LINCOLN NATIONAL CORP

Our reinsurance strategy is designed to protect our insurance subsidiaries against the severity of losses on individual claims and unusually serious occurrences in which a number of claims produce an aggregate extraordinary loss. Although reinsurance does not discharge the insurance subsidiaries from their primary liabilities to their policyholders for losses insured under the insurance policies, it does make the assuming reinsurer liable to the insurance subsidiaries for the reinsured portion of the risk. Because we bear the risk of nonpayment by one or more of our reinsurers, we primarily cede reinsurance to well-capitalized, highly rated unaffiliated reinsurers. We also utilize inter-company reinsurance agreements to manage our statutory capital position, as well as our hedge program for variable annuity guarantees. These inter-company agreements do not have an effect on the consolidated financial statements.

Lincoln Pinehurst Reinsurance Company (Bermuda) Limited (“LPINE”), a wholly owned subsidiary of LNC, operates as a Class E Bermuda-based life and annuity reinsurance company. For more information about our affiliate reinsurance transactions with LPINE, see “Introduction – Executive Summary – Significant Operational Matters” in the MD&A.

As of December 31, 2025, the policy for our reinsurance program was to retain no more than $20 million on a single insured life, with the retention on most policies being significantly below that. For more information, see Note 7.

Some portions of our annuity and life businesses have been reinsured on either a coinsurance, a coinsurance with funds withheld or a modified coinsurance basis. In a coinsurance program, the reinsurer shares proportionally in the policy level financial results of the reinsured policies (i.e., premiums, benefits/claims, expenses, and changes in reserves) based on its quota share percentage, and the related reserves and supporting assets are transferred to the reinsurer. In a coinsurance with funds withheld program, the reinsurer shares proportionally in the policy level financial results based on its assumed quota share percentage; however, the ceding company retains the assets supporting the ceded reserves under a funds withheld arrangement, and the reinsurer assumes liability for investment results of the assets in the funds withheld account. In a modified coinsurance program, the ceding company retains both the reserves and the assets supporting those reserves, with such assets held in a modified coinsurance account, while the reinsurer shares proportionally in the policy level financial results, and investment results of the assets held in the modified coinsurance account, based on the reinsurer’s quota share of risk assumed.

In addition, we acquire other reinsurance to cover products other than as discussed above with retentions and limits that management believes are appropriate for the circumstances. For example, we use reinsurance to cover larger life and disability claims in our Group Protection business.

We obtain reinsurance from a diverse group of reinsurers, and we monitor concentration and financial strength ratings of our principal reinsurers. Fortitude Reinsurance Company Ltd. (“Fortitude Re”), Protective Life Insurance Company, Security Life of Denver Insurance Company (a subsidiary of Resolution Life), Commonwealth Annuity and Life Insurance Company (a subsidiary of Global Atlantic), Hannover Life Reassurance Company of America (Bermuda) Ltd. and Athene Holding Ltd. represent our largest reinsurance exposures. For more information regarding our reinsurance arrangements and exposure, see “Reinsurance” in the MD&A and Note 7. For risks involving reinsurance, see “Item 1A. Risk Factors – Operational Matters – We face risks of non-collectability of reinsurance and increased reinsurance rates, which could materially affect our results of operations.”