Voya Financial, Inc.

7. Reinsurance

The Company reinsures its business through a diversified group of reinsurers. However, the Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements. Collectability of reinsurance balances are evaluated by monitoring ratings and evaluating the financial strength of its reinsurers. Large reinsurance recoverable balances with offshore or other non-accredited reinsurers are secured through various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit ("LOC").

Information regarding the effect of reinsurance on the Consolidated Balance Sheets is as follows as of the periods indicated:

(1) As of December 31, 2025, Future policy benefits and contract owner account balances include $3.1 billion of full-service retirement plan contracts assumed related to the acquisition of OneAmerica Financial's full-service retirement plan business.

Information regarding the effect of reinsurance in the Consolidated Statements of Operations is as follows for the periods indicated:

As part of the Company’s acquisition of the full-service retirement plan business of OneAmerica Financial, as disclosed in the Business, Basis of Presentation and Significant Accounting Policies Note to these Consolidated Financial Statements, the Company's wholly owned subsidiary, Voya Retirement Insurance and Annuity Company ("VRIAC"), entered into an indemnity reinsurance agreement with American United Life Insurance Company, a subsidiary of OneAmerica Financial. Under the reinsurance agreement, VRIAC assumed a 100% quota share of fixed and variable annuities, resulting in the Company assuming contract owner account balances of $3.8 billion under a combination indemnity coinsurance and coinsurance with funds withheld, and $20.6 billion of separate account liabilities under a modified coinsurance arrangement. Assumed separate account assets and liabilities are presented on a net basis in the accompanying Consolidated Balance Sheets.

The Company has indemnity reinsurance agreements with Security Life of Denver Company ("SLD") and with a subsidiary of Lincoln National Corporation ("Lincoln"). Under these agreements, SLD and Lincoln contractually assumed certain policyholder liabilities and obligations, although the Company remains obligated to contract owners. Reinsurance recoverable, net of the allowance for credit losses, related to the agreement with SLD was $8.1 billion and $8.6 billion as of December 31, 2025 and 2024, respectively, on the Consolidated Balance Sheets. Reinsurance recoverable, net of the allowance for credit losses, related to the reinsurance agreement with Lincoln was $0.8 billion and $0.9 billion as of December 31, 2025 and 2024, respectively, on the Consolidated Balance Sheets.

If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. As of December 31, 2025 and December 31, 2024, the Company had a deposit asset, net of the allowance for credit losses of $0.9 billion and $1.1 billion, respectively, which is reported in Other assets on the Consolidated Balance Sheets. In addition, the Company had a liability for funds withheld under ceded reinsurance agreements of $108 and $103 as of December 31, 2025 and December 31, 2024, respectively, which was recorded in Other liabilities on the Consolidated Balance Sheets. The funds withheld asset related to assumed reinsurance was $0.9 billion as of December 31, 2025, which was recorded in Other assets on the Consolidated Balance Sheets.