What You Need to Know
- Resolution Life's Security Life of Denver unit will provide the reinsurance.
- Lincoln will continue to be the administrator and recordkeeper for the policies.
- Lincoln says it wants to continue to grow its individual life business.
Lincoln Financial wants to shed a large amount of risk associated with old insurance policies while continuing to sell new policies.
The Radnor, Pennsylvania-based life insurer today announced that it has arranged to have Security Life of Denver — an arm of Resolution Life Group Holdings — reinsure a block of in-force universal life insurance and executive benefits insurance policies backed by $9.4 billion in reserves.
The Resolution Life organization came to life in 2003. It’s known for assuming large blocks of business from Hartford Financial Services Group and from Voya.
Resolution Life is one of many companies using cash from institutional money managers and wealthy individuals who see blocks of life and annuity business as a good investment.
The Resolution Life deal is structured as a coinsurance treaty.
The $9.4 billion reserve total includes $8.1 billion in reserves backing the corporate-owned life insurance, bank-owned life insurance and other products sold through its executive benefits program and $1.3 billion in reserves supporting universal life policies, Randal Freitag, Lincoln’s chief financial officer, said during a conference call the company held to discuss the deal with securities analysts.
About $5 billion of the reserves are general account reserves, and $4.4 billion support separate accounts, Freitag said during the call, which was streamed live on the web.
The block Resolution Life is reinsuring accounts for about one-eighth of Lincoln’s total life reserves, Freitag said.
Freitag noted that Lincoln will retain responsibility for 10% of the risk associated with the block it is ceding.