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What changed in LINCOLN NATIONAL CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LINCOLN NATIONAL CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+981 added−891 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-21)

Top changes in LINCOLN NATIONAL CORP's 2025 10-K

981 paragraphs added · 891 removed · 762 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

119 edited+44 added−29 removed160 unchanged
Biggest changeThe extent of regulation by the jurisdiction varies, but, in general, most jurisdictions have laws and regulations governing standards of solvency, adequacy of reserves, reinsurance, capital adequacy, licensing of companies and agents to transact business, prescribing and approving policy forms, regulating premium rates for some lines of business, prescribing the form and content of financial statements and reports, regulating the type and amount of investments permitted and standards of business conduct.
Biggest changeThe extent of regulation by the jurisdictions varies, but, in general, most jurisdictions have laws and regulations governing standards of solvency, adequacy of reserves, reinsurance, capital adequacy and licensing of companies and producers to transact business; prescribing and approving policy forms; regulating premium rates for some lines of business; prescribing the form and content of statutory financial statements and reports; and regulating the type and amount of investments permitted and standards of business conduct. 12 Table of Contents State insurance laws and regulations also include provisions governing marketplace activity of life and annuity insurers, including provisions governing the form and content of disclosure to consumers, such as advertising, illustrations, sales practices and complaint handling.
Absence Management We offer a robust portfolio of absence management services to help employers manage their state and federal family medical and company leave programs (paid and unpaid), as well as accommodation services that help employers identify accommodations that could be made to help claimants return to work (e.g., assistive devices, ergonomic assessments, etc.).
Absence Management Services We offer a robust portfolio of absence management services to help employers manage their state and federal family medical and company leave programs (paid and unpaid), as well as accommodation services that help employers identify accommodations that could be made to help claimants return to work (e.g., assistive devices, ergonomic assessments, etc.).
LLANY is domiciled in New York and its principal insurance regulatory authority is the New York Department of Financial Services (“NYDFS”).
LLANY is domiciled in New York and its principal insurance regulatory authority is the New York Department of Financial Services (the “NYDFS”).
Our U.S. insurance companies prepare statutory financial statements in accordance with accounting practices and procedures prescribed or permitted by these departments. The NAIC has approved a series of statutory accounting principles (“SAP”) that have been adopted, in some cases with minor modifications, by virtually all state insurance departments. Changes in these SAP can significantly affect our capital and surplus.
Our U.S. insurance companies prepare statutory financial statements in accordance with accounting practices and procedures prescribed or permitted by these departments. The NAIC has approved a series of statutory accounting principles (“SAP”) that have been adopted, in some cases with minor modifications, by virtually all state insurance departments. Changes in SAP can significantly affect our capital and surplus.
Standard of Conduct Regulation As a result of overlapping efforts by the Department of Labor (“DOL”), the NAIC, individual states and the SEC to impose fiduciary-like requirements in connection with the sale of annuities, life insurance policies and securities, which are each discussed in more detail below, there have been a number of proposed or adopted changes to the laws and regulations that govern the distribution of our products.
Standard of Conduct Regulation As a result of overlapping efforts by the Department of Labor (the “DOL”), the NAIC, individual states and the SEC to impose fiduciary-like requirements in connection with the sale of annuities, life insurance policies and securities, which are each discussed in more detail below, there have been a number of proposed or adopted changes to the laws and regulations that govern the distribution of our products.
These insurance holding company laws generally require an insurance holding company and insurers that are members of such insurance holding company’s system to register with the insurance department authorities, to file with it certain reports disclosing information, including their capital structure, ownership, management, financial condition and certain inter-company transactions, including material transfers of assets and inter-company business agreements, and to report material changes in that information.
These insurance holding company laws generally require an insurance holding company and insurers that are members of such insurance holding company’s system to register with the insurance department authorities, to file with such authorities certain reports disclosing information, including their capital structure, ownership, management, financial condition and certain inter-company transactions, including material transfers of assets and inter-company business agreements, and to report material changes in that information.
The Federal Insurance Office established under the Dodd-Frank Act issues annually a wide-ranging report on the state of insurance regulation in the U.S., together with a series of recommendations on ways to monitor and improve the regulatory environment. The ultimate impact of these recommendations on our business is undeterminable at this time.
Additionally, the Federal Insurance Office established under the Dodd-Frank Act issues annually a wide-ranging report on the state of insurance regulation in the U.S., together with a series of recommendations on ways to monitor and improve the regulatory environment. The ultimate impact of these recommendations on our business is undeterminable at this time.
In recent years, there has been increased scrutiny by these bodies across the industry, which has included more extensive examinations, regular sweep inquiries and more detailed review of disclosure documents. Certain of our subsidiaries have been, and may continue to be, the subject of such inquiries and examinations.
In recent years, there has been increased scrutiny by these regulatory bodies across the industry, which has included more extensive examinations, regular sweep inquiries and more detailed review of disclosure documents. Certain of our subsidiaries have been, and may continue to be, the subject of such inquiries and examinations.
We provide products and services and report results through four business segments as follows: • Annuities • Life Insurance • Group Protection • Retirement Plan Services We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments.
We provide products and services and report results through four business segments as follows: • Annuities • Life Insurance • Group Protection • Retirement Plan Services We also have Other Operations, which includes the financial results for operations that are not directly related to the business segments.
Competition The life insurance market is very competitive and consists of many companies with no one company dominating the market for all products. Principal competitive factors include product features, price, underwriting and issue process, customer service and insurers’ financial strength.
Competition The life insurance market is very competitive and consists of many companies with no one company dominating the market for all products. Principal competitive factors include product features, price, underwriting and issue process, customer service and experience and insurers’ financial strength.
As financial services regulatory reform continues to evolve in the U.S. and abroad, and the marketplace continues to respond, the extent to which our derivatives costs and strategies may change and the extent to which those changes may affect the range or pricing of our products remains uncertain.
As financial services regulatory reform continues to evolve in the U.S. and abroad, and the marketplace continues to respond, the extent to which our costs and strategies may change and the extent to which those changes may affect the range or pricing of our products remains uncertain.
Risk Factors – Operational Matters – We are subject to third-party information system and other operational risks due to our reliance on third-party vendors and suppliers and the outsourcing of certain of our business operations.” Securities, Broker-Dealer and Investment Adviser Regulation In addition to being registered under the Securities Act of 1933, some of our separate accounts as well as mutual funds that we sponsor are registered as investment companies under the Investment Company Act of 1940, and the shares of certain of these entities are qualified for sale in some or all states and the District of Columbia.
Risk Factors – Operational Matters – We are subject to third-party information system and other operational risks due to our reliance on third-party vendors and suppliers and the outsourcing of certain of our business operations.” Securities, Broker-Dealer and Investment Adviser Regulation In addition to being registered under the Securities Act of 1933, some of our separate accounts as well as mutual funds and closed-end funds that we sponsor are registered as investment companies under the Investment Company Act of 1940, and the shares of certain of these entities are qualified for sale in some or all states and the District of Columbia.
The available indices are the S&P 500 ® Index, the Russell 2000 ® Index, the MSCI EAFE, the Capital Strength Net Fee Index SM , the First Trust American Leadership Index TM , the Capital Group Growth ETF Index and the Capital Group Global Growth ETF Index.
The available indices and ETFs are the S&P 500 ® Index, the Russell 2000 ® Index, the MSCI EAFE, the Capital Strength Net Fee Index SM , the First Trust American Leadership Index TM , the Capital Group Growth ETF and the Capital Group Global Growth ETF.
See “ Item 1A. Risk Factors – Liquidity and Capital Position – A decrease in the capital and surplus of our insurance subsidiaries may result in a downgrade to our credit and insurer financial strength ratings” and “ Item 1A.
Risk Factors – Liquidity and Capital Position – A decrease in the capital and surplus of our insurance subsidiaries may result in a downgrade to our credit and insurer financial strength ratings” and “ Item 1A.
These guaranty associations and arrangements provide certain levels of protection to policyholders from losses under insurance policies issued by insurance companies that become impaired or insolvent.
These guaranty associations and similar arrangements provide certain levels of protection to policyholders from losses under insurance policies issued by insurance companies that become impaired or insolvent.
We offer the optional Lincoln ProtectedPay SM lifetime income suite, which provides a GWB and includes: Secure Core, Secure Core with Estate Lock, Secure Plus and Secure Max, and Select Core, Select Core with Estate Lock, Select Plus and Select Max.
We offer the optional Lincoln ProtectedPay ® lifetime income suite, which provides a GWB and includes: Secure Core, Secure Core with Estate Lock, Secure Plus and Secure Max, and Select Core, Select Core with Estate Lock, Select Plus and Select Max.
Claims are evaluated for eligibility and payment of benefits pursuant to the group insurance contract or self-insured plan and in compliance with federal and state laws and regulations. Efficient and accurate disability claims management is especially important to customer service satisfaction and segment results. Financial results can be impacted by both the incidence and the length of approved disability claims.
Claims are evaluated for eligibility and payment of benefits pursuant to the group insurance policy or self-insured plan and in compliance with federal and state laws and regulations. Efficient and accurate disability claims management is especially important to customer service satisfaction and segment results. Financial results can be impacted by both the incidence and the length of approved disability claims.
In December 2023, the NAIC adopted a model bulletin on the use of AI by insurers, which was intended to remind insurance carriers that decisions impacting consumers that are made or supported by advanced analytical and computational technologies, including AI, must comply with all applicable insurance laws and regulations, including unfair trade practices.
In December 2023, the NAIC adopted a model bulletin on the use of AI by insurers, which was intended to remind insurance carriers that decisions impacting consumers that are made or supported by advanced analytical and computational technologies, including AI, must comply with all applicable insurance laws and regulations, including those prohibiting unfair trade practices.
Regulation Best Interest and Form CRS became effective as of September 10, 2019, with a transition period for compliance through June 30, 2020, as of which date broker-dealers were required to be compliant. Finally, the SEC issued interpretative guidance regarding an investment adviser’s fiduciary obligation under the Advisers Act.
Regulation Best Interest and Form CRS became effective as of September 10, 2019, with a transition period for compliance through June 30, 2020, as of which date broker-dealers and investment advisers were required to be compliant. Finally, the SEC issued interpretative guidance regarding an investment adviser’s fiduciary obligations under the Advisers Act.
As of December 31, 2024, the RBC ratios of LNL, LLANY and FPP reported to their respective states of domicile and the NAIC all exceeded the “company action level.” We believe that we will be able to maintain the RBC ratios of our insurance subsidiaries in excess of “company action level” through prudent underwriting, claims handling, investing and capital management.
As of December 31, 2025, the RBC ratios of LNL, LLANY and FPP reported to their respective states of domicile and the NAIC all exceeded the “company action level.” We believe that we will be able to maintain the RBC ratios of our insurance subsidiaries in excess of the “company action level” through prudent underwriting, claims handling, investing and capital management.
Products offered include: indemnity coverage, which does not distinguish benefits based on a dental provider’s participation in a network arrangement; Preferred Provider Organization (“PPO”) products, on an insured and administrative services only basis, that do reflect the dental provider’s participation in the PPO network arrangement, including an agreement with 7 Table of Contents network fee schedules; a Dental Health Maintenance Organization product that limits benefit coverage to a closed panel of network providers; an in-network-only option that limits benefit coverage to providers in certain states; and self-funded options for groups with more than 200 employees.
Products offered include: indemnity coverage, which does not distinguish benefits based on a dental provider’s participation in a network arrangement; Preferred Provider Organization (“PPO”) products, on an insured and administrative services only basis, that do reflect the dental provider’s participation in the PPO network arrangement, including an agreement with network fee schedules; a Dental Health Maintenance Organization product that limits benefit coverage to a closed panel of network providers; an in-network-only option that limits benefit coverage to providers in certain states; and self-funded options for groups with more than 200 employees.
In supervising and regulating insurance companies, state insurance departments, charged primarily with protecting policyholders and the public rather than investors, enjoy broad authority and discretion in applying applicable insurance laws and regulation for that purpose. LNL and FPP are domiciled in Indiana and their principal insurance regulatory authority is the Indiana Department of Insurance (“IDOI”).
In supervising and regulating insurance companies, state insurance departments, charged primarily with protecting policyholders and the public rather than investors, enjoy broad authority and discretion in applying applicable insurance laws and regulations for that purpose. LNL and FPP are domiciled in Indiana and their principal insurance regulatory authority is the Indiana Department of Insurance (the “IDOI”).
DOL Fiduciary Advice Rule In 2016, the DOL released the DOL Fiduciary Rule, which became effective in 2017 and substantially expanded the range of activities considered to be fiduciary investment advice under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code. The DOL Fiduciary Rule was subsequently vacated by the U.S.
DOL Fiduciary Advice Rule In 2016, the DOL released the DOL Fiduciary Rule, which became effective in 2017 and substantially expanded the range of activities considered to be fiduciary investment advice under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Internal Revenue Code. The DOL Fiduciary Rule was subsequently vacated by the U.S.
Insurance Holding Company Regulation LNC and its insurance subsidiaries are subject to regulation pursuant to the insurance holding company laws of the states of Indiana and New York.
Insurance Holding Company Regulation LNC and its domestic insurance subsidiaries are subject to regulation pursuant to the insurance holding company laws of the states of Indiana and New York.
To obtain approval from the insurance commissioner of any acquisition of control of an insurance company, the proposed acquirer must file with the applicable commissioner an application containing information regarding: the identity and background of the acquirer and its affiliates; the nature, source and amount of funds to be used to carry out the acquisition; the financial statements of the acquirer and its affiliates; any potential plans for disposition of the securities or business of the insurer; the number and type of securities to be acquired; any contracts with respect to the securities to be acquired; any agreements with broker-dealers; and other matters.
To obtain approval from the insurance commissioner of any acquisition of control of an insurance company, the proposed acquirer must file with the applicable commissioner an application containing information regarding: the identity and background of the acquirer and its affiliates; the nature, source and amount of funds to be used to carry out the acquisition; the financial statements of the acquirer and its affiliates; any potential 14 Table of Contents plans for disposition of the securities or business of the insurer; the number and type of securities to be acquired; any contracts with respect to the securities to be acquired; any agreements with broker-dealers; and other matters.
Insurance company regulation is discussed further in this section under “Insurance Holding Company Regulation.” 12 Table of Contents Current and Recent NAIC Topics Interest Maintenance Reserve In August 2023, the NAIC approved temporary guidance to allow companies to admit a portion of net negative interest maintenance reserves (“IMR”) as an asset under certain conditions, up to a capital and surplus percentage limit.
Insurance company regulation is discussed further in this section under “Insurance Holding Company Regulation.” Current and Recent NAIC Topics Interest Maintenance Reserve In August 2023, the NAIC approved temporary guidance to allow companies to admit a portion of net negative interest maintenance reserves (“IMR”) as an asset under certain conditions, up to a capital and surplus percentage limit.
With our broad distribution network, we compete in the three primary needs of life insurance: death benefit protection, accumulation and linked benefits (MoneyGuard). In addition, we use automated underwriting within a defined criteria as well as LincXpress ® , a streamlined issue process, both of which are seen as marketplace competitive advantages.
With our broad distribution network, we compete in the three primary needs of life insurance: death 6 Table of Contents benefit protection, accumulation and linked benefits (MoneyGuard). In addition, we use automated underwriting within a defined criteria as well as LincXpress ® , a streamlined issue process, both of which are seen as marketplace competitive advantages.
These laws require, among other things, that we institute certain policies and procedures in our business to safeguard this information from improper use or disclosure; disclose our collection, processing, use and sharing practices to individuals; allow individuals, in certain circumstances, to access, correct, and delete their personal information; and, in some cases, allow individuals to opt out of certain data sharing practices.
These laws, when applicable, require, among other things, that we institute certain policies and procedures in our business to safeguard this information from improper use or disclosure; disclose our collection, processing, use and sharing practices to individuals; allow individuals, in certain circumstances, to access, correct, and delete their personal information; and, in some cases, allow individuals to opt out of certain data tracking, sharing and processing practices.
For additional information on our investments, including carrying values by category, quality ratings and net investment income, see “Consolidated Investments” in the MD&A, as well as Notes 1 and 3 . For additional information on our variable annuity hedging program, see “ Introduction – Summary of Critical Accounting Estimates – Market Risk Benefits” in the MD&A.
For additional information on our investments, including carrying values by category, quality ratings and net investment income, see “Consolidated Investments” in the MD&A, as well as Notes 1 and 3 . For additional information on our variable annuity hedging program, see “Introduction – Summary of Critical Accounting Estimates – Market Risk Benefits” in the MD&A.
SEC Regulation Best Interest In 2019, the SEC approved “Regulation Best Interest,” including a new standard of conduct for broker-dealers under the Exchange Act, which requires broker-dealers and their representatives to act in the best interest of retail customers when making recommendations of any securities transaction, without putting their financial interests ahead of the interests of retail customers.
SEC Regulation Best Interest In 2019, the SEC approved “Regulation Best Interest,” including a new standard of conduct for broker-dealers under the Exchange Act, which requires broker-dealers and their representatives to act in the best interest of retail customers when making recommendations of 17 Table of Contents any securities transaction, without putting their financial interests ahead of the interests of retail customers.
This legislation, as well as subsequent state and federal laws and regulations, includes provisions that provide for additional taxes to help finance the cost of these reforms and substantive changes and additions to health care and related laws, which could potentially impact some of our lines of business.
This legislation, as well as subsequent state and federal laws and regulations, includes provisions that provide for additional taxes to help finance the cost of these reforms and substantive changes and additions to health care 18 Table of Contents and related laws, which could potentially impact some of our lines of business.
We continue to monitor any efforts by the government to repeal or replace provisions of the Patient Protection and Affordable Care Act and the effect those efforts may have on our businesses.
We continue to monitor any efforts by the government to repeal or replace provisions of the Patient Protection and Affordable Care Act and the effect those efforts may have on our business.
All of our ratings are subject to revision or withdrawal at any time by the rating agencies, and therefore, no assurance can be given that our insurance subsidiaries can maintain these ratings. Each rating should be 11 Table of Contents evaluated independently of any other rating. Ratings are not recommendations to buy our securities.
All of our ratings are subject to revision or withdrawal at any time by the rating agencies, and therefore, no assurance can be given that our insurance subsidiaries can maintain these ratings. Each rating should be evaluated independently of any other rating. Ratings are not recommendations to buy our securities.
A special team of 6 Table of Contents claims examiners, in conjunction with claims management, focus on more complex claims matters such as claims incurred during the contestable period, beneficiary disputes and litigated claims. Long-term care claims are handled primarily by a third-party administrator.
A special team of claims examiners, in conjunction with claims management, focus on more complex claims matters such as claims incurred during the contestable period, beneficiary disputes and litigated claims. Long-term care claims are handled primarily by a third-party administrator.
Risk Factors – Legislative, Regulatory and Tax – Compliance with existing and emerging privacy laws and regulations could result in increased compliance costs and/or lead to changes in business practices and policies, and any failure to protect the confidentiality of personal information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.” With the rise of innovation and technology in the financial and insurance sectors, state and federal regulators and policymakers and the NAIC are increasingly focused on the use of “big data,” including artificial intelligence (“AI”), machine learning and automatic decision-making, across various business practices such as underwriting, sales and marketing and in claims processing.
Risk Factors – Legislative, Regulatory and Tax – Compliance with existing and emerging privacy laws and regulations could result in increased compliance costs and/or lead to changes in business practices and policies, and any failure to protect the confidentiality of personal information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.” With the rise of innovation and technology in the financial and insurance sectors, state and federal regulators and policymakers and the NAIC are increasingly focused on the use of “big data” and artificial intelligence (“AI”), including machine learning, deep learning and other techniques that enable automatic decision-making, across various business practices such as underwriting, sales and marketing and in claims processing.
Products Disability Insurance and Administrative Services We offer insured coverage for, as well as administrative services for employer self-funded, short- and long-term employer-sponsored group and voluntary disability insurance, which protects an employee against loss of wages due to illness or injury.
Products and Services Disability Insurance and Administrative Services We offer insured coverage for, as well as administrative services for employer self-funded, short- and long-term employer-sponsored group and voluntary disability plans, which protect an employee against loss of wages due to illness or injury.
For voluntary and other forms of employee paid coverages, minimum participation requirements are used to obtain a better spread of risk and minimize the risk of anti-selection. Claims Administration Claims for the Group Protection segment are managed by claim specialists.
For voluntary and other forms of employee paid coverages, minimum participation requirements are used to obtain a better spread of risk and minimize the risk of anti-selection. 8 Table of Contents Claims Administration Claims for the Group Protection segment are managed by claim specialists.
The distribution occurs through financial intermediaries, including consultants, brokers, planners, agents, financial advisers, third-party administrators (“TPAs”), financial institutions and other intermediaries. Group Protection distributes its products and services primarily through employee benefit brokers, TPAs and other employee benefit firms. As of December 31, 2024, LFD had approximately 440 internal and external wholesalers (including sales and relationship managers).
The distribution occurs through financial intermediaries, including consultants, brokers, planners, agents, financial advisers, third-party administrators (“TPAs”), financial institutions and other intermediaries. Group Protection distributes its products and services primarily through employee benefit brokers, TPAs and other employee benefit firms. As of December 31, 2025, LFD had approximately 450 internal and external wholesalers (including sales and relationship managers).
See “Item 1A. Risk Factors – Legislative, Regulatory and Tax – Increasing scrutiny and evolving expectations from investors, customers, regulators and other stakeholders regarding ESG matters may adversely affect our reputation or otherwise adversely impact our business and results of operations” and “Item 1A.
Risk Factors – Legislative, Regulatory and Tax – Continued scrutiny and evolving expectations from investors, customers, regulators and other stakeholders regarding ESG matters may adversely affect our reputation or otherwise adversely impact our business and results of operations” and “Item 1A.
However, no assurances can be given that developments affecting the insurance subsidiaries, many of which could be outside of our control, will not cause the RBC 14 Table of Contents ratios to fall below the “company action level” or below our targeted levels, which are significantly higher than the “company action level.” These developments may include, but may not be limited to: changes to the manner in which the RBC ratio is calculated; new regulatory requirements for calculating reserves, such as principles-based reserving; economic conditions leading to higher levels of impairments of securities in our insurance subsidiaries’ general accounts; and an inability to finance life reserves such as through the issuance of letters of credit (“LOCs”) supporting inter-company reinsurance structures.
However, no assurances can be given that developments affecting the insurance subsidiaries, many of which are outside of our control, will not cause the RBC ratios to fall below the “company action level” or below our targeted levels, which are significantly higher than the “company action level.” These developments may include, but may not be limited to: changes to the manner in which the RBC ratio is calculated; new regulatory requirements for calculating reserves, such as principle-based reserving; economic conditions leading to higher levels of impairments of securities in our insurance subsidiaries’ general accounts; and an inability to finance life reserves such as through the issuance of letters of credit (“LOCs”) supporting inter-company reinsurance structures. 15 Table of Contents See “ Item 1A.
The information contained on our website is not included as part of, or incorporated by reference into, this report. 20 Table of Contents
The information contained on our website is not included as part of, or incorporated by reference into, this report. 21 Table of Contents
Some of our products include secondary guarantees, which are discussed more fully below. 4 Table of Contents In general, the Life Insurance segment’s sources of revenue include premium payments, cost of insurance assessments, expense and fee charges and investment income.
Some of our products include secondary guarantees, which are discussed more fully below. In general, the Life Insurance segment’s sources of revenue include premium payments, cost of insurance assessments, expense and fee charges and investment income.
Risk Factors – Operational Matters – We face risks of non-collectability of reinsurance and increased reinsurance rates, which could materially affect our results of operations.” 10 Table of Contents INVESTMENTS An important component of our financial results is the return on investments.
Risk Factors – Operational Matters – We face risks of non-collectability of reinsurance and increased reinsurance rates, which could materially affect our results of operations.” INVESTMENTS An important component of our financial results is the return on investments.
We also have one subsidiary, LFD, that is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (“Exchange Act”) and is subject to federal and state regulation, including, but not limited to, the Financial Industry Regulation Authority’s (“FINRA”) net capital rules.
We also have one subsidiary, LFD, that is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and is subject to federal, state and self-regulatory organization regulation, including, but not limited to, the Financial Industry Regulation Authority’s (“FINRA”) net capital and other rules.
Congress alleviated some of this uncertainty by passing the Bipartisan Budget Act of 2015. The 2024 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, published by the Social Security Administration, projects that the SSDI reserves will not be depleted until 2035.
Congress alleviated some of this uncertainty by passing the Bipartisan Budget Act of 2015. The 2025 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, published by the Social Security Administration, projects that the SSDI reserves will not be depleted until 2034.
Regulators can then measure adequacy of a company’s statutory surplus by comparing it to the RBC determined by the formula. Under RBC requirements, regulatory compliance is determined by the ratio of a company’s total adjusted capital, as defined by the NAIC, to its company action level of RBC (known as the RBC ratio), also as defined by the NAIC.
Regulators can then measure the adequacy of a company’s statutory surplus by comparing it to the RBC determined by the formula. Under RBC requirements, regulatory compliance is determined by the ratio of a company’s total adjusted capital, as defined by the NAIC, to its “company action level” of RBC (known as the RBC ratio), also as defined by the NAIC.
We regard our trademarks as valuable assets in marketing our products and services and intend to protect them against infringement and dilution. HUMAN CAPITAL MANAGEMENT As of December 31, 2024, we had a total of 9,783 employees.
We regard our trademarks as valuable assets in marketing our products and services and intend to protect them against infringement and dilution. HUMAN CAPITAL MANAGEMENT As of December 31, 2025, we had a total of 9,423 employees.
OTHER OPERATIONS Other Operations includes the financial results for operations that are not directly related to the business segments and primarily consists of: investments related to the excess capital in our insurance subsidiaries; corporate investments; interest expense associated with debt; expenses associated with corporate strategic initiatives; expenses associated with benefit plans; the results of certain disability income business; our run-off Institutional Pension business in the form of group annuity contracts; and, beginning in 2025, activities related to funding agreement-backed notes (“FABN”).
OTHER OPERATIONS Other Operations includes the financial results for operations that are not directly related to the business segments and primarily consists of: investments related to the excess capital in our insurance subsidiaries; corporate investments; interest expense associated with debt; expenses associated with corporate strategic initiatives; expenses associated with benefit plans; the results of certain disability income business; our run-off Institutional Pension business in the form of group annuity contracts; and activities related to institutional funding agreements.
We cannot predict what changes, if any, these activities may ultimately have on our businesses.
We cannot predict what changes, if any, these activities may ultimately have on our business.
Form CRS is intended to provide retail investors with information about the nature of their relationship with their investment professional and 16 Table of Contents supplements other more detailed disclosures, including existing Form ADV for advisers and the new disclosures under Regulation Best Interest for broker-dealers.
Form CRS is intended to provide retail investors with information about the nature of their relationship with their investment professional and supplements other more detailed disclosures, including existing Form ADV for advisers and the disclosures required under Regulation Best Interest for broker-dealers.
In certain contract designs, w e expect to earn a spread between what we earn on the underlying general account investments supporting the fixed account and what we credit to our contract holders’ account balances.
In certain contract designs, w e expect to earn a spread between what we earn on the underlying general account investments supporting the fixed account and what we credit to our contract holders’ account balances. In others, we earn a fee on assets in the underlying custodial account.
See also “ Item 1A . Risk Factors – Covenants and Ratings – A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors.” Our insurer financial strength ratings are all on outlook stable.
See also “ Item 1A . Risk Factors – Ratings – A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors.” Our insurer financial strength ratings have all been assigned a stable outlook.
Our captive reinsurance and reinsurance subsidiaries are subject to periodic financial examinations by their respective domiciliary insurance regulators. We have not received any material adverse findings resulting from insurance department examinations of our insurance, reinsurance and captive reinsurance subsidiaries conducted during the three-year period ended December 31, 2024.
Our captive reinsurance and reinsurance subsidiaries are subject to periodic financial examinations by their respective domiciliary insurance regulators. We did not receive any material adverse findings resulting from insurance department examinations of our insurance, reinsurance and captive reinsurance subsidiaries conducted during the three-year period ended December 31, 2025.
The insurer financial strength rating scales of AM Best, Fitch Ratings (“Fitch”), Moody’s Investors Service (“Moody’s”) and S&P Global Ratings (“S&P”) are characterized as follows: • AM Best – A++ to D • Fitch – AAA to C • Moody’s – Aaa to C • S&P – AAA to D As of February 13, 2025, the financial strength ratings of our insurance subsidiaries, as published by the principal rating agencies that rate us, were as follows: AM Best Fitch Moody's S&P The Lincoln National Life Insurance Company (“LNL”) A A+ A2 A+ (3rd highest of 16) (5th highest of 19) (6th highest of 21) (5th highest of 21) Lincoln Life & Annuity Company of New York (“LLANY”) A A+ A2 A+ (3rd highest of 16) (5th highest of 19) (6th highest of 21) (5th highest of 21) First Penn-Pacific Life Insurance Company (“FPP”) A A+ A2 A- (3rd highest of 16) (5th highest of 19) (6th highest of 21) (7th highest of 21) A downgrade of the financial strength rating of one of our insurance subsidiaries could affect our competitive position in the insurance industry and make it more difficult for us to market our products, as potential customers may select companies with higher financial strength ratings.
There may be other rating agencies that also rate our insurance companies that we do not disclose in our reports. 11 Table of Contents The insurer financial strength rating scales of AM Best, Fitch Ratings (“Fitch”), Moody’s Investors Service (“Moody’s”) and S&P Global Ratings (“S&P”) are characterized as follows: • AM Best – A++ to D • Fitch – AAA to C • Moody’s – Aaa to C • S&P – AAA to D As of February 12, 2026, the financial strength ratings of our insurance subsidiaries, as published by the principal rating agencies that rate us, were as follows: AM Best Fitch Moody's S&P The Lincoln National Life Insurance Company (“LNL”) A A+ A2 A+ (3rd highest of 16) (5th highest of 19) (6th highest of 21) (5th highest of 21) Lincoln Life & Annuity Company of New York (“LLANY”) A A+ A2 A+ (3rd highest of 16) (5th highest of 19) (6th highest of 21) (5th highest of 21) First Penn-Pacific Life Insurance Company (“FPP”) A A+ A2 A- (3rd highest of 16) (5th highest of 19) (6th highest of 21) (7th highest of 21) A downgrade of the financial strength rating of one of our insurance subsidiaries could affect our competitive position in the insurance industry and make it more difficult for us to market our products, as potential customers may select companies with higher financial strength ratings.
While we continue to monitor and evaluate the various proposals, we cannot predict what other proposals may be made, or what new legislation or regulation may be introduced or become law. Therefore, until such time as final rules or laws are in place, the potential impact on our business is uncertain.
While we continue to monitor and evaluate developments in this area, we cannot predict what new legislation or regulation may be introduced or become law. Therefore, until such time as final rules or laws are in place, the potential impact on our business is uncertain.
Application of various other federal and state environmental laws could also result in the imposition of liability on us for costs associated with environmental hazards. 18 Table of Contents We routinely conduct environmental assessments for real estate we acquire for investment and before taking title through foreclosure to real property collateralizing mortgages that we hold.
Application of various other federal and state environmental laws could also result in the imposition of liability on us for costs associated with environmental hazards. We routinely conduct environmental assessments or review environmental assessments obtained by borrowers for real estate we acquire for investment and before taking title through foreclosure to real property collateralizing mortgages that we hold.
State Law Standard of Conduct Rules and Regulations In addition to the SEC and DOL rules, the NAIC and several states, including Massachusetts, Nevada, New Jersey and New York, have either enacted or proposed laws and regulations requiring investment advisers, broker-dealers and/or agents to meet a higher standard of care and provide additional disclosures when providing advice to their clients.
State Law Standard of Conduct Rules and Regulations In addition to the SEC and DOL rules, the NAIC and several states have enacted laws and regulations requiring investment advisers, broker-dealers and/or agents to meet a higher standard of care and provide additional disclosures when providing advice to their clients.
The Company conducts a comprehensive, company-wide engagement survey every two years, and often conducts department-specific pulse surveys in the alternate years, to inform our human resources strategy, measure progress and adjust plans, as necessary. We focus on equipping our managers to foster employee development and strengthen their voices.
Historically, the Company has conducted a comprehensive, company-wide engagement survey every two years, often conducting department-specific pulse surveys in the alternate years, to inform our human resources strategy, measure progress and adjust plans, as necessary. Beginning in 2026, the engagement survey will be conducted annually. We focus on equipping our managers to foster employee development and strengthen their voices.
Because we bear the risk of nonpayment by one or more of our reinsurers, we primarily cede reinsurance to well-capitalized, highly rated unaffiliated reinsurers. We also utilize inter-company reinsurance agreements to manage our statutory capital position as well as our hedge program for variable annuity guarantees. These inter-company agreements do not have an effect on the consolidated financial statements.
Because we bear the risk of nonpayment by one or more of our reinsurers, we primarily cede reinsurance to well-capitalized, highly rated unaffiliated reinsurers. We also utilize inter-company reinsurance agreements to manage our statutory capital position, as well as our hedge program for variable annuity guarantees.
In addition, we have one subsidiary that is a registered investment adviser under the Investment Advisers Act of 1940. Employees registered or associated with our investment adviser or broker-dealer subsidiaries are subject to federal securities laws and to examination requirements and regulation by state and federal securities regulators.
In addition, we have one subsidiary, Lincoln Financial Investments Corporation, that is a registered investment adviser under the Investment Advisers Act of 1940 (the “Advisers Act”). Employees registered or associated with our investment adviser or broker-dealer subsidiaries are subject to federal securities laws and to examination requirements and regulation by state and federal securities regulators and self-regulatory organizations, where applicable.
Our Bermuda-based reinsurance subsidiary, LPINE, and our Barbados-based reinsurance subsidiary, Lincoln National Reinsurance Company (Barbados) Limited, are regulated by the Bermuda Monetary Authority (“BMA”) and the Barbados Financial Services Commission, respectively, each of which enforces standards related to solvency, capital adequacy and other regulatory requirements. The insurance departments of the domiciliary jurisdictions exercise principal regulatory jurisdiction over our insurance subsidiaries.
Our Bermuda-based reinsurance subsidiary, LPINE, and our Barbados-based reinsurance subsidiary, Lincoln National Reinsurance Company (Barbados) Limited, are regulated by the Bermuda Monetary Authority (the “BMA”) and the Barbados Financial Services Commission (“FSC”), respectively, each of which enforces standards related to solvency, capital adequacy and other applicable regulatory requirements.
The results through May 6, 2024, of Lincoln Financial Network (“LFN”), our former retail distributor, are included in the business segments for which it distributed products. See “Sale of Wealth Management Business” below for more information.
The results through May 6, 2024, of Lincoln Financial Network (“LFN”), our former retail distributor, are included in the business segments for which it distributed products. See Note 1 for additional information on the 2024 sale of our wealth management business.
For eligible employees, such programs include: • a subsidized medical plan with domestic partner eligibility, plus optional dental and vision, a health savings account with a company contribution and a healthcare flexible spending account; • a well-being program that provides access to personal health coaches, health screenings and flu shots, discounts and reimbursements for programs that promote health; • an employee assistance program that provides counseling, work/life resources and tools to manage well-being; • our employee 401(k) plan with a non-discretionary core company contribution, company matching contribution and other convenient features; • dedicated Lincoln Financial Retirement Consultants to evaluate employee retirement readiness and help them map out ways to improve their readiness, in addition to an independent financial wellness advisor for complete financial well-being assistance; • hospital indemnity, accident and critical illness insurance coverages, short- and long-term disability plans and company-provided life insurance; • fertility, pregnancy and parenting support, plus paid parental leave and adoption assistance programs; • a dependent care flexible spending account and back-up dependent care; • access to Homework Connection, which provides one-on-one, on-demand homework help to students at no cost to employees; • weight management, diabetes and hypertension prevention and care; and • virtual care for musculoskeletal conditions or telemedicine.
For eligible employees, such programs include: • a subsidized medical plan with domestic partner eligibility, plus optional dental and vision, a health savings account with a company contribution and a healthcare flexible spending account; • a well-being program that provides access to personal health coaches, health screenings and flu shots, discounts and reimbursements for programs that promote health; • an employee assistance program that provides counseling, work/life resources and tools to manage well-being; • our employee 401(k) plan with a non-discretionary core company contribution, company matching contribution and other convenient features; • dedicated Lincoln Financial Retirement Consultants to evaluate employee retirement readiness and help them map out ways to improve their overall financial wellness; • hospital indemnity, accident and critical illness insurance coverages, short- and long-term disability plans and company-provided life insurance; • fertility, pregnancy and parenting support, plus paid parental leave and adoption assistance programs; • a dependent care flexible spending account and back-up dependent care; • comprehensive cardiometabolic support for weight management, diabetes and more; • virtual musculoskeletal care, including digital physical therapy; • a surgical center of excellence network; and • a virtual clinical network for telemedicine consults.
This guidance became effective for periods ending September 30, 2023 and will sunset on December 31, 2025. This guidance has had the effect of increasing our statutory capital, corresponding to an approximate 10 percentage-point increase to our estimated risk-based capital (“RBC”) ratio as of December 31, 2024. The NAIC is continuing work towards a long-term solution.
This guidance has had the effect of increasing our statutory capital, corresponding to an approximate 10 percentage-point increase to our estimated risk-based capital (“RBC”) ratio as of December 31, 2025. The NAIC is continuing work towards a long-term solution.
We remain focused on wholesaler productivity, increasing relationship management expertise and growing the number of broker-dealer relationships. Competition The retirement plan marketplace is very competitive and comprised of many providers with no one company dominating the market for all products. As stated above, we compete with numerous other financial services corporations in the small, mid and large employer-size markets.
Competition The retirement plan marketplace is very competitive and comprised of many providers with no one company dominating the market for all products. As stated above, we compete with numerous other financial services corporations in the small, mid and large employer-size markets.
Additional provisions of the Dodd-Frank Act include, among other things, the creation of a new Consumer Financial Protection Bureau to protect consumers of certain financial products; and changes to certain corporate governance rules.
Among other things, the Dodd-Frank Act created the Consumer Financial Protection Bureau to protect consumers of certain financial products and implemented changes to certain corporate governance rules.
See “Introduction – Executive Summary – Significant Operational Matters” in the MD&A for additional information on our FABN program. REINSURANCE Our reinsurance strategy is designed to protect our insurance subsidiaries against the severity of losses on individual claims and unusually serious occurrences in which a number of claims produce an aggregate extraordinary loss.
REINSURANCE Our reinsurance strategy is designed to protect our insurance subsidiaries against the severity of losses on individual claims and unusually serious occurrences in which a number of claims produce an aggregate extraordinary loss.
Our fixed IUL products function similarly to a traditional UL policy, with the added flexibility of allowing policyholders to have portions of their account balances earn credits based on the performance of indices such as the S&P 500 ® Index. These products include Lincoln WealthPreserve ® IUL and Lincoln WealthAccumulate ® IUL.
Our fixed IUL products function similarly to a traditional UL policy, with the added flexibility of allowing policyholders to have portions of their account balances earn credits based on the performance of indices such as the S&P 500 ® Index. Key products in our IUL suite have recently transitioned to new products that offer additional index options and features.
The segment employs detailed underwriting policies, guidelines and procedures designed to assist the underwriter to properly assess and quantify risks. Individual underwriting techniques (including evaluation of individual medical history information) may be used on certain covered individuals selecting benefit amounts that are above guarantee issue limits set forth in the insurance policies.
Individual underwriting techniques (including evaluation of individual medical history information) may be used on certain covered individuals selecting benefit amounts that are above guarantee issue limits set forth in the insurance policies.
In 2024, we introduced LLA2 , a new version of LLA that provides one or more indexed accounts. LLA2 offers the SecureLock+ SM feature, which enables the contract holder to capture gains and reset the growth potential and downside protection for an indexed account by locking in the interim value intra term.
LLA2 and LLA2 Income provide one or more indexed accounts and also offer the SecureLock+ SM feature, which enables the contract holder to capture gains and reset the growth potential and downside protection for an indexed account by locking in the interim value intra term.
The bulletin also sets forth state insurance regulators’ expectations on how insurers should govern the use of such technologies by or on behalf of the insurer to make or support such decisions.
The bulletin also sets forth state insurance regulators’ expectations on how insurers should govern the use of such technologies by or on behalf of the insurer to make or support such decisions. As of the end of 2025, 28 state insurance commissions have adopted the NAIC model bulletin or a similar regulation.
This rider allows annuity contract holders access and control during a portion of the income distribution phase of their contract. This added flexibility allows the contract holder to access the account balance for transfers and additional withdrawals. We use derivatives to hedge the equity market risk associated with our indexed variable annuity products.
This rider allows annuity contract holders access and control during a portion of the income distribution phase of their contract. This added flexibility allows the contract holder to access the account balance for transfers and additional withdrawals.
As part of their regulatory oversight process, state insurance departments also conduct periodic examinations, generally once every three to five years, of the books, records, accounts and business practices of insurers domiciled in their states. Examinations are generally carried out in cooperation with the insurance regulators of other states under guidelines promulgated by the National Association of Insurance Commissioners (“NAIC”).
As part of their regulatory oversight process, state insurance departments also conduct periodic examinations, generally once every three to five years, of the books, records, accounts and business practices of insurers domiciled in their states.
This product insures two lives with a single policy and pays death benefits upon the second death. A UL policy with a lifetime secondary guarantee can stay in force, even if the base policy cash value is zero, as long as secondary guarantee requirements have been met.
A UL policy with a lifetime secondary guarantee can stay in force, even if the base policy cash value is zero, as long as secondary guarantee requirements have been met.
As of December 31, 2024, the policy for our reinsurance program was to retain no more than $20 million on a single insured life, with the retention on most policies being significantly below that. For more information, see Note 7 .
For more information about our affiliate reinsurance transactions with LPINE, see “Introduction – Executive Summary – Significant Operational Matters” in the MD&A. As of December 31, 2025, the policy for our reinsurance program was to retain no more than $20 million on a single insured life, with the retention on most policies being significantly below that.
Annuities are unique in that policyholders can select a variety of payout alternatives to provide an income flow for life. Many annuity contracts also include guarantee features (living and death benefits) that are not found in any other investment vehicle and that, we believe, make annuities attractive especially in times of economic uncertainty.
Many annuity contracts also include guarantee features (living and death benefits) that are not found in any other investment vehicle and that, we believe, make annuities attractive especially in times of economic uncertainty.
Our fixed indexed annuities allow the contract holder to choose between a fixed interest crediting rate and an indexed interest crediting rate, which is based on the performance of the S&P 500 ® Index, the S&P 500 Daily Risk Control 5% TM Index, the S&P 500 Daily Risk Control 10% TM Index, the J.P.
Our fixed indexed annuities allow the contract holder to choose between a fixed interest crediting rate and an indexed interest crediting rate, which is based on the performance of the S&P 500 ® Index, the S&P 500 Daily Risk Control 10% TM Index, the BlackRock Dynamic Allocation Index, the Fidelity AIM SM Dividend Index, the Nasdaq Priva™ Index or the Capital Group Dividend Value ETF.
Depending on the product selected, surrender charge periods can range from 0 to 25 years. Our Lincoln Premier SM BOLI UL product is a UL-type product purchased by a bank that insures the lives of the bank’s employees. We offer a survivorship version of our individual IUL products, Lincoln WealthPreserve ® SIUL.
Depending on the product selected, surrender charge periods can range from 0 to 25 years. Our Lincoln Premier SM BOLI UL product is a UL-type product purchased by a bank that insures the lives of the bank’s employees. These products are characterized as Executive Benefits products when reporting sales.
FINANCIAL STRENGTH RATINGS The Nationally Recognized Statistical Ratings Organizations rate the financial strength of our insurance subsidiaries. Rating agencies rate insurance companies based on financial strength and the ability to pay claims, factors more relevant to policyholders than investors. We believe that the ratings assigned by nationally recognized, independent rating agencies are material to our operations.
FINANCIAL STRENGTH RATINGS The Nationally Recognized Statistical Ratings Organizations rate the financial strength of our insurance subsidiaries. Rating agencies rate insurance companies based on financial strength and the ability to pay obligations under insurance policies and contracts, factors more relevant to policyholders than investors.
(“Fortitude Re”), Protective Life Insurance Company, Security Life of Denver Insurance Company (a subsidiary of Resolution Life that we refer to herein as “Resolution Life”), Commonwealth Annuity and Life Insurance Company (a subsidiary of Global Atlantic) and Athene Holding Ltd. (“Athene”) represent our largest reinsurance exposures.
(“Fortitude Re”), Protective Life Insurance Company, Security Life of Denver Insurance Company (a subsidiary of Resolution Life), Commonwealth Annuity and Life Insurance Company (a subsidiary of Global Atlantic), Hannover Life Reassurance Company of America (Bermuda) Ltd. and Athene Holding Ltd. represent our largest reinsurance exposures.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, in March 2024, the SEC adopted extensive rule changes, which have been stayed pending the outcome of litigation challenges, that would require companies to include certain climate-related disclosures in their registration statements and periodic reports filed with the SEC, and in October 2023, the Governor of California signed two bills into law that were further amended in September 2024 and, beginning in 2026, will require significant climate-related disclosures (in some cases beyond the disclosures required by the SEC’s rule) by large entities doing business in that state.
Biggest changeFor example, in March 2024, the SEC adopted extensive rule changes, which have been stayed pending the outcome of litigation challenges, that would require companies to include certain climate-related disclosures in their registration statements and periodic reports filed with the SEC.
Item 1A. Risk Factors You should carefully consider the risks described below before investing in our securities. The risks and uncertainties described below are not the only ones facing our Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.
Item 1A. Risk Factors You should carefully consider the risks and uncertainties described below before investing in our securities. The risks and uncertainties described below are not the only ones facing our Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.
Increases in interest rates or sustained high interest rates, have in the past and may in the future, cause increased surrenders and withdrawals of insurance products. In periods of high or increasing interest rates, policy loans and surrenders and withdrawals of life insurance policies and annuity contracts may increase as contract holders seek to buy products with perceived higher returns.
Increases in interest rates or sustained higher interest rates, have in the past and may in the future, cause increased surrenders and withdrawals of insurance products. In periods of high or increasing interest rates, policy loans and surrenders and withdrawals of life insurance policies and annuity contracts may increase as contract holders seek to buy products with perceived higher returns.
If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, the insurance regulatory authorities could preclude or temporarily suspend us from carrying on some of or all our activities or impose substantial fines.
If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, the insurance regulatory authorities could preclude or temporarily suspend us from carrying on some or all of our activities or impose substantial fines.
Changes to laws or regulations could adversely affect our distribution model and sales of our products and may result in additional disclosure and other requirements related to the sale and delivery of our products and services, which may adversely affect our business, results of operations or financial condition.
Changes to laws or regulations could adversely affect our distribution model and sales of our products and may result in additional disclosure and other requirements related to the sale and delivery of our products and services, which may adversely affect our business, results of operations and financial condition.
Changes in regulatory approval processes, rules and other dynamics in the regulatory process could adversely impact our ability to react to such changing conditions. We cannot predict the impact that any changes to “best interest” or fiduciary standards may have on our business, financial condition or results of operations.
Changes in regulatory approval processes, rules and other dynamics in the regulatory process could adversely impact our ability to react to such changing conditions. We cannot predict the impact that any changes to “best interest” or fiduciary standards may have on our business, financial condition and results of operations.
Compliance with new or changed rules or legislation in this area may increase our regulatory burden and that of our distribution partners, require changes to our business practices and product offerings, and increase litigation risk, which could adversely affect our results of operations or financial condition.
Compliance with new or changed rules or legislation in this area may increase our regulatory burden and that of our distribution partners, require changes to our business practices and product offerings, and increase litigation risk, which could adversely affect our results of operations and financial condition.
Business – Regulatory – Securities, Broker-Dealer and Investment Adviser Regulation” for more information regarding Regulation Best Interest and other standard of conduct regulations. Changes in tax law or the interpretation of or application of existing tax laws could impact our tax costs and the products that we sell.
Business – Regulatory – Securities, Broker-Dealer and Investment Adviser Regulation” for more information regarding Regulation Best Interest and other standard of conduct regulations. Changes in tax law or the interpretation or application of existing tax laws could impact our tax costs and the products that we sell.
Climate change could also impact our counterparties and other third parties, including, among others, reinsurers and derivatives counterparties. Additionally, the value of investments, including real estate investments we hold, and the broader market indices could be adversely affected, which may impact our product profitability and the ability to write new business.
Climate change could also adversely impact our counterparties and other third parties, including, among others, reinsurers and derivatives counterparties. Additionally, the value of investments we hold, including real estate investments, and the broader market indices could be adversely affected, which may adversely impact our product profitability and the ability to write new business.
Future pandemics or other catastrophic events could cause a material adverse effect on our results of operations in any period and, depending on their severity, could also materially and adversely affect our financial condition.
Future pandemics or other catastrophic events could cause a material adverse effect on our results of operations in any period and, depending on their severity, could also materially adversely affect our financial condition.
Although our investment, product and physical exposures are diversified (e.g., geographically), reducing the enterprise impact to catastrophic events, claims resulting from natural or man-made catastrophic events could cause substantial volatility in our financial results for any fiscal quarter or year and could materially reduce our profitability or harm our financial condition.
Although our investment, product and physical exposures are diversified (e.g., geographically), reducing the enterprise impact to catastrophic events, claims resulting from natural or man-made catastrophic events could cause substantial volatility in our financial results for any fiscal quarter or year and could materially reduce our profitability and harm our financial condition.
Our ratings and the ratings of our insurance subsidiaries are subject to revision or withdrawal at any time by the rating agencies, and therefore, no assurance can be given that our insurance subsidiaries or we can maintain our current ratings. See “Item 1.
Our ratings and the ratings of our insurance subsidiaries are subject to revision or withdrawal at any time by the rating agencies, and therefore, no assurance can be given that we or our insurance subsidiaries can maintain our current ratings. See “Item 1.
An increase in the default rate of our mortgage loan investments could have a material adverse effect on our business, results of operations and financial condition. Further, any geographic or sector exposure in our mortgage loans may have adverse effects on our investment portfolios and consequently on our consolidated results of operations or financial condition.
An increase in the default rate of our mortgage loan investments could have a material adverse effect on our business, results of operations and financial condition. Further, any geographic or sector exposure in our mortgage loans may have adverse effects on our investment portfolios and consequently on our consolidated results of operations and financial condition.
We cannot predict how existing and emerging guidance, rules and regulations governing the use of AI will be interpreted or applied, or what, if any, actions may be taken regarding AI, but any applicable regulations and limitations could result in increased compliance costs and/or lead to changes in business practices and policies, which could have a material impact on our business, financial condition and results of operations.
We cannot predict how existing and emerging guidance, rules and regulations governing the use of AI will be interpreted or applied, or what, if any, actions may be taken regarding AI, but any applicable regulations and limitations could result in increased compliance costs and/or lead to changes in business practices and policies, which could have a material adverse impact on our business, financial condition and results of operations.
Competition Intense competition could negatively affect our ability to maintain or increase our profitability. Our businesses are intensely competitive. We compete based on a number of factors, including name recognition, service, investment performance, product features, price, perceived financial strength and claims-paying and credit ratings. Our competitors include insurers, broker-dealers, asset managers, hedge funds and other financial institutions.
Competition Intense competition could negatively affect our ability to maintain or increase our profitability. Our businesses are competitive. We compete based on a number of factors, including name recognition, service, investment performance, product features, price, perceived financial strength and claims-paying and credit ratings. Our competitors include insurers, broker-dealers, asset managers, hedge funds and other financial institutions.
In addition, we have at times experienced, and in the future could experience, an elevated incidence of claims and/or changes in the rate of lapses or surrenders of policies or other changes in consumer behavior as a result of financial stress. Our contract holders may choose to defer paying insurance premiums or stop paying insurance premiums altogether.
In addition, we have at times experienced, and in the future could experience, an elevated incidence of claims and increases in the rate of lapses or surrenders of policies and other changes in consumer behavior as a result of financial stress. Our contract holders may choose to defer paying insurance premiums or stop paying insurance premiums altogether.
Changes in the equity markets, interest rates and/or volatility affect the profitability of our products with guaranteed benefits; therefore, such changes may have a material adverse effect on our business and profitability. Certain of our variable annuity and fixed indexed annuity products include optional guaranteed benefit riders, including GDB (variable annuity only) and guaranteed living benefit riders.
Changes in the equity markets, interest rates and/or volatility affect the profitability of our products with guaranteed benefits; therefore, such changes may have a material adverse effect on our business and profitability. Certain of our variable annuity, fixed indexed annuity and RILA products include optional guaranteed benefit riders, including GDB (variable annuity and RILA only) and guaranteed living benefit riders.
We rely on various internal processes and associates to report our practices accurately and to respond appropriately to consumer and customer requests. We cannot predict what, if any, actions from U.S. state and federal regulators may be taken if we fail to maintain these processes or if we or our associates fail to comply with our policies or procedures.
We rely on various internal processes and associates to report our practices accurately and to respond appropriately to consumer and customer requests. We cannot predict what, if any, actions from U.S. state, federal or other regulators may be taken if we fail to maintain these processes or if we or our associates fail to comply with our policies or procedures.
In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. Substantial legal liability in these or future legal or regulatory actions could have a material financial effect or cause significant harm to our reputation, which in turn could materially harm our business prospects.
In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. Substantial legal liability in these or future legal or regulatory actions could have a material adverse financial effect or cause significant harm to our reputation, which in turn could materially harm our business prospects.
As a result, to the extent our subsidiaries are unable or are materially restricted from being able to pay dividends to us in sufficient amounts, our ability to meet our obligations could be materially affected. A decrease in the capital and surplus of our insurance subsidiaries may result in a downgrade to our credit and insurer financial strength ratings.
As a result, to the extent our subsidiaries are unable or are materially restricted from being able to pay dividends to us in sufficient amounts, our ability to meet our obligations could be materially adversely affected. A decrease in the capital and surplus of our insurance subsidiaries may result in a downgrade to our credit and insurer financial strength ratings.
We reinsure a portion of the mortality risk on fully underwritten, newly issued, individual life insurance contracts. We regularly review retention limits for continued appropriateness, and they may be changed in the future. In the event that we experience adverse mortality experience, a significant portion of that is reimbursed by our reinsurers.
We reinsure a portion of the mortality risk on fully underwritten, newly issued, individual life insurance contracts. We regularly review retention limits for continued appropriateness, and they may be changed in the future. In the event that we incur adverse mortality experience, a significant portion of that is reimbursed by our reinsurers.
Decreases in the estimated fair value of our securities may harm our results of operations or financial condition. See “Summary of Critical Estimates – Investments” in the MD&A for additional information. Significant adverse mortality experience may result in the loss of, or higher prices for, reinsurance, which could adversely affect our profitability.
Decreases in the estimated fair value of our securities may harm our results of operations and financial condition. See “Summary of Critical Estimates – Investments” in the MD&A for additional information. Significant adverse mortality experience may result in the loss of, or higher prices for, reinsurance, which could adversely affect our profitability.
We compete with other financial institutions primarily on the basis of our products, compensation, support services and financial condition. Sales in our businesses and our results of operations and financial condition could be materially adversely affected if we are unsuccessful in attracting and retaining employees, including wholesalers, as well as independent distributors of our products.
We compete with other financial institutions primarily on the basis of our products, compensation, support services and financial condition. Sales in our businesses and our results of operations and financial condition could be materially adversely affected if we are unsuccessful in attracting and retaining qualified employees, including wholesalers, as well as independent distributors of our products.
This process may lead to a flow of cash out of our businesses. For example, during 2024, our Annuities business experienced an increased outflow rate primarily due to an increase in full surrenders as a result of the elevated interest rate environment and strong equity markets.
This process may lead to a flow of cash out of our businesses. For example, during 2024 and 2025, our Annuities business experienced an increased outflow rate primarily due to an increase in full surrenders as a result of the elevated interest rate environment and strong equity markets.
Conversely, a decrease in the equity markets along with a decrease in interest rates and an increase in volatility will generally result in an increase to the guaranteed benefit riders liability and would result in a decrease to our earnings. Certain of our VUL products include secondary guarantees.
Conversely, a decrease in the equity markets along with a decrease in interest rates and an increase in volatility will generally result in an increase to our guaranteed benefit riders liability and would result in a decrease to our earnings. In addition, certain of our VUL products include secondary guarantees.
Factors such as consumer spending, business investment, domestic and foreign government spending, the volatility and strength of the capital markets, the potential for inflation or deflation and uncertainty over domestic and foreign government actions all affect the business and economic environment and, ultimately, the amount and profitability of our business.
Factors such as consumer spending, business investment, domestic and foreign government spending, the volatility and strength of the capital markets, the potential for inflation or deflation and uncertainty over domestic and foreign government actions all affect the business and economic environment and, ultimately, our business and profitability.
Changes in, or reinterpretations of, these laws can constrain the ability of our subsidiaries to pay dividends or to advance or repay funds to us in sufficient amounts and at times necessary to meet our debt obligations and corporate expenses.
Changes in, or reinterpretations of, these laws can constrain the ability of our insurance subsidiaries to pay dividends or to advance or repay funds to us in sufficient amounts and at times necessary to meet our debt obligations and corporate expenses.
An inability to access our credit facilities or committed repurchase facilities could result in a reduction in our liquidity, which in turn could lead to downgrades in our credit and financial strength ratings. We rely on our credit facilities and committed repurchase facilities as a potential source of liquidity.
An inability to access our credit facility or committed repurchase facilities could result in a reduction in our liquidity, which in turn could lead to downgrades in our credit and financial strength ratings. We rely on our credit facility and committed repurchase facilities as a potential source of liquidity.
See “Summary of Critical Accounting Estimates – Investments” in the MD&A for additional information. Changes to our valuation of investments and our methodologies, estimations and assumptions could harm our results of operations or financial condition.
See “Summary of Critical Accounting Estimates – Investments” in the MD&A for additional information. Changes to our valuation of investments and our methodologies, estimations and assumptions could harm our results of operations and financial condition.
Our insurance subsidiaries are subject to extensive supervision and regulation in the states, territories and countries in which they are licensed to do business. The insurance departments of the domiciliary jurisdiction exercise principal regulatory jurisdiction over our insurance subsidiaries.
Our insurance subsidiaries are subject to extensive supervision and regulation in the states, territories and countries in which they are licensed to do business. The insurance departments of the domiciliary jurisdictions exercise principal regulatory jurisdiction over our insurance subsidiaries.
Covenants and Ratings A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors.
Ratings A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors.
For example, if any new rules are implemented that are more onerous than Regulation Best Interest, or are not coordinated with Regulation Best Interest, the impact on our business could be substantial.
For example, if any new rules are implemented that are more onerous than Regulation Best Interest, or are not coordinated with Regulation Best Interest, the adverse impact on our business could be substantial.
In any particular year, statutory surplus amounts and RBC ratios may increase or decrease depending on a variety of factors, including the amount of statutory income or losses generated by our insurance subsidiaries (which itself is sensitive to equity market and credit market conditions), the amount of additional capital our insurance subsidiaries must hold to support business growth, changes in reserving requirements, such as principles-based reserving, our inability to obtain reserve relief, changes in equity market levels, the value of certain 27 Table of Contents fixed-income and equity securities in our investment portfolio, the value of certain derivative instruments that do not get hedge accounting treatment, changes in interest rates and foreign currency exchange rates, as well as changes to the NAIC RBC formulas.
In any particular year, statutory surplus amounts and RBC ratios may increase or decrease depending on a variety of factors, including the amount of statutory income or losses generated by our insurance subsidiaries (which itself is sensitive to equity market and credit market conditions), the amount of additional capital our insurance subsidiaries must hold to support business growth, changes in reserving requirements, such as principles-based reserving, our inability to obtain reserve relief, changes in equity market levels, the value of certain fixed-income and equity securities in our investment portfolio, the value of certain derivative instruments that do not get hedge accounting treatment, changes in interest rates and foreign currency exchange rates, as well as changes to the NAIC RBC formulas.
Our management of these rate increase actions and the outcomes of legal proceedings have not to date had a material effect on our results of operations or financial condition, but we can make no assurance regarding the impact of future rate increase actions or outcomes of future legal proceedings. 30 Table of Contents Competition for our employees is intense, and we may not be able to attract and retain the highly skilled people we need to support our business.
Our management of these rate increase actions and the outcomes of legal proceedings have not to date had a material effect on our results of operations or financial condition, but we can make no assurance regarding the impact of future rate increase actions or outcomes of future legal proceedings. 31 Table of Contents Competition for our employees is intense, and we may not be able to attract and retain the highly skilled people we need to support our business.
Federal or state regulatory actions could result in substantial fines, penalties or prohibitions or restrictions on our business activities that could materially adversely affect our business, results of operations or financial condition.
Federal or state regulatory actions could result in substantial fines, penalties or prohibitions or restrictions on our business activities that could materially adversely affect our business, results of operations and financial condition.
We accrue additional liabilities for these secondary guarantees, and these liabilities are impacted by changes in equity markets. Accordingly, strong equity markets generally decrease these additional liabilities. Conversely, a decrease in the equity markets will generally increase these additional liabilities.
We accrue additional liabilities for these secondary guarantees, and these liabilities are impacted by changes in equity markets. Strong equity markets generally decrease these additional liabilities. Conversely, a decrease in the equity markets will generally increase these additional liabilities.
Depending on the nature of the information compromised, in the event of a data breach or other unauthorized access to our customer data, we may also have obligations to notify affected individuals about the incident, and we may need to provide some form of remedy, 31 Table of Contents such as a subscription to a credit monitoring service, for the individuals affected by the incident.
Depending on the nature of the information compromised, in the event of a data breach or other unauthorized access to our customer data, we may also have obligations to notify affected individuals about the incident, and we may need to provide some form of remedy, 32 Table of Contents such as a subscription to a credit monitoring service, for the individuals affected by the incident.
As of December 31, 2024, no insurance regulatory authority had imposed on us any material fines or revoked or suspended any of our licenses to conduct insurance business in any jurisdiction or issued an order of supervision with respect to our insurance subsidiaries that would have a material adverse effect on our results of operations or financial condition.
As of December 31, 2025, no insurance regulatory authority had imposed on us any material fines or revoked or suspended any of our licenses to conduct insurance business in any jurisdiction or issued an order of supervision with respect to our insurance subsidiaries that would have a material adverse effect on our results of operations or financial condition.
Additionally, our ability to react to rapidly changing economic conditions and the dynamic, competitive market for our products will depend on the continued efficacy of provisions we have incorporated into our product design allowing frequent and contemporaneous revisions of key pricing elements, as well as our ability to work collaboratively with regulators.
Additionally, our ability to react to rapidly changing economic conditions and the dynamic, competitive market for our products will depend on the continued efficacy of provisions we have incorporated into our product designs allowing frequent and contemporaneous revisions of key pricing elements, as well as our ability to work collaboratively with regulators.
Moreover, borrowers may prepay fixed-income securities, commercial mortgages and mortgage-backed securities in our general account in order to borrow at lower market rates, which exacerbates this risk. Lowering interest crediting rates helps to mitigate the effect of spread compression on some of our products.
Moreover, borrowers may prepay fixed-income securities, commercial mortgages, mortgage-backed securities and other asset-backed securities in our general account in order to borrow at lower market rates, which exacerbates this risk. Lowering interest crediting rates helps to mitigate the effect of spread compression on some of our products.
The fair value of these guaranteed benefit riders is impacted by changes in equity markets, interest rates, volatility, foreign exchange rates and credit spreads. Accordingly, strong equity markets, increases in interest rates and decreases in volatility will generally decrease the guaranteed benefit riders liability and would result in an increase to our earnings.
The fair value of these guaranteed benefit riders is impacted by changes in equity markets, interest rates, volatility, foreign exchange rates and credit spreads. Strong equity markets, increases in interest rates and decreases in volatility will generally result in a decrease to our guaranteed benefit riders liability and would result in an increase to our earnings.
For more information on risks regarding our ratings, see “Covenants and Ratings – A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors” below.
For more information on risks regarding our ratings, see “Ratings – A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors” below.
Increasing scrutiny and evolving expectations from investors, customers, regulators and other stakeholders regarding ESG matters may adversely affect our reputation or otherwise adversely impact our business and results of operations. Certain existing or potential investors, customers, regulators and other stakeholders evaluate our business or other practices according to a variety of ESG standards and expectations.
Continued scrutiny and evolving expectations from investors, customers, regulators and other stakeholders regarding ESG matters may adversely affect our reputation or otherwise adversely impact our business and results of operations. Certain existing or potential investors, customers, regulators and other stakeholders evaluate our business or other practices according to a variety of ESG standards and expectations.
We also use the credit facilities as a potential backstop to provide statutory reserve credit to our insurance subsidiaries, including LNL. If we were unable to access our facilities in such circumstances, it could materially impact LNL’s capital and liquidity position.
We also use the credit facility as a potential backstop to provide statutory reserve credit to our insurance subsidiaries, including LNL. If we were unable to access our facilities in such circumstances, it could materially adversely impact LNL’s capital and liquidity position.
Although we rely on various internal processes and controls to protect the confidentiality of personal information that is accessible to, or in the possession of, our employees and our associates, including service providers, distribution partners, independent agents and others, a breach in the security of our information technology systems, a breach in the security of our associate’s information technology systems, or intentional or unintentional actions by an employee or associate could result in the disclosure or misappropriation of individuals’ personal information.
Although we rely on various internal processes and controls to protect the confidentiality of 24 Table of Contents personal information that is accessible to, or in the possession of, our employees and our associates, including service providers, distribution partners, independent agents and others, a breach in the security of our information technology systems, a breach in the security of an associate’s information technology systems, or intentional or unintentional actions by an employee or associate could result in the disclosure or misappropriation of individuals’ personal information.
The extent of regulation by the jurisdiction varies, but, in general, most jurisdictions have laws and regulations governing standards of solvency, adequacy of reserves, reinsurance, capital adequacy, licensing of companies and agents to transact business, prescribing and approving policy forms, regulating premium rates for some lines of business, prescribing the form and content of statutory financial statements and reports, regulating the type and amount of investments permitted, and standards of business conduct.
The extent of regulation by the jurisdictions varies, but, in general, most jurisdictions have laws and regulations governing standards of solvency, adequacy of reserves, reinsurance, capital adequacy and licensing of companies and producers to transact business; prescribing and approving policy forms; regulating premium rates for some lines of business; prescribing the form and content of statutory financial statements and reports; and regulating the type and amount of investments permitted and standards of business conduct.
This charge also impacted our statutory capital in the fourth quarter of 2022. For information on our most recent annual assumption review conducted in the third quarter of 2024, see “Summary of Critical Accounting Estimates – Annual Assumption Review” in MD&A.
This charge also impacted our statutory capital in the fourth quarter of 2022. For information on our most recent annual assumption review conducted in the third quarter of 2025, see “Summary of Critical Accounting Estimates – Annual Assumption Review” in MD&A.
If we or our associates fail to comply with applicable processes, policies, procedures and controls, misappropriation or intentional or unintentional inappropriate disclosure or misuse of individuals’ personal information, or violation of applicable state or federal laws, could occur.
If we or our associates fail to comply with applicable processes, policies, procedures and controls, misappropriation or intentional or unintentional inappropriate disclosure or misuse of individuals’ personal information, or violation of applicable laws, could occur.
Although our computer systems have in the past been, and will likely in the future be, subject to or targets of unauthorized or fraudulent access, to date, we have not had a material security breach.
Our computer systems have in the past been, and will likely in the future be, subject to or targets of unauthorized or fraudulent access; however, to date, we have not had a material security breach.
Our financial results could be adversely affected by unanticipated performance issues, unforeseen liabilities, transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees or customers, amortization of expenses related to intangibles, charges for impairment of long-term assets or goodwill and indemnifications.
Our financial results could be adversely affected by unanticipated performance issues, unforeseen liabilities, transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees or 33 Table of Contents customers, amortization of expenses related to intangibles, charges for impairment of long-term assets or goodwill and indemnifications.
The likelihood, timing or severity of a future pandemic or other catastrophe cannot be predicted. Additionally, the impact of climate change has caused, and may continue to cause, changes in weather patterns, resulting in more severe and more frequent natural disasters such as forest fires, hurricanes, tornados, floods and storm surges.
The likelihood, timing or severity of a future pandemic or other catastrophe cannot be predicted. Additionally, the impact of climate change has caused, and may continue to cause, changes in weather patterns, resulting in more severe and more frequent natural disasters such as wildfires, hurricanes, tornados, floods and storm surges.
Management of operational, legal and regulatory risks requires, among other things, policies and procedures to record properly and verify a large number of transactions and events, and these policies and procedures may not be fully effective. We face risks of non-collectability of reinsurance and increased reinsurance rates, which could materially affect our results of operations.
Management of operational, legal, regulatory, market, insurance and emerging risks requires, among other things, policies and procedures to record properly and verify a large number of transactions and events, and these policies and procedures may not be fully effective. We face risks of non-collectability of reinsurance and increased reinsurance rates, which could materially affect our results of operations.
The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event and the severity of the event. Pandemics, natural disasters and man-made catastrophes, including terrorism, may produce significant damage in larger areas, especially those that are heavily populated.
The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event and the severity of the event. Pandemics, natural disasters and man-made catastrophes, including terrorism, may produce significant damage in 30 Table of Contents larger areas, especially those that are heavily populated.
However, the hedging strategies may not be fully effective to offset the changes in the carrying value of these guarantees, as our hedging strategies hedge risks on a basis that does not correspond to their anticipated or actual 22 Table of Contents impact upon our results of operations or financial condition under GAAP.
However, the hedging strategies may not be fully effective to offset the changes in the carrying value of these guarantees, as our hedging strategies hedge risks on a basis that does not correspond to their anticipated or actual impact upon our results of operations or financial condition under GAAP.
Spreads are an important component of our net income. Declines in our spread or instances where the returns on our general account investments are not enough to support the interest rate guarantees on these products could have a material adverse effect on our businesses or results of operations.
Spreads are an important component of our net income. Declines in our spread or instances where the returns on our general account investments are not enough to support the interest rate guarantees on these products could have a material adverse effect on our business and results of operations.
For example, due to the COVID-19 29 Table of Contents pandemic that emerged in the first quarter of 2020, we experienced higher mortality claim payments due to an elevation in claim incidence. In addition, we experienced an increase in short-term and long-term disability claims related to the pandemic that negatively impacted our earnings.
For example, due to the COVID-19 pandemic that emerged in the first quarter of 2020, we experienced higher mortality claim payments due to an elevation in claim incidence. In addition, we experienced an increase in short-term and long-term disability claims related to the pandemic that negatively impacted our earnings.
In addition, increases in reserves have a negative 28 Table of Contents effect on income from operations in the quarter incurred and could also have a negative impact in future periods. For example, in the third quarter of 2022, we incurred a substantial charge related to the company’s annual review of reserve assumptions.
In addition, increases in reserves have a negative effect on income from operations in the quarter incurred and could also have a negative impact in future periods. For example, in the third quarter of 2022, we incurred a substantial charge related to the company’s annual review of reserve assumptions.
Changes from period to period in the valuation of these guarantees, and in the amount of our obligations effectively hedged, will result in volatility in our results of operations and financial condition under GAAP and in the capital levels of our insurance and reinsurance subsidiaries.
Changes from period to period in the valuation of these guarantees, and in the amount of our obligations effectively hedged, will result in volatility in our results of operations and financial 23 Table of Contents condition under GAAP and in the capital levels of our insurance and reinsurance subsidiaries.
Although we endeavor to maintain all required licenses and approvals, our businesses may not fully comply with the wide variety of applicable laws and regulations or the relevant authority’s interpretation of the laws and regulations, which may change from time to time. Also, regulatory authorities have relatively broad discretion to grant, renew or revoke licenses and approvals.
Although we endeavor to maintain all required licenses and approvals, our businesses may not fully comply with the wide variety of applicable laws and regulations or the relevant authorities’ interpretations of the laws and regulations, which may change from time to time. Also, regulatory authorities have relatively broad discretion to grant, renew or revoke licenses and approvals.
See also “Operational Matters – Our information systems may experience interruptions, breaches in security and/or a failure of disaster recovery systems that could result in a loss or disclosure of confidential information, damage to our reputation, impairment of our ability to conduct business effectively and increased expense,” and “– We are subject to third-party information system and other operational risks due to our reliance on third-party vendors and suppliers and the outsourcing of certain of our business operations” below.
Business – Regulatory – Privacy, Artificial Intelligence and Cybersecurity Regulation.” See also “Operational Matters – Our information systems may experience interruptions, breaches in security and/or a failure of disaster recovery systems that could result in a loss or disclosure of confidential information, damage to our reputation, impairment of our ability to conduct business effectively and increased expense,” and “– We are subject to third-party information system and other operational risks due to our reliance on third-party vendors and suppliers and the outsourcing of certain of our business operations” below.
To meet these requirements, we may be required to post asset adequacy reserves, which, depending on the size of the reserve, could materially affect our financial results. 21 Table of Contents Increases in interest rates and sustained high interest rates may negatively affect our profitability, capital position and the value of our investment portfolio and may also result in increased contract withdrawals and surrenders.
To meet these requirements, we may be required to post asset adequacy reserves, which, depending on the size of the reserve, could materially adversely affect our financial results. 22 Table of Contents Increases in interest rates and sustained higher interest rates may negatively affect our profitability, capital position and the value of our investment portfolio and may also result in increased contract withdrawals and surrenders.
We follow the insurance practice of reinsuring with other insurance and reinsurance companies a portion of the risks under the policies written by our insurance subsidiaries (known as “ceding”). As of December 31, 2024, we ceded $1.0 trillion of life insurance in force to reinsurers for reinsurance protection.
We follow the insurance practice of reinsuring with other insurance and reinsurance companies a portion of the risks under the policies written by our insurance subsidiaries (known as “ceding”). As of December 31, 2025, we ceded $1.2 trillion of life insurance in force to reinsurers for reinsurance protection.
As of December 31, 2024, LNL’s and LLANY’s financial strength ratings and RBC ratios exceeded the ratings and ratios required under each agreement. See “Item 1. Business – Financial Strength Ratings” for a description of our financial strength ratings. See “Reinsurance” in the MD&A for additional information on these indemnity reinsurance agreements.
As of December 31, 2025, LNL’s and LLANY’s financial strength ratings and RBC ratios satisfied the ratings and ratios required under each agreement. See “Item 1. Business – Financial Strength Ratings” for a description of our financial strength ratings. See “Reinsurance” in the MD&A for additional information on these indemnity reinsurance agreements.
Although we conduct due diligence, negotiate contractual provisions and, in many cases, conduct periodic reviews of our vendors and other third party suppliers with whom we contract and who we believe may pose a cybersecurity threat to the Company, our customers or our business partners due to the type of services they provide and/or confidential information they may be handling to confirm compliance with our information security standards, we may not be able to effectively monitor or mitigate the information security and privacy risks posed by such third parties.
Although we conduct due diligence, negotiate contractual provisions and, in many cases, conduct periodic reviews of our vendors and other third party suppliers with whom we contract and who we believe may pose a cybersecurity threat to the Company, our customers or our business partners due to the type of services they provide and/or confidential information they may be handling to confirm compliance with our information security standards, we may not be able to effectively monitor or mitigate information-security, operational-resiliency, privacy, or supply-chain risks posed by such third parties or by the subcontractors on whom they rely.
An increase in reinsurance rates may affect the profitability of our insurance business. Additionally, such a rate increase could result in our recapture of the business, which may result in a need for additional reserves and increase our exposure to claims.
An increase in reinsurance rates may affect the profitability of our insurance business. Additionally, such a rate increase could result in triggering our right to recapture the business, which, if exercised, may result in a need for additional reserves and increase our exposure to claims.
While we continue to monitor and evaluate the various proposals, we cannot predict what other proposals may be made, or what new legislation or regulation may be introduced or become law. Therefore, until such time as final rules or laws are in place, the potential impact on our business is uncertain. See “Item 1.
While we continue to monitor and evaluate the regulatory landscape in this area, we cannot predict what proposals may be made, or what new legislation or regulation may be introduced or become law. Therefore, until such time as final rules or laws are in place, the potential impact on our business is uncertain. See “Item 1.
Applicable laws and regulations generally grant supervisory agencies and self-regulatory organizations broad administrative powers, including the power to limit or restrict the subsidiaries from carrying on their businesses in the event that they fail to comply with such laws and regulations.
Applicable laws and regulations generally grant supervisory agencies and self-regulatory organizations broad administrative powers, including the power to limit or restrict our broker-dealer and investment adviser subsidiaries from carrying on their businesses in the event that they fail to comply with such laws and regulations.
If this were to occur, we may be exposed to reduced profitability and cash flow strain or we may not be able to price new business at competitive rates. Pandemics and other catastrophes have impacted, and may in the future, adversely impact liabilities for contract holder claims.
If this were to occur, we may be exposed to reduced profitability and cash flow strain or we may not be able to price new business at competitive rates. Pandemics and other catastrophes may adversely impact liabilities for contract holder claims.
Any changes in the method for calculating reserves for our annuity and life insurance products under SAP or applicable state insurance regulations, or changes in the method for calculating reserves or capital for our products under the BMA’s regulations, may result in increased reserve requirements.
Any changes in the method for calculating reserves for our group disability, annuity and life insurance products under SAP or applicable state insurance regulations, or changes in the method for calculating reserves or capital for our products under the BMA’s or Barbados FSC’s regulations, may result in increased reserve requirements.
Certain of our regulators have proposed or adopted, or may propose or adopt, ESG rules or standards that would apply to our business.
Certain of our regulators have proposed or adopted, or may in the future propose or adopt, ESG rules or standards that would apply to our business.
The RBC ratio of LNL is an important factor in the determination of the credit and financial strength ratings of LNC and its subsidiaries, and changes in statutory capital and RBC ratios have in the past influenced, and may in the future influence, ratings agency decisions to downgrade certain ratings and/or revise their ratings outlooks. See “Item 1.
The RBC ratio of LNL is an important factor in the determination of the credit and financial strength ratings of LNC and its subsidiaries, and changes in statutory capital and RBC ratios have in the past influenced, and may in the future influence, ratings agency decisions to downgrade certain ratings and/or revise their ratings 28 Table of Contents outlooks.
Business – Regulatory – Privacy, Artificial Intelligence and Cybersecurity Regulation.” We are subject to third-party information system and other operational risks due to our reliance on third-party vendors and suppliers and the outsourcing of certain of our business operations.
Business – Regulatory – Privacy, Artificial Intelligence and Cybersecurity Regulation.” We are subject to third-party information system and other operational risks due to our reliance on third-party vendors and suppliers and the outsourcing of certain of our business operations. Third parties perform significant services on our behalf.
This guidance, which will sunset on December 31, 2025, has had the effect of increasing our statutory capital, as well our estimated RBC ratio as of December 31, 2024. If the NAIC does not implement a long-term solution, our statutory capital and RBC ratio could be adversely affected.
This guidance, which is scheduled to sunset on December 31, 2026, has had the effect of increasing our statutory capital, as well as our estimated RBC ratio as of December 31, 2025. If the NAIC does not implement a long-term solution, our statutory capital and RBC ratio could be adversely affected.
See Note 17 for a description of legal and regulatory proceedings and actions. Climate change and climate change regulation may adversely affect our investment portfolio and financial condition. Climate change and climate change regulation may affect the prospects of companies and other entities whose securities we hold or our willingness to continue to hold their securities.
See Not e 1 7 for a description of legal and regulatory proceedings and actions. Climate change and climate change regulation may adversely affect our investment portfolio and financial condition. Climate change and climate change regulation may adversely affect the prospects of companies and other entities whose securities we hold or our willingness to continue to hold their securities.
The foregoing regulatory or governmental bodies, as well as state insurance regulators, the DOL and others, have the authority to review our products and business practices and those of agents and advisers that distribute our products, as well as of our registered representatives, associated persons and employees.
The foregoing regulatory or governmental bodies, as well as state insurance regulators, the DOL and others, have the authority to review our products and business practices and those of agents, advisers, broker-dealers and other financial professionals that distribute our products, as well as those of our registered representatives, associated persons and employees, as applicable.
State and federal laws and regulations also require us to disclose our data collection and sharing practices to individuals who interact with us and to provide certain individuals with access to certain pieces of their personal information, the right to request correction of their information, the right to request deletion of their information, and the right to opt out of certain tracking, sharing and processing.
State and federal laws and regulations, as well as certain applicable foreign regulations including Bermuda’s PIPA, also require us to disclose our data collection and sharing practices to individuals who interact with us and to provide certain individuals with access to certain pieces of their personal information, the right to request correction of their information, the right to request deletion of their information and the right to opt out of certain tracking, sharing and processing.
Our use or our service provider’s use of AI systems could also result in cybersecurity incidents that may involve the personal information of end users of such applications. Any such cybersecurity incidents could adversely affect our reputation and business, financial condition and results of operations.
Our use of AI systems, including those provided by our service providers, could also result in cybersecurity incidents that may involve the personal information of end users of such applications. Any such cybersecurity incidents could adversely affect our reputation and business, financial condition and results of operations.
Such an event could materially damage our reputation or lead to regulatory, civil or criminal investigations and penalties, which, in turn, could have a material impact on our business, financial condition and results of operations.
Such an event could materially damage our reputation or lead to regulatory, civil or criminal investigations and penalties, which, in turn, could have a material adverse impact on our business, financial condition and results of operations. For more information, see “Item 1.
Business – Regulatory – Other Federal Legislation – Tax Legislation.” Legal and regulatory actions are inherent in our businesses and could result in financial losses or harm our businesses. We are, and in the future may be, subject to legal and regulatory actions in the ordinary course of our business.
See also “Item 1. Business – Regulatory – Other Federal Legislation – Tax Legislation.” 26 Table of Contents Legal and regulatory actions are inherent in our businesses and could result in financial losses or harm our businesses. We are, and in the future may be, subject to legal and regulatory actions in the ordinary course of our business.
Business – Regulatory – Privacy, Artificial Intelligence and Cybersecurity Regulation” for more information.
See “Item 1. Business – Regulatory – Privacy, Artificial Intelligence and Cybersecurity Regulation” for more information.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed27 unchanged
Biggest changeWhile the CSRI division is responsible for cybersecurity responses generally, should a critical event arise, such an event would be raised to and addressed by the SIRT. Our Privacy team, which is part of the Company’s compliance function, has a dedicated incident response team responsible for assessing, identifying and managing risks from cybersecurity threats involving personal information.
Biggest changeWhile the CSRI division is responsible for cybersecurity responses generally, should a critical event arise, such an event would be raised to and addressed by the SIRT. 36 Table of Contents Our Privacy team, which is part of the Company’s compliance function, has a dedicated incident response team responsible for assessing, identifying and managing risks from cybersecurity threats involving personal information.
Supplier Risk Management and Strategy Within the governance, risk and compliance division of our Information Security team, we operate a formal supplier security assessment program, with a team dedicated to evaluating the cybersecurity risk associated with third-party suppliers with whom we have contracted and who we believe may pose a cybersecurity threat to the Company, our customers or our business partners due to the type of services they provide and/or confidential information they may be handling.
Supplier Risk Management and Strategy Within the governance, risk and compliance division of our Information Security team, we operate a formal supplier security assessment program, with a team dedicated to evaluating the cybersecurity risk associated with third-party suppliers with whom we have contracted and who we believe may pose a cybersecurity risk to the Company, our customers or our business partners due to the type of services they provide and/or confidential information they may be handling.
The CISO has a staff of more than 100 employees dedicated to protecting the data and systems belonging to the Company, our customers, business partners and consumers. 36 Table of Contents
The CISO has a staff of more than 100 employees dedicated to protecting the data and systems belonging to the Company, our customers, business partners and consumers. 37 Table of Contents
The team follows documented processes for investigation, research, assessment, notification, regulatory reporting and, if necessary, escalation to management, and such processes have 35 Table of Contents been integrated into our Information Security incident response program. The Information Security team works closely with our Privacy team to respond to any cybersecurity incidents involving personal information.
The team follows documented processes for investigation, research, assessment, notification, regulatory reporting and, if necessary, escalation to management, and such processes have been integrated into our Information Security incident response program. The Information Security team works closely with our Privacy team to respond to any cybersecurity incidents involving personal information.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeWe owned or leased 0.3 million square feet of office space in Omaha, Nebraska, and 0.1 million square feet in Dover, New Hampshire, primarily for our Group Protection segment. An additional 0.3 million square feet of office space is leased in other U.S. cities for branch offices.
Biggest changeAn additional 0.3 million square feet of office space is leased for other office space.
Item 2. Properties As of December 31, 2024, LNC and our subsidiaries owned or leased 2.3 million square feet of office and other space. We leased 0.2 million square feet of office space in Radnor, Pennsylvania, for our corporate center and for LFD.
Item 2. Properties As of December 31, 2025, LNC and our subsidiaries owned or leased 2.2 million square feet of office and other space. We leased 0.2 million square feet of office space in Radnor, Pennsylvania, for our corporate center and for LFD.
We leased 0.6 million square feet of office space in Fort Wayne, Indiana, primarily for our Annuities and Retirement Plan Services segments. We owned 0.8 million square feet of office space in Greensboro, North Carolina, primarily for our Life Insurance segment.
We leased 0.6 million square feet of office space in Fort Wayne, Indiana, primarily for our Annuities and Retirement Plan Services segments. We owned 0.8 million square feet of office space in Greensboro, North Carolina, primarily for our Life Insurance segment. We owned 0.3 million square feet of office space in Omaha, Nebraska, primarily for our Group Protection segment.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

15 edited+2 added−1 removed5 unchanged
Biggest changeBronchetti 45 Executive Vice President (since May 2022), Chief Investment Officer (since November 2021) and Head of Hedging (since May 2023) and Sustainability (since May 2022), and President, Lincoln Investment Advisors Corporation (2) (since March 2016). Head of Risk (May 2022 - May 2023). Head of Corporate Fixed Income (February 2020 - November 2021).
Biggest changeSenior Vice President, Head of Fixed Income (July 2020 - October 2025), Fortitude Re, a provider of reinsurance solutions. Christopher Neczypor 45 Executive Vice President and Chief Financial Officer (since February 2023). Executive Vice President and Chief Strategy Officer (November 2021 - February 2023). Senior Vice President and Head of Alternatives, Structured Credit and Investment Strategy (2020 - November 2021).
For the quarter ended December 31, 2024, there were no shares purchased as part of publicly announced plans or programs. (2) On November 10, 2021, our Board of Directors authorized an increase in our securities repurchase authorization, bringing the total aggregate repurchase authorization to $1.5 billion. As of December 31, 2024, our remaining security repurchase authorization was $714 million.
For the quarter ended December 31, 2025, there were no shares purchased as part of publicly announced plans or programs. (2) On November 10, 2021, our Board of Directors authorized an increase in our securities repurchase authorization, bringing the total aggregate repurchase authorization to $1.5 billion. As of December 31, 2025, our remaining security repurchase authorization was $714 million.
(2) Denotes an affiliate of LNC. 38 Table of Contents PART II Item 5 . Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Stock Market and Dividend Information Our common stock is traded on the New York stock exchange under the symbol LNC.
(2) Denotes an affiliate of LNC. 39 Table of Contents PART II Item 5 . Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Stock Market and Dividend Information Our common stock is traded on the New York stock exchange under the symbol LNC.
Our stock repurchases may be effected from time to time through open market purchases or in privately negotiated transactions and may be made pursuant to an accelerated share repurchase agreement or Rule 10b5-1 plan. Item 6. [Reserved] 39 Table of Contents Item 7.
Our stock repurchases may be effected from time to time through open market purchases or in privately negotiated transactions and may be made pursuant to an accelerated share repurchase agreement or Rule 10b5-1 plan. Item 6. [Reserved] 40 Table of Contents Item 7.
(b) Not Applicable (c) Issuer Purchases of Equity Securities The following summarizes purchases of equity securities by the issuer during the quarter ended December 31, 2024 (dollars in millions, except per share data): (c) Total Number (d) Approximate Dollar (a) Total of Shares Value of Shares Number (b) Average Purchased as Part of that May Yet Be of Shares Price Paid Publicly Announced Purchased Under the Period Purchased (1) per Share Plans or Programs (2) Plans or Programs (2) 10/1/24 – 10/31/24 – $ – – $ 714 11/1/24 – 11/30/24 – – – 714 12/1/24 – 12/31/24 – – – 714 (1) Of the total number of shares purchased, no shares were received in connection with the exercise of stock options and related taxes.
(b) Not Applicable (c) Issuer Purchases of Equity Securities The following summarizes purchases of equity securities by the issuer during the quarter ended December 31, 2025 (dollars in millions, except per share data): (c) Total Number (d) Approximate Dollar (a) Total of Shares Value of Shares Number (b) Average Purchased as Part of that May Yet Be of Shares Price Paid Publicly Announced Purchased Under the Period Purchased (1) per Share Plans or Programs (2) Plans or Programs (2) 10/1/25 – 10/31/25 – $ – – $ 714 11/1/25 – 11/30/25 – – – 714 12/1/25 – 12/31/25 – – – 714 (1) Of the total number of shares purchased, no shares were received in connection with the exercise of stock options and related taxes.
Kennedy 58 Executive Vice President (since March 2021) and Chief Distribution and Brand Officer (assuming the role of head of distribution in March 2021 and the role of head of brand in March 2022), and President, LFD (2) (since March 2021). Senior Vice President and Head of Retirement Solutions Distribution for LFD (September 2009 - March 2021).
Kennedy 59 Executive Vice President (since March 2021) and Chief Distribution and Brand Officer (assuming the role of head of distribution in March 2021 and the role of head of brand in March 2022), and President, LFD (2) (since March 2021). Senior Vice President and Head of Retirement Solutions Distribution for LFD (September 2009 - March 2021).
Cooper 60 President, Chief Executive Officer and Director (since May 2022); Chairman of the Board of Directors (since May 2023). Until May 2022, Executive Vice President (since August 2012), Head of Enterprise Risk (since 2019) and Head of Annuity Solutions Group (since March 2021). Chief Investment Officer (August 2012 - November 2021). Craig T.
Cooper 61 President, Chief Executive Officer and Director (since May 2022); Chairman of the Board of Directors (since May 2023). Until May 2022, Executive Vice President (since August 2012), Head of Enterprise Risk (since 2019) and Head of Annuity Solutions Group (since March 2021). Chief Investment Officer (August 2012 - November 2021).
Item 4. Mine Safety Disclosures Not applicable. 37 Table of Contents Information About our Executive Officers Our Executive Officers as of February 13, 2025, were as follows: Name Age (1) Position with LNC and Business Experience During the Past Five Years Ellen G.
Item 4. Mine Safety Disclosures Not applicable. 38 Table of Contents Information About our Executive Officers Our Executive Officers as of February 12, 2026, were as follows: Name Age (1) Position with LNC and Business Experience During the Past Five Years Ellen G.
As of February 13, 2025, the number of shareholders of record of our common stock was 4,985. The dividend on our common stock is declared each quarter by our Board of Directors if we are eligible to pay dividends and the Board determines that we will pay dividends.
As of February 12, 2026, the number of shareholders of record of our common stock was 4,732. The dividend on our common stock is declared each quarter by our Board of Directors if we are eligible to pay dividends and the Board determines that we will pay dividends.
Woodroffe 61 Executive Vice President and Chief People, Culture and Communications Officer (since May 2023). Senior Executive Vice President and Chief People Officer (March 2018 - April 2023), TIAA, a financial service provider. (1) Age shown is based on the officer’s age as of February 13, 2025.
Executive Vice President and Chief People, Culture and Communications Officer (May 2023 - November 2025). Senior Executive Vice President and Chief People Officer (March 2018 - April 2023), TIAA, a financial services provider. (1) Age shown is based on the officer’s age as of February 12, 2026.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Page Forward-Looking Statements – Cautionary Language 41 Introduction 42 Executive Summary 42 Summary of C ritical Accounting Estimates 44 Results of Consolidated Operations 55 Results of Annuities 57 Results of Life Insurance 62 Results of Group Protection 68 Results of Retirement Plan Services 72 Results of Other Operations 76 Consolidated Investments 78 Reinsurance 90 Liquidity and Capital Resources 91 40 Table of Contents The following Management’s Discussion and Analysis of Financial Condition and Results of Operations(“MD&A”) is intended to help the reader understand the financial condition as of December 31, 2024, compared with December 31, 2023, and the results of operations in 2024 and 2023 compared with the immediately preceding year of Lincoln National Corporation and its consolidated subsidiaries.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Page Forward-Looking Statements – Cautionary Language 42 Introduction 43 Executive Summary 43 Summary of C ritical Accounting Estimates 45 Results of Consolidated Operations 54 Results of Annuities 56 Results of Life Insurance 61 Results of Group Protection 67 Results of Retirement Plan Services 71 Results of Other Operations 76 Consolidated Investments 78 Reinsurance 94 Liquidity and Capital Resources 95 41 Table of Contents The following Management’s Discussion and Analysis of Financial Condition and Results of Operations(“MD&A”) is intended to help the reader understand the financial condition as of December 31, 2025, compared with December 31, 2024, and the results of operations in 2025 compared to 2024 of Lincoln National Corporation and its consolidated subsidiaries.
James Reid 58 Executive Vice President and President, Workplace Solutions (since August 2022). President and Chief Executive Officer (April 2021 - August 2022), Versant Health, a managed vision care company. Executive Vice President and Head of Global Employee Benefits (January 2016 - March 2021), MetLife, Inc. Sean N.
President and Chief Executive Officer (April 2021 - August 2022), Versant Health, a managed vision care company. Executive Vice President and Head of Global Employee Benefits (January 2016 - March 2021), MetLife, Inc. Sean N. Woodroffe 62 Executive Vice President and Chief People, Communications and Enterprise Services Officer (since November 2025).
Senior Vice President and Head of Alternatives, Structured Credit and Investment Strategy (2020 - November 2021). Senior Vice President and Head of Investment Risk and Strategy (April 2018 - 2020). Andrew D. Rallis 62 Executive Vice President and Chief Risk Officer (since May 2023). Executive Vice President and Global Chief Actuary (July 2012 - May 2023), MetLife, Inc.
Senior Vice President and Head of Investment Risk and Strategy (April 2018 - 2020). Andrew D. Rallis 63 Executive Vice President and Chief Risk Officer (since May 2023). Executive Vice President and Global Chief Actuary (July 2012 - May 2023), MetLife, Inc. James Reid 59 Executive Vice President and President, Workplace Solutions (since August 2022).
Brian Kroll 63 Executive Vice President, Head of Retail Life and Annuity Solutions (since May 2024). Senior Vice President, Head of Annuity Solutions (April 2011 - July 2022). Christopher Neczypor 44 Executive Vice President and Chief Financial Officer (since February 2023). Until February 2023, Executive Vice President and Chief Strategy Officer (since November 2021).
Brian Kroll 64 Executive Vice President, Head of Retail Life and Annuity Solutions (since May 2024). Senior Vice President, Head of Annuity Solutions (April 2011 - July 2022). John G. Morriss 58 Executive Vice President and Chief Investment Officer (since October 2025).
Managing Director, Head of Manager Selection & Research (July 2015 - March 2016). Jennifer Charters 52 Executive Vice President and Chief Information Officer (since November 2024). Executive Vice President and Chief Information Officer, Flagstar Bank (June 2018 - August 2024). John C.
Beazer 58 Executive Vice President and General Counsel (since December 2020). Jennifer Charters 53 Executive Vice President and Chief Information Officer (since November 2024). Executive Vice President and Chief Information Officer, Flagstar Bank (June 2018 - August 2024). John C.
Removed
Beazer 57 Executive Vice President and General Counsel (since December 2020). Executive Vice President, General Counsel (January 2020 - December 2020) and Secretary (July 2019 - December 2020), KeyCorp, a bank-based financial services company. Deputy General Counsel, KeyCorp (July 2018 - January 2020). Jayson R.
Added
Nilanjan (Neel) Adhya 51 Executive Vice President, Chief AI, Data and Analytics Officer (since January 2026). Chief Digital Officer and Global Head of Digital Platforms and Experiences (August 2021 - December 2025), BlackRock, an investment management corporation. Chief Digital Officer and Vice President of Digital Transformation (June 2019 - August 2021), IBM, a technology company. Craig T.
Added
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

352 edited+112 added−62 removed421 unchanged
Biggest changePhiladelphia, Pennsylvania February 21, 2025 110 Table of Contents LINCOLN NATIONAL CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except share data) As of December 31, 2024 2023 ASSETS Investments: Fixed maturity available-for-sale securities, at fair value (amortized cost: 2024 - $97,415 ; 2023 - $97,433; allowance for credit losses: 2024 - $46 ; 2023 - $19) $ 87,111 $ 88,738 Trading securities 2,025 2,359 Equity securities 294 306 Mortgage loans on real estate, net of allowance for credit losses (portion at fair value: 2024 - $232; 2023 - $288) 21,083 18,963 Policy loans 2,476 2,476 Derivative investments 9,677 6,474 Other investments 6,588 5,015 Total investments 129,254 124,331 Cash and invested cash 5,801 3,365 Deferred acquisition costs, value of business acquired and deferred sales inducements 12,537 12,397 Reinsurance recoverables, net of allowance for credit losses 28,750 29,843 Deposit assets, net of allowance for credit losses 30,776 29,247 Market risk benefit assets 4,860 3,894 Accrued investment income 1,108 1,082 Goodwill 1,144 1,144 Other assets 8,163 8,853 Separate account assets 168,438 158,257 Total assets $ 390,831 $ 372,413 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities Policyholder account balances $ 126,197 $ 120,737 Future contract benefits 39,807 39,864 Funds withheld reinsurance liabilities 16,907 17,641 Market risk benefit liabilities 1,046 1,716 Deferred front-end loads 6,730 5,901 Payables for collateral on investments 10,020 8,105 Short-term debt 300 250 Long-term debt 5,856 5,699 Other liabilities 7,261 7,350 Separate account liabilities 168,438 158,257 Total liabilities 382,562 365,520 Contingencies and Commitments (See Note 17) Stockholders’ Equity Preferred stock – 10,000,000 shares authorized: Series C preferred stock – 20,000 shares authorized, issued and outstanding as of December 31, 2024, and December 31, 2023 493 493 Series D preferred stock – 20,000 shares authorized, issued and outstanding as of December 31, 2024, and December 31, 2023 493 493 Common stock – 800,000,000 shares authorized; 170,380,646 and 169,666,137 shares issued and outstanding as of December 31, 2024, and December 31, 2023, respectively 4,674 4,605 Retained earnings 7,645 4,778 Accumulated other comprehensive income (loss) (5,036) (3,476) Total stockholders’ equity 8,269 6,893 Total liabilities and stockholders’ equity $ 390,831 $ 372,413 See accompanying Notes to Consolidated Financial Statements 111 Table of Contents LINCOLN NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions, except per share data) For the Years Ended December 31, 2024 2023 2022 Revenues Insurance premiums $ 6,425 $ 3,672 $ 6,087 Fee income 5,402 5,467 5,603 Net investment income 5,525 5,879 5,515 Realized gain (loss) 269 (4,311) 840 Other revenues 821 938 765 Total revenues 18,442 11,645 18,810 Expenses Benefits 7,918 6,138 8,479 Interest credited 3,443 3,248 2,877 Market risk benefit (gain) loss (2,677) (2,264) (3,246) Policyholder liability remeasurement (gain) loss (190) (152) 2,766 Commissions and other expenses 5,590 5,492 5,292 Interest and debt expense 336 331 283 Impairment of intangibles – – 634 Total expenses 14,420 12,793 17,085 Income (loss) before taxes 4,022 (1,148) 1,725 Federal income tax expense (benefit) 747 (396) 367 Net income (loss) 3,275 (752) 1,358 Other comprehensive income (loss), net of tax: Unrealized investment gain (loss) (788) 3,715 (18,059) Market risk benefit non-performance risk gain (loss) (924) (671) (210) Policyholder liability discount rate remeasurement gain (loss) 157 (160) 2,012 Foreign currency translation adjustment (3) 8 (20) Funded status of employee benefit plans (2) (16) (59) Total other comprehensive income (loss), net of tax (1,560) 2,876 (16,336) Comprehensive income (loss) $ 1,715 $ 2,124 $ (14,978) Net Income (Loss) Available to Common Stockholders Net income (loss) $ 3,275 (752) 1,358 Preferred stock dividends declared (91) (82) – Net income (loss) available to common stockholders $ 3,184 $ (834) $ 1,358 Net Income (Loss) Per Common Share Basic $ 18.66 $ (4.92) $ 7.93 Diluted 18.41 (4.92) 7.78 Cash Dividends Declared Per Common Share $ 1.80 $ 1.80 $ 1.80 See accompanying Notes to Consolidated Financial Statements 112 Table of Contents LINCOLN NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in millions) For the Years Ended December 31, 2024 2023 2022 Preferred Stock Balance as of beginning-of-year $ 986 $ 986 $ – Issuance of Series C preferred stock – – 493 Issuance of Series D preferred stock – – 493 Balance as of end-of-year 986 986 986 Common Stock Balance as of beginning-of-year 4,605 4,544 4,735 Stock compensation/issued for benefit plans 69 61 40 Retirement of common stock/cancellation of shares – – (231) Balance as of end-of-year 4,674 4,605 4,544 Retained Earnings Balance as of beginning-of-year 4,778 5,924 5,196 Net income (loss) 3,275 (752) 1,358 Retirement of common stock – – (319) Preferred stock dividends declared (91) (82) – Common stock dividends declared (317) (312) (311) Balance as of end-of-year 7,645 4,778 5,924 Accumulated Other Comprehensive Income (Loss) Balance as of beginning-of-year (3,476) (6,352) 9,984 Other comprehensive income (loss), net of tax (1,560) 2,876 (16,336) Balance as of end-of-year (5,036) (3,476) (6,352) Total stockholders’ equity as of end-of-year $ 8,269 $ 6,893 $ 5,102 See accompanying Notes to Consolidated Financial Statements 113 Table of Contents LINCOLN NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) For the Years Ended December 31, 2024 2023 2022 Cash Flows from Operating Activities Net income (loss) $ 3,275 $ (752) $ 1,358 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Realized (gain) loss (269) 4,311 (840) Market risk benefit (gain) loss (2,677) (2,264) (3,246) Sales and maturities (purchases) of trading securities, net 343 1,301 300 Impairment of intangibles – – 634 Net operating cash payments related to closing Fortitude Re reinsurance transaction – (1,438) – Change in: Deferred acquisition costs, value of business acquired, deferred sales inducements and deferred front-end loads 689 637 488 Accrued investment income (39) 4 (67) Insurance liabilities and reinsurance-related balances (3,322) (3,719) 4,377 Accrued expenses 251 109 (91) Federal income tax accruals 747 (396) 421 Other (1,005) 133 275 Net cash provided by (used in) operating activities (2,007) (2,074) 3,609 Cash Flows from Investing Activities Purchases of available-for-sale securities and equity securities (11,442) (11,131) (14,813) Sales of available-for-sale securities and equity securities 1,965 4,013 2,297 Maturities of available-for-sale securities 9,442 5,670 5,453 Purchases of alternative investments (1,390) (630) (664) Sales and repayments of alternative investments 352 111 446 Issuance of mortgage loans on real estate (4,146) (1,946) (2,507) Repayment and maturities of mortgage loans on real estate 1,673 1,268 2,255 Repayment (issuance) of policy loans, net – (119) 5 Net change in collateral on investments, certain derivatives and related settlements 4,052 (260) (4,070) Cash received from disposition, net of cash transferred 619 – – Other (304) (310) (48) Net cash provided by (used in) investing activities 821 (3,334) (11,646) Cash Flows from Financing Activities Payment of long-term debt, including current maturities (100) (500) (300) Issuance of long-term debt, net of issuance costs 346 – 296 Payment related to sale-leaseback transactions (17) (79) (70) Proceeds from certain financing arrangements 53 86 186 Payment related to certain financing arrangements (137) (49) – Net financing cash proceeds related to closing Fortitude Re reinsurance transaction – 1,246 – Deposits of fixed account balances 16,060 16,404 16,203 Withdrawals of fixed account balances (12,153) (10,660) (7,674) Transfers from (to) separate accounts, net (27) (624) 19 Common stock issued for benefit plans (5) (7) (16) Issuance of preferred stock, net of issuance costs – – 986 Repurchase of common stock – – (550) Dividends paid to preferred stockholders (91) (82) – Dividends paid to common stockholders (307) (305) (310) Other – – (2) Net cash provided by (used in) financing activities 3,622 5,430 8,768 Net increase (decrease) in cash, invested cash and restricted cash 2,436 22 731 Cash, invested cash and restricted cash as of beginning-of-year 3,365 3,343 2,612 Cash, invested cash and restricted cash as of end-of-year $ 5,801 $ 3,365 $ 3,343 See accompanying Notes to Consolidated Financial Statements 114 Table of Contents LINCOLN NATIONAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1.
Biggest changePhiladelphia, Pennsylvania February 19, 2026 115 Table of Contents LINCOLN NATIONAL CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except share data) As of December 31, 2025 2024 ASSETS Investments: Fixed maturity available-for-sale securities, at fair value (amortized cost: 2025 - $101,462 ; 2024 - $97,415; allowance for credit losses: 2025 - $110 ; 2024 - $46) $ 93,448 $ 87,111 Trading securities 1,676 2,025 Equity securities 636 294 Mortgage loans on real estate, net of allowance for credit losses (portion at fair value: 2025 - $199; 2024 - $232) 22,472 21,083 Policy loans 2,626 2,476 Derivative investments 9,945 9,677 Other investments 8,105 7,252 Total investments 138,908 129,918 Cash and invested cash 9,502 5,801 Deferred acquisition costs, value of business acquired and deferred sales inducements 12,827 12,537 Reinsurance recoverables, net of allowance for credit losses 28,012 28,750 Deposit assets, net of allowance for credit losses 33,690 30,776 Market risk benefit assets 4,753 4,860 Accrued investment income 1,122 1,108 Goodwill 1,144 1,144 Other assets 7,154 7,499 Separate account assets 180,092 168,438 Total assets $ 417,204 $ 390,831 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities Policyholder account balances $ 136,245 $ 126,197 Future contract benefits 42,077 39,807 Funds withheld reinsurance liabilities 17,922 16,907 Market risk benefit liabilities 1,118 1,046 Deferred front-end loads 7,586 6,730 Payables for collateral on investments 7,954 10,020 Short-term debt 400 300 Long-term debt 5,866 5,856 Other liabilities 7,038 7,261 Separate account liabilities 180,092 168,438 Total liabilities 406,298 382,562 Contingencies and Commitments (See Note 17) Stockholders’ Equity Preferred stock – 10,000,000 shares authorized: Series C preferred stock – 20,000 shares authorized, issued and outstanding as of December 31, 2025 and 2024 493 493 Series D preferred stock – 20,000 shares authorized, issued and outstanding as of December 31, 2025 and 2024 493 493 Common stock – 800,000,000 shares authorized; 190,051,477 and 170,380,646 shares issued and outstanding as of December 31, 2025 and 2024, respectively 5,592 4,674 Retained earnings 8,386 7,645 Accumulated other comprehensive income (loss) (4,058) (5,036) Total stockholders’ equity 10,906 8,269 Total liabilities and stockholders’ equity $ 417,204 $ 390,831 See accompanying Notes to Consolidated Financial Statements 116 Table of Contents LINCOLN NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions, except per share data) For the Years Ended December 31, 2025 2024 2023 Revenues Insurance premiums $ 6,666 $ 6,425 $ 3,672 Fee income 5,496 5,402 5,467 Net investment income 6,075 5,544 5,900 Realized gain (loss) (799) 269 (4,311) Other revenues 774 802 917 Total revenues 18,212 18,442 11,645 Expenses Benefits 7,960 7,918 6,138 Policyholder liability remeasurement (gain) loss (191) (190) (152) Interest credited 3,743 3,443 3,248 Market risk benefit (gain) loss (372) (2,677) (2,264) Commissions and other expenses 5,507 5,590 5,492 Interest and debt expense 227 336 331 Total expenses 16,874 14,420 12,793 Income (loss) before taxes 1,338 4,022 (1,148) Federal income tax expense (benefit) 161 747 (396) Net income (loss) 1,177 3,275 (752) Other comprehensive income (loss), net of tax: Unrealized investment gain (loss) 1,638 (788) 3,715 Market risk benefit non-performance risk gain (loss) (408) (924) (671) Policyholder liability discount rate remeasurement gain (loss) (264) 157 (160) Foreign currency translation adjustment 11 (3) 8 Funded status of employee benefit plans 1 (2) (16) Total other comprehensive income (loss), net of tax 978 (1,560) 2,876 Comprehensive income (loss) $ 2,155 $ 1,715 $ 2,124 Net Income (Loss) Available to Common Stockholders Net income (loss) $ 1,177 $ 3,275 $ (752) Preferred stock dividends declared (91) (91) (82) Net income (loss) available to common stockholders $ 1,086 $ 3,184 $ (834) Net Income (Loss) Per Common Share Basic $ 5.94 $ 18.66 $ (4.92) Diluted 5.83 18.41 (4.92) Cash Dividends Declared Per Common Share $ 1.80 $ 1.80 $ 1.80 See accompanying Notes to Consolidated Financial Statements 117 Table of Contents LINCOLN NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in millions) For the Years Ended December 31, 2025 2024 2023 Preferred Stock Balance as of beginning-of-year $ 986 $ 986 $ 986 Balance as of end-of-year 986 986 986 Common Stock Balance as of beginning-of-year 4,674 4,605 4,544 Issuance of common stock 825 – – Stock compensation/issued for benefit plans 93 69 61 Balance as of end-of-year 5,592 4,674 4,605 Retained Earnings Balance as of beginning-of-year 7,645 4,778 5,924 Net income (loss) 1,177 3,275 (752) Preferred stock dividends declared (91) (91) (82) Common stock dividends declared (345) (317) (312) Balance as of end-of-year 8,386 7,645 4,778 Accumulated Other Comprehensive Income (Loss) Balance as of beginning-of-year (5,036) (3,476) (6,352) Other comprehensive income (loss), net of tax 978 (1,560) 2,876 Balance as of end-of-year (4,058) (5,036) (3,476) Total stockholders’ equity as of end-of-year $ 10,906 $ 8,269 $ 6,893 See accompanying Notes to Consolidated Financial Statements 118 Table of Contents LINCOLN NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) For the Years Ended December 31, 2025 2024 2023 Cash Flows from Operating Activities Net income (loss) $ 1,177 $ 3,275 $ (752) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Realized (gain) loss 799 (269) 4,311 Market risk benefit (gain) loss (372) (2,677) (2,264) Sales and maturities (purchases) of trading securities, net 367 343 1,301 Net operating cash payments related to closing Fortitude Re reinsurance transaction – – (1,438) Early extinguishment of debt (gain) loss (94) – – Change in: Deferred acquisition costs, value of business acquired, deferred sales inducements and deferred front-end loads 574 689 637 Accrued investment income (28) (39) 4 Insurance liabilities and reinsurance-related balances (2,688) (4,068) (3,963) Accrued expenses 113 251 109 Federal income tax accruals 77 747 (396) Other (92) (259) 377 Net cash provided by (used in) operating activities (167) (2,007) (2,074) Cash Flows from Investing Activities Purchases of available-for-sale securities and equity securities (19,229) (11,442) (11,131) Sales of available-for-sale securities and equity securities 4,317 1,965 4,013 Maturities of available-for-sale securities 11,056 9,442 5,670 Purchases of other investments (2,109) (1,390) (630) Sales and repayments of other investments 1,191 352 111 Issuance of mortgage loans on real estate (4,255) (4,146) (1,946) Repayment and maturities of mortgage loans on real estate 2,871 1,673 1,268 Repayment (issuance) of policy loans, net (147) – (119) Net change in collateral on investments, certain derivatives and related settlements 2,176 4,052 (260) Cash received from disposition, net of cash transferred – 619 – Other 116 (304) (310) Net cash provided by (used in) investing activities (4,013) 821 (3,334) Cash Flows from Financing Activities Payment of long-term debt, including current maturities (300) (100) (500) Issuance of long-term debt, net of issuance costs 495 346 – Payment related to early extinguishment of debt (421) – – Payment related to sale-leaseback transactions (7) (17) (79) Proceeds from certain financing arrangements 33 53 86 Payment related to certain financing arrangements (148) (137) (49) Net financing cash proceeds related to closing Fortitude Re reinsurance transaction – – 1,246 Policyholder account balances: Deposits 21,109 16,060 16,404 Withdrawals (12,499) (12,153) (10,660) Transfers from (to) separate accounts, net (794) (27) (624) Issuance of common stock 825 – – Common stock issued for benefit plans 4 (5) (7) Dividends paid to preferred stockholders (91) (91) (82) Dividends paid to common stockholders (325) (307) (305) Net cash provided by (used in) financing activities 7,881 3,622 5,430 Net increase (decrease) in cash and invested cash 3,701 2,436 22 Cash and invested cash as of beginning-of-year 5,801 3,365 3,343 Cash and invested cash as of end-of-year $ 9,502 $ 5,801 $ 3,365 See accompanying Notes to Consolidated Financial Statements 119 Table of Contents LINCOLN NATIONAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1.
In addition, the terms of the senior note provide us with a set-off right with the corporate bond AFS security we purchased from the VIE; therefore, neither appears on the Consolidated Balance Sheets.
In addition, the terms of the senior note provide us with a set-off right with the corporate bond AFS security we purchased from the VIE; therefore, neither appears on the Consolidated Balance Sheets.
We have concluded that we are not the primary beneficiary of the non-affiliated VIE due to our lack of power over the activities that most significantly affect its economic performance as well as the extent of our obligation to absorb its losses.
We have concluded that we are not the primary beneficiary of the non-affiliated VIE due to our lack of power over the activities that most significantly affect its economic performance as well as the extent of our obligation to absorb its losses.
We have concluded that we are not the primary beneficiary of the non-affiliated VIE due to our lack of power over the activities that most significantly affect its economic performance as well as the extent of our obligation to absorb its losses.
We have concluded that we are not the primary beneficiary of the non-affiliated VIE due to our lack of power over the activities that most significantly affect its economic performance as well as the extent of our obligation to absorb its losses.
Contingencies and Commitments Contingencies Regulatory and Litigation Matters Regulatory bodies, such as state insurance departments, the SEC, the Financial Industry Regulatory Authority, tax authorities and other regulatory bodies regularly make inquiries and conduct examinations, investigations or audits concerning our compliance with, among other things, insurance laws, securities laws, tax laws, laws governing the activities of broker-dealers, registered investment advisers and unclaimed property laws.
Contingencies and Commitments Contingencies Regulatory and Litigation Matters Regulatory bodies, such as state insurance departments, the SEC, the Financial Industry Regulatory Authority, tax authorities and other regulatory bodies regularly make inquiries and conduct examinations, investigations or audits concerning our compliance with, among other things, insurance laws, securities laws, tax laws, laws governing the activities of broker-dealers and registered investment advisers and unclaimed property laws.
We use our prevailing corporate federal income tax rate of 21% and an estimated state income tax rate, where applicable, net of the impacts related to dividends-received deduction and foreign tax credits and any other permanent differences for events recognized differently in our consolidated financial statements and federal income tax returns.
We use our prevailing corporate federal income tax rate of 21% and an estimated state income tax rate, where applicable, net of the impacts related to dividends-received deduction and foreign tax credits and any other permanent differences for events recognized differently in the consolidated financial statements and federal income tax returns.
Life Insurance: DAC and VOBA capitalization and amortization; taxes, licenses and fees; expenses associated with reserve financing and LOCs and other intangible amortization. Group Protection: Taxes, licenses and fees; DAC capitalization and amortization; other intangible amortization and expenses associated with LOCs. Retirement Plan Services: DAC capitalization and amortization and taxes, licenses and fees.
Life Insurance: DAC and VOBA capitalization and amortization; taxes, licenses and fees; expenses associated with reserve financing and LOCs and other intangible amortization. Group Protection: Taxes, licenses and fees; DAC capitalization and amortization; other intangible amortization and expenses associated with LOCs. Retirement Plan Services: DAC capitalization and amortization; taxes, licenses and fees and expenses associated with LOCs.
For the Year Ended December 31, 2023 Annuities Life Insurance Group Protection Retirement Plan Services Other Operations Total Operating Revenues (1) $ 3,002 $ 6,907 $ 5,563 $ 1,310 $ (755) $ 16,027 Operating Expenses (2) Benefits and policyholder liability remeasurement (gain) loss (3) (1,504) 4,583 3,732 – (866) 5,945 Interest credited 1,252 1,290 5 665 36 3,248 Commissions 971 571 446 87 – 2,075 General and administrative expenses 471 617 846 341 258 2,533 Interest and debt expense – – – – 331 331 Other (4) 599 77 155 16 (8) 839 Total operating expenses 1,789 7,138 5,184 1,109 (249) 14,971 Total federal income tax expense (benefit) 140 (72) 80 30 (112) 66 Total income (loss) from operations 1,073 (159) 299 171 (394) 990 Reconciliation of total income (loss) from operations to net income (loss) (5) : Net annuity product features, pre-tax 68 Net life insurance product features, pre-tax (393) Credit loss-related adjustments, pre-tax (80) Investment gains (losses), pre-tax (959) Changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans, pre-tax (6) (802) Other items, pre-tax (7) (8) (9) (10) (55) Income tax benefit (expense) related to the above pre-tax items 479 Total net income (loss) $ (752) (1) See table below for reconciliation of total operating revenues to the GAAP measure presented in the Consolidated Statements of Comprehensive Income (Loss).
For the Year Ended December 31, 2023 Annuities Life Insurance Group Protection Retirement Plan Services Other Operations Total Operating Revenues (1) $ 3,002 $ 6,907 $ 5,563 $ 1,310 $ (755) $ 16,027 Operating Expenses (2) Benefits and policyholder liability remeasurement (3) (1,504) 4,583 3,732 – (866) 5,945 Interest credited 1,252 1,290 5 665 36 3,248 Commissions 971 571 446 87 – 2,075 General and administrative expenses 471 617 846 341 258 2,533 Interest and debt expense – – – – 331 331 Other (4) 599 77 155 16 (8) 839 Total operating expenses 1,789 7,138 5,184 1,109 (249) 14,971 Total federal income tax expense (benefit) 140 (72) 80 30 (112) 66 Total income (loss) from operations 1,073 (159) 299 171 (394) 990 Reconciliation of total income (loss) from operations to net income (loss): Net annuity product features, pre-tax (5) 68 Net life insurance product features, pre-tax (393) Credit loss-related adjustments, pre-tax (80) Investment gains (losses), pre-tax (959) Changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans, pre-tax (6) (802) Other items, pre-tax (7)(8)(9)(10) (55) Income tax benefit (expense) related to the above pre-tax items 479 Total net income (loss) $ (752) (1) See table below for reconciliation of total operating revenues to the GAAP measure presented in the Consolidated Statements of Comprehensive Income (Loss).
Fixed Maturity AFS Securities – Evaluation for Recovery of Amortized Cost We regularly review our fixed maturity AFS securities (also referred to as “debt securities”) for declines in fair value that we determine to be impairment-related, including those attributable to credit risk factors that may require a credit loss allowance. 117 Table of Contents For our debt securities, we generally consider the following to determine whether our debt securities with unrealized losses are credit impaired: • The estimated range and average period until recovery; • The estimated range and average holding period to maturity; • Remaining payment terms of the security; • Current delinquencies and nonperforming assets of underlying collateral; • Expected future default rates; • Collateral value by vintage, geographic region, industry concentration or property type; • Subordination levels or other credit enhancements as of the balance sheet date as compared to origination; and • Contractual and regulatory cash obligations.
Fixed Maturity AFS Securities – Evaluation for Recovery of Amortized Cost We regularly review our fixed maturity AFS securities (also referred to as “debt securities”) for declines in fair value that we determine to be impairment-related, including those attributable to credit risk factors that may require a credit loss allowance. 122 Table of Contents For our debt securities, we generally consider the following to determine whether our debt securities with unrealized losses are credit impaired: • The estimated range and average period until recovery; • The estimated range and average holding period to maturity; • Remaining payment terms of the security; • Current delinquencies and nonperforming assets of underlying collateral; • Expected future default rates; • Collateral value by vintage, geographic region, industry concentration or property type; • Subordination levels or other credit enhancements as of the balance sheet date as compared to origination; and • Contractual and regulatory cash obligations.
This included testing controls related to management’s evaluation of current and future equity market return and volatility, and the need to update policyholder lapse and benefit utilization assumptions. We involved actuarial specialists to assist with our audit procedures which included, among others, an evaluation of the methodology applied by management with those methods used in prior periods.
This included testing controls related to management’s evaluation of current and future equity market return and volatility, and the need to update policyholder lapse behavior and benefit utilization assumptions. We involved actuarial specialists to assist with our audit procedures which included, among others, an evaluation of the methodology applied by management with those methods used in prior periods.
As described in Notes 1 (see section on MRBs ), 9 and 14 to the consolidated financial statements, there is a significant amount of estimation uncertainty inherent in measuring the fair value of the MRBs because of the sensitivity of certain assumptions underlying the estimate, including equity market return, volatility, policyholder lapse and benefit utilization.
As described in Notes 1 (see section on MRBs ), 9 and 14 to the consolidated financial statements, there is a significant amount of estimation uncertainty inherent in measuring the fair value of the MRBs because of the sensitivity of certain assumptions underlying the estimate, including equity market return, volatility, policyholder lapse behavior and benefit utilization.
We also remeasure the LFPB using the single-A interest rate as of the end of each reporting period, which is reported within policyholder liability discount rate remeasurement gain (loss) on the Consolidated Statements of Comprehensive Income (Loss). We evaluate the liability for future claims on our long-term life and disability group products.
We also remeasure the LFPB using the single-A interest rate as of the end of each reporting period, which is reported within policyholder liability discount rate remeasurement gain (loss) on the Consolidated Statements of Comprehensive Income (Loss). We evaluate the liability for future claims on our long-term disability and life waiver group products.
In addition, we include financial results for operations that are not directly related to our business segments in Other Operations. The collective group of businesses uses “Lincoln Financial” as its marketing identity. Through our business segments, we sell a wide range of wealth accumulation, wealth protection, group protection and retirement income products and solutions.
In addition, we include financial results for operations that are not directly related to our business segments in Other Operations. The collective group of businesses uses “Lincoln Financial” as its marketing identity. Through our business segments, we sell a wide range of wealth accumulation, wealth protection, group protection and retirement products and solutions.
The assessment was based on an audit undertaken by a third-party auditor and consultant to the Township of Radnor, following a periodic business review of LNL undertaken by the same individual in 2018. The assessment is comprised of taxes, interest and penalties for the period in question. LNL filed a motion for summary judgment, that was denied by the court.
The assessment was based on an audit undertaken by a third-party auditor and consultant to the Township, following a periodic business review of LNL undertaken by the same individual in 2018. The assessment is comprised of taxes, interest and penalties for the period in question. LNL filed a motion for summary judgment that was denied by the court.
To determine the recovery period of a debt security, we consider the facts and circumstances surrounding the underlying issuer including, but not limited to, the following: • Historical and implied volatility of the security; • The extent to which the fair value has been less than amortized cost; • Adverse conditions specifically related to the security or to specific conditions in an industry or geographic area; • Failure, if any, of the issuer of the security to make scheduled payments; and • Recoveries or additional declines in fair value subsequent to the balance sheet date. 118 Table of Contents In periods subsequent to the recognition of a credit loss impairment through a credit loss allowance, we continue to reassess the expected cash flows of the debt security at each subsequent measurement date as necessary.
To determine the recovery period of a debt security, we consider the facts and circumstances surrounding the underlying issuer including, but not limited to, the following: • Historical and implied volatility of the security; • The extent to which the fair value has been less than amortized cost; • Adverse conditions specifically related to the security or to specific conditions in an industry or geographic area; • Failure, if any, of the issuer of the security to make scheduled payments; and • Recoveries or additional declines in fair value subsequent to the balance sheet date. 123 Table of Contents In periods subsequent to the recognition of a credit loss impairment through a credit loss allowance, we continue to reassess the expected cash flows of the debt security at each subsequent measurement date as necessary.
By the same September 26, 2024, order, the court directed, among things, that all proceedings and deadlines in this consolidated case be stayed until 30 days after resolution of all motions to dismiss (including the exhaustion of all related appeals) in the Meade matter discussed above.
By the same September 26, 2024, order, the court directed, among other things, that all proceedings and deadlines in this consolidated case be stayed until 30 days after resolution of all motions to dismiss (including the exhaustion of all related appeals) in the Meade matter discussed above.
With few exceptions for limited scope review, we are no longer subject to U.S. federal examinations for years before 2020. In the first quarter of 2021, the Internal Revenue Service commenced an examination of our 2014, 2015, 2016 and 2017 refund claims.
With few exceptions for limited scope review, we are no longer subject to U.S. federal examinations for years before 2021. In the first quarter of 2021, the Internal Revenue Service commenced an examination of our 2014, 2015, 2016 and 2017 refund claims.
One permitted practice involves accounting for the lesser of the face amount of all amounts outstanding under an LOC and the value of the Valuation of Life Insurance Policies Model Regulation (“XXX”) additional statutory reserves as an admitted asset and a form of surplus as of December 31, 2024 and 2023.
One permitted practice involves accounting for the lesser of the face amount of all amounts outstanding under an LOC and the value of the Valuation of Life Insurance Policies Model Regulation (“XXX”) additional statutory reserves as an admitted asset and a form of surplus as of December 31, 2024.
For the years ended December 31, 2024, 2023 and 2022, we recognized no interest and penalty expense (benefit), and there was no accrued interest and penalty expense related to the unrecognized tax benefits as of December 31, 2024 and 2023. In August 2022, the Inflation Reduction Act of 2022 was passed by the U.S.
For the years ended December 31, 2025, 2024 and 2023, we recognized no interest and penalty expense (benefit), and there was no accrued interest and penalty expense related to the unrecognized tax benefits as of December 31, 2025 and 2024. In August 2022, the Inflation Reduction Act of 2022 was passed by the U.S.
Segment Information We provide products and services and report results through our Annuities, Life Insurance, Group Protection and Retirement Plan Services business segments. We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments.
Segment Information We provide products and services and report results through our Annuities, Life Insurance, Group Protection and Retirement Plan Services business segments. We also have Other Operations, which includes the financial results for operations that are not directly related to the business segments.
As discussed further below, we do not believe the unrealized loss position as of December 31, 2024, required an impairment recognized in earnings 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 the fixed maturity AFS securities before recovery of their amortized cost basis; and (iii) the difference in the fair value compared to the amortized cost was due to factors other than credit loss.
As discussed further below, we do not believe the unrealized loss position as of December 31, 2025, required an impairment recognized in earnings 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 the fixed maturity AFS securities before recovery of their amortized cost basis; and (iii) the difference in the fair value compared to the amortized cost was due to factors other than credit loss.
These instruments are economic hedges unless otherwise noted and include: Forward-Starting Interest Rate Swaps We use forward-starting interest rate swaps to hedge the interest rate exposure within our annuity and life insurance products.
These instruments are economic hedges unless otherwise noted and include: Forward-Starting Interest Rate Swaps We use forward-starting interest rate swaps to hedge the interest rate exposure within our annuity, life insurance and retirement products.
Securities rated investment grade (those rated BBB- or higher by S&P Global Ratings (“S&P”) 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 December 31, 2024 and 2023, 96% of the fair value of our corporate bond portfolio was rated investment grade.
Securities rated investment grade (those rated BBB- or higher by S&P Global Ratings (“S&P”) 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 December 31, 2025 and 2024, 96% of the fair value of our corporate bond portfolio was rated investment grade.
Township of Radnor , pending in the Court of Common Pleas of Delaware County, Pennsylvania Civil Division, No. 2022-001894, is a de novo appeal filed by LNL on March 21, 2022, regarding a September 30, 2021, Notice of Tax Assessment issued by the Township of Radnor to LNL for additional business privilege tax (“BPT”) for the years 2014-2019/2020 estimate.
Township of Radnor , pending in the Court of Common Pleas of Delaware County, Pennsylvania Civil Division, No. 2022-001894, is a de novo appeal filed by LNL on March 21, 2022, regarding a September 30, 2021, Notice of Tax Assessment issued by the Township of Radnor (the “Township”) to LNL for additional business privilege tax for the years 2014-2019/2020 estimate.
Other liabilities consist primarily of other policyholder liabilities, pension and other employee benefit liabilities, certain reinsurance payables, certain financing arrangements, ceded MRB assets, derivative instrument liabilities, deferred gain on business sold through reinsurance, long-term operating lease liabilities, payables resulting from purchases of securities that had not yet settled as of the balance sheet date and other accrued expenses.
Other liabilities consist primarily of pension and other employee benefit liabilities, certain reinsurance payables, other policyholder liabilities, certain financing arrangements, payables resulting from purchases of securities that had not yet settled as of the balance sheet date, ceded MRB assets, deferred gain on business sold through reinsurance, operating lease liabilities, derivative instrument liabilities and other accrued expenses.
These derivatives are considered total return swaps with contractual returns that are attributable to various assets and liabilities associated with these reinsurance agreements. 146 Table of Contents Primary Risks Managed by Derivatives We have derivative instruments with off-balance-sheet risks whose notional or contract amounts exceed the related credit exposure.
These derivatives are considered total return swaps with contractual returns that are attributable to various assets and liabilities associated with these reinsurance agreements. 152 Table of Contents Primary Risks Managed by Derivatives We have derivative instruments with off-balance-sheet risks whose notional or contract amounts exceed the related credit exposure.
The non-performance risk 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 December 31, 2024, the non-performance risk 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.
The non-performance risk 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 December 31, 2025, the non-performance risk 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.
The expected life of the options granted represents the weighted-average period of time from the grant date to the date of exercise, expiration or cancellation based upon historical behavior. 191 Table of Contents Generally, stock options have a maximum contractual term of ten years and vest ratably over a three-year period based solely on a service condition.
The expected life of the options granted represents the weighted-average period of time from the grant date to the date of exercise, expiration or cancellation based upon historical behavior. 199 Table of Contents Generally, stock options have a maximum contractual term of ten years and vest ratably over a three-year period based solely on a service condition.
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 December 31, 2024. 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.
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 December 31, 2025. 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.
An adverse outcome in one or more of these matters may have a material impact on the consolidated financial statements, but, based on information currently known, management does not believe those cases are likely to have such an impact. 194 Table of Contents Cost of Insurance and Other Litigation Cost of Insurance Litigation Glover v.
An adverse outcome in one or more of these matters may have a material impact on the consolidated financial statements, but, based on information currently known, management does not believe those cases are likely to have such an impact. 202 Table of Contents Cost of Insurance and Other Litigation Cost of Insurance Litigation Glover v.
Based upon this evaluation as of December 31, 2024, management believes we have the ability to generate adequate amounts of cash from our normal operations (e.g., insurance premiums, fee income and investment income) to meet cash requirements with a prudent margin of safety without requiring the sale of our impaired securities.
Based upon this evaluation as of December 31, 2025, management believes we have the ability to generate adequate amounts of cash from our normal operations (e.g., insurance premiums, fee income and investment income) to meet cash requirements with a prudent margin of safety without requiring the sale of our impaired securities.
As of December 31, 2024, we estimate the aggregate range of reasonably possible losses, including amounts in excess of amounts accrued for these matters as of such date, to be up to approximately $150 million, after-tax. Any estimate is not an indication of expected loss, if any, or of the Company’s maximum possible loss exposure on such matters.
As of December 31, 2025, we estimate the aggregate range of reasonably possible losses, including amounts in excess of amounts accrued for these matters as of such date, to be up to approximately $150 million, after-tax. Any estimate is not an indication of expected loss, if any, or of the Company’s maximum possible loss exposure on such matters.
Based upon the analysis discussed above, we believe that as of December 31, 2024 and 2023, we would have recovered the amortized cost of each corporate bond. As of December 31, 2024, the unrealized losses associated with our MBS and ABS were attributable primarily to rising interest rates and widening credit spreads since purchase.
Based upon the analysis discussed above, we believe that as of December 31, 2025 and 2024, we would have recovered the amortized cost of each corporate bond. As of December 31, 2025, the unrealized losses associated with our MBS and ABS were attributable primarily to rising interest rates and widening credit spreads since purchase.
The loan’s estimated value is based on: the present value of expected future cash flows discounted at the loan’s effective interest rate; the loan’s observable market price; or the fair value of the loan’s collateral. 120 Table of Contents Allowance for credit losses are maintained at a level we believe is adequate to absorb current expected lifetime credit losses.
The loan’s estimated value is based on: the 125 Table of Contents present value of expected future cash flows discounted at the loan’s effective interest rate; the loan’s observable market price; or the fair value of the loan’s collateral. Allowance for credit losses are maintained at a level we believe is adequate to absorb current expected lifetime credit losses.
The Inflation Reduction Act of 2022 also established a 1% excise tax on stock repurchases made by publicly traded corporations. Both provisions became effective for tax years beginning after December 31, 2022. We determined that we were not within the scope of the corporate alternative minimum tax for 2024. 23.
The Inflation Reduction Act of 2022 also established a 1% excise tax on stock repurchases made by publicly traded corporations. Both provisions became effective for tax years beginning after December 31, 2022. We determined that we were not within the scope of the corporate alternative minimum tax for 2025. 23.
Future Adoption of New Accounting Standards The following table provides a description of future adoptions of new ASUs that may have an impact on our consolidated financial statements when adopted. ASUs not listed below were assessed and determined to be either not applicable or insignificant in presentation or amount.
Future Adoption of Accounting Standards The following table provides a description of future adoptions of ASUs that may have an impact on the consolidated financial statements when adopted. ASUs not listed below were assessed and determined to be either not applicable or insignificant in presentation or amount.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
If it is not recoverable, we record an impairment through a credit loss allowance for the security. 119 Table of Contents Trading Securities Trading securities consist of fixed maturity securities in designated portfolios, some of which support modified coinsurance and coinsurance with funds withheld reinsurance agreements.
If it is not recoverable, we record an impairment through a credit loss allowance for the security. 124 Table of Contents Trading Securities Trading securities consist of fixed maturity securities in designated portfolios, some of which support modified coinsurance and coinsurance with funds withheld reinsurance agreements.
Other revenues attributable to broker-dealer services and advisory fee income, reported primarily within our Annuities segment, were $225 million, $564 million and $584 million for the years ended December 31, 2024, 2023 and 2022, respectively. See “Sale of Wealth Management Business” above for additional information.
Other revenues attributable to broker-dealer services and advisory fee income, reported primarily within our Annuities segment, were $225 million and $564 million for the years ended December 31, 2024 and 2023, respectively. See “Sale of Wealth Management Business” above for additional information.
As of December 31, 2024 and 2023, we did not have any exposure related to CDSs for which we are the seller. 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.
As of December 31, 2025 and 2024, we did not have any exposure related to CDSs for which we are the seller. 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.
The outstanding principal balance of this long-term note was $1.5 billion as of December 31, 2024, and it is variable in nature, moving concurrently with any variability in the face amount of the corporate bond AFS security up to a maximum amount of $1.5 billion.
The outstanding principal balance of this long-term note was $1.5 billion as of December 31, 2025, and it is variable in nature, moving concurrently with any variability in the face amount of the corporate bond AFS security up to a maximum amount of $1.5 billion.
For the years ended December 31, 2024 and 2023, 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.
For the years ended December 31, 2025 and 2024, 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.
Dividends, if declared, will be payable commencing on March 1, 2023, and will accrue and be payable on the first day of March and 200 Table of Contents September each year, in arrears, at an annual rate of 9.250% on the liquidation preference of $25,000 per share.
Dividends, if declared, will be payable commencing on March 1, 2023, and will accrue and be payable on the first day of March and 208 Table of Contents September each year, in arrears, at an annual rate of 9.250% on the liquidation preference of $25,000 per share.
Plaintiffs Henry Morgan, Susan Smith, Charles Smith, Laura Seale, Terri Cogburn, Laura Baesel, Kathleen Walton, Terry Warner, and Toni Hale (“Plaintiffs”) allege on 196 Table of Contents behalf of a putative class that Lincoln National Corporation d/b/a Lincoln Financial Group, LNL and LLANY (together, “Lincoln”), FMR, LLC, and Fidelity Product Services, LLC (“Fidelity”) created and marketed misleading and deceptive insurance products with attributes of investment products.
Plaintiffs Henry Morgan, Susan Smith, Charles Smith, Laura Seale, Terri Cogburn, Laura Baesel, Kathleen Walton, Terry Warner, and Toni Hale (“Plaintiffs”) allege on behalf of a putative class that Lincoln National Corporation d/b/a Lincoln Financial Group, LNL and LLANY (together, “Lincoln”), FMR, LLC, and Fidelity Product Services, LLC (“Fidelity”) created and marketed misleading and deceptive insurance products with attributes of investment products.
Freitag, Deirdre P Connelly, William H. Cunningham, Reginald E. Davis, Eric G. Johnson, Gary C. Kelly, M. Leanne Lachman, Dale LeFebvre, Janet Liang, Michael F. Mee, Lynn M. Utter and Patrick S. Pittard (“Individual Defendants”) and Lincoln National Corporation (“Nominal Defendant”), No. 2:24-cv-02713 (E.D. Pa.), filed on June 20, 2024; and Robert R.
Glass, Randal J. Freitag, Deirdre P Connelly, William H. Cunningham, Reginald E. Davis, Eric G. Johnson, Gary C. Kelly, M. Leanne Lachman, Dale LeFebvre, Janet Liang, Michael F. Mee, Lynn M. Utter and Patrick S. Pittard (“Individual Defendants”) and Lincoln National Corporation (“Nominal Defendant”), No. 2:24-cv-02713 (E.D. Pa.), filed on June 20, 2024; and Robert R.
Dividend equivalents accrue with respect to unvested performance shares when and as cash dividends are paid on the Company’s common stock and vest if and to the extent that the underlying performance shares vest. Performance share information in the table below includes dividend equivalents credited on unvested performance share awards at target.
Dividend equivalents accrue with respect to unvested performance shares when and as cash dividends are paid on our common stock and vest if and to the extent that the underlying performance shares vest. Performance share information in the table below includes dividend equivalents credited on unvested performance share awards at target.
As of December 31, 2024, we had not received any collateral and, therefore, had not sold or repledged any collateral under these agreements. We also accept collateral from derivative counterparties in the form of securities that we are permitted to sell or re-pledge.
As of December 31, 2025, we had not received any collateral and, therefore, had not sold or repledged any collateral under these agreements. We also accept collateral from derivative counterparties in the form of securities that we are permitted to sell or re-pledge.
Connecticut General Life Insurance Company and The Lincoln National Life Insurance Company , filed in the U.S. District Court for the District of Connecticut, No. 3:16-cv-00827, is a putative class action that was served on The Lincoln National Life Insurance Company (“LNL”) on June 8, 2016.
Connecticut General Life Insurance Company and The Lincoln National Life Insurance Company , filed in the U.S. District Court for the District of Connecticut, No. 3:16-cv-00827, is a putative class action that was served on LNL on June 8, 2016.
Management assessed our internal control over financial reporting as of December 31, 2024, the end of our fiscal year. Management based its assessment on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Management assessed our internal control over financial reporting as of December 31, 2025, the end of our fiscal year. Management based its assessment on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Pursuant to the Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards Codification TM , we categorize our financial instruments carried at fair value into a three-level fair value hierarchy, based on the priority of inputs to the respective valuation technique.
Pursuant to the Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board Accounting Standards Codification TM , we categorize our financial instruments carried at fair value into a three-level fair value hierarchy, based on the priority of inputs to the respective valuation technique.
These retirement plans are not material to the Company’s results of operations, financial condition or cash flows for the three years ended December 31, 2024. Defined Contribution Plans We sponsor tax-qualified defined contribution plans for eligible employees and agents.
These retirement plans are not material to the Company’s results of operations, financial condition or cash flows for the three years ended December 31, 2025. Defined Contribution Plans We sponsor tax-qualified defined contribution plans for eligible employees and agents.
As of December 31, 2024, the unrealized losses associated with our corporate bond, U.S. government bond, state and municipal bond and foreign government bond securities were attributable primarily to rising interest rates and widening credit spreads since purchase.
As of December 31, 2025, the unrealized losses associated with our corporate bond, U.S. government bond, state and municipal bond and foreign government bond securities were attributable primarily to rising interest rates and widening credit spreads since purchase.
The inputs used to measure the fair value of our mortgage loans on real estate, excluding mortgage loans accounted for using the fair value option, are classified as Level 2 within the fair value hierarchy. Other Investments The carrying value of our assets classified as other investments, excluding short-term investments, approximates fair value.
The inputs used to measure the fair value of our mortgage loans on real estate, excluding mortgage loans accounted for using the fair value option, are classified as Level 3 within the fair value hierarchy. Other Investments The carrying value of our assets classified as other investments, excluding short-term investments, approximates fair value.
(7) Represents the change in fair value of the index options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts, and the associated index options to hedge policyholder index allocations applicable to future reset periods for our indexed annuity products.
(8) Represents the change in fair value of the index options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts, and the associated index options to hedge policyholder index allocations applicable to future reset periods for our indexed annuity products.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Philadelphia, Pennsylvania February 21, 2025 107 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Lincoln National Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Lincoln National Corporation (the Company) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Philadelphia, Pennsylvania February 19, 2026 112 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Lincoln National Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Lincoln National Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
The effectiveness of our internal control over financial reporting as of December 31, 2024, has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included on the following page. 106 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Lincoln National Corporation Opinion on Internal Control Over Financial Reporting We have audited Lincoln National Corporation’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
The effectiveness of our internal control over financial reporting as of December 31, 2025, has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included on the following page. 111 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Lincoln National Corporation Opinion on Internal Control Over Financial Reporting We have audited Lincoln National Corporation’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
See Note 14 for additional disclosures related to the fair value of our derivative instruments and Note 4 for derivative instruments related to our consolidated VIEs. 143 Table of Contents Interest Rate Contracts We use derivative instruments as part of our interest rate risk management strategy.
See Note 14 for additional disclosures related to the fair value of our derivative instruments and Note 4 for derivative instruments related to our consolidated VIEs. 149 Table of Contents Interest Rate Contracts We use derivative instruments as part of our interest rate risk management strategy.
As of December 31, 2024, the policy for our reinsurance program was to retain no more than $20 million on a single insured life, with the retention on most policies being significantly below that.
As of December 31, 2025, the policy for our reinsurance program was to retain no more than $20 million on a single insured life, with the retention on most policies being significantly below that.
The net operating losses arose in tax years 2018, 2021 and 2024 and, under the Tax Cuts and Jobs Act changes, have an unlimited carryforward period. The capital losses arose in tax year 2023 and can be carried back three years and forward five years.
The net operating losses arose in tax years 2018, 2021, 2024 and 2025 and under the Tax Cuts and Jobs Act changes have an unlimited carryforward period. The capital losses arose in tax years 2023 and 2025 and can be carried back three years and forward five years.
We anticipate that it is reasonably possible that unrecognized tax benefits will decrease by $2 million by the end of 2025. We recognize interest and penalties accrued, if any, related to unrecognized tax benefits as a component of tax expense.
We anticipate that it is reasonably possible that unrecognized tax benefits will decrease by $2 million by the end of 2026. We recognize interest and penalties accrued, if any, related to unrecognized tax benefits as a component of tax expense.
We categorize derivatives into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique as discussed above in “Fair Value Measurement.” The accounting for changes in the estimated fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and further, on the type of hedging relationship.
We categorize derivatives into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique as discussed above in “Fair Value Measurement.” The accounting for changes in the estimated fair value of a derivative instrument depends on whether it has been designated and qualifies as 126 Table of Contents part of a hedging relationship, and further, on the type of hedging relationship.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedules listed in the Index at Item 15(a) and our report dated February 21, 2025 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules listed in the Index at Item 15(a) and our report dated February 19, 2026 expressed an unqualified opinion thereon.
The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities. 140 Table of Contents We have repurchase agreements through which we can obtain liquidity by pledging securities.
The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities. 145 Table of Contents We have repurchase agreements through which we can obtain liquidity by pledging securities.
Lastly, the state of Vermont has permitted a practice to account for certain excess of loss reinsurance agreements with unaffiliated reinsurers as an asset and form of surplus as of December 31, 2024 and 2023.
Lastly, the state of Vermont has permitted a practice to account for certain excess of loss reinsurance agreements with unaffiliated reinsurers as an asset and form of surplus as of December 31, 2025 and 2024.
Diluted EPS is computed assuming the conversion or exercise of non-vested stock, stock options and performance share units outstanding during the year. For any period where a net loss is experienced, shares used in the diluted EPS calculation represent basic shares, as the use of diluted shares would result in a lower loss per share. 130 Table of Contents 2.
Diluted EPS is computed assuming the conversion or exercise of non-vested stock, stock options and performance 135 Table of Contents shares outstanding during the year. For any period where a net loss is experienced, shares used in the diluted EPS calculation represent basic shares, as the use of diluted shares would result in a lower loss per share. 2.
Included among the material (or potentially material) reported amounts and disclosures that require use of estimates are: fair value of certain financial assets, derivatives, allowances for credit losses, goodwill and other intangibles, MRBs, future contract benefits, income taxes including the recoverability of our deferred tax assets, and the potential effects of resolving litigated matters.
Included among the material (or potentially material) reported amounts and disclosures that require use of estimates are: fair value of certain financial assets, derivatives, allowances for credit losses, MRBs, future contract benefits, income taxes including the recoverability of our deferred tax assets and the potential effects of resolving litigated matters.
Another permitted practice involves the acquisition of an LLC note in exchange for a variable value surplus note that is recognized as an admitted asset and a form of surplus as of December 31, 2024 and 2023.
Another permitted practice involves the acquisition of an LLC note in exchange for a variable value surplus note that is recognized as an admitted asset and a form of surplus as of December 31, 2025 and 2024.
In our opinion, Lincoln National Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
In our opinion, Lincoln National Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 21, 2025 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 19, 2026 expressed an unqualified opinion thereon.
Our MRB assets and MRB liabilities are reported at fair value separately on the Consolidated Balance Sheets. We issue variable and fixed annuity contracts that may include various types of guaranteed living benefit (“GLB”) and guaranteed death benefit (“GDB”) riders that we have classified as MRBs.
Our MRB assets and MRB liabilities are reported at fair value separately on the Consolidated Balance Sheets. 132 Table of Contents We issue variable and fixed annuity contracts that may include various types of guaranteed living benefit (“GLB”) and guaranteed death benefit (“GDB”) riders that we have classified as MRBs.
(2) Excludes excess non-cash collateral pledged of $82 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements. 6.
(2) Excludes excess non-cash collateral pledged of $39 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements. 6.
Income (loss) from operations is GAAP net income excluding the following items, as applicable: • Items related to annuity product features, which include changes in MRBs, including gains and losses and benefit payments, changes in the fair value of the derivative instruments we hold to hedge GLB and GDB riders, net of fee income allocated to support the cost of hedging them, and changes in the fair value of the embedded derivative liabilities of our indexed annuity contracts and the associated index options we hold to hedge them, including collateral expense associated with the hedge program (collectively, “net annuity product features”); • Items related to life insurance product features, which include changes in the fair value of derivatives we hold as part of VUL hedging, changes in reserves resulting from benefit ratio unlocking associated with the impact of capital markets, and changes in the fair value of the embedded derivative liabilities of our IUL contracts and the associated index options we hold to hedge them (collectively, “net life insurance product features”); • Credit loss-related adjustments on fixed maturity AFS securities, mortgage loans on real estate and reinsurance-related assets (“credit loss-related adjustments”); • Changes in the fair value of equity securities, certain derivatives, certain other investments and realized gains (losses) on sales, disposals and impairments of financial assets (collectively, “investment gains (losses)”); • Changes in the fair value of reinsurance-related embedded derivatives, trading securities and mortgage loans on real estate electing the fair value option (“changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans”); • Income (loss) from the initial adoption of new accounting standards, accounting policy changes and new regulations, including changes in tax law; • Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance; • Losses from the impairment of intangible assets and gains (losses) on other non-financial assets; • Income (loss) from discontinued operations; • Other items, which include the following: certain legal and regulatory accruals; severance expense related to initiatives that realign the workforce; transaction and integration costs related to mergers and acquisitions including the acquisition or divestiture, through reinsurance or other means, of businesses or blocks of business; mark-to-market adjustment related to the LNC stock component of our deferred compensation plans (“deferred compensation mark-to-market adjustment”); gains (losses) on modification or early extinguishment of debt; and impacts from settlement or curtailment of defined benefit obligations; and • Income tax benefit (expense) related to the above pre-tax items, including the effect of tax adjustments such as changes to deferred tax valuation allowances.
Income (loss) from operations is GAAP net income (loss) excluding the following items, as applicable: • Items related to annuity product features, which include changes in MRBs, changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits, and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products (collectively, “net annuity product features”); • Items related to life insurance product features, which include changes in the fair value of derivatives we hold as part of VUL hedging, changes in reserves resulting from benefit ratio unlocking associated with the impact of capital markets, and changes in the fair value of the embedded derivative liabilities of our IUL contracts and the associated index options we hold to hedge them (collectively, “net life insurance product features”); • Credit loss-related adjustments on fixed maturity AFS securities, mortgage loans on real estate and reinsurance-related assets (“credit loss-related adjustments”); • Changes in the fair value of equity securities and certain other investments, the impact of certain derivatives, and realized gains (losses) on sales, disposals and impairments of financial assets (collectively, “investment gains (losses)”); • Changes in the fair value of reinsurance-related embedded derivatives, trading securities and mortgage loans on real estate electing the fair value option (“changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans”); • Income (loss) from the initial adoption of new accounting standards, accounting policy changes and new regulations, including changes in tax law; • Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance; • Losses from the impairment of intangible assets and gains (losses) on other non-financial assets; • Income (loss) from discontinued operations; • Other items, which include the following: certain legal and regulatory accruals; severance expense related to initiatives that realign the workforce; transaction, integration and other costs related to mergers and acquisitions including the acquisition or divestiture, through reinsurance or other means, of businesses or blocks of business, and certain other corporate initiatives; mark-to-market adjustment related to the LNC stock component of our deferred compensation plans (“deferred compensation mark-to-market adjustment”); gains (losses) on modification or early extinguishment of debt; and impacts from settlement or curtailment of defined benefit obligations; and • Income tax benefit (expense) related to the above pre-tax items, including the effect of tax adjustments such as changes to deferred tax valuation allowances.
Other Operations: Reimbursements to Other Operations from the Life Insurance segment for the use of proceeds from certain issuances of senior notes that were used as long-term structured solutions, net of expenses incurred by Other Operations for its access to a financing facility and issuance of LOCs.
Other Operations: Taxes, licenses and fees and reimbursements to Other Operations from the Life Insurance segment for the use of proceeds from certain issuances of senior notes that were used as long-term structured solutions, net of expenses incurred by Other Operations for its access to a financing facility and issuance of LOCs.
Equity Securities Equity securities are carried at fair value, and changes in fair value are recorded in realized gain (loss) on the Consolidated Statements of Comprehensive Income (Loss) as they occur. Equity securities consist primarily of common stock of publicly-traded companies, privately placed securities and mutual fund shares.
Equity Securities Equity securities are carried at fair value, and changes in fair value are recorded in realized gain (loss) on the Consolidated Statements of Comprehensive Income (Loss) as they occur. Equity securities consist primarily of common stock of publicly-traded companies, privately placed securities, mutual fund shares and closed-end funds.
These concentrations include fixed maturity AFS, trading and equity securities. 4. Variable Interest Entities Consolidated VIEs Reinsurance-Related Notes We are the sole equity owner of Lincoln Financial Limited Liability Company I (“LFLLCI”), which we formed in July 2013.
These concentrations include fixed maturity AFS, trading and equity securities. 4. Variable Interest Entities Consolidated VIEs Reinsurance-Related Notes We were the sole equity owner of Lincoln Financial Limited Liability Company I (“LFLLCI”), which was formed in July 2013.
Under Indiana laws and regulations, our Indiana insurance subsidiaries, including our primary insurance subsidiary, LNL, may pay dividends to LNC without prior approval of the Indiana Insurance Commissioner (the “Commissioner”), only from unassigned surplus and must receive prior approval of the Commissioner to pay a dividend if such dividend, along with all other dividends paid within the preceding 12 consecutive months, would exceed the statutory limitation.
Under Indiana laws and regulations, our Indiana insurance subsidiaries, including our primary insurance subsidiary, LNL, may pay dividends to Lincoln National Corporation without prior approval of the Indiana Insurance Commissioner (the “Commissioner”), only from unassigned surplus and must receive prior approval of the Commissioner to pay a dividend if such dividend, along with all other dividends paid within the preceding 12 consecutive months, would exceed the statutory limitation.
Separate Account Assets and Liabilities Separate accounts represent segregated funds that are maintained to meet specific investment objectives of policyholders who direct the investments and bear the investment risk, except to the extent of minimum guarantees made by the Company with respect to certain 125 Table of Contents accounts.
Separate Account Assets and Liabilities Separate accounts represent segregated funds that are maintained to meet specific investment objectives of policyholders who direct the investments and bear the investment risk, except to the extent of minimum guarantees made by the Company with respect to certain accounts.
(“Athene”) to reinsure fixed annuity products, which resulted in a deposit asset of $2.1 billion and $2.7 billion as of December 31, 2024 and 2023, respectively.
(“Athene”) to reinsure fixed annuity products, which resulted in a deposit asset of $1.7 billion and $2.1 billion as of December 31, 2025 and 2024, respectively.
Plaintiff Morgan alleges, inter alia , that the Individual Defendants failed to disclose to investors: (i) that the Company was experiencing a decline in its VUL business; (ii) that, as a result, the goodwill associated with the life insurance business was overstated; (iii) that, as a result, the Company’s policy lapse assumptions were outdated; (iv) that, as a result, the Company’s reserves were overstated; (v) that, as a result, the Company’s reported financial results and financial statements were misstated; and (vi) that, as a result, the Individual Defendants’ positive statements about the Company’s business, operations and prospects were materially misleading and/or lacked a reasonable basis.
Plaintiffs allege, inter alia , that the Individual Defendants failed to disclose to investors: (i) that the Company was experiencing a decline in its VUL business; (ii) that, as a result, the goodwill associated with the life insurance business was overstated; (iii) that, as a result, the Company’s policy lapse assumptions were outdated; (iv) that, as a result, the Company’s reserves were overstated; (v) that, as a result, the Company’s reported financial results and financial statements were misstated; and (vi) that, as a result, the Individual Defendants’ positive statements about the Company’s business, operations and prospects were materially misleading and/or lacked a reasonable basis.
Our deferred gains and losses on reinsurance of our annuity products are recognized over the period in which the majority of account balances is expected to run off. Deferred gains and losses are reported within other liabilities and other assets, respectively, on the Consolidated Balance Sheets.
Our deferred gains and losses on reinsurance of our annuity products are recognized over the period in which the majority of account balances is expected to run off. Deferred gains and losses are reported within 129 Table of Contents other liabilities and other assets, respectively, on the Consolidated Balance Sheets.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

142 edited+41 added−23 removed121 unchanged
Biggest changeThe composition by industry categories of all fixed maturity AFS securities in an unrealized loss position (in millions) as of December 31, 2024, was as follows: 84 Table of Contents Net Amortized Cost % Net Amortized Cost Gross Unrealized Losses % Gross Unrealized Losses Fair Value % Fair Value Healthcare $ 5,802 7.5 % $ 1,255 11.3 % $ 4,547 6.8 % Electric 7,301 9.4 % 1,187 10.8 % 6,114 9.2 % Technology 3,988 5.1 % 621 5.6 % 3,367 5.1 % Food and beverage 3,603 4.6 % 556 5.1 % 3,047 4.6 % Industrial – other 2,086 2.7 % 451 4.1 % 1,635 2.5 % Local authorities 2,306 3.0 % 451 4.1 % 1,855 2.8 % Banking 5,015 6.5 % 419 3.8 % 4,596 6.9 % ABS 6,807 8.8 % 406 3.7 % 6,401 9.6 % Pharmaceuticals 2,267 2.9 % 335 3.0 % 1,932 2.9 % Diversified manufacturing 2,262 2.9 % 323 2.9 % 1,939 2.9 % Natural gas 1,634 2.1 % 285 2.6 % 1,349 2.0 % Retail 1,565 2.0 % 261 2.4 % 1,304 2.1 % Chemicals 1,893 2.4 % 248 2.3 % 1,645 2.5 % Brokerage asset management 1,658 2.1 % 239 2.2 % 1,419 2.1 % Property and casualty 1,376 1.8 % 216 2.0 % 1,160 1.6 % Transportation services 1,922 2.5 % 215 2.0 % 1,707 2.6 % Life insurance 1,274 1.7 % 213 1.9 % 1,061 1.6 % Aerospace and defense 1,357 1.8 % 212 1.9 % 1,145 1.7 % Utility – other 1,164 1.5 % 192 1.7 % 972 1.5 % Consumer products 1,071 1.4 % 173 1.6 % 898 1.4 % Midstream 1,383 1.8 % 163 1.5 % 1,220 1.8 % Non-agency CMBS 1,503 1.9 % 155 1.4 % 1,348 2.0 % Wirelines 857 1.1 % 154 1.4 % 703 1.1 % Railroads 846 1.1 % 149 1.4 % 697 1.0 % Government-sponsored 459 0.6 % 144 1.3 % 315 0.5 % Integrated 682 0.9 % 125 1.1 % 557 0.8 % Automotive 1,463 1.9 % 123 1.1 % 1,340 2.0 % Wireless 712 0.9 % 120 1.1 % 592 0.9 % Industries with unrealized losses less than $100 million 13,260 17.1 % 1,614 14.7 % 11,646 17.5 % Total by industry $ 77,516 100.0 % $ 11,005 100.0 % $ 66,511 100.0 % Total by industry as a percentage of total fixed maturity AFS securities 79.6 % 100.0 % 76.4 % Mortgage Loans on Real Estate The following tables summarize key information on mortgage loans on real estate (in millions): As of December 31, 2024 Commercial Residential Total % Credit Quality Indicator Current $ 17,546 $ 3,572 $ 21,118 99.4 % Delinquent (1) 25 33 58 0.3 % Foreclosure – 59 59 0.3 % Total mortgage loans on real estate before allowance 17,571 3,664 21,235 100.0 % Allowance for credit losses (99) (53) (152) Total mortgage loans on real estate $ 17,472 $ 3,611 $ 21,083 85 Table of Contents As of December 31, 2023 Commercial Residential Total % Credit Quality Indicator Current $ 17,273 $ 1,742 $ 19,015 99.7 % Delinquent (1) – 21 21 0.1 % Foreclosure – 41 41 0.2 % Total mortgage loans on real estate before allowance 17,273 1,804 19,077 100.0 % Allowance for credit losses (86) (28) (114) Total mortgage loans on real estate $ 17,187 $ 1,776 $ 18,963 (1) Includes certain mortgage loans on real estate that support our modified coinsurance agreements where the investment results are passed directly to the reinsurers.
Biggest changeThe composition by industry categories of all fixed maturity AFS securities in an unrealized loss position (in millions) as of December 31, 2025, was as follows: Net Amortized Cost % Net Amortized Cost Gross Unrealized Losses % Gross Unrealized Losses Fair Value % Fair Value Healthcare $ 5,546 8.1 % $ 1,151 12.8 % $ 4,395 7.4 % Electric 6,472 9.4 % 1,018 11.3 % 5,454 9.1 % Technology 3,643 5.3 % 537 6.0 % 3,106 5.2 % Food and beverage 3,387 4.9 % 474 5.3 % 2,913 4.9 % Industrial – other 1,973 2.9 % 420 4.7 % 1,553 2.6 % Local authorities 2,001 2.9 % 392 4.4 % 1,609 2.7 % Pharmaceuticals 2,056 3.0 % 273 3.0 % 1,783 3.0 % Diversified manufacturing 2,027 3.0 % 261 2.9 % 1,766 3.0 % Banking 3,660 5.3 % 253 2.8 % 3,407 5.7 % Natural gas 1,466 2.1 % 241 2.7 % 1,225 2.1 % Retail 1,414 2.1 % 219 2.4 % 1,195 2.0 % ABS 6,658 9.7 % 214 2.4 % 6,444 10.8 % Chemicals 1,602 2.3 % 214 2.4 % 1,388 2.3 % Property and casualty 1,219 1.8 % 183 2.0 % 1,036 1.7 % Brokerage asset management 1,418 2.1 % 183 2.0 % 1,235 2.1 % Life insurance 1,207 1.8 % 178 2.0 % 1,029 1.7 % Transportation services 1,752 2.5 % 169 1.9 % 1,583 2.7 % Aerospace and defense 1,139 1.7 % 168 1.9 % 971 1.6 % Utility – other 945 1.4 % 166 1.8 % 779 1.3 % Government-sponsored 443 0.6 % 150 1.7 % 293 0.5 % Railroads 808 1.2 % 143 1.6 % 665 1.1 % Wirelines 844 1.2 % 142 1.5 % 702 1.2 % Midstream 1,195 1.7 % 128 1.4 % 1,067 1.8 % Consumer products 754 1.1 % 112 1.2 % 642 1.1 % Wireless 742 1.1 % 107 1.2 % 635 1.1 % Integrated 542 0.8 % 105 1.2 % 437 0.7 % Non-agency CMBS 1,619 2.4 % 98 1.1 % 1,521 2.4 % Industries with unrealized losses less than $100 million 12,135 17.6 % 1,300 14.4 % 10,835 18.2 % Total by industry $ 68,667 100.0 % $ 8,999 100.0 % $ 59,668 100.0 % Total by industry as a percentage of total fixed maturity AFS securities 67.8 % 100.0 % 63.9 % 88 Table of Contents The composition by industry categories of all fixed maturity AFS securities in an unrealized loss position (in millions) as of December 31, 2024, was as follows: Net Amortized Cost % Net Amortized Cost Gross Unrealized Losses % Gross Unrealized Losses Fair Value % Fair Value Healthcare $ 5,802 7.5 % $ 1,255 11.3 % $ 4,547 6.8 % Electric 7,301 9.4 % 1,187 10.8 % 6,114 9.2 % Technology 3,988 5.1 % 621 5.6 % 3,367 5.1 % Food and beverage 3,603 4.6 % 556 5.1 % 3,047 4.6 % Industrial – other 2,086 2.7 % 451 4.1 % 1,635 2.5 % Local authorities 2,306 3.0 % 451 4.1 % 1,855 2.8 % Banking 5,015 6.5 % 419 3.8 % 4,596 6.9 % ABS 6,807 8.8 % 406 3.7 % 6,401 9.6 % Pharmaceuticals 2,267 2.9 % 335 3.0 % 1,932 2.9 % Diversified manufacturing 2,262 2.9 % 323 2.9 % 1,939 2.9 % Natural gas 1,634 2.1 % 285 2.6 % 1,349 2.0 % Retail 1,565 2.0 % 261 2.4 % 1,304 2.0 % Chemicals 1,893 2.4 % 248 2.3 % 1,645 2.5 % Brokerage asset management 1,658 2.1 % 239 2.2 % 1,419 2.1 % Property and casualty 1,376 1.8 % 216 2.0 % 1,160 1.7 % Transportation services 1,922 2.5 % 215 2.0 % 1,707 2.6 % Life insurance 1,274 1.7 % 213 1.9 % 1,061 1.6 % Aerospace and defense 1,357 1.8 % 212 1.9 % 1,145 1.7 % Utility – other 1,164 1.5 % 192 1.7 % 972 1.5 % Consumer products 1,071 1.4 % 173 1.6 % 898 1.4 % Midstream 1,383 1.8 % 163 1.5 % 1,220 1.8 % Non-agency CMBS 1,503 1.9 % 155 1.4 % 1,348 2.0 % Wirelines 857 1.1 % 154 1.4 % 703 1.1 % Railroads 846 1.1 % 149 1.4 % 697 1.0 % Government-sponsored 459 0.6 % 144 1.3 % 315 0.5 % Integrated 682 0.9 % 125 1.1 % 557 0.8 % Automotive 1,463 1.9 % 123 1.1 % 1,340 2.0 % Wireless 712 0.9 % 120 1.1 % 592 0.9 % Industries with unrealized losses less than $100 million 13,260 17.1 % 1,614 14.7 % 11,646 17.5 % Total by industry $ 77,516 100.0 % $ 11,005 100.0 % $ 66,511 100.0 % Total by industry as a percentage of total fixed maturity AFS securities 79.6 % 100.0 % 76.4 % 0.764 89 Table of Contents Mortgage Loans on Real Estate The following tables summarize key information on mortgage loans on real estate (in millions): As of December 31, 2025 Commercial Residential Total % Credit Quality Indicator Current $ 17,611 $ 4,864 $ 22,475 99.2 % Delinquent (1) 29 60 89 0.4 % Foreclosure – 90 90 0.4 % Total mortgage loans on real estate before allowance 17,640 5,014 22,654 100.0 % Allowance for credit losses (113) (69) (182) Total mortgage loans on real estate $ 17,527 $ 4,945 $ 22,472 As of December 31, 2024 Commercial Residential Total % Credit Quality Indicator Current $ 17,546 $ 3,572 $ 21,118 99.4 % Delinquent (1) 25 33 58 0.3 % Foreclosure – 59 59 0.3 % Total mortgage loans on real estate before allowance 17,571 3,664 21,235 100.0 % Allowance for credit losses (99) (53) (152) Total mortgage loans on real estate $ 17,472 $ 3,611 $ 21,083 (1) Includes certain mortgage loans on real estate that support our modified coinsurance agreements, where the investment results are passed directly to the reinsurers.
New business issued or acquired, business ceded or sold, changes to or variances from actuarial assumptions and economic conditions will cause these amounts to change over time, possibly materially. See Note 1 for details of what these liabilities include and represent. (2) Represents principal amounts of debt only. See Note 1 3 for additional information.
New business issued or acquired, business ceded or sold, changes to or variances from actuarial assumptions and economic conditions will cause these amounts to change over time, possibly materially. See Note 1 for details of what these liabilities include and represent. (2) See Note 11 for additional information. (3) Represents principal amounts of debt only.
See “ Part I – Item 1A. Risk Factors – Covenants and Ratings – A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors” for more information. Item 7A.
See “ Part I – Item 1A. Risk Factors – Ratings – A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors” for more information. Item 7A.
We do not believe the unrealized loss position as of December 31, 2024, required an impairment recognized in earnings 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 the fixed maturity AFS securities before recovery of their amortized cost basis; and (iii) the difference in the fair value compared to the amortized cost was due to factors other than credit loss.
We do not believe the unrealized loss position as of December 31, 2025, required an impairment recognized in earnings 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 the fixed maturity AFS securities before recovery of their amortized cost basis; and (iii) the difference in the fair value compared to the amortized cost was due to factors other than credit loss.
Trading Securities Trading securities, which in certain cases support reinsurance funds withheld and our modified coinsurance agreements, are carried at fair value and changes in fair value are recorded in net income as they occur.
Trading Securities Trading securities, which in certain cases support reinsurance funds withheld and our modified coinsurance agreements, are carried at fair value and changes in fair value are recorded in net income (loss) as they occur.
The following summarizes our investments in fixed maturity AFS securities backed by pools of commercial mortgages (in millions) as of December 31, 2024: Multiple Property Single Property Total Net Amortized Cost Fair Value Net Amortized Cost Fair Value Net Amortized Cost Fair Value Type CMBS (1)(2) $ 1,672 $ 1,526 $ 145 $ 139 $ 1,817 $ 1,665 NAIC Designation 1 $ 1,667 $ 1,522 $ 145 $ 139 $ 1,812 $ 1,661 2 5 4 – – 5 4 3 – – – – – – 4 – – – – – – 5 – – – – – – 6 – – – – – – Total by NAIC designation (1)(2)(3) $ 1,672 $ 1,526 $ 145 $ 139 $ 1,817 $ 1,665 Total fixed maturity AFS securities backed by pools of commercial mortgages as a percentage of total fixed maturity AFS securities 1.9 % 1.9 % (1) Does not include the amortized cost of trading securities totaling $126 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers.
The following summarizes our investments in fixed maturity AFS securities backed by pools of commercial mortgages (in millions) as of December 31, 2024: Multiple Property Single Property Total Net Amortized Cost Fair Value Net Amortized Cost Fair Value Net Amortized Cost Fair Value Type CMBS (1)(2) $ 1,672 $ 1,526 $ 145 $ 139 $ 1,817 $ 1,665 NAIC Designation 1 $ 1,667 $ 1,522 $ 145 $ 139 $ 1,812 $ 1,661 2 5 4 – – 5 4 3 – – – – – – 4 – – – – – – 5 – – – – – – 6 – – – – – – Total by NAIC designation (1)(2)(3) $ 1,672 $ 1,526 $ 145 $ 139 $ 1,817 $ 1,665 Total fixed maturity AFS securities backed by pools of commercial mortgages as a percentage of total fixed maturity AFS securities 1.9 % 1.9 % 85 Table of Contents (1) Does not include the amortized cost of trading securities totaling $126 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers.
Derivatives Hedging Equity Market Risk We enter into derivative transactions to hedge our exposure to equity market risk. Such derivatives include over-the-counter equity options, total return swaps, variance swaps, and equity futures.
Derivatives Hedging Equity Market Risk We enter into derivative transactions to hedge our exposure to equity market risk. Such derivatives include over-the-counter equity options, total return swaps and equity futures.
Effect of Equity Market Sensitivity If the level of the equity markets were to have instantaneously increased or decreased by 1% immediately after December 31, 2024, we estimate the effect on income (loss) from operations for the next 12-month period from the change in asset-based fees and related expenses would be approximately $10 million.
Effect of Equity Market Sensitivity If the level of the equity markets were to have instantaneously increased or decreased by 1% immediately after December 31, 2025, we estimate the effect on income (loss) from operations for the next 12-month period from the change in asset-based fees and related expenses would be approximately $10 million.
The table below summarizes our investments in fixed maturity AFS securities backed by pools of residential mortgages (in millions) as of December 31, 2024: Agency Non-Agency Total Net Amortized Cost Fair Value Net Amortized Cost Fair Value Net Amortized Cost Fair Value Type RMBS $ 1,731 $ 1,518 $ 328 $ 345 $ 2,059 $ 1,863 ABS home equity – – 159 189 159 189 Total by type (1)(2) $ 1,731 $ 1,518 $ 487 $ 534 $ 2,218 $ 2,052 NAIC Designation 1 $ 1,731 $ 1,518 $ 460 $ 502 $ 2,191 $ 2,020 2 – – 6 6 6 6 3 – – 10 9 10 9 4 – – 9 15 9 15 5 – – 2 2 2 2 6 – – – – – – Total by NAIC designation (1)(2)(3) $ 1,731 $ 1,518 $ 487 $ 534 $ 2,218 $ 2,052 Total fixed maturity AFS securities backed by pools of residential mortgages as a percentage of total fixed maturity AFS securities 2.3 % 2.4 % Total non-agency backed as a percentage of total fixed maturity AFS securities 0.5 % 0.6 % 83 Table of Contents (1) Does not include the amortized cost of trading securities totaling $64 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers.
The table below summarizes our investments in fixed maturity AFS securities backed by pools of residential mortgages (in millions) as of December 31, 2024: Agency Non-Agency Total Net Amortized Cost Fair Value Net Amortized Cost Fair Value Net Amortized Cost Fair Value Type RMBS $ 1,731 $ 1,518 $ 328 $ 345 $ 2,059 $ 1,863 ABS home equity – – 159 189 159 189 Total by type (1)(2) $ 1,731 $ 1,518 $ 487 $ 534 $ 2,218 $ 2,052 NAIC Designation 1 $ 1,731 $ 1,518 $ 460 $ 502 $ 2,191 $ 2,020 2 – – 6 6 6 6 3 – – 10 9 10 9 4 – – 9 15 9 15 5 – – 2 2 2 2 6 – – – – – – Total by NAIC designation (1)(2)(3) $ 1,731 $ 1,518 $ 487 $ 534 $ 2,218 $ 2,052 Total fixed maturity AFS securities backed by pools of residential mortgages as a percentage of total fixed maturity AFS securities 2.3 % 2.4 % Total non-agency backed as a percentage of total fixed maturity AFS securities 0.5 % 0.6 % (1) Does not include the amortize d cost of trading securities totaling $64 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers.
For purposes of this guidance, the change in account balances is assumed to correlate with the change in the relevant index. 102 Table of Contents Credit Risk Credit risk is the risk to earnings and capital that arises from uncertainty of an obligor’s or counterparty’s ability or willingness to meet its obligations in accordance with contractually agreed upon terms.
For purposes of this guidance, the change in account balances is assumed to correlate with the change in the relevant index. 107 Table of Contents Credit Risk Credit risk is the risk to earnings and capital that arises from uncertainty of an obligor’s or counterparty’s ability or willingness to meet its obligations in accordance with contractually agreed upon terms.
We use foreign currency swaps and foreign currency forwards to hedge the foreign exchange risk related to our investment in fixed maturity securities denominated in foreign currencies.
We use foreign currency swaps and/or foreign currency forwards to hedge the foreign exchange risk related to our investment in fixed maturity securities denominated in foreign currencies.
NAIC designations 3 through 6 include bonds generally considered below investment grade (rated Ba1 or lower by Moody’s, or rated BB+ or lower by S&P and Fitch). As of December 31, 2024 and 2023, 97% of the total fixed maturity AFS securities in an unrealized loss position were investment grade.
NAIC designations 3 through 6 include bonds generally considered below investment grade (rated Ba1 or lower by Moody’s, or rated BB+ or lower by S&P and Fitch). As of December 31, 2025 and 2024, 97% of the total fixed maturity AFS securities in an unrealized loss position were investment grade.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Reinsurance .” Certain variable annuity GLB and GDB riders are accounted for as MRBs and recorded at fair value. For more information on the market risk sensitivities associated 103 Table of Contents with MRBs, see “
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Reinsurance .” Certain variable annuity GLB 108 Table of Contents and GDB riders are accounted for as MRBs and recorded at fair value. For more information on the market risk sensitivities associated with MRBs, see “
The amount of cash that we have on hand at any point in time takes into account our liquidity needs in the future, other sources of cash, such as the maturities of investments, interest and dividends we earn on our investments and the ongoing cash flows from new and existing business.
The amount of cash that we have on hand at any point in time takes into account our liquidity needs in the future, other sources of cash, such as the maturities of investm ents, interest and dividends we earn on our investments and the ongoing cash flows from new and existing business.
As a result, the relationship between reserve changes and equity market performance is non-linear during any given reporting period. Our insurance subsidiaries’ cede a portion of the variable annuity guaranteed benefit riders to LNBAR through a modified coinsurance agreement.
As a result, the relationship between reserve changes and equity market performance is non-linear during any given reporting period. Our insurance subsidiaries cede a portion of the variable annuity guaranteed benefit riders to LNBAR through a modified coinsurance agreement.
Risk Factors – Market Conditions – Increases in interest rates and sustained high interest rates may negatively affect our profitability, capital position and the value of our investment portfolio and may also result in increased contract withdrawals and surrenders” for more information on the risks related to rising interest rates.
Risk Factors – Market Conditions – Increases in interest rates and sustained higher interest rates may negatively affect our profitability, capital position and the value of our investment portfolio and may also result in increased contract withdrawals and surrenders” for more information on the risks related to rising interest rates.
Net investment income and the interest rate yield table each include commercial mortgage loan prepayments and bond make-whole premiums, alternative investments and contingent interest and standby real estate equity commitments. These items can vary significantly from period to period due to a number of factors and, therefore, can provide results that are not indicative of the underlying trends.
The net investment income and the interest rate yield tables above each include commercial mortgage loan prepayments and bond make-whole premiums, alternative investments and contingent interest and standby real estate equity commitments. These items can vary significantly from period to period due to a number of factors and, therefore, can provide results that are not indicative of the underlying trends.
These premiums are designed to make investors indifferent to prepayment. 89 Table of Contents REINSURANCE Our insurance companies cede insurance to other companies. The portion of our life insurance risks exceeding each of our insurance companies’ retention limit is reinsured with other insurers.
These premiums are designed to make investors indifferent to prepayment. 93 Table of Contents REINSURANCE Our insurance companies cede insurance to other companies. The portion of our life insurance risks exceeding each of our insurance companies’ retention limit is reinsured with other insurers.
Membership allows LNL 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. Borrowings under this facility are subject to the FHLBI’s discretion and require the availability of qualifying assets at LNL.
Membership allows LNL access to the FHLBI’s financial services, including the ability to obtain loans as an alternative source of liquidity, and to issue funding agreements, both of which are collateralized by qualifying mortgage-related assets, agency securities or U.S. Treasury securities. Borrowings under this facility are subject to the FHLBI’s discretion and require the availability of qualifying assets at LNL.
Risk Factors – Liquidity and Capital Position – A decrease in the capital and surplus of our insurance subsidiaries may result in a downgrade to our credit and insurer financial strength ratings.” We maintain an investment portfolio of various holdings, types and maturities. These investments are subject to general credit, liquidity, market and interest rate risks.
Risk Factors – Liquidity and Capital Position – A decrease in the capital and surplus of our insurance subsidiaries may result in a downgrade to our credit and insurer financial strength ratings.” 96 Table of Contents We maintain an investment portfolio of various holdings, types and maturities. These investments are subject to general credit, liquidity, market and interest rate risks.
For the year ended December 31, 2024, we recognized $257 million of gross losses on fixed maturity AFS securities, which were primarily related to portfolio rebalancing and sales that support our reinsurance funds withheld agreements where the investment results are passed directly to the reinsurers.
For the year ended December 31, 2024, we recognized $257 million of gross losses on fixed maturity AFS securities, which were primarily 81 Table of Contents related to portfolio rebalancing and sales that support our reinsurance funds withheld agreements where the investment results are passed directly to the reinsurers.
For some time now, new products have been sold with low minimum crediting floors, and we apply disciplined asset-liability management standards, such as locking in spreads on these products at the time of issue. See “ Part I – Item 1A.
For some time now, new products have been sold with low minimum crediting 105 Table of Contents floors, and we apply disciplined asset-liability management standards, such as locking in spreads on these products at the time of issue. See “ Part I – Item 1A.
Additional market exposures exist in our other general account insurance products and in our debt structure and derivatives positions. Our primary sources of market risk are substantial, relatively rapid and sustained increases or decreases in interest rates or a sharp drop in equity market values.
Additional market exposures exist in our other general account insurance products and in our debt structure and derivatives positions. Our most significant sources of market risk are substantial, relatively rapid and sustained increases or decreases in interest rates or a sharp drop in equity market values.
Risk Factors – Market Conditions – Changes in interest rates and sustained low interest rates may cause interest 100 Table of Contents rate spreads to decrease, impacting our profitability, and make it more challenging to meet certain statutory requirements” for additional information on low interest rate risks. See Note 1 1 for information on excess crediting rates over contract minimums.
Risk Factors – Market Conditions – Changes in interest rates and sustained low interest rates may cause interest rate spreads to decrease, impacting our profitability, and make it more challenging to meet certain statutory requirements” for additional information on low interest rate risks. See Note 1 1 for information on excess crediting rates over contract minimums.
As of the same dates, our modified coinsurance portfolios were partially hedged and consisted of $136 million and $156 million, respectively, of principal in U.S. dollar equivalents of foreign denominated investments with maturity dates up to 2063 as of each such date and an average interest rate of 5% and 6%, respectively.
As of the same dates, our modified coinsurance portfolios were partially hedged and consisted of $108 million and $136 million, respectively, of principal in U.S. dollar equivalents of foreign denominated investments with maturity dates up to 2063 as of each such date, and an average interest rate of 4% and 5%, respectively.
As of December 31, 2024 and 2023, our unhedged positions consisted of less than $1 million and $1 million, respectively, of principal in U.S. dollar equivalents of foreign-denominated investments with maturity dates up to 2048 and 2049, respectively, and an average interest rate of 3% as of each such date.
As of December 31, 2025 and 2024, our unhedged positions consisted of $6 million and less than $1 million, respectively, of principal in U.S. dollar equivalents of foreign-denominated investments with maturity dates up to 2048 and an average interest rate of 3% as of each such date.
We reported funds withheld reinsurance liabilities of $16.9 billion on the Consolidated Balance Sheets as of December 31, 2024. We regularly evaluate the financial condition of our reinsurers and monitor concentration risk with our largest reinsurers. We monitor all of our existing reinsurers’ financial strength ratings on a monthly basis.
We reported funds withheld reinsurance liabilities of $17.9 billion on the Consolidated Balance Sheets as of December 31, 2025. We regularly evaluate the financial condition of our reinsurers and monitor concentration risk with our largest reinsurers. We monitor all of our existing reinsurers’ financial strength ratings on a monthly basis.
Also excluded from this analysis is the modest amount of investment income on short-term investments of the holding company and employee stock exercise activity related to our stock-based incentive compensation plans. See “ Part IV – Item 15(a)(2) Financial Statement Schedules – Schedule II – Condensed Financial Information of Registrant ” for the holding company cash flow statement.
Also excluded from this analysis is the modest amount of investment income on short-term investments of the holding company and employee stock exercise activity related to our stock-based incentive compensation plans. See “Part IV – Item 15(a)(2) Financial Statement Schedules – Schedule II – Condensed Financial Information of Registrant” for the holding company cash flow statement.
As a result of our modified coinsurance and coinsurance with funds withheld agreements, we reported deposit assets, net of allowances for credit losses of $30.8 billion on the Consolidated Balance Sheets as of December 31, 2024. For additional information, see Note 7 . Our amounts recoverable from reinsurers represent receivables from and reserves ceded to reinsurers.
As a result of our modified coinsurance and coinsurance with funds withheld agreements, we reported deposit assets, net of allowances for credit losses of $33.7 billion on the Consolidated Balance Sheets as of December 31, 2025. For additional information, see Note 7 . Our amounts recoverable from reinsurers represent receivables from and reserves ceded to reinsurers.
Under the LNL reinsurance arrangement, we held approximately $2.5 billion of statutory reserves as of December 31, 2024. LNL must maintain an AM Best financial strength rating of at least B++, an S&P financial strength rating of at least BBB- and a Moody’s financial strength rating of at least Baa3.
Under the LNL reinsurance arrangement, we held approximately $2.4 billion of statutory reserves as of December 31, 2025. LNL must maintain an AM Best financial strength rating of at least B++, an S&P financial strength rating of at least BBB- and a Moody’s financial strength rating of at least Baa3.
(3) Consists primarily of reimbursements to Other Operations from the Life Insurance segment for the use of proceeds from certain issuances of senior notes that were used as long-term structured solutions, net of expenses incurred by Other Operations for its access to a financing facility and issuance of letters of credit (“LOCs”).
(2) Consists primarily of reimbursements to Other Operations from the Life Insurance segment for the use of proceeds from certain issuances of senior notes that were used as long-term structured solutions, net of expenses incurred by Other Operations for its access to a financing facility and issuance of letters of credit (“LOCs”) and taxes, licenses and fees.
For additional information about our short-term and long-term debt and our credit facilities, see Note 1 3 . 94 Table of Contents Preferred Stock Details underlying preferred stock dividends paid (in millions) were as follows: For the Years Ended December 31, 2024 2023 2022 Series C preferred stock dividends $ 46 $ 36 $ – Series D preferred stock dividends 45 46 – Total preferred stock dividends $ 91 $ 82 $ – For additional information on preferred stock, see Note 18 .
For additional information about our short-term and long-term debt and our credit facility, see Note 1 3 . 98 Table of Contents Preferred Stock Details underlying preferred stock dividends paid (in millions) were as follows: For the Years Ended December 31, 2025 2024 2023 Series C preferred stock dividends $ 46 $ 46 $ 36 Series D preferred stock dividends 45 45 46 Total preferred stock dividends $ 91 $ 91 $ 82 For additional information on preferred stock, see Note 18 .
If it were necessary to liquidate fixed maturity AFS securities prior to maturity or call to meet cash flow needs, we would first look to those fixed maturity AFS securities that are in an unrealized gain position, which had a fair value of $20.6 billion as of December 31, 2024, rather than selling fixed maturity AFS securities in an unrealized loss position.
If it were necessary to liquidate fixed maturity AFS securities prior to maturity or call to meet cash flow needs, we would first look to those fixed maturity AFS securities that are in an unrealized gain position, which had a fair value of $33.8 billion as of December 31, 2025, rather than selling fixed maturity AFS securities in an unrealized loss position.
Of this amount, $22.9 billion was held by reinsurers in reserve credit trusts (such reserve credit trusts are held by non-affiliated reinsurers; therefore, they are not reflected on the Consolidated Balance Sheets), $1.6 billion was held in our funds withheld portfolios and $171 million was secured by LOCs for which we are the beneficiary, an off-balance sheet arrangement.
Of this amount, $22.0 billion was held by reinsurers in reserve credit trusts (such reserve credit trusts are held by non-affiliated reinsurers; therefore, they are not reflected on the Consolidated Balance Sheets), $1.4 billion was held in our funds withheld portfolios and $142 million was secured by LOCs for which we are the beneficiary, an off-balance sheet arrangement.
Our variable annuity hedge program mitigates the risk to LNBAR from guaranteed benefit riders and continues to focus on generating sufficient income to fund future claims with a goal of maximizing distributable earnings and explicitly protecting capital. LNL also uses a partial hedge that mitigates potential capital volatility from guaranteed benefits on VUL policies.
Our variable annuity hedge program mitigates the risk to LNBAR from guaranteed benefit riders and continues to focus on generating sufficient income to fund future claims with a goal of maximizing distributable earnings and explicitly protecting capital. LNL also uses a partial hedge and a third-party reinsurance agreement to mitigate potential capital volatility from guaranteed benefits on VUL policies.
Effect of Interest Rate Sensitivity The following table presents our estimate of the effect on income (loss) from operations by business segment and Other Operations (in millions) for the next 12-month period if the level of interest rates were to instantaneously increase or decrease by 1% and remain at those levels immediately after December 31, 2024, relative to interest rates remaining flat: 1% Increase 1% Decrease Annuities (1) $ (21) $ 21 Life Insurance 6 (6) Group Protection 4 (4) Retirement Plan Services 6 (6) Other Operations (13) 13 Income (loss) from operations $ (18) $ 18 (1) Includes the impact on bond funds in our separate accounts, which move in the opposite direction of interest rates.
Effect of Interest Rate Sensitivity The following table presents our estimate of the effect on income (loss) from operations by business segment and Other Operations (in millions) for the next 12-month period if the level of interest rates were to instantaneously increase or decrease by 1% and remain at those levels immediately after December 31, 2025, relative to interest rates remaining flat: 1% Increase 1% Decrease Annuities (1) $ (21) $ 22 Life Insurance 3 (3) Group Protection 3 (3) Retirement Plan Services 9 (8) Other Operations (13) 13 Income (loss) from operations $ (19) $ 21 (1) Includes the impact on bond funds in our separate accounts, which move in the opposite direction of interest rates.
This arrangement may require LNL to place assets in trust equal to the relevant statutory reserves. Under LLANY’s largest indemnity reinsurance arrangement, we held $913 million of statutory reserves as of December 31, 2024.
This arrangement may require LNL to place assets in trust equal to the relevant statutory reserves. Under LLANY’s largest indemnity reinsurance arrangement, we held $848 million of statutory reserves as of December 31, 2025.
LLANY is a member of the Federal Home Loan Bank of New York (“FHLBNY”) with an estimated maximum borrowing capacity of $750 million. Borrowings under this facility are subject to the FHLBNY’s discretion and require the availability of qualifying assets at LLANY. As of December 31, 2024, LLANY had no outstanding borrowings under this facility.
LLANY is a member of the Federal Home Loan Bank of New York (“FHLBNY”) with a Board-approved maximum borrowing capacity of $750 million. Borrowings under this facility are subject to the FHLBNY’s discretion and require the availability of qualifying assets at LLANY. As of December 31, 2025, LLANY had no outstanding borrowings under this facility.
AM Best Fitch Moody's S&P “aaa to c” “AAA to D” “Aaa to C” “AAA to D” bbb+ BBB+ Baa2 BBB+ (8th of 22) (8th of 23) (9th of 21) (8th of 22) 97 Table of Contents As of February 13, 2025, our indicative short-term credit ratings as published by the principal rating agencies that rate our short-term credit are indicated in the following table.
AM Best Fitch Moody's S&P “aaa to c” “AAA to D” “Aaa to C” “AAA to D” bbb+ BBB+ Baa2 BBB+ (8th of 22) (8th of 23) (9th of 21) (8th of 22) 101 Table of Contents As of February 12, 2026, our indicative short-term credit ratings as published by the principal rating agencies that rate our short-term credit are indicated in the following table.
These requirements may include satisfying certain earnings, reserve or solvency thresholds in order to pay a dividend or obtaining regulatory approval for payment of any dividend in excess of such thresholds. 92 Table of Contents We expect our direct domestic insurance subsidiaries could pay dividends to LNC of approximately $730 million in 2025 without prior approval from the respective state commissioners.
These requirements may include satisfying certain earnings, reserve or solvency thresholds in order to pay a dividend or obtaining regulatory approval for payment of any dividend in excess of such thresholds. We expect our direct domestic insurance subsidiaries could pay dividends to LNC of approximately $805 million in 2026 without prior approval from the respective state commissioners.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – (c) Issuer Purchases of Equity Securities .” Details underlying return of capital to common stockholders (in millions) were as follows: For the Years Ended December 31, 2024 2023 2022 Dividends to common stockholders $ 306 $ 305 $ 310 Repurchase of common stock – – 550 Total cash returned to common stockholders $ 306 $ 305 $ 860 Number of shares repurchased – – 8.7 Alternative Sources of Liquidity Inter-Company Cash Management Program To meet short-term liquidity needs that arise in the ordinary course of business, we utilize an inter-company cash management program between LNC and participating subsidiaries whereby participating subsidiaries can borrow cash from or lend cash to LNC.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – (c) Issuer Purchases of Equity Securities .” Details underlying return of capital to common stockholders (in millions) were as follows: For the Years Ended December 31, 2025 2024 2023 Dividends to common stockholders $ 324 $ 306 $ 305 Repurchase of common stock – – – Total cash returned to common stockholders $ 324 $ 306 $ 305 Alternative Sources of Liquidity Inter-Company Cash Management Program To meet short-term liquidity needs that arise in the ordinary course of business, we utilize an inter-company cash management program between LNC and participating subsidiaries whereby participating subsidiaries can borrow cash from or lend cash to LNC.
However, securities designated NAIC 1 and 2 could be deemed below investment grade by the rating agencies as a result of the current RBC rules for residential mortgage-backed securities (“RMBS”) and CMBS for statutory reporting.
However, securities designated NAIC 1 and 2 could be deemed below investment grade by the rating agencies as a result of the current risk-based capital (“RBC”) rules for residential mortgage-backed securities (“RMBS”) and CMBS for statutory reporting.
We recognized $(42) million and $(22) million of credit loss benefit (expense) on our fixed maturity AFS securities for the years ended December 31, 2024 and 2023, respectively.
We recognized $(89) million and $(42) million of credit loss benefit (expense) on our fixed maturity AFS securities for the years ended December 31, 2025 and 2024, respectively.
We have established standards and criteria for our use and selection of reinsurers. In order for a new reinsurer to participate in our current program, we generally require the reinsurer to have an AM Best rating of A or greater or an S&P rating of AA- or better and a specified RBC percentage (or similar capital ratio measure).
In order for a new reinsurer to participate in our current program, we generally require the reinsurer to have an AM Best rating of A or greater or an S&P rating of AA- or better and a specified RBC percentage (or similar capital ratio measure).
LNC made capital contributions in cash to other subsidiaries of $5 million, $7 million, and $925 million in 2024, 2023 and 2022, respectively. On May 6, 2024, we closed the sale of all of the ownership interests in the subsidiaries of the Company that comprised the Company’s wealth management business operated through LFN to Osaic.
LNC made $5 million and $7 million in capital contributions in cash to other subsidiaries in 2024 and 2023, respectively. On May 6, 2024, we closed the sale of all of the ownership interests in the subsidiaries of the Company that comprised the Company’s wealth management business operated through LFN to Osaic Holdings, Inc., a Delaware corporation.
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.
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, through an integrated asset-liability management process.
The total outstanding principal and interest on commercial mortgage loans on real estate that were two or more payments delinquent, excluding foreclosures, as of December 31, 2024 and 2023, was $34 million and less than $1 million, respectively, or less than 1% of total mortgage loans on real estate.
The total outstanding principal and interest on commerci al mortgage loans on real estate that were two or more payments delinquent, excluding foreclosures, as of December 31, 2025 and 2024, was $40 million and $34 million, respectively, or less than 1% of total mortgage loans on real estate.
For the Years Ended December 31, 2024 2023 2022 Net Flows By Market Small market $ (11) $ 382 $ 295 Mid – large market 1,944 1,279 3,601 Multi-Fund ® and other (1,821) (1,529) (1,200) Total net flows $ 112 $ 132 $ 2,696 For more information on account balances, see Notes 1 0 and 11 . 74 Table of Contents Commissions and Other Expenses Details underlying commissions and other expenses (in millions) were as follows: For the Years Ended December 31, 2024 2023 2022 Commissions and Other Expenses Commissions: Deferrable $ 4 $ 4 $ 4 Non-deferrable 99 83 75 General and administrative expenses 340 341 303 Taxes, licenses and fees 19 19 17 Total expenses incurred 462 447 399 DAC deferrals (21) (21) (21) Total expenses recognized before amortization 441 426 378 DAC amortization 19 18 20 Total commissions and other expenses $ 460 $ 444 $ 398 DAC Deferrals As a percentage of annuity sales/deposits 0.4% 0.4% 0.3% Commissions and other expenses that result directly from and are essential to the successful acquisition of new or renewal business are deferred to the extent recoverable and are amortized on a constant level basis over the expected term of the related contracts using the groupings and actuarial assumptions consistent with those used for calculating the related policyholder liability balances.
For the Years Ended December 31, 2025 2024 2023 Net Flows By Market Small market $ 96 $ (11) $ 382 Mid – large market (1,309) 1,944 1,279 Multi-Fund ® and other (1,799) (1,821) (1,529) Total net flows $ (3,012) $ 112 $ 132 For more information on account balances, see Notes 1 0 and 11 . 74 Table of Contents Commissions and Other Expenses Details underlying commissions and other expenses (in millions) were as follows: For the Years Ended December 31, 2025 2024 2023 Commissions and Other Expenses Commissions: Deferrable $ 6 $ 4 $ 4 Non-deferrable 109 99 83 General and administrative expenses 342 340 341 Taxes, licenses and fees 18 19 19 Total expenses incurred 475 462 447 DAC deferrals (20) (21) (21) Total expenses recognized before amortization 455 441 426 DAC amortization 18 19 18 Total commissions and other expenses $ 473 $ 460 $ 444 DAC Deferrals As a percentage of annuity sales/deposits 0.3% 0.4% 0.4% Commissions and other expenses that result directly from and are essential to the successful acquisition of new or renewal business are deferred to the extent recoverable and are amortized on a constant level basis over the expected term of the related contracts using the groupings and actuarial assumptions consistent with those used for calculating the related policyholder liability balances.
(2) The Constant Maturity Treasury (“CMT”) curve is the applicable 5-year, 10-year or 30-year CMT forward curve. 99 Table of Contents (3) Includes notional o f $62 million and fair value of $8 million t hat support our modified coinsurance and funds withheld reinsurance agreements . Investment results for these agreements are passed directly to the reinsurers.
(2) Includes notional o f $53 million and fair value of $4 million t hat support our modified coinsurance and funds withheld reinsurance agreements . Investment results for these agreements are passed directly to the reinsurers. (3) The Constant Maturity Treasury (“CMT”) curve is the applicable 3-year, 5-year, 7-year or 30-year CMT forward curve.
Under two other LLANY arrangements, by which we established $551 million of statutory reserves as of December 31, 2024, LLANY must maintain an AM Best financial strength rating of at 90 Table of Contents least B++, an S&P financial strength rating of at least BBB- and a Moody’s financial strength rating of at least Baa3.
Under two other LLANY arrangements, by which we established $530 million of statutory reserves as of December 31, 2025, LLANY must maintain an AM Best financial strength rating of at least B++, an S&P financial strength rating of at least BBB- and a Moody’s financial strength rating of at least Baa3.
As of December 31, 2024, our modified coinsurance foreign currency forwards consisted of $10 million of U.S. dollar market value with maturity dates up to 2031. Investment results for our modified coinsurance agreements are passed directly to the reinsurers.
As of December 31, 2025 and 2024, our modified coinsurance foreign currency forwards consisted of $(1) million and $10 million, respectively, of U.S. dollar market value with maturity dates up to 2031 as of each such date. Investment results for our modified coinsurance agreements are passed directly to the reinsurers.
Our Bermuda-based reinsurance subsidiary, LPINE, and our Barbados-based reinsurance subsidiary, Lincoln National Reinsurance Company (Barbados) Limited (“LNBAR”), are regulated by the BMA and the Barbados Financial Services Commission, respectively.
Our Bermuda-based reinsurance subsidiary, LPINE, and our Barbados-based reinsurance subsidiary, Lincoln National Reinsurance Company (Barbados) Limited (“LNBAR”), are regulated by the BMA and the Barbados FSC, respectively.
The total outstanding principal and interest on residential mortgage loans on real estate that were three or more payments delinquent, excluding foreclosures, as of December 31, 2024 and 2023, was $32 million and $20 million, respectively, or less than 1% of total mortgage loans on real estate.
The total outstanding principal and interest on residential mortgage loans on real estate that were three or more payments delinquent, excluding foreclosures, as of December 31, 2025 and 2024, was $58 million and $32 million, r espectively, or less than 1% of total mortgage loans on real estate.
Risk Factors” and “Forward-Looking Statements – Cautionary Language” above. Consolidated Sources and Uses of Liquidity and Capital Our primary sources of liquidity and capital are insurance premiums and fees, investment income, maturities and sales of investments, issuance of debt or other types of securities and policyholder deposits. We also have access to alternative sources of liquidity as discussed below.
Consolidated Sources and Uses of Liquidity and Capital Our primary sources of liquidity and capital are insurance premiums and fees, investment income, maturities and sales of investments, issuance of debt or other types of securities and policyholder deposits. We also have access to alternative sources of liquidity as discussed below.
For more discussion of our counterparty risk with our reinsurers, see “ Part I – Item 1A.
For more discussion of our counterparty risk with our reinsurers, see “Part I – Item 1A.
As of December 31, 2024 and 2023, our ABS home equity and RMBS had a market value of $2.1 billion and $2.0 billion, respectively, and a net unrealized gain (loss) of $(178) million and $(155) million, respectively.
As of December 31, 2025 and 2024, our ABS home equity and RMBS had a market value of $2.4 billion and $2.1 billion, respectively, and a net unrealized gain (loss) of $(80) million and $(178) million, respectively.
Estimated fair value does not reflect daily settlement of futures or monthly settlement of total return swaps. (2) Includes notion al and fair value of $1.9 billion and $58 million, respectively, as of December 31, 2024, and $2.7 billion and $94 million, respectively, as of December 31, 2023, that support our modified coinsurance and funds withheld reinsurance agreements.
Estimated fair value does not reflect daily settlement of futures or monthly settlement of total return swaps. (2) Includes notional and fair value of $1.4 billion and $41 million, respectively, as of December 31, 2025, and $1.9 billion and $58 million, respectively, as of December 31, 2024, that support our modified coinsurance and funds withheld reinsurance agreements.
Composition by Industry Categories of our Unrealized Losses on Fixed Maturity AFS Securities When considering unrealized gain and loss information, it is important to recognize that the information relates to the position of securities at a particular point in time and may not be indicative of the position of our investment portfolios subsequent to the balance sheet date.
(3) Based upon the rating designations determined and provided by the NAIC. 87 Table of Contents Composition by Industry Categories of our Unrealized Losses on Fixed Maturity AFS Securities When considering unrealized gain and loss information, it is important to recognize that the information relates to the position of securities at a particular point in time and may not be indicative of the position of our investment portfolios subsequent to the balance sheet date.
During the second quarter of 2024, LNL made a $929 million extraordinary dividend in the form of investments to LNC for the purpose of the initial capitalization of LPINE. See “Introduction – Executive Summary” above and “Subsidiaries’ Capital” below for more information about LPINE.
During 2024, LNL made a $929 million extraordinary dividend in the form of investments to LNC for the purpose of the initial capitalization of LPINE. See “Subsidiaries’ Capital” below for more information about LPINE.
Fee Income Details underlying fee income (in millions) were as follows: For the Years Ended December 31, 2024 2023 2022 Fee Income Annuity expense assessments $ 214 $ 191 $ 192 Mutual fund fees 75 69 68 Total expense assessments 289 260 260 Surrender charges 3 2 1 Total fee income $ 292 $ 262 $ 261 Our fee income is primarily composed of expense assessments that we charge to cover insurance and administrative expenses, and mutual fund fees earned for services we provide to our mutual fund programs.
Fee Income Details underlying fee income (in millions) were as follows: For the Years Ended December 31, 2025 2024 2023 Fee Income Annuity expense assessments $ 218 $ 214 $ 191 Mutual fund fees 78 75 69 Total expense assessments 296 289 260 Surrender charges 5 3 2 Total fee income $ 301 $ 292 $ 262 Our fee income is primarily composed of expense assessments that we charge to cover insurance, administrative, recordkeeping and other services and mutual fund fees earned for services we provide to our mutual fund programs.
Our primary uses are to pay policy claims and benefits, to fund commissions and other general operating expenses, to purchase investments, to fund policy surrenders and withdrawals, to pay dividends to our common and preferred stockholders, to repurchase our common stock and to repay debt.
Our primary uses are to pay obligations under insurance policies and contracts, to fund commissions and other general operating expenses, to purchase investments, to fund policy surrenders and withdrawals, to pay dividends to our common and preferred stockholders, to repurchase our common stock and to repay debt.
Commercial mortgage loan prepayments and bond make-whole premiums, investment income on alternative investments and surplus investment income can vary significantly from period to period due to a number of factors and, therefore, may contribute to investment income results that are not indicative of the underlying trends. 73 Table of Contents Account Balances Details underlying account balances (dollars in millions) were as follows: As of or For the Years Ended December 31, 2024 2023 2022 Separate Account Balance Information (1) Separate account deposits $ 2,225 $ 2,268 $ 2,348 Separate account net flows (1,129) (240) 11 Separate account balances 21,489 19,668 16,885 Average daily separate account balances 21,003 18,183 17,946 Average daily S&P 500 ® Index (2) 5,428 4,285 4,100 General Account Balance Information General account deposits $ 3,407 $ 2,776 $ 4,012 General account net flows (1,088) (1,718) 433 General account balances 23,619 23,784 25,138 Average general account balances 23,603 24,502 24,558 Mutual Fund Account Balance Information Mutual fund deposits $ 9,106 $ 6,734 $ 6,542 Mutual fund net flows 2,329 2,090 2,252 Mutual fund account balances (3) 67,473 57,533 46,707 (1) Excludes the fixed portion of variable annuities.
Commercial mortgage loan prepayments and bond make-whole premiums, investment income on alternative investments and surplus investment income can vary significantly from period to period due to a number of factors and, therefore, may contribute to investment income results that are not indicative of the underlying trends. 73 Table of Contents Account Balances Details underlying account balances (dollars in millions) were as follows: As of or For the Years Ended December 31, 2025 2024 2023 Separate Account Balance Information (1) Separate account deposits $ 2,305 $ 2,225 $ 2,268 Separate account net flows (1,403) (1,129) (240) Separate account balances 23,136 21,489 19,668 Average daily separate account balances 22,046 21,003 18,183 Average daily S&P 500 ® Index (2) 6,211 5,428 4,285 General Account Balance Information General account deposits $ 4,065 $ 3,407 $ 2,776 General account net flows (1,006) (1,088) (1,718) General account balances 23,843 23,619 23,784 Average general account balances 23,665 23,603 24,502 Mutual Fund Account Balance Information Mutual fund deposits $ 10,286 $ 9,106 $ 6,734 Mutual fund net flows (603) 2,329 2,090 Mutual fund account balances (3) 77,061 67,473 57,533 (1) Excludes the fixed portion of variable annuities.
Accordingly, the earned rate on each portfolio lags behind changes in market yields. As rates rise, the lag may be increased by slowing MBS prepayments. The greater and faster the rise in interest rates, the more the earned rate will tend to lag behind market rates.
As rates rise, the lag may be increased by slowing MBS prepayments. The greater and faster the rise in interest rates, the more the earned rate will tend to lag behind market rates.
For additional information, see “Fixed Maturity AFS Securities – Evaluation for Recovery of Amortized Cost” in Note 1 and “ Liquidity and Capital Resources ” below. As of December 31, 2024 and 2023, the estimated fair value for all private placement securities was $20.9 billion and $20.6 billion, respectively, representing 16% and 17% of total investments, respectively.
For additional information, see “Fixed Maturity AFS Securities – Evaluation for Recovery of Amortized Cost” in Note 1 and “ Liquidity and Capital Resources ” below. As of December 31, 2025 and 2024, the estimated fair value for all private placement secu rities was $23.2 billion a nd $20.9 billion, respectively, represen ting 17% and 16% of total investments, respectively.
The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged. As of December 31, 2024, we were in a net collateral payable position of $7.1 billion compared to $5.0 billion as of December 31, 2023.
The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged. As of December 31, 2025, we were in a net collateral payable position of $7.8 billion.
One of these arrangements also requires LLANY to maintain an RBC ratio of at least 185% or an S&P capital adequacy ratio of 115%. Each of these arrangements may require LLANY to place assets in trust equal to the relevant statutory reserves. See “ Item 1. Business – Financial Strength Ratings ” for a description of our financial strength ratings.
One of these arrangements also requires LLANY to maintain an RBC ratio of at least 185% or an S&P capital adequacy ratio of 115%. Each of these 94 Table of Contents arrangements may require LLANY to place assets in trust equal to the relevant statutory reserves. See “ Item 1.
As of December 31, 2024, the fair value of such commercial mortgage loans on real estate that were in delinquent status was $21 million. As of December 31, 2023, there were no such mortgage loans in delinquent status.
As of December 31, 2025, and December 31, 2024, the fair value of such commercial mortgage loans on real estate that were in delinquent status was $20 million and $21 million, respectively .
As reported on the Consolidated Balance Sheets, we had $135.1 billion of investments and cash and invested cash, which exceeded the liabilities for our future obligations under insurance policies and contracts, net of amounts recoverable from reinsurers and amounts on deposit with reinsurers, which totaled $109.4 billion as of December 31, 2024.
As reported on the Consolidated Balan ce Sheets, we had $148.4 billion of investments and cash and invested cash, which exceeded the liabilities for our future obligations under insurance policies and contracts, net of amounts recoverable from reinsurers and amounts on deposit with reinsurers, which totaled $120.6 billion as of December 31, 2025.
As of December 31, 2023, there were specifically identified impaired commercial and residential mortgage loans with an aggregate carrying value of $2 million and $47 million, respectively, or less than 1% of total mortgage loans on real estate.
As of December 31, 2025, there were specifically identified impaired commercial and residential mortgage loans with an aggregate carrying value of $67 million and $85 million, respec tively, or less than 1% of total mortgage loans on real estate.
We follow a balanced approach to investing for both current income and prudent risk management, with an emphasis on generating sufficient current income, net of income tax, to meet our obligations to customers, as well as other general liabilities.
For more information, see Note 7. Investment Objective Investments are an integral part of our operations. We follow a balanced approach to investing for both current income and prudent risk management, with an emphasis on generating sufficient current income, net of income tax, to meet our obligations to customers, as well as other general liabilities.
We depend on the ability of derivative product dealers and their guarantors to honor their obligations to pay the contract amounts under various derivatives agreements.
Derivatives We are exposed to counterparty credit risk through our various derivative contracts. We depend on the ability of derivative product dealers and their guarantors to honor their obligations to pay the contract amounts under various derivatives agreements.
Risk Factors ” and “Forward-Looking Statements – Cautionary Language” above. LIQUIDITY AND CAPITAL RESOURCES Overview Liquidity Liquidity refers to our ability to generate adequate amounts of cash from our normal operations to meet cash requirements with a prudent margin of safety.
LIQUIDITY AND CAPITAL RESOURCES Overview Liquidity Liquidity refers to our ability to generate adequate amounts of cash from our normal operations to meet cash requirements with a prudent margin of safety.
The market value of fixed maturity AFS and trading securities backed by subprime loans was $179 million and represented less than 1% of our total investment portfolio as of December 31, 2024. Fixed maturity AFS securities represented $172 million, or 96%, and trading securities represented $7 million, or 4%, of the subprime exposure as of December 31, 2024.
The market value of fixed maturity AFS and trading securities backed by subprime loans was $170 million and represented less than 1% of our total investment portfolio as of December 31, 2025. Fixed maturity AFS securities represented $168 million, or 99%, and trading securities represented $2 million, or 1%, of the subprime exposure as of December 31, 2025.
The profitability of our fixed annuity and life insurance products is affected by our ability to achieve target spreads, or margins, between the interest income earned on the general account assets and the interest credited to the policyholder on our average general account balances, including the fixed portion of variable.
The profitability of our products is affected by our ability to achieve target spreads, or margins, between the interest income earned on the general account assets and the interest credited to the policyholder account balance.
The quality of our fixed maturity AFS securities portfolio, as measured at estimated fair value and by the percentage of fixed maturity AFS securities invested in various ratings categories, relative to the entire fixed maturity AFS security portfolio (in millions) was as follows: As of December 31, 2024 As of December 31, 2023 Rating Agency Net Net NAIC Equivalent Amortized Fair % of Amortized Fair % of Designation (1) Designation (1) Cost Value Total Cost Value Total Investment Grade Securities 1 AAA / AA / A $ 58,103 $ 51,596 59.2 % $ 56,557 $ 51,234 57.7 % 2 BBB 36,224 32,583 37.4 % 37,832 34,614 39.0 % Total investment grade securities 94,327 84,179 96.6 % 94,389 85,848 96.7 % Below Investment Grade Securities 3 BB 960 910 1.0 % 1,176 1,090 1.2 % 4 B 1,857 1,826 2.1 % 1,760 1,719 2.0 % 5 CCC and lower 138 124 0.2 % 86 78 0.1 % 6 In or near default 87 72 0.1 % 3 3 0.0 % Total below investment grade securities 3,042 2,932 3.4 % 3,025 2,890 3.3 % Total fixed maturity AFS securities $ 97,369 $ 87,111 100.0 % $ 97,414 $ 88,738 100.0 % Total securities below investment grade as a percentage of total fixed maturity AFS securities 3.1 % 3.4 % 3.1 % 3.3 % (1) Based upon the rating designations determined and provided by the National Association of Insurance Commissioners (“NAIC”) or the major credit rating agencies (Fitch Ratings (“Fitch”), Moody’s Investors Service (“Moody’s”) and S&P Global Ratings (“S&P”)).
The quality of our fixed maturity AFS securities portfolio, as measured at estimated fair value and by the percentage of fixed maturity AFS securities invested in various ratings categories, relative to the entire fixed maturity AFS security portfolio (in millions) was as follows: As of December 31, 2025 As of December 31, 2024 Rating Agency Net Net NAIC Equivalent Amortized Fair % of Amortized Fair % of Designation (1) Designation (1) Cost Value Total Cost Value Total Investment Grade Securities 1 AAA / AA / A $ 61,616 $ 56,349 60.3 % $ 58,103 $ 51,596 59.2 % 2 BBB 36,551 33,995 36.4 % 36,224 32,583 37.4 % Total investment grade securities 98,167 90,344 96.7 % 94,327 84,179 96.6 % Below Investment Grade Securities 3 BB 1,025 955 1.0 % 960 910 1.0 % 4 B 1,970 1,966 2.1 % 1,857 1,826 2.1 % 5 CCC and lower 108 106 0.1 % 138 124 0.2 % 6 In or near default 82 77 0.1 % 87 72 0.1 % Total below investment grade securities 3,185 3,104 3.3 % 3,042 2,932 3.4 % Total fixed maturity AFS securities $ 101,352 $ 93,448 100.0 % $ 97,369 $ 87,111 100.0 % Total securities below investment grade as a percentage of total fixed maturity AFS securities 3.1 % 3.3 % 3.1 % 3.4 % (1) Based upon the rating designations determined and provided by the National Association of Insurance Commissioners (the “NAIC”) or the major credit rating agencies (Fitch Ratings (“Fitch”), Moody’s Investors Service (“Moody’s”) and S&P Global Ratings (“S&P”)).
See Note 3 for maturity date information for our fixed maturity investment portfolio. Our gross unrealized losses recognized in OCI on fixed maturity AFS securities as of December 31, 2024, increased by $1.2 billion since December 31, 2023.
See Note 3 for maturity date information for our fixed maturity investment portfolio. O ur gross unrealized losses recognized in OCI on fixed maturity AFS securities as of December 31, 2025, decreased by $2.0 billion sin ce December 31, 2024.
Details underlying our debt activities (in millions) for the year ended December 31, 2024, were as follows: Beginning Balance Issuance Maturities, Repayments and Refinancing Change in Fair Value Hedges Other Changes (1) Ending Balance Short-Term Debt Current maturities of long-term debt (2) $ 250 $ – $ (100) $ – $ 150 $ 300 Long-Term Debt Senior notes $ 4,491 $ 350 $ – $ (27) $ (316) $ 4,498 Term loans – – – – 150 150 Subordinated notes (3) 995 – – – – 995 Capital securities (3) 213 – – – – 213 Total long-term debt $ 5,699 $ 350 $ – $ (27) $ (166) $ 5,856 (1) Includes the non-cash reclassification of long-term debt to current maturities of long-term debt, accretion (amortization) of discounts and premiums, amortization of debt issuance costs and amortization of adjustments from discontinued hedges, as applicable.
Details underlying our debt activities (in millions) for the year ended December 31, 2025, were as follows: Beginning Balance Issuances Maturities, Repayments and Refinancing Change in Fair Value Hedges Other Changes (1) Ending Balance Short-Term Debt Current maturities of long-term debt (2) $ 300 $ – $ (300) $ – $ 400 $ 400 Long-Term Debt Senior notes (3) $ 4,498 $ 1,000 $ (299) $ 34 $ (505) $ 4,728 Term loans 150 – – – – 150 Subordinated notes (4) 995 – (194) – – 801 Capital securities (5) 213 – (26) – – 187 Total long-term debt $ 5,856 $ 1,000 $ (519) $ 34 $ (505) $ 5,866 (1) Includes the non-cash reclassification of long-term debt to current maturities of long-term debt, premium (discount) associated with debt issuances, accretion (amortization) of discounts and premiums, amortization of debt issuance costs and amortization of adjustments from discontinued hedges, as applicable.
Details underlying the primary sources of the holding company’s liquidity (in millions) were as follows: For the Years Ended December 31, 2024 2023 2022 Cash Dividends and Return of Capital from Subsidiaries LNL $ 505 $ 495 $ 645 First Penn-Pacific Life Insurance Company – 15 22 Lincoln Investment Management Company 40 25 38 Lincoln National Management Corporation – – 7 Lincoln National Reinsurance Company (Barbados) Limited 50 150 85 Total cash dividends and return of capital from subsidiaries $ 595 $ 685 $ 797 Interest from Subsidiaries Interest on inter-company notes $ 154 $ 147 $ 118 The table above focuses on significant and recurring cash flow items and excludes the effects of certain financing activities, including the periodic issuance and retirement of debt, issuance of preferred stock, cash flows related to our inter-company cash management program and certain investing activities, including capital contributions to subsidiaries.
These sources support the general corporate needs of the holding company, including its common and preferred stock dividends, common stock repurchases, interest and debt service, funding of callable securities, acquisitions and investment in core businesses. 95 Table of Contents Details underlying the primary sources of the holding company’s liquidity (in millions) were as follows: For the Years Ended December 31, 2025 2024 2023 Cash Dividends and Return of Capital from Subsidiaries LNL $ 685 $ 505 $ 495 First Penn-Pacific Life Insurance Company 10 – 15 Lincoln Investment Management Company 25 40 25 Lincoln National Reinsurance Company (Barbados) Limited 50 50 150 Lincoln Pinehurst Reinsurance Company (Bermuda) Limited 75 – – Total cash dividends and return of capital from subsidiaries $ 845 $ 595 $ 685 Interest from Subsidiaries Interest on inter-company notes $ 138 $ 154 $ 147 The table above focuses on significant and recurring cash flow items and excludes the effects of certain financing activities, including the periodic issuance and retirement of debt, issuance of preferred stock or common stock, cash flows related to our inter-company cash management program and certain investing activities, including capital contributions to subsidiaries.
Holding company borrowing activity is reported in loans from and accrued interest due to subsidiaries on the holding company’s balance sheet. Holding company lending activity is reported in loans to and accrued interest due from subsidiaries on the holding company’s balance sheet. As of December 31, 2024, LNC did not have outstanding lending into the cash management program.
As of December 31, 2025, LNC had $157 million of outstanding borrowings from the cash management program related primarily to liquidity management and had no outstanding lending into the cash management program. Holding company borrowing activity is reported in loans from and accrued interest due to subsidiaries on the holding company’s balance sheet.
We seek annuity and life reinsurance coverage to limit our exposure to mortality losses and/or to enhance our capital and risk management. We acquire other reinsurance as applicable with retentions and limits that management believes are appropriate for the circumstances. The consolidated financial statements included in “ Item 8.
We seek annuity and life reinsurance coverage to limit our exposure to mortality losses and/or to enhance our capital and risk management. We acquire other reinsurance as applicable with retentions and limits that management believes are appropriate for the circumstances. For more information about the impacts of reinsurance on our consolidated financial statements, see Notes 1 and 7.

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