The deal is subject to customary closing conditions, including approvals from regulatory authorities. Credit: garagestock via Shutterstock.com.

Bermuda-based multi-line reinsurer Fortitude Re has signed a $28bn life and annuity reinsurance agreement with The Lincoln National Life Insurance Company, a subsidiary of Lincoln National Corporation and its affiliates.

Under this agreement, Lincoln will cede $28bn of in-force universal life insurance and fixed annuity business to the multi-line reinsurer.

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The risk transfer transaction particularly features about 40% of Lincoln’s universal life with secondary guarantees (ULSG) in force, besides MoneyGuard and fixed annuities.

Lincoln stated that the reinsured block comprises $9bn of ULSG statutory reserves or around 40% of its total in-force ULSG; almost $12bn of MoneyGuard statutory reserves, or about 80% of the firm’s total in-force MoneyGuard; and about $8bn of fixed annuities statutory reserves, or 40% of the firm’s total in-force fixed annuities.

According to the agreement, Lincoln will continue to service and administer the reinsured policies.

Fortitude Re CEO Alon Neches said: “With today’s announcement, Fortitude Re has again demonstrated why we are the preferred choice for insurers who seek solutions instead of transactions and who want to work with partners instead of counterparties.

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“We are grateful for the trust that Lincoln has put in Fortitude Re and to the teams at both firms who have collaborated intensively and worked tirelessly to reach this milestone.”

The deal is subject to customary closing conditions, including approvals from regulatory authorities.

It is expected to close in Q2 2023 with an effective date of 1 April 2023.