LINCOLN NATIONAL CORP

Previous wording

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 June 30, 2025, compared with December 31, 2024, and the results of operations for the three and six months ended June 30, 2025, compared with the corresponding periods in 2024 of Lincoln National Corporation and its consolidated subsidiaries. Unless otherwise stated or the context otherwise requires, “LNC,” “Company,” “we,” “our” or “us” refers to Lincoln National Corporation and its consolidated subsidiaries.

Current wording

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 September 30, 2025, compared with December 31, 2024, and the results of operations for the three and nine months ended September 30, 2025, compared with the corresponding periods in 2024 of Lincoln National Corporation and its consolidated subsidiaries. Unless otherwise stated or the context otherwise requires, “LNC,” “Company,” “we,” “our” or “us” refers to Lincoln National Corporation and its consolidated subsidiaries.

Previous wording

Industry trends and significant operational matters are described in “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Introduction – Executive Summary” of our 2024 Form 10-K.

Current wording

Industry trends and significant operational matters are described in “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Introduction – Executive Summary” of our 2024 Form 10-K, which is further updated by the discussion that follows.

Previous wording

Liability for future policy benefits (“LFPB”) represents the reserve amounts associated with non-participating traditional life insurance contracts and limited payment life-contingent annuity contracts that are calculated to meet the various policy and contract obligations as they mature. Establishing adequate reserves for our obligations to policyholders requires assumptions to be made that are intended to represent an estimation of experience for the period that policy benefits are payable. If actual experience is better than or equal to the assumptions, then reserves should be adequate to provide for future benefits and expenses. If experience is worse than the assumptions, additional reserves may be required. Significant assumptions include mortality rates, morbidity and policyholder behavior (e.g., persistency) and withdrawals. During the third quarter of each year, we conduct our comprehensive review of the actuarial assumptions to best estimate future premium and benefit cash flows (“cash flow assumptions”) and projection models used in estimating these liabilities and update these assumptions as needed (excluding the claims settlement expense assumption that is locked-in at inception) in the calculation of the net premium ratio. We may also update these assumptions in other quarters as we become aware of information that is indicative of the need for such an update. In measuring our LFPB, we establish cohorts, which are groupings of long-duration contracts. On a quarterly basis, we retrospectively update the net premium ratio at the cohort level for actual experience. For all contract cohorts issued after January 1, 2021, interest is accrued on LFPB at the single-A interest rate on the contract cohort inception date. For contract cohorts issued prior to January 1, 2021, interest remains accruing at the original discount rate in effect on the contract cohort inception date due to the modified retrospective transition method. We also remeasure the LFPB using the single-A interest rate as of the end of each reporting period.

Current wording

Liability for future policy benefits (“LFPB”) represents the reserve amounts associated with non-participating traditional life insurance contracts and limited payment life-contingent annuity contracts that are calculated to meet the various policy and contract obligations as they mature. Establishing adequate reserves for our obligations to policyholders requires assumptions to be made that are intended to represent an estimation of experience for the period that policy benefits are payable. If actual experience is better than or equal to the assumptions, then reserves should be adequate to provide for future benefits and expenses. If experience is worse than the assumptions, additional reserves may be required. Significant assumptions include mortality rates, morbidity and policyholder behavior (e.g., persistency) and withdrawals. During the third quarter of each year, we conduct our comprehensive review of the actuarial assumptions to best estimate future premium and benefit cash flows (“cash flow assumptions”) and projection models used in estimating these liabilities and update these assumptions as needed (excluding the claims settlement expense assumption that is locked-in at inception) in the calculation of the net premium ratio. We may also update these assumptions in other quarters as we become aware of information that is indicative of the need for such an update. See “Annual Assumption Review” below for more information. In measuring our LFPB, we establish cohorts, which are groupings of long-duration contracts. On a quarterly basis, we retrospectively update the net premium ratio at the cohort level for actual experience. For all contract cohorts issued after January 1, 2021, interest is accrued on LFPB at the single-A interest rate on the contract cohort inception date. For contract cohorts issued prior to January 1, 2021, interest remains accruing at the original discount rate in effect on the contract cohort inception date due to the modified retrospective transition method. We also remeasure the LFPB using the single-A interest rate as of the end of each reporting period.

Previous wording

Future contract benefits include reserves for long-term life and disability claims associated with our Group Protection segment. These reserves use actuarial assumptions primarily based on claim termination rates, offsets for other insurance including social security and long-term disability incidence and severity assumptions. Such cash flow assumptions are subject to the comprehensive review process discussed above. We remeasure the liability for future claims using a single-A interest rate as of the end of each reporting period.

Current wording

Future contract benefits include reserves for long-term disability and life waiver claims associated with our Group Protection segment. These reserves use actuarial assumptions primarily based on claim termination rates, mortality rates, offsets for other insurance including social security, morbidity, incidence and severity assumptions. Such cash flow assumptions are subject to the comprehensive review process discussed above. We remeasure the liability for future claims using a single-A interest rate as of the end of each reporting period. See “Annual Assumption Review” below for more information.

Previous wording

We previously issued UL-type contracts where we provided a secondary guarantee to the policyholder. The policy can remain in force, even if the base policy account balance is zero, as long as contractual secondary guarantee requirements have been met. These guaranteed benefits require an additional liability that is calculated based on the application of a benefit ratio (calculated as the present value of total expected benefit payments over the life of the contract from inception divided by the present value of total expected assessments over the life of the contract). These secondary guarantees are reported within future contract benefits on the Consolidated Balance Sheets. The level and direction of the change in reserves will vary over time based on the emergence of the benefit ratio and the level of assessments associated with the contracts. Cash flow assumptions incorporated in a benefit ratio in measuring these additional liabilities for other insurance benefits include mortality rates, morbidity, policyholder behavior (e.g., persistency) and withdrawals based principally on generally accepted actuarial methods and assumptions. During the third quarter of each year, we conduct our comprehensive review of the cash flow assumptions and projection models used in estimating these liabilities and update these assumptions in the calculation of the benefit ratio. We may also update these assumptions in other quarters as we become aware of information that is indicative of the need for such an update.

Current wording

We previously issued UL-type contracts where we provided a secondary guarantee to the policyholder. The policy can remain in force, even if the base policy account balance is zero, as long as contractual secondary guarantee requirements have been met. These guaranteed benefits require an additional liability that is calculated based on the application of a benefit ratio (calculated as the present value of total expected benefit payments over the life of the contract from inception divided by the present value of total expected assessments over the life of the contract). These secondary guarantees are reported within future contract benefits on the Consolidated Balance Sheets. The level and direction of the change in reserves will vary over time based on the emergence of the benefit ratio and the level of assessments associated with the contracts. Cash flow assumptions incorporated in a benefit ratio in measuring these additional liabilities for other insurance benefits include mortality rates, morbidity, policyholder behavior (e.g., persistency) and withdrawals based principally on generally accepted actuarial methods and assumptions. During the third quarter of each year, we conduct our comprehensive review of the cash flow assumptions and projection models used in estimating these liabilities and update these assumptions in the calculation of the benefit ratio. We may also update these assumptions in other quarters as we become aware of information that is indicative of the need for such an update. See “Annual Assumption Review” below for more information.

Previous wording

Net amount at risk (“NAR”) represents the amount of GLB or GDB in excess of a policyholder’s account balance at the balance sheet date. Underperforming markets increase our exposure to potential benefits with the GLB and GDB riders. A contract with a GDB rider is “in the money” if the policyholder’s account balance falls below the GDB. As of June 30, 2025 and 2024, 4% and 8%, respectively, of all in-force contracts with a GDB rider were “in the money.” A contract with a GLB rider is “in the money” if the policyholder’s account balance falls below the present value of GLB payments, assuming no full surrenders. As of June 30, 2025 and 2024, 15% and 18%, respectively, of all in-force contracts with a GLB rider were “in the money.” However, the only way the policyholder can realize the excess of the present value of benefits over the account balance of the contract is through a series of withdrawals or income payments that do not exceed a maximum amount. If, after the series of withdrawals or income payments, the account balance is exhausted, the policyholder will continue to receive a series of annuity payments. The account balance can also fluctuate with market returns on a daily basis resulting in increases or decreases in the excess of the present value of benefits over account balance.

Current wording

Net amount at risk (“NAR”) represents the amount of GLB or GDB in excess of a policyholder’s account balance at the balance sheet date. Underperforming markets increase our exposure to potential benefits with the GLB and GDB riders. A contract with a GDB rider is “in the money” if the policyholder’s account balance falls below the GDB. As of September 30, 2025 and 2024, 3% and 5%, respectively, of all in-force contracts with a GDB rider were “in the money.” A contract with a GLB rider is “in the money” if the policyholder’s account balance falls below the present value of GLB payments, assuming no full surrenders. As of September 30, 2025 and 2024, 12% and 13%, respectively, of all in-force contracts with a GLB rider were “in the money.” However, the only way the policyholder can realize the excess of the present value of benefits over the account balance of the contract is through a series of withdrawals or income payments that do not exceed a maximum amount. If, after the series of withdrawals or income payments, the account balance is exhausted, the policyholder will continue to receive a series of annuity payments. The account balance can also fluctuate with market returns on a daily basis resulting in increases or decreases in the excess of the present value of benefits over account balance.

Previous wording

MRBs are valued based on a stochastic projection of risk-neutral scenarios that incorporate a spread reflecting our non-performance risk. Ceded MRBs are valued based on a stochastic projection of risk-neutral scenarios that incorporate a spread reflecting our counterparties’ non-performance risk. The scenario assumptions, at each valuation date, are those we view to be appropriate for a hypothetical market participant and include assumptions for capital markets, lapse, benefit utilization, mortality, risk margin and administrative expenses. These assumptions are based on a combination of historical data and actuarial judgments. The assumption for our own non-performance risk and our counterparties’ non-performance risk for MRBs and ceded MRBs, respectively, are determined at each valuation date and reflect our risk and our counterparties’ risks of not fulfilling the obligations of the underlying liability. The spread for the non-performance risk is added to the discount rates used in determining the fair value from the net cash flows. We believe these assumptions are consistent with those that would be used by a market participant; however, as the related markets develop, we will continue to reassess our assumptions. During the third quarter of each year, we conduct our comprehensive review of the assumptions used in calculating the fair value of these MRBs and update these assumptions on a prospective basis as needed. We may also update these assumptions in other quarters as we become aware of information that is indicative of the need for such an update. For information on fair value inputs, see Note 13.

Current wording

MRBs are valued based on a stochastic projection of risk-neutral scenarios that incorporate a spread reflecting our non-performance risk. Ceded MRBs are valued based on a stochastic projection of risk-neutral scenarios that incorporate a spread reflecting our counterparties’ non-performance risk. The scenario assumptions, at each valuation date, are those we view to be appropriate for a hypothetical market participant and include assumptions for capital markets, lapse, benefit utilization, mortality, risk margin and administrative expenses. These assumptions are based on a combination of historical data and actuarial judgments. The assumption for our own non-performance risk and our counterparties’ non-performance risk for MRBs and ceded MRBs, respectively, are determined at each valuation date and reflect our risk and our counterparties’ risks of not fulfilling the obligations of the underlying liability. The spread for the non-performance risk is added to the discount rates used in determining the fair value from the net cash flows. We believe these assumptions are consistent with those that would be used by a market participant; however, as the related markets develop, we will continue to reassess our assumptions. During the third quarter of each year, we conduct our comprehensive review of the assumptions used in calculating the fair value of these MRBs and update these assumptions on a prospective basis as needed. We may also update these assumptions in other quarters as we become aware of information that is indicative of the need for such an update. For information on fair value inputs, see Note 13. See “Annual Assumption Review” below for more information.

Previous wording

Policyholder account balances include the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability includes universal life insurance (“UL”), MoneyGuard®, variable universal life insurance (“VUL”), indexed universal life insurance (“IUL”), investment-type annuity (including registered index-linked annuities (“RILA”), individual and group fixed and fixed portion of variable annuities, fixed indexed deferred annuities and non-life contingent payout fixed annuities) and funding agreement products where account balances are equal to deposits plus interest credited less withdrawals, surrender charges, asset-based fees and policyholder administration charges (collectively known as “policyholder assessments”), as well as amounts representing the fair value of embedded derivative instruments associated with our fixed indexed annuity and IUL products. During the third quarter of each year, we conduct our comprehensive review of the assumptions and projection models underlying our reserves and embedded derivatives and update assumptions as needed. We may also update these assumptions in other quarters as we become aware of information that is indicative of the need for such an update.

Current wording

Policyholder account balances include the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability includes universal life insurance (“UL”), MoneyGuard®, variable universal life insurance (“VUL”), indexed universal life insurance (“IUL”), investment-type annuity (including registered index-linked annuities (“RILA”)), individual and group fixed and fixed portion of variable annuities, fixed indexed deferred annuities and non-life contingent payout fixed annuities) and funding agreement products where account balances are equal to deposits plus interest credited less withdrawals, surrender charges, asset-based fees and policyholder administration charges (collectively known as “policyholder assessments”), as well as amounts representing the fair value of embedded derivative instruments associated with our fixed indexed annuity and IUL products. During the third quarter of each year, we conduct our comprehensive review of the assumptions and projection models underlying our reserves and embedded derivatives and update assumptions as needed. We may also update these assumptions in other quarters as we become aware of information that is indicative of the need for such an update. See “Annual Assumption Review” below for more information.

Previous wording

Reinsurance recoverables are generally measured and recognized consistent with the assumptions and methodologies used to project the future performance of the underlying direct business as discussed in the “Future Contract Benefits” and “Policyholder Account Balances” sections above. During the third quarter of each year, we conduct our comprehensive review of the assumptions and projection models and update assumptions as needed. In addition, we consider the potential impact of counterparty credit risks related to the reinsurance recoverable by estimating an allowance for credit losses using a probability of loss model approach to estimate expected credit losses for reinsurance recoverables. For additional information on our allowance for credit losses on reinsurance-related assets, see Note 7 in our 2024 Form 10-K.

Current wording

Reinsurance recoverables are generally measured and recognized consistent with the assumptions and methodologies used to project the future performance of the underlying direct business as discussed in the “Future Contract Benefits” and “Policyholder Account Balances” sections above. During the third quarter of each year, we conduct our comprehensive review of the assumptions and projection models and update assumptions as needed. See “Annual Assumption Review” below for more information. In addition, we consider the potential impact of counterparty credit risks related to the reinsurance recoverable by estimating an allowance for credit losses using a probability of loss model approach to estimate expected credit losses for reinsurance recoverables. For additional information on our allowance for credit losses on reinsurance-related assets, see Note 7 in our 2024 Form 10-K.

Previous wording

During the third quarter of each year, we conduct our comprehensive review of the assumptions and projection models used in estimating MRBs, our reserves and embedded derivatives. For more information on our comprehensive review, see Note 1 in our 2024 Form 10-K.

Current wording

During the third quarter of each year, we conduct our comprehensive review of the assumptions and projection models used in estimating MRBs, our reserves and embedded derivatives. For more information on our comprehensive review, see Note 1 in our 2024 Form 10-K. Details underlying the impact to net income (loss) from our annual assumption review (in millions) were as follows:

Previous wording

As of June 30, 2025, we had an approximate $1.9 billion deferred tax asset related to net unrealized losses on fixed maturity available-for-sale (“AFS”) securities. In the assessment of the future realizability of this deferred tax asset, management concluded that its tax planning strategies, including holding these securities to recovery, were prudent and feasible as these unrealized losses were caused by factors other than credit loss, and we have the intent and ability to hold these securities to recovery and collect all of the contractual cash flows.

Current wording

As of September 30, 2025, we had an approximate $1.7 billion deferred tax asset related to net unrealized losses on fixed maturity available-for-sale (“AFS”) securities. In the assessment of the future realizability of this deferred tax asset, management concluded that its tax planning strategies, including holding these securities to recovery, were prudent and feasible as these unrealized losses were caused by factors other than credit loss, and we have the intent and ability to hold these securities to recovery and collect all of the contractual cash flows.

Previous wording

(2)For the three months ended June 30, 2025 and 2024, includes changes in MRBs of $932 million and $126 million, respectively; changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits of $(595) million and $50 million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $68 million and $76 million, respectively. For the six months ended June 30, 2025 and 2024, includes changes in MRBs of $(370) million and $2,021 million, respectively; changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits of $(321) million and $(537) million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $4 million and $218 million, respectively.

Current wording

(1)For the three months ended September 30, 2025 and 2024, includes changes in MRBs of $337 million and $(666) million, respectively; changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits of $30 million and $188 million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $43 million and $97 million, respectively. For the nine months ended September 30, 2025 and 2024, includes changes in MRBs of $(33) million and $1,354 million, respectively; changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits of $(307) million and $(350) million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $63 million and $315 million, respectively.

Previous wording

(3)Includes primarily changes in the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction. The coinsurance with funds withheld investment portfolio includes fixed maturity securities classified as AFS with changes in fair value recorded in OCI. Since the corresponding and offsetting changes in fair value of the embedded derivative related to the coinsurance with funds withheld investment portfolio are recorded in realized gain (loss), volatility can occur within net income (loss). See Note 7 for more information.

Current wording

(2)Includes primarily changes in the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction. The coinsurance with funds withheld investment portfolio includes fixed maturity securities classified as AFS with changes in fair value recorded in OCI. Since the corresponding and offsetting changes in fair value of the embedded derivative related to the coinsurance with funds withheld investment portfolio are recorded in realized gain (loss), volatility can occur within net income (loss). See Note 7 for more information.

Previous wording

(4)For information on the sale of our wealth management business, see Note 1 in our 2024 Form 10-K.

Current wording

(3)For information on the sale of our wealth management business, see Note 1 in our 2024 Form 10-K.

Previous wording

(5)Includes $(114) million for the six months ended June 30, 2024, primarily related to the settlement of cost of insurance litigation in the first quarter of 2024.

Current wording

(4)Includes certain legal accruals of $(9) million for the three and nine months ended September 30, 2025; and $(114) million for the nine months ended September 30, 2024, primarily related to the settlement of cost of insurance litigation in the first quarter of 2024.

Previous wording

(6)Includes severance expense related to initiatives to realign the workforce of $(2) million and $(7) million for the three months ended June 30, 2025 and 2024, respectively, and $(8) million and $(56) million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

(5)Includes severance expense related to initiatives to realign the workforce of $(5) million and $(16) million for the three months ended September 30, 2025 and 2024, respectively, and $(13) million and $(72) million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

(7)Includes transaction, integration and other costs related to mergers, acquisitions, divestitures and certain other corporate initiatives for the three months ended June 30, 2025 and 2024, respectively, of $(18) million primarily related to the Bain Capital transaction and $(27) million related to the sale of our wealth management business; and for the six months ended June 30, 2025 and 2024, respectively, of $(38) million related to the Bain Capital transaction and the sale of our wealth management business and $(37) million primarily related to the sale of our wealth management business.

Current wording

(6)Includes transaction, integration and other costs related to mergers, acquisitions, divestitures and certain other corporate initiatives consisting of $(55) million of transaction costs related to restructuring certain captive reinsurance subsidiaries and $(22) million related to Life Insurance segment persistency optimization for the three months ended September 30, 2025; $(2) million related to the sale of our wealth management business for the three months ended September 30, 2024; for the nine months ended September 30, 2025, includes $(55) million of transaction costs related to restructuring certain captive reinsurance subsidiaries, $(22) million related to Life Insurance segment persistency optimization, $(20) million related to the sale of our wealth management business and $(18) million primarily related to the Bain Capital transaction; for the nine months ended September 30, 2024, includes $(39) million primarily related to the sale of our wealth management business.

Previous wording

(8)Includes deferred compensation mark-to-market adjustment of $1 million for the three months ended June 30, 2025 and 2024, and $(8) million and $(12) million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

(7)Includes deferred compensation mark-to-market adjustment of $(14) million and $(1) million for the three months ended September 30, 2025 and 2024, respectively, and $(22) million and $(13) million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

(9)Includes gains (losses) on early extinguishment of debt of $94 million for the three and six months ended June 30, 2025.

Current wording

(8)Includes gains on early extinguishment of debt of $94 million for the nine months ended September 30, 2025.

Previous wording

•Higher gain in net annuity product features driven by the impact of capital markets.

Current wording

•Gain in net annuity product features in 2025 compared to loss in 2024 driven by the impact of capital markets.

Previous wording

•Less favorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.

Current wording

•Lower unfavorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.

Previous wording

•Lower loss in net life insurance product features driven by change in the fair value of hedges associated with VUL products attributable to the impact of capital markets.

Current wording

•Lower loss in net life insurance product features driven by the change in the fair value of hedges associated with VUL products attributable to the impact of capital markets.

Previous wording

•Lower investment losses driven by lower losses on fixed maturity AFS securities.

Current wording

•Lower investment losses driven by gains in 2025 on certain investments associated with the fourth quarter 2023 reinsurance transaction compared to losses in 2024 and lower realized losses on certain investments.

Previous wording

The decrease in net income was partially offset by the following:

Current wording

The increase in net income was partially offset by the following:

Previous wording

•Unfavorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans in 2025 compared to favorable changes in 2024 driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.

Current wording

•Higher unfavorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.

Previous wording

•Loss in net life insurance product features in 2025 compared to gain in 2024 driven by change in the fair value of hedges associated with VUL products attributable to the impact of capital markets.

Current wording

•Lower loss in net life insurance product features driven by the change in the fair value of hedges associated with VUL products attributable to the impact of capital markets.

Previous wording

•Net favorable other items in 2025 compared to net unfavorable in 2024 driven by gain on extinguishment of debt in 2025 and settlement of cost of reinsurance litigation in 2024.

Current wording

•Lower net unfavorable other items driven by gain on extinguishment of debt in 2025 and settlement of cost of reinsurance litigation in 2024, partially offset by transaction costs related to restructuring certain captive reinsurance subsidiaries and persistency optimization in our Life Insurance segment in 2025.

Previous wording

•Improvement in our total loss ratio in our Group Protection segment.

Current wording

•Improvement in our total loss ratio in our Group Protection segment and growth in average account balances.

Previous wording

(1)Insurance premiums include primarily our income annuities that have a corresponding offset in benefits. Benefits include primarily changes in income annuity reserves driven by insurance premiums.

Current wording

(1)Insurance premiums include primarily our income annuities that have a corresponding offset in benefits and policyholder liability remeasurement. Benefits and policyholder liability remeasurement include primarily changes in income annuity reserves driven by insurance premiums.

Previous wording

(2)Consists primarily of revenues attributable to broker-dealer services, which are subject to market volatility and have a comparable offset in commissions and other expenses; and the net settlement related to certain reinsurance transactions, which has a corresponding offset in net investment income and interest credited. During the second quarter of 2024, we closed the sale of our wealth management business. For more information, see Note 1 in our 2024 Form 10-K.

Current wording

(2)Consists primarily of revenues attributable to the net settlement related to certain reinsurance transactions, which has a corresponding offset in net investment income and interest credited; and broker-dealer services, which are subject to market volatility and have a comparable offset in commissions and other expenses. During the second quarter of 2024, we closed the sale of our wealth management business. For more information, see Note 1 in our 2024 Form 10-K.

Previous wording

•Higher commissions and other expenses, net of broker-dealer expenses, driven by higher other costs pertaining to business operations and higher deferred acquisition costs (“DAC”) amortization.

Current wording

•Higher commissions and other expenses, driven by the impact from our annual assumption review and higher deferred acquisition costs (“DAC”) amortization.

Previous wording

•Lower net investment income, net of interest credited, which more than offset impacts from higher average general account balances, improving portfolio yields from the current interest rate environment and higher investment income within our surplus portfolio. The lower net investment income, net of interest credited, was experienced in certain reinsured portfolios that have a corresponding increase in other revenues.

Current wording

•Lower net investment income, net of interest credited, in certain reinsured portfolios and lower investment income within our surplus portfolio, which more than offset impacts from higher average general account balances and improving portfolio yields from the current interest rate environment. The lower net investment income, net of interest credited in certain reinsured portfolios had a corresponding increase in other revenues.

Previous wording

•Lower federal income tax expense due to unfavorable separate account dividends-received deduction true-ups in 2024.

Current wording

•Lower federal income tax expense due to more unfavorable separate account dividends-received deduction true-ups in 2024.

Previous wording

•Higher commissions and other expenses, net of broker-dealer expenses, driven by higher DAC amortization and higher other costs pertaining to business operations.

Current wording

•Higher commissions and other expenses, net of broker-dealer expenses, driven by higher DAC amortizationand the impact from our annual assumption review.

Previous wording

•Lower net investment income, net of interest credited, which more than offset impacts from higher average general account balances, improving portfolio yields from the current interest rate environment and higher investment income within our surplus portfolio. The lower net investment income, net of interest credited, was experienced in certain reinsured portfolios that have a corresponding increase in other revenues.

Current wording

•Lower net investment income, net of interest credited, in certain reinsured portfolios and lower investment income within our surplus portfolio, which more than offset impacts from higher average general account balances and improving portfolio yields from the current interest rate environment. The lower net investment income, net of interest credited, in certain reinsured portfolios had a corresponding increase in other revenues.

Previous wording

The other component of net flows relates to the retention of new business and account balances. An important measure of retention is the reduction in account balances caused by full surrenders, deaths and other contract benefits. These outflows as a percentage of average gross account balances were 11% for thethree and six months ended June 30, 2025, and 10% and 11%, respectively, for the corresponding periods in 2024.

Current wording

The other component of net flows relates to the retention of new business and account balances. An important measure of retention is the reduction in account balances caused by full surrenders, deaths and other contract benefits. These outflows as a percentage of average gross account balances were 11% for thethree and nine months ended September 30, 2025 and 2024.

Previous wording

(1)Includes term insurance premiums, which have a corresponding partial offset in benefits for changes in reserves. The decrease in insurance premiums in the second quarter of 2025 was driven by the expiration of a 10-year assumed reinsurance treaty in the first quarter of 2025, which has a corresponding offset in benefits.

Current wording

(1)Includes term insurance premiums, which have a corresponding partial offset in benefits and policyholder liability remeasurement for changes in reserves. The decrease in insurance premiums in the third quarter of 2025 was driven by the expiration of a 10-year assumed reinsurance treaty in the first quarter of 2025, which has a corresponding offset in benefits and policyholder liability remeasurement.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2025 to 2024

Current wording

Comparison of the Three and Nine Months Ended September 30, 2025 to 2024

Previous wording

The decrease in income from operations was partially offset by policyholder liability remeasurement gain in 2025 compared to a loss in 2024 driven by more favorable experience on income annuities than expected.

Current wording

Income from operations for this segment increased due primarily to the following:

Previous wording

The increase in income from operations for this segment was partially offset by higher benefits driven by aging of the block, partially offset by improved mortality due to lower claims incidence.

Current wording

The increase in income from operations for this segment was partially offset by higher benefits and policyholder liability remeasurement driven by the impact from our annual assumption review and aging of the block, partially offset by improved mortality due to lower claims incidence.