Reinsurance

6 Months Ended

Jun. 30, 2024

Lincoln Pinehurst Reinsurance Company (Bermuda) Limited

Effective June 30, 2024, we entered into a reinsurance agreement with Lincoln Pinehurst Reinsurance Company (Bermuda) Limited (“LPINE”), an affiliated reinsurer, to reinsure certain blocks of in-force group protection and fixed annuity products.

This agreement is structured as coinsurance with funds withheld. As significant insurance risk was transferred for the group protection block, amounts recoverable from LPINE were $4.2 billion as of June 30, 2024. We recorded a deferred loss of $144 million as of June 30, 2024. Fixed annuities are not life-contingent and do not contain significant insurance risk; therefore, we recorded deposit assets of $6.8 billion as of June 30, 2024. In this coinsurance with funds withheld reinsurance agreement, we as the ceding company withhold, and therefore retain, the assets backing the reserves and deposit assets.

We held investments with a carrying value of $11.0 billion in support of reserves associated with the LPINE transaction in a funds withheld arrangement as of June 30, 2024, which consisted of the following (in millions):




Fixed maturity AFS securities	$	9,349
Mortgage loans on real estate	1,531
Accrued investment income	94
Total	$	10,974

See “Realized Gain (Loss)” in Note 16 for information on reinsurance-related embedded derivatives.

LNBAR

We reinsure blocks of business to LNBAR, an affiliated reinsurer. Effective October 1, 2023, we entered into an agreement with LNBAR that is structured as a coinsurance treaty, with some assets withheld, for certain blocks of in-force MoneyGuard® products. As significant insurance risk was transferred for the MoneyGuard blocks, amounts recoverable from LNBAR were $14.4 billion and $13.2 billion as of June 30, 2024, and December 31, 2023, respectively. We reported a deferred gain on the transaction of $4.2 billion as of June 30, 2024, and December 31, 2023. We amortized $40 million and $83 million of the deferred gain during the three and six months ended June 30, 2024, respectively. We held other investments and cash and invested cash with a carrying value of $1.1 billion and $871 million as of June 30, 2024, and December 31, 2023, respectively, in support of reserves associated with this agreement.

LNBAR has funded trusts to support reserves ceded by us of which the balance in the trusts changes as a result of ongoing reinsurance activity and totaled $13.3 billion and $13.0 billion as of June 30, 2024, and December 31, 2023, respectively.

Fortitude Reinsurance Company Ltd.

Effective October 1, 2023, we entered into a reinsurance agreement with Fortitude Reinsurance Company Ltd. (“Fortitude Re”), an authorized Bermuda reinsurer with reciprocal jurisdiction reinsurer status in Indiana, to reinsure certain blocks of in-force UL with secondary guarantees (“ULSG”) and fixed annuity products, including group pension annuities. Fortitude Re represents our largest unaffiliated reinsurance exposure as of June 30, 2024, and December 31, 2023.

The agreement between us and Fortitude Re is structured as a coinsurance treaty for the ULSG and fixed annuities blocks. As significant insurance risk was transferred for ULSG products and life-contingent annuities, amounts recoverable from Fortitude Re were $10.5 billion as of June 30, 2024, and December 31, 2023. We reported a deferred loss on the transaction of $2.6 billion and $2.7 billion as of June 30, 2024, and December 31, 2023, respectively. We amortized $22 million and $44 million of the deferred loss during the three and six months ended June 30, 2024, respectively. Annuities that are not life-contingent do not contain significant insurance risk; therefore, we reported deposit assets for these contracts of $3.6 billion and $4.2 billion as of June 30, 2024, and December 31, 2023, respectively.