Level 3 Unobservable Input Reconciliation
Items Included in Net Income	[5]							(1)
Transfers Into or Out of Level 3, Net	[3],[5]							1
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]	78		82		76		76
Gains (Losses) in OCI and Other	[1],[5]	(1)		3		1		14
Transfers Into or Out of Level 3, Net	[3],[5]			(9)				(14)
Ending Fair Value	[5]	77		76		77		76
Equity AFS Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]			183		161		177
Items Included in Net Income	[5]							1
Gains (Losses) in OCI and Other	[1],[5]			(1)				(2)
Issuances, Sales, Maturities, Settlements, Calls, Net	[5]			9				15
Transfers Into or Out of Level 3, Net	[3],[5]			(1)		(161)	[4]	(1)
Ending Fair Value	[5]			190				190
Trading Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]	22		59		49		65
Items Included in Net Income	[5]			(1)		(5)		1
Gains (Losses) in OCI and Other	[1],[5]							8
Issuances, Sales, Maturities, Settlements, Calls, Net	[5]	2	[2]	(10)		(20)	[2]	(26)
Transfers Into or Out of Level 3, Net	[3],[5]	(6)	[4]	1		(6)	[4]	1
Ending Fair Value	[5]	18		49		18		49
Equity Securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]	26
Transfers Into or Out of Level 3, Net	[3],[4],[5]					26
Ending Fair Value	[5]	26				26
Derivative Investments [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[5]	93		155		30		(93)
Items Included in Net Income	[5]	(115)		(14)		106		(25)
Gains (Losses) in OCI and Other	[1],[5]	(55)		7		(119)		94
Issuances, Sales, Maturities, Settlements, Calls, Net	[5]	431	[2]	(85)		337	[2]	87
Ending Fair Value	[5]	354		63		354		63
GLB Direct Embedded Derivatives [Member] | Other Assets [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[6]	1,248		298		903
Items Included in Net Income	[6]	400		272		745		570
Ending Fair Value	[6]	1,648		570		1,648		570
GLB Direct Embedded Derivatives [Member] | Other Liabilities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[6]							(371)
Items Included in Net Income	[6]							371
GLB Ceded Embedded Derivatives [Member] | Other Assets [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[6]	41		85		51		371
Items Included in Net Income	[6]	(6)		(32)		(16)		(318)
Ending Fair Value	[6]	35		53		35		53
GLB Ceded Embedded Derivatives [Member] | Other Liabilities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[6]	(1,288)		(383)		(954)
Items Included in Net Income	[6]	(393)		(240)		(727)		(623)
Ending Fair Value	[6]	(1,681)		(623)		(1,681)		(623)
Indexed Annuity And Embedded Derivatives [Member] | Other Assets [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[6]	29				11
Items Included in Net Income	[6]	4				4
Issuances, Sales, Maturities, Settlements, Calls, Net		11	[2],[6]	3		29	[2],[6]	3
Ending Fair Value		44	[6]	3		44	[6]	3
Indexed Annuity And Embedded Derivatives [Member] | Future Contract Benefits [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	[6]	(1,400)		(1,268)		(1,418)		(1,139)
Items Included in Net Income	[6]	(164)		(47)		(175)		(230)
Issuances, Sales, Maturities, Settlements, Calls, Net	[6]	(7)	[2]	(3)		22	[2]	51
Ending Fair Value	[6]	$ (1,571)		$ (1,318)		$ (1,571)		$ (1,318)

[1] The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 6).

[2] Net issuances, sales, maturities, settlements, calls, net include financial instruments acquired from Liberty Life as follows: corporate bonds of $67 million and ABS of $17 million.

[3] Transfers into or out of Level 3 for AFS and trading securities are displayed at amortized cost as of the beginning-of-year. For AFS and trading securities, the difference between beginning-of-period amortized cost and beginning-of-period fair value was included in OCI and earnings, respectively, in the prior period.

[4] Transfers into or out of Level 3 for FHLB stock between equity securities and other investments at cost on our Consolidated Balance Sheets.

[5] Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss). Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

[6] Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

XML

Fair Value of Financial Instruments (Schedule Of Investment Holdings Movements) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	$ 254	$ 276	$ 1,215	$ 659
Sales	452	(388)	250	(206)
Maturities	(121)	(131)	(351)	(367)
Settlements	11	(33)	(58)	(75)
Calls	(8)	(26)	(69)	(134)
Total	588	(302)	987	(123)
Corporate Bonds [Member] | Fixed Maturity Securities [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	186	206	882	438
Sales	(3)	(354)	(163)	(419)
Maturities	(1)	(19)	(3)	(66)
Settlements	(65)	(43)	(236)	(169)
Calls	(8)	(26)	(69)	(134)
Total	109	(236)	411	(350)
ABS [Member] | Fixed Maturity Securities [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances			22
Sales			(17)
Total			5
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Sales			(5)
Total			(5)
RMBS [Member] | Fixed Maturity Securities [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	7	6	7	10
Total	7	6	7	10
CMBS [Member] | Fixed Maturity Securities [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	18		39	55
Settlements		(1)	(2)	(1)
Total	18	(1)	37	54
CLOs [Member] | Fixed Maturity Securities [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	17	15	164	33
Total	17	15	164	33
Equity AFS Securities [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances		10		18
Sales		(1)		(3)
Total		9		15
Trading Securities [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	2		4	2
Sales		(10)	(24)	(27)
Settlements				(1)
Total	2	(10)	(20)	(26)
Equity Securities [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances			1
Sales			(1)
Derivative Investments [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	96	50	225	145
Sales	455	(23)	460	243
Maturities	(120)	(112)	(348)	(301)
Total	431	(85)	337	87
Indexed Annuity And Embedded Derivatives [Member] | Other Assets [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	11	3	29	3
Total	11	3	29	3
Indexed Annuity And Embedded Derivatives [Member] | Future Contract Benefits [Member]
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	(83)	(14)	(158)	(45)
Settlements	76	11	180	96
Total	$ (7)	$ (3)	$ 22	$ 51

XML

Fair Value of Financial Instruments (Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held) (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Change in unrealized gains (losses) included in net income	[1]	$ (12)	$ (81)	$ 87	$ (172)
Derivative Investments [Member]
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Change in unrealized gains (losses) included in net income		(1)	(83)	105	(159)
Indexed Annuity And Embedded Derivatives [Member]
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Change in unrealized gains (losses) included in net income		(11)	2	(18)	(13)
GLB Direct And Ceded Embedded Derivative [Member]
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Change in unrealized gains (losses) included in net income		576	428	1,264	1,340
GLB Ceded Embedded Derivatives [Member]
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Change in unrealized gains (losses) included in net income		$ (576)	$ (428)	$ (1,264)	$ (1,340)

[1] Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

XML

Fair Value of Financial Instruments (Components Of The Transfers In And Out Of Level 3) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers In to Level 3	$ 11	$ 117	$ 80	$ 335
Transfers Out of Level 3	(159)	(124)	(519)	(303)
Total Transfers Into or (Out) of Level 3	(148)	(7)	(439)	32
Corporate Bonds [Member] | Fixed Maturity Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers In to Level 3	11	116	54	277
Transfers Out of Level 3	(42)	(57)	(115)	(88)
Total Transfers Into or (Out) of Level 3	(31)	59	(61)	189
ABS [Member] | Fixed Maturity Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers In to Level 3				14
Transfers Out of Level 3		(15)		(21)
Total Transfers Into or (Out) of Level 3		(15)		(7)
U.S. Government Bonds [Member] | Fixed Maturity Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers In to Level 3				5
Total Transfers Into or (Out) of Level 3				5
RMBS [Member] | Fixed Maturity Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers Out of Level 3			(12)
Total Transfers Into or (Out) of Level 3			(12)
CMBS [Member] | Fixed Maturity Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers In to Level 3				3
Transfers Out of Level 3		(14)	(21)	(59)
Total Transfers Into or (Out) of Level 3		(14)	(21)	(56)
CLOs [Member] | Fixed Maturity Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers In to Level 3				30
Transfers Out of Level 3	(111)	(28)	(204)	(116)
Total Transfers Into or (Out) of Level 3	(111)	(28)	(204)	(86)
State And Municipal Bonds [Member] | Fixed Maturity Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers In to Level 3				2
Transfers Out of Level 3				(1)
Total Transfers Into or (Out) of Level 3				1
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers Out of Level 3		(9)		(14)
Total Transfers Into or (Out) of Level 3		(9)		(14)
Equity AFS Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers Out of Level 3		(1)	(161)	(1)
Total Transfers Into or (Out) of Level 3		(1)	(161)	(1)
Trading Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers In to Level 3		1		4
Transfers Out of Level 3	(6)		(6)	(3)
Total Transfers Into or (Out) of Level 3	$ (6)	$ 1	(6)	$ 1
Equity Securities [Member]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net [Abstract]
Transfers In to Level 3			26
Total Transfers Into or (Out) of Level 3			$ 26

XML

Fair Value of Financial Instruments (Fair Value Inputs Quantitative Information) (Details) - Significant Unobservable Inputs (Level 3) [Member] - Discounted Cash Flow Valuation Technique [Member]	Sep. 30, 2018 USD ($)
Corporate Bonds [Member] | Fixed Maturity Securities [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	$ 2,445,000,000
Corporate Bonds [Member] | Maximum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Fixed maturity AFS and trading securities, measurement input	0.248
Corporate Bonds [Member] | Minimum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Fixed maturity AFS and trading securities, measurement input	0.005
ABS [Member] | Fixed Maturity Securities [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	$ 23,000,000
ABS [Member] | Maximum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Fixed maturity AFS and trading securities, measurement input	0.030
ABS [Member] | Minimum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Fixed maturity AFS and trading securities, measurement input	0.030
Foreign Government Bonds [Member] | Fixed Maturity Securities [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	$ 78,000,000
Foreign Government Bonds [Member] | Maximum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Fixed maturity AFS and trading securities, measurement input	0.028
Foreign Government Bonds [Member] | Minimum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Fixed maturity AFS and trading securities, measurement input	0.011
Hybrid And Redeemable Preferred Securities [Member] | Fixed Maturity Securities [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	$ 4,000,000
Hybrid And Redeemable Preferred Securities [Member] | Maximum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Fixed maturity AFS and trading securities, measurement input	0.018
Hybrid And Redeemable Preferred Securities [Member] | Minimum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Fixed maturity AFS and trading securities, measurement input	0.018
Equity Securities [Member] | Fixed Maturity Securities [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	$ 21,000,000
Equity Securities [Member] | Maximum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Equity securities, measurement input	0.051
Equity Securities [Member] | Minimum [Member] | Fixed Maturity Securities [Member] | Liquidity/Duration Adjustment [Member]
Liabilities Fair Value Disclosure [Abstract]
Equity securities, measurement input	0.045
GLB Direct And Ceded Embedded Derivative [Member] | Other Assets [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	$ 1,683,000,000
GLB Direct And Ceded Embedded Derivative [Member] | Maximum [Member] | Other Assets [Member] | Lapse Rate [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.30
GLB Direct And Ceded Embedded Derivative [Member] | Maximum [Member] | Other Assets [Member] | Utilization Of Guaranteed Withdrawls [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	1.00
GLB Direct And Ceded Embedded Derivative [Member] | Maximum [Member] | Other Assets [Member] | Claims Utilization Factor [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	1.00
GLB Direct And Ceded Embedded Derivative [Member] | Maximum [Member] | Other Assets [Member] | Premiums Utilization Factor [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	1.15
GLB Direct And Ceded Embedded Derivative [Member] | Maximum [Member] | Other Assets [Member] | NPR [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.0032
GLB Direct And Ceded Embedded Derivative [Member] | Maximum [Member] | Other Assets [Member] | Volatility [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.29
GLB Direct And Ceded Embedded Derivative [Member] | Minimum [Member] | Other Assets [Member] | Lapse Rate [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.01
GLB Direct And Ceded Embedded Derivative [Member] | Minimum [Member] | Other Assets [Member] | Utilization Of Guaranteed Withdrawls [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.85
GLB Direct And Ceded Embedded Derivative [Member] | Minimum [Member] | Other Assets [Member] | Claims Utilization Factor [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.60
GLB Direct And Ceded Embedded Derivative [Member] | Minimum [Member] | Other Assets [Member] | Premiums Utilization Factor [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.80
GLB Direct And Ceded Embedded Derivative [Member] | Minimum [Member] | Other Assets [Member] | NPR [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.0001
GLB Direct And Ceded Embedded Derivative [Member] | Minimum [Member] | Other Assets [Member] | Volatility [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.01
Indexed Annuity And Embedded Derivatives [Member] | Other Assets [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	$ 44,000,000
Indexed Annuity And Embedded Derivatives [Member] | Maximum [Member] | Other Assets [Member] | Lapse Rate [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.09
Indexed Annuity And Embedded Derivatives [Member] | Minimum [Member] | Other Assets [Member] | Lapse Rate [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative assets, measurement input	0.01
Future contract benefits - indexed annuity and IUL contracts embedded derivatives | Future Contract Benefits [Member]
Liabilities Fair Value Disclosure [Abstract]
Liabilities measured at fair value	$ (1,571,000,000)
Future contract benefits - indexed annuity and IUL contracts embedded derivatives | Maximum [Member] | Future Contract Benefits [Member] | Lapse Rate [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.09
Future contract benefits - indexed annuity and IUL contracts embedded derivatives | Minimum [Member] | Future Contract Benefits [Member] | Lapse Rate [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.01
GLB Ceded Embedded Derivatives [Member] | Other Liabilities [Member]
Liabilities Fair Value Disclosure [Abstract]
Liabilities measured at fair value	$ (1,681,000,000)
GLB Ceded Embedded Derivatives [Member] | Maximum [Member] | Other Liabilities [Member] | Lapse Rate [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.30
GLB Ceded Embedded Derivatives [Member] | Maximum [Member] | Other Liabilities [Member] | Utilization Of Guaranteed Withdrawls [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	1.00
GLB Ceded Embedded Derivatives [Member] | Maximum [Member] | Other Liabilities [Member] | Claims Utilization Factor [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	1.00
GLB Ceded Embedded Derivatives [Member] | Maximum [Member] | Other Liabilities [Member] | Premiums Utilization Factor [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	1.15
GLB Ceded Embedded Derivatives [Member] | Maximum [Member] | Other Liabilities [Member] | NPR [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.0032
GLB Ceded Embedded Derivatives [Member] | Maximum [Member] | Other Liabilities [Member] | Volatility [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.29
GLB Ceded Embedded Derivatives [Member] | Minimum [Member] | Other Liabilities [Member] | Lapse Rate [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.01
GLB Ceded Embedded Derivatives [Member] | Minimum [Member] | Other Liabilities [Member] | Utilization Of Guaranteed Withdrawls [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.85
GLB Ceded Embedded Derivatives [Member] | Minimum [Member] | Other Liabilities [Member] | Claims Utilization Factor [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.60
GLB Ceded Embedded Derivatives [Member] | Minimum [Member] | Other Liabilities [Member] | Premiums Utilization Factor [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.80
GLB Ceded Embedded Derivatives [Member] | Minimum [Member] | Other Liabilities [Member] | NPR [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.0001
GLB Ceded Embedded Derivatives [Member] | Minimum [Member] | Other Liabilities [Member] | Volatility [Member]
Liabilities Fair Value Disclosure [Abstract]
Derivative liability, measurement input	0.01

XML

Segment Information (Narrative) (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Segment Information [Abstract]
Federal rate	21.00%	35.00%	21.00%	35.00%	35.00%

XML

Segment Information (Reconciliation Of Revenue From Segments To Consolidated) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Excluded realized gain (loss), pre-tax	$ (107)	$ (144)	$ (149)	$ (459)
Total revenues	4,039	3,269	11,295	9,735
Annuities Segment [Member]
Segment Reporting Information [Line Items]
Total revenues	1,031	986	3,032	2,954
Retirement Plan Services Segment [Member]
Segment Reporting Information [Line Items]
Total revenues	290	288	867	853
Life Insurance Segment [Member]
Segment Reporting Information [Line Items]
Total revenues	1,647	1,515	4,770	4,537
Group Protection Segment [Member]
Segment Reporting Information [Line Items]
Total revenues	1,128	564	2,617	1,646
Other Operations [Member]
Segment Reporting Information [Line Items]
Total revenues	$ 50	$ 60	$ 158	$ 204

XML

Segment Information (Reconciliation Of Income (Loss) From Operations By Segment To Consolidated Net Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Excluded realized gain (loss), after-tax	$ (84)	$ (93)	$ (118)	$ (298)
(Gain) loss on early extinguishment of debt, after tax		(3)		(3)
Net impact from the Tax Cuts and Jobs Act	9		(4)
Acquisition and integration costs related to mergers and acquisitions, after-tax	(8)		(47)
Net income (loss)	378	385	1,204	1,055
Annuities Segment [Member]
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Net income (loss)	265	288	824	813
Retirement Plan Services Segment [Member]
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Net income (loss)	37	33	118	103
Life Insurance Segment [Member]
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Net income (loss)	143	119	395	372
Group Protection Segment [Member]
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Net income (loss)	62	$ 41	136	82
Other Operations [Member]
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Net income (loss)	$ (46)		$ (100)	$ (14)

XML

Segment Information (Schedule Of Revenue From Contracts With Customers) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	$ 326	$ 918
Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	2	12
Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	324	906
Fee Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	185	546
Other Revenues [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	141	372
Annuities Segment [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	230	681
Annuities Segment [Member] | Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers		3
Annuities Segment [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	230	678
Annuities Segment [Member] | Fee Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	137	403
Annuities Segment [Member] | Other Revenues [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	93	278
Retirement Plan Services Segment [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	47	140
Retirement Plan Services Segment [Member] | Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	1	4
Retirement Plan Services Segment [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	46	136
Retirement Plan Services Segment [Member] | Fee Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	42	126
Retirement Plan Services Segment [Member] | Other Revenues [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	5	14
Life Insurance Segment [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	8	24
Life Insurance Segment [Member] | Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	1	5
Life Insurance Segment [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	7	19
Life Insurance Segment [Member] | Fee Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	6	17
Life Insurance Segment [Member] | Other Revenues [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	2	7
Group Protection Segment [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	41	73
Group Protection Segment [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	41	73
Group Protection Segment [Member] | Other Revenues [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	$ 41	$ 73