Lincoln National and its subsidiaries have entered into a $550mn, 10-year letter of credit transaction with Credit Suisse to support regulatory capital requirements for its life insurance business.
The transaction is expected to provide approximately $400m of initial statutory capital relief to Lincoln’s primary insurance subsidiary Lincoln National Life Insurance Company. The estimated annual GAAP expense is $10m, after-tax.
Fred Crawford, executive vice president and chief financial officer of Lincoln National, said: We are pleased to have executed on a comprehensive term life reserve transaction of this size and duration. This transaction represents a significant step forward on executing our long-term capital management plan supporting the life business and one of several actions taken in 2009 to fortify our overall capital position heading into 2010.
Lincoln Financial Group had assets under management of $137bn as of September 30, 2009. It offers financial products and services such as life insurance and long-term care protection, annuities, individual and group retirement plans life and disability insurance; 401(k) and 403(b) plans; group benefits and comprehensive financial planning and advisory services.