Resolution Life US Holdings has signed a reinsurance deal with Lincoln National covering life policies worth $9.4bn.
The transaction mostly covers policyholders who took out their insurance through a bank or their employer and a smaller number of universal life policies.
Under the agreement, Lincoln will transfer $9.4bn in reserves held to cover the policy liabilities to Resolution Life but Lincoln will continue to administer the policies, with Resolution Life paying the liabilities as they fall due.
The transaction, effective as of 1 October, is not subject to any closing conditions or regulatory approval requirements.
Resolution Life US and Security Life of Denver (SLD) chief executive officer Matthew Grove, said: “Executing this transaction with Lincoln shows the strength of Resolution Life’s reinsurance offering in the US.
“It is a great example of our holistic approach to managing diversified insurance risks at scale, and it will contribute meaningfully to the momentum of our US business after the completion of our acquisition of Security Life of Denver earlier this year.”
Wells Fargo acted as financial advisers while Debevoise & Plimpton served as legal counsel to Resolution Life on the transaction between Resolution Life’s insurance subsidiary, Security Life of Denver Insurance Company and Lincoln National Corporation’s insurance subsidiary, The Lincoln National Life Insurance Company.